There's no question that keeping your online business healthy is essential for its success. But which report can help you know if your business is doing okay?
An income statement example can give you a detailed overview of your company's financial health and help you identify areas that need improvement. How can you prepare a comprehensive income statement for your business?
In this blog, we'll discuss the parts of this crucial financial statement. We will also give examples of income statements that are helpful for your online business. Let's dive right in!
One of the essential financial statements for any business, including online businesses, is an income statement. It shows your revenue, expenses, and net income for a month, three months, and so on. You can use the income statement to assess your small business’s health and make forecasts about its performance.
Perhaps, you're confused by the following names. You shouldn't be, as these statements are all income statements.
By comparing cash flow period after period, you can get a good sense of how your business is performing. For example, if you see that your revenue is increasing, but your expenses are also rising, you'll know it's time to make some changes to your budget.
Income statements can also help you measure your strength in sales, see how much leftover money you have, and determine what expenses to cut back on. You can use this document to secure investments or loans. So, if you're not regularly making income statements, now is the perfect time to start.
Now that you understand the importance of having this statement as one of your financial reports, it's time to learn how to make one for your online business.
As an ecommerce business owner, you might have already invested in accounting software with templates for these financial statements. But here's what you should remember for the income statement format: headings.
The headings typically include:
For instance, your business might report its income statement for the fiscal year ended December 31, 2022 in US dollars. Plus, the heading may also include other disclosures, such as whether the statement is prepared on a GAAP or non-GAAP basis.
After compiling all of your transactions into their correct charts of accounts, you can choose whether to prepare an income statement using a single-step or a multi-step income statement.
So, what is an example of an income statement using the first approach? The single-step income statement computes all your revenue and expenses in a single calculation of net income. Thus, it reports revenues and expenses that are easy to understand.
Net Income = (Revenue + Gains) – (Expenses + Losses)
Below is an example of an income statement with this approach.
MPOM Pet Supplies
For Month Ended June 30, 2021
(in US dollars)
|Revenues + Gain|
|Total revenues and gains||$61,400|
|Expenses + Losses|
|Cost of goods sold||$22,200|
|Bank & ATM fees||$22|
|Marketing and advertising expenses||$1,100|
|Income tax expense||$14,500|
|Minus: Total expenses and losses||$50922|
While a multi-step income statement subtracts operating expenses from gross profit to net income. Non-operating accounts, such as interest expense or gains on the sale of investments, are then subtracted or added to arrive at the final figure for net income. Thus, a multi-step income statement provides a more detailed picture of a company's profitability.
Gross Profit = Net Sales - Cost of Good Sold > Operating Income = Gross Profit - Operating Expense > Net Income = Operating Income + Non-Operating Items
Below is an example of an income statement using the multi-step approach.
MPOM Pet Supplies
For Month Ended June 30, 2021
(in US dollars)
|Cost of Goods Sold (COGS)||$22,200|
|Bank & ATM fee||$22|
|Marketing and advertising expense||$1,100|
|Minus: Operating Expenses||$10,222|
|Add: Capital gains||$4,400|
|Minus: Interest expense||$4,000|
|Earnings Before Income Tax||$20,578|
|Minus: Income Tax Expense||$14,500|
Do you want to evaluate your profits over several periods? Then, a comparative income statement will give you a larger view of your business's finances.
It combines information from several income statements into a single statement. This makes it easy to compare your business's performance from different periods side-by-side. You can also compare your income statements with your competitors as an official document open to the public.
By comparing your small business's income statement from one year to the next, for instance, analysts can get a clear picture of its financial health.
MPOM Pet Supplies
For Years Ended December 31
|(In thousands of dollars)|
By now, you may realize the three main sections of an income statement—the revenue, the expenses, and the net income. This income statement format is simple enough. However, businesses have different ways to earn income, such as sales from goods sold or services, and spend their cash, such as administrative expenses.
Common items found in any income statement are:
This is the first line item you'll put on your income statement. It represents the total cash your online business has earned in a year, for example. Remember, your revenue is different from profit. Profit is determined by subtracting your total expenses from your total revenue. So, in the sample income statement, MPOM had $57,000 in sales and $50,922 in expenses. Thus, its profit would be $10,478.
This item is your business's direct costs from manufacturing your products or honing your services. This item includes the cost of materials, overhead costs, training, and labor used to produce the goods.
But COGS does not include indirect costs, such as shipping or marketing. The COGS formula is
COGS = beginning inventory + purchases - ending inventory
All businesses should aim to reduce their COGS to increase profitability. You can accomplish this by negotiating better deals with suppliers or manufacturing products more efficiently. Generally, the lower a company's COGS, its profits will be higher.
Total sales minus the cost of goods sold is your gross income or profit. Then, you evaluate your gross profit margin. This metric is the ratio of your gross profit to your total sales. You can use the gross profit to recognize your online business's financial health and pricing strategy.
For instance, if you have a high gross profit margin, you are selling your products at a higher price than your competitors. Meanwhile, you are overspending on production costs if you have a low margin of gross profit.
What expenses maintain your business door open? Also known as the general and administrative expense, an operating expense involves expenditures that don't directly relate to making your products or services. It commonly includes:
EBIT, or earnings before interest and taxes, measures your business's profitability. It essentially represents the company's operating income or the amount of money it makes from its core business activities before deducting interest and taxes.
Taxes are government-required expenses, and interest is the cost of your borrowings, such as cash loans.
Other income is a category on the income statement that includes interest income and gains on the sale of assets. For example, you can receive revenue from bank interest while adding the income from selling your equipment or tangible assets to your final profit.
The final figure in an income statement is the net income or net profit. It shows how much money you will actually get after deducting all of your expenses. To calculate net profit, you subtract your total expenses from total revenue or your taxes and interest expense from your EBIT.
If the result is positive, the company has made a profit. If the result is negative, your business incurs a net loss. Net income can fluctuate from month to month or year, depending on various factors such as sales revenue, direct cost, and interest rates.
As an online entrepreneur, it's important to keep a close eye on your finances. After all, you can't continue your operations without a good bottom line.
One of the best ways to stay on top of your finances is to prepare an income statement and analyze it. If you need help interpreting your numbers, don't hesitate to ask Unloop for our professional advice, ensuring that your business will always be profitable.
If you have a financial tool on hand, pair it with our easy income statement template. Download it now!
Are you overwhelmed by bookkeeping tasks? That's okay. No business owner is proficient in every facet of their business. That's why it's essential to outsource certain tasks to specialists who can handle them more effectively and efficiently than you could on your own.
Bookkeeping is one such task, and we're going to discuss why outsourcing is a smart move for any e-commerce business. Keep reading to know more!
Outsourced bookkeeping is the practice of hiring an external firm or individual to handle a company's financial reports. This can include invoicing, paying bills, reconciling statements, and running financial reports.
While some businesses outsource all of their bookkeeping needs, others may only outsource certain tasks. There are several advantages to outsourcing bookkeeping, which we will discuss in a bit. Before you read below, however, it is important to know that the number one consideration is to choose a reputable and experienced provider to avoid potential problems.
Now here are the ten benefits of outsourced bookkeeping services.
Many small business owners do their own bookkeeping to save some money. However, this is often false scrimping, as it can take up a lot of time that could be better spent on other tasks—tasks that could end up being more profitable to begin with.
In addition, it can be difficult to stay on top of all the changes in tax laws and bookkeeping standards. As a result, many businesses spend more money on fixing errors and catching up on late filings.
Outsourcing bookkeeping from the start can save you money down the line.
Bookkeeping is critical in running a business. It involves tracking all of the financial transactions made by a company and ensuring that they are recorded accurately.
This can be a tedious process, especially for e-commerce businesses with a considerable number of transactions. As a result, many outsource their bookkeeping to an experienced professional.
By doing so, they can free up their time to concentrate on other elements of their business. So if you're looking to save time and hassle, consider outsourcing your bookkeeping to a qualified bookkeeping service provider.
The importance of data security has been thrust into the spotlight in recent years, as high-profile breaches have led to billions of dollars in losses for companies and consumers alike.
The financial industry is no exception, as sensitive information such as account numbers and financial records are often stored electronically. However, by outsourcing bookkeeping to a reputable firm, businesses can ensure that their data is properly protected.
Businesses can take advantage of state-of-the-art security measures and experienced staff dedicated to protecting client data. Plus, many bookkeeping firms offer disaster recovery services, which can help to protect businesses in the event of a breach.
As the importance of data privacy continues to grow, outsourcing bookkeeping is an essential step for any business looking to secure its data.
When a business grows, so does the number of financials to keep track of. That's why every small business needs an efficient bookkeeping system to scale up its operations. For this reason, many small businesses are opting to outsource their bookkeeping essentials.
Outsourced financials allows you to focus on the business's core competencies and leave the bookkeeping to professionals. It will save you a lot of resources that can be better spent on other scopes of the business. As a result, outsourced accounting and bookkeeping services can lead to better scalability and profitability.
In today's job market and economy, it is more necessary than ever to make the most of your training resources. One strategy to do this is to outsource your bookkeeping.
Hiring an experienced bookkeeping service provider can free up training resources better spent on hiring key personnel to grow and maintain your business. It also allows you to maintain your finances without worrying about hiring and training new in-house accounting staff.
Any small business owner must keep accurate financial records to be successful. However, this task has become increasingly complex in recent years, as businesses must comply with a growing number of regulations.
As a result, many businesses have chosen to outsource their bookkeeping to expert service providers. These providers offer several advantages, including access to the latest software and customer support.
Efficiency is a key aspect of running a business. Every business is under constant pressure to improve process efficiency and performance. From sales and marketing to human resources and product development, there are a lot of moving parts to managing a business.
Therefore, third-party bookkeeping services can help businesses improve their financial management by helping companies keep track of their books in a more efficient way.
By working with experts, businesses can optimize their work processes and gain greater control over their finances. It can also help businesses to improve cash flow, reduce unnecessary expenses, and improve financial reporting.
Overall, it's a smart way to optimize work processes and improve your bottom line.
Accuracy is essential in bookkeeping. A single mistake can lead to sanctions and possibly jail time. By outsourcing your bookkeeping, you can rest assured that your financial records are being handled by experienced professionals keeping accurate and true records.
Money is the lifeblood of any business. But keeping track of your income and expenses can be a full-time job. That's why a good bookkeeper will help you stay compliant with tax laws and avoid costly mistakes that could jeopardize your business. So if you're looking to take some of the financial tracking burdens off your shoulders, consider outsourcing your bookkeeping.
Are you looking for expert advice and support when it comes to bookkeeping? If so, then outsourcing could be the ideal solution for you. When you outsource bookkeeping, you gain access to experienced professionals who can offer you valuable guidance and support. It can help ensure that your books are kept in order to control your finances better.
There are many reasons why you should consider outsourcing your bookkeeping. Perhaps you don't have the resources or time to do it yourself, or you want to free up your staff to focus on other tasks.
Alternatively, you may feel that an external firm can provide a higher level of service than you could achieve internally.
The cost of outsourcing bookkeeping will differ depending on the size of your organization and the specific services you need.
However, bookkeeping service providers charge much less than in-house bookkeepers. It is also noteworthy that companies would not offer the same rates.
There are several ways to outsource a reputable bookkeeper, including asking for recommendations from other business owners, searching online directories, or contacting professional associations. Once you've found a few potential service providers, be sure to check references and get quotes before making your final decision.
There's no easy answer when it comes to whether or not your financial records are safe if you outsource your bookkeeping. It depends on several factors, including who you hire and how they keep track of your information.
Generally speaking, you'll want to make sure that the bookkeeper you hire is reputable and that they have a good system in place for keeping track of your financial information.
Yes, you can typically choose to outsource only certain aspects of your bookkeeping, such as preparing financial statements or tracking payables.
This can be a great option if you want to maintain some control over your finances but don't have the time or resources to do everything yourself.
So there you have it, ten compelling reasons to outsource to a bookkeeping service. It's clear that the benefits are many and varied, so it makes sense to give it some thought if you want to grow your e-commerce business.
Are you an inventory business in the US or Canada? Grow with Unloop, and you can get all of these benefits and more without lifting a finger. We’ll take care of everything for you so that you can focus on growing your business!
Call us today to get a quote.
Having a good financial tracking system is a must for every business owner. In addition, hiring a qualified bookkeeper is one of the best ways to increase your cash flow. Many business owners, however, make the error of managing their own books, which results in inaccurate bookkeeping.
If you're worried about the cost of hiring a decent bookkeeper, remember that not keeping up with bookkeeping can leave you with an even heftier price tag. In this article, discover the importance of hiring a bookkeeping service and how it can help you run your small business efficiently.
As a small business owner, you may have asked yourself, “Why do I need a bookkeeping service?” or "What is a bookkeeper's job?" But, first, do you know the difference between a bookkeeper and an accountant?
Bookkeepers process and record financial activities, including payments, purchases, expenses, and more. An accountant or business owner will adjust the entries recorded by the bookkeeper before releasing the company's financial statement. Bookkeepers do the daily financial transactions of a company.
You might ask, "What is a bookkeeper in accounting?" because the two careers look similar. However, a bookkeeper's job focuses more on recording transactions, while an accountant pays more attention to drawing conclusions about the business's finances.
Many small ecommerce sellers often find it difficult to distinguish an accountant from a bookkeeper. Although they share common goals, there are still crucial differences between them. So let's dig deeper into the differences between the roles of bookkeepers and accountants.
Bookkeepers focus on recording and consistently collecting financial information. They record transactions, collect and file financial documents, keep track of cash flow, reconcile accounts, prepare financial statements, and provide other services related to accounting.
Meanwhile, accountants are experts in interpreting financial data and providing recommendations based on their findings. As a result, they can help you make better business decisions, avoid mistakes and save money, reduce your tax liability, cut costs, and more.
Bookkeepers and accountants have different education and certification requirements. Bookkeepers generally have a bachelor's degree in accounting or finance, while accountants have a master's degree in accounting or finance.
You can tell an accountant from a bookkeeper by the letters after their name. Bookkeepers with certifications from the National Association of Certified Public Bookkeepers or the American Institute of Professional Bookkeepers will have CPB or CB after their names. However, these certifications are optional for a bookkeeper.
Meanwhile, accountants can obtain the Certified Public Accountant (CPA) title after passing the Uniform Certified Public Accountant exam and meeting other criteria. To become a CPA, an accountant must have at least two years of experience as a professional accountant.
Accountants and bookkeepers are used to dealing with numbers and financial data daily. But, aside from this, their skills also have some differences.
The best bookkeepers take the time to review their work, ensuring that every detail is right. This is a job that requires patience and great attention to detail.
An accountant has to be very organized, have good problem-solving skills, and pay strong attention to financial details. In addition, an accountant has to be able to think on their feet and come up with creative solutions when things don't go as planned.
Bookkeepers are not accountants; they don't have the same training to make complex financial analyses of business operations.
You might still be asking, "What does a bookkeeper do, and does it matter if I do my own books?" While it may be cost-effective to process and record all your financial transactions in the beginning, it may cost you a lot more in the long run, especially if you still lack an understanding of basic bookkeeping.
Here are some ways a good bookkeeper can help your business thrive:
Handling day-to-day financial transactions involves data entry. This is when bookkeepers start to track accounts. A certified bookkeeper's responsibility is to prepare invoices and send them to clients.
It is also part of their job to manage the accounts receivable ledger. Aside from this, a professional bookkeeper also handles accounts payable such as petty cash and other expenses.
A business needs to file its taxes on time. Tax deadlines are quite strict, but if you keep your bookkeeping up to date, you do not need to scramble during tax time.
If you have hired a professional bookkeeper, they can help you have accurate financial reports. This can save you precious time and prevent you from paying additional fines.
Although the services that a bookkeeper offers vary, some can help you with processing paychecks and tax payments. They can also help you with other human resources department functions, such as managing employees' timesheets.
Perhaps you think that getting a good bookkeeper will cost you a lot, so you resort to doing your books yourself. However, the problem with doing your company’s bookkeeping is that an unqualified bookkeeper is prone to errors
If you're seriously considering hiring a bookkeeper for your small business, the average monthly rate ranges from $500 to $2,500.
The cost of hiring bookkeepers depends on some factors:
The cost of hiring one can also depend on whether a bookkeeper will be full-time or part-time, freelancing, or virtual.
Now that you have everything you need to know about bookkeepers, imagine the amount of time and effort you'll be able to save if you have one who will handle your financial work.
When you hire a professional bookkeeper, you can spend your time and effort on other important matters for your business. Plus, the accurate information that bookkeepers provide can help you make solid decisions for your business's growth.
Still struggling and need support? Let Unloop help you with your professional bookkeeping needs. Book a call with us and start your journey to business growth today!
As a business owner, one of the most important tasks you'll face is determining how to collect and remit sales tax. For new business owners using Shopify as their ecommerce platform, it's important to understand how Shopify handles sales tax collection and remittance.
We understand that if you're new to Shopify, or ecommerce in general, you may be wondering if Shopify collects sales tax on your behalf. You will be better able to decide what is best for your company and its taxes if you fully appreciate and recognize these ideas.
This blog post will provide an overview of Shopify sales tax policy and answer some common questions about sales tax for Shopify app users.
Sales tax is a fee levied on the acquisition of interests and services. Businesses are in charge of obtaining sales tax from clients and sending it to the appropriate authorities. In the United States, the sales tax rate is governed by state and local laws, which means that rates and rules can vary depending on where you do business.
For enterprises that market taxable interests or services, collecting sales tax is an important part of complying with the law. Remitting sales tax to the government ensures that businesses are contributing their fair share to the funding of public services. Sales tax also levels the playing field between brick-and-mortar businesses and online sellers, who might otherwise have an unfair advantage.
If you're a store owner, it's important to understand your obligations with respect to sales tax. The good news is that there are many tools at your disposal to assist you in navigating the complexity of sales tax law. With a little bit of research and planning, you can ensure that your business is compliant with all sales tax requirements.
You won't have your sales tax collected by Shopify. Shopify is not obligated to handle your sales tax collection and remittance. Even if you are a retailer located in the U.S. or Canada, Shopify will not automatically compute, remit, and organize sales tax on your behalf.
This is due to the fact that, unlike Amazon, eBay, and Walmart, Shopify is not a marketplace facilitator. These websites facilitate the transactions between sellers and customers who compete for business using the same store front.
It’s a downer that Shopify doesn't collect or handle your sales tax. Nevertheless, you may connect a tax app with your business and modify Shopify's settings to ensure that each qualified transaction automatically adds the right sales tax rate at checkout.
Tax registrations for the following regions are used to establish taxes:
These regions follow the same process as merchants from the U.S. and Canada. On the other hand, depending on your local tax rules, taxes are imposed at the national or regional level if you are not headquartered in one of these regions and you need to levy taxes.
If you're a small business owner using Shopify, you may be wondering how to handle sales tax collection. In general, you must charge and collect sales tax from customers in any state where you have "nexus," defined as having a physical presence in a state such as a store or a warehouse.
If you have nexus in a state, you'll need to register with the state's taxation department and obtain a sales tax permit. After you've acquired your authorization, you may begin collecting sales tax from consumers in that jurisdiction.
Some business owners make the mistake of thinking that they only need to collect sales tax from customers in their own state. However, this is not the case. If you have nexus in another state, you must also collect sales tax from customers in that state. As a result, it's critical to keep your knowledge up to date on the states where you have nexus so that you may properly collect sales tax.
Fortunately, Shopify makes it simple to collect and pay sales tax. You may include the appropriate taxes for each state where you have nexus with Shopify's built-in Sales Tax settings. On the Taxes and duties tab in your Shopify admin, you may access and check your settings as you set up taxes.
You must be aware of sales tax laws if you're selling anything online. You might need to gather and pay sales tax on the goods you sell depending on where you live. But don't worry—Shopify can help simplify the process for you.
First, go to your Shopify settings and navigate the "Taxes" page. From there, you can enter your location, and Shopify will automatically calculate the appropriate sales taxes for your area.
So if you're ever wondering, "Where can I find more information about Shopify and sales tax collection?" just head over to Shopify's website—they've got everything you need to get started.
Select the applicable tax location by going to Settings > Taxes. Integrating a tax app with Shopify can help you make sure you are collecting the necessary amounts for each state if you are selling in the U.S. across numerous states.
Before you may collect and send sales tax to Shopify, you must apply for a sales tax permit. Locate the states that are part of your nexus and register there. Then you may modify your store's settings to charge sales tax on your purchases.
If you conduct business with the UK or Europe, you must also review the VAT and sales tax regulations in each region. They will each have their own criteria and tax software that can assist you in determining the appropriate charges to make and payments to make.
Fortunately, Shopify has a great support team that can help you with any questions. They also provide helpful guides that explain the fundamentals of sales tax on their website.
Therefore, if you're thinking about beginning a business on Shopify, do your study on sales tax before you launch. Although it's not as difficult as it seems, you must first grasp the fundamentals before you can begin selling. It's critical for business owners to grasp the fundamentals of sales tax. This way, you can ensure you are collecting and paying taxes correctly.
There are a few other things business owners should know about Shopify and sales tax collection, which we cover in our other blogs. Unloop is here to assist you with your taxes and other financial issues.
Don't be afraid to seek outside assistance if you need it, but don't sell yourself short. Concentrate on what you ought to be doing—managing your small business—and book a call with us today!
Small business owners have tons to think about. If you have several employees, human resources should be one of your concerns. Today’s work setup has moved from purely in-house to hiring remote workforces, so keeping everyone on the same page can be a challenge.
In this blog post, we’ll discuss how Peachtree’s complete accounting software, now called Sage 50Cloud, could be one of your business’s favorite HR tools. It handles various HR tasks together with your business’s bookkeeping and accounting needs. We’ll list down the features you can enjoy using Peachtree/Sage HR and how they can help with your business financial management.
Get full visibility of your people’s background no matter where they work through the help of Sage HR. The Peachtree software serves as storage for their personal information, job titles and responsibilities, schedules, and more. On your employees’ end, Sage software serves as a portal where they’ll find information about the company from organizational charts, updates, company policies, wages, and even their payslips.
Sage HR makes it easy for business owners to change schedules. Employers can tweak timetables in a few clicks, and staff can check their new shifts online or using the Sage mobile application. With seamless communication, your business operations can run smoothly.
The Peachtree accounting software is also a means for workers to file and get approval for their leaves and information about their timesheets. Both employees and employers can enjoy the stress-free leave filing procedure. The software calendar has all these details. You can even see the hours people render and who's on shift or not.
Individuals and teams can stay updated on their goals and progress as these are included in the information Sage HR shares. The software also allows colleague-to-colleague, top-down, or bottom-up giving of feedback and insights. With this, it is easier to work together in setting and hitting goals. Everyone can also stay informed of the team’s areas for improvement and what they should work on.
As a small business owner, you need to keep track of these employee expenses and benefits:
Sage HR assists you in tracking and monitoring by letting employees take pictures to submit documents and receipts. You can also set rules on who is eligible for these expenses and benefits.
Looking for software that gives you updates on recruitment? This is another feature Sage HR offers that not every accounting software has. If you want to keep an eye on how your recruitment campaigns are going, you can get updates using this accounting tool.
You can also plot candidate interview schedules on your recruitment calendar included on Sage HR. When these aspirants become your new employees, their data can be easily stored on the Sage HR software too. You can keep employee records from the moment they apply throughout their whole employment duration.
When tracked, all these details can help keep your books updated and your small business accounting in place. You’ll have complete information about your current employees and incoming new hires for their payslips. Details inside the payslips can be automatically filled out because of the hours, shifts, leaves, performance, expenses, and benefits that are stored on Sage HR. When tax season comes, your accountant can use the data Peachtree collects. You can also use the data for financial reporting, expense claims, invoice creation, deduction processing, and more!
Peachtree HR is the software’s feature that can manage in-house and remote employee files and records. It stores all the employee data in one secure system and allows for authorized access to specific information by managers or administrators. It also ensures seamless management of HR processes. For businesses with remote employees, Sage HR ensures everyone is kept up-to-date on company happenings, maintaining a cohesive workforce.
Unloop also uses the best accounting software like Quickbooks, Xero, and Hubdoc to assist you in keeping your books updated and your business finances in place. If you need assistance in this area or in bookkeeping, accounts payable, forecasting, payroll, and taxes, feel free to call us. We’d love to talk to you!
Starting a business is a risk. However, it is exciting and it might be tempting to swim ahead into new waters in an attempt to achieve success. Unfortunately, small business owners will have a million things to do. The process of creating a product to sell is only one facet of a business. There's finances, marketing, and advertising, and business owners only have themselves to rely on most of the time.
You often need a second set of hands to help you run a business. Moreover, if there are areas of the business that you're not familiar with, getting an expert may be a wise move for your success. But many business owners are reluctant to hire professionals because of the cost. o you really need one?
Here are some important questions to ask yourself to help you decide if you need a professional accountant.
If you're a certified accountant, managing your business finances will be easy. But let's say you're a beginner in the ecommerce industry. Can you do the accounting by yourself? Assess how much you know about accounting and how sure you are that you can handle your finances efficiently and error-free.
When you encounter double-entry bookkeeping, income statements, cash flows, accounts payable and receivable, and fixed expenses, can you differentiate and identify their purposes? Business finance covers many things, so make sure you can handle whatever applies to your business if you opt not to hire a professional.
If accounting for small businesses fits in your skill set, the next thing you need to ask yourself is if you can dedicate time to manage your finances. As a business owner, you have to oversee the different parts of your business, and business owners often get heavily involved in different processes of their business.
Tasks like talking and striking deals with your suppliers, picking up goods from warehouses, fulfilling deliveries, meetings with potential partners, managing your business webpage, and answering messages about your products are just a few of the jobs you must complete daily—especially if you work alone.
After all these tasks, can you still see yourself managing your finances? Finances require accuracy and complete concentration. After a tiring day, are you still up to the task?
Handling finances also means managing your taxes. Even seasoned people in the business dread managing taxes. There are many taxes levied when you start a business, and different taxes require different declarations and forms. How well-versed are you when it comes to business taxation?
Do you know how to file income taxes? How about sales tax? Do you know the sales tax rate and laws? Do you know how sales tax collection works? You should also be familiar with filing due dates, depending if you file taxes annually or quarterly.
Furthermore, there are also tax exemptions. Do you know the laws that make your products eligible for exemption? Tax exemption can lessen the taxes you pay to the collection agency. You can allocate these funds to further develop your business through investments.
Professional accountants do have a standard rate. It may vary depending on whether you hire from accounting firms or look for a private accountant. Of course, the more experience the accountant has, the higher they will charge.
Budget is one of the factors why many business owners opt to forgo hiring professionals. On average, an accountant's hourly rate is $117. Other services like small business bookkeeping cost an average of $200. Research shows that business owners spend anywhere from $1,000 to $20,000 on accounting annually.
This price point may be daunting for individuals fresh on the market. One thing you can do is hire accountants in a part-time position. This way, you'll still get the help you need without breaking your budget. You can create a schedule when you need your accountant, instead of having them on-call five days a week.
It's easier to handle finances at the beginning of your business. But maybe you need help in other things like organizing and keeping your records clean. An accountant is distinct from a bookkeeper. A bookkeeper does not need to pass state-mandated licensing examinations or a professional accounting degree.
Bookkeepers are trained to organize and record your business’s cash flow. They record all the financial transactions so you can track the money that goes in and out of your business. In addition, they can produce financial statements and reports which can say a lot about the health of your industry.
They can provide you with balance sheets to see if your expenses are parallel with your sales so that you can plan your finances strategically. In addition, bookkeeping costs significantly less than accounting, and there are even automated bookkeeping software that won’t break the bank.
However, bookkeepers can't do what accountants do. Their main goal is to record all your financial transactions; it is an accountant's duty to interpret and analyze the data. So maybe once a month or every quarter, have your bookkeeper meet a professional accountant for a consultation.
Bookkeeping for small businesses is an advantage, but a bookkeeper’s role is limited to your cash flow—no more, no less. So what difference does a certified accountant make? Here are some of the crucial duties a qualified accountant has to perform for your business.
Ask yourselves again, “Do I need an accountant for my small business?” It's not a requirement for every business, but it's a huge advantage. At the beginning, hiring an accountant may seem unnecessary. But as your business grows and a lot of cash comes in and out, an accountant will make sense of all the financial data to make sure your business’s overall financial health is in order.
If you’re considering getting an accountant, Unloop offers the best services for ecommerce sellers. We have professionals that can help you navigate different aspects of your business. Our services include payroll management, income tax, sales tax, accounting, and bookkeeping.
Book a call with us now and consult with our experts. Let us help you carve your way to success.
Invoicing is a business essential and a feature included in the best accounting software. Business owners like you looking for software with invoicing are probably wondering which between Sage and QuickBooks Online is the better option. Both of these programs will have unique offerings, but in the end, one will be better for your business.
In this blog post, we'll compare Sage Accounting vs. QuickBooks to show you which one is best for you. But first, let’s get to know the types of invoices in accounting and your store’s finances.
An invoice can be a hard copy or digitized document that contains information about the seller and the buyer, the date of the transaction, and payment details. There are different types like:
These invoices serve as documentation that will help in income and expense tracking and cash flow management. With the right software, you can collect the details from these invoices for categorization and later run a report for analysis.
The good news is that the comparison between Sage accounting software vs. QuickBooks Online isn’t too drastic, as both offer competitive invoicing features. Either will be a great choice. Nevertheless, you only need one accounting software for your business, so we’ll help you decide.
Sage/Sage50 Cloud/Peachtree stands out among the many choices of accounting and financial management tools because of its industry-based assistance. The software assists accounting for companies in construction, real estate, human resources, manufacturing, chemical, wholesale, food and beverage, and even in the nonprofit sector. It addresses different small business accounting software needs, especially with its invoicing feature.
Say hello to Sage’s business cloud accounting invoicing. In only a few clicks, you can generate invoices and send them to customers. You surely won’t miss the traditional way of sending hard copy invoices which takes time for data entry, printing, and delivery.
When your customers receive their invoices, they can send their payments online. The Sage accounting software partners with Stripe, an online payment processing software. After paying, the money will be transferred into your business account. The customer’s payment and your receipt will be done without any hassle.
You can automatically turn the estimates and quotes you have into invoices and send them to your customers in just a few clicks. Regular invoice creation can also be done quickly because the data you need, from the customer’s contact information, your business details, and the details of the products, are all stored in the online accounting software.
Sage50 Cloud used to only be for desktop use, but now, it is also available on mobile. So, if you ever need to generate invoices or stay on top of your small business’s financial management, you can easily do it on your phone. This data is kept safe as Sage is a cloud-based accounting software.
Meanwhile, Intuit QuickBooks is also a great choice for your business’s accounting and financial management. It has a live bookkeeping service that keeps all financial transactions up-to-date. Payroll and payment tracking, bank accounts, credit cards, integrations with other applications, project management, and inventory management are some of the accounting tasks this tool can accomplish. For invoicing, here is what QuickBooks Online offers:
QuickBooks Online can generate invoices, but more than this, the software can also send bulk invoices as the system can store all customer and product information. You can save a lot of time doing this instead of creating invoices one by one.
If you have regular transactions, skip the hassle of creating invoices again and again or forgetting to send one through the help of recurring invoices. This accounting feature schedules the sending of the invoice. It also avoids late payments as customers can send their payments timely as well.
If it is your first time creating an invoice or using accounting software, QuickBooks Online can assist you through the Priority Circle. This training tool is completely free for those using QuickBooks Pro/Advanced. With Priority Circle, you’ll learn how to create different invoices, make templates, and send them to customers. QuickBooks also offers customer support for your invoice and accounting-related questions.
The “Pay Now” link can work magic in encouraging customers to pay on time. Since QuickBooks welcomes integration with various payment methods, your customers can pay in ways convenient to them. The money goes straight to your account and reflects on your bank feed with no hassle!
QuickBooks Online is on par with Sage50 Cloud regarding software mobile access. You can create and send invoices as long as you have your phone and an internet connection. You’ll also have your business’s financial information in your pocket anywhere you go.
Both are great accounting software, but when it comes to Sage/Peachtree vs. QuickBooks for small businesses, we believe that QuickBooks Online takes the top spot. QuickBooks has more advanced features like invoice training that is much needed by beginners, and it allows the creation and sending of bulk invoices. The accounting software also has more choices when it comes to payment methods.
Of course, your store may have unique needs that could sway you towards choosing Sage. But for the average small business, QuickBooks Online is likely the better option for invoicing and beyond.
If you need assistance with keeping your books in order, Unloop offers bookkeeping services. We have a team of professionals well-versed with QuickBooks and other accounting and bookkeeping tools like Xero. Be sure to give us a call—we’d love to discuss our offers with you.
Deciding to invest in bookkeeping software for your small business is already tough enough. Add choosing the right bookkeeping software for your business to the mix, and you can quickly become overwhelmed, especially with the countless choices available.
In this article, we'll have Xero vs. Quickbooks vs. Freshbooks to help you decide which one is best for your business. We'll look at the similarities and differences in the accounting features of each program. So whether you're just starting or looking to switch to new software, read on for all the information you need to make the right choice!
The three accounting software have plenty of similarities in the features they offer that you might ask yourself if there is a need for a discussion on Quickbooks vs. Xero vs. Freshbooks. When you sign-up for a plan on one these three, you can enjoy all these benefits:
|Accounting Software Features||How It Works||Freshbooks||Quickbooks Online||Xero|
|Inventory Tracking and Management||Inventory management, integration to various eCommerce accounts, and tracking of in-stock items||✅||✅||✅|
|Accounts Receivable and Payable (Double-Entry Accounting)||Income and expense tracking for cash flow management||✅||✅||✅|
|Invoice||Includes limited or unlimited invoice customization, adding of a “Pay now” button, recurring invoices, and payment reminders||✅||✅||✅|
|Taxes||Data prepared for the tax season||✅||✅||✅|
|Project Tracking||Manage your teams and projects||✅||✅||✅|
|Time Tracking||Track work hours of your employees||✅||✅||✅|
|Bank Reconciliation||Monitors and records your bank account transactions||✅||✅||✅|
|Automation||Many features of the accounting software are automated and do not need manual entry||✅||✅||✅|
|Integrations||Integrations on eCommerce sites, other software, and apps||✅||✅||✅|
|Data Security, Role-based Access, Cloud-based||Cloud-based storage is used for data security||✅||✅||✅|
|Mobile Application||Software users on the go can check their business finances on their mobile phones||✅||✅||✅|
|Reporting||With all business data available, you can generate reports in an instant||✅||✅||✅|
|Free Trial||Try out some of the premium features of the software for free||✅||✅||✅|
|Payment Gateways||Users can utilize bank, credit card, online payments, and more!||✅||✅||✅|
If the three have many similarities, these distinct features will be the deciding factors on which one you will pick. You’ll see that the three small business accounting software only have a few differences, but they will be enough for you to know which shines brighter than the rest.
If you want something straightforward and complete with everything a beginner in bookkeeping and accounting needs, Freshbooks is the perfect accounting software for you. The software has a simple interface and no complicated features that will make first-time users have a difficult time. Yet, despite the simplicity, it still has all the features you need to start and keep your business’s bookkeeping and accounting running.
Freshbooks pricing is also excellent for a startup or small business, freelancer, and a self-employed individual. The three plans don’t cost more than $15. Nevertheless, if Freshbooks doesn’t include the accounting services you need within the plan, Freshbooks has customized pricing plans.
One of the offers of Quickbooks Online is Live Bookkeeping which includes live bookkeeper customer support who will rummage through all your financial data for cleanup, storage, and categorization. So, if you ever sign-up for a plan for them in the middle of the year, you do not have to worry about the data from the first half of the year. They will take care of it.
You will also find Quickbooks Online’s payroll management feature helpful if you have employees. You can integrate a payroll software you are using on Quickbooks or use Quickbooks Payroll itself.
Quickbooks doesn’t fall short with customer service too. After signing up for the plans, you will be added to the Priority Circle, where you can access resources on utilizing Quickbooks to manage your business’s accounting.
Meanwhile, Xero takes data analysis to the next level through its Xero Analytics which you can upgrade to Analytics Plus. These features will allow you to produce a financial forecast from seven to 90 days in the future. You can also easily glimpse your business's financial health through a data dashboard projecting essential details about your business.
Customize the reports you see by using your business's key performance indicators and metrics, so you can easily see where your business is doing good and which the areas of improvement are.
Like Quickbooks, Xero takes over payroll management through Gusto Payroll integration. Xero also tracks sales taxes, one of the most difficult ones to track because of its sensitivity to change.
Freshbooks, Quickbooks, and Xero are some of the best accounting software available, and they have many similarities. They are all cloud-based, double-entry accounting systems that allow you to manage your inventory, invoices, taxes, track your projects and time, and reconcile your bank’s information. Additionally, they each offer a free trial and various payment gateways.
However, there are some key differences between the three programs. For example, Freshbooks is a beginner's champion because it is easy to use. Quickbooks’ Live Bookkeeping and Priority Circle can help you with bookkeeping tasks. While Xero Analytics and Sales Taxes can help keep your numbers on track if you sell products taxable in multiple states.
If you choose Quickbooks or Xero, we at Unloop can be your partner in running the tools. We have experienced bookkeepers and accountants who are well-versed in various accounting software. Give us a call today, and let us help you with your business’s bookkeeping.
In business, you need to keep track of many things besides numbers. From customer data to inventory and shipping, the list can seem endless.
But what about your finances? Do you have time to keep up with bookkeeping and monthly statements? Are you familiar with all the latest tax laws and accounting procedures? If you aren’t, it might be time to consider hiring an accounting consultant service. Discover how consulting accounting firms can help you streamline your financial processes.
Any business that wants to be successful needs to have a solid understanding of cash flow. That's where accounting consulting comes in. Accounting consultants help businesses keep track of their finances and make sure they're making sound decisions with their money. Here are some of the specific responsibilities accounting consultants have:
When business owners or entrepreneurs seek out accounting consulting firms, they are looking for more than just someone to crunch the numbers.
An effective accounting consultant will provide clients with accurate financial reports. They will also use their knowledge and expertise to advise on improving the client's bottom line. In other words, clients are looking for a partner who will help them navigate the often complex world of business finances.
They will take the time to get to know their client's business inside and out. Thus, they will ask questions and listen to the answers to gain a deeper understanding of the client's goals and objectives.
With this knowledge in hand, they can then offer tailored recommendations on financial planning, cash flow management, and other aspects of running a business. In short, an effective accounting consultant wears many hats, serving as a trusted advisor, sounding board, and problem-solver in one.
Maintaining a healthy balance in your accounts payable is essential to the success of your small online business. Late payments can damage your relationships with suppliers, and missed payments can lead to costly penalties.
Accounting services with specialized accounts payable skills can help you keep on top of your current liabilities and make sure that your payments are made on time. On top of that, you need to maintain debts at a healthy level. This includes offering risk management advice on when to take out loans and lines of credit, as well as helping your business develop a plan to pay off debts promptly.
Providing accounting consulting services to clients could include anything from helping you understand and interpret your financial statements to providing advice on managing your cash flow. They should also be expected to keep up-to-date with changes in accounting processes and to ensure that your online business is compliant.
A key part of a financial consultant's role would be identifying areas where clients could improve their accounting process. For example, a consultant might suggest ways in which you could reduce your costs or improve your collections process.
A focus on current assets, liabilities, and profitability analysis could improve a business's financial health moving forward. An accounting consultant will play a vital role in helping businesses navigate the ever-changing finance world.
When it comes to payroll, you especially want to be sure that the accounting firm you'll be hiring offers payroll services. After all, timely and accurate paychecks are essential to keeping your employees happy and productive.
A good outsourced accountant will keep track of employee hours, calculate withholdings, process payroll taxes, and direct deposit paychecks into employees' accounts.
One of the most important responsibilities of an ecommerce business is keeping tabs on your economic nexus.
Whether you're expanding into new markets or launching a new product line, it's important to make sure that you're compliant with all the relevant tax laws. By working with an accountant who understands nexus requirements, you can avoid costly penalties or fines through proper tax preparation.
Any business owner will tell you that staying on top of your finances is vital to your business's success. But for many virtual entrepreneurs, managing the day-to-day financial tasks can be a real challenge. That's where accounting consulting firms come in. Here's how to get the right experts for the job.
Accounting consulting firms can help you minimize risks and maximize financial gain, ensuring smooth business operations. By working with an accounting consultant, you can get the advice and support you need to make the most out of your virtual business.
If you're interested in learning more about how accounting consultants could benefit your online operation, we'd be happy to chat with you. Simply book a call with Unloop, and one of our seasoned team members will walk you through what we can do for your business.
Maintaining a healthy balance sheet is crucial for any business, but it’s especially important for Amazon FBA sellers. This is because Amazon FBA sellers are constantly investing in inventory, and they need to know that they have the financial resources in place to support this ongoing investment. The balance sheet provides an overview of a company’s financial health, and it can be used to assess whether a company has the ability to continue funding its operations.
For Amazon FBA sellers, the balance sheet can be a valuable tool for understanding whether they are on solid financial footing. By closely monitoring their balance sheet, Amazon FBA sellers can ensure that they have the necessary resources in place to maintain their inventories and support their businesses.
Most sellers think of the balance sheet as just another way to check their Amazon account balance. However, it can also be used to keep track of inventory levels, sales data, and other important information for FBA sellers.
Here are four ways a balance sheet can help keep your business in tip-top condition as an FBA seller:
Your balance sheet gives a clear view of your business’s finances as an FBA seller. It lists your current and long-term assets and liabilities, which indicate your company’s potential to create cash and continue business operations in the future.
It can also show you if your debt levels are sustainable by helping you compare your current assets and liabilities. By doing this, you can see if your business can fulfill its short-term obligations. Additionally, having a balance sheet can aid you in determining other financial issues to avoid serious financial problems.
As an Amazon FBA seller, it’s important to keep track of your inventory with a balance sheet. This helps you keep track of what you have in stock, what needs to be restocked, and what is selling well. As a result, you can make smarter decisions for your business and ensure that you always have the products your customers need.
Additionally, organizing your Amazon balance can help you spot trends in your sales and inventory levels, which can be helpful in forecasting future sales. So a balance sheet is ultimately a valuable tool that can help you run your Amazon FBA business more effectively.
Financial ratios are useful in assessing how well your Amazon business is doing in terms of productivity, profitability, solvency, and liquidity. Thus, they are also helpful when determining the long-term viability of a company. And you can see a detailed and organized view of all the important information regarding these by having a balance sheet.
Furthermore, having an organized financial statement also helps you determine your company’s cash flow.
When you have a balance sheet for bookkeeping, it’s easy to show your business’s financial condition to potential lenders or investors. It’s because they will need information about how stable your company’s financial condition has been over time. They will also require information about your credit history and track record of your paid debts.
Potential lenders and investors may also look at your balance sheet to see where their money will go and when they might expect it back. Thus, it’s important to have a consistently updated balance sheet.
No, it’s not required for FBA sellers to have a balance sheet. However, having a balance sheet for your Amazon business is a huge advantage. It will help you organize your finances so that you can effortlessly determine your cash balance, cash flow, net income, total assets, and total liabilities.
Having it will also make it easier for you to make financial statements, including your income statement and cash flow statement. You also won’t have a hard time dealing with any financial ratio. Furthermore, it will be more convenient for any potential investor if you have a balance sheet, which means you can close deals more easily.
Yes, you can directly ship your FBA inventory to Amazon through your Amazon dashboard. Under the inventory tab, you can find an option to manage your FBA inventory. Then, you can choose the preferred stock you want to ship by choosing the send/replenish inventory option under the edit tab.
Afterward, you can continue organizing your shipping plan and packaging plan. Once you’re done with these processes, Amazon decides where your products will be shipped based on their demand from different areas across the country. This way, you can benefit from Amazon’s wide distribution network and extensive audience reach.
Getting the Fulfilled By Amazon service can definitely help boost your sales for several reasons. First, Amazon FBA broadens your potential customer base by widening your audience reach. Second, it helps you get more sales since Amazon is a reliable brand that handles most of your selling and shipping needs.
Furthermore, Amazon FBA can also increase your products’ search rankings. This is greatly beneficial for you because potential customers tend to check out or purchase products that are placed higher on the search results.
The Amazon balance sheet is a great resource for entrepreneurs. By understanding how it works and what it can tell you about your business, you can make smart decisions that will help your company flourish. Thus, be sure to keep track of your inventory and financial ratios using the balance sheet so that you have a good idea of where your business stands financially.
If you want to know more information on how to use a balance sheet or need other related services for your business, explore our website. We offer a variety of services that can help entrepreneurs just like you succeed in the ever-changing world of business.