Monthly Archives: February 2024

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How to Pick a Small Business Accounting Software Program

Picking the small business accounting software you will use for your business can be a big decision. Once you select a software program it can be very difficult and costly to switch systems later if you are unhappy with your selection. That is why it is a good idea to thoroughly review all of your options before making the decision for your small business.

Some of the key factors that should be reviewed when selecting a small business accounting software program for your small business are

 

  1. Cost
  2. Learning curve
  3. Input efficiency
  4. Reporting capabilities
  5. Flexibility

In more detail here is what you should be looking for in each of the above key factors

 

  1. Cost – Compare the costs all the various programs you are considering. Ensure to take into account if the program cost is a one time payment or an on going monthly fee. On going monthly fee programs can sometimes be very expensive if you need to pay the monthly fee for as long as you use the small business accounting software program. Cost is not the only factor though, weight the other features of the programs against their cost as it might make sense to pay a little more for an accounting software program that has more features, is easier to use or is just more flexible.
  2. Learning curve – Take into account how long it is going to take you to learn the system. If an accounting program will take days or weeks to learn there is significant cost to your business by selecting a small business accounting software program of that nature. There is a lot of value in having a system that can be learned quickly by yourself or future employees.
  3. Input efficiency – Take into account how long it will take to make journal entries and run reports. If with one accounting system you will be able to enter twice as many accounting entries per hour versus another program, definitely choose the program that is quicker to work with. The less time you spend entering your accounting transactions the more time you have to run your business and make more money.
  4. Reporting capabilities – One of the key differentiators between small business accounting software programs is the reporting features available within a given system. Reporting on your financial results is critical to managing your business that is why you need to make sure the program you purchase can easily deliver the reports you need. Many accounting programs have set reports that can not be modified. If you are considering a software system of this nature it is critical you ensure the standard reports can not be customized to include the information you want and need.
  5. Flexibility – Finally the fifth factor to consider when selecting a small business accounting software program is the flexibility of the program. Flexibility includes the ease at which the necessary information can be extracted from the system. It also includes how easy it is to make correcting entries or the ability to transfer the program from one computer to another. The last thing you want to have happen is have all of your accounting information locked into your small business accounting software program but not be able to access or modify it in the way you want.

When making your final decision on the small business accounting software you will choose you should weight how each option you are reviewing compares on all 5 of these factors and also determine which of the 5 factors is most important to your particular business and situation. Only you know what your small business accounting software program needs to be able to do. If you follow this process you will make a smart informed decision that will result in the selection of a small business accounting software program that is right for your business.

 

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Top Ways to Turn Your Small Business Into a Business Empire

Top ways to turn your small business into a profitable business empire.

Small businesses are those businesses which may be started with small capital investments. There are millions of people who are running small or home businesses. Nearly 70% of newly started small businesses fail due to lack of capital, competitions and various other reasons.

Before we look into the reason for success or failure of small businesses let us look into some of the most successful businesses that were started with some powerful and innovative ideas. if you start any small business in a routine way then you may earn just hand to mouth. To take your small business on top you must provide something new and innovative.

How some of the ordinary people turned their small business into a global business empire:

(1). King c. Gillette: A traveling salesman found that his straight razor had dulled and it has become impossible for him to make a close shave. Many time his dulled razor use to cut his skin as there was no sharpness left so he started thinking about new safety razor. A new idea about making a twin blade razor was born in which disposable blade may be put and replaced. Even though many engineers rejected the idea but he continued to experiment and today Gillette have become a billion dollar company. He introduced a low cost, disposable blade that can make close and safe shave.

Summary: He faced a problem and wanted to find an innovative solution to that problem. Although he was a salesman with limited resources but he knew that idea can be turned into money. He realized that if his dreams can be realized then he can turn it into a profitable business empire. This is the power of innovative idea. An innovative idea can make unlimited wealth. Any small business can be turned into a big business empire if you try to introduce some new concepts.

(2). Tory Kumon: A high school mathematics teacher in Japan, Toru Kumon, became concerned because his second grade school son was bringing home poor grades in mathematics. Encouraged by his wife to find a better way to teach his son, Kumon began to examine the textbooks and exercises being used. Kumon felt that there were better ways and looked for a different method for his son. The Kumons worked together and while his wife supervised the home work of their son, Toru Kumon re-wrote the exercises and drills for his son, giving him a slightly more difficult set of problems every day. By the time the son had finished eighth grade, he was working through calculus problems, easily and correctly, and could handle work found on university entrance examinations.

Toru Kumon realized that if his son was having this problem, there would be other children in the same situation. Kumon then decided to take his methods to other parents whose children were having these same challenges. He did this by opening Kumon Learning Centers throughout Japan. Kumon was not without his critics, though. Members of the educational establishment were against him – primarily because it was not their idea. They could not refute the fact that the Kumon system works. Today kumon have more then 26000 centers in 46 countries. This is the power of a small and powerful idea!

Summary: Kumon saw a problem – poor academic performance and defined it as an opportunity – opportunity to create a learning system that would resolve the poor academic performance problems. After working with his son and finding something that work, he found he could provide this service to other parents that were having the same challenges. At the same time, he could create income for himself. He provided something of value and a lower cost than many of the alternatives.

(3)Amancio ortega: Amancio Ortega was born in the year 1936 in Spain. His father was a railway worker and his mother worked as a maid to support the family. Due to the financial problems that his family was facing, at the tender age of 13 he started working as a delivery boy at a shirt makers shop. Thereafter he worked for a lot of stores and tailors and closely studied as to how the products and cost of the products changed as they traveled from the manufacturer to the consumer. As a result of this study he became focused on the importance of getting the products directly to the consumer by eliminating the middleman. During his experience of working as a manager of a local clothing shop he realized that only rich people were able to afford high fashion clothes because of the high prices they came with. Having observed this, he was determined to manufacture high fashion clothes that were low priced and accessible to all. He continued to gain experience and knowledge while working until 1963 when he started his own company with just $25. He started designing and making fine bathrobes and started selling it to customers and also started supplying them at various stores. Later on with the profits that he earned with the help of this business he started his own factory. Today his personal worth is more then $20 billions. This is the power of innovative ideas on which a small business is developed into a business empire.

Let us try to shed some light on the innovative ideas that he used to turn his small business into a fortune.

(A)He realized that the high end fashion clothes were only accessible to rich people as only they could afford it. A major portion of the price margin was consumed by the middlemen. To eliminate this problem, he started creating high end fashion clothes or rather look-alike of top fashionable clothes for the masses at affordable prices by eliminating the middlemen. In this way then number of people who bought his clothes increased and in turn he became very popular.

Benefits to the consumer: Due to Amancio’s innovative idea, the middle class people who could not normally afford costly and latest designs were able to avail these fashionable clothes at reasonable rates.

(B)Direct Retailing: Amancio realized that middle men like wholesalers, semi wholesalers were deciding the final selling prices of these clothes and thus they ended up being very costly. Thus he opened his own string of stores called ZARA where he passed the margin that was being taken by the middle men to the customers.

(C)When Amancio started his business; the industry standard was to introduce new fashion twice a year. Thus people had to wait for a very long span of time and would visit the shop only twice a year to buy the new fashionable clothes. Amancio introduced the unique concept of instant fashion by introducing latest designs and new fashions within 2-3 weeks. This in turn pulled people to his shops many times in a month. This also helped customers by bringing new designs to them and the shopkeepers were benefited too because of the constant visits by the customers.

(D)Modifying unsold designs: Some designs do not sell as much as the popular ones. What Amancio did was to change and alter the failed designs so that they would be sold. He did this by putting up new patterns and accessories on the old designs.

(E)Advantage of information technology: To know more about what type of designs sell and what type does not sell and also to know more about the unsold stocks, Amancio took advantage of information technology that allowed him to monitor the unsold inventories. This also helped him realize the actual taste of the customers.

Summary: Amancio ortega started a small business with just $25 but today his personal net worth is more then $20 billions. At the time he started his business there were already thousands of businessmen, designers, and established fashion houses but only he was able to make it to the top because he introduced something new in his small business and rest is history.

Most of the self made billionaires possessed or developed the following qualities to become rich and these are necessary for success in any business: They started with a small business and developed into a business empire. Some of the qualities required to develop a small business into a business empires are as follow.

1. A burning desire to become rich
2. A fixed goal and a sound business plan to materialize it.
3. The faith and persistence in your efforts and making the tough decision of never to give up even after many failures.
4. A practical plan of action
5. Developing the ability to organize information and creating something new out of it.
6. The ability to innovate
7. Working towards developing new ideas and innovations instead of worrying about the investments required for the business.
8. Compensating for lack of education with self education and mastering all specialized knowledge with practical experience.
9. Finding ways to make money without any capital
10. Trying to create something new that would provide additional benefits to the customers or to the industry.
11. They are never ashamed to take up even a small job so as to learn in and outs of the business and to sharpen their skills in the field.
12. The ability to turn even $1 into thousands.
13. Creates opportunities for themselves instead of waiting for them to happen
14. They mastered all the specialized knowledge that is required for the selected business and tried to learn everything that is necessary to make a fortune
15. Developed their ability to create the best.
16. Creates and develops only such things that have a demand or that will be sold for sure.
17. They are never afraid of competition and beat it with the help of better products.
18. They always think and plan 10-20 years ahead of the time
19. They develop a profitable idea to attract investment.
20. They start initially with a knowledge based or skill based business.
21. They learn how to think like a customer and constantly try to find ways to provide goods and services at a low cost and with high value.

Summary: whatever small businesses you want to start first of all make a research about the ideas that are being used by top and successful companies. Now try to find some loop holes or better solutions and try to introduce them in your small business.

 

News

The Top Six Reasons Why Small Businesses Should Outsource Their Payroll

A lot of business owners aren’t experts in accounting or have training or experience in running their own payroll. Payroll processing can be challenging and confusing to small business owners, and the fact that the IRS can impose penalties if not filed correctly makes payroll processing somewhat intimidating. Because of this, most small business owners leave payroll processing to experts -either by outsourcing payroll, or processing it in-house (also known as traditional payroll).

1. Outsourcing Your Payroll is More Cost Effective

If a business owner uses a certified public accountant (CPA) to perform in-house payroll processing, costs could be anywhere between $260 and $480 per payroll run -not per month, but each time payroll is run.

For in-house payroll processing, using a CPA is the best way for having your payroll done correctly because certified public accountants are specially trained in accounting and payroll procedures. However, certified public accountants charge between $65 and $120 per hour and at approximately 4 hours per payroll processing run, the cost can be quite substantial. And if your business runs payroll bi-weekly or weekly, you’ll double or even quadruple this amount. Even without a business degree, everyone knows that the lower your expenses are, the quicker you can become a profitable owner.

Outsourcing your payroll can give you all the benefits and accuracy of having a CPA do your payroll, but will run you at a fraction of the cost. It’s the best of both worlds; easy, accurate, and cost effective. Outsourced payroll can save you thousands of dollars per year.

So how much can you really save? Let’s compare how much it would cost for Small Business Inc. to run payroll for its four employees once a month. Just to be conservative, we’ll use $65 per hour to estimate the traditional in-house payroll cost –the low end per hour cost for a CPA.

Outsourced Payroll

Base price of $44.95 per payroll run + $1.85 per employee = $52.35

[$44.95 + ($1.85 x 4)]

Traditional In-house Payroll

Four hours at $65 per hour = $260

Outsourcing payroll saves Small Business Inc. $207.65 per month.

2. Outsourced Payroll Helps Small Business Owners Avoid IRS Penalties

So what happens if you can’t afford a CPA and you decide to try your hand at calculating, paying, and filings your own small business payroll? Because of the complexity and ever changing payroll laws, it’s easy to make mistakes.

Each year, approximately 40% of small business owners are penalized by the IRS for paying or filing their payroll taxes incorrectly. That’s a pretty high percentage, and at approximately $850 a year in penalties, doing your own small business payroll processing might not be as cost effective as if you had a specialist do it for you. Payroll outsourcing companies such as Online Business Payroll automatically calculates, pays, and files your small business payroll taxes for you. Because of the automated process, you’ll never be late or miss a payment or filing.

3. Outsourced Payroll is Easy

Payroll processing done through an outsourced small business payroll service is easy to use. Although setting up your employees could take a few minutes, the actual payroll run can be done in just a few minutes.

Just log into your outsourced payroll service’s secure online portal and enter in the hours each employee worked during the pay period. After you enter in your employees’ hours, review the information, and click submit. Your payroll is done.

4. Outsourced Payroll Takes Care of W-2 and 1099 Forms for You

At the end of the year, small business owners must give their employees either a W-2 form or a 1099 form by January 31st of the following year. W-2s are forms that let employees know how much money they earned as well as how much federal, state, and local taxes were withheld during the year. Form 1099 is for independent contractors who you paid more than $600 to during the year.

Not only do you need to give these forms to your employees and independent contractors, but you also have to file certain forms with the IRS. Again, if you don’t know what you’re doing, this could cost you in IRS penalties.

Outsourced payroll companies keep track of this information and file it for you. At paperless companies such as Online Business Payroll, small business owners can print W-2s and 1099 forms for their employees right on the spot. Small business owners are able to get tax forms to their employees faster by being able to print these documents for them, rather than employees waiting for their tax forms to arrive in the mail.

5. Outsourcing Payroll Services Let You Maintain Control

Most outsource payroll services, allow you to maintain control over your payroll while taking care of the tough payroll tax calculations in the background. Outsourcing your payroll is a beneficial relationship because it allows you to stay in compliance with tax laws, but also allows you to focus on your business instead of trying to become an expert in payroll processing.

Entering your payroll information online allows for you to maintain control of your payroll processing and helps eliminate double entries or typing mistakes often associated with calling or faxing in your payroll information to a customer representative. You enter it, you review it, you approve it –you’re always in control of your small business payroll processing.

6. First Month Free

The best thing about using an outsourced payroll service is a lot of companies allow you to try their service for free. You have nothing to lose, why not give outsourcing a try.