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Mike P - Green background
Michael Pignatelli, CPA
CEO, Unloop

Category: Accounting

Human resources (HR) and accounting might be two different worlds inside a company, but when you look closely, they are extremely intertwined. Knowing the relationship between the two is the difference between a low to mid-performing company and a successful one. When it comes to running a successful business, it’s no secret that a quality accounting and HR system are keys.

Peachtree’s complete accounting software, named Sage 50cloud (we’ll use Sage/Peachtree interchangeably moving forward), has provided companies with the tools and bookkeeping and accounting insights for over three decades. This program is ideal for small and medium businesses because of its exceptional HR features. Let's dive into why it's one of the best options available!

  1. Peachtree Accounting Software Allows Access to Employee Information

When you search “How to use Peachtree accounting software,” the first answers you will get are about management of accounts payable, account receivable, invoices, and documents related to your company finances. But the Sage software is more than that. With its Core HR feature, it also stores all basic and confidential information about your employees.

Core HR serves as a digital bulletin, so everyone who has access to it is updated about their company. Business policies and organizational charts are easily viewable because they are all stored on Sage/Peachtree.

  1. Sage 50cloud Shows Employee Schedules in One Place

Without the help of an HR team, a company’s schedule will always lean towards accommodating sales and clients, regardless of how exhausting it is for the workforce. Thankfully, through a partnership of the accounting and HR team, you can have a balanced schedule that covers peak hours while ensuring staff wellness. 

Sage 50cloud’s HR feature shows every employee’s schedule in a single place, whether the staff is working in-house, freelance, outsourced, or in a hybrid setup. In case of schedule adjustments to cover business needs, you can update the software quickly with a few clicks. After any change, everybody can have the most updated version of the schedule right away.

  1. Peachtree Accounting Software Enables Convenient Leave Filing

Filing leaves is more than just a scheduling issue. In a manager's eye, a schedule change means an adjustment in the quota or in the goals of other team members. Hence, vacations are both an HR and finance matter.

Thankfully, members of concerned departments can be on the same page as Sage/Peachtree accounting software shows the sales trends and forecasts, as well as everybody’s schedule. 

This way, team members are encouraged to take a leave on non-peak days. When leaves occur on busy days, the HR and accountant can adjust goals guided by data on the software.

  1. Sage/Peachtree Records Employee Rendered Time

The world has evolved, redefining work to more than just the four corners of the office and taking it in coffee shops, at home, and anywhere there is an internet connection. 

What developed with it are the different ways to track employee work time. Biometric attendance machines await office-based workers, while online time recorders are installed on desktops, laptops, and even phones allowing users to complete tasks outside the office.

Integrate these different time tracking apps into the Peachtree system, so all the data is in one place. HR can easily monitor hours rendered, and the accounting team can translate the hours into employees’ salaries.

  1. Peachtree Manages Individual and Team Performance 

The Peachtree software stores both company finances and workforce details. Hence, it is also reliable for seeing individual, team, and company performance. You can utilize these data:

  • Sales: This shows employee productivity.
  • Employee Tenure: The experience that can affect one’s contributions and achievements.
  • Team Managers: Leaders that affect an individual and team's performance.
  • Engagement: An individual and team’s performance can also be defined by how engaged they are in what they do.
  • Incentives and Recognitions: Recognitions and other rewards motivate employees to reach goals.
  • Turnover Rate: High turnover rates can affect workforce morale.
  • New Hires: The learning curve that new hires face regarding company processes and plans affect team production.

You can determine what motivates or demotivates workers by including these indicators that affect each other. You can address the roadblocks and continue best practices to reach company goals.

  1. Sage 50cloud Makes Recruitment Visible

Finally, the Peachtree accounting software also gives you recruitment visibility. HR's role is to check whether the applicant is a perfect fit for the qualifications set by the management team. But, HR also needs to check if the applicant can adjust or can fit the company’s culture. Studies have shown that employees who are enculturated perform better. A mix of excellent skill and adjustment to the company culture works miracles in employee productivity, motivation to reach goals, and the way they care for clients.

Final Thoughts

Peachtree is an enterprise resource planning software that has a lot to offer like advanced budgeting, billing, monitoring of financial transactions, cloud-connected features, and more! But with the six reasons mentioned above, it is clear why Peachtree Accounting is the most human-friendly software. 

So if you are asking, “How much does Peachtree accounting software cost?” and “Is it worth the investment?” Our answer is a resounding yes!If you need a team of experts to do bookkeeping and accounting for you, do not hesitate to give Unloop a call! Our bookkeeping and accounting services are just what your small business needs.

6 Reasons Peachtree Accounting Is Also a Human Resource-Friendly Software
Watch Now

Human resources (HR) and accounting might be two different worlds inside a company, but when you look closely, they are extremely intertwined. Knowing the relationship between the two is the difference between a low to mid-performing company and a successful one. When it comes to running a successful business, it’s no secret that a quality accounting and HR system are keys.

Peachtree’s complete accounting software, named Sage 50cloud (we’ll use Sage/Peachtree interchangeably moving forward), has provided companies with the tools and bookkeeping and accounting insights for over three decades. This program is ideal for small and medium businesses because of its exceptional HR features. Let's dive into why it's one of the best options available!

  1. Peachtree Accounting Software Allows Access to Employee Information

When you search “How to use Peachtree accounting software,” the first answers you will get are about management of accounts payable, account receivable, invoices, and documents related to your company finances. But the Sage software is more than that. With its Core HR feature, it also stores all basic and confidential information about your employees.

Core HR serves as a digital bulletin, so everyone who has access to it is updated about their company. Business policies and organizational charts are easily viewable because they are all stored on Sage/Peachtree.

  1. Sage 50cloud Shows Employee Schedules in One Place

Without the help of an HR team, a company’s schedule will always lean towards accommodating sales and clients, regardless of how exhausting it is for the workforce. Thankfully, through a partnership of the accounting and HR team, you can have a balanced schedule that covers peak hours while ensuring staff wellness. 

Sage 50cloud’s HR feature shows every employee’s schedule in a single place, whether the staff is working in-house, freelance, outsourced, or in a hybrid setup. In case of schedule adjustments to cover business needs, you can update the software quickly with a few clicks. After any change, everybody can have the most updated version of the schedule right away.

  1. Peachtree Accounting Software Enables Convenient Leave Filing

Filing leaves is more than just a scheduling issue. In a manager's eye, a schedule change means an adjustment in the quota or in the goals of other team members. Hence, vacations are both an HR and finance matter.

Thankfully, members of concerned departments can be on the same page as Sage/Peachtree accounting software shows the sales trends and forecasts, as well as everybody’s schedule. 

This way, team members are encouraged to take a leave on non-peak days. When leaves occur on busy days, the HR and accountant can adjust goals guided by data on the software.

  1. Sage/Peachtree Records Employee Rendered Time

The world has evolved, redefining work to more than just the four corners of the office and taking it in coffee shops, at home, and anywhere there is an internet connection. 

What developed with it are the different ways to track employee work time. Biometric attendance machines await office-based workers, while online time recorders are installed on desktops, laptops, and even phones allowing users to complete tasks outside the office.

Integrate these different time tracking apps into the Peachtree system, so all the data is in one place. HR can easily monitor hours rendered, and the accounting team can translate the hours into employees’ salaries.

  1. Peachtree Manages Individual and Team Performance 

The Peachtree software stores both company finances and workforce details. Hence, it is also reliable for seeing individual, team, and company performance. You can utilize these data:

  • Sales: This shows employee productivity.
  • Employee Tenure: The experience that can affect one’s contributions and achievements.
  • Team Managers: Leaders that affect an individual and team's performance.
  • Engagement: An individual and team’s performance can also be defined by how engaged they are in what they do.
  • Incentives and Recognitions: Recognitions and other rewards motivate employees to reach goals.
  • Turnover Rate: High turnover rates can affect workforce morale.
  • New Hires: The learning curve that new hires face regarding company processes and plans affect team production.

You can determine what motivates or demotivates workers by including these indicators that affect each other. You can address the roadblocks and continue best practices to reach company goals.

  1. Sage 50cloud Makes Recruitment Visible

Finally, the Peachtree accounting software also gives you recruitment visibility. HR's role is to check whether the applicant is a perfect fit for the qualifications set by the management team. But, HR also needs to check if the applicant can adjust or can fit the company’s culture. Studies have shown that employees who are enculturated perform better. A mix of excellent skill and adjustment to the company culture works miracles in employee productivity, motivation to reach goals, and the way they care for clients.

Final Thoughts

Peachtree is an enterprise resource planning software that has a lot to offer like advanced budgeting, billing, monitoring of financial transactions, cloud-connected features, and more! But with the six reasons mentioned above, it is clear why Peachtree Accounting is the most human-friendly software. 

So if you are asking, “How much does Peachtree accounting software cost?” and “Is it worth the investment?” Our answer is a resounding yes!If you need a team of experts to do bookkeeping and accounting for you, do not hesitate to give Unloop a call! Our bookkeeping and accounting services are just what your small business needs.

Read more

Maintaining your company's finances is one of the hardest things about running a business. You have to keep many records in doing so, and most startup business owners only know how to keep their books clean. But is bookkeeping the same as accounting?

Here's the difference between bookkeeping and accounting, the different types of bookkeeping and accounting, and how they can help your business.

Is Bookkeeping and Accounting the Same Thing?

Since they both involve caring for a company's finances, many mistake bookkeeping and accounting to be the same. However, they are vastly different. Bookkeeping is collecting and filing a business entity's financial transactions, while accounting is evaluating financial information for that entity or organization.

While both deal with records, bookkeeping and accounting are completely different tasks. Knowing the difference between bookkeeping and accounting will allow you to properly section your business’s financial records and provide reliable references when you need to make a decision.

If you’re running a business and struggling with your own bookkeeping and accounting, then it’s probably because you’re lacking a few steps to do those tasks properly. Here are the tasks that make up bookkeeping and accounting and how doing them can benefit your business. 

Types of Accounting

Depending on your company's financial situation, you can perform accounting in two ways: cash-basis or accrual.

Cash-Basis

Cash-basis accounting is a type of accounting that bases the company's financial situation on its immediate transactions. In cash-basis accounting, you record how much money goes directly into your business and how much you spend on expenses, and figure out your net profit from there.

When accounting on a cash basis, you don't include delayed payments as part of your company's cash flow, making this method more limited than accrual accounting.

Accrual Accounting

Accrual accounting, on the other hand, is a type of accounting that accounts for all assets and liabilities of a company. In this type of accounting, sales that have not been fulfilled yet are also included in the cash flow while also keeping track of expenses that have not yet been fulfilled. 

With accrual accounting, you are given the whole picture of your company's financial situation. And with fulfilled and unfulfilled payments included in your company's financial data, you can make long-term plans for your financial transactions and better understand your company's overall financial health.

Here are a few examples of accruals.

Accrued Revenues

Accrued revenue is the money companies are expected to receive even before payment. Once revenue has been earned, a company’s accounting considers it the company’s money.

Deferred Revenues

Deferred revenue is the money a company receives for goods or services even before they have fulfilled their client’s demands. When a business makes deferred revenues, the amount is usually postponed from being included in a company’s revenue until the client’s demands have been met.

Accrued Income

Accrued income is profit earned before payment. Unlike accrued revenue, accrued income is a company’s net profit. Accounting for accrued income does not include expenses attached to the sale of the goods or services that provided the income.

Accrued Expenses

Accrued expenses, on the other hand, is the amount of money a company owes. When companies make loans or make purchases with long-term payment schedules, the company logs these expenses regardless of whether or not they fit the same accounting period.

Accounts Receivable

Accounts receivable is the amount of money a company expects to be paid. What makes accounts receivable different from accrued income is that invoices have already been sent for the money in accounts receivable, giving the company a concrete timeframe of when they expect to get the money.

Accounts Payable

Accounts payable is the amount of money a company owes to other people or businesses when they make purchases from them (in the form of goods or services).

Accounting Tasks

Since bookkeeping and accounting are not the same, here are some tasks accountants do that are not part of a bookkeeper's day.

Financial Statements

One of an accountant's biggest responsibilities is to make financial statements. Financial statements provide the company with an overview of its finances, which help its owners to make important decisions.

Some financial statements are:

  • Income statement
  • Balance sheet
  • Statement of financial position
  • Statement of change in equity
  • Cash flow statement

Forecasting

From the financial data, accountants then make forecasts of a company's projected financial position. Financial forecasts are valuable to business owners since it gives them a bigger idea of their company's financial standing, both in the present and moving forward.

Tax Returns

It is every business owner's legal obligation to pay their taxes, but not every business owner knows the ins and outs of tax policy. For this, you need the valuable expertise of accountants.

An accountant will be in charge of your tax preparation, tax filings, and eventually, your tax returns, so you can worry less about your business's standing with the government and focus more on growing your business.

Types of Bookkeeping

Even though bookkeeping is much simpler than accounting, there are still two ways to do it: single-entry and double-entry bookkeeping.

Single-Entry Bookkeeping

In the simplest sense, bookkeeping for startups can just mean jotting down expenses and evening them out at the end of the week with your sales. This type of bookkeeping is called single-entry bookkeeping, which tracks only how much money goes in and out of your company without diving into the specifics.

While acceptable for small business owners, single-entry bookkeeping can leave much room for error, especially in financial reports. For example, since it lacks data, single-entry bookkeeping cannot produce a balance sheet. You'll also have difficulty doing your taxes since the IRS does not allow single-entry bookkeeping to be used as a record for tax returns.

Double-Entry Bookkeeping

Double-entry bookkeeping is much more complicated, but it will be able to give you much more accurate financial reports. In double-entry bookkeeping, transactions are entered twice, once each for different accounting tools: debit and credit.

For example, if you make a loan, single-entry bookkeeping will label it as income. However, the interest attached to that loan will also become an expense. On the other hand, if you enter a loan in double-entry bookkeeping, the system will label it as a debit, which is a liability more than an asset.

Double-entry bookkeeping can provide you with much more accurate financial reports and, since it logs debit and credit, can also provide your company with a balance sheet.

Bookkeeping Tasks

Bookkeeping is a daily job; you must leave no financial transactions unrecorded. Otherwise, it could damage the integrity of your company's finances. Here are some bookkeeping tasks and how often you should do them.

Weekly Bookkeeping Tasks

Record Transactions

At the end of the week, you should log your company's transactions—any sales, expenses, and invoices—so you have a steady record coming into the next week. You can do this on a journal or spreadsheet, although it would be advisable to have your records on a computer rather than exposed in a ledger.

Label Transactions

Of course, it's not enough to count the money that goes in and out of the company; you'll have to label them, too. Marking which transactions are which can add context to your financial records, making it easier to double-check your financial records in hindsight.

File and Go Digital

Once you've logged your company's financial records for the week, you should file them properly. Most companies have storage rooms just for financial records since they pile up so quickly.

You should also consider going digital with your records since physical copies are easy to tamper with and could get destroyed. Once your financial records are damaged, lots of trouble could follow. This task is easier for ecommerce companies that usually get digital receipts.

Monthly Bookkeeping Tasks

Reconcile Accounts

Reconciling accounts is one good way of maintaining your company's financial integrity. Reconciling your accounts can fish out any inconsistencies in your company's accounting, which could single out any attempts of fraud or theft within a company.

Prepare and Follow Up Invoices

Once your business expands, it's normal not to have all payments land in your account at once. Sometimes you'll have to follow up. Every month, you must review your company's receivables and prepare payment invoices according to schedule. Other times, you'll have to follow up on customers so they pay your business.

Pay Bills

Of course, no business comes without any expenses. Since most bills come monthly, you'll have to close these accounts at a monthly period as well. Settle your bills regularly, so your company doesn't fall into debt.

Evaluate Finances

Once the dust has settled, it's important you take a look at your company's financial situation to make decisions moving forward. If you had made plans beforehand, take the most recent accounting into consideration and adjust your company's goals accordingly.

Leave Financial Management to Unloop

Having a rough time accounting for your company's finances is completely understandable. After all, as a business owner, you've got so much more on your mind—like the company itself. Spending all your efforts on just one part of the business would be a waste of time.
So leave the accounting to us; we offer all types of accounting services, such as bookkeeping, accounts payable, forecasting, payroll, and tax. Book a call now, and see how Unloop can keep your business on the right track!

Accounting FAQs: Is Bookkeeping the Same As Accounting?
Watch Now

Maintaining your company's finances is one of the hardest things about running a business. You have to keep many records in doing so, and most startup business owners only know how to keep their books clean. But is bookkeeping the same as accounting?

Here's the difference between bookkeeping and accounting, the different types of bookkeeping and accounting, and how they can help your business.

Is Bookkeeping and Accounting the Same Thing?

Since they both involve caring for a company's finances, many mistake bookkeeping and accounting to be the same. However, they are vastly different. Bookkeeping is collecting and filing a business entity's financial transactions, while accounting is evaluating financial information for that entity or organization.

While both deal with records, bookkeeping and accounting are completely different tasks. Knowing the difference between bookkeeping and accounting will allow you to properly section your business’s financial records and provide reliable references when you need to make a decision.

If you’re running a business and struggling with your own bookkeeping and accounting, then it’s probably because you’re lacking a few steps to do those tasks properly. Here are the tasks that make up bookkeeping and accounting and how doing them can benefit your business. 

Types of Accounting

Depending on your company's financial situation, you can perform accounting in two ways: cash-basis or accrual.

Cash-Basis

Cash-basis accounting is a type of accounting that bases the company's financial situation on its immediate transactions. In cash-basis accounting, you record how much money goes directly into your business and how much you spend on expenses, and figure out your net profit from there.

When accounting on a cash basis, you don't include delayed payments as part of your company's cash flow, making this method more limited than accrual accounting.

Accrual Accounting

Accrual accounting, on the other hand, is a type of accounting that accounts for all assets and liabilities of a company. In this type of accounting, sales that have not been fulfilled yet are also included in the cash flow while also keeping track of expenses that have not yet been fulfilled. 

With accrual accounting, you are given the whole picture of your company's financial situation. And with fulfilled and unfulfilled payments included in your company's financial data, you can make long-term plans for your financial transactions and better understand your company's overall financial health.

Here are a few examples of accruals.

Accrued Revenues

Accrued revenue is the money companies are expected to receive even before payment. Once revenue has been earned, a company’s accounting considers it the company’s money.

Deferred Revenues

Deferred revenue is the money a company receives for goods or services even before they have fulfilled their client’s demands. When a business makes deferred revenues, the amount is usually postponed from being included in a company’s revenue until the client’s demands have been met.

Accrued Income

Accrued income is profit earned before payment. Unlike accrued revenue, accrued income is a company’s net profit. Accounting for accrued income does not include expenses attached to the sale of the goods or services that provided the income.

Accrued Expenses

Accrued expenses, on the other hand, is the amount of money a company owes. When companies make loans or make purchases with long-term payment schedules, the company logs these expenses regardless of whether or not they fit the same accounting period.

Accounts Receivable

Accounts receivable is the amount of money a company expects to be paid. What makes accounts receivable different from accrued income is that invoices have already been sent for the money in accounts receivable, giving the company a concrete timeframe of when they expect to get the money.

Accounts Payable

Accounts payable is the amount of money a company owes to other people or businesses when they make purchases from them (in the form of goods or services).

Accounting Tasks

Since bookkeeping and accounting are not the same, here are some tasks accountants do that are not part of a bookkeeper's day.

Financial Statements

One of an accountant's biggest responsibilities is to make financial statements. Financial statements provide the company with an overview of its finances, which help its owners to make important decisions.

Some financial statements are:

  • Income statement
  • Balance sheet
  • Statement of financial position
  • Statement of change in equity
  • Cash flow statement

Forecasting

From the financial data, accountants then make forecasts of a company's projected financial position. Financial forecasts are valuable to business owners since it gives them a bigger idea of their company's financial standing, both in the present and moving forward.

Tax Returns

It is every business owner's legal obligation to pay their taxes, but not every business owner knows the ins and outs of tax policy. For this, you need the valuable expertise of accountants.

An accountant will be in charge of your tax preparation, tax filings, and eventually, your tax returns, so you can worry less about your business's standing with the government and focus more on growing your business.

Types of Bookkeeping

Even though bookkeeping is much simpler than accounting, there are still two ways to do it: single-entry and double-entry bookkeeping.

Single-Entry Bookkeeping

In the simplest sense, bookkeeping for startups can just mean jotting down expenses and evening them out at the end of the week with your sales. This type of bookkeeping is called single-entry bookkeeping, which tracks only how much money goes in and out of your company without diving into the specifics.

While acceptable for small business owners, single-entry bookkeeping can leave much room for error, especially in financial reports. For example, since it lacks data, single-entry bookkeeping cannot produce a balance sheet. You'll also have difficulty doing your taxes since the IRS does not allow single-entry bookkeeping to be used as a record for tax returns.

Double-Entry Bookkeeping

Double-entry bookkeeping is much more complicated, but it will be able to give you much more accurate financial reports. In double-entry bookkeeping, transactions are entered twice, once each for different accounting tools: debit and credit.

For example, if you make a loan, single-entry bookkeeping will label it as income. However, the interest attached to that loan will also become an expense. On the other hand, if you enter a loan in double-entry bookkeeping, the system will label it as a debit, which is a liability more than an asset.

Double-entry bookkeeping can provide you with much more accurate financial reports and, since it logs debit and credit, can also provide your company with a balance sheet.

Bookkeeping Tasks

Bookkeeping is a daily job; you must leave no financial transactions unrecorded. Otherwise, it could damage the integrity of your company's finances. Here are some bookkeeping tasks and how often you should do them.

Weekly Bookkeeping Tasks

Record Transactions

At the end of the week, you should log your company's transactions—any sales, expenses, and invoices—so you have a steady record coming into the next week. You can do this on a journal or spreadsheet, although it would be advisable to have your records on a computer rather than exposed in a ledger.

Label Transactions

Of course, it's not enough to count the money that goes in and out of the company; you'll have to label them, too. Marking which transactions are which can add context to your financial records, making it easier to double-check your financial records in hindsight.

File and Go Digital

Once you've logged your company's financial records for the week, you should file them properly. Most companies have storage rooms just for financial records since they pile up so quickly.

You should also consider going digital with your records since physical copies are easy to tamper with and could get destroyed. Once your financial records are damaged, lots of trouble could follow. This task is easier for ecommerce companies that usually get digital receipts.

Monthly Bookkeeping Tasks

Reconcile Accounts

Reconciling accounts is one good way of maintaining your company's financial integrity. Reconciling your accounts can fish out any inconsistencies in your company's accounting, which could single out any attempts of fraud or theft within a company.

Prepare and Follow Up Invoices

Once your business expands, it's normal not to have all payments land in your account at once. Sometimes you'll have to follow up. Every month, you must review your company's receivables and prepare payment invoices according to schedule. Other times, you'll have to follow up on customers so they pay your business.

Pay Bills

Of course, no business comes without any expenses. Since most bills come monthly, you'll have to close these accounts at a monthly period as well. Settle your bills regularly, so your company doesn't fall into debt.

Evaluate Finances

Once the dust has settled, it's important you take a look at your company's financial situation to make decisions moving forward. If you had made plans beforehand, take the most recent accounting into consideration and adjust your company's goals accordingly.

Leave Financial Management to Unloop

Having a rough time accounting for your company's finances is completely understandable. After all, as a business owner, you've got so much more on your mind—like the company itself. Spending all your efforts on just one part of the business would be a waste of time.
So leave the accounting to us; we offer all types of accounting services, such as bookkeeping, accounts payable, forecasting, payroll, and tax. Book a call now, and see how Unloop can keep your business on the right track!

Read more

Accounts payable is a powerful leverage. It helps businesses purchase goods and sell them for profit without upfront cash outlay.

Using accounts payable helps small businesses grow fast. It allows companies to cover demand surges and boost production using suppliers' resources. These credit purchases free up liquid assets, enabling firms to allocate more to other business activities such as investing or financing. 

But purchasing on credit challenges your money management skills. With every accounts payable transaction comes a promise to pay within a short timeframe. So to maintain goodwill and grow your business, you must know the challenges that come with it. 

Unloop knows those challenges. Let us break it down and give you tips on how to set up an efficient accounts payable system that can run on autopilot.

Common Credit Challenges Small Businesses Face

Managing accounts payable is one of the pain points of businesses. Whatever industry you're in, and no matter what size, as long as you purchase raw materials or merchandise on credit, you'll face these issues.

Invoicing Challenges

Whenever businesses send bills using the paper method, they face different challenges. Invoices can stack up on the file cabinets and get lost in the mix. Your staff will need to request another one from the supplier, which may result in duplicates that lead to issues in the accounts payable process down the road.

One solution to invoice challenges is having a good accounts payable software with an excellent invoice filing system. It will make invoice tracking easier.

Payment Discrepancies

A direct result of duplicate invoices is duplicate payments. If several people manage accounts payable bills, tracking payments becomes a challenge, leading to unnecessary cash outlay.

Aside from duplicate payments, incorrect and missing payments also happen. These payment discrepancies may seem insignificant in small doses, but they pile up over time and cause huge losses.

Improved accounts payable processes help reduce these payment issues. A system that you or an appointed staff manages makes accurate payments a norm in the business.

Unapproved Vendor Payments

In some cases, your staff have to pay impromptu bills. So they skip a few steps in the process, especially if it's time-sensitive. This action can fly under the radar and cause issues in the accounting and finance departments.

Unapproved payments can extend beyond vendors. If left unchecked, it can lead to other unauthorized expenses that can cost the business significantly in the long run.

You or your management staff can curb this from happening if you automate accounts payable and set up a centralized approval system.

Slow Processing Bills

Both traditional and ecommerce businesses need to be efficient. So in managing accounts payable, fast processing is vital for more timely supplier payments.

A slow accounts payable process results in a cash flow bottleneck. Your suppliers may postpone important transactions because of delays in expected cash inflow. This hold-up is detrimental to your supplier's business and to yours. They can impose a penalty when you're overdue, or you can lose your supplier completely.

Getting accounts payable automation software brings efficiency to the processing of your bill. It removes the manual paperwork process and connects accounts in a single place, allowing instant cash transfers.

accounting software for accounts payable - Invoices mailed using a smartphone

Factors To Look For When Choosing an Accounts Payable Software

You need software to address the common accounts payable challenges. But software must serve your needs, such as convenience and security. So when you're shopping for AP software, consider the following features.

Bulk Approval

The best accounts payable software lets you approve multiple bill payments at once. With bulk payment approvals, you or your manager can pay all selected invoices with a click of a button. This feature saves time, especially when your business operates with many credit purchases and pays many suppliers.

Wide Range of Payment Methods

For quick and timely payments, accounts payable software must be flexible. It has to accept a wide range of payment methods. This gives you more options to pay in case one isn't working out. You meet deadlines, and you maintain credibility.

Having a wide range of payment methods is helpful for international payments. It's perfect if you source suppliers outside the country. Plus, if the software can accommodate a range of payment methods, it may also receive the same from your buyers.

User-Friendly Interface

Part of what makes good AP software is having an easy-to-use interface. One way to tell is by exploring the software's dashboard—it must look simple and clean, with the essential details readily available.

Accessibility

Your AP automation software should be cloud-based. This feature makes it available to any laptop or desktop device worldwide. As long as you have an internet connection, you and your staff can manage your accounts payable instantly.

Accessibility also means being mobile-friendly. So choose an AP software that has a responsive interface. That way, you can have an equivalent mobile application as user-friendly as the one on desktop devices.

Integration-Ready

Accounts payable software must integrate into various application programming interfaces (API). You must be able to buff up your AP software by adding nifty features that make AP management easier.

Another excellent integration feature is if your accounts payable automation software can integrate into QuickBooks Online (QBO). If your accounts payable automatically sync to your accounting software's journals, that will carry significant weight off your workload.

Recommended Accounts Payable Software: Bill

Bill is our recommended software for ecommerce business owners selling in online marketplaces. We love it for the following reasons.

Ease of Documentation

Filing and documenting invoices is easier with Bill. You can make invoice exchanges by sending emails to your colleagues and suppliers. You can also store invoices in the software using your email.

Whether you have a physical or an electronic invoice, Bill makes it easy. You can use your smartphone to take a picture of a physical document. If you have an electronic one, you can upload it online.

What's excellent about Bill is the invoice automation feature. It uses AI assist that scans your document and inputs all the comprehensible details of your invoice.

Secure Collaborations

Bill allows multiple users to access the account. The software can handle various collaborations between owners, bookkeepers, and business staff. This makes it convenient for everyone to work on accounts payable discrepancies and payments.

To avoid unauthorized payments, approved administrators can choose the access level of Bill account users. You and your managers can restrict or allow certain functions, thereby preventing fraud or mismanagement.

Bank and Payment Reconciliations

Upon setting up your bank account, Bill uses ACH payment methods for faster transactions. Whenever there is debit and credit, the software syncs to your bank and updates the balance.

The software lets your vendors sync their bank accounts to Bill. This helps make more efficient payment processing because both the business and your vendor's bank account are connected to a platform.

Payment Tracking

The accounts payable software allows you to track payments in real time. You'll know the payment status and whether it's delayed, received, or cashed.

This feature is handy if you're used to using ACH or electronic fund transfers as modes of payment. You can estimate when the payment will clear and credit your supplier's bank account, letting you pay on time.

accounts payable software for small business - A businessperson look at an an invoice from a laptop screen

Recommended Accounting Software: QuickBooks Online

If you're using Bill as your AP automation software, we recommend combining it with QBO. It's an excellent accounting software for accounts payable. The two make a powerful combination that makes a robust accounts payable and accounting system. The data entry of complex AP transactions sync to your accounting books as it should, which makes for accurate financial reporting.

Fully Automate Your Accounts Payable

Having Bill and QBO for your business is having the right tools for an excellent accounts payable process. They both have features that partially automate processes such as invoice info entry and transaction sync. But this will take effort to run.

Why not fully automate your accounts payable (and accounting) process with the help of experts? They can do most of the work to give you the following benefits.

Timely Payments: Bookkeepers will determine how much you owe and when it is due so they can set it up for you.

One-Click Approval: Every due payment will be shown to you or your manager, ready for approval. Once approved, they start the payment process.

Best Exchange Rates: When making overseas payments, professionals can use the most cost-efficient forex rates to your business's advantage.

Maximize Your Accounts Payable Software for Small Businesses With Unloop

When it comes to accounts payable software, small businesses will benefit from Unloop. We are a team of bookkeepers and accountants with skills and experience in accounts payable management. We specialize in ecommerce businesses and have been using Bill and QBO to run ecommerce accounting systems efficiently.If you decide to get Bill and QBO, or if you already have a specific software in mind, you can trust that we'll maximize these tools to your business’s advantage. Book a call with us or check out our accounts payable services now.

Accounts Payable Software: Small Business Credit Challenges and the Tool That Fixes Them
Watch Now

Accounts payable is a powerful leverage. It helps businesses purchase goods and sell them for profit without upfront cash outlay.

Using accounts payable helps small businesses grow fast. It allows companies to cover demand surges and boost production using suppliers' resources. These credit purchases free up liquid assets, enabling firms to allocate more to other business activities such as investing or financing. 

But purchasing on credit challenges your money management skills. With every accounts payable transaction comes a promise to pay within a short timeframe. So to maintain goodwill and grow your business, you must know the challenges that come with it. 

Unloop knows those challenges. Let us break it down and give you tips on how to set up an efficient accounts payable system that can run on autopilot.

Common Credit Challenges Small Businesses Face

Managing accounts payable is one of the pain points of businesses. Whatever industry you're in, and no matter what size, as long as you purchase raw materials or merchandise on credit, you'll face these issues.

Invoicing Challenges

Whenever businesses send bills using the paper method, they face different challenges. Invoices can stack up on the file cabinets and get lost in the mix. Your staff will need to request another one from the supplier, which may result in duplicates that lead to issues in the accounts payable process down the road.

One solution to invoice challenges is having a good accounts payable software with an excellent invoice filing system. It will make invoice tracking easier.

Payment Discrepancies

A direct result of duplicate invoices is duplicate payments. If several people manage accounts payable bills, tracking payments becomes a challenge, leading to unnecessary cash outlay.

Aside from duplicate payments, incorrect and missing payments also happen. These payment discrepancies may seem insignificant in small doses, but they pile up over time and cause huge losses.

Improved accounts payable processes help reduce these payment issues. A system that you or an appointed staff manages makes accurate payments a norm in the business.

Unapproved Vendor Payments

In some cases, your staff have to pay impromptu bills. So they skip a few steps in the process, especially if it's time-sensitive. This action can fly under the radar and cause issues in the accounting and finance departments.

Unapproved payments can extend beyond vendors. If left unchecked, it can lead to other unauthorized expenses that can cost the business significantly in the long run.

You or your management staff can curb this from happening if you automate accounts payable and set up a centralized approval system.

Slow Processing Bills

Both traditional and ecommerce businesses need to be efficient. So in managing accounts payable, fast processing is vital for more timely supplier payments.

A slow accounts payable process results in a cash flow bottleneck. Your suppliers may postpone important transactions because of delays in expected cash inflow. This hold-up is detrimental to your supplier's business and to yours. They can impose a penalty when you're overdue, or you can lose your supplier completely.

Getting accounts payable automation software brings efficiency to the processing of your bill. It removes the manual paperwork process and connects accounts in a single place, allowing instant cash transfers.

accounting software for accounts payable - Invoices mailed using a smartphone

Factors To Look For When Choosing an Accounts Payable Software

You need software to address the common accounts payable challenges. But software must serve your needs, such as convenience and security. So when you're shopping for AP software, consider the following features.

Bulk Approval

The best accounts payable software lets you approve multiple bill payments at once. With bulk payment approvals, you or your manager can pay all selected invoices with a click of a button. This feature saves time, especially when your business operates with many credit purchases and pays many suppliers.

Wide Range of Payment Methods

For quick and timely payments, accounts payable software must be flexible. It has to accept a wide range of payment methods. This gives you more options to pay in case one isn't working out. You meet deadlines, and you maintain credibility.

Having a wide range of payment methods is helpful for international payments. It's perfect if you source suppliers outside the country. Plus, if the software can accommodate a range of payment methods, it may also receive the same from your buyers.

User-Friendly Interface

Part of what makes good AP software is having an easy-to-use interface. One way to tell is by exploring the software's dashboard—it must look simple and clean, with the essential details readily available.

Accessibility

Your AP automation software should be cloud-based. This feature makes it available to any laptop or desktop device worldwide. As long as you have an internet connection, you and your staff can manage your accounts payable instantly.

Accessibility also means being mobile-friendly. So choose an AP software that has a responsive interface. That way, you can have an equivalent mobile application as user-friendly as the one on desktop devices.

Integration-Ready

Accounts payable software must integrate into various application programming interfaces (API). You must be able to buff up your AP software by adding nifty features that make AP management easier.

Another excellent integration feature is if your accounts payable automation software can integrate into QuickBooks Online (QBO). If your accounts payable automatically sync to your accounting software's journals, that will carry significant weight off your workload.

Recommended Accounts Payable Software: Bill

Bill is our recommended software for ecommerce business owners selling in online marketplaces. We love it for the following reasons.

Ease of Documentation

Filing and documenting invoices is easier with Bill. You can make invoice exchanges by sending emails to your colleagues and suppliers. You can also store invoices in the software using your email.

Whether you have a physical or an electronic invoice, Bill makes it easy. You can use your smartphone to take a picture of a physical document. If you have an electronic one, you can upload it online.

What's excellent about Bill is the invoice automation feature. It uses AI assist that scans your document and inputs all the comprehensible details of your invoice.

Secure Collaborations

Bill allows multiple users to access the account. The software can handle various collaborations between owners, bookkeepers, and business staff. This makes it convenient for everyone to work on accounts payable discrepancies and payments.

To avoid unauthorized payments, approved administrators can choose the access level of Bill account users. You and your managers can restrict or allow certain functions, thereby preventing fraud or mismanagement.

Bank and Payment Reconciliations

Upon setting up your bank account, Bill uses ACH payment methods for faster transactions. Whenever there is debit and credit, the software syncs to your bank and updates the balance.

The software lets your vendors sync their bank accounts to Bill. This helps make more efficient payment processing because both the business and your vendor's bank account are connected to a platform.

Payment Tracking

The accounts payable software allows you to track payments in real time. You'll know the payment status and whether it's delayed, received, or cashed.

This feature is handy if you're used to using ACH or electronic fund transfers as modes of payment. You can estimate when the payment will clear and credit your supplier's bank account, letting you pay on time.

accounts payable software for small business - A businessperson look at an an invoice from a laptop screen

Recommended Accounting Software: QuickBooks Online

If you're using Bill as your AP automation software, we recommend combining it with QBO. It's an excellent accounting software for accounts payable. The two make a powerful combination that makes a robust accounts payable and accounting system. The data entry of complex AP transactions sync to your accounting books as it should, which makes for accurate financial reporting.

Fully Automate Your Accounts Payable

Having Bill and QBO for your business is having the right tools for an excellent accounts payable process. They both have features that partially automate processes such as invoice info entry and transaction sync. But this will take effort to run.

Why not fully automate your accounts payable (and accounting) process with the help of experts? They can do most of the work to give you the following benefits.

Timely Payments: Bookkeepers will determine how much you owe and when it is due so they can set it up for you.

One-Click Approval: Every due payment will be shown to you or your manager, ready for approval. Once approved, they start the payment process.

Best Exchange Rates: When making overseas payments, professionals can use the most cost-efficient forex rates to your business's advantage.

Maximize Your Accounts Payable Software for Small Businesses With Unloop

When it comes to accounts payable software, small businesses will benefit from Unloop. We are a team of bookkeepers and accountants with skills and experience in accounts payable management. We specialize in ecommerce businesses and have been using Bill and QBO to run ecommerce accounting systems efficiently.If you decide to get Bill and QBO, or if you already have a specific software in mind, you can trust that we'll maximize these tools to your business’s advantage. Book a call with us or check out our accounts payable services now.

Read more

One of a business owner's top priorities is filing taxes. Since almost every sale or purchase comes with taxes (particularly sales tax), accounting for every single one can be a headache. Fortunately, if you're an Amazon seller, the ecommerce platform has got you covered.

Here's how Amazon made selling a lot easier with the Amazon Tax Exemption Program (ATEP).

What Is Sales Tax?

For most purchases you make, you'll notice there are additional costs included in the receipt. One of them is the sales tax, which is a percentage-based value-added tax attached to the purchase of goods and services. According to law, every sale must be taxed, which is why you must account for each item’s sales tax.

The buyer, specifically the end consumer, shoulders the sales tax. If you are a reseller purchasing the product, you'll have to charge your customer the sales tax levied by the government to pay your product's sales tax.

Since the end consumer should cover the sales tax, resellers usually have to ask for tax refunds since they have to pay it initially. However, if the seller has tax exemptions, they can forgo paying the sales tax until they sell the product.

Do You Have To Pay Tax on Amazon?

Yes, you do. Even if your purchases are made online, every sale must still be taxed according to law. The tax rate applicable for a given order is the combined state or local rate for the location to which the order was sent or fulfilled. In some states, the tax on sales is lower than in others.

Does Amazon Charge Sales Tax?

No, Amazon cannot charge sales tax; only the government is allowed to levy taxes on the sale of goods and services. However, Amazon can collect taxes for you through the Amazon Tax Exemption Program (ATEP).

What Does It Mean To Have Tax Exempt Status?

While all business owners are legally obliged to pay taxes, there are some individuals or organizations whom tax exemption applies to are the following:

  • Churches and religious bodies
  • Charitable or non-profit organizations
  • Political entities
  • Private foundations
  • Resellers
  • Veterans

Individuals or organizations who are granted tax exemptions are allowed to waive taxes for purchases, therefore saving them money. On the other hand, resellers are still required to pay the sales tax, but they can ask for refunds after selling their products.

If you're a reseller on Amazon, you can get sales tax exemptions through the ATEP.

What Is the Amazon Tax Exemption Program?

The Amazon Tax Exemption Program is Amazon's way of handling your sales taxes for you. Instead of having to pay and refund sales taxes individually, you can instead apply for tax exemptions, buy your products tax-free, and have the end consumer pay the sales tax directly to Amazon as part of the ATEP.

How Do You Enroll In ATEP?

Amazon sellers with an Amazon business account qualify for ATEP by default. By saving your tax settings through Amazon's Tax Exemption Wizard, you automatically enroll yourself in ATEP.

If you want to enroll as a buyer, however, you'll have to go through the whole process of getting your Amazon Tax Exemption Certificate. The Tax Exemption Wizard will walk you through the process.

Can I Opt Out of ATEP?

If for some reason, you feel like ATEP isn't for you, you can always choose to leave the program and organize your sales taxes on your own. The Amazon Tax Exemption Program is not mandatory, so you shouldn't feel pressured to leave the program if it doesn't work for you.

However, we do recommend you use ATEP since it comes with many benefits.

How Do Sellers Benefit From ATEP?

Collecting taxes can be tricky, not to mention crucial for every business. But with the creation of ATEP, Amazon and its business have had an easier time selling to their customers. Here are two ways Amazon sellers benefit from ATEP.

As a Buyer

In general, Amazon resellers get their products from another business, and when they make purchases, they have to pay sales taxes initially and then collect the sales tax from customers when the sale has been made.

By having tax exempt status through ATEP, you can make tax exempt purchases for your business. This means you don't not only save money by not paying the sales tax for your purchases for resale, but you can also save time by allowing Amazon to waive your sales taxes and collect it directly from the end consumer.

As a Seller

You can get a lot of headaches as a reseller since part of a reseller's job is to collect sales taxes from each sale. That's why, as a seller, ATEP saves you a lot of time and money by collecting these taxes for you. Now you can worry less about your taxes and focus more on selling your product.

If your customer also has tax exempt status, Amazon's tax exemption program will also handle the process for you, lessening the burden on your accounting.

What If Amazon Sellers Don't Follow Tax Policies?

As stressed, taxes are every business owner's legal obligation. If you don't pay your taxes— or if you pay them incorrectly—you could be looking at the suspension of your business or, worse, legal implications like going to jail.

In 2020 alone, around 593 people were sent to jail for tax-related crimes, like tax fraud or tax evasion. The same goes for Amazon sellers. Even if ecommerce sellers don’t have brick-and-mortar businesses, the same tax laws apply depending on your location. So as a business owner, you should be wary of such violations since they could mean the end of your business.

Manage Your Taxes With Unloop

Having trouble with your taxes? You're not the only one. Organizing and filing taxes can be a nightmare, especially for ecommerce businesses. If you're thinking of outsourcing help for your taxes, then it's time you give Unloop a chance.
We offer bookkeeping, accounts payable, payroll, forecasting, and tax services. Book a call, and let's work out how Unloop can help you!

Selling Made Easier With the Amazon Tax Exemption Program (ATEP)
Watch Now

One of a business owner's top priorities is filing taxes. Since almost every sale or purchase comes with taxes (particularly sales tax), accounting for every single one can be a headache. Fortunately, if you're an Amazon seller, the ecommerce platform has got you covered.

Here's how Amazon made selling a lot easier with the Amazon Tax Exemption Program (ATEP).

What Is Sales Tax?

For most purchases you make, you'll notice there are additional costs included in the receipt. One of them is the sales tax, which is a percentage-based value-added tax attached to the purchase of goods and services. According to law, every sale must be taxed, which is why you must account for each item’s sales tax.

The buyer, specifically the end consumer, shoulders the sales tax. If you are a reseller purchasing the product, you'll have to charge your customer the sales tax levied by the government to pay your product's sales tax.

Since the end consumer should cover the sales tax, resellers usually have to ask for tax refunds since they have to pay it initially. However, if the seller has tax exemptions, they can forgo paying the sales tax until they sell the product.

Do You Have To Pay Tax on Amazon?

Yes, you do. Even if your purchases are made online, every sale must still be taxed according to law. The tax rate applicable for a given order is the combined state or local rate for the location to which the order was sent or fulfilled. In some states, the tax on sales is lower than in others.

Does Amazon Charge Sales Tax?

No, Amazon cannot charge sales tax; only the government is allowed to levy taxes on the sale of goods and services. However, Amazon can collect taxes for you through the Amazon Tax Exemption Program (ATEP).

What Does It Mean To Have Tax Exempt Status?

While all business owners are legally obliged to pay taxes, there are some individuals or organizations whom tax exemption applies to are the following:

  • Churches and religious bodies
  • Charitable or non-profit organizations
  • Political entities
  • Private foundations
  • Resellers
  • Veterans

Individuals or organizations who are granted tax exemptions are allowed to waive taxes for purchases, therefore saving them money. On the other hand, resellers are still required to pay the sales tax, but they can ask for refunds after selling their products.

If you're a reseller on Amazon, you can get sales tax exemptions through the ATEP.

What Is the Amazon Tax Exemption Program?

The Amazon Tax Exemption Program is Amazon's way of handling your sales taxes for you. Instead of having to pay and refund sales taxes individually, you can instead apply for tax exemptions, buy your products tax-free, and have the end consumer pay the sales tax directly to Amazon as part of the ATEP.

How Do You Enroll In ATEP?

Amazon sellers with an Amazon business account qualify for ATEP by default. By saving your tax settings through Amazon's Tax Exemption Wizard, you automatically enroll yourself in ATEP.

If you want to enroll as a buyer, however, you'll have to go through the whole process of getting your Amazon Tax Exemption Certificate. The Tax Exemption Wizard will walk you through the process.

Can I Opt Out of ATEP?

If for some reason, you feel like ATEP isn't for you, you can always choose to leave the program and organize your sales taxes on your own. The Amazon Tax Exemption Program is not mandatory, so you shouldn't feel pressured to leave the program if it doesn't work for you.

However, we do recommend you use ATEP since it comes with many benefits.

How Do Sellers Benefit From ATEP?

Collecting taxes can be tricky, not to mention crucial for every business. But with the creation of ATEP, Amazon and its business have had an easier time selling to their customers. Here are two ways Amazon sellers benefit from ATEP.

As a Buyer

In general, Amazon resellers get their products from another business, and when they make purchases, they have to pay sales taxes initially and then collect the sales tax from customers when the sale has been made.

By having tax exempt status through ATEP, you can make tax exempt purchases for your business. This means you don't not only save money by not paying the sales tax for your purchases for resale, but you can also save time by allowing Amazon to waive your sales taxes and collect it directly from the end consumer.

As a Seller

You can get a lot of headaches as a reseller since part of a reseller's job is to collect sales taxes from each sale. That's why, as a seller, ATEP saves you a lot of time and money by collecting these taxes for you. Now you can worry less about your taxes and focus more on selling your product.

If your customer also has tax exempt status, Amazon's tax exemption program will also handle the process for you, lessening the burden on your accounting.

What If Amazon Sellers Don't Follow Tax Policies?

As stressed, taxes are every business owner's legal obligation. If you don't pay your taxes— or if you pay them incorrectly—you could be looking at the suspension of your business or, worse, legal implications like going to jail.

In 2020 alone, around 593 people were sent to jail for tax-related crimes, like tax fraud or tax evasion. The same goes for Amazon sellers. Even if ecommerce sellers don’t have brick-and-mortar businesses, the same tax laws apply depending on your location. So as a business owner, you should be wary of such violations since they could mean the end of your business.

Manage Your Taxes With Unloop

Having trouble with your taxes? You're not the only one. Organizing and filing taxes can be a nightmare, especially for ecommerce businesses. If you're thinking of outsourcing help for your taxes, then it's time you give Unloop a chance.
We offer bookkeeping, accounts payable, payroll, forecasting, and tax services. Book a call, and let's work out how Unloop can help you!

Read more

During your ecommerce business operations, you may have wondered about the difference between bookkeeping and accounting. You have probably used the terms interchangeably during the course of your business activities, especially during the times you and your financial consultant were trying to figure out missing payments or tax remittances.

But despite the frequent use of these terms, people are still confused about whether bookkeeping and accounting are the same. Let Unloop answer that question so you can distinguish what they are and how to use each for your business's growth.

What Is the Difference Between Accounting and Bookkeeping?

Many new business owners need clarification on bookkeeping and accounting. They interchange the terms and think they mean the same thing, but they differ in many ways.

Bookkeeping as a Discipline

Bookkeeping focuses on the activity of recording financial transactions. It's a rigorous accounting process that needs attention to detail and patience.

The discipline of bookkeeping follows the accounting cycle when recording business transactions.

Charting

Charting helps bookkeepers establish the recordkeeping system of a business by identifying the labels of each business transaction. In most cases, bookkeepers can proceed to recordkeeping if your company already has accounting and bookkeeping software with a preset Chart of Accounts (COA). On the other hand, in the absence of software, bookkeepers can create a COA for you.

Journal Entries

After the bookkeeper identifies or charts the accounts, they can use them to record business transactions in a journal. Bookkeepers use a double-entry method for each journal entry, which includes the accounts debited and credited and a given amount.

Ledger Recording

To bookkeepers, the ledger is another book they maintain containing all the debit and credit transactions of a given account. They often record the amount on the ledger on a given period and calculate its net total (i.e., debit minus credit).

Trial Balance

After getting the net totals of all the ledger accounts, the bookkeeper can proceed with a trial balance. This activity aims to ensure every transaction amount is accurate and corresponds with one another. Consequently, a trial balance also helps bookkeepers find recording errors and fix them before they generate reports.

Financial Statement Generation

Once everything is balanced and set, the bookkeeper can prepare an accurate financial statement. The business owner or the accountant will then use these reports for decision-making or tax purposes.

Closing Books

At the end of the business period—usually every 12 months—the bookkeeper is also in charge of closing the books and carrying over the real account balances, the accounts showing in the balance sheet, and their corresponding amounts, to the new business period.

Accounting as a Discipline

Accounting is broader in scope in which bookkeeping plays an essential role. While professional accountants also study bookkeeping, the bulk of what they learn from accounting helps them read and interpret financial reports and create accounting standard procedures customized to the industry or business.

Accounting branches into different subdisciplines.

Financial

This is the process of interpreting and analyzing financial statements made by the bookkeeper. Financial accounting is big-picture accounting that applies to any enterprise, whether corporate or a small business. It is concerned with profit maximization, general management policies, and increasing shareholder value.

Cost

This branch of accounting deals with production and manufacturing. Cost accounting takes a thorough approach to costing raw materials and production processes to ensure they are priced appropriately, which is important when pricing the finished product.

Managerial

Just like financial accounting, the managerial approach uses the same financial data the bookkeeper records. What makes managerial accounting different is how it uses information.

Aside from a monthly financial statement report, managerial accounting also uses financial records to generate other internal reports used by business decision-makers. Managerial accountants audit these reports and govern the system that produces them, while business owners and managers use the information to help with day-to-day business operations.

Tax

Tax accounting focuses on the specific knowledge of tax rules and regulations. This subdiscipline helps tax accounting practitioners to comply but, more importantly, allows them to maneuver the taxation system and make efficient tax decisions for the business's benefit.

Understanding tax accounting benefits a business tremendously and is highly valued. A professional who has mastered tax accounting can build the most beneficial accounting processes, methods, and business structures that result in paying less in tax liabilities.

Bookkeeping and Accounting: Differences in Job Function

Aside from discipline, the job of bookkeepers and accountants also differ. Bookkeepers can either be accountants or non-accountants, but the job functions that involve the accounting discipline will require a professional with a degree.

The Bookkeeper

Bookkeepers are the ones in charge of recordkeeping. Their functions can be considered back office and involve a lot of paperwork and file organization. Here are several highlights of a bookkeeping job.

Record Financial Transactions

The primary job function of a bookkeeper is to record transactions in line with generally accepted accounting practices. They follow the accounting cycle when recording daily business trades.

Find and Fix Recording Errors

Bookkeepers are well-equipped to identify and find errors in the books they maintain. They start with a trial balance and work their way into the ledgers, journals, and financial records to find and fix records.

Prepare Financial Reports

All the recording eventually leads to the creation of financial statements. The bookkeepers will prepare an income statement, balance sheet, and cash flow statement for the business owner or accountant's review.

Work With Accountants and Managers

In day-to-day tasks, bookkeepers coordinate with business managers to give them the financial data they need to make decisions. They also aid accountants during tax season and allow them to access records for consulting or auditing purposes.

The Accountant

An accountant is any professional with a degree in accountancy. They can be licensed as a certified public accountant (CPA) and hold other certifications in a given specialty. But they can also be a non-licensed practitioner employed by a business. Here are the broad strokes of their job function.

Report Analysis and Interpretation

Accountants analyze financial statements and other reports to find areas where the business can improve. They also interpret financial data and make reports of their own. From there, they can recommend policies or managerial actions to benefit the business financially.

Audit Processes and Financial Records

In some cases, bookkeepers record transactions using different principles and techniques, which alters the numbers in financial statements and other reports. For example, a bookkeeper may choose to register a huge expense as is, or they can capitalize it; this can affect the bottom line of an income statement. In this case, it's the auditor's job to check whether these choices are sound and correct them if needed.

Accountants are primarily internal auditors. They check the recordkeeping processes of a business. But some large financial firms and tax institutions hire external auditors to review companies' books.

Controller

A controller oversees and directs different accounting and financial systems of a business. They help ensure a business's accounting and financial processes are running smoothly. So they help plan and manage the business's budget and supervise accurate payroll disbursement.

Consulting

Non-certified and certified public accountants can offer consulting services to big and small businesses. They can help establish accounting processes for newly established companies or provide actionable steps to reduce cost, maximize profit, or efficiently use the business's assets.

You Need Bookkeeping and Accounting Services for Your Business

Knowing the functions of bookkeeping and accounting will teach you one thing—you need both to run a successful business. If you're participating in a fast-paced, highly competitive ecommerce marketplace, you'll also need to learn these disciplines quickly if you're going to do it yourself. This will be a challenge if you're in the thick of things.Your best option is to get both bookkeeping and accounting services. Our team at Unloop is composed of professional accountants who know how to do bookkeeping. If you still need an accountant, we can help connect you with one. So book a call for a consultation or check out our bookkeeping services now.

The Difference Between Bookkeeping and Accounting: Discipline and Function
Watch Now

During your ecommerce business operations, you may have wondered about the difference between bookkeeping and accounting. You have probably used the terms interchangeably during the course of your business activities, especially during the times you and your financial consultant were trying to figure out missing payments or tax remittances.

But despite the frequent use of these terms, people are still confused about whether bookkeeping and accounting are the same. Let Unloop answer that question so you can distinguish what they are and how to use each for your business's growth.

What Is the Difference Between Accounting and Bookkeeping?

Many new business owners need clarification on bookkeeping and accounting. They interchange the terms and think they mean the same thing, but they differ in many ways.

Bookkeeping as a Discipline

Bookkeeping focuses on the activity of recording financial transactions. It's a rigorous accounting process that needs attention to detail and patience.

The discipline of bookkeeping follows the accounting cycle when recording business transactions.

Charting

Charting helps bookkeepers establish the recordkeeping system of a business by identifying the labels of each business transaction. In most cases, bookkeepers can proceed to recordkeeping if your company already has accounting and bookkeeping software with a preset Chart of Accounts (COA). On the other hand, in the absence of software, bookkeepers can create a COA for you.

Journal Entries

After the bookkeeper identifies or charts the accounts, they can use them to record business transactions in a journal. Bookkeepers use a double-entry method for each journal entry, which includes the accounts debited and credited and a given amount.

Ledger Recording

To bookkeepers, the ledger is another book they maintain containing all the debit and credit transactions of a given account. They often record the amount on the ledger on a given period and calculate its net total (i.e., debit minus credit).

Trial Balance

After getting the net totals of all the ledger accounts, the bookkeeper can proceed with a trial balance. This activity aims to ensure every transaction amount is accurate and corresponds with one another. Consequently, a trial balance also helps bookkeepers find recording errors and fix them before they generate reports.

Financial Statement Generation

Once everything is balanced and set, the bookkeeper can prepare an accurate financial statement. The business owner or the accountant will then use these reports for decision-making or tax purposes.

Closing Books

At the end of the business period—usually every 12 months—the bookkeeper is also in charge of closing the books and carrying over the real account balances, the accounts showing in the balance sheet, and their corresponding amounts, to the new business period.

Accounting as a Discipline

Accounting is broader in scope in which bookkeeping plays an essential role. While professional accountants also study bookkeeping, the bulk of what they learn from accounting helps them read and interpret financial reports and create accounting standard procedures customized to the industry or business.

Accounting branches into different subdisciplines.

Financial

This is the process of interpreting and analyzing financial statements made by the bookkeeper. Financial accounting is big-picture accounting that applies to any enterprise, whether corporate or a small business. It is concerned with profit maximization, general management policies, and increasing shareholder value.

Cost

This branch of accounting deals with production and manufacturing. Cost accounting takes a thorough approach to costing raw materials and production processes to ensure they are priced appropriately, which is important when pricing the finished product.

Managerial

Just like financial accounting, the managerial approach uses the same financial data the bookkeeper records. What makes managerial accounting different is how it uses information.

Aside from a monthly financial statement report, managerial accounting also uses financial records to generate other internal reports used by business decision-makers. Managerial accountants audit these reports and govern the system that produces them, while business owners and managers use the information to help with day-to-day business operations.

Tax

Tax accounting focuses on the specific knowledge of tax rules and regulations. This subdiscipline helps tax accounting practitioners to comply but, more importantly, allows them to maneuver the taxation system and make efficient tax decisions for the business's benefit.

Understanding tax accounting benefits a business tremendously and is highly valued. A professional who has mastered tax accounting can build the most beneficial accounting processes, methods, and business structures that result in paying less in tax liabilities.

Bookkeeping and Accounting: Differences in Job Function

Aside from discipline, the job of bookkeepers and accountants also differ. Bookkeepers can either be accountants or non-accountants, but the job functions that involve the accounting discipline will require a professional with a degree.

The Bookkeeper

Bookkeepers are the ones in charge of recordkeeping. Their functions can be considered back office and involve a lot of paperwork and file organization. Here are several highlights of a bookkeeping job.

Record Financial Transactions

The primary job function of a bookkeeper is to record transactions in line with generally accepted accounting practices. They follow the accounting cycle when recording daily business trades.

Find and Fix Recording Errors

Bookkeepers are well-equipped to identify and find errors in the books they maintain. They start with a trial balance and work their way into the ledgers, journals, and financial records to find and fix records.

Prepare Financial Reports

All the recording eventually leads to the creation of financial statements. The bookkeepers will prepare an income statement, balance sheet, and cash flow statement for the business owner or accountant's review.

Work With Accountants and Managers

In day-to-day tasks, bookkeepers coordinate with business managers to give them the financial data they need to make decisions. They also aid accountants during tax season and allow them to access records for consulting or auditing purposes.

The Accountant

An accountant is any professional with a degree in accountancy. They can be licensed as a certified public accountant (CPA) and hold other certifications in a given specialty. But they can also be a non-licensed practitioner employed by a business. Here are the broad strokes of their job function.

Report Analysis and Interpretation

Accountants analyze financial statements and other reports to find areas where the business can improve. They also interpret financial data and make reports of their own. From there, they can recommend policies or managerial actions to benefit the business financially.

Audit Processes and Financial Records

In some cases, bookkeepers record transactions using different principles and techniques, which alters the numbers in financial statements and other reports. For example, a bookkeeper may choose to register a huge expense as is, or they can capitalize it; this can affect the bottom line of an income statement. In this case, it's the auditor's job to check whether these choices are sound and correct them if needed.

Accountants are primarily internal auditors. They check the recordkeeping processes of a business. But some large financial firms and tax institutions hire external auditors to review companies' books.

Controller

A controller oversees and directs different accounting and financial systems of a business. They help ensure a business's accounting and financial processes are running smoothly. So they help plan and manage the business's budget and supervise accurate payroll disbursement.

Consulting

Non-certified and certified public accountants can offer consulting services to big and small businesses. They can help establish accounting processes for newly established companies or provide actionable steps to reduce cost, maximize profit, or efficiently use the business's assets.

You Need Bookkeeping and Accounting Services for Your Business

Knowing the functions of bookkeeping and accounting will teach you one thing—you need both to run a successful business. If you're participating in a fast-paced, highly competitive ecommerce marketplace, you'll also need to learn these disciplines quickly if you're going to do it yourself. This will be a challenge if you're in the thick of things.Your best option is to get both bookkeeping and accounting services. Our team at Unloop is composed of professional accountants who know how to do bookkeeping. If you still need an accountant, we can help connect you with one. So book a call for a consultation or check out our bookkeeping services now.

Read more

If you start a business, whether putting up a physical store or selling things online, you can't run from the fact that you have tax obligations. Almost everything you sell is imposed with taxes, and as a business owner, it's important that you know how to navigate around taxes to operate your business properly. 

Understanding your tax liabilities will help your business grow and even help strategize your next move to improve your income. Moreover, neglecting your taxes can result in fees and penalties that can damage your company and lead to your business’s closure. 

To help you jumpstart your business, we'll give you a quick and easy overview about ecommerce taxes. So take down notes and carve your way up to success. 

Getting to Know Sales Tax in Online Business 

If you’re a business owner and a seller, it’s guaranteed that you will encounter sales tax. All the items you will put on sale will be levied with sales tax. These taxes are certain percentages added to the final bill of your consumers. Customers pay for the sales tax, and business owners act as the middlemen that collect the tax and remit them to the proper tax collections agency. 

However, as an online seller, your potential buyers can come from different places. In different countries and across states, sales tax differs, which may cause confusion among the sellers. Here are some practices to keep you up on track with these ecommerce taxes to run your business smoothly and properly. 

Know where your sales tax nexus is

If you are a business owner in the United States, it's important to know that 45 states impose different sales tax percentages, and five states don't collect them. Understanding how the sales tax works in your economic nexus will help collect them properly. Here are some key points to help you further. 

  • Every sales tax nexus has a threshold for sales. Most states have a threshold of 200 transactions or $100,000 in sales before you start collecting sales taxes. Other states have lower thresholds at $10,000 and even collect taxes from the first goods sold. Take note of these thresholds to comply with your economic nexus requirements. 
  • Make a record of all your sales. At some point, your data will give a bigger picture of where the most volume of your sales comes from. Then, you apply the correct sales tax rate and collect them appropriately by pinpointing your sales. 
  • Do your research on ecommerce sales tax. Aside from government-mandated sales taxes, some locations also require local sales tax. If these taxes are piling up and are still confusing to you, you can hire professional accountants to help you manage your sales tax so you can focus on running other aspects of your business. 
online seller analyzing trends 

Always check your platform's affiliate policies. 

If you sell your products through online marketing platforms like Amazon, Shopify, or Etsy, make sure to be aware of their policies. Online marketplaces have different programs that can help you collect and remit taxes hassle-free. 

For example, when you sell on Amazon, the sales tax is automatically added to the final bill of your customer upon check out. Amazon will collect sales tax for you, and you can access the records of the amount collected in your Amazon seller profile to file the report at the end of each fiscal year. 

According to Amazon policies, the sales tax rate they charge is higher than the law mandates because the collection service fees are payments for their simplified tax collection service. However, online platforms may vary in their policies, so it's best to check them out first to determine which marketing platform is best for your business. 

Apply for a seller’s permit.

If you already know your location and percentage of the sales tax, your next step is to register for a seller's permit so you can start collecting taxes. Not all states require permits, but it's best to check their local websites if they require one. 

Furthermore, each state has different tax compliance and paperwork requirements. But, most states allow applications through an online process, so you can skip those long lines and hours of waiting in the revenue department. 

Sales tax collection and remittance. 

There are different ways each state processes remittance of sales taxes. For example, some states require monthly and some allow for quarterly remittance. As a result, managing the collection and remittance of sales tax can be time-consuming and confusing. To help you manage the taxes, you can: 

  • Use accounting software to keep up with your sales and tax collection. Accounting software simplifies the tax handling of your business. The software can record and calculate sales taxes. It can also produce accurate reports you can use in your filing. 
  • You can hire professionals to analyze the numbers for you. However, if ecommerce sales taxes are simply too confusing for you, outsource the job to a professional to avoid damaging mistakes. 

Final Thoughts 

The ecommerce market is rapidly growing day by day. However, it's not enough that you know all the product trends to stay alive with the heavy competition. Other aspects of your business like inventory, advertising, finance, and taxes are also essential to keep your business on top. We hope this blog on the overview of ecommerce taxes helps you create a strategy for running your company smoothly. 

If you need an extra hand to take care of technical stuff like finances and taxes, you can find your help here at Unloop. We have professionals who are experts on everything about ecommerce. Bookkeeping, income tax, sales tax, and even strategizing plans for your business—we’ve got them all. Your step ahead to success is with us, so what are you waiting for? Book a call with us now!

Everything You Need to Know About Ecommerce Tax to Help You Start a Business This 2023
Watch Now

If you start a business, whether putting up a physical store or selling things online, you can't run from the fact that you have tax obligations. Almost everything you sell is imposed with taxes, and as a business owner, it's important that you know how to navigate around taxes to operate your business properly. 

Understanding your tax liabilities will help your business grow and even help strategize your next move to improve your income. Moreover, neglecting your taxes can result in fees and penalties that can damage your company and lead to your business’s closure. 

To help you jumpstart your business, we'll give you a quick and easy overview about ecommerce taxes. So take down notes and carve your way up to success. 

Getting to Know Sales Tax in Online Business 

If you’re a business owner and a seller, it’s guaranteed that you will encounter sales tax. All the items you will put on sale will be levied with sales tax. These taxes are certain percentages added to the final bill of your consumers. Customers pay for the sales tax, and business owners act as the middlemen that collect the tax and remit them to the proper tax collections agency. 

However, as an online seller, your potential buyers can come from different places. In different countries and across states, sales tax differs, which may cause confusion among the sellers. Here are some practices to keep you up on track with these ecommerce taxes to run your business smoothly and properly. 

Know where your sales tax nexus is

If you are a business owner in the United States, it's important to know that 45 states impose different sales tax percentages, and five states don't collect them. Understanding how the sales tax works in your economic nexus will help collect them properly. Here are some key points to help you further. 

  • Every sales tax nexus has a threshold for sales. Most states have a threshold of 200 transactions or $100,000 in sales before you start collecting sales taxes. Other states have lower thresholds at $10,000 and even collect taxes from the first goods sold. Take note of these thresholds to comply with your economic nexus requirements. 
  • Make a record of all your sales. At some point, your data will give a bigger picture of where the most volume of your sales comes from. Then, you apply the correct sales tax rate and collect them appropriately by pinpointing your sales. 
  • Do your research on ecommerce sales tax. Aside from government-mandated sales taxes, some locations also require local sales tax. If these taxes are piling up and are still confusing to you, you can hire professional accountants to help you manage your sales tax so you can focus on running other aspects of your business. 
online seller analyzing trends 

Always check your platform's affiliate policies. 

If you sell your products through online marketing platforms like Amazon, Shopify, or Etsy, make sure to be aware of their policies. Online marketplaces have different programs that can help you collect and remit taxes hassle-free. 

For example, when you sell on Amazon, the sales tax is automatically added to the final bill of your customer upon check out. Amazon will collect sales tax for you, and you can access the records of the amount collected in your Amazon seller profile to file the report at the end of each fiscal year. 

According to Amazon policies, the sales tax rate they charge is higher than the law mandates because the collection service fees are payments for their simplified tax collection service. However, online platforms may vary in their policies, so it's best to check them out first to determine which marketing platform is best for your business. 

Apply for a seller’s permit.

If you already know your location and percentage of the sales tax, your next step is to register for a seller's permit so you can start collecting taxes. Not all states require permits, but it's best to check their local websites if they require one. 

Furthermore, each state has different tax compliance and paperwork requirements. But, most states allow applications through an online process, so you can skip those long lines and hours of waiting in the revenue department. 

Sales tax collection and remittance. 

There are different ways each state processes remittance of sales taxes. For example, some states require monthly and some allow for quarterly remittance. As a result, managing the collection and remittance of sales tax can be time-consuming and confusing. To help you manage the taxes, you can: 

  • Use accounting software to keep up with your sales and tax collection. Accounting software simplifies the tax handling of your business. The software can record and calculate sales taxes. It can also produce accurate reports you can use in your filing. 
  • You can hire professionals to analyze the numbers for you. However, if ecommerce sales taxes are simply too confusing for you, outsource the job to a professional to avoid damaging mistakes. 

Final Thoughts 

The ecommerce market is rapidly growing day by day. However, it's not enough that you know all the product trends to stay alive with the heavy competition. Other aspects of your business like inventory, advertising, finance, and taxes are also essential to keep your business on top. We hope this blog on the overview of ecommerce taxes helps you create a strategy for running your company smoothly. 

If you need an extra hand to take care of technical stuff like finances and taxes, you can find your help here at Unloop. We have professionals who are experts on everything about ecommerce. Bookkeeping, income tax, sales tax, and even strategizing plans for your business—we’ve got them all. Your step ahead to success is with us, so what are you waiting for? Book a call with us now!

Read more

A common characteristic of an early-phase startup is that it is all cost. During the early phase, the startup founder tries to build a new product without the certainty of commercial value. Perhaps they even put their savings on the line to get to the product launch, and for most entrepreneurs, that's all they care about.

That's why accounting never crosses their minds. Yet, this can also be the key to measuring how far they've come and if they should continue. Let Unloop unpack the methods of startups and why founders should establish an accounting system early on.

The Startup Method

A startup is a newly founded business, regardless of size and methodology. Until the late 2000s, most people's idea of a startup was just that—a new business. But since then, the idea of creating startups has become standardized and more focused on innovation. That's why people in the business world often associate it with big tech.

But the standard methods of a startup aren't exclusive. So whether you're a budding small business owner trying to launch a new product on Amazon or a group of co-founders creating a better AirBnb, you're most likely following the steps below, consciously or otherwise.

Solution Brainstorming

The founder sees the problem or the opportunity in the market, but there's no one offering a solution. If there's anyone offering one, it's ineffective. The founder sees this and knows there can be a better way, so they think of ideas on how to make things better.

They run every idea under the feasibility, profitability, and market reception criteria. Then a shortlist is created and screened until the founder decides on one solution to pursue.

Prototyping

After the founder decides on a solution, they may bring in more people to help materialize it. The team will conduct further research to flesh out the processes and features of the product.

The idea is to develop a product with all the essential features to make it functional. This is called the minimum viable product (MVP) or prototype.

Beta Testing

During the beta testing phase, the founder and their team release the prototype to a select group of consumers. These people will use the product and give the team feedback about user experience and possible improvements relative to their needs.

Iteration

This process can be a continuous cycle for each proposed product. Iteration means going back to the drawing board to make improvements to the product prototype or, if found unviable commercially, to scrap the product and move on to the next.

Iteration usually happens after beta testing, but it can still happen even if the product has already been launched.

Planning Business Structure

Formally founding the startup by determining the legal structure is also flexible. It can happen even before the brainstorming process or after a successful beta testing. This step involves registering the startup as a formal business—usually a corporation—with the founders and the team getting a piece of the initial private stock offering.

The point of legalizing the business is to manage risk. For example, the founders can limit their risk exposure to the shares they own with the startup. The government requires that startups register for compliance and tax payments, while the consumers will see a legalized business as trustworthy.

Product Development

Formal product development starts when the consumers see value in the product they're testing, enough to pay the price the startup is asking. At this phase, the team has gathered all data from the beta testing and all the necessary iteration data. They're now ready to build the product with more polished features.

Commercial Product Launch

The final phase is when the startup produces the final product and officially enters the market. If it's an application, consumers can download it for a price. If it's a physical product, it's put on the shelves or uploaded as a product listing on a website or an ecommerce marketplace.

Startup Expectations: Why It’s Wise To Do Accounting for Startup Businesses

Based on the methods laid out above, we can build a case for getting your accounting ready as early as possible. Here are some things that happen when you run a startup.

The Development Process Can Take Time

The development will take time, whether you’re innovating a disruptive solution or offering a simple product. Depending on the complexity of the product, it can be days or even years before you build your first MVP.

We've all heard of the adage time is money. So all the time spent renting a co-working space to brainstorm and develop a product will add up and cost the founder. In most cases, they will lose track.

The Startup May Need Rounds of Funding

Funding doesn't always come from the founder. In some cases, the founder may only have an idea, a skillset, and a few people willing to contribute labour. If they want the startup to take off, they'll need outside funding.

The best bet will be venture capitalists and private investors, and they will need to see how their investment is performing. So it's always a good idea to account for the money you're meant to grow.

There Are Stakeholders That May Need a Salary

In a typical scenario, people working in a startup are doing it part-time as a passion project. But once it gets off the ground, things can get more hands-on to the point that most or all the people involved in the project will need to work full-time.

When the founder and their team dedicate themselves to the project like regular employees, they'll need a salary. This means they have to pay taxes. That's where startup accounting can help.

Profits May Take Time To Roll In (If at All)

If there's a single expectation you should have before performing accounting for startups, it is that profits may not roll in soon. Like product development, it can take months or years to realize a positive bottom line.

By establishing an accounting system early on in the startup, you'll know whether you're already making a profit from the day-to-day operations or are still on the road to paying your startup costs before the product launch.

How Establishing an Accounting System Early Helps a Startup

When it comes to startups, the decision to establish an accounting system early on is a low-priority task. That’s reasonable, considering there is no business coming in yet. Everything is a study. It’s only when investors throw big money at it that founders begin to appreciate the benefits of accounting. But let us show you what getting your accounting fixed early will do for your startup.

A Solid Accounting System

For startups, establishing an accounting system can be as easy as subscribing to accounting software and having a team of experts run it part-time. An accountant or bookkeeper recording financial transactions of the startup helps place the foundation of the accounting process that will grow along with the startup.

This means no more headaches about planning the right processes later, as it can get more complex when the startup becomes a medium or large-scale business.

Bookkeeping for Startups Creates a Source of Financial Records

All the financial data should be recorded properly at the beginning. Even if it's all going to the expense account, it can become part of financial reports during the product development phase. This information is useful to the founders and other stakeholders as it gives them an idea of how the business is budgeting its startup resources.

Helps Founders Manage Startup Performance

Once the startup becomes a fully-operational business that earns profit, all the business transactions recorded also form part of the financial statements (i.e., the income statements, balance sheets, and cash flow statements). This information will be essential for evaluating how the business is doing.

Financial statements help owners make important business decisions, such as taking the company public, requesting another round of investments, or closing shop.

Sorts Out the Startup’s Bank Account

Another thing that happens with startups is disorganized finances. Some founders think that the money they toss into their de facto startup is unofficial as it isn't formally registered to any trade and commerce authority. So their personal finances and their startup are one and the same.

Employing an accounting system from the get-go helps founders separate personal and startup transactions. This makes reconciling bank statements and financial reporting for the startup smooth sailing in the long run.

Assists in Paying Tax Obligations

Recall that when founders and the team start getting salaries for their work in the startup, they're obligated to remit payroll taxes, especially if the startup is already legalized.

Once the startup earns significant profits, it may be subject to different taxes. For example, an income tax is an obligation of any business entity. During tax season, they must file income tax returns to stay compliant. Establishing an accounting system early on and having it run by experts will make filing easier and more accurate.

Accounting for Startups Easily Measures Progress

To close, consider that even the smallest projects incur costs. To measure the project’s success, the cost incurred to pull it off is always part of the equation. That goes the same for startups.

So whether you’re in the ideation phase or already on your 100th iteration pre-product launch, an accounting system will help you count your costs. This gives you, the founder, the chance to recoup them.Unloop can help you establish an accounting system that fits your needs, whatever startup stage you’re in. So book a call with us if you want an accountant for your startup business, or check out our bookkeeping services now.

Accounting for Startups: A Way To Measure Progress (and Profits)
Watch Now

A common characteristic of an early-phase startup is that it is all cost. During the early phase, the startup founder tries to build a new product without the certainty of commercial value. Perhaps they even put their savings on the line to get to the product launch, and for most entrepreneurs, that's all they care about.

That's why accounting never crosses their minds. Yet, this can also be the key to measuring how far they've come and if they should continue. Let Unloop unpack the methods of startups and why founders should establish an accounting system early on.

The Startup Method

A startup is a newly founded business, regardless of size and methodology. Until the late 2000s, most people's idea of a startup was just that—a new business. But since then, the idea of creating startups has become standardized and more focused on innovation. That's why people in the business world often associate it with big tech.

But the standard methods of a startup aren't exclusive. So whether you're a budding small business owner trying to launch a new product on Amazon or a group of co-founders creating a better AirBnb, you're most likely following the steps below, consciously or otherwise.

Solution Brainstorming

The founder sees the problem or the opportunity in the market, but there's no one offering a solution. If there's anyone offering one, it's ineffective. The founder sees this and knows there can be a better way, so they think of ideas on how to make things better.

They run every idea under the feasibility, profitability, and market reception criteria. Then a shortlist is created and screened until the founder decides on one solution to pursue.

Prototyping

After the founder decides on a solution, they may bring in more people to help materialize it. The team will conduct further research to flesh out the processes and features of the product.

The idea is to develop a product with all the essential features to make it functional. This is called the minimum viable product (MVP) or prototype.

Beta Testing

During the beta testing phase, the founder and their team release the prototype to a select group of consumers. These people will use the product and give the team feedback about user experience and possible improvements relative to their needs.

Iteration

This process can be a continuous cycle for each proposed product. Iteration means going back to the drawing board to make improvements to the product prototype or, if found unviable commercially, to scrap the product and move on to the next.

Iteration usually happens after beta testing, but it can still happen even if the product has already been launched.

Planning Business Structure

Formally founding the startup by determining the legal structure is also flexible. It can happen even before the brainstorming process or after a successful beta testing. This step involves registering the startup as a formal business—usually a corporation—with the founders and the team getting a piece of the initial private stock offering.

The point of legalizing the business is to manage risk. For example, the founders can limit their risk exposure to the shares they own with the startup. The government requires that startups register for compliance and tax payments, while the consumers will see a legalized business as trustworthy.

Product Development

Formal product development starts when the consumers see value in the product they're testing, enough to pay the price the startup is asking. At this phase, the team has gathered all data from the beta testing and all the necessary iteration data. They're now ready to build the product with more polished features.

Commercial Product Launch

The final phase is when the startup produces the final product and officially enters the market. If it's an application, consumers can download it for a price. If it's a physical product, it's put on the shelves or uploaded as a product listing on a website or an ecommerce marketplace.

Startup Expectations: Why It’s Wise To Do Accounting for Startup Businesses

Based on the methods laid out above, we can build a case for getting your accounting ready as early as possible. Here are some things that happen when you run a startup.

The Development Process Can Take Time

The development will take time, whether you’re innovating a disruptive solution or offering a simple product. Depending on the complexity of the product, it can be days or even years before you build your first MVP.

We've all heard of the adage time is money. So all the time spent renting a co-working space to brainstorm and develop a product will add up and cost the founder. In most cases, they will lose track.

The Startup May Need Rounds of Funding

Funding doesn't always come from the founder. In some cases, the founder may only have an idea, a skillset, and a few people willing to contribute labour. If they want the startup to take off, they'll need outside funding.

The best bet will be venture capitalists and private investors, and they will need to see how their investment is performing. So it's always a good idea to account for the money you're meant to grow.

There Are Stakeholders That May Need a Salary

In a typical scenario, people working in a startup are doing it part-time as a passion project. But once it gets off the ground, things can get more hands-on to the point that most or all the people involved in the project will need to work full-time.

When the founder and their team dedicate themselves to the project like regular employees, they'll need a salary. This means they have to pay taxes. That's where startup accounting can help.

Profits May Take Time To Roll In (If at All)

If there's a single expectation you should have before performing accounting for startups, it is that profits may not roll in soon. Like product development, it can take months or years to realize a positive bottom line.

By establishing an accounting system early on in the startup, you'll know whether you're already making a profit from the day-to-day operations or are still on the road to paying your startup costs before the product launch.

How Establishing an Accounting System Early Helps a Startup

When it comes to startups, the decision to establish an accounting system early on is a low-priority task. That’s reasonable, considering there is no business coming in yet. Everything is a study. It’s only when investors throw big money at it that founders begin to appreciate the benefits of accounting. But let us show you what getting your accounting fixed early will do for your startup.

A Solid Accounting System

For startups, establishing an accounting system can be as easy as subscribing to accounting software and having a team of experts run it part-time. An accountant or bookkeeper recording financial transactions of the startup helps place the foundation of the accounting process that will grow along with the startup.

This means no more headaches about planning the right processes later, as it can get more complex when the startup becomes a medium or large-scale business.

Bookkeeping for Startups Creates a Source of Financial Records

All the financial data should be recorded properly at the beginning. Even if it's all going to the expense account, it can become part of financial reports during the product development phase. This information is useful to the founders and other stakeholders as it gives them an idea of how the business is budgeting its startup resources.

Helps Founders Manage Startup Performance

Once the startup becomes a fully-operational business that earns profit, all the business transactions recorded also form part of the financial statements (i.e., the income statements, balance sheets, and cash flow statements). This information will be essential for evaluating how the business is doing.

Financial statements help owners make important business decisions, such as taking the company public, requesting another round of investments, or closing shop.

Sorts Out the Startup’s Bank Account

Another thing that happens with startups is disorganized finances. Some founders think that the money they toss into their de facto startup is unofficial as it isn't formally registered to any trade and commerce authority. So their personal finances and their startup are one and the same.

Employing an accounting system from the get-go helps founders separate personal and startup transactions. This makes reconciling bank statements and financial reporting for the startup smooth sailing in the long run.

Assists in Paying Tax Obligations

Recall that when founders and the team start getting salaries for their work in the startup, they're obligated to remit payroll taxes, especially if the startup is already legalized.

Once the startup earns significant profits, it may be subject to different taxes. For example, an income tax is an obligation of any business entity. During tax season, they must file income tax returns to stay compliant. Establishing an accounting system early on and having it run by experts will make filing easier and more accurate.

Accounting for Startups Easily Measures Progress

To close, consider that even the smallest projects incur costs. To measure the project’s success, the cost incurred to pull it off is always part of the equation. That goes the same for startups.

So whether you’re in the ideation phase or already on your 100th iteration pre-product launch, an accounting system will help you count your costs. This gives you, the founder, the chance to recoup them.Unloop can help you establish an accounting system that fits your needs, whatever startup stage you’re in. So book a call with us if you want an accountant for your startup business, or check out our bookkeeping services now.

Read more

Are you a small business owner in need of an efficient and secure way to manage your finances? Peachtree accounting software is the answer! This powerful software provides unmatched capabilities when it comes to safeguarding financial data, due to its use of cloud-based solutions. 

In this blog post, we'll explore five key benefits you can take advantage of by using Peachtree software (now known as Sage 50cloud). From accounting, bookkeeping, automation and scalability to allowing collaboration and the peace of mind of knowing that all your data is securely backed up—there's something in the software for everyone! So don't wait around any longer—read on for all the details about how Peachtree accounting can help make your life easier.

Peachtree Accounting Software

Peachtree accounting, like any other software, is a tool that assists small, medium, and different-sized businesses in their accounting needs. The tool offers accounting, timeslip tracking, human resource management, customer relationship management, and construction and real estate-focused assistance. 

The tool was only available on desktop, but now you can access it on your mobile phone. Regular tasks like accessing contacts, creating invoices, taking receipt images, managing cash flow, and bank integration and reconciliation can all be done on-the-go. 

When you have complete financial data in a single software, the generation of reports will be easier. And, as a result, getting a view of your business's financial health will be easier, too. You can use the software for managing your small business, tracking projects, managing your payroll, checking your inventory, and ensuring payments are made and recorded on the books automatically. You’ll also have visibility when it comes to your workforce and customers through Sage 50cloud.

5 Benefits of Peachtree’s Cloud-Connected Features

With the plethora of features, one of the most enticing offers Sage 50cloud has is its operations on the cloud. This feature brings peace of mind to business owners like you who know the importance of protecting financial data from corruption or hacking. In this part of the article, we’ll discuss five benefits of Peachtree’s cloud-connected features. Let’s begin!

Data Security for Accounting, HRMS, and CRM

Accounting data includes income, expenses, assets, fixed and current assets, liabilities, equity, capital, sales, cost of goods sold, and net income. When you use Sage 50cloud, your software will also have information about your company's human resources and customer management, making the stored data even more precious. However, with Sage 50cloud, you know that this information is protected as it operates on the cloud.

A Wide Range of Available Integrations

Aside from its built-in tools, you can widen the data you store in it through integrations. The following are some of what you can connect to Sage 50cloud:

  • Accounting: Sage AP Automation, eBridge Connections
  • Payment Tools: Credit Hound, Stripe, Paya
  • Inventory Management Engines: MarKov, MISys
  • Monitoring Sales Tax: Sage Sales Tax by Avalara
  • Time Trackers: VeriClock, EBillity
  • CRM Manager: My CRM Manager
  • Workflow Management: Zynk Workflow
  • Ecommerce Tools: CartSpan, Epos Now
  • Document Entry and Storage: Sync, AutoEntry

By integrating these apps with Sage, all the data from these tools will also be stored in the cloud.

Automation and Accuracy

Because there are a lot of integrations you can use, the need to manually input data is minimized or even zeroed out. As a result, you can always be confident about the accuracy of the data in the Sage 50cloud system. You can enjoy seeing a realistic view of your business finances in real time, and you can prevent audits because of erroneous tax reports.

Scalability of Usable Features

Scalability is something manual accounting cannot offer. Although Excel sheets have evolved to add integrations, it is still not as flexible as what software like Sage 50cloud can do.

Sage 50cloud offers different plans: Pro Accounting, Premium Accounting, and Quantum Accounting, which have different accounting, HRM, and CRM features. When your business grows, so do your accounting needs, and you can easily adjust through Sage.

Teamwork and Collaboration Features

Another great feature of Sage 50cloud, which works because it operates on the cloud, is its accessibility to key members of the team. Individuals concerned with business finances can have access to financial data anywhere, anytime as long as there is an internet connection. They can update and change any detail and everybody accessing the file will see the updated version in real time. This is unlike an Excel sheet that can only be accessed on a single computer. 

Unloop and Peachtree Complete Accounting Software

Peachtree’s complete accounting software provides an efficient and secure option for businesses that are looking for a cloud-based and cost-effective solution to manage their data. From accounting to HRMS and CRM, Peachtree’s automated and accurate features ensure consistency across your business functions. With the wide range of available integrations, scalability options, and team collaboration capabilities, you not only save time, but can also trust that your processes will be reliable and result-driven. Unloop takes pride in knowing the importance of cloud accounting, and we use the same software to manage the accounting needs of different businesses. With this comprehensive approach to accounting software, you can rest assured knowing that all of your valuable data is securely protected, and easily accessed, on the cloud!

The 5 Benefits of Peachtree’s Complete Accounting Software on the Cloud
Watch Now

Are you a small business owner in need of an efficient and secure way to manage your finances? Peachtree accounting software is the answer! This powerful software provides unmatched capabilities when it comes to safeguarding financial data, due to its use of cloud-based solutions. 

In this blog post, we'll explore five key benefits you can take advantage of by using Peachtree software (now known as Sage 50cloud). From accounting, bookkeeping, automation and scalability to allowing collaboration and the peace of mind of knowing that all your data is securely backed up—there's something in the software for everyone! So don't wait around any longer—read on for all the details about how Peachtree accounting can help make your life easier.

Peachtree Accounting Software

Peachtree accounting, like any other software, is a tool that assists small, medium, and different-sized businesses in their accounting needs. The tool offers accounting, timeslip tracking, human resource management, customer relationship management, and construction and real estate-focused assistance. 

The tool was only available on desktop, but now you can access it on your mobile phone. Regular tasks like accessing contacts, creating invoices, taking receipt images, managing cash flow, and bank integration and reconciliation can all be done on-the-go. 

When you have complete financial data in a single software, the generation of reports will be easier. And, as a result, getting a view of your business's financial health will be easier, too. You can use the software for managing your small business, tracking projects, managing your payroll, checking your inventory, and ensuring payments are made and recorded on the books automatically. You’ll also have visibility when it comes to your workforce and customers through Sage 50cloud.

5 Benefits of Peachtree’s Cloud-Connected Features

With the plethora of features, one of the most enticing offers Sage 50cloud has is its operations on the cloud. This feature brings peace of mind to business owners like you who know the importance of protecting financial data from corruption or hacking. In this part of the article, we’ll discuss five benefits of Peachtree’s cloud-connected features. Let’s begin!

Data Security for Accounting, HRMS, and CRM

Accounting data includes income, expenses, assets, fixed and current assets, liabilities, equity, capital, sales, cost of goods sold, and net income. When you use Sage 50cloud, your software will also have information about your company's human resources and customer management, making the stored data even more precious. However, with Sage 50cloud, you know that this information is protected as it operates on the cloud.

A Wide Range of Available Integrations

Aside from its built-in tools, you can widen the data you store in it through integrations. The following are some of what you can connect to Sage 50cloud:

  • Accounting: Sage AP Automation, eBridge Connections
  • Payment Tools: Credit Hound, Stripe, Paya
  • Inventory Management Engines: MarKov, MISys
  • Monitoring Sales Tax: Sage Sales Tax by Avalara
  • Time Trackers: VeriClock, EBillity
  • CRM Manager: My CRM Manager
  • Workflow Management: Zynk Workflow
  • Ecommerce Tools: CartSpan, Epos Now
  • Document Entry and Storage: Sync, AutoEntry

By integrating these apps with Sage, all the data from these tools will also be stored in the cloud.

Automation and Accuracy

Because there are a lot of integrations you can use, the need to manually input data is minimized or even zeroed out. As a result, you can always be confident about the accuracy of the data in the Sage 50cloud system. You can enjoy seeing a realistic view of your business finances in real time, and you can prevent audits because of erroneous tax reports.

Scalability of Usable Features

Scalability is something manual accounting cannot offer. Although Excel sheets have evolved to add integrations, it is still not as flexible as what software like Sage 50cloud can do.

Sage 50cloud offers different plans: Pro Accounting, Premium Accounting, and Quantum Accounting, which have different accounting, HRM, and CRM features. When your business grows, so do your accounting needs, and you can easily adjust through Sage.

Teamwork and Collaboration Features

Another great feature of Sage 50cloud, which works because it operates on the cloud, is its accessibility to key members of the team. Individuals concerned with business finances can have access to financial data anywhere, anytime as long as there is an internet connection. They can update and change any detail and everybody accessing the file will see the updated version in real time. This is unlike an Excel sheet that can only be accessed on a single computer. 

Unloop and Peachtree Complete Accounting Software

Peachtree’s complete accounting software provides an efficient and secure option for businesses that are looking for a cloud-based and cost-effective solution to manage their data. From accounting to HRMS and CRM, Peachtree’s automated and accurate features ensure consistency across your business functions. With the wide range of available integrations, scalability options, and team collaboration capabilities, you not only save time, but can also trust that your processes will be reliable and result-driven. Unloop takes pride in knowing the importance of cloud accounting, and we use the same software to manage the accounting needs of different businesses. With this comprehensive approach to accounting software, you can rest assured knowing that all of your valuable data is securely protected, and easily accessed, on the cloud!

Read more

Warren Buffet once said to an intern, "accounting is the language of business." In our contemporary business landscape, this makes sense. Every formal ecommerce or traditional small business you trade with knows this language—it's a necessity.

Success in anything is related to communication. How well you communicate dictates how far you can go; to communicate, you must know the language. The same thing goes with the language of business—accounting.

Let Unloop tell you why accounting is the language of business and how you can learn it to take your business to a whole new realm of success.

Why Is Accounting the Language of Business?

Just as we need language and speech to exchange ideas, accounting is born out of the need to exchange money. As soon as we used money as a medium of trade, the need to count it followed—this is in the spirit of fair trade.

Since then, counting money has grown more sophisticated. It has become known as accounting, and we use it today because of the following.

It Supports Finance

In the context of business, finance is the discipline of managing money. Yet, for money management to exist, there has to be something tangible to work on. That's what accounting provides—numbers.

Accounting allows business owners to look at their financial transactions and interpret them to manage their business's resources effectively.

Accounting Aids Economics (and Vice Versa)

On a macro level, accounting generates financial and economic data that policymakers can use to formulate monetary and fiscal policies that will eventually keep the nation's economy healthy.

On a micro level, business managers also use financial statements to create new business and management policies to help the business grow, be it a traditional one or one in an online marketplace.

It’s the Lingua Franca of the Business World

Accounting follows a standard called the Generally Accepted Accounting Principles (GAAP). This solidifies the accounting concepts, processes, and methods used enough to make it adaptable by everyone doing business.

Every business that pays taxes uses the same language with few variations, which adapt to the region or state they do business with. But more or less, this allows all accountants and business people to understand each other. It makes it easy to interpret and audit financial documents and make sound business decisions.

The Pillars of the Language of Accounting

The road to learning the language of business starts with the fundamental parts. Like in speech—where we have nouns, pronouns, verbs, adjectives, and adverbs that serve as building blocks of sentences—accounting has the following five pillars.

Assets

Every tangible or intangible thing put into the business is considered an asset. It can be property, equipment, furniture, vehicles, labor, and money on hand or to be received.

Recognizing assets involves determining their value in monetary terms. That said, the easiest to quantify is the most liquid form of asset: cash. As for other assets, such as property, accountants find their market value and record their money equivalent.

Liabilities

Long and short-term debts incurred by a business fall under liabilities. This is considered a pillar because it is part of every business's nature to get into debt.

Liabilities are expressed in monetary terms representing the amount of obligation a business has. Some examples of liabilities are short and long-term loans, accounts payable, mortgages, and other expenses that are yet to be paid.

Equity - Capital

Equity is a stakeholder or a sole proprietor's share of the business expressed in monetary terms. Accountants determine this by getting the difference between assets and liabilities; the resulting amount represents a businessperson's ownership value.

This pillar increases or decreases in value depending on business performance. In any business structure, the goal is always to increase the amount of equity. Commonly this is done by making efforts to increase sales and revenue, but accountants and finance people know other activities that can grow equity.

Expenses

This pillar expresses the day-to-day expenditure of a business. It's straightforward, but expenses can behave differently and come from different business sides.

For example, you have expenses from producing goods (often called costs), then you also have expenses coming from administrative functions, such as payroll and supplies. To get an accurate picture, accountants must classify all these expenses accordingly.

Revenue

Money that comes into the business, mainly from selling goods and services, is called revenue. But just like expenses, revenue can come from other sources besides sales. Revenue can also come from interests earned or rental income from a property, just to name a few.

Financial Statements: Communicating the Accounting Language

The pillars of accounting language make up business transactions recorded in the books. These are then processed and arranged into an understandable form called financial statements.

Financial statements communicate the accounting language that most accounting professionals, managers, and business owners can understand. They come in three forms.

The Income Statement

This instrument breaks down revenue and expenses incurred during a period of business operations. Essentially, it communicates how much money the business earned from sales and other sources of revenue. It also tells you how much of the revenue the business keeps after all expenses are accounted for.

The resulting bottom line, also known as net profit after tax, forms part of the business's assets which will affect the balance sheet.

The Balance Sheet

Balance sheets communicate the value of the business. It breaks down assets, liabilities, and equity to arrive at a monetary equivalent of a business's worth and, eventually, how much the owner can get from it.

This instrument follows the accounting formula of Assets = Liabilities + Equity, meaning the total amount of the asset section must be equal to the combined amount of liability and capital represented in another section.

The Cash Flow Statement

The cash flow statement filters all the cash transactions of a business and categorizes them into three different business activities: operations, financing, and investment. This is one accounting statement that communicates the degree of money inflow and outflow.

A cash flow statement is important to business managers as it gives them a bird's eye view of where cash resources are used and how it stalls or propels business growth.

Accounting Professionals Are Your Translators

Accounting professionals understand the pillars of accounting and the complexities attached to them. They act as translators. They keep all transactions to arrange them into financial statements that communicate accounting in understandable format.

As translators, they have knowledge and skill sets that allow them to make complicated things simple. These skills allow them to do the following.

Bookkeeping

Bookkeeping is classifying and recording business transactions in line with generally accepted accounting principles. The bookkeeping process follows full cycle accounting and builds the business's accounting records which the accountant will use to draw up accounting reports.

Financial Statement Reporting

Preparing financial statements comes after bookkeeping and is done monthly or yearly. Generating financial reports depends on bookkeeping, and the more accurate the financial records, the more financial statements communicate to stakeholders.

Auditing

Accountants can also check the methods other accountants use. This is called auditing and helps ensure that recordkeeping and financial statement reporting align with the standards.

Tax Compliance

Part of understanding the language of accounting is being adept with taxes and how it affects the business. So accountants study different taxes and keep themselves up to date with current tax laws to ensure accurate and compliant tax expense recording.

Consulting

If there's anyone who knows how your business works, it's the accountant. They look at the numbers and see the nut and bolts of your business. As such, they can take on a consulting capacity and advise managers on which parts of the business need attention to ensure increased profits and equity.

Understanding the Accounting Language Is a Process

Any business owner wanting to increase their chances of success must understand accounting. But just like any language, it takes time to learn.

The good news is you can speed up the learning process by working with someone fluent in the language. These are the accountants.

Work with them, let them help you understand the language using financial statements, allow yourself to read them, and be sure to ask your accountant questions. In time, once you have more insights and have read many financial statements, you'll be poised to lead your business to greater heights.To learn what the language of business is and how to use it to increase your chances of success, book a call with us or check out our bookkeeping services now.

Accounting Is the Language of Business, and You Must Learn It To Succeed
Watch Now

Warren Buffet once said to an intern, "accounting is the language of business." In our contemporary business landscape, this makes sense. Every formal ecommerce or traditional small business you trade with knows this language—it's a necessity.

Success in anything is related to communication. How well you communicate dictates how far you can go; to communicate, you must know the language. The same thing goes with the language of business—accounting.

Let Unloop tell you why accounting is the language of business and how you can learn it to take your business to a whole new realm of success.

Why Is Accounting the Language of Business?

Just as we need language and speech to exchange ideas, accounting is born out of the need to exchange money. As soon as we used money as a medium of trade, the need to count it followed—this is in the spirit of fair trade.

Since then, counting money has grown more sophisticated. It has become known as accounting, and we use it today because of the following.

It Supports Finance

In the context of business, finance is the discipline of managing money. Yet, for money management to exist, there has to be something tangible to work on. That's what accounting provides—numbers.

Accounting allows business owners to look at their financial transactions and interpret them to manage their business's resources effectively.

Accounting Aids Economics (and Vice Versa)

On a macro level, accounting generates financial and economic data that policymakers can use to formulate monetary and fiscal policies that will eventually keep the nation's economy healthy.

On a micro level, business managers also use financial statements to create new business and management policies to help the business grow, be it a traditional one or one in an online marketplace.

It’s the Lingua Franca of the Business World

Accounting follows a standard called the Generally Accepted Accounting Principles (GAAP). This solidifies the accounting concepts, processes, and methods used enough to make it adaptable by everyone doing business.

Every business that pays taxes uses the same language with few variations, which adapt to the region or state they do business with. But more or less, this allows all accountants and business people to understand each other. It makes it easy to interpret and audit financial documents and make sound business decisions.

The Pillars of the Language of Accounting

The road to learning the language of business starts with the fundamental parts. Like in speech—where we have nouns, pronouns, verbs, adjectives, and adverbs that serve as building blocks of sentences—accounting has the following five pillars.

Assets

Every tangible or intangible thing put into the business is considered an asset. It can be property, equipment, furniture, vehicles, labor, and money on hand or to be received.

Recognizing assets involves determining their value in monetary terms. That said, the easiest to quantify is the most liquid form of asset: cash. As for other assets, such as property, accountants find their market value and record their money equivalent.

Liabilities

Long and short-term debts incurred by a business fall under liabilities. This is considered a pillar because it is part of every business's nature to get into debt.

Liabilities are expressed in monetary terms representing the amount of obligation a business has. Some examples of liabilities are short and long-term loans, accounts payable, mortgages, and other expenses that are yet to be paid.

Equity - Capital

Equity is a stakeholder or a sole proprietor's share of the business expressed in monetary terms. Accountants determine this by getting the difference between assets and liabilities; the resulting amount represents a businessperson's ownership value.

This pillar increases or decreases in value depending on business performance. In any business structure, the goal is always to increase the amount of equity. Commonly this is done by making efforts to increase sales and revenue, but accountants and finance people know other activities that can grow equity.

Expenses

This pillar expresses the day-to-day expenditure of a business. It's straightforward, but expenses can behave differently and come from different business sides.

For example, you have expenses from producing goods (often called costs), then you also have expenses coming from administrative functions, such as payroll and supplies. To get an accurate picture, accountants must classify all these expenses accordingly.

Revenue

Money that comes into the business, mainly from selling goods and services, is called revenue. But just like expenses, revenue can come from other sources besides sales. Revenue can also come from interests earned or rental income from a property, just to name a few.

Financial Statements: Communicating the Accounting Language

The pillars of accounting language make up business transactions recorded in the books. These are then processed and arranged into an understandable form called financial statements.

Financial statements communicate the accounting language that most accounting professionals, managers, and business owners can understand. They come in three forms.

The Income Statement

This instrument breaks down revenue and expenses incurred during a period of business operations. Essentially, it communicates how much money the business earned from sales and other sources of revenue. It also tells you how much of the revenue the business keeps after all expenses are accounted for.

The resulting bottom line, also known as net profit after tax, forms part of the business's assets which will affect the balance sheet.

The Balance Sheet

Balance sheets communicate the value of the business. It breaks down assets, liabilities, and equity to arrive at a monetary equivalent of a business's worth and, eventually, how much the owner can get from it.

This instrument follows the accounting formula of Assets = Liabilities + Equity, meaning the total amount of the asset section must be equal to the combined amount of liability and capital represented in another section.

The Cash Flow Statement

The cash flow statement filters all the cash transactions of a business and categorizes them into three different business activities: operations, financing, and investment. This is one accounting statement that communicates the degree of money inflow and outflow.

A cash flow statement is important to business managers as it gives them a bird's eye view of where cash resources are used and how it stalls or propels business growth.

Accounting Professionals Are Your Translators

Accounting professionals understand the pillars of accounting and the complexities attached to them. They act as translators. They keep all transactions to arrange them into financial statements that communicate accounting in understandable format.

As translators, they have knowledge and skill sets that allow them to make complicated things simple. These skills allow them to do the following.

Bookkeeping

Bookkeeping is classifying and recording business transactions in line with generally accepted accounting principles. The bookkeeping process follows full cycle accounting and builds the business's accounting records which the accountant will use to draw up accounting reports.

Financial Statement Reporting

Preparing financial statements comes after bookkeeping and is done monthly or yearly. Generating financial reports depends on bookkeeping, and the more accurate the financial records, the more financial statements communicate to stakeholders.

Auditing

Accountants can also check the methods other accountants use. This is called auditing and helps ensure that recordkeeping and financial statement reporting align with the standards.

Tax Compliance

Part of understanding the language of accounting is being adept with taxes and how it affects the business. So accountants study different taxes and keep themselves up to date with current tax laws to ensure accurate and compliant tax expense recording.

Consulting

If there's anyone who knows how your business works, it's the accountant. They look at the numbers and see the nut and bolts of your business. As such, they can take on a consulting capacity and advise managers on which parts of the business need attention to ensure increased profits and equity.

Understanding the Accounting Language Is a Process

Any business owner wanting to increase their chances of success must understand accounting. But just like any language, it takes time to learn.

The good news is you can speed up the learning process by working with someone fluent in the language. These are the accountants.

Work with them, let them help you understand the language using financial statements, allow yourself to read them, and be sure to ask your accountant questions. In time, once you have more insights and have read many financial statements, you'll be poised to lead your business to greater heights.To learn what the language of business is and how to use it to increase your chances of success, book a call with us or check out our bookkeeping services now.

Read more

The previous years only showed us that ecommerce is booming and continuing to be popular with entrepreneurs. Large retail sites like Amazon, Shopify, and Etsy have virtually everything you could want to buy. And setting up an ecommerce business opens your products and services to millions of customers that could give you big earnings.

However, along with the flow of money, accounting is essential in keeping your business running, and first-timers may find accounting challenging. In this blog post, we'll run down some common challenges business owners may encounter and share some tips to overcome them.

Managing Inventory

Inventory management is a challenging endeavor for both large and small enterprises. Inventory management involves many tasks to ensure that your business runs smoothly. First, listing all your products is crucial. You should always have a rough estimate of the number of your items. This practice will help you post the right product listing on your platform and take note of products you need to replenish.

You are also responsible for tracking your goods if you have multiple warehouses. It is best that you distribute your products equally, so your items don't go out of stock. On paper, listing and tracking inventory looks easy. But what do you do when delivery delays happen, or there may be a surplus of items, or even higher demand?

Difficulties in inventory are easily overcome when you designate a team to manage them. But, if you're a small business owner who does everything by yourself, your best option is to get accounting software with an inventory management feature. This feature will automate inventory tracking for you and even notify you of your deliveries and the number of products in stock.

Understanding How Sales Tax Works

Understanding how sales tax works is a part of ecommerce accounting. Small business owners dread accounting mainly because of its tax implications, but you can't run from it forever. Every ecommerce business needs to comply with sales taxes. That's why it is important you understand how the collection is done and pay the right taxes to proper tax collection agencies.

Many things could go wrong when you mishandle your taxes, and paying penalties will do no good for your business. Here are some practices you can do to overcome challenges in handling your business sales taxes:

  • Sales tax rates may differ depending on your location or the type of product you are selling. Sale tax rates are posted on the tax collection agency website, so check them out so you can impose the proper sales tax on your goods.
  • Take advantage of the features of your ecommerce platform. If you sell products on Amazon, you can use a service that allows consumers' sales taxes to be automatically collected. This way, you can guarantee that you are collecting the right amount of sales tax for remittance.
  • Invest in the right accounting tools. Software like QuickBooks Online and TaxJar calculate the sales tax you need to collect for each of your products.
  • Be mindful of the due dates. Depending on your sales volume, the revenue agency may require you to remit quarterly, semi-annual, or yearly sales tax.

Handling Product Returns

If you have an online store, you will have to handle refunds and returns one way or another. These returns can really put your accounting tasks into chaos. There are several accounting tasks you need to perform when handling returns. First, when an item is returned, you need to have it restocked in your inventory to put it up again for listing.

Furthermore, refunds can disrupt your cash flow. For example, once an item is sold, you write it off as sales. But when the item comes back for a refund, and you've paid the client back, you must write it off as an expense. This is so that at the end of the accounting period, your cash flow statements are balanced.

Figuring Out Your Business Expenses

Cash is king for ecommerce businesses. But remember, running a business is not all about revenue and income sales. To keep your firm operating, you must also pay your expenses. For example, you must cover expenses when you restock your inventory.

If you produce your products, there are expenses in buying equipment. You have to understand your business expenses to ensure you create a working profitable margin and you can price your items accordingly.

Here are some things you can do to keep track of your expenses:

  • Track every cost related to the product sold.
  • Designate a cost ledger in your bookkeeping software entries.
  • Pay attention to your profit and loss statement. Use accounting software for your financial statements to ensure that they are accurate.

Keeping Track of Third-Party Marketplace Fees

If you're selling on big ecommerce platforms like Amazon, Shopify, eBay, and the like, more likely, you are paying for third-party fees without even realizing it. These fees are considered business expenses, and if you don't manage them correctly, they will be a negative on your balance sheets.

Here are some tips to help you understand third-party marketplace fees in different ecommerce platforms:

  • Never skip reading and understand the seller's agreement provided by the platform. All crucial details about payment fees should be included in the agreement.
  • Consider the fees when pricing your goods to ensure you achieve your profit margin.
  • Use accounting software for ecommerce businesses to help you calculate fees and plan your expenses accordingly.
  • Other platforms offer bulk listings and promotions that can reduce the cost of fees. Take advantage of these offers to lessen fees.

Meeting the Demands of Your Customers

Online market trends change rapidly. One day, a product that people seldom buy will suddenly be in demand, and you will find it out of stock. Meeting the demand of your customers is a good thing for your business.

Here are some ways to keep up with the demands of your clients:

  • Understand the demand for each product you sell and check with your suppliers on how fast they can deliver when you need fresh stock.
  • Do business forecasting to determine which products are most in demand and the season when customers look for them the most so your inventory is always ready.
  • Don't overbuy items that are sold slowly. Doing this will lock up money in your inventory which can appear negative in your financial reports.

Handling Payments in Different Currencies

If you want to expand your business, offering your products to international clients is good for your business. To make it easier for them, you must receive their payments in their country's currency. However, converting currencies can be confusing and involves hidden charges.

Here are some things you can do to overcome challenges when accepting different currencies:

  • Look for software that can help you sell in as many different currency options as possible. This will make conversion easier for you and your customers.
  • Use accounting software that can handle multiple currencies to ensure that exchange rates are always on point and all fees are handled accordingly.
  • Know your credit card payment processor's exchange rate and compare it to the baseline of mid-market rates.

Unloop: Accounting for Small Ecommerce Businesses

Challenges in ecommerce accounting are common, especially when you're new to the online world. But there's no need to worry. There are accountants for ecommerce businesses ready to handle your accounting needs. Unloop is one of them.

We offer different accounting services for small business owners. We have:

  • Bookkeeping
  • Accounts payable services
  • Forecasting
  • Payroll
  • Taxes

Hiring a professional is good for your business if things get too challenging. Unloop can take care of all your accounting requirements so you can concentrate on other areas of your company. We hope this blog post helps you manage your accounting tasks better, but if you need a hand, don't forget to book a call with us!

Accounting for Ecommerce Businesses: Challenges and How To Beat Them
Watch Now

The previous years only showed us that ecommerce is booming and continuing to be popular with entrepreneurs. Large retail sites like Amazon, Shopify, and Etsy have virtually everything you could want to buy. And setting up an ecommerce business opens your products and services to millions of customers that could give you big earnings.

However, along with the flow of money, accounting is essential in keeping your business running, and first-timers may find accounting challenging. In this blog post, we'll run down some common challenges business owners may encounter and share some tips to overcome them.

Managing Inventory

Inventory management is a challenging endeavor for both large and small enterprises. Inventory management involves many tasks to ensure that your business runs smoothly. First, listing all your products is crucial. You should always have a rough estimate of the number of your items. This practice will help you post the right product listing on your platform and take note of products you need to replenish.

You are also responsible for tracking your goods if you have multiple warehouses. It is best that you distribute your products equally, so your items don't go out of stock. On paper, listing and tracking inventory looks easy. But what do you do when delivery delays happen, or there may be a surplus of items, or even higher demand?

Difficulties in inventory are easily overcome when you designate a team to manage them. But, if you're a small business owner who does everything by yourself, your best option is to get accounting software with an inventory management feature. This feature will automate inventory tracking for you and even notify you of your deliveries and the number of products in stock.

Understanding How Sales Tax Works

Understanding how sales tax works is a part of ecommerce accounting. Small business owners dread accounting mainly because of its tax implications, but you can't run from it forever. Every ecommerce business needs to comply with sales taxes. That's why it is important you understand how the collection is done and pay the right taxes to proper tax collection agencies.

Many things could go wrong when you mishandle your taxes, and paying penalties will do no good for your business. Here are some practices you can do to overcome challenges in handling your business sales taxes:

  • Sales tax rates may differ depending on your location or the type of product you are selling. Sale tax rates are posted on the tax collection agency website, so check them out so you can impose the proper sales tax on your goods.
  • Take advantage of the features of your ecommerce platform. If you sell products on Amazon, you can use a service that allows consumers' sales taxes to be automatically collected. This way, you can guarantee that you are collecting the right amount of sales tax for remittance.
  • Invest in the right accounting tools. Software like QuickBooks Online and TaxJar calculate the sales tax you need to collect for each of your products.
  • Be mindful of the due dates. Depending on your sales volume, the revenue agency may require you to remit quarterly, semi-annual, or yearly sales tax.

Handling Product Returns

If you have an online store, you will have to handle refunds and returns one way or another. These returns can really put your accounting tasks into chaos. There are several accounting tasks you need to perform when handling returns. First, when an item is returned, you need to have it restocked in your inventory to put it up again for listing.

Furthermore, refunds can disrupt your cash flow. For example, once an item is sold, you write it off as sales. But when the item comes back for a refund, and you've paid the client back, you must write it off as an expense. This is so that at the end of the accounting period, your cash flow statements are balanced.

Figuring Out Your Business Expenses

Cash is king for ecommerce businesses. But remember, running a business is not all about revenue and income sales. To keep your firm operating, you must also pay your expenses. For example, you must cover expenses when you restock your inventory.

If you produce your products, there are expenses in buying equipment. You have to understand your business expenses to ensure you create a working profitable margin and you can price your items accordingly.

Here are some things you can do to keep track of your expenses:

  • Track every cost related to the product sold.
  • Designate a cost ledger in your bookkeeping software entries.
  • Pay attention to your profit and loss statement. Use accounting software for your financial statements to ensure that they are accurate.

Keeping Track of Third-Party Marketplace Fees

If you're selling on big ecommerce platforms like Amazon, Shopify, eBay, and the like, more likely, you are paying for third-party fees without even realizing it. These fees are considered business expenses, and if you don't manage them correctly, they will be a negative on your balance sheets.

Here are some tips to help you understand third-party marketplace fees in different ecommerce platforms:

  • Never skip reading and understand the seller's agreement provided by the platform. All crucial details about payment fees should be included in the agreement.
  • Consider the fees when pricing your goods to ensure you achieve your profit margin.
  • Use accounting software for ecommerce businesses to help you calculate fees and plan your expenses accordingly.
  • Other platforms offer bulk listings and promotions that can reduce the cost of fees. Take advantage of these offers to lessen fees.

Meeting the Demands of Your Customers

Online market trends change rapidly. One day, a product that people seldom buy will suddenly be in demand, and you will find it out of stock. Meeting the demand of your customers is a good thing for your business.

Here are some ways to keep up with the demands of your clients:

  • Understand the demand for each product you sell and check with your suppliers on how fast they can deliver when you need fresh stock.
  • Do business forecasting to determine which products are most in demand and the season when customers look for them the most so your inventory is always ready.
  • Don't overbuy items that are sold slowly. Doing this will lock up money in your inventory which can appear negative in your financial reports.

Handling Payments in Different Currencies

If you want to expand your business, offering your products to international clients is good for your business. To make it easier for them, you must receive their payments in their country's currency. However, converting currencies can be confusing and involves hidden charges.

Here are some things you can do to overcome challenges when accepting different currencies:

  • Look for software that can help you sell in as many different currency options as possible. This will make conversion easier for you and your customers.
  • Use accounting software that can handle multiple currencies to ensure that exchange rates are always on point and all fees are handled accordingly.
  • Know your credit card payment processor's exchange rate and compare it to the baseline of mid-market rates.

Unloop: Accounting for Small Ecommerce Businesses

Challenges in ecommerce accounting are common, especially when you're new to the online world. But there's no need to worry. There are accountants for ecommerce businesses ready to handle your accounting needs. Unloop is one of them.

We offer different accounting services for small business owners. We have:

  • Bookkeeping
  • Accounts payable services
  • Forecasting
  • Payroll
  • Taxes

Hiring a professional is good for your business if things get too challenging. Unloop can take care of all your accounting requirements so you can concentrate on other areas of your company. We hope this blog post helps you manage your accounting tasks better, but if you need a hand, don't forget to book a call with us!

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About unloop

Unloop is the first and only accounting firm exclusively servicing ecommerce and inventory businesses in the US and Canada. With the power of people and technology, our team dives deep into COGS and inventory accounting.. You are paired with a dedicated bookkeeping team that prepares accurate financial statements, financial forecasts, and can also pay bills or run payroll for you. Come tax time, everything is organized and ready to go, so you don't need to worry. Book a call with an ecommerce accountant today to learn more.

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