Accountant Lingo & Finding the Right Accountant

In last month’s blog, we covered the benefits of having an accountant and what the difference is between CPAs, accountants, and bookkeepers. Now the question is “Where do I even start when looking for the right accountant?” Everything in the accounting realm can be confusing at first or it may simply take up too much of your time. Gaining an understanding of basic terms in accounting may help you feel more secure in your business and even help you find the right accountant.

Finding the right Accountant

If you’re considering an accountant, you may have no idea where to start. A good place to start is overall communication and guidance. Having an accountant should be a vital part of your team and they should be willing to work with you and help you really understand the money side of your business. This means detailing the explanations for any questions you may have and teaching you aspects of money handling so you are able to do some things on your own later on (if needed/desired.) Having good communication goes in hand with availability. Having someone you can never get ahold of can make it frustrating for you in the long run. Remember that relationships are a two way street and everyone should have a good relationship that works for both parties.

Although there are many questions to consider asking an accountant before you hire them; we are only going to review a few that will aid in finding the right accountant for you. Are they willing to teach you about finances and do they offer additional consulting if needed? Do they offer standard packages or can they customize services based on your needs? Are they able to help with 1099s and any further subcontractor needs? Do they have any specialities? When looking at bigger firms it may also be worthwhile to ask if they outsource any of their work or if they perform it personally and if they don’t perform it personally, will the person you deal with change? Will you get a regular person to discuss your finances with?

After hiring an accountant, you’ll want to really dig deep and work towards the best financial plan you can for your business. Here are some things to think about when deciding what you need. For one, contemplate what taxes you’ll need done and what records you need to keep for filing and in case of audits. Whether you do or don’t know what taxes need to be done for your business, an accountant can help you figure it out or even file for you (in most cases.) Next, you’ll want to work with them to better manage your cash flow and know your breakeven point. A break-even point is when sales and expenses are equal. It’s essential to know your break-even point because it can help you figure out a pricing strategy and make your budget more accurate. Working with an accountant should improve your business by figuring out what changes your business needs.

Understanding common terms in Accounting

When you’re new to the accounting world, there are many terms that you may be lost on. Although your accountant should be willing and able to review any terminology you don’t understand, learning some of the basic accountant lingo for yourself can be beneficial to helping you grasp more of the financials of your business. Let’s begin with assets and liabilities. Assets and liabilities show how much your business is worth. Assets are property (either tangible or intangible) that adds value to your business. Assets could include things like inventory, (paid off) vehicles, and even your brand value. Liabilities are any long-term or short-term monies your business owes. Examples of liabilities include credit card payments, bank fees, and loans. Additionally, accounts receivable is an asset while your accounts payable is a liability. Accounts receivable (AR) is the money you owe to any person/vendor while accounts payable (AP) is the exact opposite (so money owed to you by people/vendors).

Another thing you’re going to see or hear about a lot is P/L reports and the balance sheet. P/L stands for Profit and Loss. A P/L report is a report showing all the expenses and income you had in a certain period of time. The balance sheet shows the business as it currently stands including all assets, liabilities, and equity. Equity is money remaining after all liabilities are gone and all assets sold. It basically shows the owner(s)/investor(s) stake in the company. Just like there are different types of assets and liabilities, there are also different types of equity in a business. You can run both P/L reports and balance sheet reports by month, week, yearly, or any other custom setting to find a time you’re looking for.

Accountants and all their terms

Knowing what you’re looking for in an accountant can elevate your business even higher. Don’t forget to check out last month’s blog for all the reasons why having an accountant is valuable in your business! Additionally, having a basic understanding of frequently used accounting terms helps you better understand the money going through your business and further your involvement in your finances with your accountant.

Accountants vs. CPAs vs. Bookkeepers

Accountants, CPAs, and bookkeepers- We’re sure that you hear these words all the time. In the world of accounting, these titles are often bounced around and sometimes interchangeably. Even though they all do many of the same tasks, they are different and it’s important to know their differences.

Accountants, CPAs, and Bookkeepers – What’s the difference?

Let’s start with bookkeepers. Bookkeepers are usually the basis for accounting in business. There is no formal training required to become a bookkeeper and they typically work under accountants. Bookkeepers handle the daily financial transactions and usually other tasks like: payroll, loan payments, creating invoices, and billing. They also create financial reports that an accountant can then review with a client. So onto accountants, accountants can do everything a bookkeeper does but they also have other responsibilities. Primarily, they are there to help with long-term financial planning and any other financial consulting advice. This means that atop of overseeing bookkeeping tasks, they can: create and review budgets, correct any accounting discrepancies, calculate tax liabilities, and give tax advice. Finally, we have CPAs. CPAs are also known as certified public accountants. They can do any tasks that a bookkeeper or accountant can do but CPAs are the only ones who work with the IRS which means they are the only ones that can file yearly taxes for you. Not all accountants are CPAs but all CPAs are accountants. This is because in order to become a CPA, one must have a bachelor’s degree in accounting, a certain amount of hours under a CPA (hours dependent on the state), and pass the CPA exam.

It may be time to consider hiring a professional if your taxes are too complex, accounting is taking up too much of your time, or if the business is growing up. When it comes to choosing the right professional for you, most people go with an accountant. This is because accountants are usually more cost-effective than a CPA and more often than not, they already work with a bookkeeper. Although this does mean you still have to have someone file your end of the year taxes (or you can do it yourself), it can make it a lot easier when you have an accountant who is taking care of your books all year.

The benefits of Accountants

Many of us love to save money any way we can by doing things ourselves. If your business is small enough, this may not be a problem when it comes to accounting for you. In general though, it is always a good idea to have an accountant for your company. For starters, having an accountant can actually save you money because they can let you know where money is being overspent and what software/programs could save you when doing payroll, inventory, and more. Not having immense knowledge in accounting could also cost you more when it comes to taxes. Common reasons people lose more money in taxes is because they file late, miscalculate their tax bill, or lose out on tax breaks by not claiming them. Next, one of the biggest upsides to having an accountant is that they save you time. If you make any mistakes, it could take hours to fix that could be avoided or handled by an accountant. Also, when you have more time, you can focus on generating more sales or simply putting more time into needed areas of your business. Furthermore, many people use their free time at home to crunch numbers and do all their accounting. This free time could now be used to focus on their families even more or their personal life in general. After this, having a long-term accountant comes with its own set of advantages. If your accountant has been in the industry for a long time, they usually have a vast network of different business professionals. This means that the accountant may have more knowledge on your profession and if they don’t, they can reach out to a specialist in their network and get the help they need to help you. Finally, as the accountant learns more about your books, they become a specialist for your business. They will start to see trends, places to improve, and what could be damaging if continued. They grow with your business and will be able to better predict how new products (or other big business changes) will affect your business.

In Summary

No matter what accounting professional you choose, spend time picking the right one as they save you time, money, and peace of mind!

Advertising & Marketing For You and Your Business

When it comes to owning a business, or even trying to branch out as yourself, everyone knows that you must do some advertising and marketing. Though this can feel like a daunting task, it doesn’t have to be! There’s a multitude of ways to advertise yourself and your business whether it be for free or if you have the freedom to spend a little cash.

Marketing Yourself

Before we start with advertising your business, it’s important you market yourself just as well! As a business owner, the way you present yourself has an impact on your business. Even if you are not a business owner, it’s just as important to create a good name for yourself. First and foremost, you want to be yourself! Being authentic allows those similar to you to find you and gives way to the kind of company you want to be a part of/are a part of. Next, become a master in your field. Although a big part of being a professional in a job comes with experience, you can still take time to study, read, or even watch videos about different topics in your field. Having a wide range of knowledge and lesser known information in your field can give better insight to more problems and helps you to stand out from everyone else.

In our digital age, social media is a necessity that can expand you (and your business) anywhere you want it to go! If you are creating a new social media, there are various choices in picking the right platform, so think about your target audience and what you think will reach them best. Stay true to yourself as customers will be more likely to bond with you/your company when they see a genuine side to you. Another way to stay online is to join an online community. This may help you expand out more and/or learn more from others all over. Outside of the digital world, don’t be afraid to network! Going to tradeshows, local events, or skill workshops can open an opportunity to meet like-minded people and talk about you and your business even more.

Advertising your Business

When it comes to advertising for your business, there are many ways to make your business more distinguishable than the rest. For starters, everything begins with a quality website. Even though having a website will usually cost you money, it is a must have expense. Websites are your home base for everything; it shows what your business has to offer, ways to reach out to you, and gives an idea of what your company is like. In your website, consider creating a blog. The blog should center around answering questions or giving advice to certain topics that are in your field. Having a blog grants the opportunity for more clients to find you when searching for information related to what you’re writing. This is because search engines pull keywords from the text you write; so the more you write, the more likely you are to be seen. According to a study done by First Page Sage, consistent publication of high-quality content is the number one factor in high search engine optimization (SEO). Additionally, think about having an email marketing campaign. You can send your blogs out in the email campaign or simply update customers on the newest things that are happening. Don’t forget to add a call to action in your emails! A call to action prompts customers to get in touch with you quickly and efficiently about any questions, comments, or concerns they may have.

Earlier we brought up SEO. SEO can be extremely beneficial as a means for free advertising for your company. There are a considerable amount of ways to improve SEO as it is a collection of different algorithms that improve your ranking on Google. One way to help improve SEO is to make sure you fill out every category on your Google’s business page with the most important being your company’s name, address, and phone number. Furthermore, creating a (free) Google My Business account will allow you to verify your business page on Google, increasing your SEO as well. Another way to boost SEO is to create listings on major directories. Directories show off your business’s contact information. By adding yourself into the larger ones, the lesser known ones will automatically pull information from the bigger ones; thus, your business will show up in more places. Some examples of free and large directories include: Yelp, Bing, and the Better Business Bureau. Bear in mind, there are multiple ways to increase your SEO and it takes time to increase so don’t stress if it doesn’t all change immediately!

Now that we’ve talked about quite a few ways to advertise for free (for the most part), there are a few ways to advertise by spending some money. First off, and the most straightforward, Google, YouTube, and Facebook Ads. In Google, this puts you above organic listings; automatically giving you a headstart in advertising. Next, creating promotional merchandise can have a profound effect on your company. In a study done by the British Promotional Merchandise Association, 77% people said they appreciate promotional merchandise with 78% of people keeping their merchandise for a long time. When creating merchandise, keep in mind that you will want these products to serve your target audience well. Also, take into consideration if these items will be reusable or if they are eco-friendly as these factors impact customers. In addition to handing out promotional merchandise, you could also host giveaways or competitions to win them instead. This gets the word to spread about your business and creates excitement within your community.

In what other ways is advertising important?

Advertising is more than just how many sales you can bring in. It helps to inform customers of your products/services and introduces new products/services as well. Advertising influences the way people see your business too. By showing your values and having a strong mission statement, this enhances customer trust and magnifies your business’s identity. As your business grows and your advertising reaches more people, this makes it easier to monitor supply & demand as well as see your target audience more clearly. Last but not least, working for a business that is well received and talked about will make employees feel good about their jobs. All of this boosts employee morale and means employees are more likely to spread the word about their company.

Advertising and Marketing Comes in Many Forms

In regards to advertising and marketing, there are numerous ways to make your business stand out from all the rest! Don’t forget to check out the following blogs, from us: Business Models & Their Importance, Social Media Presence, and Kindness & Its Value In Your Business, as they tie into many things we talked about earlier. (Having a target audience, social media tips and why it’s important, and why having high employee morale is important alongside the significance of reviews!)