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A young woman works on a laptop to prepare her small business for the upcoming year

How to Prepare Your Small Business for the New Year

Business Resolutions Start Now

The end of the year is a bustling time for small business owners. Between skyrocketing holiday sales, extended hours, and juggling multiple duties, it can be difficult to find a moment to stop and think about preparing for 2022. 

Where do you start? What metrics can be used to predict and measure success? What steps can be taken to effectively prepare your business for the new year? 

Planning for the new year may seem overwhelming. Xendoo can give you your time back. In this blog post, we will help you strategically chart your path for success, so you can be ready for a new year of growth!

Review Financial Performance

To prepare for the future, take a look at the past year. Analyze your business’s performance from the previous year by reviewing your key financial statements.

  • The Balance Sheet summarizes a business’s assets, liabilities, and equity at a specific point in time. This statement provides insight into cash, inventory levels, Accounts Payable (money owed to others) and Receivable (money owed to the business owner), credit card and bank balances, and the equity in the company.
  • The Profit & Loss Statement outlines the revenue and expenses a business incurred during a specific period, which provides insight into the business’s profitability. It can be used to track and strategically plan for financial trends, such as seasons of high and low demand.  
  • The Cash Flow Statement provides visibility into when cash flows into and out of a business, and how cash balances have changed over a specific time period. It can also be used to project and prepare for the cash needs of the business.

These financial statements illustrate how your business performed throughout the year and reveal hidden opportunities for growth. The best practice is reviewing the financial reports on a monthly basis, as they gauge your business’s financial health and provide insights to timely decision making. 

Click here for more details on the financial statements. 

Forecast Cash Flow and Create a Budget

Cash flow represents the money that flows into and out of your business over time, and is crucial for ongoing business success. For more information on cash flow, click here

Like the financial statements, look at the past to plan for the future. Your cash flow history can be used to create a cash flow forecast, understand and predict upcoming cash needs, and create a budget for the new year. 

Healthy cash flow ensures that you will have the cash you need, when needed.

Understanding your cash needs and budgeting accordingly enables you to meet your financial goals and obligations, and continue to grow your business. 

Prepare for Tax Season Now

The earlier tax preparation starts, the greater the savings will be when tax season arrives. Start by taking a look at your financial statements and tax bills from previous years, which will provide an idea of what will be owed this year. From there, you can start setting aside money to reduce tax season surprises.

Up-to-date bookkeeping allows for tax-readiness throughout the year. Having income and expenses organized will save time and prevent confusion and stress when tax season arrives. 

Lastly, consider partnering with an online accounting service. Get access to an expert team that provides all-in-one bookkeeping, tax preparation, filing, and consulting, so you can make informed business decisions and maximize your savings all year long!

Outsource Your Bookkeeping 

Small business owners cover multiple responsibilities, one of the most stressful and time-consuming of which is bookkeeping. If you would like to take back 4 to 6 hours a month to focus on growing your business, now is the time to outsource your bookkeeping!

An online bookkeeper takes bookkeeping off your plate, so you can spend your time actively working on your business. They also provide monthly financial statements, delivering financial visibility and the actionable insight needed for long-term business growth. 

Online bookkeepers also provide catch up bookkeeping services to get previous years’ books in order. Whether you are behind a few months or years, Xendoo will bring your financials up to date so you can strategically plan for the future.

Spend the New Year with Xendoo

It is time to crush your business resolutions! Xendoo has your back with online bookkeeping, accounting, and tax services. Allow us handle the hassles while you focus on what you love to do: growing your business, all year round!

We would love to get to know you and your business. Schedule a call with one of our online accountants to get started.

Year-End Bookkeeping and Accounting Checklist for Small Business Owners

The end of the year is a hectic time for small business owners. Between catching their breath after tax season and managing holiday traffic and sales, year-end bookkeeping and accounting tasks understandably fall to the bottom of the to-do list. 

Xendoo is here to help you avoid the year-end scramble. Check out our checklist to organize your finances and successfully wrap up the year! 

Get Your Books Caught Up

The first step toward new year readiness is ensuring that your books are up-to-date, which can be done by:

  • Accounting for all bills and invoices, even if they have yet to be paid. 
  • Reviewing bank and credit card statements to confirm that they match. 
  • Recording any expenses that were paid for using personal funds. 

Accurate records ensure reliable financial statements. If your books are behind a few months, or even years, you are not alone. 25% of business owners are behind on their books. Xendoo is here to help. Our online bookkeepers provide catch up bookkeeping services, so you can focus on the future. 

Collect the Necessary Forms 

Once January arrives, your accountant will request certain forms in order to close your books and file your small business taxes. Be sure to collect them as soon as possible to ensure a smooth start to the new year.

 

Form W-2

Form W-2 is used by business owners to report salary information for their employees, as well as the taxes that are withheld from their paychecks. Employees need this information to file their personal tax returns

 

Business owners are responsible for sending this form to the IRS. Employers are required to provide the form to their employees no later than January 31st, so that employees have enough time to file their taxes.

 

Form W-9 

If you worked with an independent contractor or vendor, and paid them $600 or more, you will report those payments to the IRS using Form 1099-MISC. The information needed to complete this form is listed on Form W-9, which can be collected from your contractors.

If any W-9s are missing, be sure to reach out to your independent contractors and have them complete the form before the end of the year.

 

Schedule K-1

CPAs provide the Schedule K-1. It is used by S-Corporation shareholders and partnership members to report their share of the business’s profits and losses, and is included with your personal tax return.

 

Form 1009-K

The 1099-K tracks the payments received through third-party payment networks, like eBay, Stripe, Shopify, PayPal, and others. You will receive one 1099-K from each of the Online Payment Networks you use, and you are required to complete each one. Your gross receipts must be reported to be at least as high as the amount reported on your 1009-K.

The 1099-K shows gross sales, which is the amount before fees are deducted. What appears in your bank account is the Net Amount, the amount after fees are deducted from the Gross Amount. The sales from each vendor must be reported as the Gross Amount, which is what appears on the 1099-K.

Click here to download our Tax Documentation Checklist.

Follow Up on Past-Due Invoices

Review past-due invoices to see what you are owed. If there are any outstanding payments, reach out to your customers before the end of the year to successfully close your books. 

Account for Inventory

If your business stores inventory, perform an end of year inventory count to make sure your totals match your Balance Sheet and your books. This review will provide insight for waste and loss management, as well as reduce inaccuracies in inventory counts and receivings.

Consider utilizing an inventory management software to streamline inventory creation and order fulfillment.   

Review Your Financial Statements

Once your bookkeeping is completed, review your financial statements to confirm your numbers are correct and that you are utilizing accurate data. You can also take that time to review how your business grew over the course of the year. Was there a steady increase in profits? Can you identify connections in your costs and sales? The financial statements provide visibility to confirm that you are on track to meet your goals, make projections, and prepare for the future.

Click here to learn more about the key financial statements. 

Reach Out for Help

Everyone deserves a supportive team of people who care. If the year-end scramble has you feeling overwhelmed, reach out to an online bookkeeping service. It is an excellent resource for accurate financials and time-saving solutions! 

Xendoo’s bookkeeping and accounting team provides consistent monthly bookkeeping and timely, accurate financial reports, delivering financial visibility all throughout the year. This provides the insight needed to make the most informed decisions for your business.

Ring In Success

Now that the year-end bookkeeping and accounting checklist is complete, you are ready to welcome a new year of successful growth! We would love to partner with you as your online bookkeeping, accounting, and tax team! 

Schedule a call with one of our online accountants to get started. 

Xendoo provides online bookkeeping, accounting, and tax support for your partnership business.

How Do I Pay Myself and My Taxes as a Partnership?

Every partnership owner faces the unique challenges of self-payment, tax filing, and maximizing their tax savings. Although they would rather focus on growing their business, taxes and payroll often take up too much of their valuable time. 

If the self-payment struggle is all too familiar to you, Xendoo is here to help. We have created this guide to help you pay yourself and maximize your savings as a partnership owner!

How to Pay Yourself as a Partnership Owner: The Owner’s Draw or Guaranteed Payments 

Partnership owners pay themselves by taking an owner’s draw or a guaranteed payment, with profits distributed to each member based on the partnership agreement. Note that partnership owners are not permitted to take a salary, as the IRS states that you cannot be both a partner and an employee. 

The Owner’s Draw

An Owner’s Draw differs from a regular salary in that you can take money from the company’s earnings as needed, rather than on a scheduled basis. Depending on how well your business is performing, you can draw more or less, allowing for flexibility in your payments.

 

If your business is profitable, subtract liabilities (any debt your company owes) from assets (items of value the company owns). The remaining amount is referred to as ownership equity, which is what you will take your draw from. This amount is reflected on the Balance Sheet, under Owner’s Equity. Once you determine the amount you want to take, it can be transferred from your business bank account to your personal account.  

 

Because the Owner’s Draw is taken from ownership equity, it reduces the funds that can be used for operating or growing the business. Partnership members must balance how much they need to support themselves and what the business needs to thrive.

 

Guaranteed Payments

What if your business is in the early stages, and not producing profit yet? The solution lies in guaranteed payments. 

 

Guaranteed payments are a minimum amount that is guaranteed to be paid to a partner regardless of business profitability. The payments must be made even if the result is a loss for the business. They provide a consistent income to partners as the business grows and becomes profitable. Note that if the business is operating at a loss and providing guaranteed payments to partners, that loss must be funded through debt or investments (equity) to ensure that the necessary expenses of the business can be paid. 

 

Discuss your options with an online partnership accountant at Xendoo. They will provide the financial insight needed to make the most informed decision regarding self-payment in your partnership! 

How Do I Pay My Taxes as a Partnership Owner?

Partnerships file their taxes using Form 1065, which determines that each partner is reporting their income correctly. Each partner must complete an accompanying Schedule K-1, which breaks down their share of the profits and losses. They also report this information on their individual tax return (Form 1040), with a Schedule E attached. The owner’s draw is not subject to payroll taxes, but it is considered personal income and is taxed accordingly. If partnership members take the owner’s draw, they must pay estimated taxes, which helps decrease their tax bill. 

 

Guaranteed payments are tax-deductible to the partnership, and are treated as self-employment income for the partnership members. They are reported on the Schedule K-1, and noted as income on the Schedule E. If the partnership members choose to take guaranteed payments, they will pay both income tax and self-employment taxes as individuals. 

What are the Tax Advantages of Filing as a Partnership? 

No Double Taxation 

The partnership itself does not pay income taxes. Partnerships are considered “pass-through entities”, meaning that profits and losses “pass through” the business to the partners, with each paying a portion of the total income tax of the business’s earnings. In this situation, profits and losses are only taxed at the personal level, which allows partnerships to avoid double taxation. 

 

Even with a significant tax advantage, taxes can still be stressful. Talk to a small business CPA at Xendoo. We provide online accounting for partnerships, as well as online bookkeeping services so you can stay tax-ready all year long.

Xendoo is Here for You

You are not alone as you navigate self-payment, tax filing, and all the financial ins and outs of your partnership. Xendoo is here to help! Our online bookkeeping and accounting team provides partnership owners with the financial insight needed to make the most informed decision regarding self-payment and partnership taxes! 

 

Are we a fit for your partnership? Get started today with a free consultation.

 

Want to learn more about the different business entity types? Click here.  

How to pay yourself if you're an S Corporation

How Do I Pay Myself and My Taxes as an S-Corporation?

When businesses are born, business owners are likely not daydreaming about taxes and payroll. Yet, they still face the unique challenge of figuring out how to pay themselves, file their taxes, and maximize their tax savings.

As their business grows, many business owners opt for S-Corporation Election due to the tax advantages it presents, but they must be mindful of how much they pay themselves, in order to remain compliant in the eyes of the IRS. Unless they moonlight as an experienced accountant, self-payment and tax filing can be confusing and stressful for small business owners – understandably so!

Like most things involving taxes, it gets complicated. That is why we have created this comprehensive guide to help business owners pay themselves and maximize their savings as an S-Corporation!

 

How to Pay Yourself as an S-Corporation: Salary and Distributions

Under other business structures, you simply take a share of company profit as your payment. In an S-Corporation, you have the option to pay yourself in two ways: 

  • Salary, your wages or reasonable compensation. This is considered taxable income to the payee by the IRS.
  • Distributions, the earnings that are paid as distributions to you as the owner. These are not employee wages and are not taxed as self-employment income in an S-Corporation.

For example, if your business produced $100,000 in profit, you could take a reasonable salary of $40,000, and the remaining $60,000 as a distribution. It may seem strange to receive payment in two different forms, but it comes with significant tax savings, which will be discussed shortly. 

How Much Do I Pay Myself as an S-Corporation? 

The short answer is, it depends.

S-Corporation shareholder-employees are required to receive a reasonable salary, which is generally defined as at least what other businesses would pay someone in that role for similar services. Every business is different, so the exact amount that business owners pay themselves will vary. 

To determine your reasonable salary, you can start with the U.S. Bureau of Labor Statistics, which provides insight into compensation across different industries. This will give you an idea of what you should be paying yourself based on your field and the profit you produce. 

Some of the factors the IRS considers to determine a reasonable salary are:

  • Training and experience
  • Duties and responsibilities
  • Time and effort devoted to the business
  • Distribution history
  • Payments to non-shareholder employees
  • Timing and manner of paying bonuses to key people
  • What comparable businesses pay for similar services
  • Compensation agreements
  • Use of a formula to determine compensation

You must be careful to pay yourself a reasonable salary. Paying yourself a salary that is too low (or none at all) can draw scrutiny from the IRS, as it is considered an attempt to avoid paying self-employment taxes.

The good news is that you do not have to figure it all out on your own! The Xendoo team is more than happy to help you determine your reasonable salary. Speak to one of our online accountants to learn more.

How Do I Pay My Taxes as an S-Corporation?

The first step is to elect to be taxed as an S-Corporation. To qualify for S-Corporation status, your business must meet the following requirements:

 

  • Your business must be incorporated in the United States.
  • Your business may only have certain types of shareholders, including individuals, and certain trusts and estates. They may not be partnerships, corporations, or non-resident alien shareholders.
  • Your business cannot have more than 100 shareholders.
  • Your business can only have one class of stock.
  • Your business cannot be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).

If your business meets all of this criteria, you can move forward by filing Form 2553, and sending it to the IRS. If your company has multiple shareholders, each of them must sign and submit this form as well. Once approved by the IRS, you will file your S-Corporation taxes using Form 1120S. 

To minimize error and maximize tax savings, partner with an online Tax CPA at Xendoo. We file your taxes for you so you can focus on growing your business. 

What are the Tax Advantages of Filing as an S-Corporation? 

No Double Taxation 

C-corporations are taxed twice, with the business paying corporate income taxes, and shareholders paying taxes on their share of the income. On the other hand, S-Corporations are not subject to corporate income tax. Instead, shareholders file a Schedule K-1 along with Form 1120S, which reports their share of the company’s profits or losses. This allows S-Corporations to avoid double taxation.

 

No Self-Employment Taxes (on Distributions)

Another key advantage of S-Corporations Election is that the distributions owners receive are not subject to self-employment taxes! 

Every small business must pay self-employment taxes to fund social security and medicare. If your business operates as an LLC, you are required to pay self-employment taxes on your entire share of the profit, regardless of how you use the money. On top of that, you will also be taxed at your personal income tax rate. As the owner of the S-Corporation, you only pay self-employment taxes on your reasonable salary. The distributions you take are exempt from self-employment tax! 

To illustrate, let’s revisit the example from earlier:

 

Your business makes $100,000 in profit. 

As a single-member LLC, you will pay $15,300 in self-employment taxes.

If you file the S-Corporation Election, you pay yourself a reasonable salary of $40,000. The remaining $60,000 is taken as a distribution from profit. You will pay $6,120 in self-employment taxes only on your salary. The remaining $60,000 is exempt, resulting in a tax savings of $9,180 compared to the LLC!

For quick reference, take a look at the chart below:

S-Corporation Election is a simple, yet effective, way to maximize your tax savings. Are you ready to take the next step? Schedule a free consultation with a Xendoo accountant today! 

Xendoo is Here for You

You are not alone as you navigate the waters of self-payment and tax filing. Xendoo Online Bookkeeping, Accounting, and Tax is here to help! We move at the speed of business, so you can make informed decisions faster – like deciding if an S-Corporation Election is right for your business!

Want to learn more about the different business entity types? Click here. 

Click here to access Form 2553.

Click here to access Form 1120S.

Click here to access the Schedule K-1.

A man looks at an expense report on his laptop

Learn When You Should Outsource Your Accounting

A man looks at an expense report on his laptop

Business owners have a ton of demands on their plate, from bringing on the right staff members to marketing their products and working to improve the customer experience. But as your business starts to take off, it can leave you with a difficult choice. Should you focus on growing your core business or continue to focus on the administrative side, like managing your accounting and bookkeeping needs?

When your business was small, it was easy to handle both. But now that you’re growing, it may be more difficult to adequately cover your administrative tasks. 

Getting behind in your books can leave you frantically preparing for tax season. Without accurate financial records, it can be harder to secure funding and prepare for the future, too.

Outsource accounting services can help you stay up-to-date on your books, compliant with regulations, and firmly in control of your company’s financial future. With that in mind, here are some of the reasons why you should consider partnering with an online accounting firm.

Scaling as Your Business Grows

Your profitability depends on your ability to generate revenue and sustain growth over time. Outsource accounting services can help you accomplish this, providing a set of benefits that can help to cover back office responsibilities as you and your team focus on your core business tasks.

Specialized Skills for Every Step of Your Journey

While in-house accountants tend to be generalists, online bookkeeping firms can offer a specialized experience for every phase of your business journey. 

Outsource accounting firms can often provide experience in unique areas such as:

  • Personal financial planning and assistance
  • Forensic accounting
  • Managerial accounting
  • IT auditing
  • Non-profits
  • Tax preparation

Additionally, the financial professionals found at today’s top firms often have experience in your respective industry, providing actionable advice that can optimize your company at every step of your journey. 

Tax Planning

The specialized skills of an outsourced accountant typically include experience in tax planning and preparation. Outsource accounting services can not only ensure that your company has set aside sufficient funds to pay your annual income tax, but they can also help you to take advantage of the existing tax code to enhance profitability while staying in compliance with regulations.

This can be crucial for growing businesses. As your business expands, you may discover that rising revenues and a changing customer base can place you in unique tax situations. These needs can best be addressed by a professional accountant. Outsource accounting teams can enable you to navigate the confusing world of tax law.

Financial Reporting and Planning

Growing businesses often rely on small business loans for tasks like:

  • Increasing inventory
  • Hiring new employees or contractors
  • Investing in new technologies
  • Expanding retail or office space
  • Other overhead costs

But in order to secure a small business loan, most lenders will want to see the basic data about your financials.

If your books are “a little behind,” this can jeopardize your ability to secure the necessary funds to grow your business. 

Top-quality outsource accounting services can provide catch-up options designed to bring your books completely up-to-date. Best of all, with accurate reporting, you’ll be in a better position to secure additional funds as your business expands.

Taking Your Time Back

Your time is too valuable to spend on your books. And accounting doesn’t usually fall under your team’s core competencies. 

A core competency is a unique skill or advantage that is ultimately responsible for your company’s growth. Any business process that’s not a core competency should be outsourced, allowing your team to focus on their respective areas of specialty.

That’s why bookkeeping and accounting rank among the top tasks to outsource for growing companies. Outsource accounting services can help you with these administrative processes so that you and your team can stay focused on your core business.

Here are just a few of the additional benefits that you can expect when you partner with high-quality outsource accounting services:

Saving Time While Staying in Control

Running your company is job number one. Relying on outsourced online bookkeeping services to handle your books can liberate you from the tyranny of administration and put you back in a position to make data-driven decisions.

Some business owners are reluctant to do this since it naturally means surrendering control. But letting someone else handle your books can actually mean greater control over your company—not less.

For instance, most accounting firms rely on the latest cloud-based technology, offering access to your financial data 24/7 from anywhere in the world. And at Xendoo, our professional team is never more than a phone call, text message, or email away.

You save time and benefit from up-to-date, easy-to-access information about your company’s cash flow and financial forecasting, giving you confidence that you simply can’t match by juggling your own spreadsheets and flow charts.

Keeping Your Employees Focused

Of course, you may already be wise enough to delegate these responsibilities to another team member. But think about how much more your team could accomplish if they weren’t spending time clicking around in QuickBooks. 

Your office staff could divert their attention to revenue-generating tasks as:

  • Social media management
  • Marketing
  • Contacting customers
  • Pursuing new leads
  • Negotiating with vendors

Outsource accounting services reduce the burden on your staff as a whole, allowing you to direct your team’s attention to the key processes that go into running your business.

Spending Less Time Hiring New Staff Members

When you pursue outsourced accounting for small business needs, you won’t have to interview, hire, and onboard your own staff accountant. That means you’ll spend less time assembling a job description, posting a job ad, reviewing resumes, onboarding a new employee, setting up benefits, or securing an office space.

With an outsourced accounting firm, you can rely on a partner that will be around for the long term. You’ll benefit from the reliability of a dedicated team that understands your needs and provides ongoing support.

A Fast, Reliable Turnaround

What happens if your in-house accountant needs to take a sick day or goes on a two-week vacation? Depending on the circumstances, this could bring your company—including its payroll—to a grinding halt until your staff member returns.

With an outsourced financial firm, you have the reliability of a remote team and can avoid the time delays associated with unexpected absences or delays.

Reduce Costs and Increase Accuracy

Outsource accounting services can reduce costs, all while ensuring greater accuracy for your financial records. These benefits are seen in several ways:

Reduce Staffing Costs

Did you know that a typical certified public accountant (CPA) can charge roughly $40 per hour? The number climbs even higher if you need someone with specialized experience. 

Hiring an in-house accountant can be cost-prohibitive for small businesses, whose margins are often already razor-thin.

Outsource accounting services typically operate on a monthly fee. Xendoo, for example, offers plans starting at $195 per month. These monthly fees are a mere fraction of the costs of hiring an in-house accountant.

Reduce Errors

Errors can cost you, especially when it comes to your annual taxes. In many cases, business owners may face penalties for errors made in their tax reports, along with consequences for failing to file appropriate documentation on time. 

Outsource accounting teams can minimize these errors, eliminating the expense associated with mistakes.

Optimize Costs

Accounting firms can streamline tax preparation to help grow businesses. But the advanced reporting features that they offer can also help you to streamline every aspect of your business.

Advanced analytical data can help you refine your business strategy and find ways to reduce costs. It can also help you to plan for seasons of increased demand, which may be particularly helpful information for retailers or eCommerce companies.

Get Paid Faster

Businesses often lose money from unpaid invoices. Online accounting services can speed up the invoicing process, ensuring that you can send invoices and receive payments faster than ever before.

Eliminating the delay between delivery and payment can ensure a healthier revenue stream and keep money from getting lost in a sea of outstanding invoices. 

The reporting features offered by modern accounting firms can alert you to outstanding payments that need to be collected, giving you better control over your company’s cash flow.

Reduce Fraud

While no business owner wants to consider themselves to be vulnerable to fraud, an online accounting service can minimize your risk by handling your finances through a secure cloud-based platform.

This professional team might also be able to help investigate employee fraud by closely examining your books, saving your business the money that could otherwise be lost from white-collar crime.

The Best Time Is Today

If you’re wondering when to invest in an outsourced accounting company, the best time is now.

At Xendoo, we offer our clients online bookkeeping features and accounting services that streamline every aspect of their businesses. We can save you time, save you money, and help your business thrive and grow.

If you’ve been spending your time trying to stay focused on two things at once, it’s time to go “all in.” Give us a try today by signing up for our free trial. Get out of the back office and back to doing what matters most.

A female small business owner smiles inside her boutique shop

Celebrating Women’s Small Business Month: Thoughts from Xendoo CEO and Founder, Lil Roberts

National Women’s Small Business Month celebrates women’s achievements in business, and highlights what they bring to their communities as small business owners. We took a moment to interview Xendoo founder and CEO Lil Roberts, to get insight into what it takes to be a successful entrepreneur, and the importance of women leading in business. 

Build Up Your Team

What encouragement do you have for women who are in male-dominated industries? 

Shift your mindset. Do not let who dominates the industry define your role within it. Succeeding in business is all about excelling at what you do best, and building up a team that compliments the areas that you lack experience in. A multifaceted team is what makes a business thrive. When your team is growing their skills and knowledge, when your customers are happy, that is where you will find true success in your business.

It is crucial to focus on the problem that needs to be solved, and build a team that is as passionate about solving that problem as you are. That is what success looks like in every industry, no matter who it is dominated by. 

Inclusive by Nature

What is the importance of women leading in business?

Lil smiled and recalled a moment in which she had the opportunity to speak to Frances Frei, Senior Associate Dean for Executive Education at Harvard Business School. Frei shared her experience of solving problems with a team of women and immigrants, referencing studies that prove that when women lead, everyone wins. That is not to say that people and businesses cannot thrive under male leadership – they do. It simply highlights that women tend to be inclusive by nature, and adept at empowering those around them to do and be their best. This leads to the creation of supportive, passionate teams and therefore, successful businesses. 

Hats Off to You 

To all female business owners and entrepreneurs, we are rooting for you. Happy National Women’s Small Business Month from your friends at Xendoo! Take time to celebrate your business and your amazing team this month. Focus on what you love – growing your business. Xendoo has your online bookkeeping covered. 

Schedule a free consultation with one of our accountants. We would love to get to know you and your business, and partner with you as your bookkeeping, accounting, and tax team! 

 

Watch the full interview with Lil below:

3 Keys to Working Smarter, Not Harder in Business

Work Smarter, Not Harder

At SmartScout, we built our business around the idea of working “smarter”. Easy enough to say. What steps can small business owners take to work smarter? Glad you asked.

The three keys to working smarter, not harder, in business are education, technology, and delegation. In this blog post, we will show you how you can use these keys to expand your knowledge, streamline your workflow, and delegate work to your team to grow their skills.  

1. Never Stop Learning

What counts as educating yourself? It is both more and less than you might think. Reading this blog, for example, counts toward educating yourself. You either came to this blog because you were already following it, or you were searching for the answer to a specific question. It is crucial to stay informed on what is happening in your business niche so you can keep up with the competition and continue to grow your knowledge. However, this tends to keep you on surface level subjects, and when you find a topic that really interests you, you need to dive in deeper.

Watch Youtube videos, listen to podcasts, and take training courses. Even better is to learn from experts who actually walk the walk. Follow industry leaders on social media, and ask them questions when you can. Attend networking events and trade shows to connect with industry leaders and fellow life-long learners.

Most important of all, never stop learning. Self-improvement is a never-ending game, so find the way it works best for you, and keep at it!

2. Automate with Technology

Automate tedious work with technology to save time and minimize human error. One of the beauties of the modern world is that technology can steamline almost any task. There are solutions for every business function, including product research

For example, eCommerce business owners can save time by utilizing an online research tool such as SmartScout. The SmartScout database enables you to find thousands of lucrative products for arbitrage, calculate and reduce FBA fees, and increase product visibility with strategic advertising – just to name a few! Work that once took hours now takes moments with the SmartScout database. 

The goal is to balance time saved with money spent. If the task is outside of your area of expertise or simply takes up too much of your time, utilize tools that will save you time and sanity.  

3. Let Go and Delegate

Just like you need to give thoughtless tasks to technology, give thoughtful tasks to other people, so they can do their highest level thinking. This gets hard when it comes to things you are passionate about. Ask yourself, what are you holding onto that you need to let go of?

This is the reason why people who are promoted for their skills in a field often struggle as managers. They do not communicate with their team, nor do they trust them to follow through on assignments. To be a good delegator, you must become a good manager. Communicate clearly with your team and trust them with the tasks you give them, so they can help grow the business and their skillset.

What about the tasks that you do not like to do? If you lack expertise in a particular area and do not have a team member to take up the responsibility, partner with a professional. 

Many business owners spend countless hours on bookkeeping, which takes time away from running their businesses and enjoying their lives. By partnering with an online bookkeeper, they can effortlessly keep their financials up to date and stay tax-compliant, all with the support of an expert. This gives them the freedom to focus on what they love – growing their business. 

Need to improve your managerial or tech skills? Head back to the top of the list, and the cycle continues!

Always Getting Better

Successful business owners are always looking for ways to improve. The key is to work smarter, not harder! Continue to learn, automate mundane tasks with cutting-edge technology, and delegate work to save time and help your team grow in skill and knowledge. These simple practices can help you become the best business owner you can be!

What does your Amazon business need to succeed? With SmartScout, you have access to more product, brand, and seller data than anything out there. If you are ready to turbocharge your business, we are here to help!

How Franchisors Can Build a Strong Item 19

How Much Money Can I Make?

As franchisors work to sell franchises, one question they will always be asked is, “how much money can I make?”. The answer to this question can be found within one section of the Franchise Disclosure Document: Item 19.

In order to create a compelling Item 19, franchisors need financial data on the performance of each franchise location. Typically, it is up to the franchisees to keep their books up to date and share that data with the franchisor. But, like many small business owners, they juggle countless responsibilities, may not understand the complexities of accounting, and bookkeeping understandably falls by the wayside. 

An Expert Team

Without the right tools, building a strong Item 19 can feel like a massive undertaking. But, with the support of a franchise bookkeeping team, franchisors can receive timely, accurate information that will help them build a compelling Item 19!

What is Item 19? 

Item 19 is a section in the Franchise Disclosure Document (FDD), a document that must be presented to individuals who want to purchase a franchise. The purpose of Item 19 is for franchisors to lay out the financial performance representations (FPR) of the franchise. It paints a picture of how potential franchisees can expect to perform and estimates how much money they could make should they join the franchise.

Why is Item 19 Important?

Item 19 is more than just a rundown of financial performance. It is a powerful tool that aids in decision making, builds trust between the franchisor and potential franchisee, and sets realistic expectations.

  • Decision Making. A strong Item 19 helps franchisors attract and select the ideal franchisee candidates. It also ensures that a franchise brand is a solid investment, and helps the franchisee compare their options to determine if they are joining a successful business. 
  • Trust and Transparency. Item 19 signifies financial transparency and creates trust between the franchisor and potential franchisee. It shows that a franchisor knows their numbers, and has no issue disclosing them. The more information that can be provided on financial performance, the better. This transparency creates strong relationships between franchisors and their franchisees. 
  • Realistic Expectations. Item 19 allows the franchisor to set realistic expectations for financial performance. While a franchise may be profitable as a whole, individual success can vary. An Item 19 that contains data-backed projections of how much potential franchisees could realistically make provides the clarity they need to make an informed decision. 

How to Build a Strong Item 19

What do franchisors need to build a strong Item 19? Put simply, clear, accurate financials. The key elements that create a powerful Item 19 are: 

  • Average Gross Profit
  • Average Gross Sales
  • Cost breakdowns of goods and services
  • Operating cost insights
  • EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
  • Industry-specific data points (number of customers served, number of services provided or products sold, etc.)

These metrics provide financial insight into the franchise, clearly lay out the costs and obligations of a franchise purchase, and set realistic expectations for financial performance. 

The amount of information franchisors are able to share in Item 19 largely depends on the information their franchisees deliver. How can franchisees provide reliable, accurate information to their franchisors? It comes down to consistent monthly bookkeeping

The Necessary Resources 

Franchises have unique needs when it comes to bookkeeping and accounting, such as tracking royalties and advertising fees, and sometimes, multi-currency support. All of it needs to be properly recorded in accounting software so monthly reports can be produced. Franchisors need a team of trusted experts with knowledge of the franchise space, so they can receive accurate data from their franchisees.

  • Consistent Monthly Bookkeeping. In order for franchisors to build a strong Item 19, they need up-to-date financial records for each franchise location. A bookkeeper can provide visibility into financial performance on the franchisee’s behalf, so franchisors have access to the information they need across all locations

An online bookkeeping service is particularly helpful in this situation. Instead of hiring multiple bookkeepers, the franchisor can rely on a single provider who delivers uniform services for each location – no matter where they are located.  

  • Accurate, Up-to-Date Reports. Accurate monthly reports are crucial to creating a solid Item 19, as all information is legally required to be accurate, truthful, and backed by numbers. A well-documented financial history showcases franchise growth and profitability and helps franchisors create a compelling Item 19. 

Expert Bookkeeping for Franchise Businesses

Xendoo Online Bookkeeping is a leading provider of online bookkeeping and accounting services for franchise businesses. Our franchise-focused team provides franchisors with timely report delivery and visibility into financial performance for each location.

Are we a fit for your franchise? Let’s talk! Schedule your free consultation today.

hiring a bookkeeper

How To Find The Right Online Accountant For Your Business

hiring a bookkeeper

Every small business owner should have access to an accountant. A small business accountant can provide guidance at every stage of your company’s development, and they can be invaluable when it comes to tax preparation, succession planning, and more. An online accountant can also deliver these services at a price that fits the limited budget of modern business owners. 

But finding the right accountant is about more than just cost. Today, we’ll go over the best features offered by online accountants for small business owners so that you can find the right fit for your company.

What to Look for in an Online Accountant

What should you expect when you’re searching for online accountants for small business needs? 

We’ve narrowed it down to these five essential features:

Industry Experience

Online accountants are not hard to find, but the key is to find an accountant whose skill set matches the needs of your business. 

What type of business do you run? Are you a service provider, a retailer, or exclusively eCommerce? Is your business structured as a partnership, an LLC, or an S Corp?

These questions will be critical in finding the right accountant. You’ll need to partner with an online accountant who has clear experience in preparing tax returns and financial documents for companies that have a similar profile to yours. 

Ideally, you’ll want an online accountant who has worked for companies of a similar size, revenue stream, and industry, too.

But don’t limit yourself to accountants that work with companies of your size. After all, most entrepreneurs entertain dreams of growing their businesses. This will also require the assistance of an accountant who has worked for companies that are larger than your own. 

Finding an accountant who has experience in working with companies your size and larger can set you on a positive trajectory, knowing that your accounting help will scale with your business.

Access to Tools

The right accountant for small business owners might also need to have some experience in cloud-based systems, especially if your business relies on such software as part of your regular operations.

Before committing to an accountant, make sure to go over these requirements, and ask about their prior experience. This will ensure that you hire an accountant whose experience matches the evolving needs of your company.

Dedicated Support

Some business owners might feel nervous that hiring online accountants for small business needs will deprive them of the personal touch of a regular employee. This concern is perfectly understandable, but the right accounting firm can offer dedicated support in the way that you choose. 

You need an online accounting service that relies on the latest and best accounting software. You want a provider who can minimize accounting errors and ensure a greater level of accuracy. This is especially important during tax season, where errors can lead to an audit and potentially result in penalties and fines. 

Online software also means that you’ll be able to access your company’s financial information anytime, anywhere

Xendoo provides a number of ways to keep clients connected to the process. Our online bookkeeping features include regular monthly reports that will keep you up to date on your cash flow and other financial data. 

All of our dedicated professionals are available on your terms, whether that be through email, text message, or a phone call. We’ll work with you to communicate when you want and how you want, so you never feel out of touch with your online CPA.

Streamlined Processes

Modern business owners face a variety of financial needs, including:

  • Bookkeeping
  • Payroll
  • Tax planning
  • Tax preparation
  • Budgeting and planning
  • Personal tax preparation and filing

Partnering with online accountants for small business needs such as these can ensure that important processes are completed on time and with total accuracy.

Some business owners find that this is a welcome change from trying to juggle their own books. If you find yourself falling behind, some accounting firms offer catch-up accounting services, which can help you bring your books up to date. 

Xendoo, for instance, offers catch-up services to clients who have fallen months or even years behind.

By reconciling your books regularly, your small business accountant can ensure that you always have a clear picture of the financial health of your company. 

Understanding your cash flow can be invaluable when it comes to long-range planning, and it can also save you the hassle and expense of penalties from filing a late tax return.

Streamlining your financial processes can even be helpful for obtaining future business loans. Usually, lenders will expect to see a report of your company’s financial status. By having recent reports relating to your income and expenses, you’ll be able to gain access to the funds you need to grow your business.

Strong Reviews

Once you locate a few online accountants for small business owners, you’ll want to narrow down the field a bit further. What are other customers saying about this accounting service? 

While every accounting firm will boast of its strengths, the real evidence of its success is found in the testimony of its clients!

Typically, you won’t have to look far to find online reviews for an accounting firm, though the best online accountants will feature customer reviews and testimonials directly on their websites. 

These reviews provide several relevant clues about the nature of the firm. First, it communicates that other business owners have benefited from the services of an online accountant. Second, skimming through these reviews may help you locate companies that operate within your industry, which helps you to know whether an accounting firm “gets” the unique needs and challenges you face.

You might also check to see whether an accounting firm has received any third-party awards or certifications. Xendoo, for instance, is accredited by the Better Business Bureau and currently holds an “A” rating, the highest rating available.

Transparent Pricing

Finally, you want to find an accountant that offers transparent pricing. How much does an accountant cost? An accountant for small business owners will usually charge around $40 per hour, according to the Bureau of Labor Statistics, though it’s not uncommon to find accountants that charge significantly more. 

An online accountant costs less than an in-person service, though you’ll want to make sure you find an accounting firm that offers transparent pricing. 

By “transparent,” we mean that there should be no hidden fees. You don’t want to find yourself “stuck” with an online accountant who later demands additional money for their services. It’s vital that you know what to expect and how much you’ll be charged for financial services.

At Xendoo, we offer several clear plans designed to fit the needs of your business. Our most popular plan will cost only $395 per month. 

Many business owners find that partnering with online accountants for small business services can save a significant amount of money that would otherwise be spent on a full-time employee.

Xendoo: Find an Online Accountant for Small Business

Where can you find an online accountant that ticks all these boxes? Xendoo strives for excellence in all these categories, thanks to our dedicated team of professionals.  

At Xendoo, we provide a variety of accounting and bookkeeping solutions that can be tailored to the needs of your business. 

Our friendly team of experts can straighten out your books, help you prepare for tax season, or provide the data you need for long-term success. 

Want to learn more? Take us for a test drive by signing up for our free trial, and see how Xendoo can bring your business even further into the future.

Four Signs it is Time to Hire an Online Bookkeeper

Bookkeeping is Holding You Back

Business owners know their companies like the back of their hands. They are the head of every department and perform the work of multiple people. Of all the roles they play, our customers express that the bookkeeper role is their least favorite. 

DIY bookkeeping holds business owners back from fully focusing on their business, which is why they decide to outsource it. Is it time for you to do the same? Let’s take a look at 4 signs that it could be time to hire an online bookkeeper! 

#1. Bookkeeping Takes Time Away from Your Business… and Your Life

Assess what bookkeeping is costing you. Is it taking significant time away from running your business? Let’s break it down. 

Suppose your time is worth $200 per hour, and you spend 10 hours per month doing your books. That costs you $2,000 per month just for bookkeeping! How much could you increase your sales? What else could you accomplish with that time? 

How does bookkeeping affect your personal life? Before partnering with us, many of our customers were up late at night and missed out on time with loved ones due to bookkeeping. Whether you are closing sales or enjoying a family dinner, your time is valuable. DIY bookkeeping does not make sense when you could be spending your time on the things that matter to you.

#2. Your Books are Behind

It is impossible to evaluate your business’ financial health when your books are behind. Old data cannot predict cash flow, track your revenue, or indicate if you are profitable. Out-of-date books may prevent you from making the best financial decisions for your business.

A professional bookkeeper can bring your books up to date. Bookkeepers input and classify your monthly activity. They also generate vital monthly reports such as Profit & Loss statements and Balance Sheets, which display your total income and expenses and your assets and liabilities, respectively. They also provide actionable insight to the current state of your finances. Xendoo bookkeepers reconcile your books weekly to keep you on track for future success.

Guess what! You are not alone. 25% of business owners are behind on their bookkeeping. Whether you are behind a few months or a few years, Xendoo will bring your finances up to date in no time. To get your books caught up, click here.  

#3. You are Not Sure if You are Doing Your Books Correctly

DIY bookkeeping leaves room for error, especially in the hectic life of a business owner. It is rarely anyone’s area of expertise (or passion). If your numbers are not adding up, do not wait until tax season to figure out why.      

Bookkeepers connect the dots between your sales, expenses, and profits to ensure business growth. They know how to properly categorize your transactions, keeping your books compliant and ready for tax season. At Xendoo Online Bookkeeping, you can rely on your dedicated team of finance experts to deliver accurate statements and financial peace of mind year-round.

#4. Tax Season is Chaotic

When tax season rolls around, do you drop off a 30-pound box of receipts at your accountant’s office and hope for the best? After all the back and forth, are you disappointed by your tax refund? 

A chaotic and unrewarding tax season is a surefire sign that it is time to hire a bookkeeper. Your bookkeeper’s meticulous organization of your finances sets you up for smooth sailing during the most dreaded time of the year. 

Best of all, because your bookkeeper understands your business and your finances, they recognize every opportunity to maximize your tax savings! You will never have to worry if you pay too much in taxes. With a bookkeeper on your corner, you can walk into tax season prepared – and you will walk out knowing you maximized your tax savings!

The Importance of Bookkeeping

Bookkeeping is vital to the success of every business. It provides insight into your financial health and drives your decisions. When your books are in order, you can strategize effectively and plan for growth. Keeping your books compliant and up to date is crucial throughout the year so that you are ready for tax season. Consistent bookkeeping habits maximize your deductions and make an otherwise stressful time, a breeze. 

Bookkeeping is preventative care for your business. It puts a microscope on your finances to help you catch small problems before they snowball. A professional bookkeeper can take the stress of bookkeeping off of your plate so you can fully focus on running your business. 

Xendoo Does it for You

Bookkeeping does not have to be an uphill battle. Let Xendoo’s expert online bookkeeping and tax team handle the hassles so you can have more time for what you love!

Schedule your free consultation today!

 

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.