Deciding Between Bookkeeping Software and Bookkeeping Service

Bookkeeping – the record of day-to-day financial transactions such as sales, purchases, income, and payments by an individual or an organization. These records need to be produced at the end of every financial year. From small to medium to large business, maintaining financial records is a mush which therefore necessitates bookkeeping process.

The choice of preparing and producing the accounts: organization basically has three options: one is to prepare and maintain records manually; the next can be to employ the bookkeeping services and the last option is to use a bookkeeping software system. Each has its own advantages and disadvantages. Whatever may be the employed method, the ultimate thing is to produce accurate accounting information needed on time.

As the recorded financial transaction is very important for financial decisions and knowledge over the business performance, efficiency, and accuracy over the recorded transactions becomes the major concern. Further, the accounting information is the accumulation of documents such as sales invoices, purchase invoices, and possibly bank records during the financial year and after the end of the financial year for tax purposes.

Improper records of the above said data (as financial records) leads to unwanted penalties, simply administrative burdens. In analyzing the choices: keeping and maintaining manually may lead to data loss, inaccuracies, fines, and penalties thus leading to severe issues at the end of the financial year.

Manual bookkeeping needs regular and periodic evaluation of the data. In going for the choice of having a bookkeeper, trust and knowledge over the operation become the mandatory thing for any organization. Also periodic and regular tracking of the works and records maintained is necessary. Having a bookkeeper is also partially includes in manual work where accuracy level still depends on the knowledge of the bookkeeper.

The third choice of installing bookkeeping software also has few disadvantages. But these are overruled by its wide advantages. The major advantage is the reduction in paperwork and 90% of reducing the manual work thereby achieving accuracy and efficiency. By having bookkeeping software, no one other than the business owners and the authorized person knows the financial status which can be called the security over the accounts.

So by having the gist in hand, the advantages and disadvantages over the choices can be analyzed as discussed above. It can be said with proof that accounting software provides better financial control and performance over the others: manual bookkeeping and having a bookkeeper. Thereby administrative burden can be reduced and the organization can focus on its core activities.

Bank reconciliation | Bank Statement

Bank reconciliation is a process of matching the accounting details with the bank statements. Companies record the transaction like checks written, receiving payments, service charges paid in a general ledger of the company. So in the same checking account, the bank will also record the transaction done by the company.

Why do Bank reconciliation:

Most banks send statements to their clients on a monthly basis. So most companies check their ledger with the transactions recorded in the bank statement. Loss of checks can be found out easily by checking the statement or even the amount can be added to the ledger. Errors committed in cash received, are rectified while doing bank reconciliation. This process ensures that none of the transactions is missed out in the bank’s statements and vice versa.

For sure this is a tedious and time-consuming process to manually check each and every entry. Especially the bank service charges deduction maybe only on the bank statement, it cannot be found in the company ledger. Most important is the interest charges credited by the bank will be in the bank statement, but not in the companies’ ledger.

Apart from checking the amounts, even the timing at which the transaction was done is important. Say if a check was deposited at the end of the month the transactions will be in the ledger, but not in the current month’s bank statement. Bank reconciliation can avoid check bounces, undue credit reduction from a bank.

Bank reconciliation has more advantages than disadvantages. All companies no matter big or small do bank reconciliation to set right the accounts on a monthly basis. Instead of breaking the head while preparing final statements, bank reconciliation would be the best alternative.

Nowadays with online banking, banking reconciliation becomes simpler with advanced bookkeeping software. Most bookkeeping software is designed to integrate with online bank statements.

Banking Registers

The register is basically the official written record of names or events or transactions. Banking Registers are the records that are maintained in order to keep track of your banking transactions.

Numia, online accounting software not only helps you to record your accounting transactions or maintain your banking records but also enables you to edit or delete the transaction. You can view the report of the transactions of each and every bank separately within your desired time period.

The steps involved are as follows:

  • Select Bank-> Banking Registers.
  • Select the bank name to view the accounting transactions in that specified bank.
  • Select the account name.
  • Now you can view the list of transactions made in that bank in the corresponding account name.
  • Edit or delete the transaction by just clicking the edit or delete icons which are viewed by moving the cursor over the transaction.
  • You can also customize the report by clicking the “Customize” option. Customizing allows you to view the transaction report within specified dates and to differentiate the transactions based on reconciliation.
  • You can also export the report to an “Excel spreadsheet” or simply print it.

Chart Of Accounts

Chart of accounts is the list of accounts adopted or used by a company. The choice of having different types of accounts in the chart of accounts depends on the company. It varies from company to company, as the organizational makeup is different for each company. Some common chart account followed in balance sheets are Assets, Liabilities, Owner’s (Stockholders’) Equity.

Assets:

Assets are the resources acquired by the company that can be expressed in terms of cash. Following are some of the common asset accounts included in the chart of accounts. The current assets are the assets that will be converted to cash within a year or in the current operating cycle of a company. The second types of asset accounts are Long term investment accounts that are for investment that will not be disposed of in near future. The third types of accounts are the fixed assets that are purchased with aim of using them in a long term to increase the profit of a company. The fourth types of asset accounts are for the intangible assets, whose value cannot be calculated physically like the trademarks, patents, etc.

Liabilities:

A liability is an obligation for a company or an individual to settle a debt. There are only two commonly account for liabilities. Current liability accounts are for accounts that can be settled with the current operational cycle. Long term liability account is for liabilities that would take more than a year to settle.

Owner’s (Stockholders’) Equity:

Owner or stockholders’ equity is a calculation by negating liabilities from assets. There are organized into three types they are paid-in capital, retained earnings, treasury stock. Paid in capital is contributed by investors by buying the stocks above the normal value. Retained gain is the net income or profit that is not given to the shareholders but is invested in the same business. The last type of accounts is Treasury stock, which is the stock purchased back by the company.

Tips to be a great sales leader

A person is said to be a great sales leader, only when he is capable of building his team in an efficient manner to achieve the sales target and company’s goals. A great leader is an inspiration, a motivational tool, and gives their significant contribution to the success of their sales team.

Following are some of the tips to be a successful sales lead:

  • Sales Managers and Sales People required to practice professional development in order to value their growth and clients/customers.
  • A well versed professional with his core skills such as Planning, Execution, Current Marketing Trends, Industrial Knowledge, Product and Customer Satisfaction, Communication, and Differentiation skills.
  • Good at major accounting strategies, competitive strategies, presentation and proposal writing skills.
  • Must be specific, set deadlines for the targets, capable of tackling the worst marketing situations. Share the facts and vision of the organization with the teammates and motivate them for their utmost contribution.
  • Try to understand the difficulties of the sales team and support them with the necessary resources.
  • Capable of learning and implementing advanced sales techniques.
  • To be an inspiring leader, you must be reflective and risk-takers.
  • Value the skills of the salesperson and give high training and focus on attitude.
  • Communication plays a vital role to interact with the salespeople. Active listening to the teammates is very essential.

Great sales leads know how to get work done by the people. They set proper goals and encourage their team to meet the necessity. Promote an enjoyable work environment and build a culture where people value themselves, each other, the company, and the customers.

Accounting Basics

There are a few (and only a few) things you need to understand in order to make setting up your accounting system easier.

Debits and Credits

These are the backbone of any accounting system. Understand how debits and credits work and you’ll understand the whole system. Every accounting entry in the general ledger contains both a debit and a credit. Further, all debits must equal all credits. If they don’t, the entry is out of balance.

Accounting Basics – 5 Basic Accounting Types:

  • Assets
  • Liabilities
  • Equity
  • Income and
  • Expenses

Balance Sheet Accounts

The three so-called Balance Sheet Accounts are Assets, Liabilities, and Equity. Balance Sheet Accounts are used to track the changes in the value of things you own or owe.

Assets are the group of things that you own. Your assets could include a car, cash, a house, stocks, or anything else that has convertible value. Convertible value means that theoretically, you could sell the item for cash.

Liabilities are the group of things on which you owe money. Your liabilities could include a car loan, a student loan, a mortgage, your investment margin account, or anything else which you must pay back at some time.

Equity is the same as “net worth.” It represents what is left over after you subtract your liabilities from your assets. It can be thought of as the portion of your assets that you own outright, without any debt.

Income and Expenses Accounts

The two Income and Expense Accounts are used to increase or decrease the value of your accounts.

Income is the payment you receive for your time, services you provide, or the use of your money.

Expenses refer to money you spend to purchase goods or services provided by someone else.

Online Accounting Revolution

Online technology has revolutionized over the past ten years in which each and every business sector are gaining their potential benefits of the internet certainly where accountancy has no exception. The accounting profession is going through a revolution to make the business to track in a faster and hassle free manner. Technology has laid its impact on accounting with the advent of certain features to keep your business track to run in a smooth way. Online accounting would highly be a preferable way of managing the finances of your business either for freelance or work on short term contracts.

Online accounting is known for its simplicity, as the complexity in financial management can be overcome. With the online accounting program, business owners can track their financial position in an easier and quicker way. Computerized accounting systems have now replaced manual accounting systems in most organizations. Many online accounting services allow the users to record their transactions, view their current assets, and also renders in creating their own invoices and payslips.

Accounting application has in fact allowed maintaining the proper tracking of the information, based on a regular interval basis resulting in better efficiency and accountability. Users are able to access their financial information wherever they are without waiting for the accountant’s report looking into the current cash flow. Also, it would be highly securable as the data are encrypted and stored online. Both the time and expense are saved with the accountancy programs leading to significant tax reductions.

Online accounting would be ideal for the business owners in managing the finance on daily basis in an easily accessible way with more accuracy and security rather than moving with the services of an accountant. A new era of forensic accounting helps to keep track of frauds during the sabotage of the electronic information which engaged in the accounting improvement as well as it allows in maintaining a track on their personal money. Now it would be much easier for business owners to stay connected with their financial information in an easy way with the help of this online accounting technology.

Account Types

There are a total of 13 basic account types. They are:

Seven Asset Accounts

Cash

Use this account to track the money you have on hand, in your wallet, in your piggy bank, under your mattress, or wherever you choose to keep it handy. This is the most liquid, or easily traded, type of asset.

Bank

This account is used to track the cash balance that you keep in institutions such as banks, credit unions, savings and loans, or brokerage firms – wherever someone else safeguards your money. This is the second most liquid type of account because you can easily convert it to cash on hand.

Stock

Track your individual stocks and bonds using this type of account. With these types of assets, you may not be able to easily convert them to cash unless you can find a buyer, and you are not guaranteed to get the same amount of cash you paid for them.

Mutual Fund

This is similar to the stock account, except that it is used to track funds.

Currency

If you trade other currencies as investments, you can use this type of account to keep track of them.

Accounts Receivable

This is typically a business use only account in which you place outstanding debts owed to you.

Asset

For personal finances, use this type of account to track “big-ticket” item purchases that significantly impact your net worth.

Three Liability Accounts

Credit Card

Use this to track your credit card receipts and reconcile your credit card statements. Credit cards represent a short-term loan that you are obligated to repay to the credit card company.

Accounts Payable

This is typically a business use only account in which you place bills you have yet to pay.

Software Liability

Use this type of account for all other loans, generally larger long-term loans such as a mortgage or vehicle loan. This account can help you keep track of how much you owe and how much you have already repaid.

One Equity Account

Equity

It represents what is left over after you subtract your liabilities from your assets, so it is the portion of your assets that you own outright, without any debt.

Income Account

Income

Income is the payment you receive for your time, services you provide, or the use of your money.

One Expense Account

Expense

Expenses refer to money you spend to purchase goods or services provided by someone else.

How to measure productivity of a business

When dealing with business scenario, irrespective of its success measuring the productivity is a major factor. Strangely some business people are left with no answer when they are asked about the methodology to measure the productivity of a business. In few cases, business might yield unexpectedly a high profit that might satisfy the organization. But the businessmen will not be aware of the fact that the same business would do three times better while measuring the productivity.

Earlier there was a myth that business can either be improved or cannot be improved, but now it is not so. Productivity can be measured with certain business aspects in such a way that the business operations get reviewed at all the stages with the evaluation of their improvements. Under the pricing options see what could be measured to enable tracking of costs. Are the customers satisfied with the business pricing of the company.

In the conventional business, quality for the products was not given importance as it was considered to be an expensive one. Now the steps have to be taken to track the two critical indicators of quality, say the defects and variance. Next is the performance of the company’s employees . This plays a very important role in determining the productivity. So their performance should be tracked in order to predict the future productivity and if any improvements needed should be indicated.

Desired business outcomes are determined along with any other outcome that would leverage the further business activities. Risks are not anticipated in a business but it is obvious for it to occur. Try to measure the risks at an early stage that your customer cares about. Evaluate the feedback system from the employees and customers too. To improve the business henceforth, the above factors are to be followed and measured accordingly.