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.
Any big or small business owner must ensure their employees receive the hard-earned money they deserve. Nevertheless, mistakes during payroll processing are bound to happen. Thankfully, the emergence of an automated payroll system allows you to pay your employees seamlessly.
Let's delve into the depths of an automated payroll solution and how it can transform your business’s financial operations.
Before we get into the nitty-gritty of payroll automation, it's crucial to understand the processes behind it. As you might have already guessed, payroll involves giving your employees accurate salaries on time.
To do so, you have to calculate
Additionally, you have to consider several other factors, such as
To any business owner without an established finance team, these tasks may become too confusing and daunting to handle on their own. Learning to do these accounting tasks accurately also takes much time and effort.
Fortunately, you won't have to stress too much over perfecting these tiresome payroll processes. With an automated payroll, you have an organized tool for the job. A computerized payroll system will simplify and speed up how you calculate and distribute your employee's paychecks.
An automated system can do the following processes:
You might still be skeptical about streamlining your payroll tasks to organized software. To ease any of your worries, we've gathered a few reasons why you should automate payroll to improve your business.
Saves Time
Time is precious and should not be wasted. Even the tiniest moments count when you're operating and handling a business. Hence, it's only logical to spend every second wisely.
You would have to spend hours upon hours doing manual data entry for payroll when you should be working on important business matters. An automated payroll system allows you to allocate more time to those tasks.
Even the slightest mistake can cause grave consequences when calculating employee wages. The payroll team must ensure accurate and timely wage distribution.
However, with the dizzying amount of accounting and recordkeeping tasks involved in payroll, some people will inevitably make mistakes and unintentionally issue inaccurate employee payments. These errors can cause financial issues for both the employee and the employer and lead to severe legal penalties.
Precise and accurate payment calculations are guaranteed with a computerized payroll system. The software can correctly and swiftly compute and adjust an employee's pay while considering possible wage deductions, raises, bonuses, and more.
One of the most confusing and headache-inducing parts of payroll processing is filing and calculating tax withholdings. Getting this part right is crucial as it involves various laws and regulations. An error may likely result in legal trouble for your business.
With automated payroll systems, you don't have to calculate all of your employee's gross pay and take out tax deductions on your own. You can let the software accurately figure out and navigate the complicated world of tax filing.
Using automated payroll software can also foster employee trust. Most automated systems allow staff members to access their paychecks easily and view possible changes in their regular wages. These are possible with employee self-service portals and other employee-centric features.
They can also update and input payroll information easily using automated systems. Because of this feature, the system can smoothly adjust employee pay stubs according to real-time changes.
Paying employees with an automated system can indirectly improve your relationship with them. Receiving befitting compensation for their work is one of the primary ways to motivate employees. With computerized payroll systems, employees are guaranteed accurate and timely pay.
Moreover, with the transparency that automated systems provide, you can improve and develop trust and confidence in your employees. They will feel secure knowing that you pay them what they're due.
Manually handling your payroll may seem like a breeze at first. But as your business grows, it will become more complicated and time-consuming. The sooner you implement payroll automation, the more time and resources you'll save in the long run.
Hopefully, the benefits mentioned above are enough to convince you to start automating your payroll. Your next course of action is learning how to switch from manual to automated payroll. You can either use payroll automation software or hire a payroll service.
Take matters into your own hands by searching for payroll automation software that suits your business. Choosing payroll software will primarily depend on your company's size, business needs, and other related factors.
Besides the payroll software cost, here are some features you must consider:
Besides calculating your employee's wages, automated software can also provide regular comprehensive payroll reports to help monitor your finances. Some even use combined HR and payroll software for more efficient employee and payroll management.
Once you've made your choice, all you have to do is input the necessary payroll data and documents, such as employee information and tax forms, into the software. Ensure that what you've placed in the system is accurate to avoid financial errors.
Another option is to hire management assistance from professional payroll services. They especially come in handy for owners of large corporations and businesses handling a significant number of employees.
All you have to do is track your employees' work hours and forward this data to the service provider. The service will calculate the payroll amount based on those hours and deduct taxes from their paychecks before rolling them out during payday. Naturally, they would typically use automated software.
Payroll is part and parcel of any business, no matter the industry. Plenty of accounting tasks necessitate payroll processing, from tracking your employees' work hours to delivering their wages on time. While these tasks can be done independently and manually, doing so will be time-consuming and may lead to unintentional errors.
So, switch to stress-free automated payroll management with Unloop's payroll services. Our team of professionals uses efficient, up-to-date tools like QuickBooks to ensure automated, organized, and efficient payroll processing for your company. Book a call with us today!
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.
Any big or small business owner must ensure their employees receive the hard-earned money they deserve. Nevertheless, mistakes during payroll processing are bound to happen. Thankfully, the emergence of an automated payroll system allows you to pay your employees seamlessly.
Let's delve into the depths of an automated payroll solution and how it can transform your business’s financial operations.
Before we get into the nitty-gritty of payroll automation, it's crucial to understand the processes behind it. As you might have already guessed, payroll involves giving your employees accurate salaries on time.
To do so, you have to calculate
Additionally, you have to consider several other factors, such as
To any business owner without an established finance team, these tasks may become too confusing and daunting to handle on their own. Learning to do these accounting tasks accurately also takes much time and effort.
Fortunately, you won't have to stress too much over perfecting these tiresome payroll processes. With an automated payroll, you have an organized tool for the job. A computerized payroll system will simplify and speed up how you calculate and distribute your employee's paychecks.
An automated system can do the following processes:
You might still be skeptical about streamlining your payroll tasks to organized software. To ease any of your worries, we've gathered a few reasons why you should automate payroll to improve your business.
Saves Time
Time is precious and should not be wasted. Even the tiniest moments count when you're operating and handling a business. Hence, it's only logical to spend every second wisely.
You would have to spend hours upon hours doing manual data entry for payroll when you should be working on important business matters. An automated payroll system allows you to allocate more time to those tasks.
Even the slightest mistake can cause grave consequences when calculating employee wages. The payroll team must ensure accurate and timely wage distribution.
However, with the dizzying amount of accounting and recordkeeping tasks involved in payroll, some people will inevitably make mistakes and unintentionally issue inaccurate employee payments. These errors can cause financial issues for both the employee and the employer and lead to severe legal penalties.
Precise and accurate payment calculations are guaranteed with a computerized payroll system. The software can correctly and swiftly compute and adjust an employee's pay while considering possible wage deductions, raises, bonuses, and more.
One of the most confusing and headache-inducing parts of payroll processing is filing and calculating tax withholdings. Getting this part right is crucial as it involves various laws and regulations. An error may likely result in legal trouble for your business.
With automated payroll systems, you don't have to calculate all of your employee's gross pay and take out tax deductions on your own. You can let the software accurately figure out and navigate the complicated world of tax filing.
Using automated payroll software can also foster employee trust. Most automated systems allow staff members to access their paychecks easily and view possible changes in their regular wages. These are possible with employee self-service portals and other employee-centric features.
They can also update and input payroll information easily using automated systems. Because of this feature, the system can smoothly adjust employee pay stubs according to real-time changes.
Paying employees with an automated system can indirectly improve your relationship with them. Receiving befitting compensation for their work is one of the primary ways to motivate employees. With computerized payroll systems, employees are guaranteed accurate and timely pay.
Moreover, with the transparency that automated systems provide, you can improve and develop trust and confidence in your employees. They will feel secure knowing that you pay them what they're due.
Manually handling your payroll may seem like a breeze at first. But as your business grows, it will become more complicated and time-consuming. The sooner you implement payroll automation, the more time and resources you'll save in the long run.
Hopefully, the benefits mentioned above are enough to convince you to start automating your payroll. Your next course of action is learning how to switch from manual to automated payroll. You can either use payroll automation software or hire a payroll service.
Take matters into your own hands by searching for payroll automation software that suits your business. Choosing payroll software will primarily depend on your company's size, business needs, and other related factors.
Besides the payroll software cost, here are some features you must consider:
Besides calculating your employee's wages, automated software can also provide regular comprehensive payroll reports to help monitor your finances. Some even use combined HR and payroll software for more efficient employee and payroll management.
Once you've made your choice, all you have to do is input the necessary payroll data and documents, such as employee information and tax forms, into the software. Ensure that what you've placed in the system is accurate to avoid financial errors.
Another option is to hire management assistance from professional payroll services. They especially come in handy for owners of large corporations and businesses handling a significant number of employees.
All you have to do is track your employees' work hours and forward this data to the service provider. The service will calculate the payroll amount based on those hours and deduct taxes from their paychecks before rolling them out during payday. Naturally, they would typically use automated software.
Payroll is part and parcel of any business, no matter the industry. Plenty of accounting tasks necessitate payroll processing, from tracking your employees' work hours to delivering their wages on time. While these tasks can be done independently and manually, doing so will be time-consuming and may lead to unintentional errors.
So, switch to stress-free automated payroll management with Unloop's payroll services. Our team of professionals uses efficient, up-to-date tools like QuickBooks to ensure automated, organized, and efficient payroll processing for your company. Book a call with us today!
Learning how to calculate accounts receivable is an important step towards better financial management, and the reason is obvious for anyone that owns a business; nobody wants to forget the money they're owed, especially when it's a huge amount.
In this blog, we'll discuss everything there is to know about accounts receivable, the formulas involved in calculating it, and why you need to keep tabs on this account that's on your company's balance sheet.
For starters, let's discuss what accounts receivable is. The short of it is that it's the money that customers owe a business on credit. But how does that happen exactly?
Accounts receivable are recorded on the business's books when a customer receives goods or services from the business but can't pay at the time of purchase.
For example, an Amazon seller may provide products to a client and invoice them for the products. If the client does not pay immediately, the amount owed by the client for the products is recorded as an accounts receivable.
Accounts receivable can also be accrued through installment payments or financing arrangements, such as when a customer purchases a product on credit and pays for it over time.
During the pandemic, many businesses learned that proper accounts receivable management can lead to sturdy financial positions. You see, accruing accounts receivable allows businesses to provide flexibility to their customers while still being able to track and manage the money owed to them.
Owing money can also work both ways. With accounts receivable, a business is owed by its customers for every product or service it sells on credit. Accounts payable is the opposite. It happens when the business owes its vendors or suppliers money for goods or services received but has yet to pay for them.
On the balance sheet, both accounts are recorded differently. Accounts receivable are recorded as assets, while accounts payable are considered liabilities.
A good balance between accounts receivable and accounts payable is critical for maintaining a healthy cash flow and financial stability.
Accounts receivable is only recognized as an asset when a business has a legal right to receive payment from a customer for goods or services that have been provided but not yet paid for.
Accounts receivable are classified as a current asset because it is expected to be collected relatively quickly, typically within 30 to 60 days. As such, accounts receivable represent an essential component of a business's overall financial health, as it reflects the amount of cash the business expects to receive soon.
Under the cash basis accounting method, accounts receivable are only recorded once payment is received. Any sales made on credit or outstanding invoices are recorded as revenue once the payment is received. Hence, the accounts receivable balance remains zero until the customer pays.
On the other hand, under the accrual accounting method, accounts receivable are recorded as soon as the sale is made or the service is provided, even if payment has yet to be received. This means that the revenue is recognized at the time of the sale or service, regardless of when payment is received. The accounts receivable balance reflects the total amount owed by customers as of the end of the reporting period.
So how do you calculate accounts receivable? Do you rely on accounting software to handle everything financial-related? Do you hire an accountant to deal with the math?
The truth is, it's best if new business owners like yourself understand how it's calculated to better maneuver net sales and other essential accounts in your day-to-day transactions.
Currently, there are two standard methods for accounts receivable calculation: the balance sheet method and the aging method.
The balance sheet method involves taking the total accounts receivable balance on the balance sheet and subtracting any allowances for doubtful accounts.
The allowance for doubtful accounts is an estimated amount of uncollectible debts based on experience or other factors. The result is the net accounts receivable balance, which represents the amount the business expects to collect from its customers.
Accounts Receivable (AR) - Allowance for Doubtful Accounts (ADA) = Net Accounts Receivable (NAR)
The aging method involves categorizing the accounts receivable by the age of the invoice or outstanding payment. Typically, businesses will group the accounts receivable in 30-day intervals, such as current, 1–30 days, 31–60 days, and so on.
For each age category, the business estimates the percentage of the outstanding balance likely to be collected. This percentage is based on historical data or industry averages. The sum of the estimated amounts for each age category is the total estimated accounts receivable balance.
(Amounts outstanding up to 30 days × Estimated percentage collectible) + (Amounts outstanding 31–60 days × Estimated percentage collectible) + (Amounts outstanding 61–90 days × Estimated percentage collectible) + (Amounts outstanding over 90 days × Estimated percentage collectible) = Total estimated accounts receivables
The balance sheet method is simple and quick but provides less detailed information on the accounts receivable than the aging method.
The aging method takes more time and effort to calculate, but it provides a more detailed breakdown of the accounts receivable by age, which can help determine which invoices are most overdue and require immediate attention.
Ultimately, businesses should choose the best method for their needs and resources.
Analyzing accounts receivable is vital for cash flow, financial planning, and risk management. It allows businesses to identify areas where they may be experiencing delays in payment or facing issues with collection, enabling them to take corrective action and improve their cash flow.
By understanding the trends and patterns in their accounts receivable, businesses can make more accurate financial projections and plan for future growth.
Now, there are several metrics that businesses can use to analyze accounts receivable. Here are some of the most commonly used ones.
This ratio measures how often a business collects its average accounts receivable balance during a given period. The accounts receivable turnover ratio formula is:
Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable
A high ratio indicates that the business is collecting its receivables in a timely manner, while a low ratio indicates that the business is taking a long time to collect its receivables or needs a better collection process.
DSO measures the average number of days it takes for a business to collect payment on its sales. The formula for DSO is:
DSO = (Accounts Receivable / Net Credit Sales) x Number of Days in the Period
Unlike the accounts receivable turnover ratio, a lower DSO indicates that a business collects payment more quickly. In comparison, a higher DSO indicates that the business is taking longer to collect a payment, which can lead to cash flow problems and may require additional efforts to improve the accounts receivable collection process.
This ratio measures the percentage of accounts receivable the business writes off as bad debt. The formula is:
Bad Debt Ratio = (Total Bad Debts / Net Credit Sales) x 100
A lower lousy debt ratio indicates that the business effectively manages its accounts receivable and minimizes the risk of bad debts.
This metric measures the average number of days it takes for a business to collect payment on its accounts receivable. The formula is:
Average Collection Period = (Accounts Receivable / Net Credit Sales) x Number of Days in the Period
A lower average collection period indicates that the business is collecting payment more quickly, while a higher average collection period indicates the business is taking a long time to collect payment.
In the same way that we ought to calculate accounts receivable accurately, we want to be sure that we're managing collections responsibly. The goal is always to what your company collects so we can avoid future financial difficulties and maximize the company's ability to generate revenue.
To better manage your accounts receivables, here are a few tips that can help:
In conclusion, calculating and managing accounts receivable is critical to a business's financial health. It is important to regularly analyze accounts receivable, identify issues, and implement effective strategies to manage them.
At Unloop, we understand that and want to ensure you succeed.
By working with our accounting experts, you can focus on running your business while we handle your accounting needs, ensuring that your business stays on track and financially healthy—we’ve even got accounts payable services!
Contact us today to learn how we can help you manage your accounts receivable and achieve financial success.
Learning how to calculate accounts receivable is an important step towards better financial management, and the reason is obvious for anyone that owns a business; nobody wants to forget the money they're owed, especially when it's a huge amount.
In this blog, we'll discuss everything there is to know about accounts receivable, the formulas involved in calculating it, and why you need to keep tabs on this account that's on your company's balance sheet.
For starters, let's discuss what accounts receivable is. The short of it is that it's the money that customers owe a business on credit. But how does that happen exactly?
Accounts receivable are recorded on the business's books when a customer receives goods or services from the business but can't pay at the time of purchase.
For example, an Amazon seller may provide products to a client and invoice them for the products. If the client does not pay immediately, the amount owed by the client for the products is recorded as an accounts receivable.
Accounts receivable can also be accrued through installment payments or financing arrangements, such as when a customer purchases a product on credit and pays for it over time.
During the pandemic, many businesses learned that proper accounts receivable management can lead to sturdy financial positions. You see, accruing accounts receivable allows businesses to provide flexibility to their customers while still being able to track and manage the money owed to them.
Owing money can also work both ways. With accounts receivable, a business is owed by its customers for every product or service it sells on credit. Accounts payable is the opposite. It happens when the business owes its vendors or suppliers money for goods or services received but has yet to pay for them.
On the balance sheet, both accounts are recorded differently. Accounts receivable are recorded as assets, while accounts payable are considered liabilities.
A good balance between accounts receivable and accounts payable is critical for maintaining a healthy cash flow and financial stability.
Accounts receivable is only recognized as an asset when a business has a legal right to receive payment from a customer for goods or services that have been provided but not yet paid for.
Accounts receivable are classified as a current asset because it is expected to be collected relatively quickly, typically within 30 to 60 days. As such, accounts receivable represent an essential component of a business's overall financial health, as it reflects the amount of cash the business expects to receive soon.
Under the cash basis accounting method, accounts receivable are only recorded once payment is received. Any sales made on credit or outstanding invoices are recorded as revenue once the payment is received. Hence, the accounts receivable balance remains zero until the customer pays.
On the other hand, under the accrual accounting method, accounts receivable are recorded as soon as the sale is made or the service is provided, even if payment has yet to be received. This means that the revenue is recognized at the time of the sale or service, regardless of when payment is received. The accounts receivable balance reflects the total amount owed by customers as of the end of the reporting period.
So how do you calculate accounts receivable? Do you rely on accounting software to handle everything financial-related? Do you hire an accountant to deal with the math?
The truth is, it's best if new business owners like yourself understand how it's calculated to better maneuver net sales and other essential accounts in your day-to-day transactions.
Currently, there are two standard methods for accounts receivable calculation: the balance sheet method and the aging method.
The balance sheet method involves taking the total accounts receivable balance on the balance sheet and subtracting any allowances for doubtful accounts.
The allowance for doubtful accounts is an estimated amount of uncollectible debts based on experience or other factors. The result is the net accounts receivable balance, which represents the amount the business expects to collect from its customers.
Accounts Receivable (AR) - Allowance for Doubtful Accounts (ADA) = Net Accounts Receivable (NAR)
The aging method involves categorizing the accounts receivable by the age of the invoice or outstanding payment. Typically, businesses will group the accounts receivable in 30-day intervals, such as current, 1–30 days, 31–60 days, and so on.
For each age category, the business estimates the percentage of the outstanding balance likely to be collected. This percentage is based on historical data or industry averages. The sum of the estimated amounts for each age category is the total estimated accounts receivable balance.
(Amounts outstanding up to 30 days × Estimated percentage collectible) + (Amounts outstanding 31–60 days × Estimated percentage collectible) + (Amounts outstanding 61–90 days × Estimated percentage collectible) + (Amounts outstanding over 90 days × Estimated percentage collectible) = Total estimated accounts receivables
The balance sheet method is simple and quick but provides less detailed information on the accounts receivable than the aging method.
The aging method takes more time and effort to calculate, but it provides a more detailed breakdown of the accounts receivable by age, which can help determine which invoices are most overdue and require immediate attention.
Ultimately, businesses should choose the best method for their needs and resources.
Analyzing accounts receivable is vital for cash flow, financial planning, and risk management. It allows businesses to identify areas where they may be experiencing delays in payment or facing issues with collection, enabling them to take corrective action and improve their cash flow.
By understanding the trends and patterns in their accounts receivable, businesses can make more accurate financial projections and plan for future growth.
Now, there are several metrics that businesses can use to analyze accounts receivable. Here are some of the most commonly used ones.
This ratio measures how often a business collects its average accounts receivable balance during a given period. The accounts receivable turnover ratio formula is:
Accounts Receivable Turnover Ratio = Net Credit Sales / Average Accounts Receivable
A high ratio indicates that the business is collecting its receivables in a timely manner, while a low ratio indicates that the business is taking a long time to collect its receivables or needs a better collection process.
DSO measures the average number of days it takes for a business to collect payment on its sales. The formula for DSO is:
DSO = (Accounts Receivable / Net Credit Sales) x Number of Days in the Period
Unlike the accounts receivable turnover ratio, a lower DSO indicates that a business collects payment more quickly. In comparison, a higher DSO indicates that the business is taking longer to collect a payment, which can lead to cash flow problems and may require additional efforts to improve the accounts receivable collection process.
This ratio measures the percentage of accounts receivable the business writes off as bad debt. The formula is:
Bad Debt Ratio = (Total Bad Debts / Net Credit Sales) x 100
A lower lousy debt ratio indicates that the business effectively manages its accounts receivable and minimizes the risk of bad debts.
This metric measures the average number of days it takes for a business to collect payment on its accounts receivable. The formula is:
Average Collection Period = (Accounts Receivable / Net Credit Sales) x Number of Days in the Period
A lower average collection period indicates that the business is collecting payment more quickly, while a higher average collection period indicates the business is taking a long time to collect payment.
In the same way that we ought to calculate accounts receivable accurately, we want to be sure that we're managing collections responsibly. The goal is always to what your company collects so we can avoid future financial difficulties and maximize the company's ability to generate revenue.
To better manage your accounts receivables, here are a few tips that can help:
In conclusion, calculating and managing accounts receivable is critical to a business's financial health. It is important to regularly analyze accounts receivable, identify issues, and implement effective strategies to manage them.
At Unloop, we understand that and want to ensure you succeed.
By working with our accounting experts, you can focus on running your business while we handle your accounting needs, ensuring that your business stays on track and financially healthy—we’ve even got accounts payable services!
Contact us today to learn how we can help you manage your accounts receivable and achieve financial success.
Amazon has revolutionized the shopping process for both large and small businesses. Selling your products online allows your business to expose your products to millions of customers. However, since online selling is continuing to be popular with entrepreneurs, you also have millions of competitors out there.
If you are determined to put your business online, Amazon is the best for you. Setting up an Amazon Business account helps companies get ahead by giving Amazon-exclusive discounts on pricing, plus it offers features to aid in your business operations.
Amazon Business is a business-focused account that caters to all businesses, from small and medium to large enterprises. The main purpose of a business account is for businesses to have an approval process so they can keep their spending in check.
Business accounts allow an entity to create multiple users to make purchases for the company. Your business also enjoys the benefits of efficient and swift deliveries. But, it doesn’t stop there! Once you have a business account, you can upgrade to a Prime account which opens your business to more exclusive benefits.
But unlike business accounts (which are free), Prime members need to pay a membership fee to enjoy its features.
Amazon Prime membership fees may vary depending on the number of users that use the account. Here is a breakdown of their annual prices.
| Number of Users | 1 user | 3 users | 10 users | 100 users | Unlimited Users |
| Price | $69 | $179 | $499 | $1,299 | $10,099 |
You may be thinking that you already have a personal account, So why do you still need to get a Business account? Amazon offers many features and services exclusive to business account holders. For example, having these accounts opens you to business-only selections, bulk discounts, and a wide variety of product lines.
Once your Amazon Business account is set up, you can add multiple sellers in one central account, which anyone in your business can use. The benefits of an Amazon business account is for both the seller and buyer, and here's what you can do with it.
Amazon helps with the selling process when you set up a business account, and it's free. Whether you're a small-scale one-person business or a larger enterprise, it doesn't matter. Any company can open a business account.
To set up your account:
There are over 5 million products currently available across business accounts on Amazon. Aside from access to an unlimited number of items, you also enjoy exclusive prices for business account holders. Whether you do B2B transactions or use your business account as a buyer, you'll enjoy discounts that are not available on personal accounts.
Amazon offers lower prices for bulk purchases. Furthermore, you can ask sellers for discounts.
In 2022, there were currently 200 million active users on Amazon. This number grows each year. When you enroll in Amazon Business, your products will be listed in the vast Amazon catalog, which is accessible to millions of established customers.
Whether you sell from the US or are an international seller, you will be eligible for the FBA program. Amazon is available in numerous countries worldwide, and is continually expanding. Amazon has warehouses in different locations even outside of the US, so international sellers can enjoy the FBA program too.
Furthermore, since the primary feature of FBA is storing your products and shipping, you can save money from renting warehouse space and hiring extra workers for the shipping and packing process. You can also guarantee that the FBA program will handle your products correctly to satisfy your customers.
You can choose to upgrade to a Business Prime account if you already have a Business account. The Prime account is a membership offered by Amazon for businesses and companies. Using a Business Prime account comes with more benefits compared to a standard business account. However, Amazon charges businesses when they upgrade to Prime depending on the number of users in your account.
So is it worth upgrading to a Business Prime account? Here are a few benefits of Amazon Business Prime memberships.
With a Prime account, you can send orders to your customers faster. Customers who shop from your business can enjoy discounted shipping rates, and even free one- or two-day shipping on eligible items. Free shipping will entice shoppers to buy from your business primarily because of the savings they can get.
Free Survey and Analytics Tool
It's vital for businesses to know the feedback of their customers regarding their products and services. Amazon helps companies gather their customer's reviews by using a third-party application. The free tool Amazon provides sends surveys to your customers via SMS, emails, POS kiosks, and other integrated services.
The free analytics tool is beneficial for businesses to track their growth, and with Amazon Prime, you get to enjoy these tools for free.
You will receive an Amazon Business American Express card upon membership with Amazon Prime. This card is exclusive to Prime holders and has no annual fees. With the card, you can enjoy 5% cashback or 90 days to pay with no interest for your purchases.
Amazon Workdocs allows you to store your essential business files in one location. You can quickly locate invoices, receipts, and other documents, allowing for collaborations.
The guided buying allows you to create buying policies for your Business Prime account.
If you have staff, you might give them the responsibility of making purchases from other companies. You can control the items they buy through the guided buying feature. You can list approved items they can purchase and put up restricted categories.
If there's a way to make selling on Amazon better and more convenient, grab it. Utilize the advantages of having an Amazon Business account. If you have the budget for a Business Prime membership, you're in for more benefits and tons of savings for your business. So don't forget to sign your business up today.
Running a small ecommerce firm may also be time-consuming and labour-intensive. While you handle selling your products and launching advertisements, Unloop can help with the accounting side of things. Unloop can help your business stay on top of taxes, expenses, payroll, and several other accounting tasks.
Book a call with us and learn more about how to get started.
Amazon has revolutionized the shopping process for both large and small businesses. Selling your products online allows your business to expose your products to millions of customers. However, since online selling is continuing to be popular with entrepreneurs, you also have millions of competitors out there.
If you are determined to put your business online, Amazon is the best for you. Setting up an Amazon Business account helps companies get ahead by giving Amazon-exclusive discounts on pricing, plus it offers features to aid in your business operations.
Amazon Business is a business-focused account that caters to all businesses, from small and medium to large enterprises. The main purpose of a business account is for businesses to have an approval process so they can keep their spending in check.
Business accounts allow an entity to create multiple users to make purchases for the company. Your business also enjoys the benefits of efficient and swift deliveries. But, it doesn’t stop there! Once you have a business account, you can upgrade to a Prime account which opens your business to more exclusive benefits.
But unlike business accounts (which are free), Prime members need to pay a membership fee to enjoy its features.
Amazon Prime membership fees may vary depending on the number of users that use the account. Here is a breakdown of their annual prices.
| Number of Users | 1 user | 3 users | 10 users | 100 users | Unlimited Users |
| Price | $69 | $179 | $499 | $1,299 | $10,099 |
You may be thinking that you already have a personal account, So why do you still need to get a Business account? Amazon offers many features and services exclusive to business account holders. For example, having these accounts opens you to business-only selections, bulk discounts, and a wide variety of product lines.
Once your Amazon Business account is set up, you can add multiple sellers in one central account, which anyone in your business can use. The benefits of an Amazon business account is for both the seller and buyer, and here's what you can do with it.
Amazon helps with the selling process when you set up a business account, and it's free. Whether you're a small-scale one-person business or a larger enterprise, it doesn't matter. Any company can open a business account.
To set up your account:
There are over 5 million products currently available across business accounts on Amazon. Aside from access to an unlimited number of items, you also enjoy exclusive prices for business account holders. Whether you do B2B transactions or use your business account as a buyer, you'll enjoy discounts that are not available on personal accounts.
Amazon offers lower prices for bulk purchases. Furthermore, you can ask sellers for discounts.
In 2022, there were currently 200 million active users on Amazon. This number grows each year. When you enroll in Amazon Business, your products will be listed in the vast Amazon catalog, which is accessible to millions of established customers.
Whether you sell from the US or are an international seller, you will be eligible for the FBA program. Amazon is available in numerous countries worldwide, and is continually expanding. Amazon has warehouses in different locations even outside of the US, so international sellers can enjoy the FBA program too.
Furthermore, since the primary feature of FBA is storing your products and shipping, you can save money from renting warehouse space and hiring extra workers for the shipping and packing process. You can also guarantee that the FBA program will handle your products correctly to satisfy your customers.
You can choose to upgrade to a Business Prime account if you already have a Business account. The Prime account is a membership offered by Amazon for businesses and companies. Using a Business Prime account comes with more benefits compared to a standard business account. However, Amazon charges businesses when they upgrade to Prime depending on the number of users in your account.
So is it worth upgrading to a Business Prime account? Here are a few benefits of Amazon Business Prime memberships.
With a Prime account, you can send orders to your customers faster. Customers who shop from your business can enjoy discounted shipping rates, and even free one- or two-day shipping on eligible items. Free shipping will entice shoppers to buy from your business primarily because of the savings they can get.
Free Survey and Analytics Tool
It's vital for businesses to know the feedback of their customers regarding their products and services. Amazon helps companies gather their customer's reviews by using a third-party application. The free tool Amazon provides sends surveys to your customers via SMS, emails, POS kiosks, and other integrated services.
The free analytics tool is beneficial for businesses to track their growth, and with Amazon Prime, you get to enjoy these tools for free.
You will receive an Amazon Business American Express card upon membership with Amazon Prime. This card is exclusive to Prime holders and has no annual fees. With the card, you can enjoy 5% cashback or 90 days to pay with no interest for your purchases.
Amazon Workdocs allows you to store your essential business files in one location. You can quickly locate invoices, receipts, and other documents, allowing for collaborations.
The guided buying allows you to create buying policies for your Business Prime account.
If you have staff, you might give them the responsibility of making purchases from other companies. You can control the items they buy through the guided buying feature. You can list approved items they can purchase and put up restricted categories.
If there's a way to make selling on Amazon better and more convenient, grab it. Utilize the advantages of having an Amazon Business account. If you have the budget for a Business Prime membership, you're in for more benefits and tons of savings for your business. So don't forget to sign your business up today.
Running a small ecommerce firm may also be time-consuming and labour-intensive. While you handle selling your products and launching advertisements, Unloop can help with the accounting side of things. Unloop can help your business stay on top of taxes, expenses, payroll, and several other accounting tasks.
Book a call with us and learn more about how to get started.
Trading in your Windows-based accounting system for Apple accounting software can be daunting at first. It often requires a significant adjustment in how you oversee financial operations. You might also feel like the new application holds your potential back, leaving you stuck and frustrated.
Don’t worry! The switch may have its challenges, but it also offers exciting opportunities. There is now free accounting software specifically made for your current setup.
Start your accounting journey on the right foot with these tips for finding the right software solution designed for Mac users. Get ready to streamline and facilitate every financial aspect of running a small business.
Apple is committed to revolutionizing the business world by introducing cutting-edge features such as accounting into its operating system. They aim to simplify digital operations for enterprises and open up more opportunities that provide maximum return on investment, freeing them from compatibility problems.
Thanks to Mac-friendly accounting software, entrepreneurs everywhere can experience an exponential increase in productivity and workflows. No longer should they miss out on the huge gains of modern financial programs—software is a must-have for new Apple users who want to continue their business efficiency.
Financial statements and graph visualizations are also taken to a whole new level when using accounting software for Mac. Every table and chart a business produces showcases its best work like never before. They can even present data points without sacrificing quality.
Best of all, small business owners won't have to worry about inaccuracies that come with manually handling accounts. Like with Windows, software is automated and adaptive for Mac users everywhere.
All these factors make software an ideal solution for successful financial collaborations.
With the overwhelming variety of Mac accounting software programs, it can be challenging to choose just one. But you’ll soon discover the best accounting software for your accounting needs by considering certain key factors in your decision-making process.
Here are a few things to keep in mind.
The availability of both online and offline versions is a great starting point for your research. With cloud-based accounting software, you can get vital information from any corner, making financial processes much more manageable.
At the same time, going offline provides users with secure access free of connection errors or other technical trouble. Users can take full advantage of their informational needs and wants by having both options available.
There may be times when you’ll need to move your financial data from your Mac computer to other Apple devices such as iPads or iPhones. This extra feature can make transferring and syncing records much more accessible and smoother.
By staying connected with your accounts, you can ensure that no important update or deadline slips past unnoticed. It may be a low priority for some, but getting an iOS app can make a difference in terms of convenience.
Don't get bogged down with payroll calculations; choose an accounting software solution for your Mac desktop with integrated payroll management tools. With this feature, you can easily access employee data analytics and calculate salaries to help you breeze through those operations.
Payroll integration guarantees timely tax withholdings, employee payments, and federal and state regulations compliance. Automating these business processes improves bookkeeping tasks and offers an extra layer of assurance and peace of mind.
Keep your Mac desktop running with accounting software that includes automatic reconciliation features. As the name suggests, it allows small businesses to manage monthly transactions without the time-consuming hassle of data entry and manual reconciliations.
Automated reconciliation can verify bank accounts, credit cards, and other transactions within the accounting system against their sources. From there, users can gain insight into company finances—all in a fraction of the usual processing period.
Finding an accounting platform with unlimited user access is ideal for effective operation and future growth so your team can thrive without additional financial burdens.
Companies can control their data and collaboration efforts with unlimited access to a single account. These accounting software features also have major implications for tracking employee productivity. Integrating this with team management tools means they can maximize efficiency in their accounting tasks like never before.
For Mac desktop users, customer support is an often ignored yet fundamental element when choosing the perfect accounting software. Eye-catching interfaces and tech enhancements may be a plus, but strong customer support can address any issues or queries you may have—proving why this feature shouldn't go unnoticed.
Poor customer service can leave you feeling stranded and frustrated. Make sure your digital experience is worry-free by selecting an accounting solution that delivers reliable, patient, and knowledgeable support when dealing with account-related matters.
Good accounting software should give you easy access to the customer-facing aspects of your financials, such as professional invoices, purchase order management, and customer accounts. This way, you can prepare for conversations with clients and vendors.
Leveraging an integrated client data system can also open a world of market access. It makes it easier to manage emails, conduct follow-up interactions with customers, get an overview of the customer journey, and make data-driven decisions that propel your enterprise forward.
Here’s your chance to be resourceful without sacrificing productivity. Accounting software with excellent expense tracking, reporting capabilities, and tax calculation is much-need for any business.
You can’t go wrong with these accounting features to easily manage hundreds of transactions and sort them out quickly. By finding a way to accurately break down expenses, measure necessary data research, and initiate automated calculations, you can access any information related to expenses without intricacy.
It’s time to move on to the next step—finding the right accounting programs for your device. With all the knowledge you need, you can dive into some of the excellent options available from Apple.
Below are the best accounting solutions for Apple’s operating system. From the highly advanced to simple, user-friendly tools, there’s sure to be an accounting app that fits what you’re looking for.
QuickBooks Online is the go-to choice for small business owners looking to control their money operations. This cloud accounting software empowers entrepreneurs with features like invoice tracking, expense monitoring, and secure payment acceptance, enabling them to stay on top of their finances without inconvenience.
Another version of QuickBooks is available to many Mac Users: QuickBooks Desktop App for Mac. It can give you instant insight into cash flow and profitability. It can also link directly to bank accounts, so you don't have to load multiple financial applications. Unfortunately, you can no longer enjoy this version after May 2023. So use it while you can.
FreshBooks is another small business accounting software option for Apple. From tracking billable hours to safeguarding data integrity in the cloud, this tool offers an Apple-friendly approach to tackling all your monetary resources.
With FreshBooks, companies can trust that their accounting operations have powerful capabilities to monitor and evaluate expenses. This gives an unbeatable view of its return on investment while categorizing personal and business finances.
Sage's basic subscription offers the perfect starting point for small business owners who want to get their finances in order. Accounting and organizational tools give users a helping hand to focus on growing their business without worrying about numbers or clutter.
With its intuitive interface, 1-on-1 expert session, and secure payment processing options, this scalable accounting software is setting a new benchmark in the field, proving to be an invaluable asset for any Mac user.
Xero is the perfect pick for taking care of those pesky accounting tasks. With clear interfaces and convenient features like capturing snapshots of key accounts, you can easily reference previous versions with one click, making it perfect for even the busiest business owner.
Xero also can add additional users to their plan without increased cost. It is perfect for companies with multiple staff involved in their accounting processes. Apple users no longer have to strain over the paperwork. Instead, they can keep things efficient and organized.
Financial management through Apple can be a struggle, especially when you’re not accustomed to the PC and android environment. It takes patience, attention to detail, and organizational skills that may not come naturally to most.
But one thing is sure: those frustrating days of handling your financial operations will now be in the past. Thanks to the availability of high-quality, reliable accounting software for Mac, you can make your bookkeeping, budgeting, and project management easier than ever before.
Feeling uncertain? Unloop can help free you up! Our accounting professionals will find the perfect software for your small business to ensure everything runs smoothly and accurately.
Get in touch today, and we'll sort things out!
Trading in your Windows-based accounting system for Apple accounting software can be daunting at first. It often requires a significant adjustment in how you oversee financial operations. You might also feel like the new application holds your potential back, leaving you stuck and frustrated.
Don’t worry! The switch may have its challenges, but it also offers exciting opportunities. There is now free accounting software specifically made for your current setup.
Start your accounting journey on the right foot with these tips for finding the right software solution designed for Mac users. Get ready to streamline and facilitate every financial aspect of running a small business.
Apple is committed to revolutionizing the business world by introducing cutting-edge features such as accounting into its operating system. They aim to simplify digital operations for enterprises and open up more opportunities that provide maximum return on investment, freeing them from compatibility problems.
Thanks to Mac-friendly accounting software, entrepreneurs everywhere can experience an exponential increase in productivity and workflows. No longer should they miss out on the huge gains of modern financial programs—software is a must-have for new Apple users who want to continue their business efficiency.
Financial statements and graph visualizations are also taken to a whole new level when using accounting software for Mac. Every table and chart a business produces showcases its best work like never before. They can even present data points without sacrificing quality.
Best of all, small business owners won't have to worry about inaccuracies that come with manually handling accounts. Like with Windows, software is automated and adaptive for Mac users everywhere.
All these factors make software an ideal solution for successful financial collaborations.
With the overwhelming variety of Mac accounting software programs, it can be challenging to choose just one. But you’ll soon discover the best accounting software for your accounting needs by considering certain key factors in your decision-making process.
Here are a few things to keep in mind.
The availability of both online and offline versions is a great starting point for your research. With cloud-based accounting software, you can get vital information from any corner, making financial processes much more manageable.
At the same time, going offline provides users with secure access free of connection errors or other technical trouble. Users can take full advantage of their informational needs and wants by having both options available.
There may be times when you’ll need to move your financial data from your Mac computer to other Apple devices such as iPads or iPhones. This extra feature can make transferring and syncing records much more accessible and smoother.
By staying connected with your accounts, you can ensure that no important update or deadline slips past unnoticed. It may be a low priority for some, but getting an iOS app can make a difference in terms of convenience.
Don't get bogged down with payroll calculations; choose an accounting software solution for your Mac desktop with integrated payroll management tools. With this feature, you can easily access employee data analytics and calculate salaries to help you breeze through those operations.
Payroll integration guarantees timely tax withholdings, employee payments, and federal and state regulations compliance. Automating these business processes improves bookkeeping tasks and offers an extra layer of assurance and peace of mind.
Keep your Mac desktop running with accounting software that includes automatic reconciliation features. As the name suggests, it allows small businesses to manage monthly transactions without the time-consuming hassle of data entry and manual reconciliations.
Automated reconciliation can verify bank accounts, credit cards, and other transactions within the accounting system against their sources. From there, users can gain insight into company finances—all in a fraction of the usual processing period.
Finding an accounting platform with unlimited user access is ideal for effective operation and future growth so your team can thrive without additional financial burdens.
Companies can control their data and collaboration efforts with unlimited access to a single account. These accounting software features also have major implications for tracking employee productivity. Integrating this with team management tools means they can maximize efficiency in their accounting tasks like never before.
For Mac desktop users, customer support is an often ignored yet fundamental element when choosing the perfect accounting software. Eye-catching interfaces and tech enhancements may be a plus, but strong customer support can address any issues or queries you may have—proving why this feature shouldn't go unnoticed.
Poor customer service can leave you feeling stranded and frustrated. Make sure your digital experience is worry-free by selecting an accounting solution that delivers reliable, patient, and knowledgeable support when dealing with account-related matters.
Good accounting software should give you easy access to the customer-facing aspects of your financials, such as professional invoices, purchase order management, and customer accounts. This way, you can prepare for conversations with clients and vendors.
Leveraging an integrated client data system can also open a world of market access. It makes it easier to manage emails, conduct follow-up interactions with customers, get an overview of the customer journey, and make data-driven decisions that propel your enterprise forward.
Here’s your chance to be resourceful without sacrificing productivity. Accounting software with excellent expense tracking, reporting capabilities, and tax calculation is much-need for any business.
You can’t go wrong with these accounting features to easily manage hundreds of transactions and sort them out quickly. By finding a way to accurately break down expenses, measure necessary data research, and initiate automated calculations, you can access any information related to expenses without intricacy.
It’s time to move on to the next step—finding the right accounting programs for your device. With all the knowledge you need, you can dive into some of the excellent options available from Apple.
Below are the best accounting solutions for Apple’s operating system. From the highly advanced to simple, user-friendly tools, there’s sure to be an accounting app that fits what you’re looking for.
QuickBooks Online is the go-to choice for small business owners looking to control their money operations. This cloud accounting software empowers entrepreneurs with features like invoice tracking, expense monitoring, and secure payment acceptance, enabling them to stay on top of their finances without inconvenience.
Another version of QuickBooks is available to many Mac Users: QuickBooks Desktop App for Mac. It can give you instant insight into cash flow and profitability. It can also link directly to bank accounts, so you don't have to load multiple financial applications. Unfortunately, you can no longer enjoy this version after May 2023. So use it while you can.
FreshBooks is another small business accounting software option for Apple. From tracking billable hours to safeguarding data integrity in the cloud, this tool offers an Apple-friendly approach to tackling all your monetary resources.
With FreshBooks, companies can trust that their accounting operations have powerful capabilities to monitor and evaluate expenses. This gives an unbeatable view of its return on investment while categorizing personal and business finances.
Sage's basic subscription offers the perfect starting point for small business owners who want to get their finances in order. Accounting and organizational tools give users a helping hand to focus on growing their business without worrying about numbers or clutter.
With its intuitive interface, 1-on-1 expert session, and secure payment processing options, this scalable accounting software is setting a new benchmark in the field, proving to be an invaluable asset for any Mac user.
Xero is the perfect pick for taking care of those pesky accounting tasks. With clear interfaces and convenient features like capturing snapshots of key accounts, you can easily reference previous versions with one click, making it perfect for even the busiest business owner.
Xero also can add additional users to their plan without increased cost. It is perfect for companies with multiple staff involved in their accounting processes. Apple users no longer have to strain over the paperwork. Instead, they can keep things efficient and organized.
Financial management through Apple can be a struggle, especially when you’re not accustomed to the PC and android environment. It takes patience, attention to detail, and organizational skills that may not come naturally to most.
But one thing is sure: those frustrating days of handling your financial operations will now be in the past. Thanks to the availability of high-quality, reliable accounting software for Mac, you can make your bookkeeping, budgeting, and project management easier than ever before.
Feeling uncertain? Unloop can help free you up! Our accounting professionals will find the perfect software for your small business to ensure everything runs smoothly and accurately.
Get in touch today, and we'll sort things out!
If you want to establish or change your accounting system, you may have heard of or used two basic accounting methods: the cash and accrual accounting methods. These are the textbook methods that every business can choose from.
But there's another method that some entities use. It's called modified accrual accounting, and it can be an excellent record keeping method if you want to see your business's numbers more clearly.
Let Unloop explain the modified accrual method to you. But before we do, we'll also go over the two primary accounting methods to give you a more thorough understanding.
Most starting businesses adopt a cash basis method of accounting. This way of financial recordkeeping recognizes transactions only when the money comes in or goes out, making bookkeeping easy.
Here are some reasons why cash basis accounting is fantastic for both traditional and ecommerce businesses.
Straightforward
Accountants and bookkeepers use the double-entry method when recording transactions. But what makes it straightforward is they only use cash as a debit or credit account in each transaction.
Cash Accurate
Since transactions are only recorded when the business spends or receives cash, managers, and small business owners have an accurate view of the movement of cash assets within the business.
Simple Reporting
Bookkeeping and accounting using the cash basis make financial statement reporting simple. In a given period, there will only be a few accounts presented, making it easier to analyze. Reading the simple reports generated from a cash basis accounting method helps in quick decision-making.
Despite the ease and simplicity of cash basis accounting, it has certain drawbacks.
Challenging for Complex Transactions
When transactions become more complex in real-world events, the cash basis method may have difficulty keeping up. For example, when a business purchases a significant asset on an installment basis, this could affect multiple accounts for an extended period, and official recording may only take place after a long period.
A Narrow View of the Business
Cash basis accounting only sees transactions as they come and go. This limits the view of a manager or a business owner because, in the real world, transactions are incurred or earned earlier or later than usual.
The accrual basis method allows revenue recognition even if it has yet to be received. and recognizes expenses before anything is paid or incurred. As long as the economic event happened, accrual basis accounting will record it. That’s why large businesses with expanded activity and high annual income adopt accrual accounting rather than cash accounting.
Here's why big businesses use accrual accounting when recording business transactions.
Can Handle Complex Transactions
Accrual accounting lets accountants and bookkeepers record transactions involving multiple accounts. For example, if they are a software company that sold $100 of a single product on the current date and the buyer pays $10 initially while the rest is payable in 90 days, they can record everything on the current date and not after 90 days when the payment is completed.
Business Accurate
Using the accrual method is business accurate because it allows accountants and bookkeepers to record transactions as they happen. This gives managers and owners an accurate view of what's happening in the business in real-time.
Widely Acceptable
Generally Accepted Accounting Principles (GAAP) approves the use of accrual accounting. It is also the type of accounting method that banks and tax authorities require for any business with substantial profit earnings or loan requests.
As great as the accrual method is, it also has several drawbacks.
It Is Complex
Recording transactions using the accrual method can be complex. Putting them together in a financial statement can be more challenging than with cash basis accounting, as there can be many accounts to balance.
Prone to Fraud and Errors
Unlike the cash basis method, where you can have one debit and credit account in a double-entry transaction, accrual accounting can have multiple and the amounts in each account may vary—which is where errors occur and fraudulent transactions can sneak in.
The modified accrual accounting is a hybrid of the two methods. It uses the best features of cash and accrual basis and adapts depending on the transaction's nature. This is also known as the modified cash basis or hybrid accounting method.
Short-Term
When recording economic events in the short term, primarily if it affects the entity's cash balance, the modified accrual basis adapts the cash method.
These transactions are the ones incurred monthly or daily. Regular business expenses such as utilities and suppliers adopt a cash-based accounting method.
Long-Term
If an economic event affects the business long-term, such as in years, the accrual method is used to record the transaction.
Acquisitions of property or big-ticket equipment are recorded using the accrual method. The transaction is recognized at the date the transaction is made for more accurate recording purposes.
A critical advantage of the modified accrual method is balanced reporting. The financial statements of entities using this method will show little shortage or surplus as the more significant expenses are distributed throughout the business's life, and the more minor expenses are justified.
It can be the most complex of methods because it uses a combination of cash and accrual basis. Switching between two methods when recording transactions will test any bookkeeper or accountant.
No, they can't. GAAP and International Financial Reporting Standards (IFRS) don't allow modified accrual accounting.
Government entities generally use the modified accrual method. But private, for-profit entities such as ecommerce marketplace sellers can also use it for internal purposes to improve their vision.
You can get experts to decide which method is best for your business, given its current situation. On the other hand, if you started with either a cash or accrual basis, you can let experts continue to use those methods effectively.
Unloop can help you decide what can be done for your business. Book a call or check out our bookkeeping services to find out more.
If you want to establish or change your accounting system, you may have heard of or used two basic accounting methods: the cash and accrual accounting methods. These are the textbook methods that every business can choose from.
But there's another method that some entities use. It's called modified accrual accounting, and it can be an excellent record keeping method if you want to see your business's numbers more clearly.
Let Unloop explain the modified accrual method to you. But before we do, we'll also go over the two primary accounting methods to give you a more thorough understanding.
Most starting businesses adopt a cash basis method of accounting. This way of financial recordkeeping recognizes transactions only when the money comes in or goes out, making bookkeeping easy.
Here are some reasons why cash basis accounting is fantastic for both traditional and ecommerce businesses.
Straightforward
Accountants and bookkeepers use the double-entry method when recording transactions. But what makes it straightforward is they only use cash as a debit or credit account in each transaction.
Cash Accurate
Since transactions are only recorded when the business spends or receives cash, managers, and small business owners have an accurate view of the movement of cash assets within the business.
Simple Reporting
Bookkeeping and accounting using the cash basis make financial statement reporting simple. In a given period, there will only be a few accounts presented, making it easier to analyze. Reading the simple reports generated from a cash basis accounting method helps in quick decision-making.
Despite the ease and simplicity of cash basis accounting, it has certain drawbacks.
Challenging for Complex Transactions
When transactions become more complex in real-world events, the cash basis method may have difficulty keeping up. For example, when a business purchases a significant asset on an installment basis, this could affect multiple accounts for an extended period, and official recording may only take place after a long period.
A Narrow View of the Business
Cash basis accounting only sees transactions as they come and go. This limits the view of a manager or a business owner because, in the real world, transactions are incurred or earned earlier or later than usual.
The accrual basis method allows revenue recognition even if it has yet to be received. and recognizes expenses before anything is paid or incurred. As long as the economic event happened, accrual basis accounting will record it. That’s why large businesses with expanded activity and high annual income adopt accrual accounting rather than cash accounting.
Here's why big businesses use accrual accounting when recording business transactions.
Can Handle Complex Transactions
Accrual accounting lets accountants and bookkeepers record transactions involving multiple accounts. For example, if they are a software company that sold $100 of a single product on the current date and the buyer pays $10 initially while the rest is payable in 90 days, they can record everything on the current date and not after 90 days when the payment is completed.
Business Accurate
Using the accrual method is business accurate because it allows accountants and bookkeepers to record transactions as they happen. This gives managers and owners an accurate view of what's happening in the business in real-time.
Widely Acceptable
Generally Accepted Accounting Principles (GAAP) approves the use of accrual accounting. It is also the type of accounting method that banks and tax authorities require for any business with substantial profit earnings or loan requests.
As great as the accrual method is, it also has several drawbacks.
It Is Complex
Recording transactions using the accrual method can be complex. Putting them together in a financial statement can be more challenging than with cash basis accounting, as there can be many accounts to balance.
Prone to Fraud and Errors
Unlike the cash basis method, where you can have one debit and credit account in a double-entry transaction, accrual accounting can have multiple and the amounts in each account may vary—which is where errors occur and fraudulent transactions can sneak in.
The modified accrual accounting is a hybrid of the two methods. It uses the best features of cash and accrual basis and adapts depending on the transaction's nature. This is also known as the modified cash basis or hybrid accounting method.
Short-Term
When recording economic events in the short term, primarily if it affects the entity's cash balance, the modified accrual basis adapts the cash method.
These transactions are the ones incurred monthly or daily. Regular business expenses such as utilities and suppliers adopt a cash-based accounting method.
Long-Term
If an economic event affects the business long-term, such as in years, the accrual method is used to record the transaction.
Acquisitions of property or big-ticket equipment are recorded using the accrual method. The transaction is recognized at the date the transaction is made for more accurate recording purposes.
A critical advantage of the modified accrual method is balanced reporting. The financial statements of entities using this method will show little shortage or surplus as the more significant expenses are distributed throughout the business's life, and the more minor expenses are justified.
It can be the most complex of methods because it uses a combination of cash and accrual basis. Switching between two methods when recording transactions will test any bookkeeper or accountant.
No, they can't. GAAP and International Financial Reporting Standards (IFRS) don't allow modified accrual accounting.
Government entities generally use the modified accrual method. But private, for-profit entities such as ecommerce marketplace sellers can also use it for internal purposes to improve their vision.
You can get experts to decide which method is best for your business, given its current situation. On the other hand, if you started with either a cash or accrual basis, you can let experts continue to use those methods effectively.
Unloop can help you decide what can be done for your business. Book a call or check out our bookkeeping services to find out more.
Are you stuck in a bookkeeping pinch and don't have access to a computer or a laptop? That's a tough situation you’ve got there. As a business owner, you don't always have the luxury of sitting at your desk all day working on accounting tasks. There are other business matters to address, which may sometimes require you to be out of the office.
You can always appoint a bookkeeping and accounting team to manage financial matters. Still, staying on top of what's happening is necessary. So, is there anything you can do about it? Yes, there is! If you're using QuickBooks online, you can use the mobile app to accomplish essential bookkeeping duties.
Let us give you a quick overview of the convenience of mobile bookkeeping with QuickBooks.
Mobile devices are used for almost anything nowadays. Most people bring their smartphones around with them, whether they’re for locating areas or for completing quick transactions. Conducting business on your smartphone is no exception. It's a fast and convenient way to get things done.
This is why bookkeeping mobile apps must function correctly. It can be complicated, but a smooth mobile platform makes a significant difference. Here are eight convenient features of the QuickBooks mobile app that you'll appreciate.
The dashboard, menu, and other pages of the QuickBooks Online mobile app differ from the desktop version. They are designed to fit the restricted screen space of mobile devices perfectly.
The orientation is vertical rather than landscape for quick scrolling. Text is as concise as possible to avoid clutter. The page elements are also interactive, allowing you to expand the details when necessary.
You can view a lot of vital business data at a glance. Examples are:
Is this your first time using the mobile app? Don't worry. It is more user-friendly than other accounting or bookkeeping software. Should you experience a learning curve, seek the help of a professional bookkeeping team.
If you're in the mood for changing how your loans, sales receipts, invoices, and estimates appear, the QuickBooks Online mobile app allows you to customize them. You may change the logo and colour of an invoice or add attachments, notes, or photos for reference. You can also make them fit your branding personality.
Know what happens with your bank accounts using the mobile syncing feature in a matter of minutes. Connect securely with your bank and use smart matching to automatically record any transactions you or your company make. You may also view profit and loss, pay bills, and categorize the details you want to see.
What if syncing is taking too long to update? In that case, consider adding your transactions manually. It will only require a couple of clicks; nothing you can't accomplish!
It is essential to keep and attach receipts to their corresponding bills. If you're out of the office and need to record certain expenses, simply take a quick snapshot of the receipt and upload it using the QuickBooks Online mobile app. This helps you monitor and organize your company expenses with ease.
QuickBooks Online will then upload and sync them to the main website.
Your financial accounting information is highly confidential. You must ensure that you're the only one with access to make changes to the app. The QuickBooks Online mobile app offers different locking methods to control user access. Choose between using a PIN, touch ID, or the fingerprint method to sign in. Enabling third-party password manager support is another option.
Sometimes, customers forget about invoice due dates. Thus, you need to track and remind them to do so to avoid any bookkeeping or accounting issues. But how can you manage when you already have a full plate? Manually tracking and reminding them will take too much time and effort.
The QuickBooks Online mobile app has a feature called automated invoice reminders. It allows you to enable polite reminders for overdue or soon-to-be invoices. These reminders are sent a few days prior to or after their due date. You can also personalize the message to embody your branding personality.
Some mobile devices don't support specific file formats. You still have to install an app that can open them. But with mobile bookkeeping in QuickBooks, you can open various file types included in attachments. It could be a pdf, doc, or another accounting file type.
The mobile app also supports multi-currency and negative prices and rates.
You can perform more banking actions using the QuickBooks Online mobile app. Aside from syncing, you can access bank, credit card, and transaction feeds, which you can modify and refresh on demand. If you need to work on multiple transactions simultaneously, that is also possible with the app.
Other banking actions include adding a new bank account, reconciling transactions from connected bank accounts, viewing card balances, and easy swiping to accept bank transactions.
No bookkeeping software is doing it like QuickBooks. It is often preferable compared to other bookkeeping and accounting tools. That said, it could be better and will only work for some businesses out there.
Still considering using QuickBooks Online? Here are reasons that might resonate with you.
Did you know that QuickBooks Online uses a 128-bit Secure Sockets Layer encryption? That alone is enough to demonstrate how secure their system is. It will require massive calculations and virtually thousands of years to break it! That's how secure this encryption method is.
QuickBooks also uses a cloud-based accounting system. Your data is stored in the cloud, enabling access anytime and anywhere on the Internet. It's easy to control who can view and modify confidential financial data about your business. Your data is also updated in real time and comes with a backup.
QuickBooks has something to offer for businesses with tight budgets. They have flexible pricing plans, a reason they're popular among small companies. The prices range from $7.50 per month to $90 per month, depending on your chosen plan. Each plan also offers a free setup, so you can start connecting bank accounts and cards.
QuickBooks is just one of many tools you can use for bookkeeping and accounting tasks. Juggling them can be confusing and overwhelming, so why not manage them all in one place? That's where QuickBooks's integration feature comes in. Connect your Amazon, Shopify, or other ecommerce platforms to it for easy transactions and inventory management.
While QuickBooks offers ready-to-use templates for generating invoices, business plans, stats, and spreadsheets, it also makes room for customization. Feel free to change the look and feel of your documents to make them stand out even more or match your branding.
Keeping up with bookkeeping and accounting while you're out and about for other business matters may seem like a pipe dream. But QuickBooks brings this dream to a reality with their mobile app. You can now pay bills, record expenses, ask for invoices, view transactions and activity, generate reports, and secure your financial data anytime and anywhere.
Sit back and relax, knowing your business finances are in good shape and that you can always fix them without a computer or laptop.
The more your business grows, the harder it is to handle bookkeeping. This is especially true for small companies with little to zero experience in professional bookkeeping with QuickBooks. In that case, why not consider working with Unloop?
Our bookkeeping services specialize in ecommerce and inventory businesses. We’ll set up your stack, which includes QuickBooks for bookkeeping. We’ll also prepare your financial statements and work with your CPA or other CPA firms to help keep your taxes in check. Book a discovery call with us and talk to an expert for free!
Are you stuck in a bookkeeping pinch and don't have access to a computer or a laptop? That's a tough situation you’ve got there. As a business owner, you don't always have the luxury of sitting at your desk all day working on accounting tasks. There are other business matters to address, which may sometimes require you to be out of the office.
You can always appoint a bookkeeping and accounting team to manage financial matters. Still, staying on top of what's happening is necessary. So, is there anything you can do about it? Yes, there is! If you're using QuickBooks online, you can use the mobile app to accomplish essential bookkeeping duties.
Let us give you a quick overview of the convenience of mobile bookkeeping with QuickBooks.
Mobile devices are used for almost anything nowadays. Most people bring their smartphones around with them, whether they’re for locating areas or for completing quick transactions. Conducting business on your smartphone is no exception. It's a fast and convenient way to get things done.
This is why bookkeeping mobile apps must function correctly. It can be complicated, but a smooth mobile platform makes a significant difference. Here are eight convenient features of the QuickBooks mobile app that you'll appreciate.
The dashboard, menu, and other pages of the QuickBooks Online mobile app differ from the desktop version. They are designed to fit the restricted screen space of mobile devices perfectly.
The orientation is vertical rather than landscape for quick scrolling. Text is as concise as possible to avoid clutter. The page elements are also interactive, allowing you to expand the details when necessary.
You can view a lot of vital business data at a glance. Examples are:
Is this your first time using the mobile app? Don't worry. It is more user-friendly than other accounting or bookkeeping software. Should you experience a learning curve, seek the help of a professional bookkeeping team.
If you're in the mood for changing how your loans, sales receipts, invoices, and estimates appear, the QuickBooks Online mobile app allows you to customize them. You may change the logo and colour of an invoice or add attachments, notes, or photos for reference. You can also make them fit your branding personality.
Know what happens with your bank accounts using the mobile syncing feature in a matter of minutes. Connect securely with your bank and use smart matching to automatically record any transactions you or your company make. You may also view profit and loss, pay bills, and categorize the details you want to see.
What if syncing is taking too long to update? In that case, consider adding your transactions manually. It will only require a couple of clicks; nothing you can't accomplish!
It is essential to keep and attach receipts to their corresponding bills. If you're out of the office and need to record certain expenses, simply take a quick snapshot of the receipt and upload it using the QuickBooks Online mobile app. This helps you monitor and organize your company expenses with ease.
QuickBooks Online will then upload and sync them to the main website.
Your financial accounting information is highly confidential. You must ensure that you're the only one with access to make changes to the app. The QuickBooks Online mobile app offers different locking methods to control user access. Choose between using a PIN, touch ID, or the fingerprint method to sign in. Enabling third-party password manager support is another option.
Sometimes, customers forget about invoice due dates. Thus, you need to track and remind them to do so to avoid any bookkeeping or accounting issues. But how can you manage when you already have a full plate? Manually tracking and reminding them will take too much time and effort.
The QuickBooks Online mobile app has a feature called automated invoice reminders. It allows you to enable polite reminders for overdue or soon-to-be invoices. These reminders are sent a few days prior to or after their due date. You can also personalize the message to embody your branding personality.
Some mobile devices don't support specific file formats. You still have to install an app that can open them. But with mobile bookkeeping in QuickBooks, you can open various file types included in attachments. It could be a pdf, doc, or another accounting file type.
The mobile app also supports multi-currency and negative prices and rates.
You can perform more banking actions using the QuickBooks Online mobile app. Aside from syncing, you can access bank, credit card, and transaction feeds, which you can modify and refresh on demand. If you need to work on multiple transactions simultaneously, that is also possible with the app.
Other banking actions include adding a new bank account, reconciling transactions from connected bank accounts, viewing card balances, and easy swiping to accept bank transactions.
No bookkeeping software is doing it like QuickBooks. It is often preferable compared to other bookkeeping and accounting tools. That said, it could be better and will only work for some businesses out there.
Still considering using QuickBooks Online? Here are reasons that might resonate with you.
Did you know that QuickBooks Online uses a 128-bit Secure Sockets Layer encryption? That alone is enough to demonstrate how secure their system is. It will require massive calculations and virtually thousands of years to break it! That's how secure this encryption method is.
QuickBooks also uses a cloud-based accounting system. Your data is stored in the cloud, enabling access anytime and anywhere on the Internet. It's easy to control who can view and modify confidential financial data about your business. Your data is also updated in real time and comes with a backup.
QuickBooks has something to offer for businesses with tight budgets. They have flexible pricing plans, a reason they're popular among small companies. The prices range from $7.50 per month to $90 per month, depending on your chosen plan. Each plan also offers a free setup, so you can start connecting bank accounts and cards.
QuickBooks is just one of many tools you can use for bookkeeping and accounting tasks. Juggling them can be confusing and overwhelming, so why not manage them all in one place? That's where QuickBooks's integration feature comes in. Connect your Amazon, Shopify, or other ecommerce platforms to it for easy transactions and inventory management.
While QuickBooks offers ready-to-use templates for generating invoices, business plans, stats, and spreadsheets, it also makes room for customization. Feel free to change the look and feel of your documents to make them stand out even more or match your branding.
Keeping up with bookkeeping and accounting while you're out and about for other business matters may seem like a pipe dream. But QuickBooks brings this dream to a reality with their mobile app. You can now pay bills, record expenses, ask for invoices, view transactions and activity, generate reports, and secure your financial data anytime and anywhere.
Sit back and relax, knowing your business finances are in good shape and that you can always fix them without a computer or laptop.
The more your business grows, the harder it is to handle bookkeeping. This is especially true for small companies with little to zero experience in professional bookkeeping with QuickBooks. In that case, why not consider working with Unloop?
Our bookkeeping services specialize in ecommerce and inventory businesses. We’ll set up your stack, which includes QuickBooks for bookkeeping. We’ll also prepare your financial statements and work with your CPA or other CPA firms to help keep your taxes in check. Book a discovery call with us and talk to an expert for free!
Accounts payable is a powerful leverage. Accounts payable helps businesses purchase goods and sell them for profit without upfront cash outlay, and finding the right accounts payable software for small businesses helps track these transactions.
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, letting firms allot more to other business activities such as investing or financing.
But purchasing on credit tests your money management skills. With every accounts payable transaction comes a promise to pay vendors on time. 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. Together with that, let us also give you the software that can assist you.
Managing accounts payable is one of the pain points of many businesses. Whatever the size and type of industry you're in, you'll face these issues as long as you purchase raw materials or merchandise on credit.
Whenever businesses send bills using the paper method, they face numerous challenges. Invoices can stack up on file cabinets and get lost in the mix. When this happens, 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.
Solution: A good accounts payable software with an excellent invoice processing system will make invoice data entry and tracking easier.
Duplicate invoice processing can lead to duplicate payments. If several people manage accounts payable bills, tracking payments becomes challenging, leading to unnecessary cash outlay.
Aside from duplicate payments, incorrect and missing payments happen, too. These vendor payment discrepancies may seem insignificant in small amounts, but they pile up over time and cause huge losses.
Solution: Improved accounts payable processes help reduce payment issues. A system you or an appointed staff manages normalizes accurate payments from the business.
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 your business’s accounting and finance department.
Unapproved payments can extend beyond fulfilling credit obligations to vendors. If left unchecked, it can lead to other unauthorized expenses that can cost the business significantly in the long run.
Solution: You or your management staff can curb this from happening if you automate accounts payable and set up a centralized approval system.
Both traditional and ecommerce businesses need to be efficient. Fast processing is vital for timely supplier payments when managing accounts payable.
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 yours. They can impose a penalty when you're overdue, or you can lose your supplier completely.
Solution: 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.
Investing in accounting software makes the account payable woes mentioned above easy to manage. However, some businesses still prefer the old-fashioned way. Although it’s time-consuming, traditional methods are practically free. But before you decide to stay old school, here are some downsides to it to give you a little push on finally going for accounting automation.
Human errors are one of the dangers of manually doing accounts payables. From simple arithmetic mistakes to more complex errors and miscommunication on transactions, a number of things can go wrong in doing things manually. Even a small mistake can cause large consequences, especially for small businesses.
Reports are essential to assess the status of your business. When you rely on manual reports, you are limited to generating them in a short timeframe. If you want an annual expense report, you'll have to review tons of records and assemble them—you'll spend more than a week just doing that.
It will be harder for your business to spot patterns and pain points because you can't see the bigger picture. If problems need addressing, you won't know until they become significant.
When your business grows, you need more data to track and record. When you expand your business, you'll probably deal with more vendors, and to pay them when it’s due using memory is impossible. Your transactions will increase, and keeping up with them will be more challenging.
The bottom line is, a manual accounts payable system is not scalable. In the long run, it will only cause your business more complications.
You are now aware of what a software automation solution can do to assist you efficiently. Remembering these characteristics will help you choose among the sea of tools available today. To slim down your selection, here are the five best accounts payable software you can invest in.
Bill accounting software is considered one of the best for accounts payable due to its user-friendly interface, advanced security features, and robust automation capabilities.
With Bill, organizations can easily track invoices, automate payment processes, and eliminate manual data entry errors. Let's dive into the software's features that make it an indispensable tool for modern finance teams.
Invoice processing 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.
Bill makes it easy whether you have a physical or an electronic invoice. For a physical document, you can use your smartphone to take a picture of and convert it electronically. 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.
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 vital functions from certain users, thereby preventing fraud or mismanagement.
Upon setting up your bank account, Bill uses ACH payment methods for faster transactions. The software syncs to your bank and updates the accounts payable balance whenever there is debit and credit.
The software also lets your vendors sync their bank accounts to Bill. This helps make payment processing more efficient because the business and your vendor's bank account are connected to the platform.
The accounts payable software allows you to track and manage 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.
If you're using Bill as your AP automation software, we recommend combining it with Quickbooks Online. It's an excellent accounting platform for accounts payable. The two make a powerful combination of robust accounts payable and accounting systems. The data entry of complex AP transactions syncs to your accounting books as it should, which makes for accurate financial reporting.
Having Bill and QuickBooks Online for your small business is having the right tools for the best accounts payable process. They both have features that partially automate invoice processing such as info entry and transaction sync.
But running Bill and QuickBooks Online will take effort. Why not fully automate your accounts payable and accounting system 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: Professionals can use the most cost-efficient forex rates to the business's advantage when making overseas payments.
NetSuite is a cloud accounting solution that automates small business payment processes such as processing supplier invoices, transaction matching, journal entries, and reconciliations. NetSuite automates the majority of accounting processes, so it eliminates manual tasks and significantly reduces human error.
Below are some of Netsuite’s best features.
You can make, track, and manage your orders more efficiently by using NetSuite’s purchase orders management feature. It offers real-time visibility into order status, vendor performance, and inventory levels.
Vendor management allows businesses to effectively manage vendor relationships. It centralizes vendor information, tracks performance, and streamlines communication. With real-time data, it enhances collaboration, negotiates better terms, and ensures compliance.
Data entry and extraction leverages advanced technology to automate mundane data entry tasks and extract relevant information from documents. This feature particularly focuses on accounts payable, reducing user manual efforts that minimizes human error. Through this feature, data processing becomes faster.
TeamPay is an automated invoice processing software that handles routing for approval and payments. It provides complete visibility into POs. Create, pay, and manage bills via virtual cards, checks, wire, or ACH.
Here are some of the highlights of TeamPay.
If you want to automate regular payments, such as subscriptions and bills, TeamPay can help. The software has a feature that simplifies financial operations by scheduling and executing payments on predefined dates.
The requisition Management feature streamlines the procurement process by enabling employees to request purchases online. It enforces spending policies, automates approvals, and centralizes requisition data.
TeamPay's workflow management feature allows businesses to design, customize, and automate their spend approval processes. Your business approval chains and routes will stay organized while ensuring alignment with your company policies.
Airbase is an all-in-one spend management platform that gives small businesses control over every dollar they spend. Processing bills and invoices in one automated platform, scheduling and sending payments, and syncing with your accounting system are made easier with Airbase.
Here are more of its outstanding software accounts payable features.
Send checks digitally, streamlining payment processes, through the help of AirBase. Detail checking is done automatically, allowing you to save time. Because everything’s automated, checks are also easier to track.
Airbase's Electronic Fund Transfer (EFT) functionality facilitates secure and efficient financial transactions. It enables businesses to electronically transfer funds for various purposes, such as payroll, vendor payments, and expense reimbursements.
Through Airbase’s expense tracking, reporting, reimbursements, and approval workflows are made easier. It centralizes expense data, provides real-time visibility, and enforces spending policies.
Managing accounts payable is crucial to a business's success. However, there are challenges to purchasing on credit that small businesses need to overcome, such as invoicing challenges, payment discrepancies, unapproved vendor payments, and slow processing of bills.
Turning to accounts payable software can help small businesses manage these challenges more efficiently. Just take note of the features we enumerated here to pick the right tool. To determine the best one, always consider the needs of your small business.
Regarding accounts payable management, you can use some help from Unloop. We are a team of bookkeepers with skills and experience in accounts payable management. We specialize in ecommerce small businesses and have been using Bill and QBO to run ecommerce accounting systems efficiently.
If you decide to get Bill and QBO or already have specific software in mind, you can trust that we'll maximize these tools to your business's advantage. Book a call with us now, so we can discuss our offers with you.
Accounts payable is a powerful leverage. Accounts payable helps businesses purchase goods and sell them for profit without upfront cash outlay, and finding the right accounts payable software for small businesses helps track these transactions.
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, letting firms allot more to other business activities such as investing or financing.
But purchasing on credit tests your money management skills. With every accounts payable transaction comes a promise to pay vendors on time. 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. Together with that, let us also give you the software that can assist you.
Managing accounts payable is one of the pain points of many businesses. Whatever the size and type of industry you're in, you'll face these issues as long as you purchase raw materials or merchandise on credit.
Whenever businesses send bills using the paper method, they face numerous challenges. Invoices can stack up on file cabinets and get lost in the mix. When this happens, 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.
Solution: A good accounts payable software with an excellent invoice processing system will make invoice data entry and tracking easier.
Duplicate invoice processing can lead to duplicate payments. If several people manage accounts payable bills, tracking payments becomes challenging, leading to unnecessary cash outlay.
Aside from duplicate payments, incorrect and missing payments happen, too. These vendor payment discrepancies may seem insignificant in small amounts, but they pile up over time and cause huge losses.
Solution: Improved accounts payable processes help reduce payment issues. A system you or an appointed staff manages normalizes accurate payments from the business.
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 your business’s accounting and finance department.
Unapproved payments can extend beyond fulfilling credit obligations to vendors. If left unchecked, it can lead to other unauthorized expenses that can cost the business significantly in the long run.
Solution: You or your management staff can curb this from happening if you automate accounts payable and set up a centralized approval system.
Both traditional and ecommerce businesses need to be efficient. Fast processing is vital for timely supplier payments when managing accounts payable.
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 yours. They can impose a penalty when you're overdue, or you can lose your supplier completely.
Solution: 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.
Investing in accounting software makes the account payable woes mentioned above easy to manage. However, some businesses still prefer the old-fashioned way. Although it’s time-consuming, traditional methods are practically free. But before you decide to stay old school, here are some downsides to it to give you a little push on finally going for accounting automation.
Human errors are one of the dangers of manually doing accounts payables. From simple arithmetic mistakes to more complex errors and miscommunication on transactions, a number of things can go wrong in doing things manually. Even a small mistake can cause large consequences, especially for small businesses.
Reports are essential to assess the status of your business. When you rely on manual reports, you are limited to generating them in a short timeframe. If you want an annual expense report, you'll have to review tons of records and assemble them—you'll spend more than a week just doing that.
It will be harder for your business to spot patterns and pain points because you can't see the bigger picture. If problems need addressing, you won't know until they become significant.
When your business grows, you need more data to track and record. When you expand your business, you'll probably deal with more vendors, and to pay them when it’s due using memory is impossible. Your transactions will increase, and keeping up with them will be more challenging.
The bottom line is, a manual accounts payable system is not scalable. In the long run, it will only cause your business more complications.
You are now aware of what a software automation solution can do to assist you efficiently. Remembering these characteristics will help you choose among the sea of tools available today. To slim down your selection, here are the five best accounts payable software you can invest in.
Bill accounting software is considered one of the best for accounts payable due to its user-friendly interface, advanced security features, and robust automation capabilities.
With Bill, organizations can easily track invoices, automate payment processes, and eliminate manual data entry errors. Let's dive into the software's features that make it an indispensable tool for modern finance teams.
Invoice processing 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.
Bill makes it easy whether you have a physical or an electronic invoice. For a physical document, you can use your smartphone to take a picture of and convert it electronically. 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.
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 vital functions from certain users, thereby preventing fraud or mismanagement.
Upon setting up your bank account, Bill uses ACH payment methods for faster transactions. The software syncs to your bank and updates the accounts payable balance whenever there is debit and credit.
The software also lets your vendors sync their bank accounts to Bill. This helps make payment processing more efficient because the business and your vendor's bank account are connected to the platform.
The accounts payable software allows you to track and manage 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.
If you're using Bill as your AP automation software, we recommend combining it with Quickbooks Online. It's an excellent accounting platform for accounts payable. The two make a powerful combination of robust accounts payable and accounting systems. The data entry of complex AP transactions syncs to your accounting books as it should, which makes for accurate financial reporting.
Having Bill and QuickBooks Online for your small business is having the right tools for the best accounts payable process. They both have features that partially automate invoice processing such as info entry and transaction sync.
But running Bill and QuickBooks Online will take effort. Why not fully automate your accounts payable and accounting system 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: Professionals can use the most cost-efficient forex rates to the business's advantage when making overseas payments.
NetSuite is a cloud accounting solution that automates small business payment processes such as processing supplier invoices, transaction matching, journal entries, and reconciliations. NetSuite automates the majority of accounting processes, so it eliminates manual tasks and significantly reduces human error.
Below are some of Netsuite’s best features.
You can make, track, and manage your orders more efficiently by using NetSuite’s purchase orders management feature. It offers real-time visibility into order status, vendor performance, and inventory levels.
Vendor management allows businesses to effectively manage vendor relationships. It centralizes vendor information, tracks performance, and streamlines communication. With real-time data, it enhances collaboration, negotiates better terms, and ensures compliance.
Data entry and extraction leverages advanced technology to automate mundane data entry tasks and extract relevant information from documents. This feature particularly focuses on accounts payable, reducing user manual efforts that minimizes human error. Through this feature, data processing becomes faster.
TeamPay is an automated invoice processing software that handles routing for approval and payments. It provides complete visibility into POs. Create, pay, and manage bills via virtual cards, checks, wire, or ACH.
Here are some of the highlights of TeamPay.
If you want to automate regular payments, such as subscriptions and bills, TeamPay can help. The software has a feature that simplifies financial operations by scheduling and executing payments on predefined dates.
The requisition Management feature streamlines the procurement process by enabling employees to request purchases online. It enforces spending policies, automates approvals, and centralizes requisition data.
TeamPay's workflow management feature allows businesses to design, customize, and automate their spend approval processes. Your business approval chains and routes will stay organized while ensuring alignment with your company policies.
Airbase is an all-in-one spend management platform that gives small businesses control over every dollar they spend. Processing bills and invoices in one automated platform, scheduling and sending payments, and syncing with your accounting system are made easier with Airbase.
Here are more of its outstanding software accounts payable features.
Send checks digitally, streamlining payment processes, through the help of AirBase. Detail checking is done automatically, allowing you to save time. Because everything’s automated, checks are also easier to track.
Airbase's Electronic Fund Transfer (EFT) functionality facilitates secure and efficient financial transactions. It enables businesses to electronically transfer funds for various purposes, such as payroll, vendor payments, and expense reimbursements.
Through Airbase’s expense tracking, reporting, reimbursements, and approval workflows are made easier. It centralizes expense data, provides real-time visibility, and enforces spending policies.
Managing accounts payable is crucial to a business's success. However, there are challenges to purchasing on credit that small businesses need to overcome, such as invoicing challenges, payment discrepancies, unapproved vendor payments, and slow processing of bills.
Turning to accounts payable software can help small businesses manage these challenges more efficiently. Just take note of the features we enumerated here to pick the right tool. To determine the best one, always consider the needs of your small business.
Regarding accounts payable management, you can use some help from Unloop. We are a team of bookkeepers with skills and experience in accounts payable management. We specialize in ecommerce small businesses and have been using Bill and QBO to run ecommerce accounting systems efficiently.
If you decide to get Bill and QBO or already have specific software in mind, you can trust that we'll maximize these tools to your business's advantage. Book a call with us now, so we can discuss our offers with you.
Many entrepreneurs know that accounting for startups is unnecessary. A common rationale is that an early-phase startup involves only expenses in its financial transactions. During the early phase, the startup founder tries to build a new product without the certainty of commercial value.
Yet, accounting can also be the key to measuring how far the business has come and if it should continue. Let Unloop unpack the nature of startups, its typical operating procedures, and why founders should establish an accounting system early on.
To a layman, a startup and a small business are interchangeable. However, differences in certain aspects of their structure and objectives, such as the following, separate the two.
When you think about a small business, what usually comes to mind are restaurants, cafes, or brick-and-mortar retail shops. Small businesses typically compete in a stable market with other businesses, projecting their growth to be slow and steady.
On the other hand, startups are built for rapid business growth, so startup businesses usually differ from conventional ones. For example, a startup restaurant would have a system different from regular restaurants. Otherwise, it remains a small business.
Typically, startups grow faster by creating innovative ventures that can disrupt an existing market. McDonald's is a great example of a startup—it changed the way food was made and inadvertently created a new industry: fast food.
A startup and a small business can have identical structures. But there is a high possibility a startup will switch to a business structure that best suits its goals, like growth. Fast growth requires a startup founder to be ready to scrap any ineffective parts of their organization. It is one of the key characteristics of a startup: instability. It is a process that involves high risks and high rewards.
Meanwhile, small businesses limit themselves to conventional, tried-and-true organizational structures. For example, if you run a restaurant, there is a natural hierarchy in the kitchen. There is a chef de cuisine, a sous chef, then the garde manger, and so on—and success in the industry means sticking to the formula.
Financing determines the major difference between a startup and a small business because their objectives stem from whoever is financing their operations. Since startups are risky, expensive ventures, they are usually funded by angel investors or venture capitalists for equity, from which they will expect quick returns in exchange for taking on most, if not all, of the exposure, hence the need for scalable growth.
A small business is usually self-funded, either from the owner's savings or a personal loan. Because funding comes from the owner's pocket, the risk exposure is high, so the owner tends to grow the business slowly to make sure decisions would lead to a steady flow of income.
Until the late 2000s, most people thought a startup was just another business. But since then, the idea of creating startups has become standardized and more focused on innovation, and it isn’t exclusive to big players.
It’s important to recognize this process in your own business for you to better navigate accounting under the context of a startup. Note the brief review of the method below.
Based on the methods laid out above, we can build a case for setting up startup accounting systems as early as possible. Here are some things that happen when you run a startup.
Whether you're innovating a disruptive solution or offering a simple product, the development will take time. 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 drain down the startup's business bank accounts. In certain cases, founders will lose track of their financial position and may need another round of funding to get off the ground.
Funding doesn't always have to come from the founder. In some cases, the founder may only have an idea, a skillset, and a few people willing to contribute labor. 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. Financial records and bank statements give founders a rundown of transactions, but to keep track of where the fund is going, you need to generate financial reports, which makes accounting systems necessary.
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 to survive. This also means they have to pay taxes. That's where establishing an accounting system and hiring an accountant can help.
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 through financial statements 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.
When it comes to startups, the decision to establish an accounting system early on is often a low-priority task. That's reasonable, considering there is no business coming in yet. 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.
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 transactions and overseeing the startup's financial data 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.
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 the startup's financial health and how its budgeting resources.
Once the startup becomes a fully-operational business that earns profit, all the business transactions recorded also form part of the financial statement (i.e., the income statement, balance sheet, and cash flow statement). This information will be essential for evaluating how the business is doing.
Financial statements help owners see the business's financial health and make important business decisions, such as taking the company public, requesting another round of investments, or closing shop.
Another thing that happens with startups is disorganized finances. Some founders think that the money they toss into the de facto startup is unofficial as it isn't formally registered to any trade and commerce authority. So their personal finances, and perhaps along with their investors, are mixed into the startup as one and the same.
Knowing accounting basics and employing proper accounting methods from the get-go helps founders separate personal, investors, and startup business transactions. This makes reconciling bank statements and financial reporting for the startup smooth sailing in the long run.
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, income tax is one of the many financial obligations 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.
Once you have an accounting system in place, you also have to run it on top of managing your startup. To most founders, this can be overwhelming, especially if their skillset leans toward building and running their own business.
Given this scenario, investing in bookkeeping software run by startup accountants from an outsourced accounting firm is a step in the right direction. Here are some ways it can make your life as a business owner easier.
Can you imagine handling your own accounting on top of everything? Accounting and bookkeeping services take away the extra stress from your job and allow you to spend more energy on running your business.
Outsourced accounting firms save you money since hiring accounting services is much cheaper than adding an entire team of accountants to your payroll.
Once you have your data ready, it's important you evaluate them accurately. But even if you have the most accurate books, the data in them won't matter unless you have an experienced team analyzing them for you.
Accounting services for startups follow generally accepted accounting principles (GAAP) and use either cash accounting or accrual accounting method depending on the startup business's needs. They also know how to analyze your financial reports specifically for your business's long-term goals. To do so, they will produce and analyze the following financial statements:
Any financial decision can make or break your startup—that's how volatile startups are. If you want it to grow continuously and produce adequate results, you'll have to make decisions that are nothing short of the best.
Accounting services for startups have an in-house team of seasoned accountants who specialize in launching your startup further. They can help make decisions concerning investments, stock options, and valuation. This is especially helpful for taxes since companies always struggle with the technical side of filing taxes and how to save money on tax returns.
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, 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 need your startup’s finances sorted, or check out our bookkeeping services now.
Many entrepreneurs know that accounting for startups is unnecessary. A common rationale is that an early-phase startup involves only expenses in its financial transactions. During the early phase, the startup founder tries to build a new product without the certainty of commercial value.
Yet, accounting can also be the key to measuring how far the business has come and if it should continue. Let Unloop unpack the nature of startups, its typical operating procedures, and why founders should establish an accounting system early on.
To a layman, a startup and a small business are interchangeable. However, differences in certain aspects of their structure and objectives, such as the following, separate the two.
When you think about a small business, what usually comes to mind are restaurants, cafes, or brick-and-mortar retail shops. Small businesses typically compete in a stable market with other businesses, projecting their growth to be slow and steady.
On the other hand, startups are built for rapid business growth, so startup businesses usually differ from conventional ones. For example, a startup restaurant would have a system different from regular restaurants. Otherwise, it remains a small business.
Typically, startups grow faster by creating innovative ventures that can disrupt an existing market. McDonald's is a great example of a startup—it changed the way food was made and inadvertently created a new industry: fast food.
A startup and a small business can have identical structures. But there is a high possibility a startup will switch to a business structure that best suits its goals, like growth. Fast growth requires a startup founder to be ready to scrap any ineffective parts of their organization. It is one of the key characteristics of a startup: instability. It is a process that involves high risks and high rewards.
Meanwhile, small businesses limit themselves to conventional, tried-and-true organizational structures. For example, if you run a restaurant, there is a natural hierarchy in the kitchen. There is a chef de cuisine, a sous chef, then the garde manger, and so on—and success in the industry means sticking to the formula.
Financing determines the major difference between a startup and a small business because their objectives stem from whoever is financing their operations. Since startups are risky, expensive ventures, they are usually funded by angel investors or venture capitalists for equity, from which they will expect quick returns in exchange for taking on most, if not all, of the exposure, hence the need for scalable growth.
A small business is usually self-funded, either from the owner's savings or a personal loan. Because funding comes from the owner's pocket, the risk exposure is high, so the owner tends to grow the business slowly to make sure decisions would lead to a steady flow of income.
Until the late 2000s, most people thought a startup was just another business. But since then, the idea of creating startups has become standardized and more focused on innovation, and it isn’t exclusive to big players.
It’s important to recognize this process in your own business for you to better navigate accounting under the context of a startup. Note the brief review of the method below.
Based on the methods laid out above, we can build a case for setting up startup accounting systems as early as possible. Here are some things that happen when you run a startup.
Whether you're innovating a disruptive solution or offering a simple product, the development will take time. 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 drain down the startup's business bank accounts. In certain cases, founders will lose track of their financial position and may need another round of funding to get off the ground.
Funding doesn't always have to come from the founder. In some cases, the founder may only have an idea, a skillset, and a few people willing to contribute labor. 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. Financial records and bank statements give founders a rundown of transactions, but to keep track of where the fund is going, you need to generate financial reports, which makes accounting systems necessary.
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 to survive. This also means they have to pay taxes. That's where establishing an accounting system and hiring an accountant can help.
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 through financial statements 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.
When it comes to startups, the decision to establish an accounting system early on is often a low-priority task. That's reasonable, considering there is no business coming in yet. 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.
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 transactions and overseeing the startup's financial data 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.
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 the startup's financial health and how its budgeting resources.
Once the startup becomes a fully-operational business that earns profit, all the business transactions recorded also form part of the financial statement (i.e., the income statement, balance sheet, and cash flow statement). This information will be essential for evaluating how the business is doing.
Financial statements help owners see the business's financial health and make important business decisions, such as taking the company public, requesting another round of investments, or closing shop.
Another thing that happens with startups is disorganized finances. Some founders think that the money they toss into the de facto startup is unofficial as it isn't formally registered to any trade and commerce authority. So their personal finances, and perhaps along with their investors, are mixed into the startup as one and the same.
Knowing accounting basics and employing proper accounting methods from the get-go helps founders separate personal, investors, and startup business transactions. This makes reconciling bank statements and financial reporting for the startup smooth sailing in the long run.
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, income tax is one of the many financial obligations 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.
Once you have an accounting system in place, you also have to run it on top of managing your startup. To most founders, this can be overwhelming, especially if their skillset leans toward building and running their own business.
Given this scenario, investing in bookkeeping software run by startup accountants from an outsourced accounting firm is a step in the right direction. Here are some ways it can make your life as a business owner easier.
Can you imagine handling your own accounting on top of everything? Accounting and bookkeeping services take away the extra stress from your job and allow you to spend more energy on running your business.
Outsourced accounting firms save you money since hiring accounting services is much cheaper than adding an entire team of accountants to your payroll.
Once you have your data ready, it's important you evaluate them accurately. But even if you have the most accurate books, the data in them won't matter unless you have an experienced team analyzing them for you.
Accounting services for startups follow generally accepted accounting principles (GAAP) and use either cash accounting or accrual accounting method depending on the startup business's needs. They also know how to analyze your financial reports specifically for your business's long-term goals. To do so, they will produce and analyze the following financial statements:
Any financial decision can make or break your startup—that's how volatile startups are. If you want it to grow continuously and produce adequate results, you'll have to make decisions that are nothing short of the best.
Accounting services for startups have an in-house team of seasoned accountants who specialize in launching your startup further. They can help make decisions concerning investments, stock options, and valuation. This is especially helpful for taxes since companies always struggle with the technical side of filing taxes and how to save money on tax returns.
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, 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 need your startup’s finances sorted, or check out our bookkeeping services 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.
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.
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.
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.
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 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.
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.
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 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.
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.
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.
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.
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.
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 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 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 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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 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.
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.
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.
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.
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.
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 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 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 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.
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.
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.
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.
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.
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.
The previous years only showed us that ecommerce is booming and continuing to be popular with entrepreneurs. Platforms like Amazon and Shopify have proven lucrative avenues for establishing online stores and generating revenue. But amidst the thriving landscape, it is crucial not to overlook the critical aspect of accounting for an ecommerce business.
Along with the flow of money, accounting is essential in keeping your store running. Unfortunately, this area can present a serious problem, especially for those new to the industry. We understand the intricacies first-timers face, so we’re here to help!
This blog addresses these common challenges head-on and equips you with tips and tricks to conquer them confidently.
Accounting is the backbone of ecommerce financial management. Without it, companies would struggle to make informed decisions, track their financial health, and comply with regulatory requirements.
Unfortunately, ecommerce business owners often have many daily responsibilities to handle. Their time and energy are often spread thin, from shipping logistics to customer service. Constantly juggling tasks can make it difficult to dedicate the mental focus and attention required for accurate accounting.
The round-the-clock nature of ecommerce operations also means that enterprises are persistently on the move. Such activity can lead to fatigue and mental exhaustion, making it harder to perform complex accounting tasks. Errors and inaccuracies can occur, potentially affecting financial records and decision-making.
Given that the road is not always smooth in ecommerce accounting, it is important to be proactive in identifying and addressing certain problems you might face. Done properly, you might figure out what could be done to optimize your efficiency and maintain stability.
Below are eight of these challenges you may face:
Inventory management is a tough endeavor for both large and small enterprises in many ways:
| 5 Challenges of Inventory Management | |
| Product Listings | A rough estimate of the number of items is essential for accurate product listings. |
| Tracking Goods Across Warehouse | Regular inventory checks, real-time tracking systems, and effective warehouse communication are essential to maintain inventory accuracy and meet customer demand. |
| Dealing With Delivery Delays | Delayed shipments can impact order fulfillment, stock levels, and customer satisfaction. |
| Surplus Stock Management | Holding excess inventory ties up valuable resources and affects cash flow. |
| Managing Demand Fluctuations | Businesses must implement dynamic pricing strategies, pre-order systems, or leverage real-time sales data to make informed inventory replenishment decisions. |
As you can see, inventory management requires vigilance. It’s impossible to deliver all these tasks on your own without the right tools, techniques, and support.
Sales tax is a part of the ecommerce accounting system that often instills a sense of dread among small business owners. But you can’t run from it forever. Everyone needs to comply with sales taxes. You must understand how tax collection is done and pay proper tax collection agencies the correct amounts.
Sadly, many things could go wrong if you don’t know how to handle sales taxes. It can be any of the following:
One way or another, you will have to handle refunds and returns. These returns can pose challenges to your accounting. Here’s why:
Refunds can also disrupt your cash flow. Here’s a brief example:
| Once an item is sold, you write it off as sales. But when the item is refunded, and you've reimbursed the customer, you must record it as an expense. |
This way, your cash flow statement is balanced at the end of the accounting period.
Cash is king for ecommerce business owners. But remember, running a business is not always about revenue and income sales. You must know your expenses to create a profitable margin and price items accordingly.
Commonly overlooked aspects of expense tracking for ecommerce store owners include:
Expenses are no longer new to any seasoned ecommerce business owner. That’s why most of them already determined the suitable accounting method for their business entity, whether cash-basis accounting or accrual accounting. From there, they can make sound financial decisions and maintain accurate financial reports.
Bank reconciliation involves comparing the transactions recorded in your system with the corresponding entries in your bank statement. It is a crucial process for ensuring the accuracy and integrity of your financial data.
However, a few factors can make bank reconciliation daunting for ecommerce companies:
Suppose you're selling on big ecommerce platforms like Amazon, Shopify, or eBay. In that case, you are paying third-party fees without even realizing it. Fees like this are considered business expenses. They will be negative on your balance sheets if you don't manage them correctly.
Online market trends change rapidly. One day, a product people seldom buy will suddenly become in demand and swiftly go out of stock. Meeting customer demands is a good thing for your business. But when does it become a challenge?
Expanding your business and reaching international clients opens up a world of opportunities. But when receiving payments in different currencies, things can get tricky.
Here’s an illustration of why it can give you a run for your money:
| The Challenges of Multiple Currencies in Ecommerce | |
| Fluctuating Exchange Rates | Exchange rates constantly change, making it hard to keep up. One moment, the rate may work in your favor, but it can also quickly turn against you. |
| Hidden Fees | Currency conversion often comes with additional fees. These costs can eat into your profits and add up quickly. |
| Compliance | Each country has unique rules and requirements for currency conversions. Failing to comply can result in legal issues and financial penalties. |
We’re here to tell you that the challenges mentioned above are no match for your business when you have the perfect solution: leveraging cutting-edge accounting software.
With the click of a button, accounting software effortlessly generates essential financial reports like profit and loss, balance sheets, and cash flow statements. You’ll have real-time insights into your financial health, helping you closely monitor your cash flow.
What's more, accounting software can guide you in performing various ecommerce bookkeeping tasks. You can seamlessly integrate with your sales platforms, payment gateways, and inventory management systems, streamlining data entry and eliminating the need for manual reconciliations.
As your business grows and deals with multiple currencies, accounting software can handle the intricacies of such transactions. It can automatically convert currencies, calculate exchange rates, and ensure precise financial reporting across different markets.
| IMPORTANT NOTE: Choose accounting software that aligns with your requirements and offers features like inventory tracking, tax management, and integration capabilities. Take the time to research and select a reputable software provider that offers excellent customer support to ensure your accounting software remains efficient and up to date. |
You don’t have to rely on accounting software alone. There are accountants for ecommerce businesses ready to handle your accounting needs. Unloop is one of them.
We offer different accounting services for ecommerce business owners. We offer expert assistance in the following areas:
✅Forecasting
Hiring a professional is good for your business when things get too demanding. We aim to take the burden off your shoulders and streamline your financial management, allowing you to focus on growing your business.
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!
The previous years only showed us that ecommerce is booming and continuing to be popular with entrepreneurs. Platforms like Amazon and Shopify have proven lucrative avenues for establishing online stores and generating revenue. But amidst the thriving landscape, it is crucial not to overlook the critical aspect of accounting for an ecommerce business.
Along with the flow of money, accounting is essential in keeping your store running. Unfortunately, this area can present a serious problem, especially for those new to the industry. We understand the intricacies first-timers face, so we’re here to help!
This blog addresses these common challenges head-on and equips you with tips and tricks to conquer them confidently.
Accounting is the backbone of ecommerce financial management. Without it, companies would struggle to make informed decisions, track their financial health, and comply with regulatory requirements.
Unfortunately, ecommerce business owners often have many daily responsibilities to handle. Their time and energy are often spread thin, from shipping logistics to customer service. Constantly juggling tasks can make it difficult to dedicate the mental focus and attention required for accurate accounting.
The round-the-clock nature of ecommerce operations also means that enterprises are persistently on the move. Such activity can lead to fatigue and mental exhaustion, making it harder to perform complex accounting tasks. Errors and inaccuracies can occur, potentially affecting financial records and decision-making.
Given that the road is not always smooth in ecommerce accounting, it is important to be proactive in identifying and addressing certain problems you might face. Done properly, you might figure out what could be done to optimize your efficiency and maintain stability.
Below are eight of these challenges you may face:
Inventory management is a tough endeavor for both large and small enterprises in many ways:
| 5 Challenges of Inventory Management | |
| Product Listings | A rough estimate of the number of items is essential for accurate product listings. |
| Tracking Goods Across Warehouse | Regular inventory checks, real-time tracking systems, and effective warehouse communication are essential to maintain inventory accuracy and meet customer demand. |
| Dealing With Delivery Delays | Delayed shipments can impact order fulfillment, stock levels, and customer satisfaction. |
| Surplus Stock Management | Holding excess inventory ties up valuable resources and affects cash flow. |
| Managing Demand Fluctuations | Businesses must implement dynamic pricing strategies, pre-order systems, or leverage real-time sales data to make informed inventory replenishment decisions. |
As you can see, inventory management requires vigilance. It’s impossible to deliver all these tasks on your own without the right tools, techniques, and support.
Sales tax is a part of the ecommerce accounting system that often instills a sense of dread among small business owners. But you can’t run from it forever. Everyone needs to comply with sales taxes. You must understand how tax collection is done and pay proper tax collection agencies the correct amounts.
Sadly, many things could go wrong if you don’t know how to handle sales taxes. It can be any of the following:
One way or another, you will have to handle refunds and returns. These returns can pose challenges to your accounting. Here’s why:
Refunds can also disrupt your cash flow. Here’s a brief example:
| Once an item is sold, you write it off as sales. But when the item is refunded, and you've reimbursed the customer, you must record it as an expense. |
This way, your cash flow statement is balanced at the end of the accounting period.
Cash is king for ecommerce business owners. But remember, running a business is not always about revenue and income sales. You must know your expenses to create a profitable margin and price items accordingly.
Commonly overlooked aspects of expense tracking for ecommerce store owners include:
Expenses are no longer new to any seasoned ecommerce business owner. That’s why most of them already determined the suitable accounting method for their business entity, whether cash-basis accounting or accrual accounting. From there, they can make sound financial decisions and maintain accurate financial reports.
Bank reconciliation involves comparing the transactions recorded in your system with the corresponding entries in your bank statement. It is a crucial process for ensuring the accuracy and integrity of your financial data.
However, a few factors can make bank reconciliation daunting for ecommerce companies:
Suppose you're selling on big ecommerce platforms like Amazon, Shopify, or eBay. In that case, you are paying third-party fees without even realizing it. Fees like this are considered business expenses. They will be negative on your balance sheets if you don't manage them correctly.
Online market trends change rapidly. One day, a product people seldom buy will suddenly become in demand and swiftly go out of stock. Meeting customer demands is a good thing for your business. But when does it become a challenge?
Expanding your business and reaching international clients opens up a world of opportunities. But when receiving payments in different currencies, things can get tricky.
Here’s an illustration of why it can give you a run for your money:
| The Challenges of Multiple Currencies in Ecommerce | |
| Fluctuating Exchange Rates | Exchange rates constantly change, making it hard to keep up. One moment, the rate may work in your favor, but it can also quickly turn against you. |
| Hidden Fees | Currency conversion often comes with additional fees. These costs can eat into your profits and add up quickly. |
| Compliance | Each country has unique rules and requirements for currency conversions. Failing to comply can result in legal issues and financial penalties. |
We’re here to tell you that the challenges mentioned above are no match for your business when you have the perfect solution: leveraging cutting-edge accounting software.
With the click of a button, accounting software effortlessly generates essential financial reports like profit and loss, balance sheets, and cash flow statements. You’ll have real-time insights into your financial health, helping you closely monitor your cash flow.
What's more, accounting software can guide you in performing various ecommerce bookkeeping tasks. You can seamlessly integrate with your sales platforms, payment gateways, and inventory management systems, streamlining data entry and eliminating the need for manual reconciliations.
As your business grows and deals with multiple currencies, accounting software can handle the intricacies of such transactions. It can automatically convert currencies, calculate exchange rates, and ensure precise financial reporting across different markets.
| IMPORTANT NOTE: Choose accounting software that aligns with your requirements and offers features like inventory tracking, tax management, and integration capabilities. Take the time to research and select a reputable software provider that offers excellent customer support to ensure your accounting software remains efficient and up to date. |
You don’t have to rely on accounting software alone. There are accountants for ecommerce businesses ready to handle your accounting needs. Unloop is one of them.
We offer different accounting services for ecommerce business owners. We offer expert assistance in the following areas:
✅Forecasting
Hiring a professional is good for your business when things get too demanding. We aim to take the burden off your shoulders and streamline your financial management, allowing you to focus on growing your business.
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!
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.
