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Sales trend analysis (STA) is the cornerstone of sustainable business growth, so knowing its ins and outs is essential. As a rookie in the field, you must still be in the stage of learning the ropes, so we're here to help you.

This guide will equip you with essential skills to decipher market fluctuations, customer behaviors, and emerging patterns. We delve deep into sales data analysis techniques, empowering you to make informed decisions, optimize inventory, enhance customer experiences, and boost profitability. 

From leveraging advanced analytics tools to practical tips on interpreting consumer preferences, this comprehensive resource is your road map to navigating the ever-changing ecommerce terrain. So, let's begin!

Sales Trends Analysis Benefits and Value

Making informed decisions and developing strategies are some benefits of STA. By understanding the underlying trends, companies can anticipate market demand, identify high-performing products or services, and focus on areas that require improvement.

Key Components and Factors for Analysis

A comprehensive sales analysis must consider these key components and factors.

What Is the Formula for Sales Trend Analysis?

((Current Period Value - Base Period Value) / Base Period Value) * 100

Getting the answer involves gathering historical sales data and ensuring all the gathered details are accurate and updated. The answers will provide patterns or deviations over a specified period. By analyzing these trends, you’ll know the behavior of your target market and base your decisions on data instead of instinct.

Gathering Data

If you want to make data gathering easier, keep an eye on the details and establish a process too. How so? You can check out the details below.

Identify Relevant Data Sources.

Identifying the sources that provide accurate and reliable data for analysis is crucial. This may include internal sources such as Customer Relationship Management (CRM) systems, different kinds of reports, and customer data. External sources like market research reports, industry publications, and competitor analysis can give you better financial judgment when monitored.

Collect Data and Organize Them Effectively.

Once the relevant data sources are identified, collect and organize them. Capture data consistently over time using standardized formats, and maintain proper documentation. Because automated tools and data management systems are champions in streamlining collection, organization of information from various channels are done swiftly.

Ensure Data Accuracy and Reliability.

Validate the collected data to eliminate duplicates or errors and address inconsistencies. Regular audits and cross-checking with multiple sources help ensure reliable figures for analysis.

Performing Trend Analysis

After gathering data and keeping them organized, you must know how to make sense of them, and below are just some ways to do so.

Identify Patterns, Cycles, and Anomalies in Sales Data.

Identify patterns, cycles, and anomalies in your sales data. Once you notice the trends, you can come up with study and develop conclusions about your customers and the market.

Utilize Statistical and Analytical Tools for Analysis.

Companies often rely on statistical and analytical tools to conduct STA effectively. These tools help to accurately measure and interpret sales patterns and fluctuations, identify key trends, and make data-driven decisions. From regression analysis to time-series forecasting models, these tools enable you to uncover hidden insights within your sales data.

Perform STA.

However, merely identifying trends is not enough; it is equally crucial to interpret and understand the implications of these trends. You must assess whether the observed sales upwards or downwards shift trend is sustainable or just seasonal. 

Understanding the implications of sales trends helps you adjust your strategies, make informed decisions, and adapt business operations accordingly. For example, a declining trend in sales may indicate the need for marketing efforts to reach new customers or develop new products. Seasonal sales cycles may need inventory levels or staffing adjustments. 

Forecasting Sales Trends

After doing an STA, you can further use data for sales forecasting. By leveraging historical data, implementing suitable forecasting models, and considering internal and external factors, you can gain meaningful insights into sales trends, facilitating better decision-making and maximizing profitability.

Use Historical Data to Predict Future Trends.

Historical sales data provides valuable insights into past performance, allowing you to identify patterns and trends. By analyzing previous sales figures, companies can determine seasonal fluctuations, identify successful marketing strategies, and forecast future sales based on historical patterns.

Implement Forecasting Models and Techniques.

You can employ various forecasting models and techniques to predict sales trends accurately. These include quantitative methods like time series and regression analysis and qualitative methods like expert opinions and market research surveys. Employing a combination of techniques can enhance the accuracy of sales trend predictions.

Factors to Consider for Accurate Sales Trend Predictions

To ensure accurate sales trend predictions, consider these:

Considering these components allows you to make more precise sales forecasts, enabling them to allocate resources effectively, streamline production, and adjust sales strategies accordingly.

Trends Analysis and Business Strategies

Applying STA to business strategy provides valuable insights for improving areas of weakness, targeting the right markets, optimizing resource allocation, and staying adaptable. Businesses can leverage these insights to elevate their performance and drive sustained growth.

Identify Areas for Improvement Based on Trends

Analyze sales trends to identify areas for improvement. By studying patterns in customer behavior and sales data, you can pinpoint areas of weakness and take corrective measures including product feature improvement, perfecting customer service, or refining pricing strategies.

Adjust Sales Strategies and Target Markets

STA enables you to adjust your sales strategies and target markets. By closely monitoring trends, you can understand shifts in customer preferences, buying habits, or industry trends. With this knowledge, businesses can realign their sales tactics and focus on target markets that show growth potential.

Allocate Resources Effectively for Maximum Impact

STA helps identify high-potential areas where resources are best allocated. This ensures that marketing and sales efforts are focused on segments with the highest likelihood of yielding positive results.

Adapt to Changing Market Dynamics

Organizations like yours can identify emerging opportunities or threats by continuously evaluating sales trends and adjusting their sales strategy accordingly. Through this, you can stay flexible and adaptable to market changes.

Tools and Technologies for Trend Analysis

Regarding STA, a range of software and tools are available to assist you in understanding and interpreting sales data. Some popular options include CRM software, business intelligence platforms, and data visualization tools. These tools include tracking sales metrics, generating reports, and providing predictive analytics.

Select the Right Tools for Specific Needs

Evaluating and selecting the right tools for specific needs requires careful consideration. You should assess your business requirements and goals before making a decision. Factors to consider include:

Integrate Analysis Tools Into Existing Systems

Integrate STA tools into your existing systems to ensure seamless data flow and avoid duplication of efforts. The tool you select should be able to integrate with other systems, such as CRM, ERP, or POS software, to gather data automatically. 

This integration allows for you to create powerful dashboards for real-time data analysis. It also reduces manual data entry and enhances the accuracy of the insights gained. Additionally, system integration enables data sharing across different departments and management teams, facilitating collaboration and informed decision-making throughout the organization.

Challenges and Best Practices in Trend Analysis

STA is a crucial component of strategic business planning, but it also comes with challenges and pitfalls. Knowing the difficulties in handling this task makes you more prepared in case you face them. You can also proactively avoid them by following some best practices. 

Perform Sales Trend Analysis With Unloop

Mastering STA is paramount for sustained success. We hope this guide has provided you with tools to decode market fluctuations and customer behaviors to help you decide better for your business.

The work will be lighter if you seek assistance and partner with experts, just like our team at Unloop. Our team is trained in bookkeeping, data gathering and management as well as financial reporting, so you won't find it difficult to collate, organize, and make sense of business data.

Let us help you do your trend analysis correctly. Contact us now!

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Time-consuming, stressful, and tedious are often words associated with the manual bank reconciliation process. It is typical for businesses to do bank reconciliation every month. But other businesses choose to do them more frequently, so there are fewer transactions to check and a lesser possibility of errors and inconsistencies.

For businesses, bank reconciliations might be a hassle, but it doesn't have to be. Bank reconciliation software can speed up the process and make it easier for you. We'll discuss the automation process's benefits and give a quick overview of how to do it.

How To Automate Bank Reconciliation

Automating the bank reconciliation process is not as challenging as it sounds. Don't forget to take notes! If you follow these simple setup processes, you'll worry less about bank reconciliation.

1. Look for an accounting software with a good bank reconciliation feature. Popular options are Xero, QuickBooks, FreshBooks, and Wave accounting software. But don't be afraid to explore more automatic bank reconciliation software. 
2. Connect your bank account to the software with credentials provided by the bank. This process will allow the software to access your data and import them.
3. Once the import process is complete, you need to review and categorize the different transactions according to the accounting system you have. Some typical transaction categories are accounts payables, cash equivalents, inventory, account receivables, and cash accounts.
4. Accounting software options allow businesses to set up bank rules. Don't forget to input the necessary settings to start the automation process and prevent errors.
5. After categorizing, the reconciliation process will start, and the system will highlight any inconsistencies and alert you of anything that requires immediate attention.
6. After the reconciliation process, you need to perform required adjustments such as outstanding checks, ongoing deposits, and bank fees.
7. Set up a schedule for your reconciliations to ensure your business does the reconciliation process on a regular basis.

Advantages of Automatic Bank Reconciliation

An automated process makes running a business more convenient. Investing in accounting software is a wise move for every business. However, other businesses, especially small ones, are reluctant to spend the money. If you're still in doubt, here are some of the advantages of automating your bank reconciliation process.

Fewer Errors and Inconsistencies

The manual reconciliation process is error-prone. No matter how careful business owners are, it is easy to misread figures and make mistakes in calculations and inputs. Not to mention, you have to go through tons of spreadsheets and documents to fix the errors. That is a significant amount of time that businesses could be using for other areas of their operations.

You can make sure everything is accurate down to the last detail with automatic reconciliation. Also, once a lapse is spotted, you will be notified so you can resolve it right away.

A Great Time Saver

One of the excellent benefits of automated reconciliation is its time efficiency. With an accounting system, features that track outgoing cash, and the ability to match receipts to transactions, the reconciliation process can be completed in a matter of minutes compared to doing it manually, which can take hours.

Furthermore, you can skip combing through your spreadsheets for hours and hours. The accounting software can check the totals in the spreadsheet to see if they match your balance sheets, income statements, and other financial records.

Improves Cash Flow Management

You can achieve better cash flow management by automating your bank reconciliation process. The automatic process can quickly identify wrong and incomplete transactions, which can significantly affect a business's cash flow. Businesses can therefore decide how to manage their cash flow with confidence knowing exactly how much money they have available.

In addition, automatic bank reconciliation allows businesses to identify and resolve any outstanding issues on time, which can help them avoid late fees and other penalties that can negatively impact their cash flow. Overall, by improving the accuracy and efficiency of the reconciliation process, businesses can optimize their cash flow and improve their financial health.

Better Fraud Detection and Prevention

Software with automatic bank reconciliation have fraud detection features that can help businesses identify early on if there are any unauthorized transactions or unusual activities that can indicate fraud. They can also alert businesses of missing or altered transactions that could be a sign of embezzlement.

With better fraud detection and prevention, businesses can protect their financial assets and maintain their integrity. When businesses detect fraud early, they can take swift action and prevent significant damage to the business. Further, automated bank reconciliations can make an audit trail for all your transactions, which is essential for investigating and resolving any fraudulent activities.

Helps With Better Business Decision Making

The benefits when businesses fully automate bank reconciliations go beyond the process. It can help business owners make more sound and crucial decisions. Here are some ways in which automated bank reconciliations help with decision-making.

• It provides accurate financial data in real-time so you can make informed decisions with reliable key information.
• It aids with better cash flow management to help you make decisions regarding your business funds, especially with your business expenses and other investments.
• You can be confident that your accounts are accurate and consistent so you can make critical decisions and create strategies for managing your finances.
• Automated bank reconciliation also helps with better forecasting. You can easily identify if there are potential shortcomings and surpluses, and it helps you make necessary adjustments.

Get Professional Accounting Help With Unloop

Reconciling bank accounts is just one part of the entire accounting process. Many business owners, even seasoned ones, would prefer to avoid accounting altogether. Fortunately for entrepreneurs out there, Unloop offers the professional services you need.

We have a team of professionals that can handle all your accounting needs. Say goodbye to financial stress and hello to business growth! Experience our exceptional services, like bookkeeping, payroll, taxes, forecasting and more.

Book a call with our experts today, and see how we can help you!

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

These days, we're seeing a lot of popular accounting software programs offering different business solutions that make entrepreneurs' lives easier. Despite this abundance, it's still best to narrow down your options. We've done that for you by pitting two of the best software against each other: Peachtree vs. QuickBooks.

In this article, Unloop will tackle two of the most talked-about accounting software in business, Peachtree—also known as Sage 50—and QuickBooks. Naturally, these two must be on top of your choices, so let us help you decide by showing you a fair comparison that will help you weigh what's best for your own business.

Overview: Sage 50 (Peachtree) vs. QuickBooks 

As small business owners and accounting professionals, we must first consider accuracy when choosing accounting software. Managing and auditing your books with highly accurate solutions is paramount, and we know that both software is worth trying, especially if you're an owner looking for a risk-free option. 

Key Features 

For ecommerce businesses, a mid-tier software is the practical choice when setting up an accounting system for the first time. Sage 50 and QuickBooks Online each offer one with the features that every business owner or accountant will benefit from. Let’s put them side by side for comparison.

App Integrations

One of the biggest advantages of QuickBooks Online is its vast app integrations across many platforms, not just for accounting but for payroll and ecommerce with over 750 apps. Compared to Sage 50 with over 120 apps available in the marketplace, QuickBooks easily takes the lead for this criteria.

Layout and Design

QuickBooks Online’s interface is user-friendly. When you pull up the software, you’ll first see a sidebar menu on the left side that has all the essential options you need such as the dashboard, banking, sales, taxes, and reports, to name a few. 

The main section of QuickBooks Online’s interface gives you a straightforward design with few details, yet presents you with the necessary ones in a way that’s easy to digest. 

Sage 50, on the other hand, gives more detail and looks tighter compared to most accounting software. They are generous with details, so you’ll often encounter windows and dialogue boxes that contain lists, dropdown boxes, radio buttons, and other key design features. This is perfect for business owners and managers who want more information and control on how they manage their finances.

Sage 50 vs. QuickBooks: Price Points

The good news is that both Sage 50 and QuickBooks Online graciously offer special discounts. Moreover, QuickBooks has a 30-day trial period, and Sage 50 lets you take a test drive or view an on-demand demo.

If you do decide to subscribe, here are the available plans.

QuickBooks Online 

QuickBooks Online has four plans with varying subscription prices and user capacity.

Peachtree (Now Sage 50) 

PeachTree offers three tiers for their online accounting software. Each of the plans are also paid on subscription basis.

Sage 50 Accounting Software Highlights

Sage 50 isa tool you can install on a desktop computer. When you look for tools to help you track your business finances, this name will be among the first recommendations you will see. Here are its highlights.

A Tool for Businesses of Different Sizes

Sage 50 has categorized its offers for different businesses: small, medium, and businesses of any size. So, owners can easily pick the services that fit the expanse of their venture. For instance, a small business offer includes cloud-based accounting, time and billing tracking, and workforce management. More and more bookkeeping and accounting features are added to the plans for other business sizes.

Solutions for Different Industries

Sage’s service categorization for various industries differentiates it from other small business accounting tools. The software particularly flexes its reliability by being an accounting tool for several for-profit and non-profit industries. The tool’s features are tailor-fitted to satisfy the needs of the different trades.

Satisfying Different Business Needs

Nevertheless, if you do not fall into any of the industries mentioned, you can still enjoy these features of Sage 50:

• ERP, accounting, CRM, and HR software
• Inventory and supply chain management
• Business intelligence
• Payment processing
• Accounting
• Startup cost budget templates

These offers will be included depending on the plan you subscribe to. The greater your investment, the more features you will get. 

QuickBooks Accounting Software Highlights

Not far behind, the accounting tool many businesses go to is QuickBooks. Similar to most software companies, its maker, Intuit, offers several product lines such as their top-of-the line QuickBooks Enterprise and their powerful starter, QuickBooks Essentials. But the most popular among ecommerce businesses is QuickBooks Online.

You can access this software on desktop computers and mobile phones. QuickBooks is equally reliable as Sage 50 because of the following features.

Live Bookkeeping

When you sign up for a QuickBooks plan, you'll enjoy its live bookkeeping immediately. This feature keeps your books up-to-date by ensuring that financial data from the start of the year to the current month are collected, categorized, and stored. If you sign-up midyear, bookkeepers will track whatever data is missing. Trained bookkeepers will update your books live from then on.

Classic Features for Accounting

You'll also get to enjoy these traditional bookkeeping and accounting features by using QuickBooks:

• Invoice generation, sending, and scheduling
• Bank reconciliation
• Income and expense tracking
• Snapping and storing receipts
• Making and receiving payments
• Tax tools
• Tool integration
• Data security
• Bookkeeping
• Inventory management
• Time and project tracking

Tax Penalty Protection

Keeping your finances tracked has plenty of benefits, but one is being prepared when tax season comes. With QuickBooks, you'll be equipped with all the data you need. To ensure that all the data you submit for a tax audit is accurate, QuickBooks has a tax penalty protection that guarantees up to a $25,000 payment per year if you get any tax-related inaccuracies and errors from the tool.

QuickBooks Priority Circle

Another perk that sets QuickBooks apart from its competitors is the Priority Circle. This service offers QuickBooks Advanced users in-depth training about software usage and 24/7 customer support. You won’t need to go the extra mile by looking for a QuickBooks training program, which will surely cost extra.

Quickbooks vs. Sage 50: The Similarities

As two highly-sought accounting software, Sage 50 and QuickBooks understand what most businesses need when it comes to management. To be competitive, they have to expand what their software is capable of, extending them beyond bookkeeping and accounting. The result is a set of four features similar to each other yet delivered in their own unique ways. 

You’ll enjoy the following offerings with both QuickBooks and Sage 50. 

Business Accounting

Make sense of all the details your bookkeeper has logged in and generate reports of your business income and expenses through accounting features of both QuickBooks and Sage 50. You can rely on both software to store and create accurate reports quicker than manual accounting. Software and third-party apps make the task very simple and less complex. 

There are other accounting apps available such as Photeeq, FreshBooks, and Zoho Books. If you have important documents in another software, you can integrate them easily to QuickBooks or Peachtree as both software have the capabilities. 

As a result, there will be no need to open several books and Excel sheets to check data because everything you need will be in one place. With these features, you can access real-time business data remotely and generate reports from the latest numbers. 

Cloud-Based Accounting

Cloud-based technology is a way to secure data. Before, you’d store important information about the company on an office desktop, which anyone can access. Now, data can be stored in the cloud with impregnable security that requires special approval for each step.

The company's manager can control who can access business information through cloud-based accounting. In most cases, the company bookkeeper, accountant, and finance teams are the only people granted access. Then, everyone with access can see the same information no matter where you access the app.

Time and Project Tracking Capabilities 

You can reap plenty of benefits with accurate time tracking and project management. Among them are the following:

• You can check the time rendered by all your employees in-house or remotely.
• Project progress is visible to you and other members of the team. 
• Different teams and departments can collaborate.
• Business operations are organized.
• The software can generate time tracking into invoices for easier payroll processing. 
• The processed payroll can automatically be sorted as company expenses.
• You can store data on time and project spending for future reference. 

A small business owner must look for these convenient features in accounting software—both Sage 50 and QuickBooks offer them. 

Payments and Billing 

Everything these days is automated, so if you run into software that does not offer the automation expectations you have, strike it off your list. Regarding receiving and sending payments, generating invoices, storing receipts, and sorting all these transactions into categories for accounting, both QuickBooks and Sage 50 have got you covered. 

So, get ready to link your payment gateways, receiving accounts, bank accounts, and credit cards to Sage 50 and QuickBooks so the software can track all direct deposits and expenses immediately. Wherever you are, when you receive a notification of payment or request to pay, you can process them instantly as long as there is an internet connection.

HR Services

Both Sage 50 and QuickBooks have a service focused on human resource (HR) management, which is essential once you've grown your business and already managed several employees.

The HR feature is especially helpful if you have a diverse team of professionals working for you. This ensures employees' wellbeing is handled well according to the laws and regulations where your business operates.

Sage 50 vs. QuickBooks: The Differences

Despite their similarities, the two accounting software also have to differentiate themselves to stand out. Here are the four key differences that may determine whether you'll choose Sage 50 or QuickBooks.

QuickBooks Offers Live Bookkeeping, Sage 50 Offers Live Updates

A prime difference between Sage 50 and QuickBooks is bookkeeping services. QuickBooks has a team of expert bookkeepers clients can consult with via appointment to check how their business is sailing. Once you sign up for QuickBooks’s full-service live bookkeeping, these professionals can help you cleanup your accounting data and do ongoing accounting and consultation. 

The live bookkeeping function, however, is different with Sage. The Sage Live feature only offers real-time collaboration with people that handle your bookkeeping. As for providing a full service accountant, you’ll need to get your own.

Quickbooks Is Simpler, Sage 50 Is More Detailed

In terms of accounting software interface, QuickBooks focuses more on a user-friendly interface with a clean-looking dashboard and a simplified side menu which helps users easily see and navigate through the sections to find out essential information.

Sage 50 gives more detail. It packs a lot of options on its dashboard which includes a sidebar menu and a top bar menu. Users can see different sections and icons on their screen for pointing to a specific segment you need to update or manage. 

Sage 50 and QuickBooks Offer Difference Industry-Specific Features 

Accounting and bookkeeping are needed in all business types and sizes. Aside from offering general assistance, both Sage 50 and QuickBooks provide industry-specific accounting in niches different from each other. Here are the differences in industries they serve.

Which Is Better? Sage 50 vs. QuickBooks

We recommend QuickBooks Online over Sage 50 because of a few critical factors. It’s cheaper than Peachtree because it doesn’t require a desktop app and the software can work online. The accounting software also has a user-friendly interface, making it easier for ecommerce business owners to learn. Many accountants also prefer the simplicity of QuickBooks Online. 

Unloop’s team of bookkeepers are also experts in QuickBooks Online. It's the software we use to help out ecommerce business owners clean up and maintain their financial records so they can make better decisions. If you choose QuickBooks as your accounting software, maximize its potential by having a team who knows how to use it as if your bookkeeping is on autopilot. Give us a call now!

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

The ecommerce landscape can be difficult to navigate, especially with many new currencies, regulations, and tax laws on the horizon. Accounting will be more challenging than it used to be. Multi-currency ecommerce accounting is a topic that scares many entrepreneurs. Luckily, multi-currency accounting software is here to help! 

What do these tools have to offer for blossoming businesses like yours? This article will walk you through the basics of multi-currency accounting and show what this software can do for your business.

Driving Down the Multi-Currency Lane: The Essentials of Multi-Currency Accounting in Ecommerce

One of the most important things you need to know about ecommerce accounting is how it works with multi-currency transactions. If you're new to the ecommerce system, taking everything in won't be easy. So let this article help you with a quick discussion.

First Stop: Multiple Currencies as the Biggest Challenge for Ecommerce Businesses

Let's say your company is based in the US, but you get product supplies from China and sell them to European clients. As you can guess, this will involve three currencies: USD, RMB, and EUR. Consequently, the following (but are not limited to) challenges may arise:

• Your European client or Chinese supplier may ask you to create invoices in their respective currencies. Meanwhile, you also need to record the income in USD.
• Overseas customers shopping on your ecommerce site need to see the product pricing in their default foreign currency.
• You can’t simply accept payments with various currencies because dealing with and integrating them into your ecommerce platform can be confusing.
• Complying with various ecommerce marketplace taxes like the Amazon tax rate can be challenging. You'll ask yourself, "How much tax do I have to pay on Amazon or Shopify?"

There are just too many things involved when dealing with foreign currency transactions. You can't simply calculate all the costs and generate a receipt in USD for these reasons. 

Second Stop: How Does it Affect Bookkeeping and Accounting?

Foreign transactions involve money more than anything else, affecting your bookkeeping and accounting operations the most. Here are specific processes that become more complicated and time-consuming when multi-currency is involved:

• Converting local and foreign currency
• Incorporating the right sales value for international orders
• Translating multiple currency values into a single currency for financial reporting
• Accounting for assets (e.g., accounts payable and receivables, etc.) whose values change when the exchange rate does
• Filing payment and other financial reports to the government where you need details of the currency received from international clients
• Reconciling the ledger balance, which needs bank transactions outlined in relevant currencies
• Tracking foreign exchange gain or loss when money transfers (one bank account to another from different countries).

Third Stop: Overcoming Foreign Currency Challenges With a Multi-Currency Accounting Software or Account

Suppose your ecommerce business deals with multiple currencies. In that case, you must find a way to avoid confusion and making mistakes. 

Luckily, some ecommerce platforms or small business accounting software can solve your multi-currency dilemma: creating a multi-currency account.

What Can Multi-Currency Accounting Software Do For Your Business?

It pays to use online accounting software that offers multi-currency features. These systems allow you to perform essential accounting functions while ensuring you accurately track and manage transactions in various currencies.

With multi-currency and entry-level accounting software, you can:

• Experience enhanced cash flow management despite possible currency fluctuations.
• Perform multi-currency invoicing and billing.
• View reports in your base currency that reflect the impact of foreign currency transactions.
• Seamlessly integrate with your bank feeds and import bank transactions from different currency accounts.
• Stay updated on exchange rate changes.

What Is a Multi-Currency Account and How Does It Benefit Your Accounting?

A multi-currency account is a single bank account that allows the holding, payment, and receiving of multiple money currencies. If you're selling internationally, this is a great advantage to reduce the hassle of complex rates.

Here's how it makes your business's financial operations easier when dealing with foreign payments:

• Using only one bank account for all currencies
• Spending less time with reconciliations
• Fewer accounting adjustments involving different exchange rates
• Avoid paying for foreign exchange commissions
• Transferring money easily

Fourth Stop: What is the Basic Process of Multi-Currency Accounting?

Now that you understand its necessity, here's a basic overview of creating a multi-currency account. Take note that the process may differ per platform or software. Below is a general step-by-step procedure to give you a gist:

1. Register an account for the specific platform.
2. Determine the currencies and conversion rates you want to use.
3. Define and set the main currency for your business transactions.
4. Verify your account by complying with the requirements advised by the provider.
5. Enter period, historical, and daily rates for translation and conversion.
6. Update your rates regularly and post journals to update your account balances.

Bonus Stop: How to Set Up a Multi-Currency Account using OFX

OFX is an example of an excellent international money transfer platform. The good thing about OFX is that it doesn't charge transfer fees and offers more reasonable rates than its competitors. 

In addition, it supports 55 currencies and takes 1-5 days to transfer, depending on the location (unfortunately, it doesn't accept same-day transfers).

Here's an overview of how you can set up a multi-currency account on this platform:

1. Register online or through their mobile app and fill in the important details.
2. Complete registration via call. OFX will set up an appointment with you to ask basic and necessary questions (e.g., currencies and rates you prefer to use)
3. Verify your account. OFX may request some documents and lead you to the Secure Site, where you must send the required documents directly.
4. Wait for the approval and opening of your global currency account within a few business days.

Organize Foreign Currencies With Unloop's Bookkeeping Services

The world is rapidly moving to digital reliance, and ecommerce is running in full force. Hence, businesses must ensure that their financial management system supports and adapts multi-currency accounting. 

Otherwise, you'll have difficulty dealing with the overwhelming complexity of foreign rates. Before it gets to that, learn how to get financially native in foreign lands. 

Now, we understand that this could be a lot of information. But don't fret; Unloop can extend a hand to help you organize foreign currencies! Whether you need bookkeeping in Calgary or other Canadian areas and across the US, Unloop can help ease your bookkeeping management duties through a remote setting. 

We're ready to be your long-term business partner and help you with your bookkeeping tasks, such as calculating COGS and dealing with Shopify and Amazon corporate tax rates. OFX is also one of the tools we use for our services.

Book a call with us today or explore our blog section for more resources.

Many Canadian ecommerce sellers dread handling taxes. The apprehension roots in the difficulty of understanding the many rules and regulations surrounding taxes. Adding to the challenge, especially for ecommerce sellers, are the different rates for sales taxes. Sellers offering services and products in different territories need to keep up with the ever-changing rules on sales taxes. 

These troubles make every business owner, especially those new in the field and unfamiliar with taxation, abandon the possibility of understanding taxes and handling the task on their own. While you can delegate taxes to professionals, it still pays to know how it works, even in the most basic sense.

With that, here are the seven frequently asked questions ecommerce sellers ask about taxes. Knowing the answers may give you the confidence to handle your own. Let’s begin!

1. When Can You Start Filing Your Taxes?

When you become an ecommerce seller, there are a lot of key dates you need to remember, some of which are tax deadlines. In Canada, you can file your taxes for the previous year’s income as early as February, but the tax filing deadline is on April 30. 

The Canada Revenue Agency (CRA) makes the process easier, you can file taxes online. Just be ready with the complete financial details for the whole calendar year and receipts in case the CRA looks for them.

To keep yourself from cramming months before the tax due date, it is best practice to put your business bookkeeping and accounting in place as early as launching your business. This ensures that you will have all the financial transactions recorded throughout the year. You will also minimize the possibility of inaccuracy as your bookkeeper or accountant won’t need to rush.

2. What Is an Income Tax Return?

An income tax return is a document containing a person or a company’s annual income, expenses, and other financial transactions that occurred within the year. It is from these details where the taxpayer and authorities calculate one’s tax liability, which is often paid annually. If there is any overpayment, the taxpayer can request for a tax refund.

Canadian residents, immigrants, indigenous peoples, deceased individuals, people who have left Canada temporarily or permanently, and temporary Canadian residents are all obliged to pay income tax return. 

When filing for tax returns, you must declare your total annual income to know how much you need to pay. The Canadian government determines a tax rate depending on your total income. Rates may change yearly. For instance, the 2022 tax rate has already been changed for 2023, so it is best to stay updated. All provinces and territories in Canada submit their taxes to the CRA except for Quebec, where taxes are paid to the Revenu Quebec.

3. What Should I Know About Canadian Sales Taxes?

Sales taxes in Canada vary per province or territory, and each charges General Sales Tax (GST), Provincial Sales Tax (PST), a combination of PST and GST, or Harmonized Sales Tax (HST). Sellers and service providers who have a physical store or office and even those selling online are required to pay sales taxes when they earn at least $30,000 in a year. 

Sellers are to base the rate they charge on the destination of the package, and here are the rates.

These tax rates are charged for every sale made, which the buyers should shoulder. Yet, it is your duty as a seller to provide transparency in every transaction. Show your customers a breakdown of their pay, including the sales tax charges.

4. What Will the Canada Revenue Agency Do If I Don’t Pay My Taxes?

Although challenging, ecommerce sellers like you should always prioritize paying taxes as there are repercussions. The CRA requires one time payments, so when they find out that a business owner does not pay taxes, a collections officer will be assigned to review their case. If found guilty, they can be subjected to pay interest rates on top of the taxes they weren’t able to pay.

The good news is most Canadians are responsible taxpayers, but if the business cannot pay, the CRA can seize the company’s assets and bank accounts, garnish wages, and register a lien on the owner’s home. Tax relief can still be given to business owners (when eligible for it),, and owners can also make payment arrangements with the CRA after setting up a meeting with the agency.

5. What Tax Software Can I Use for My Business?

Many bookkeeping and accounting software already have a tax computing feature. They can also integrate with ecommerce sites like Amazon and Shopify. These platforms compute sales taxes and send the data to your main accounting software through integration.

There are also separate software like Taxomate, Taxify, Hello Tax, and TaxJar that can give you the following assistance:

• Updated sales tax rates in different locations
• Integration with various ecommerce sites for data transfer
• Tax calculation, reporting, and remittance
• Enterprise Resource Planning (ERP) for business accounting and resource management
• Economic nexus determination
• Automatic collection of sales taxes during product checkout
• Multicurrency functions
• Income tax return calculation
• Tax-exempt applications
• Customer support

However, for the most comprehensive software, consider QuickBooks. It has features to track, collect, review, and pay your sales taxes. And even when you sell on sites that handle sales taxes for you, you can still integrate the data collected from that platform with the QuickBooks software, so all your data is in one place. Because all your financial transactions are recorded on QuickBooks, you can use it to find the amount of income tax you need to pay.

6. What Should I Know About Taxes When Selling on Amazon?

Whether you sell on Amazon or are still planning to, the first thing you should know is the platform’s Marketplace Tax Collection (MTC).

Because of the Marketplace Facilitator Law (MPF), third-party sellers like Amazon are compelled to compute, collect, report, and remit sales taxes. This is good news for sellers like you as you no longer have to worry about these tasks. All you need to do now is monitor the sales taxes and integrate the data from Amazon into your bookkeeping and accounting software for tracking.

You should also know that the platform also has the Amazon Tax Exemption Program (ATEP), which considers individuals and organizations that are eligible for tax exemption.

As an ecommerce seller, it’s a wise business move to sell on Amazon. Amazon is the largest ecommerce site in the world, and although the competition is tough, there is also a high chance of introducing and selling your products to a broader audience.

7. What Tax Information Should I Know When Selling on Shopify?

Shopify does not offer the same tax assistance as Amazon, but you can optimize the settings in the ecommerce site to make your sales tax management more efficient. You can set up Shopify to add sales taxes upon customer checkout. 

To streamline the tax detail determination, collection, and remittance process, you can integrate the data from Shopify into the tax software you use. They can do the following steps after Shopify has charged the correct sales taxes to customers. 

You can also integrate all the data from Shopify into your bookkeeping and accounting system so that you can compute your income tax return correctly and quickly by the end of the year.

Let Unloop Help With Your Taxes

Knowing some of the tax details can give you confidence as an ecommerce seller. It may make you realize that taxes aren’t that dreadful to handle, especially when you have the right software and tools. You’ll also realize that many ecommerce platforms have made taxes easier for sellers like you by doing the computation, collection, and remittance themselves.

If you are looking for convenience when filing for tax returns, another wise thing to do is to partner with tax experts to whom you can delegate this complex task. Unloop could be the partner you are looking for!When you partner with us, whether you are in Canada or the US, we can help you make tax season less of a worry. Don’t worry about your income tax, either! We’ll handle the bookkeeping and connect you with the best CPAs in North America for filing taxes. Beat the deadline! Connect with us now; we’d love to discuss the details with you!

The tax part of income is no one’s favorite. You have tax duties to meet whether you own your own business or not. It can be messy, confusing, and costly when you get it wrong.

If you need clarification about your taxes, you've come to the right place. This is the ultimate tax hack, so remember to take notes—come tax filing season, you’ll be ready!

What is Tax Liability?

Tax liability is the amount of money you are required to pay the government based on your income. People with low income are often exempted from paying taxes, but there are also people that pay taxes through federal income taxes or payroll taxes.

Tax liability also comes in different forms. It can come from state and local taxes, excise, sales, or other taxes from things that generate income.

Important Details on Tax Liability

• You are required to pay taxes as individuals and businesses when you receive money from income, make sales, and issue payslips. A fixed amount of tax liability is generated for each billable event that is proportionally divided by the sum.
• Certain groups of taxpayers are subjected to double taxation. For example, when a business owner and his company are considered separate legal entities, the owner's and company's income are both subjected to tax.
• Sales tax is also a tax liability. Consumers fulfill this tax, and businesses are tasked to remit them to tax collection agencies monthly, quarterly, or annually. Businesses that sell products are obligated to pay sales taxes. The state or local tax legislation may have an impact on the sales tax rates.
• A tax liability is created by the company's payslip. Businesses are required to withhold social security, Medicare, and income tax from employee paychecks.
• Individuals and corporations can lower their overall tax obligation by obtaining deductions, tax exemptions, and tax credits. Many people take the standard deduction, but you can also make deductions if you have enough business and personal costs.

Types of Tax Liabilities

We have already established that there are different forms of tax liabilities. To help you better understand tax liabilities, below are some of the most typical categories.

Income Tax Liability

All employers are subjected to federal income taxes. In other cases, their income is also subject to local and state taxes. It is a common practice for employers to withhold income tax liabilities from their employee's wages. Your income tax obligation can also include a tax on your business income if you're not a legal organization. You can pay an estimated tax amount for your income tax debt throughout the year.

Self-Employment Tax Liability

Both the employer and employee shares of the social security and Medicare taxes are covered by the self-employed tax. Social security and Medicare taxes must be deducted from an employed person's income. Self-employment tax can be paid through anticipated tax payments.

Payroll Tax Liability

Payroll taxes are the money employers withhold from the payroll and the money they spend to generate their income tax liability. These taxes should be filed to the IRS according to a schedule.

Capital Gains Tax Liability

Capital gains tax liability is levied on generated income when an investor successfully makes a sale in their investments. The tax owed is applicable during the fiscal year the investment is sold. Capital gains tax rates can vary between 0%, 15%, and 20%depending on the filer's income.

An individual may owe a long-term capital gain when an income from the investment is owned for at least a year. If not, short-term capital gains are applied. For short-term capital gains, the tax rate depends on the payer's ordinary income bracket.

Small Business Tax Liability

Small businesses also have a share of their tax liability. Here are some events when tax liabilities are applicable for small businesses.

• Business transactions that generate income are subjected to taxes.
• If your business does paid events, you must pay a portion of it to the tax authorities.
• A business that sells tobacco, gasoline, alcohol, and other goods imposed with excise tax—these are considered a tax liability for businesses.

How To Calculate Tax Liability?

If you want to get ahead of your taxes, you can calculate your tax liability by yourself. Here are a few easy steps to assist you in appropriately calculating them.

Step 1 - Identify the category to which you or your company belongs.

Step 2 - Calculate the quarterly estimated tax payments using a calculation tool.

Step 3 - If you're a C corporation, you need to calculate your taxes using the corporate tax scheme, which has eight different tax rate brackets and a flat tax rate regardless of the corporation's income.

Step 4 - If you are not a C corporation, you are a flow-through entity, which means you are responsible for paying your own taxes rather than those of the company. Your tax rate is determined by your taxable income as well as how you file your taxes.

Step 5 - Pay your estimated taxes. Payments for income taxes are due in April. However, federal tax liability should be paid whenever they are incurred. Depending on their taxable income, the majority of small firms should make anticipated tax payments throughout the year.

Step 6 - Pay employment taxes. These taxes usually include the following:

• Social security taxes which is 12.4% of wages paid up to $147,000.
• Medicare tax which is equal to 2.9% of wages paid.
• Federal unemployment tax (FUTA), which is equal to 6% of the first $7,000 of an employee's wage.

Step 7 - Once you're done calculating tax liability, the last step is to pay the taxes you 

owe.

How To Reduce Your Tax Liability?

If you're stressed about the amount of taxes you need to pay, there are some ways you can reduce your tax liability. Take note of these tips to help reduce your tax bill.

Maximize Your Tax Credits

Tax credits are the best way to reduce the tax you owe. You can make full use of a number of available tax credits. These credits can reduce the amount dollar for dollar compared to deductions, which is based on percentages.

Here are some ways to earn tax credits.

• Child and dependent tax credit
• Earned income tax credit
• American opportunity tax credit

Save Up for Retirement

Your Individual Retirement Account (IRA) contributions are a great strategy to reduce your tax liability. Most pre-tax contributions to traditional IRAs are made before taxes are deducted, lowering your taxable income for the current tax year. Taxes on your donations will be due once you remove the funds.

Donate to Charity

Charitable contributions are another way to lessen your tax bill. Donations of cash, toys, appreciated stock, or volunteer efforts to qualified organizations can provide substantial tax savings. Here are some things to remember.

• The time you spend volunteering is not deductible, but the money you spend when you volunteer is. This covers the amount you spend on ingredients for donated food, and travel expenses attending the charity event.
• Itemize your donations to ensure your charitable contributions will be eligible as deductions.

Use Business Expenses To Lower Taxes

You can deduct a huge variety of company expenses. So make sure to keep and document receipts so you have records when you declare them as deductions. Here are some business expenses you can use as deductions.

• Rent for office space
• Home office expenses
• Business-related travel expenses
• Inventory expenses

Get Your Tax Professionally Handled With Unloop

Tax obligations are complicated. With so many numbers, it's easy to become confused. Fortunately for business owners, Unloop is here to help you handle your tax liabilities.
We offer different services to handle all your accounting needs. Our services include bookkeeping, accounts payable, forecasting, payroll, and taxes. Book a call with us today and talk to an expert for free.

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

In today’s digital age, embracing cloud-based accounting software with data encryption is a big advantage. Not only does it streamline your company’s finances, these cutting-edge solutions secure any sensitive financial data on cloud servers, providing increased protection.

As you consider cloud-based accounting systems, evaluating the strength of data encryption is paramount. It can make all the difference in protecting your valuable information from potential threats.

This guide has everything you need to know about using cloud-based software with top-notch data security. Discover the advantages it holds over traditional accounting software, the best tool for your needs, and how it can maximize the efficiency of your business operations.

Traditional vs. Cloud Accounting System

As technology evolves, so is the need for strong security measures. The choice between traditional and cloud accounting systems can impact the security and competence of your financial operations. With cyber threats on the rise, it’s important to protect your business from unnecessary risks.

Both systems have merits, but knowing their function can help you decide how to keep pace with online disasters. Below, we present a detailed illustration highlighting the key differences.

Traditional systems have served businesses well in the past. Still, the dynamic digital landscape calls for more advanced and secure solutions. Cloud-based accounting systems offer more efficiency, flexibility, and stronger security measures. It can position your business to adapt and thrive in the face of technological challenges.

Selecting the Right Cloud Accounting Software

You now know the advantages of opting for cloud-based accounting solutions over traditional ones. But our help doesn’t end here—we also want to help you make the best choice for your business.

Here are the key priorities to consider.

• Robust Cloud Storage Capabilities: Choose an accounting solution that securely stores sensitive financial and customer data.
  
• Strict Security Measures: A reliable cloud provider implements security measures to protect your information from cybercriminals, such as encryption and multi-factor authentication.

• Comprehensive Services: Evaluate the support services offered by the cloud provider. Opt for software providing comprehensive technical support for prompt issue resolution.

• User-Friendly Interface: Opt for a user-friendly platform that facilitates smooth adoption and minimizes the learning curve for your team.

• Integration Capabilities: Consider how well the accounting software integrates with your existing business tools and systems, as seamless integration will boost productivity and data accuracy.

• Scalability: Pick a cloud accounting software that can scale with your business growth, accommodating increased data storage needs and expanding financial requirements.

• Compliance and Certifications: Verify that the software provider complies with industry regulations and holds relevant certifications, showing their commitment to data security and privacy.

With the right cloud-based accounting solutions in place, everything is possible.

Our Top Pick for Cloud-Based Accounting Software With Data Encryption: QuickBooks

Given the features and details presented above, it becomes evident that QuickBooks stands out as the top contender. Whether you are a small startup or an established enterprise, Quickbooks's prominent features can bring peace of mind in many ways.

1. Fool-Proof Encryption

The competition is tough in the ecommerce world. Some even resort to black hat tactics to get ahead of the game. Saying your financial data should be safeguarded is an understatement. You'll never know when hackers will attack, posing constant concern.

You can sleep soundly with QuickBooks, knowing all your business financial data is safe. Its data encryption converts readable texts into incomprehensible codes. Hackers cannot intercept or hack data when it travels from a computer or a mobile phone to the cloud. 

2. Role-Based Access

Threats to data security do not only come from the outside but also from within. Some online companies suffer fraud because financial data can be accessed easily. When anyone can access information, there's a chance of system manipulation to cover up for any deceit.

QuickBooks helps with quality control. Its role-based access helps you identify who’s accountable for data loss when issues arise. You can also keep the circle small, limit the number of users, and delegate the task to authorized people in the company—which could be you and your trusted bookkeeper and accountant.

3. Desktop to Internet Connection-Only Access

QuickBooks has a wide range of plans for various types of small businesses. There's a QuickBooks Desktop app, which is best for businesses that do not prioritize access flexibility. Although you can enjoy all the features of QuickBooks, saving data in the cloud is not included.

Enter QuickBooks Online. The plan offers an anytime and anywhere access feature with internet connectivity, so all its functions can be done online and even on mobile phones. 

With QuickBooks in cloud systems, you encourage collaboration and flexibility. Your team can work together whenever and wherever they are—beyond just a single computer.

4. Real-Time Updates

Using a USB to transfer data from one device to another may still be a thing, but with Quickbooks cloud-based accounting, you can leave this tedious task in the past. 

You don’t need to log into a single computer and see the most updated version of your books and accounts. Any changes to the data are now automatically updated and displayed. Everybody in your team is updated, and nobody's left out.

5. Unlimited Data Storage

QuickBooks already takes up a lot of space in your computer or mobile phone, so what more when there are other files you need to save? 

You no longer have to worry when your data is saved in the cloud. Unlike hardware systems with limited storage, the cloud has infinite space for your financial data. You can keep years of historical accounting data in the system and use them for forecasting and business planning.

6. Cloud Analytics

Aside from business planning and forecasting, you'll need plenty of financial reports to make sense of all the data stored in the cloud. Among the reports you should be regularly checking and getting are the following:

Reporting becomes easier with QuickBooks, as everything is instantly tracked and computed. Unlike Excel sheets, there’s no need to set formulas since everything is error-free. Plus, you can generate other key performance indicators and special reports if needed. 

QuickBooks already has set templates to streamline the reporting process. You can also create customized report templates based on the data you want to see.

7. Freedom From Data Corruption

Data corruption is every bookkeeper, accountant, and business owner's nightmare. Computers are prone to viruses. When files are affected, they can be corrupted and destroyed. Even worse, there is no chance for them to be retrieved. 

Hard copies are also threatened with destruction and loss, with accidents and document recovery after disasters potentially leading to further losses.

Fortunately, QuickBooks's cloud-based feature allows data storage on outside servers. You can safely store all digitized documents and important files in the cloud, providing a reliable backup and protection against data loss. 

8. Automatic Updates

You must keep an eye on other updates as a business owner, like sales taxes, price changes, inventory updates, and data updates. All these changes can occur automatically within the QuickBooks system.

Automatic updates are the best benefits you'll get with QuickBooks. The latest versions of the software can instantly be downloaded, so you'll always be up-to-date.

Going Cloud-Based: Get Quickbooks Assistance From Unloop

The tools and software you use should fulfill their purpose of protecting your business operations and fine-tuning your performance. With QuickBooks as your cloud-computing accounting software, you can achieve the best of both worlds.

Struggling to use your accounting tools? Leave it to Unloop! Our team is knowledgeable in QuickBooks and other bookkeeping and accounting software. Allow us to guide you through the process and optimize your financial management.

Book a call now! Elevate the efficiency of your business to new heights.

Disclaimer: Please note this article is not financial advice. The purpose of our blog is purely educational, so please consult a professional accountant or financial advisor before making any financial decision.

Inventory ensures your business operations run smoothly and you meet the demands of your customers. Understanding how inventory in accounting works will help business owners like yourself effectively manage stock and overcome potential challenges. 

Let's discuss this facet further to help you understand how much inventory matters in your company’s rise to success.

What Is Inventory Accounting?

In accounting, inventory consists of items at different production stages and assets for your business. Effect inventory accounting helps businesses to efficiently create, market, and ship products. 

Additionally, it shields companies from product shortages and transportation delays. Inventory is considered a major asset for businesses and should not be taken for granted.

When a product is sold from the inventory, its cost is reflected in the cost of goods sold (CoGS) in the income statement. There are three ways to calculate inventory value:

Different Types of Inventory in Accounting

There is more to inventory than just a stock of goods. Understanding its types will also help you make sound financial and business decisions. Here are the three main types of inventory.

Raw Materials

Raw materials are involved in the first step of product manufacturing. These stock items are yet to be used for creation and are categorized into two: 

• Recognizable in their original form
• Unrecognizable raw materials

Work in Progress

Work in progress, or WIP, is an inventory of partially finished goods still in line for completion. This category refers to raw materials, overhead costs, and labor of products in the different stages of production.

Finished Goods

From the name itself, finished goods are products that have completed manufacturing. They may also refer to stock bought by a company in its final form and not yet sold to customers.

When a finished product is sold, it is no longer considered inventory; it is classified as merchandise. 

In accounting, the cost of sales of finished goods is categorized under the short-term assets section of the balance sheet.

6 Challenges in Inventory Management + Solutions

Understanding inventory basics is simple, but managing it is another thing. Managing involves coordinating the supply chains and overseeing product purchases. You should also maintain inventory levels and control sales to meet customer demands.

Inventory management can give you a clearer picture of the cash flow. However, this task can be challenging even for small businesses. Besides inventory costs, here are some challenges inventory management may pose and their solutions.

Inconsistent Inventory Control 

One of the most common problems of inventory management is inconsistent tracking. The lack of control fails to give you the full picture of inventory levels, leading to problems such as overstocking or stockouts. These issues result in huge financial losses and operational inefficiencies.

Solution: Track all your items properly so you know which inventory items to sort, consistently manufacture, and slow down on. Developing and investing in modernizing your warehouse processes will help track inventory better. 

Cloud inventory management solutions and other software options can automate real-time tasks like tracking and monitoring your inventory count.

Underperforming Vendors

Success in inventory management and ecommerce success partly depends on your merchants, so choose wisely. Your business will be severely affected when your suppliers fail to deliver the required inventory, leading to stockouts or delayed order fulfillment. Likewise, if they provide products with subpar quality, your business and brand reputation will suffer. 

Solutions:

1. Make surveys and merchant audits before you sign contracts.
2. Ensure they meet your requirements for shipping schedules, delivery modes, packaging, and others.
3. If you have a specialty product, ensure they meet the quality requirements.
4. Some merchants let you try their services for a discounted price. You can capitalize on that to see if they suit your business.

Poor Inventory Process

Inventory processes include picking up or receiving the goods, transportation, packing, and sending them to the buyer. If these procedures are unorganized and inefficient, you may encounter delays in order fulfillment and unnecessary operational costs.

Solution: The best option to assess and improve your inventory process is through experimentation. Figure out which inventory process techniques work best with your production, fulfillment, and business needs by trying every option possible and optimizing the processes you are currently using.

No Contingency Plans

Unforeseen incidents can always mess up your inventory management. Even if you don't experience frequent problems, never assume you won't encounter one. Always have a contingency plan if things go wrong.

Solution: For instance, what will be the best solution when experiencing delays in your actual inventory? You can order in advance or try decoupling inventory (setting aside extra materials) so that when delays happen, they do not entirely stop your operations.

If you have too much inventory on hold (making your sales stagnant), put them up for sale at a discounted price or include them in some of your product bundles to avoid the accumulation of obsolete inventory.

Poor Labor Collaboration

Cooperation among employees is a common problem of the inventory management team. It will be harder for a business to spot issues if the teams involved in inventory are not exchanging vital information.

With no proper exchange of information, employees will not know their tasks, how to progress, and the status of their work, which can result in disrupted workflow in the inventory warehouse. 

Proper communication and collaboration are critical to a successful and efficient inventory process. 

Solution: You can address the communication problem by placing a system that connects all your teams for easier exchange of information.

Lack of Production Planning

Product planning can affect your sales estimates and production timing as it determines how much inventory you'll need to meet future demands. Without it, there is a risk of overproduction or underproduction. These situations can lead to excess and dead inventory or stockouts.

Additionally, a lack of production planning may lead to additional production costs to make up for last-minute or rush orders and to avoid delays, such as additional shipping costs. 

Solution: Getting product planning right is crucial. Every month, businesses should have a report on their product results to plan for their targets in the next month, spot potential problems, and brainstorm solutions.

Get Inventory Accounting Help With Unloop

Inventory valuation is essential for businesses to price their items and get an overview of their company's financial health. Managing inventory also involves accounting, which can make the task more challenging. 

Fortunately for business owners like yourself, Unloop can help you with the accounting part of your inventory management.

We offer different services, such as

• accounting, 
• accounts payable, 
• forecasting, 
• bookkeeping, 
• payroll, and 
• taxes. 

Let us handle your finances so you can focus on managing your inventory. Talk to an expert and book a call with us today!

To run a business properly, understanding your finances is a must. Although you have professionals that can seamlessly handle business finances, as business owners, it is crucial to oversee your business. Liability is one of the most important aspects of a business.

In this article, we'll further discuss liabilities in accounting so you can stay on top of your day-to-day business operations.

What Is a “Liability” in Accounting?

The money due by a company to a person or another entity is referred to in accounting as liabilities. In simpler terms, these are your company's debts regardless of when they are due. Moreover, liabilities may be things with a comparable worth.

Liabilities can help businesses manage their business operations and speed up value creation. But, when handled improperly, they can harm firms significantly and, occasionally, permanently.

Different Types of Liabilities in Accounting

Several items cover business liabilities. These can be wages you need to pay your employees, unpaid taxes, or due mortgage payables. In general, liabilities are divided into two broad categories: short-term and long-term.

We'll discuss each category and provide examples to help business owners understand them better.

Short-Term Liabilities

Short-term liabilities are also called current liabilities. These are liabilities that your business needs to pay within a year, hence “short term”. These include taxes payables, vendor invoices, and wages payables.

Here are examples of current liabilities.

• Wages Payable: These are income that employees earned for a specific period that have yet to be paid or released by the employer—this liability is often seen since it's common for companies to cycle the payroll on a biweekly basis.
• Interest Payable: Businesses use credits to finance their products and services for short periods. These are interests that businesses need to pay for their credit purchases.
• Dividends Payable: This represents the amount a company owes shareholders after a dividend is declared. The payment period cycles every two weeks, so these liabilities appear multiple times a year.
• Unearned Revenue: This refers to the company's liabilities to deliver its goods or services after a customer pays for them in advance. You can decrease the amount of this liability as you accomplish deliveries to your customers.
• Discontinued Operations: Most businesses pass over this special liability but should examine it more carefully. Any operations or divisions that are up for sale or have already been sold must be taken into account from a financial standpoint. This also covers the financial impacts of ending a product line.

Long-Term Liabilities

Long-term liabilities are also coined as non-current liabilities. From the name itself, these are business liabilities you are expected to pay in 12 months or more. Bonds payable or long-term debt is one example and are usually the largest of these liabilities.

Here are other examples of long-term liabilities.

• Warranty Liability: This liability is the amount of money a company will spend repairing their products depending on the agreed-upon warranty. This liability is common in technology and automobile businesses because their products usually have long-standing warranties.
• Contingent Liabilities: A contingent liability is a responsibility that might materialize based on how a future event plays out. Contingent liabilities are documented if the contingency exists, and it is relatively possible to estimate its size. Unless all requirements are unmet, the obligation may be mentioned in a footnote to the financial statements.
• Deferred Credits: These credits are revenue received but are yet to be shown as earned on the income statement. After the money is no longer deferred, this item is decreased by the sum earned and added to the firm's revenue stream. This can include client advances or a deal where credits are owed but are not yet considered revenue.
• Post-Employment Benefits: These are benefits that a company employee or a family member may receive when an employee retires. The amount can increase over time depending on how long they work and the agreement on their contract.
• Unamortized Investment Tax Credits (UITC): This is the discrepancy between an asset's historical cost and its current depreciation. The unamortized sum is a liability even though it is only a preliminary assessment of the asset's fair market value.

Expenses vs. Liabilities: What's the Difference?

An expense is a business's operational cost incurred to produce income. An expense is primarily distinguished from liabilities by how it relates to your company's revenue. Expenses and revenues are declared on income statements, while assets and liabilities appear on the balance sheet.

Furthermore, expenses can be paid quickly with cash, whereas delaying payment would make the expense a liability.

How Liabilities Work in Business

Examining how you pay for everything for your organization will help you comprehend business liabilities in a clear manner. You borrow money or use cash from a checking account to make purchases. Using a credit card is a form of borrowing, just like any other kind.

Your balance sheet depicts your company's financial health at the completion of each accounting period, listing all of your liabilities. Throughout time, liabilities may be fulfilled by the transfer of funds, products, or services.

You must list all your liabilities and add them up to get your total liabilities. A simple accounting method can be used to determine whether your books are balanced.

Liabilities + Equity = Assets

Your total liabilities and equity must match the total assets for your business to be considered balanced.

Example of Assets

You can't talk about liabilities without knowing your business assets. Assets are items with value that a company owns. Here are some prime examples of business assets.

• Cash: Cash is the most typical business asset. It is money you have for immediate disposal. Cash can be a few hundred dollars to millions depending on how big a business is.
• Security: Securities are assets that can be easily liquidated to increase the cash you have at hand.
• Inventory: Inventory is your stock of goods that you can sell for money.
• Property: This refers to any land holdings, buildings, or structures your company may possess, such as a workplace, a retail space, or undeveloped land. Direct sales or equity loans are the two most popular ways to dispose of the property. With the latter, a company can sell its property for cash without giving up ownership.
• Equipment: Business assets are equipment that continue to be valuable after being purchased. This includes any equipment the company employs and can sell for a substantial profit, such as computers, business vehicles, servers, and other high-tech pieces of equipment.

Manage Your Finances With Unloop

Managing a company's financial obligations can be confusing, especially for small businesses. Fortunately for beginners like you, Unloop can help you sort out your finances. Our bookkeeping services will keep your business in the loop for your finances. Our services include:

• Creating monthly financial statements—balance sheets, income statements, and cash flow statements.
• Subscription to accounting software such as QuickBooks and Xero.
• Unlimited financial accounts and associated monthly reconciliations.
• Creating custom analytics and KPIs specifically designed for your business.

We also offer other accounting services such as forecasting, accounts payable, payroll, and taxes. Stop worrying about your finances and let the experts handle it. Book a call with us today!

The payroll process is not as easy as releasing payments to your employees. You have to collect their time cards, note deductions and reimbursements, and handle their tax obligations. Fortunately for business owners, payroll systems exist to make the process simpler.

There are several payroll software options you can choose from, and each have different features that can help with the payroll process. But which ones are worth investing in? We'll list some of the best features of a payroll system businesses should utilize.

Time Tracking Feature

One of the essential features of payroll software is a time-tracking feature. Most businesses pay their employees based on the hours they work. So keeping accurate track of the time your people work will allow you to pay them properly.

Furthermore, automated time tracking eliminates the error from the manual process. It also gives the payroll team the confidence that the recorded time is valid since no one outside the administration can alter the time in the system.

Easy Setup

Every minute spent running a business is precious, so don't waste it on a payroll system that's hard to set up and too technical to understand. Before investing in payroll software, always look for the setup options.

Here are some things you should check.

• Does the payroll system come with an easy to understand and detailed instruction manual?
• Does the payroll solution provide demonstration videos to help with your setup?
• Is there customer service ready to answer your questions when you need help with the software?

It would also help to see customer reviews to assess if the software suits your needs. Furthermore, take advantage of payroll systems with free trial features. This way, you can closely examine the software, from installation to its features.

Tax Filing Feature

One of the reasons why you should get payroll management software is to make the tax filing process more convenient. The HR and accounting departments know that handling taxes in payroll is one of the most tedious tasks, and this payroll feature will streamline your payroll processes further.

In general, you want a payroll system that can calculate, file, collect, and deposit payroll taxes on your business's behalf. Here are other payroll system features to look for regarding taxes.

• Collecting, filing, and remitting local, state, and federal payroll taxes.
• Able to do year-end W2 and W3 filing.
• Automatic tax updates.
• Guarantees accurate tax calculations and timely deposits and filing.

Expense Management Feature

If your business includes reimbursable employee expenses, then this payroll feature is a must-have. These payroll solutions can automate expense reports and payment processes. This will save business owners time and ensure that reimbursements are paid on a schedule.

The expense management feature also provides document management so you can store all receipts and proofs of reimbursement to ensure you release the correct payment to your employees. You can access them easily when you need to check them.

Direct Deposit Payroll Software Feature

One of the most crucial features of payroll is direct deposit. Gone are the days when businesses paid through cash and cheques. Direct deposit is quicker and easier to process, which takes a load of work from the payroll team.

Here are some configurations your direct deposit feature should have.

• Timing options (e.g., deposit pay on a biweekly schedule)
• Expedite direct deposit options

Make sure also to check the additional fees that come with direct deposits. Fees may vary depending on the payroll provider. The lower the fees, the better it is for your business.

Payroll Reports

The reporting feature is a must-have payroll software feature for automated payroll software options. The last thing you want to do when you need information is to look through a mountain of paper and assemble them to create a report. It's time-consuming and impractical. Find a software that will help you generate different reports.

Here are some necessary reports your payroll software should provide.

• Payroll details
• Payroll tax liabilities
• Forms W2 and W3
• Form 940
• Form 941
• Tax reports

You also can check for breakdowns. For example, can you make reports for individual employees? Can you make summary reports? The more reports the software can generate, the easier it will be for business owners like you.

Employee Self-Service

Two benefits come with self-service functions. First, it allows your employees access to change necessary payroll data like bank account numbers and addresses. Second, it allows your employees to see their available leave credits and access reports such as W2 and pay slips.

Although this feature allows employees access, they cannot change anything, such as time and pay rate.

Integration Options

Payroll processing consists of several tasks. It would be helpful to integrate other software into your payroll system. Integration will streamline the whole payroll process and make it seamless and accurate.

Here are some integrations you should consider.

• Time and attendance software
• Accounting software
• HR software
• Worker compensation tools

Make sure to explore different payroll providers. Others will ask for fees to integrate other software with theirs. Some software options can also do all the accounting tasks with a more expensive subscription plan, but they are worth considering.

Advantages of Payroll Management Software

Even with the surge of different business software, many business owners are still reluctant to get a subscription. It may look like an unnecessary expense for a small business, but investing in software greatly benefits your business operations. 

What are the advantages of a payroll software?

• Everything Automated: Using spreadsheets opens your payroll process to costly mistakes. Manual DIY processes may be free, but the time you spend to do them could be spent better on other aspects that cater to your business's growth.
• Accurate Calculations: The last thing you want is your employee to get the wrong compensation. If they are under-compensated, it affects the administration's credibility. When you overcompensate, it sets back your budget.
• Tax Compliance Management: Employees rely on the HR department to manage taxes regarding their payroll. Payroll software allows easy access to essential tax documents to guarantee compliance.
• Automatic Alerts: Workflow notification is an excellent benefit of payroll software. It alerts the HR team of any data error in the payroll process before it rolls so you can fix it before it can cause damage.

Unloop: Your Online Payroll Services Solution

If the payroll process is too much for you, let professionals handle it. Unloop offers ecommerce and small business payroll services for stress-free payroll processing. Here's what we can do for your business.

• Payroll Done for You: Let us know when to run your payroll, and we'll take it from there. We can guarantee that your employees will receive their accurate pay on time.
• Cloud-Based Payroll Software: We’ll link your business to a cloud-based payroll and benefits management software to handle your payroll processes better.
• Generate Year-End Returns: With just a few clicks, you can quickly generate year-end tax returns so your employees can file their taxes correctly.
• Payroll Tax Filing: Worry less about filing taxes since everything is automated. When the tax period comes, all you need to do is to click a button, and we’ll handle it for you..

Managing payroll is part of running a business. As your business grows, the more employees you need, and the more you need to pay. At one point or another, getting software or a professional service is a viable choice. We hope these outstanding features help you choose a suitable payroll software for your business’s needs.
If you need professional help, Unloop offers other accounting services such as bookkeeping, accounts payable, forecasting, and taxes. Talk to our experts and book a discovery call with us today.