Search

HOW TO AVOID THESE TOP 5 ACCOUNTING OBSTACLES

Updated: Jul 7


Staying on top of your finances as a small business owner is no small feat, but it’s essential to running a successful operation. There are many accounting obstacles that most businesses face, but these are the five biggies, and what you can do to avoid them.


1. More than 80 percent of businesses fail because of cash flow issues.


Managing cash flow is such a big deal for small businesses. In fact, a recent study shows that cash flow issues lead to the demise of 82% of businesses. Why? It’s often difficult for business owners to earmark enough money to cover recurring costs that are essential to the business. You can avoid cash flow problems by combing through your bills carefully, and staying on top of payments from customers (a perfect segue to number 2…).

2. Accurate accounts receivable/collections are essential to small businesses.


Your cash flow and accounts receivable/collections go hand in hand. That’s because your accounts receivable is critical to calculating how profitable you are and how much cash you have coming in. It’s obvious that you need money coming in from customer payments in order to have money going out to pay for business expenses. You need to create a solid invoicing processes that involves timely, regular communication with customers.


3. Processing payroll is a big challenge for many small businesses.


When it comes to tax codes, tax filing, and proper accounting practices, it’s no wonder the payroll process can be overwhelming to business owners. Most businesses are inconsistent in their approach to managing payroll; incorrectly file tax information, or are using the wrong accounting software. A simple solution is to partner with an accountant with comprehensive payroll and accounting services who can help find what works best for your business.


4. Managing paperwork can be an accounting nightmare for many business owners.


From reconciling your books and keeping up with expenses to filing all the proper tax forms and creating a budget, a mountain of paperwork piles up quickly for any small business owner. A good way to alleviate any obstacles before it overwhelms you is to sit down with an accounting professional to determine a plan that works best for your operations. Perhaps it’s finding the right payroll software or filing the tax documents specific to your business—an expert resource is invaluable.


5. Reconciling the books each month.


Closing out the books on a monthly basis can be time-consuming and frustrating. It’s easy to make mistakes that can lead to inaccurate calculations or even IRS audits. A good way to stay on top of this task is with the right accounting system, and getting into the habit of monitoring transactions often—even daily if you can so that monthly task gets easier.

6. Turn your accounting challenges into solutions—contact us ASAP.

You have enough to worry about when it comes to running your busines successfully—get peace-of-mind accounting services from Sidekick. In fact, small business owners throughout Wisconsin and nationwide count on us to promote their financial health through results-driven accounting solutions. Discover what we can do for you—call 414-310-7689 or email us.



TIMELY, PRACTICAL PAYROLL TIPS FOR YOUR SMALL BUSINESS


Setting up a payroll management system. Following tax laws. Navigating recent tax credits and the Payroll Protection Program (PPP)…You have a lot to juggle when it comes to payroll for your small business. The experts at Sidekick Accounting Services are here to help with some timely, practical payroll tips.


Start with an Employer Identification Number


If your business is brand new, you’ll need to register for an Employer Identification Number (EIN). For tax purposes, an EIN for businesses is the equivalent of a Social Security Number for individual employees. Obtaining one should be the first financial task on yours list, as many banks won’t let you open a business account without one. Note that you may need a state-level EIN in addition to a Federal EIN, depending on where your business is located.


Determine Payroll Schedule and How to Calculate Wages


Figure out how and how often you’ll pay your employees. Most small businesses pay their employees on a weekly or bi-weekly basis; you’ll have to decide what works best for your payroll practices and what complies with federal and state minimum payday laws. When it comes to calculating wages, you’ll need to determine if you’ll have hourly employees (nonexempt) or salaried employees (exempt)


Implement a Time-Tracking and Payroll System


How will you track employees’ time and calculate their wages? Will you do payroll by hand, or use payroll software to streamline your timesheets and payroll operations? Do you have the accounting know-how to management your payroll properly, or does it make more sense to hire a payroll professional? These are all questions you’ll need to address so you can implement the best timesheet and payroll system for your small business.


Know and Follow Wage Laws


This is perhaps the trickiest aspect of payroll to navigate, yet every business needs to comply with all state and federal wage laws. You must pay the proper FICA taxes (such as Social Security and Medicare), local and state taxes, and income taxes for each employee. Be sure you’re making payroll tax deposits that synch with your scheduled tax liability. It’s important that you or someone in your business understand your legal and financial obligations


Navigate the COVID-19 Economic Landscape for Small Businesses


You may have qualified and received a loan through the Payroll Protection Program (PPP), but perhaps you still have several questions about PPP next steps, or need information on other loan resources through the U.S. Small Business Administration. Remember that beyond payroll, there are other ways to keep your small business prosperous amidst this pandemic.


Work with Payroll Experts Dedicated to Small Businesses


Helping small businesses like yours thrive is a daily occurrence at Sidekick Accounting Services. That’s because we focus on education and support so you have the financial tools you need to triumph in your industry. We serve clients throughout Wisconsin and the U.S. with flexible, effective monthly accounting services. Contact us to learn more.

17 views0 comments