As an aspiring entrepreneur, launching a business is often one of the biggest decisions. As exciting as it can be to embark on this journey, it also requires careful consideration and planning. If you are looking for success, financial planning and forecasting should be part of your startup strategy. Taking control of your finances from the beginning is essential for the health and growth of any business venture. It’s what separates successful companies from those that fail in their early years.
This blog post discusses why efficient money management through financial planning and forecasting is the key to helping your startup business succeed. Keep reading!
As the name suggests, financial forecasting predicts how your finances will look in a given time period. Forecasting is usually made annually and based on historical data for objectivity and accuracy.
Note that forecasts aren’t 100% correct, and they are always subject to change, especially if there are new variables that pop up during the fiscal year. Nevertheless, it pays to invest in forecasting, especially if you are a startup. Here are some benefits of financial projections.
No matter how limited the historical information is for new businesses, it helps if you still base your financial forecast on any of the past data you’ve gathered. This practice ensures that you have bias-free, objective, and accurate forecasting of future income, expenses, savings, profits, and trends.
Just note that there is a higher chance for beginning businesses to have forecast changes, as owners are testing the waters. Nevertheless, the forecast is still a good guide in the decision-making process.
It’s exciting to know how much you’ll be earning in the next year! Knowing these details brings a lot of benefits like the following:
With your knowledge about your income comes the visibility of your future expenses. If you spend the same amount as you spent from the period you derived your data from, you are likely to have the same income.
If you already have a large income, this is good news. All you need to do is to maintain the best practices and keep expenses to a minimum to maintain your high income. However, if you want to raise your revenue, you’ll get the chance to take a closer look at the areas where you can minimize the costs.
Have you successfully saved in the previous year, or was it a challenge? As a startup business, it’s a bit of a struggle to begin saving, but you can still make it a goal and achieve it for the coming year. To successfully do this, financial forecasting will be of great help.
When you know your income and expenses in advance, you’ll know your net income. Net income is calculated by deducting the total expenses from your total income. Then, you can plan on how much of this net income will go to your savings.
Months and quarters with low income, high expenses, and the inability to hit revenue goals can happen. Some of the expenses which can turn into roadblocks when left unmanaged are the following:
Financial challenges will be reflected in numerical form if you do financial forecasting. You can pinpoint specifically what the culprit is and can plan how to manage it better moving forward.
Financial forecasts are beneficial for your knowledge and a helpful tool for you to gain more investors. As a startup business, having individuals willing to invest in your business keeps you from having large loans. Interest fees can hurt your business more than you know. Your investors will also likely be well-versed in the ecommerce industry and the products you sell. You can benefit from this expertise.
If you see your business working hand-in-hand with investors, a financial forecast can help gain their trust. This report lets them know if your company is worth investing in.
Financial planning is essential to all businesses, especially for startups like yours. The plan serves as a guide, so all your financial decisions are not made blindly. A forecast and a financial plan are always intertwined. The latter will be the means for you to bring the forecast to life or improve the outcome of that report. Through a well-thought-out financial plan, you can reap all these benefits.
Financial planning allows you to set clear future goals and ways to achieve them. Through it, you can create step-by-step annual plans on how to maintain a profitable company, maintain or increase income, save, set financial plans for profit, and see when you can expand your growing business.
You can practice strategic decision making because you have visibility on all your assets and an idea of the possible costs. Hence, your actions will be directed towards spending less and earning more.
Your income trend in the forecast will remain in numbers unless you work for it. If you continue the techniques of your current operation, you are likely to achieve the same earnings as the previous years you got your data from. However, if you are ready to step up, you at least have a base point through the forecast. You can be as creative as possible with the plans you suggest to increase your business income and revenue, or attain the highest profit possible.
Looking at your expenses closely is the key to ensuring that you make the highest income. The lower your expenses, the higher your income will be. As a startup business, here are some helpful tips you can follow:
Challenges are a constant in running a business, especially when you are just starting up. For instance, you will see which months sales become stagnant. In this case, you can heighten your marketing and advertising beforehand to avoid it from happening. You will see how much taxes you are to incur in certain periods, so you can control travel expenses, utilize retirement and health insurance benefits, check qualified deductions, and deduct charity contributions. Many more roadblocks can be proactively addressed or kept at bay with a forecast and proper strategic planning.
Having investors for a startup business is a great help in ensuring you have enough capital to launch and keep your business running. Showing your financial forecast is putting your best foot forward, but telling them about your financial plan shows your confidence. Your plan shows that the financial data will not just stay in the books but will come to life. As a result, investors will be more encouraged to invest their money in helping your business grow.
Preparing a financial forecast will help any new business succeed in the long run. It's essential to get valuable insights on how much income you'll bring in and what your expenses will be, and can even predict any roadblocks that could come up. A financial forecast is also key when pitching your business to investors—it shows that you're confident and have a clear plan for the future.
If you need help in getting started, our team at Unloop can assist you with forecasting and planning so that you can set your business up for success. Let us help you work on the limitations of financial planning and forecasting and make the most of these tools. Contact us now, we’d love to assist you!
As an aspiring entrepreneur, launching a business is often one of the biggest decisions. As exciting as it can be to embark on this journey, it also requires careful consideration and planning. If you are looking for success, financial planning and forecasting should be part of your startup strategy. Taking control of your finances from the beginning is essential for the health and growth of any business venture. It’s what separates successful companies from those that fail in their early years.
This blog post discusses why efficient money management through financial planning and forecasting is the key to helping your startup business succeed. Keep reading!
As the name suggests, financial forecasting predicts how your finances will look in a given time period. Forecasting is usually made annually and based on historical data for objectivity and accuracy.
Note that forecasts aren’t 100% correct, and they are always subject to change, especially if there are new variables that pop up during the fiscal year. Nevertheless, it pays to invest in forecasting, especially if you are a startup. Here are some benefits of financial projections.
No matter how limited the historical information is for new businesses, it helps if you still base your financial forecast on any of the past data you’ve gathered. This practice ensures that you have bias-free, objective, and accurate forecasting of future income, expenses, savings, profits, and trends.
Just note that there is a higher chance for beginning businesses to have forecast changes, as owners are testing the waters. Nevertheless, the forecast is still a good guide in the decision-making process.
It’s exciting to know how much you’ll be earning in the next year! Knowing these details brings a lot of benefits like the following:
With your knowledge about your income comes the visibility of your future expenses. If you spend the same amount as you spent from the period you derived your data from, you are likely to have the same income.
If you already have a large income, this is good news. All you need to do is to maintain the best practices and keep expenses to a minimum to maintain your high income. However, if you want to raise your revenue, you’ll get the chance to take a closer look at the areas where you can minimize the costs.
Have you successfully saved in the previous year, or was it a challenge? As a startup business, it’s a bit of a struggle to begin saving, but you can still make it a goal and achieve it for the coming year. To successfully do this, financial forecasting will be of great help.
When you know your income and expenses in advance, you’ll know your net income. Net income is calculated by deducting the total expenses from your total income. Then, you can plan on how much of this net income will go to your savings.
Months and quarters with low income, high expenses, and the inability to hit revenue goals can happen. Some of the expenses which can turn into roadblocks when left unmanaged are the following:
Financial challenges will be reflected in numerical form if you do financial forecasting. You can pinpoint specifically what the culprit is and can plan how to manage it better moving forward.
Financial forecasts are beneficial for your knowledge and a helpful tool for you to gain more investors. As a startup business, having individuals willing to invest in your business keeps you from having large loans. Interest fees can hurt your business more than you know. Your investors will also likely be well-versed in the ecommerce industry and the products you sell. You can benefit from this expertise.
If you see your business working hand-in-hand with investors, a financial forecast can help gain their trust. This report lets them know if your company is worth investing in.
Financial planning is essential to all businesses, especially for startups like yours. The plan serves as a guide, so all your financial decisions are not made blindly. A forecast and a financial plan are always intertwined. The latter will be the means for you to bring the forecast to life or improve the outcome of that report. Through a well-thought-out financial plan, you can reap all these benefits.
Financial planning allows you to set clear future goals and ways to achieve them. Through it, you can create step-by-step annual plans on how to maintain a profitable company, maintain or increase income, save, set financial plans for profit, and see when you can expand your growing business.
You can practice strategic decision making because you have visibility on all your assets and an idea of the possible costs. Hence, your actions will be directed towards spending less and earning more.
Your income trend in the forecast will remain in numbers unless you work for it. If you continue the techniques of your current operation, you are likely to achieve the same earnings as the previous years you got your data from. However, if you are ready to step up, you at least have a base point through the forecast. You can be as creative as possible with the plans you suggest to increase your business income and revenue, or attain the highest profit possible.
Looking at your expenses closely is the key to ensuring that you make the highest income. The lower your expenses, the higher your income will be. As a startup business, here are some helpful tips you can follow:
Challenges are a constant in running a business, especially when you are just starting up. For instance, you will see which months sales become stagnant. In this case, you can heighten your marketing and advertising beforehand to avoid it from happening. You will see how much taxes you are to incur in certain periods, so you can control travel expenses, utilize retirement and health insurance benefits, check qualified deductions, and deduct charity contributions. Many more roadblocks can be proactively addressed or kept at bay with a forecast and proper strategic planning.
Having investors for a startup business is a great help in ensuring you have enough capital to launch and keep your business running. Showing your financial forecast is putting your best foot forward, but telling them about your financial plan shows your confidence. Your plan shows that the financial data will not just stay in the books but will come to life. As a result, investors will be more encouraged to invest their money in helping your business grow.
Preparing a financial forecast will help any new business succeed in the long run. It's essential to get valuable insights on how much income you'll bring in and what your expenses will be, and can even predict any roadblocks that could come up. A financial forecast is also key when pitching your business to investors—it shows that you're confident and have a clear plan for the future.
If you need help in getting started, our team at Unloop can assist you with forecasting and planning so that you can set your business up for success. Let us help you work on the limitations of financial planning and forecasting and make the most of these tools. Contact us now, we’d love to assist you!
The choice of bookkeeping service package you make today will directly impact your profit margin and your time for the short or long term. You also have to account for the costs your business incurs more than your revenue for it to be profitable.
Accounting services are essential for a growing business, but they have a cost. As a business owner, you pay to keep your business numbers intact. So it's only logical to make a cost-effective choice before deciding to commit.
If you're looking for bookkeeping price packages in Canada or the US, let Unloop help you with the following guide.
Bookkeeping and accounting firms adapt different pricing models for their services. This is to allow an option that will match the client's needs with the solutions they provide. There are at least three pricing packages.
This type of bookkeeping pricing package offers you a fixed amount to pay for an agreed service. They may do the work earlier or later than expected, but as long as the service is completed, you must pay the rate.
Compared to a flat rate, an hourly rate charges you a fixed amount on an hourly basis. This type of accounting pricing package makes efficiency important because the longer the service takes to complete, the higher the amount you pay. The good news is that an hourly rate is a good option if you only need minor services.
Some accounting businesses bundle services together and offer them on a fixed monthly bookkeeping and accounting rate called a subscription. They also offer different levels or what they call "tiers" that cater to different levels of accounting business needs.
Many accounting service companies offer a host of services for their clients. Their arrangement may vary depending on your case, or it may be a fixed package containing several services. But no matter what accounting service firm you deal with, you will encounter the following services.
This service is a staple in any bookkeeping service company. If there's only one service they have to provide, it is bookkeeping, which is the core process of any financial accounting.
From bookkeeping, they can extend the service to financial statement preparation and reporting. In most cases, financial statements come bundled as part of bookkeeping service packages as it is connected to the process. But some accounting service firms offer monthly financial reports as a business advantage.
In some enterprises with a business-to-business (B2B) model, there can be frequent volume purchases, and these transactions often involve credits. Accountants understand that with the volume comes the complexity of managing accounts payable, which can wreak havoc on a business's cash flow. So they offer assistance and management as part of their service offering.
As the number of employees increases, paying them becomes more challenging. That's because apart from the volume, you may also have different types of employees, such as regular full-time, part-time, or contract employees. All these employee types have different treatments. So accountants offer payroll services to ensure salary is paid accurately for everyone and the disbursement is recorded properly in the business's accounting system.
Accountants understand the value of knowing future revenue potential for management. So to relieve business owners of the guesswork, accountants offer forecasting services to project short-term and long-term income and how a purchase decision can affect future revenues.
Tax is the most complex subject for any business owner. Yet taxes are obligations that every business must fulfill. To ensure that business owners are paying the correct tax amount and avoid legal repercussions, accountants can offer tax preparation assistance to help businesses know the right tax amount to pay.
Before selecting from bookkeeping pricing packages offered by an accounting service company, consider the following criteria. These will help you determine the right arrangement that will maximize your profit.
How big the business is plays an important factor when choosing a bookkeeping service. There are several ways to measure your business size: the number of employees, the size of equity invested, and the volume of transactions.
Each of these will affect how complex the accounting service is needed. For example, if you're a startup business with less than five employees, you may only need a part-time bookkeeping service, but if you have hundreds of regular workers, you'll need a skilled accounting team handling the payroll, books, and bank accounts.
Most small businesses use a program or software to handle their accounting and bookkeeping work. So it's important to tell your prospective bookkeeper what you are using (or not using) so they can do their best to adjust to your needs.
As an example, Unloop is a bookkeeping agency that specializes in QuickBooks. If you're using the same software, the transition will be smooth, but if you're using a different accounting software such as Xero or Sage50, they will have to work with what you have or transition you to QuickBooks.
An accountant familiar with your industry will know how your numbers work. This means they are far more capable of working efficiently and giving you accounting information that they know will help.
Unloop is a service agency that specializes in ecommerce. We know how to work with numbers and can provide you with the reports you need for decision-making. Not only that, but we can also offer advice on what steps you can take to maximize profitability.
Inquire about what services the bookkeeping company has to offer. The more services they can offer, the better. That's because you can always expand the service you need for them, which makes for a more efficient operation of your accounting systems.
You'll want to get a full-service accounting agency that offers services like the ones mentioned above. This way, you won't have to search for another company to do a different aspect of your accounting.
A bookkeeping service company must have a track record of both past and ongoing clients. So check if they have some under their belt. This verifies their legitimacy and competence.
It's much better if you can get feedback about their service. Check their website for client testimonials or ask for case studies you can read. If their clients are satisfied, then it's likely that you will be, too.
Now that you know the different pricing packages and services available, you are in a better position to decide what the best package applies to your business. But to hone in on the most cost-effective decision, you must find out what your business needs and talk to an accounting service provider.Talk to Unloop. We have three different price packages to offer you to make sure it's customized according to your business needs. Book a call with us or check out our ecommerce services now.
The choice of bookkeeping service package you make today will directly impact your profit margin and your time for the short or long term. You also have to account for the costs your business incurs more than your revenue for it to be profitable.
Accounting services are essential for a growing business, but they have a cost. As a business owner, you pay to keep your business numbers intact. So it's only logical to make a cost-effective choice before deciding to commit.
If you're looking for bookkeeping price packages in Canada or the US, let Unloop help you with the following guide.
Bookkeeping and accounting firms adapt different pricing models for their services. This is to allow an option that will match the client's needs with the solutions they provide. There are at least three pricing packages.
This type of bookkeeping pricing package offers you a fixed amount to pay for an agreed service. They may do the work earlier or later than expected, but as long as the service is completed, you must pay the rate.
Compared to a flat rate, an hourly rate charges you a fixed amount on an hourly basis. This type of accounting pricing package makes efficiency important because the longer the service takes to complete, the higher the amount you pay. The good news is that an hourly rate is a good option if you only need minor services.
Some accounting businesses bundle services together and offer them on a fixed monthly bookkeeping and accounting rate called a subscription. They also offer different levels or what they call "tiers" that cater to different levels of accounting business needs.
Many accounting service companies offer a host of services for their clients. Their arrangement may vary depending on your case, or it may be a fixed package containing several services. But no matter what accounting service firm you deal with, you will encounter the following services.
This service is a staple in any bookkeeping service company. If there's only one service they have to provide, it is bookkeeping, which is the core process of any financial accounting.
From bookkeeping, they can extend the service to financial statement preparation and reporting. In most cases, financial statements come bundled as part of bookkeeping service packages as it is connected to the process. But some accounting service firms offer monthly financial reports as a business advantage.
In some enterprises with a business-to-business (B2B) model, there can be frequent volume purchases, and these transactions often involve credits. Accountants understand that with the volume comes the complexity of managing accounts payable, which can wreak havoc on a business's cash flow. So they offer assistance and management as part of their service offering.
As the number of employees increases, paying them becomes more challenging. That's because apart from the volume, you may also have different types of employees, such as regular full-time, part-time, or contract employees. All these employee types have different treatments. So accountants offer payroll services to ensure salary is paid accurately for everyone and the disbursement is recorded properly in the business's accounting system.
Accountants understand the value of knowing future revenue potential for management. So to relieve business owners of the guesswork, accountants offer forecasting services to project short-term and long-term income and how a purchase decision can affect future revenues.
Tax is the most complex subject for any business owner. Yet taxes are obligations that every business must fulfill. To ensure that business owners are paying the correct tax amount and avoid legal repercussions, accountants can offer tax preparation assistance to help businesses know the right tax amount to pay.
Before selecting from bookkeeping pricing packages offered by an accounting service company, consider the following criteria. These will help you determine the right arrangement that will maximize your profit.
How big the business is plays an important factor when choosing a bookkeeping service. There are several ways to measure your business size: the number of employees, the size of equity invested, and the volume of transactions.
Each of these will affect how complex the accounting service is needed. For example, if you're a startup business with less than five employees, you may only need a part-time bookkeeping service, but if you have hundreds of regular workers, you'll need a skilled accounting team handling the payroll, books, and bank accounts.
Most small businesses use a program or software to handle their accounting and bookkeeping work. So it's important to tell your prospective bookkeeper what you are using (or not using) so they can do their best to adjust to your needs.
As an example, Unloop is a bookkeeping agency that specializes in QuickBooks. If you're using the same software, the transition will be smooth, but if you're using a different accounting software such as Xero or Sage50, they will have to work with what you have or transition you to QuickBooks.
An accountant familiar with your industry will know how your numbers work. This means they are far more capable of working efficiently and giving you accounting information that they know will help.
Unloop is a service agency that specializes in ecommerce. We know how to work with numbers and can provide you with the reports you need for decision-making. Not only that, but we can also offer advice on what steps you can take to maximize profitability.
Inquire about what services the bookkeeping company has to offer. The more services they can offer, the better. That's because you can always expand the service you need for them, which makes for a more efficient operation of your accounting systems.
You'll want to get a full-service accounting agency that offers services like the ones mentioned above. This way, you won't have to search for another company to do a different aspect of your accounting.
A bookkeeping service company must have a track record of both past and ongoing clients. So check if they have some under their belt. This verifies their legitimacy and competence.
It's much better if you can get feedback about their service. Check their website for client testimonials or ask for case studies you can read. If their clients are satisfied, then it's likely that you will be, too.
Now that you know the different pricing packages and services available, you are in a better position to decide what the best package applies to your business. But to hone in on the most cost-effective decision, you must find out what your business needs and talk to an accounting service provider.Talk to Unloop. We have three different price packages to offer you to make sure it's customized according to your business needs. Book a call with us or check out our ecommerce services now.
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.
One of the most dominant taxes that Amazon collects from its buyers is the sales tax. It is charged on top of the purchase price and is deposited into the seller’s account. The merchant then has an obligation to remit the taxes. But the exact amount may not be reflected in a seller’s account because account deposits are made in a lump sum.
This is one of the challenges most Amazon sellers face in their online business. It’s also something they cannot ignore, especially when their ecommerce business is growing. They want to know how much sales tax they should remit. Let Unloop answer this question.
The question of how does Amazon calculate sales tax has no simple answer. That’s because many factors go into a sales tax, so the answers vary depending on where you’re doing business, among other things.
To answer this question, we’ll have to dive deep into what sales tax is to get an idea of how it works.
Sales tax is levied whenever an item is sold or a service is rendered. This tax is imposed on the final consumer during the point of sale. This means the seller of the goods or services is the one responsible for its collection and remittance.
This form of tax makes up a significant amount of the government’s revenue. The sales tax is levied in small amounts but makes up for it in quantities because of its presence in every business exchange between a seller and a final consumer.
As simple as it may seem, sales tax collection is complicated. Most especially for ecommerce sellers such as those who are on Amazon.
Simply put, an economic nexus or a sales tax nexus is a state where you do business. That means the state where your business is legally registered.
Due to recent changes in how people do business, there have been some revisions to the rules on determining an economic nexus. For example, the existence and growth of ecommerce sellers participating in marketplaces such as Amazon can now have multiple economic nexuses.
The determination of today’s economic nexus largely depends on the degree of business connection a seller has with the state in terms of business. The physical location is placed on the back burner as a determiner.
Although physical location is still recognized, it is largely replaced by a financial threshold system wherein the level of business transaction amount per annum is the metric a state uses to determine whether you should be put under their jurisdiction.
For example, if you do business in Arkansas (AR) and reach more than $100,000 selling to consumers in that state, you’ll have to account for sales tax deductions.
To say that revenue threshold is the only determining factor of economic nexus is oversimplified. The state tax laws vary depending on the state you do business with. That means if you’re huge on Amazon and have a wide scope of operation, you could have multiple economic nexuses.
A lot of factors come into play when you determine your nexus state. The primary one is whether the state you’re doing business with levies sales tax on the transaction origin or the destination. But there are other factors, such as the following:
Returning to our question: if you’re an Amazon seller and need to pay sales tax, how is it calculated? Given the above mentioned factors, once you’ve determined all your economic nexus and you meet the criteria, you’ll have to research the sales tax rates on your economic nexus.
Note that the tax rates are not the same for each state. Additionally, each state has multiple jurisdictions and all of them may have different sales tax compliance requirements, even if they are in the same state. This is because of local sales taxes.
We get it, sales tax calculation is tedious. Imagine manually calculating each transaction you incur in every state to determine the amount to charge sales tax on. That could take forever to do. On top of that, you also have to officially register for a sales tax permit in every state you have a link nexus on, which takes time and effort.
It would be easier if Amazon had a sales tax calculator, and they do. In fact, due to marketplace facilitator laws, you don’t have to calculate sales tax on every nexus state you’re in; Amazon does it for you.
The government polices the marketplace to comply with sales tax laws and collect sales taxes on behalf of the seller. This relieves the pressure of calculating exactly how much you should charge for sales tax.
But there’s a catch: In some states where Amazon does not collect sales tax, sellers may calculate it, but they remit it to your account. Then it gets mixed up with your sales revenue, and that’s where you have to do the tedious manual work.
Part of the burden of collecting sales tax is knowing how to set it up on Amazon. Without setting up your nexus in the marketplace, Amazon may not collect or calculate sales tax on your behalf. This is where Unloop can help out—we can assist in setting up your nexus in the marketplace and make things easier for you. This way, all you need to worry about is nexus registration and sales tax remittance to states where Amazon doesn’t do it. So book a call, or check out our ecommerce services now.
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.
One of the most dominant taxes that Amazon collects from its buyers is the sales tax. It is charged on top of the purchase price and is deposited into the seller’s account. The merchant then has an obligation to remit the taxes. But the exact amount may not be reflected in a seller’s account because account deposits are made in a lump sum.
This is one of the challenges most Amazon sellers face in their online business. It’s also something they cannot ignore, especially when their ecommerce business is growing. They want to know how much sales tax they should remit. Let Unloop answer this question.
The question of how does Amazon calculate sales tax has no simple answer. That’s because many factors go into a sales tax, so the answers vary depending on where you’re doing business, among other things.
To answer this question, we’ll have to dive deep into what sales tax is to get an idea of how it works.
Sales tax is levied whenever an item is sold or a service is rendered. This tax is imposed on the final consumer during the point of sale. This means the seller of the goods or services is the one responsible for its collection and remittance.
This form of tax makes up a significant amount of the government’s revenue. The sales tax is levied in small amounts but makes up for it in quantities because of its presence in every business exchange between a seller and a final consumer.
As simple as it may seem, sales tax collection is complicated. Most especially for ecommerce sellers such as those who are on Amazon.
Simply put, an economic nexus or a sales tax nexus is a state where you do business. That means the state where your business is legally registered.
Due to recent changes in how people do business, there have been some revisions to the rules on determining an economic nexus. For example, the existence and growth of ecommerce sellers participating in marketplaces such as Amazon can now have multiple economic nexuses.
The determination of today’s economic nexus largely depends on the degree of business connection a seller has with the state in terms of business. The physical location is placed on the back burner as a determiner.
Although physical location is still recognized, it is largely replaced by a financial threshold system wherein the level of business transaction amount per annum is the metric a state uses to determine whether you should be put under their jurisdiction.
For example, if you do business in Arkansas (AR) and reach more than $100,000 selling to consumers in that state, you’ll have to account for sales tax deductions.
To say that revenue threshold is the only determining factor of economic nexus is oversimplified. The state tax laws vary depending on the state you do business with. That means if you’re huge on Amazon and have a wide scope of operation, you could have multiple economic nexuses.
A lot of factors come into play when you determine your nexus state. The primary one is whether the state you’re doing business with levies sales tax on the transaction origin or the destination. But there are other factors, such as the following:
Returning to our question: if you’re an Amazon seller and need to pay sales tax, how is it calculated? Given the above mentioned factors, once you’ve determined all your economic nexus and you meet the criteria, you’ll have to research the sales tax rates on your economic nexus.
Note that the tax rates are not the same for each state. Additionally, each state has multiple jurisdictions and all of them may have different sales tax compliance requirements, even if they are in the same state. This is because of local sales taxes.
We get it, sales tax calculation is tedious. Imagine manually calculating each transaction you incur in every state to determine the amount to charge sales tax on. That could take forever to do. On top of that, you also have to officially register for a sales tax permit in every state you have a link nexus on, which takes time and effort.
It would be easier if Amazon had a sales tax calculator, and they do. In fact, due to marketplace facilitator laws, you don’t have to calculate sales tax on every nexus state you’re in; Amazon does it for you.
The government polices the marketplace to comply with sales tax laws and collect sales taxes on behalf of the seller. This relieves the pressure of calculating exactly how much you should charge for sales tax.
But there’s a catch: In some states where Amazon does not collect sales tax, sellers may calculate it, but they remit it to your account. Then it gets mixed up with your sales revenue, and that’s where you have to do the tedious manual work.
Part of the burden of collecting sales tax is knowing how to set it up on Amazon. Without setting up your nexus in the marketplace, Amazon may not collect or calculate sales tax on your behalf. This is where Unloop can help out—we can assist in setting up your nexus in the marketplace and make things easier for you. This way, all you need to worry about is nexus registration and sales tax remittance to states where Amazon doesn’t do it. So book a call, or check out our ecommerce services now.
Every seller wants tax exemption; there's no exception. If we can channel every dime we pay to our company instead of the government, we'd all be happy businesspeople.
That said, we need to know what tax exemptions apply to our businesses. It will help us get a financial advantage that we can leverage to grow our ecommerce enterprise.
If you're a business owner selling on Amazon, let Unloop shed some light on how to use tax exemption on Amazon and ensure you're set up to get this privilege.
Before you set up a tax exemption on Amazon, it's important to know that when you opt in for this privilege, you'll be under the Amazon Tax Exemption Program (ATEP).
This program lets you purchase your supplies or raw materials within the Amazon network without added taxes. In effect, you'll get a discounted price on your purchase because the tax on top of it is removed.
To know how to enroll for tax exemption as an Amazon marketplace merchant, we'll have Amazon explain the step-by-step procedure on how to do it. You may find out more about the ATEP and how to set it up on your account here.
To enjoy the ATEP, you'll have to fulfill certain things first, which will be discussed in the following section.
No, they can't. Amazon Seller Central is a merchant's selling platform. Consequently, it's also a channel where you collect sales tax from customers and remit them to the appropriate tax authorities.
The Amazon Tax Exemption Program applies to sellers who purchase their merchandise or raw materials from Amazon, their affiliates, and other Amazon sellers.
To get tax exemptions for their purchases, they must sign up for an Amazon Business account.
Yes, you do. In most cases, you'll have to apply for sales tax exemption if you're purchasing from another Amazon business or seller. But if you're a merchant that resells products, you will be enrolled automatically.
As a result, an Amazon seller who buys one product from another Amazon merchant and sells it for a profit will have their sales tax automatically waived due to ATEP.
On the other hand, remember that this may still depend on the taxing authority where the order is going. If a destination nexus state needs a requirement to be fulfilled, the merchant must submit it before any exemption takes place.
Documentation requirements vary by state or taxing authority. But the primary requirement for Amazon is called the tax exemption certificate.
You will have to enroll for this certification, depending on your industry. But if you're a reseller in the Amazon marketplace, the entity will automatically enroll you in the ATEP program and issue the seller a tax exemption certificate on your behalf.
This document proves that you are a person or entity exempted from paying taxes during purchase. It lets you opt out of the sales taxation system. The main objective of this is to help businesses boost their income and encourage more business.
Another benefit of a tax-exempt certificate is to give the marketplace seller convenience. If a buyer has an Amazon tax exempt account the seller is relieved of the obligation to collect and remit sales tax.
Yes, it does. A tax exemption certificate can be good for at least five years in most states. Though some are only good for a year.
If you have an Amazon account for business-to-business (B2B) transactions, you'll have to watch out for when your tax-exempt certificate will expire. You don't want to be surprised with a high sales tax amount to pay because of a huge volume of purchases.
On the flip side, if you're an Amazon marketplace seller, you also may have to watch out for Amazon sales tax exemption certificates. If a customer claims they should be exempt and presents no certification, it may cause some trouble.
Yes, you do! Picking up from the last segment, you may have gotten exposure for an Amazon sales tax because there's a claim of exemption, but no tax exempt certificates are given.
The good news is that Amazon has a robust system for sales tax collection, especially if you're a marketplace seller. But ultimately, setting up and remitting the correct sales tax is the merchant's responsibility.
Tax exemptions go both ways. If you want to know how to add tax exemption to Amazon purchases as a merchant, you need to enroll for it, except if you're a reseller. On the other hand, your customer (business or individual) can also get tax exemption when they purchase a product you sell.On both occasions, you will need to consult with your accountant about handling tax exemption on Amazon. But if you want assistance setting up your Amazon sales tax collection, Unloop can help you out. Call us at 877-421-7270 for a consultation, or check out our ecommerce services now.
Every seller wants tax exemption; there's no exception. If we can channel every dime we pay to our company instead of the government, we'd all be happy businesspeople.
That said, we need to know what tax exemptions apply to our businesses. It will help us get a financial advantage that we can leverage to grow our ecommerce enterprise.
If you're a business owner selling on Amazon, let Unloop shed some light on how to use tax exemption on Amazon and ensure you're set up to get this privilege.
Before you set up a tax exemption on Amazon, it's important to know that when you opt in for this privilege, you'll be under the Amazon Tax Exemption Program (ATEP).
This program lets you purchase your supplies or raw materials within the Amazon network without added taxes. In effect, you'll get a discounted price on your purchase because the tax on top of it is removed.
To know how to enroll for tax exemption as an Amazon marketplace merchant, we'll have Amazon explain the step-by-step procedure on how to do it. You may find out more about the ATEP and how to set it up on your account here.
To enjoy the ATEP, you'll have to fulfill certain things first, which will be discussed in the following section.
No, they can't. Amazon Seller Central is a merchant's selling platform. Consequently, it's also a channel where you collect sales tax from customers and remit them to the appropriate tax authorities.
The Amazon Tax Exemption Program applies to sellers who purchase their merchandise or raw materials from Amazon, their affiliates, and other Amazon sellers.
To get tax exemptions for their purchases, they must sign up for an Amazon Business account.
Yes, you do. In most cases, you'll have to apply for sales tax exemption if you're purchasing from another Amazon business or seller. But if you're a merchant that resells products, you will be enrolled automatically.
As a result, an Amazon seller who buys one product from another Amazon merchant and sells it for a profit will have their sales tax automatically waived due to ATEP.
On the other hand, remember that this may still depend on the taxing authority where the order is going. If a destination nexus state needs a requirement to be fulfilled, the merchant must submit it before any exemption takes place.
Documentation requirements vary by state or taxing authority. But the primary requirement for Amazon is called the tax exemption certificate.
You will have to enroll for this certification, depending on your industry. But if you're a reseller in the Amazon marketplace, the entity will automatically enroll you in the ATEP program and issue the seller a tax exemption certificate on your behalf.
This document proves that you are a person or entity exempted from paying taxes during purchase. It lets you opt out of the sales taxation system. The main objective of this is to help businesses boost their income and encourage more business.
Another benefit of a tax-exempt certificate is to give the marketplace seller convenience. If a buyer has an Amazon tax exempt account the seller is relieved of the obligation to collect and remit sales tax.
Yes, it does. A tax exemption certificate can be good for at least five years in most states. Though some are only good for a year.
If you have an Amazon account for business-to-business (B2B) transactions, you'll have to watch out for when your tax-exempt certificate will expire. You don't want to be surprised with a high sales tax amount to pay because of a huge volume of purchases.
On the flip side, if you're an Amazon marketplace seller, you also may have to watch out for Amazon sales tax exemption certificates. If a customer claims they should be exempt and presents no certification, it may cause some trouble.
Yes, you do! Picking up from the last segment, you may have gotten exposure for an Amazon sales tax because there's a claim of exemption, but no tax exempt certificates are given.
The good news is that Amazon has a robust system for sales tax collection, especially if you're a marketplace seller. But ultimately, setting up and remitting the correct sales tax is the merchant's responsibility.
Tax exemptions go both ways. If you want to know how to add tax exemption to Amazon purchases as a merchant, you need to enroll for it, except if you're a reseller. On the other hand, your customer (business or individual) can also get tax exemption when they purchase a product you sell.On both occasions, you will need to consult with your accountant about handling tax exemption on Amazon. But if you want assistance setting up your Amazon sales tax collection, Unloop can help you out. Call us at 877-421-7270 for a consultation, or check out our ecommerce services now.
As a business owner, there are several tasks that will need your attention aside from bookkeeping. However, staying on top of your bookkeeping will ensure that your business finances are healthy and running smoothly. Moreover, bookkeeping is your way to stop early financial issues in your business.
If you're not well-versed in finances and accounting, navigating the different bookkeeping tasks may be difficult. To help you understand, we’ve prepared the ultimate bookkeeping checklist that every business owner should know. So take notes!
Bookkeeping involves a wide range of tasks, and we've categorized these tasks whether you need them to do them daily, monthly, quarterly, or yearly. Here are daily bookkeeping chores you should keep on top of.
You should always want to handle your cash flow as a business owner. It is crucial for every business to know how much cash is going out and coming in and the cash you have on hand. This is the first way to know whether you are making a profit. So make it a habit to check your cash position at the beginning and at the end of your business day.
Having bookkeeping software is convenient for handling bookkeeping tasks for your business. Most bookkeeping software have regular updates to cater to the needs of a growing business. Make sure to check for daily updates and install them before your day begins to keep all necessary tasks automated and accurate.
Moreover, ensure that all data entries you need to input are finished. Things like data you need to enter manually, personal information of your clients, and other invoicing tasks.
Here is the essential weekly bookkeeping checklist for business owners.
The earlier you do the reconciliation, the more time you have to spot inaccuracies and potential issues in your bank statements. Reconciliation allows you to fix problems before they become full-blown and seriously damage your business. So, we recommend doing reconciliation on a weekly basis.
Creating and sending invoices should be done weekly if you're a product-based business offering bulk orders. The more frequently you send invoices, the faster you get payments from your clients. Furthermore, invoices help your clients know when payments are due. Creating and sending invoices in a timely manner will promote a healthy cash flow for your business.
If you're working with different vendors, make sure to pay them on time, especially when your inventory stocks depend on your suppliers. Make it a habit to know all the deadlines for your payables, even if not you are not paying them on a weekly basis. Keeping ahead of your payables will ensure your business will run smoothly.
The bookkeeping software can make bookkeeping reports for your business, but it's your responsibility to upload all the receipts for recordkeeping. It is a good practice to upload receipts of business transactions, so you don't drown in receipts at the end of the month.
Though bookkeeping is important, some tasks can be done once per month. Here is the monthly bookkeeping checklist you should take note of.
If you have employees, fixing their payroll is at the top of your monthly to-do list. You can choose weekly payments or your preferred schedule, but monthly payouts are easier for your bookkeeping tasks. Doing payroll also includes deducting necessary taxes and government-mandated payments.
Checking your monthly balance sheet is equivalent to checking your business's monthly performance. This practice will help you see if you have done better or if there are points in your business you still need to improve on.
Checking your monthly balance sheet is also your opportunity to look for discrepancies. For example, if some of your clients are late on their payments, this is the time to follow up and settle.
Take note of these tasks so you can complete them every quarter.
While you do monthly checks on your balance sheets, diving deeper into your finances by assessing your profit and loss statements each quarter will help you see a clearer and bigger picture of your financial health. Business finances go up and down, and this is the perfect time to see if your business strategy is still working and make plans to increase your sales if needed.
Make sure to familiarize yourself with the tax you need to pay quarterly. Taxes like federal unemployment and state unemployment taxes are paid quarterly. Other businesses are also required to pay their sales tax every quarter, so be conscious of those dates.
Settling your taxes also means you have to handle tax filings. Make sure you have all the documentation needed to avoid any delays.
The end of the year usually comes with a surge in sales, and it becomes more hectic. So to close your bookkeeping properly, here are some year-end bookkeeping tasks you need to do.
In most cases, you must file IRS form W-2 for all your employees and 1099-NEC for independent contractors at the end of each year. As business owners, you are responsible for giving your employees copies of the IRS forms so they can use them to file their tax returns.
Before the year ends, if you have any outstanding invoices to your vendors or clients, you should settle them to close your books. After closing your books, you can now make year-end financial statements to assess your overall financial health and see how well your business performed throughout the year.
Some of these financial statements need the checking and approval of accountants to ensure they are valid when filing your business taxes.
Filing tax returns marks the end of the bookkeeping checklist. If you have a business accountant, you can pass on the filing process to them. But make sure you have the proper documentation to complete the process. Some documents you may need are bank statements, payroll reports, and balance sheets.
After filling, all you need to do is to pay your taxes, and your bookkeeping tasks are done for the entire year. Then, it's time to plan and get ready for another year of bookkeeping.
Business bookkeeping can be a handful for owners new to the business industry. However, handling finances is essential to running a business and shouldn't be taken for granted. So, Unloop is here to offer you professional help for your bookkeeping needs.
Are you ready to clean up your bookkeeping checklist? We hope these categorized tasks help you handle bookkeeping better. For more professional help, book a call and work with us today!
As a business owner, there are several tasks that will need your attention aside from bookkeeping. However, staying on top of your bookkeeping will ensure that your business finances are healthy and running smoothly. Moreover, bookkeeping is your way to stop early financial issues in your business.
If you're not well-versed in finances and accounting, navigating the different bookkeeping tasks may be difficult. To help you understand, we’ve prepared the ultimate bookkeeping checklist that every business owner should know. So take notes!
Bookkeeping involves a wide range of tasks, and we've categorized these tasks whether you need them to do them daily, monthly, quarterly, or yearly. Here are daily bookkeeping chores you should keep on top of.
You should always want to handle your cash flow as a business owner. It is crucial for every business to know how much cash is going out and coming in and the cash you have on hand. This is the first way to know whether you are making a profit. So make it a habit to check your cash position at the beginning and at the end of your business day.
Having bookkeeping software is convenient for handling bookkeeping tasks for your business. Most bookkeeping software have regular updates to cater to the needs of a growing business. Make sure to check for daily updates and install them before your day begins to keep all necessary tasks automated and accurate.
Moreover, ensure that all data entries you need to input are finished. Things like data you need to enter manually, personal information of your clients, and other invoicing tasks.
Here is the essential weekly bookkeeping checklist for business owners.
The earlier you do the reconciliation, the more time you have to spot inaccuracies and potential issues in your bank statements. Reconciliation allows you to fix problems before they become full-blown and seriously damage your business. So, we recommend doing reconciliation on a weekly basis.
Creating and sending invoices should be done weekly if you're a product-based business offering bulk orders. The more frequently you send invoices, the faster you get payments from your clients. Furthermore, invoices help your clients know when payments are due. Creating and sending invoices in a timely manner will promote a healthy cash flow for your business.
If you're working with different vendors, make sure to pay them on time, especially when your inventory stocks depend on your suppliers. Make it a habit to know all the deadlines for your payables, even if not you are not paying them on a weekly basis. Keeping ahead of your payables will ensure your business will run smoothly.
The bookkeeping software can make bookkeeping reports for your business, but it's your responsibility to upload all the receipts for recordkeeping. It is a good practice to upload receipts of business transactions, so you don't drown in receipts at the end of the month.
Though bookkeeping is important, some tasks can be done once per month. Here is the monthly bookkeeping checklist you should take note of.
If you have employees, fixing their payroll is at the top of your monthly to-do list. You can choose weekly payments or your preferred schedule, but monthly payouts are easier for your bookkeeping tasks. Doing payroll also includes deducting necessary taxes and government-mandated payments.
Checking your monthly balance sheet is equivalent to checking your business's monthly performance. This practice will help you see if you have done better or if there are points in your business you still need to improve on.
Checking your monthly balance sheet is also your opportunity to look for discrepancies. For example, if some of your clients are late on their payments, this is the time to follow up and settle.
Take note of these tasks so you can complete them every quarter.
While you do monthly checks on your balance sheets, diving deeper into your finances by assessing your profit and loss statements each quarter will help you see a clearer and bigger picture of your financial health. Business finances go up and down, and this is the perfect time to see if your business strategy is still working and make plans to increase your sales if needed.
Make sure to familiarize yourself with the tax you need to pay quarterly. Taxes like federal unemployment and state unemployment taxes are paid quarterly. Other businesses are also required to pay their sales tax every quarter, so be conscious of those dates.
Settling your taxes also means you have to handle tax filings. Make sure you have all the documentation needed to avoid any delays.
The end of the year usually comes with a surge in sales, and it becomes more hectic. So to close your bookkeeping properly, here are some year-end bookkeeping tasks you need to do.
In most cases, you must file IRS form W-2 for all your employees and 1099-NEC for independent contractors at the end of each year. As business owners, you are responsible for giving your employees copies of the IRS forms so they can use them to file their tax returns.
Before the year ends, if you have any outstanding invoices to your vendors or clients, you should settle them to close your books. After closing your books, you can now make year-end financial statements to assess your overall financial health and see how well your business performed throughout the year.
Some of these financial statements need the checking and approval of accountants to ensure they are valid when filing your business taxes.
Filing tax returns marks the end of the bookkeeping checklist. If you have a business accountant, you can pass on the filing process to them. But make sure you have the proper documentation to complete the process. Some documents you may need are bank statements, payroll reports, and balance sheets.
After filling, all you need to do is to pay your taxes, and your bookkeeping tasks are done for the entire year. Then, it's time to plan and get ready for another year of bookkeeping.
Business bookkeeping can be a handful for owners new to the business industry. However, handling finances is essential to running a business and shouldn't be taken for granted. So, Unloop is here to offer you professional help for your bookkeeping needs.
Are you ready to clean up your bookkeeping checklist? We hope these categorized tasks help you handle bookkeeping better. For more professional help, book a call and work with us today!
Starting a business comes with many headaches, and most have nothing to do with selling products and services. A huge responsibility of a business owner is managing a business's situation—building a culture, training employees, and, most of all, keeping the company's financial situation in good standing.
Since startup companies have little to no assets, they tend to go the simpler route with their financial records. Many startup owners prefer dealing with cash-basis accounting, better known as single-entry bookkeeping (which we'll discuss more later).
While this is a good way to manage accounting for your startup, you can't depend on it forever.
If your business grows, you might have to expand your accounting to cover the new areas of your financial business structure, like assets, liabilities, and equity. The IRS even mandates that companies with annual gross sales of over $5 million cannot use single-entry accounting.
Eventually (with enough hard work and luck), your business will grow, and along with it must grow your financial statements, financial transactions, and financial records—basically your whole accounting system. You'll need to make a choice: go big or go home.
In general terms, bookkeeping is the process of accounting for a company's business transactions. Bookkeeping organizes business transactions and turns them into records that reflect the company's financial situation, which completes the accounting process.
Financial records are vital in keeping businesses afloat. Without bookkeeping, businesses would be in financial darkness. With no written or recorded financial information, any financial decision or transaction would have to be closer to a guess than a concrete decision. Simply put, a business without proper bookkeeping in place will not thrive, let alone survive.
That said, not all forms of financial management are made equal. For example, startup accounting and bookkeeping differ from that of large businesses—it all falls on what is necessary and what your business prohibits you from excluding in a financial statement.
Essentially, there are two types of bookkeeping, both with their own advantages and disadvantages.
Single-entry bookkeeping is the simplest form of accounting and bookkeeping. With single-entry bookkeeping, you simply state income and business expenses—usually accompanied by a brief description of the financial transaction and its date—against each other on a table and calculate the difference as your business's cash balance. This is also called cash accounting.
Accounting for startups and small businesses usually starts with single-entry bookkeeping for several reasons. One is because single-entry bookkeeping is much cheaper. You can do it on cheap accounting software or, if you're frugal, you can even do it on a piece of paper with a pen or a pencil.
While single-entry bookkeeping falls under generally accepted accounting principles, it isn't ideal, especially for growing businesses. This is due to single-entry bookkeeping having entries lacking detail. In addition, since single-entry bookkeeping does not specify the nature of income and business expenses, it cannot produce a balance sheet—an essential part of your company's financial health. It is also more prone to error and is unacceptable for taxes.
If you're counting on your business growing, you will have to consider double-entry bookkeeping for your company's financial data.
Single-entry to double-entry bookkeeping is like Little League to the NBL. While single entry bookkeeping can get you an idea of your company's financial data, double-entry bookkeeping gives you the whole picture.
With double-entry bookkeeping, you include debit and credit or the increase and decrease of accounts in different situations. For example, debit can increase assets and decrease liabilities, while credit can increase liabilities and then decrease assets.
Single-entry bookkeeping does not have debit and credit and thus cannot specify the nature of accounts. A classic example of this is loans. In single-entry bookkeeping, the money produced from loans is inserted directly into income; in double-entry bookkeeping, the loan is tagged as a liability—a debit—adding context to your financial report and leaving you with much more accurate accounting.
Double-entry bookkeeping takes notes of assets, liabilities, and equities, in addition to everything a single-entry system records. This can be used to produce a balance sheet. Large businesses prefer double-entry bookkeeping because it is more contextual, and it becomes easier to account for vast assets and put them into financial records.
Eventually, large businesses will move to accrual accounting, something double-entry bookkeeping makes easier. By then, their finances will operate more on a schedule instead of relying solely on the income entering the company.
Now that you know the two types, it's time we dive into the tasks which make up bookkeeping, some of which you might probably be doing already. Here are some bookkeeping tasks to do on a weekly and monthly basis.
Weekly bookkeeping tasks are mostly about records. Every week, you must input the week's transactions and prepare them for evaluation at the end of the month. Here are some of them.
One of the first bookkeeping tasks you must do weekly is to record any type of financial transaction made in the company's name: mainly income and expenses.
Most startup businesses do this in a journal, but it's ideal to do it on a spreadsheet or bookkeeping software since it's safer to store it digitally than have it out in the open.
Of course, it's not enough that you'll simply jot how much money is going in and out; you'll also have to mark transactions differently to ensure an accurate accounting of your finances.
For example, while sales and loans both bring in money for the company, only sales can be labeled as assets in double-entry bookkeeping because loans have to be paid back in the future and are thus liabilities.
After jotting your transactions in a journal or typing them into bookkeeping software, you'll want to file them for later reference. Physical copies of receipts should be shelved and digitized to avoid losing them.
Digitization is important, especially in today's ecommerce world, where most transactions are done electronically.
Monthly bookkeeping tasks are important for your company's financial health and stability. The tasks you'll have to be doing on a monthly basis are about maintaining your company's financial standing and, more importantly, looking into its future.
Reconciling your accounts is, basically, double-checking. This helps maintain the integrity of your records and spot any inconsistencies that could be signs of fraud or theft within a company.
Accounting is not only recording finances but also predicting how much your company has in the future. By readying your invoices, you can come up with a realistic income you can expect for the following month.
Sometimes, we let unpaid invoices slide. While it is normal to have to follow up on outstanding invoices, this should be an urgent priority. Letting unpaid invoices go robs your company of the money you were expecting from a sale and disrupts the harmony of your finances.
Following up on outstanding invoices can lead to them being paid which procures additional income for your company.
While income adds assets to your business, expenses add liabilities, and paying them or leaving them unpaid could determine your net profit margin ratio for the next month as well as the overall health of your business.
Clearing your monthly bills leaves you with less debt going into the next month, and less debt means more profit for your business. It can also help monitor how much you owe in business taxes before you submit your next tax returns.
Once all monthly tasks have been settled, you are left with your company's financial status, which you will then evaluate (ideally, with the help of an accountant). You will see how much your business has profited, how the cash flow is doing, how much there is to spend, or worse, how much you have lost and how much you still owe.
Regardless, it is important to evaluate your finances because this is how you can decide on your company's future, and the steps to take to help it grow.
Bookkeeping can be difficult, especially for startups, so if you want to go big with your business, it's time for you to upgrade your company's bookkeeping and accounting processes.
Unloop is one of the best accounting services on the market, and, luckily for you, we offer bookkeeping services, too. At Unloop, we can ensure you save money by having accurate records. We also handle accounts payable, forecasting, payroll, and tax services.
Book a call with us, and see what Unloop can do for your business!
Starting a business comes with many headaches, and most have nothing to do with selling products and services. A huge responsibility of a business owner is managing a business's situation—building a culture, training employees, and, most of all, keeping the company's financial situation in good standing.
Since startup companies have little to no assets, they tend to go the simpler route with their financial records. Many startup owners prefer dealing with cash-basis accounting, better known as single-entry bookkeeping (which we'll discuss more later).
While this is a good way to manage accounting for your startup, you can't depend on it forever.
If your business grows, you might have to expand your accounting to cover the new areas of your financial business structure, like assets, liabilities, and equity. The IRS even mandates that companies with annual gross sales of over $5 million cannot use single-entry accounting.
Eventually (with enough hard work and luck), your business will grow, and along with it must grow your financial statements, financial transactions, and financial records—basically your whole accounting system. You'll need to make a choice: go big or go home.
In general terms, bookkeeping is the process of accounting for a company's business transactions. Bookkeeping organizes business transactions and turns them into records that reflect the company's financial situation, which completes the accounting process.
Financial records are vital in keeping businesses afloat. Without bookkeeping, businesses would be in financial darkness. With no written or recorded financial information, any financial decision or transaction would have to be closer to a guess than a concrete decision. Simply put, a business without proper bookkeeping in place will not thrive, let alone survive.
That said, not all forms of financial management are made equal. For example, startup accounting and bookkeeping differ from that of large businesses—it all falls on what is necessary and what your business prohibits you from excluding in a financial statement.
Essentially, there are two types of bookkeeping, both with their own advantages and disadvantages.
Single-entry bookkeeping is the simplest form of accounting and bookkeeping. With single-entry bookkeeping, you simply state income and business expenses—usually accompanied by a brief description of the financial transaction and its date—against each other on a table and calculate the difference as your business's cash balance. This is also called cash accounting.
Accounting for startups and small businesses usually starts with single-entry bookkeeping for several reasons. One is because single-entry bookkeeping is much cheaper. You can do it on cheap accounting software or, if you're frugal, you can even do it on a piece of paper with a pen or a pencil.
While single-entry bookkeeping falls under generally accepted accounting principles, it isn't ideal, especially for growing businesses. This is due to single-entry bookkeeping having entries lacking detail. In addition, since single-entry bookkeeping does not specify the nature of income and business expenses, it cannot produce a balance sheet—an essential part of your company's financial health. It is also more prone to error and is unacceptable for taxes.
If you're counting on your business growing, you will have to consider double-entry bookkeeping for your company's financial data.
Single-entry to double-entry bookkeeping is like Little League to the NBL. While single entry bookkeeping can get you an idea of your company's financial data, double-entry bookkeeping gives you the whole picture.
With double-entry bookkeeping, you include debit and credit or the increase and decrease of accounts in different situations. For example, debit can increase assets and decrease liabilities, while credit can increase liabilities and then decrease assets.
Single-entry bookkeeping does not have debit and credit and thus cannot specify the nature of accounts. A classic example of this is loans. In single-entry bookkeeping, the money produced from loans is inserted directly into income; in double-entry bookkeeping, the loan is tagged as a liability—a debit—adding context to your financial report and leaving you with much more accurate accounting.
Double-entry bookkeeping takes notes of assets, liabilities, and equities, in addition to everything a single-entry system records. This can be used to produce a balance sheet. Large businesses prefer double-entry bookkeeping because it is more contextual, and it becomes easier to account for vast assets and put them into financial records.
Eventually, large businesses will move to accrual accounting, something double-entry bookkeeping makes easier. By then, their finances will operate more on a schedule instead of relying solely on the income entering the company.
Now that you know the two types, it's time we dive into the tasks which make up bookkeeping, some of which you might probably be doing already. Here are some bookkeeping tasks to do on a weekly and monthly basis.
Weekly bookkeeping tasks are mostly about records. Every week, you must input the week's transactions and prepare them for evaluation at the end of the month. Here are some of them.
One of the first bookkeeping tasks you must do weekly is to record any type of financial transaction made in the company's name: mainly income and expenses.
Most startup businesses do this in a journal, but it's ideal to do it on a spreadsheet or bookkeeping software since it's safer to store it digitally than have it out in the open.
Of course, it's not enough that you'll simply jot how much money is going in and out; you'll also have to mark transactions differently to ensure an accurate accounting of your finances.
For example, while sales and loans both bring in money for the company, only sales can be labeled as assets in double-entry bookkeeping because loans have to be paid back in the future and are thus liabilities.
After jotting your transactions in a journal or typing them into bookkeeping software, you'll want to file them for later reference. Physical copies of receipts should be shelved and digitized to avoid losing them.
Digitization is important, especially in today's ecommerce world, where most transactions are done electronically.
Monthly bookkeeping tasks are important for your company's financial health and stability. The tasks you'll have to be doing on a monthly basis are about maintaining your company's financial standing and, more importantly, looking into its future.
Reconciling your accounts is, basically, double-checking. This helps maintain the integrity of your records and spot any inconsistencies that could be signs of fraud or theft within a company.
Accounting is not only recording finances but also predicting how much your company has in the future. By readying your invoices, you can come up with a realistic income you can expect for the following month.
Sometimes, we let unpaid invoices slide. While it is normal to have to follow up on outstanding invoices, this should be an urgent priority. Letting unpaid invoices go robs your company of the money you were expecting from a sale and disrupts the harmony of your finances.
Following up on outstanding invoices can lead to them being paid which procures additional income for your company.
While income adds assets to your business, expenses add liabilities, and paying them or leaving them unpaid could determine your net profit margin ratio for the next month as well as the overall health of your business.
Clearing your monthly bills leaves you with less debt going into the next month, and less debt means more profit for your business. It can also help monitor how much you owe in business taxes before you submit your next tax returns.
Once all monthly tasks have been settled, you are left with your company's financial status, which you will then evaluate (ideally, with the help of an accountant). You will see how much your business has profited, how the cash flow is doing, how much there is to spend, or worse, how much you have lost and how much you still owe.
Regardless, it is important to evaluate your finances because this is how you can decide on your company's future, and the steps to take to help it grow.
Bookkeeping can be difficult, especially for startups, so if you want to go big with your business, it's time for you to upgrade your company's bookkeeping and accounting processes.
Unloop is one of the best accounting services on the market, and, luckily for you, we offer bookkeeping services, too. At Unloop, we can ensure you save money by having accurate records. We also handle accounts payable, forecasting, payroll, and tax services.
Book a call with us, and see what Unloop can do for your business!
Do you want your business to run more efficiently and cost-effectively? Thanks to the QuickBooks-Amazon integration, businesses can simplify their financial processes by automatically transferring important information from Amazon. This eliminates time-consuming manual data entry processes and allows for better control over inventory, purchase orders, invoices, payments, shipments, and other critical data points.
This blog post will answer the question, “Does QuickBooks integrate with Amazon?” and explore how QuickBooks integration for Amazon sellers works and its many benefits. As you’ll find out, integrating these two powerful tools can drastically improve organizational efficiency while cutting costs and errors at all levels of your business operations.
So, are you considering investing in QuickBooks for Amazon business bookkeeping and accounting? When you do, make sure you use an Amazon Business account and be its primary administrator—and not have a personal or Amazon Seller account—to connect the accounting software to Amazon. You also need to specifically use the Amazon Business Purchases application to transport all Amazon data into the accounting tool. Meanwhile, you also need to be a QuickBooks's company administrator to allow the integration.
When you satisfy all these requirements, you can sign in to your QuickBooks and Amazon accounts to begin data importation. Select the date you want to import and wait until the transfer is complete. From this first import, your data on QuickBooks will be updated four times a day.
With the integration, you can do all of these.
When your Amazon account is integrated with QuickBooks, you can get a quick view of your sales and revenue on QuickBooks, whether in raw form or in a report. You can also get an in-depth view of where these sales and revenue come from—organic sales or pay-per-click (PPC)—as these details are also available.
When you know the data, you can continue your best practices on search engine optimization (SEO) and PPC or adjust accordingly to reach your sales and revenue goals.
Taxes are one of the most challenging tasks you need to handle as a business owner. But the good news is that Amazon handles sales taxes in many jurisdictions through the Marketplace Facilitator Program (MPF).
With MPF, Amazon computes, collects, remits, and refunds shoppers’ sales taxes. They also collect and store the data, which you can view when you integrate Amazon with QuickBooks.
On top of this, when all your income and expenses are in one software, you can quickly compute your yearly taxable income and pay accurate taxes when tax season comes.
On Amazon, returns and refunds are part of the business. And the platform makes it easy for sellers as they can handle these transactions too. By integrating QuickBooks and Amazon, you’ll know how many returns and refunds you’ve had and how much Amazon charges.
If you see plenty of returns and refunds, and higher costs for repackaging or processing the pullout of the items, you can run a quality check on your items to find the root cause of the faulty products.
Part of being a new Amazon seller is deciding whether you’ll go for Fulfillment by Amazon (FBA), which you can try. If you do, integrating QuickBooks and Amazon will greatly help you in deciding whether to continue with the service or find other options. Amazon tracks the following FBA fees, and these will all be transported to QuickBooks:
There are a lot of fees to keep track of, but the service is worth it as you get 24/7 customer service, with Amazon handling product selection, packing, storage, and shipment. Nevertheless, it is still best to check the numbers to see if you’re making a profit.
To boost your sales and make your listing appear on the first pages of the search results, you should utilize Amazon Sponsored Ads. There are various ad types you can choose from, like Sponsored Products, Sponsored Brands, Sponsored Display, and Amazon Stores. Whichever you choose, you can rely on Amazon to show you advertising cost of sales (ACoS), attributed sales, impressions, and clicks to help you analyze how your campaigns are doing.
And when you integrate these data into QuickBooks, you can run a deeper analysis to know the cost, revenue, return on investment, and profit derived from advertising.
One of the major turn-offs for shoppers are items that are out of stock. Ensure your products are always available for customers by staying on top of your inventory. You can do just this through QuickBooks-Amazon integration. You can check which items need repurchasing and which still have enough stock.
These items also have monetary value, so you’ll know how much you spend on product acquisition against your sales. Ideally, the costs should be lower than sales; if you see otherwise, you should think of ways to lower production costs.
Amazon updates data available on the platform four times a day, so the dashboard you see on QuickBooks is up-to-date. If you want more updates, you’ll unfortunately have to put up with it. Right now, Amazon does not allow customization of update frequency.
The data visibility that Amazon-QuickBooks integration provides is an excellent reason for you to push through connecting the two. But if you still need to be convinced, here are more reasons to link Amazon and QuickBooks.
The best thing about QuickBooks is that it does not only integrate with Amazon, but also with these tools and applications:
You can integrate plenty more invoicing, CRM, payroll, document, receipt, and payment tools with QuickBooks. As a result, you can find all the data you need in a single software. You can customize reports, so the data can be combined to give you a more holistic view of your business.
Because all data is in one place, you can run different kinds of reports using only a single software. Some of the accounting reports you may want to take a look at regularly are the following:
You can also customize reports to see your company’s key performance indicators. Experts suggest that reports for startups should be made as often as possible to enable owners to adjust action plans or pinpoint best practices immediately.
You can acquire all the necessary data without manual inputs. Integrating applications and tools in a single accounting software makes bookkeeping easy. It saves you time and ensures that everything in the books is accurate.
When data is correct, you can make sound decisions. Also, when tax season comes, your income declaration and tax payments will be accurate, saving you from being penalized by the tax bureau.
Let your finance team access data in the cloud anytime and anywhere as long as there is an internet connection. Unlike with traditional accounting, there is no need to log in on a computer; QuickBooks is accessible on mobile. This setup works well with modern work arrangements where many companies have both in-house and remote employees working worldwide.
Despite the accessibility, QuickBooks also ensures data security by storing all the data in the cloud. This keeps all confidential financial data protected from hacking and corruption. Aside from data protection, QuickBooks also has role-based access, which allows only certain roles in your company to access your books.
QuickBooks-Amazon integration is a powerful tool that can help ecommerce businesses streamline their operations, save time, and make more informed decisions. If you sell on Amazon, QuickBooks can make your life a lot easier by keeping all of your data in one place and automating many tedious tasks associated with managing an online business. Best of all, QuickBooks is accessible from anywhere, so you can always stay on top of your numbers.If you are looking for a team to help you with this integration, we’d love to help! We at Unloop provide solutions for Amazon sellers like you who want to get their finances handled. If you want to know more about our services, call us today. We’d love to talk to you!
Do you want your business to run more efficiently and cost-effectively? Thanks to the QuickBooks-Amazon integration, businesses can simplify their financial processes by automatically transferring important information from Amazon. This eliminates time-consuming manual data entry processes and allows for better control over inventory, purchase orders, invoices, payments, shipments, and other critical data points.
This blog post will answer the question, “Does QuickBooks integrate with Amazon?” and explore how QuickBooks integration for Amazon sellers works and its many benefits. As you’ll find out, integrating these two powerful tools can drastically improve organizational efficiency while cutting costs and errors at all levels of your business operations.
So, are you considering investing in QuickBooks for Amazon business bookkeeping and accounting? When you do, make sure you use an Amazon Business account and be its primary administrator—and not have a personal or Amazon Seller account—to connect the accounting software to Amazon. You also need to specifically use the Amazon Business Purchases application to transport all Amazon data into the accounting tool. Meanwhile, you also need to be a QuickBooks's company administrator to allow the integration.
When you satisfy all these requirements, you can sign in to your QuickBooks and Amazon accounts to begin data importation. Select the date you want to import and wait until the transfer is complete. From this first import, your data on QuickBooks will be updated four times a day.
With the integration, you can do all of these.
When your Amazon account is integrated with QuickBooks, you can get a quick view of your sales and revenue on QuickBooks, whether in raw form or in a report. You can also get an in-depth view of where these sales and revenue come from—organic sales or pay-per-click (PPC)—as these details are also available.
When you know the data, you can continue your best practices on search engine optimization (SEO) and PPC or adjust accordingly to reach your sales and revenue goals.
Taxes are one of the most challenging tasks you need to handle as a business owner. But the good news is that Amazon handles sales taxes in many jurisdictions through the Marketplace Facilitator Program (MPF).
With MPF, Amazon computes, collects, remits, and refunds shoppers’ sales taxes. They also collect and store the data, which you can view when you integrate Amazon with QuickBooks.
On top of this, when all your income and expenses are in one software, you can quickly compute your yearly taxable income and pay accurate taxes when tax season comes.
On Amazon, returns and refunds are part of the business. And the platform makes it easy for sellers as they can handle these transactions too. By integrating QuickBooks and Amazon, you’ll know how many returns and refunds you’ve had and how much Amazon charges.
If you see plenty of returns and refunds, and higher costs for repackaging or processing the pullout of the items, you can run a quality check on your items to find the root cause of the faulty products.
Part of being a new Amazon seller is deciding whether you’ll go for Fulfillment by Amazon (FBA), which you can try. If you do, integrating QuickBooks and Amazon will greatly help you in deciding whether to continue with the service or find other options. Amazon tracks the following FBA fees, and these will all be transported to QuickBooks:
There are a lot of fees to keep track of, but the service is worth it as you get 24/7 customer service, with Amazon handling product selection, packing, storage, and shipment. Nevertheless, it is still best to check the numbers to see if you’re making a profit.
To boost your sales and make your listing appear on the first pages of the search results, you should utilize Amazon Sponsored Ads. There are various ad types you can choose from, like Sponsored Products, Sponsored Brands, Sponsored Display, and Amazon Stores. Whichever you choose, you can rely on Amazon to show you advertising cost of sales (ACoS), attributed sales, impressions, and clicks to help you analyze how your campaigns are doing.
And when you integrate these data into QuickBooks, you can run a deeper analysis to know the cost, revenue, return on investment, and profit derived from advertising.
One of the major turn-offs for shoppers are items that are out of stock. Ensure your products are always available for customers by staying on top of your inventory. You can do just this through QuickBooks-Amazon integration. You can check which items need repurchasing and which still have enough stock.
These items also have monetary value, so you’ll know how much you spend on product acquisition against your sales. Ideally, the costs should be lower than sales; if you see otherwise, you should think of ways to lower production costs.
Amazon updates data available on the platform four times a day, so the dashboard you see on QuickBooks is up-to-date. If you want more updates, you’ll unfortunately have to put up with it. Right now, Amazon does not allow customization of update frequency.
The data visibility that Amazon-QuickBooks integration provides is an excellent reason for you to push through connecting the two. But if you still need to be convinced, here are more reasons to link Amazon and QuickBooks.
The best thing about QuickBooks is that it does not only integrate with Amazon, but also with these tools and applications:
You can integrate plenty more invoicing, CRM, payroll, document, receipt, and payment tools with QuickBooks. As a result, you can find all the data you need in a single software. You can customize reports, so the data can be combined to give you a more holistic view of your business.
Because all data is in one place, you can run different kinds of reports using only a single software. Some of the accounting reports you may want to take a look at regularly are the following:
You can also customize reports to see your company’s key performance indicators. Experts suggest that reports for startups should be made as often as possible to enable owners to adjust action plans or pinpoint best practices immediately.
You can acquire all the necessary data without manual inputs. Integrating applications and tools in a single accounting software makes bookkeeping easy. It saves you time and ensures that everything in the books is accurate.
When data is correct, you can make sound decisions. Also, when tax season comes, your income declaration and tax payments will be accurate, saving you from being penalized by the tax bureau.
Let your finance team access data in the cloud anytime and anywhere as long as there is an internet connection. Unlike with traditional accounting, there is no need to log in on a computer; QuickBooks is accessible on mobile. This setup works well with modern work arrangements where many companies have both in-house and remote employees working worldwide.
Despite the accessibility, QuickBooks also ensures data security by storing all the data in the cloud. This keeps all confidential financial data protected from hacking and corruption. Aside from data protection, QuickBooks also has role-based access, which allows only certain roles in your company to access your books.
QuickBooks-Amazon integration is a powerful tool that can help ecommerce businesses streamline their operations, save time, and make more informed decisions. If you sell on Amazon, QuickBooks can make your life a lot easier by keeping all of your data in one place and automating many tedious tasks associated with managing an online business. Best of all, QuickBooks is accessible from anywhere, so you can always stay on top of your numbers.If you are looking for a team to help you with this integration, we’d love to help! We at Unloop provide solutions for Amazon sellers like you who want to get their finances handled. If you want to know more about our services, call us today. We’d love to talk to you!
Business accounting involves evaluating the past performance of your business and determining how well your business is thriving. However, peeking into your business's future performance is equally essential. It allows you to plan accordingly to ensure that your business runs smoothly and can withstand potential issues along the way.
Financial forecasting is a way of predicting a business's future financial position using historical data gathered from reports like cash flow statements, revenues, expenses, and sales data. We'll talk about the various forecasting techniques in this article to assist you in evaluating the performance of your company.
Many factors can affect your business, some of which you have no control over. However, financial forecasting allows you to see potential scenarios, so you are ready when they happen. There are two types of forecasting methods: qualitative and quantitative methods.
We go over some of the most popular techniques in each area so you can better comprehend them.
Qualitative forecasting bases its predictions on experts' and customers' responses rather than using historical data. This method is valuable for new businesses with no data to begin with.
Here are some examples of qualitative methods.
An expert's opinion is simply asking an individual or group of experts about the subject matter, which they will give predictions on according to their knowledge. In order to make the most accurate prediction possible, an expert should offer opinions without bias. From there, business executives will decide if they want to go with the suggested actions.
Business owners may bring more than one expert to collaborate on their predictions. But, of course, it is up to the administrators to decide which expert opinion to follow. They can solely rely on experts for future planning, or they can do other methods and consider other factors that may affect the business.
Market research is commonly used to determine the market needs of a certain product or service. The entire addressable market and the company's current clients are used in this strategy to collect data. Market research uses customer surveys, analyses of metrics for current campaigns, testing, and research on your competitors' marketing strategies.
Market research needs large data as much as possible to eliminate human bias. This method requires a lot of time, effort, and resources to deploy. However, if done correctly, you'll get the most accurate financial forecast possible.
The Delphi method is similar to experts' opinions, except it is more systematic and structured. In this method, you will still need experts for their insight, but instead of giving them the freedom to make predictions according to their knowledge, they will need to answer several questionnaires until the business comes up with a forecasting model.
Qualitative forecasting helps executives make informed business decisions like determining how much of their inventory to keep, hiring more people for their company, or applying adjustments to their sales operations. Qualitative forecasting methods are also used to develop projects and marketing campaigns highlighting the business's products and services.
All businesses can perform qualitative forecasting, but here are some industries that will greatly benefit from qualitative forecasting.
Quantitative financial forecasting is a data-driven forecasting method that businesses use to make accurate predictions for big decisions. This form of forecasting uses historical data to analyze patterns to determine what the business performance will be like in the future.
Quantitative forecasting results are affected by past data, relevant variables, and time parameters. You can do this financial forecasting for budget, sales, or projected expenses for a future time period. Here are some examples of quantitative forecasting methods.
The simplest quantitative forecast you can use is the straight-line method. This method only needs an approximate projected growth rate of your business which is usually based on your past performance.
The straight-line method predicts your business's future by calculating your previous and projected performance. For example, in the last three months, your sales have been $300,000 in total, and for the coming three months, you are projected to increase by 5%, so you can calculate your future revenue by:
300,000 x 1.05 = $315,000
So, for the next three months, you predicted sales growth would go up to $315,000.
The naive method is the best financial forecasting method if you want calculations to be as simple as possible. The naive method suggests that your business performance will be the same as in the past. For example, if your business made $500,000 in sales last year, according to the naive method, your business will generate the same amount of sales this year.
This prediction does not consider any seasonal trends or other factors that could affect your business. So this type of prediction can easily change when something major happens within a specific period.
The seasonal index method analyzes patterns in data points by separating months of the year into seasons. In most cases, seasons are divided into four quarters:
Q1: January, February, and March
Q2: April, May, and June
Q3: July, August, and September
Q4: October, November, and December
Experts calculate past seasonal index scores to determine how your business will perform in the future. For example, in the last two years, your seasonal scores were:
2021: Q1 (58) Q2 (60) Q3 (55) Q4 (70)
2022: Q1 (62) Q2 (54) Q3 (65) Q4 (60)
Your projected seasonal index score from the two data points will be:
2023: Q1 (60) Q2 (57) Q3 (60) Q4 (65)
After getting the projected seasonal index scores, you can go on with creating a forecast for your business performance.
This method is used to forecast the revenue of a business in a specific period. Revenue run rates are calculated based on previous data and assuming your sales rate will continue at a certain pattern given a specific period.
For example, your business made $50,000 in the first quarter of the year. Using the revenue run rate method, you will assume that you will generate the same amount for every quarter. Hence, your total revenue for a year will be $200,000.
Gathering data and creating inferences using quantitative methods help you draw more accurate predictions. More than accuracy, using the quantitative method provides:
There is no doubt that business forecasting methods help administrators and stakeholders make better business decisions. Whether you choose a qualitative or quantitative method, taking a peek into your future ensures that you will be ready to take on your business's future.
If you're serious about doing business predictions, Unloop offers forecasting for businesses. Our service gives you a tailor-made forecasting model to drive your business to success. So what are you waiting for? Book a call with us today!
Business accounting involves evaluating the past performance of your business and determining how well your business is thriving. However, peeking into your business's future performance is equally essential. It allows you to plan accordingly to ensure that your business runs smoothly and can withstand potential issues along the way.
Financial forecasting is a way of predicting a business's future financial position using historical data gathered from reports like cash flow statements, revenues, expenses, and sales data. We'll talk about the various forecasting techniques in this article to assist you in evaluating the performance of your company.
Many factors can affect your business, some of which you have no control over. However, financial forecasting allows you to see potential scenarios, so you are ready when they happen. There are two types of forecasting methods: qualitative and quantitative methods.
We go over some of the most popular techniques in each area so you can better comprehend them.
Qualitative forecasting bases its predictions on experts' and customers' responses rather than using historical data. This method is valuable for new businesses with no data to begin with.
Here are some examples of qualitative methods.
An expert's opinion is simply asking an individual or group of experts about the subject matter, which they will give predictions on according to their knowledge. In order to make the most accurate prediction possible, an expert should offer opinions without bias. From there, business executives will decide if they want to go with the suggested actions.
Business owners may bring more than one expert to collaborate on their predictions. But, of course, it is up to the administrators to decide which expert opinion to follow. They can solely rely on experts for future planning, or they can do other methods and consider other factors that may affect the business.
Market research is commonly used to determine the market needs of a certain product or service. The entire addressable market and the company's current clients are used in this strategy to collect data. Market research uses customer surveys, analyses of metrics for current campaigns, testing, and research on your competitors' marketing strategies.
Market research needs large data as much as possible to eliminate human bias. This method requires a lot of time, effort, and resources to deploy. However, if done correctly, you'll get the most accurate financial forecast possible.
The Delphi method is similar to experts' opinions, except it is more systematic and structured. In this method, you will still need experts for their insight, but instead of giving them the freedom to make predictions according to their knowledge, they will need to answer several questionnaires until the business comes up with a forecasting model.
Qualitative forecasting helps executives make informed business decisions like determining how much of their inventory to keep, hiring more people for their company, or applying adjustments to their sales operations. Qualitative forecasting methods are also used to develop projects and marketing campaigns highlighting the business's products and services.
All businesses can perform qualitative forecasting, but here are some industries that will greatly benefit from qualitative forecasting.
Quantitative financial forecasting is a data-driven forecasting method that businesses use to make accurate predictions for big decisions. This form of forecasting uses historical data to analyze patterns to determine what the business performance will be like in the future.
Quantitative forecasting results are affected by past data, relevant variables, and time parameters. You can do this financial forecasting for budget, sales, or projected expenses for a future time period. Here are some examples of quantitative forecasting methods.
The simplest quantitative forecast you can use is the straight-line method. This method only needs an approximate projected growth rate of your business which is usually based on your past performance.
The straight-line method predicts your business's future by calculating your previous and projected performance. For example, in the last three months, your sales have been $300,000 in total, and for the coming three months, you are projected to increase by 5%, so you can calculate your future revenue by:
300,000 x 1.05 = $315,000
So, for the next three months, you predicted sales growth would go up to $315,000.
The naive method is the best financial forecasting method if you want calculations to be as simple as possible. The naive method suggests that your business performance will be the same as in the past. For example, if your business made $500,000 in sales last year, according to the naive method, your business will generate the same amount of sales this year.
This prediction does not consider any seasonal trends or other factors that could affect your business. So this type of prediction can easily change when something major happens within a specific period.
The seasonal index method analyzes patterns in data points by separating months of the year into seasons. In most cases, seasons are divided into four quarters:
Q1: January, February, and March
Q2: April, May, and June
Q3: July, August, and September
Q4: October, November, and December
Experts calculate past seasonal index scores to determine how your business will perform in the future. For example, in the last two years, your seasonal scores were:
2021: Q1 (58) Q2 (60) Q3 (55) Q4 (70)
2022: Q1 (62) Q2 (54) Q3 (65) Q4 (60)
Your projected seasonal index score from the two data points will be:
2023: Q1 (60) Q2 (57) Q3 (60) Q4 (65)
After getting the projected seasonal index scores, you can go on with creating a forecast for your business performance.
This method is used to forecast the revenue of a business in a specific period. Revenue run rates are calculated based on previous data and assuming your sales rate will continue at a certain pattern given a specific period.
For example, your business made $50,000 in the first quarter of the year. Using the revenue run rate method, you will assume that you will generate the same amount for every quarter. Hence, your total revenue for a year will be $200,000.
Gathering data and creating inferences using quantitative methods help you draw more accurate predictions. More than accuracy, using the quantitative method provides:
There is no doubt that business forecasting methods help administrators and stakeholders make better business decisions. Whether you choose a qualitative or quantitative method, taking a peek into your future ensures that you will be ready to take on your business's future.
If you're serious about doing business predictions, Unloop offers forecasting for businesses. Our service gives you a tailor-made forecasting model to drive your business to success. So what are you waiting for? 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.
Technology will advance whether your business adapts to it or not. In the long run, a business that does not adapt to technological developments will become incompetent. This is especially true for cloud-based accounting software.
Accounting is becoming more technologically dependent. The cloud stores sizable amounts of data, which experts manage. However, if business owners keep believing in technology misconceptions, their businesses may be at a disadvantage.
Unloop is here to offer new perspectives to common beliefs that restrain business owners from considering cloud-based accounting and provide a practical solution to help them jump in and enjoy the technology.
If your business still relies on stacks of ledgers or creaky read/write hard disk drives (HDDs), you may have these ideas in your mind.
One dominant misconception about cloud-based accounting software is vulnerability. It makes sense to think that it's open for everyone if it's up in the air.
However, cloud accounting software systems are designed to have sophisticated security protocols. These security measures are monitored and updated to ensure your data is private and secure. That means whatever data you have in the cloud is for your eyes only until you choose to share it.
Some small business owners think that online accounting software is just a fad. Given enough time, we'll all return to our hard drives and papers. That may be the case, but it's unlikely to happen soon.
BlueWeave Consulting research shows that the cloud-based computing market was valued at $390 billion in 2021. This figure is expected to grow by 11% until 2028. It's a big market with an even bigger need to fill, and there is no sign of it slowing down at any rate.
The best accounting software that is "up in the clouds" has a technologically intimidating ring to it, especially for SME entrepreneurs. However, they think cloud-based services are for large companies with big data storage requirements, while the opposite is true.
Small businesses can also take advantage of cloud-based accounting even if their data requirement is small. It can be a huge benefit to start cloud accounting when you're early in the business.
Cost is another obstacle that stops entrepreneurs from switching to a cloud-based solution. They think the service model will cripple their budget as most cloud-based software are subscription-based.
A cloud-based accounting solution is indeed paid for regularly. But the price you pay is also proportional to the volume of data and services you want. So, you'll get a fair price depending on your business needs.
File Name: (1) accounting software cloud based.jpg
Alt Tag: cloud based accounting software - A businessperson holding a tablet flat
Moving your accounting system to the cloud seems like a headache. It's new technology. Plus, it might not be familiar, and it may take a long time for you to adapt to it.
Accounting works the same way, whether written in the books, stashed on a hard drive, or stored in the cloud. The cloud-based accounting system should be fairly easy to use and adapt if you know how accounting principles work.
The best cloud accounting software interface can make any small business owner conclude it's for experts—it's not. While it's true that experts will use accounting software faster, you can also give it a go.
Top cloud accounting software like QuickBooks Online (QBO) has a user-friendly interface perfect for ecommerce small business accounting and financial reporting. Intuit, the maker of QBO, understands that its accounting software caters to accounting needs of all business stakeholders. That's why it's made to be simple to use.
On the other hand, if you don't have the time nor the interest to explore these small business accounting software, you can easily let the experts handle it for you, which brings us to the next misconception.
Uploading your accounting data to the cloud to be handled by a team of experts may seem like you're giving up control. But the fact is, you're delegating control, and you take on a different role.
Cloud-based accounting services from a team of experts allow you to share your accounting data privately. Then, these experts can handle bookkeeping and accounting functions for your business, leaving you with the task to monitor and analyze your business performance using the reports they provide regularly.
Take a positive step for your business and consider outsourcing with Unloop. We are knowledgeable experts trained in the best cloud-based accounting software and experienced with multichannel markets. Here's a glimpse of what's in store for you and your business.
A wide array of services: Our team offers more than just bookkeeping. We can give you monthly financial statements, calculate the cost of goods sold (COGS), assist in forecasting, and many other services.
Cost adaptable: We make sure the fees you'll pay are proportionate to the nature and size of your business. Plus, you get the value of cloud-based storage and a team of experts handling it.
Secure and reliable: Let us take over your manual data entry process. Your business financial information will be protected by us, and you're free to retrieve it as you wish. We're just a click or call away.Book a call if you're curious about how cloud-based accounting can work for your business. You can also explore our ecommerce accounting service offerings now.
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.
Technology will advance whether your business adapts to it or not. In the long run, a business that does not adapt to technological developments will become incompetent. This is especially true for cloud-based accounting software.
Accounting is becoming more technologically dependent. The cloud stores sizable amounts of data, which experts manage. However, if business owners keep believing in technology misconceptions, their businesses may be at a disadvantage.
Unloop is here to offer new perspectives to common beliefs that restrain business owners from considering cloud-based accounting and provide a practical solution to help them jump in and enjoy the technology.
If your business still relies on stacks of ledgers or creaky read/write hard disk drives (HDDs), you may have these ideas in your mind.
One dominant misconception about cloud-based accounting software is vulnerability. It makes sense to think that it's open for everyone if it's up in the air.
However, cloud accounting software systems are designed to have sophisticated security protocols. These security measures are monitored and updated to ensure your data is private and secure. That means whatever data you have in the cloud is for your eyes only until you choose to share it.
Some small business owners think that online accounting software is just a fad. Given enough time, we'll all return to our hard drives and papers. That may be the case, but it's unlikely to happen soon.
BlueWeave Consulting research shows that the cloud-based computing market was valued at $390 billion in 2021. This figure is expected to grow by 11% until 2028. It's a big market with an even bigger need to fill, and there is no sign of it slowing down at any rate.
The best accounting software that is "up in the clouds" has a technologically intimidating ring to it, especially for SME entrepreneurs. However, they think cloud-based services are for large companies with big data storage requirements, while the opposite is true.
Small businesses can also take advantage of cloud-based accounting even if their data requirement is small. It can be a huge benefit to start cloud accounting when you're early in the business.
Cost is another obstacle that stops entrepreneurs from switching to a cloud-based solution. They think the service model will cripple their budget as most cloud-based software are subscription-based.
A cloud-based accounting solution is indeed paid for regularly. But the price you pay is also proportional to the volume of data and services you want. So, you'll get a fair price depending on your business needs.
File Name: (1) accounting software cloud based.jpg
Alt Tag: cloud based accounting software - A businessperson holding a tablet flat
Moving your accounting system to the cloud seems like a headache. It's new technology. Plus, it might not be familiar, and it may take a long time for you to adapt to it.
Accounting works the same way, whether written in the books, stashed on a hard drive, or stored in the cloud. The cloud-based accounting system should be fairly easy to use and adapt if you know how accounting principles work.
The best cloud accounting software interface can make any small business owner conclude it's for experts—it's not. While it's true that experts will use accounting software faster, you can also give it a go.
Top cloud accounting software like QuickBooks Online (QBO) has a user-friendly interface perfect for ecommerce small business accounting and financial reporting. Intuit, the maker of QBO, understands that its accounting software caters to accounting needs of all business stakeholders. That's why it's made to be simple to use.
On the other hand, if you don't have the time nor the interest to explore these small business accounting software, you can easily let the experts handle it for you, which brings us to the next misconception.
Uploading your accounting data to the cloud to be handled by a team of experts may seem like you're giving up control. But the fact is, you're delegating control, and you take on a different role.
Cloud-based accounting services from a team of experts allow you to share your accounting data privately. Then, these experts can handle bookkeeping and accounting functions for your business, leaving you with the task to monitor and analyze your business performance using the reports they provide regularly.
Take a positive step for your business and consider outsourcing with Unloop. We are knowledgeable experts trained in the best cloud-based accounting software and experienced with multichannel markets. Here's a glimpse of what's in store for you and your business.
A wide array of services: Our team offers more than just bookkeeping. We can give you monthly financial statements, calculate the cost of goods sold (COGS), assist in forecasting, and many other services.
Cost adaptable: We make sure the fees you'll pay are proportionate to the nature and size of your business. Plus, you get the value of cloud-based storage and a team of experts handling it.
Secure and reliable: Let us take over your manual data entry process. Your business financial information will be protected by us, and you're free to retrieve it as you wish. We're just a click or call away.Book a call if you're curious about how cloud-based accounting can work for your business. You can also explore our ecommerce accounting service offerings now.
If you have a small business, most of your accounting tasks will fall under bookkeeping. However, bookkeeping is more than just keeping organized records of your business expenses. Every record you store is essential in tracking and improving your business's overall financial health.
Fortunately, you don't have to be a bookkeeping expert to handle your business's bookkeeping needs. But still, many small business owners can't do their bookkeeping properly. So here are some fool-proof accounting tips for small businesses to handle your books properly.
Getting paid is the most exciting part of running a business. But managing your accounts receivables is not as fun as getting paid. It is important that you list as soon as your customer pays you so you can monitor if they still have any outstanding balances.
However, as your orders increase and you receive more payments, keeping up with your receivables will be more difficult to accomplish. So when it's time to balance your books, you'll often encounter a lot of discrepancies, especially if you forget to log those receivables.
Make it a weekly habit to record all your receivables. So by the end of each month, your transactions won't pile up and get lost.
Bookkeeping is manageable if you do it routinely and in parts. Even though it is tempting to cram everything right before tax season, you'll thank yourself for handling bookkeeping better and more promptly. In addition, spending more time on bookkeeping means your data is much more likely to be accurate.
For small business owners, here are basic bookkeeping tasks you should accomplish every week:
Even if you're no professional bookkeeper, it is still important that you put effort into understanding how accounting works. The more you understand what the numbers you see means, the easier it is for you to do several accounting and bookkeeping tasks.
After ticking your monthly bookkeeping checklist, you should consider making cash flow statements. This financial statement gives you a better understanding of your company's cash position. It lets you see the cycle of your income and expenses. With this, you can properly plan and allocate your business's finances.
It's a common mistake for business owners to forget to make copies of their business transactions, leading to several accounting issues. Being diligent with compiling receipts of your business transactions is important for accurate bookkeeping.
Additionally, several bookkeeping software will help you track and store your business receipts. They have features that let you take a snap of the receipts and instantly log any expenses or sales in the software so that you can record every last one of your transactions.
Aside from having more organized books, keeping track of your transactions can also save you money. One example is by logging business expenses which you can write off on your taxes.
If you're still confused about the expenses you can claim as business expenses, here are some examples in different categories.
The list of business expenses goes on and is not limited to these three categories. As long as they are not expenses for personal use and you have the receipts to prove it, you can log them as a company expense.
Bookkeeping software is there for a purpose, so maximize them. Accounting software can automate several tasks so you can focus on other parts of your business. Invest in software that can simplify tasks for you. Here are some accounting tasks you can consider for automation:
These are just some of the tasks that will benefit greatly from automation. Other advanced software can do more, so make sure to invest in a software your business needs and one that fits within your budget.
Almost all businesses today use accounting software for their bookkeeping instead of recording in physical books. However, if your small business cannot afford software yet, understanding and knowing how to do double-entry bookkeeping is best for your accounting processes.
In simple terms, double-entry bookkeeping records the transaction's expense and gain. For example, you buy 2 kgs of lip gloss base for $30 for your cosmetic business. You will record -30 on your expenses but record +2 on your inventory gain.
This bookkeeping style will help you assess your business performance and make better financial decisions.
Receiving cash payments for your business is exciting, but tracking them is not as fun as it sounds. In bookkeeping, keeping track of cash payments is tedious.
Unlike other methods like online payments, bank transfers, debit, and credit cards, which leave a trail when the transaction is complete,cash payments don't leave proof unless you write them down. So when your business accepts cash, make it a habit to give receipts at the end of each transaction. In addition, you should have a receipt book so you can give your customers a copy of the receipt and have one for yourself.
Preparing for your business's future is great for bookkeeping. There are two ways you can plan ahead for your business. First, have plans for major expenses. There's no telling when you need to stock your inventory big time or replace a piece of expensive equipment. In these cases, sudden expenses can disrupt your cash flow.
Next, use your financial statements to anticipate your business's financial position. Cash flow statements, expense records, income statements, and other reports help you project your budget for the next few months. If you are always on top of your financial management, you'll handle bookkeeping duties easier.
The best accounting tips for small business owners all boils down to choosing the best software. Unfortunately, most small business owners are still reluctant to invest in software, thinking it's too big of an expense.
But in reality, there are several free accounting software that can perform basic accounting tasks that small businesses may need. So before dismissing the thought of getting an accounting system, look for options that will fit your budget. You'll be surprised by the tons of options you can choose from.
One thing is sure, accounting is not for everybody. So if you think that bookkeeping tasks are too much for you and your time is better spent on other parts of your business, outsource it to a professional.
As your business grows, accounting tasks will be more demanding and time-consuming. However, with a professional bookkeeper, you're sure that your finances will be in order. Furthermore, you’re assured that everything they do is accurate and valid.
The foundation of good accounting is organized and proper bookkeeping, and as a business owner, it starts with you. We hope these accounting tips help you manage your bookkeeping tasks properly.
If you need professional help with your bookkeeping needs, Unloop offers professional accounting help for your ecommerce business. So check out our different services and book a call with us today!
If you have a small business, most of your accounting tasks will fall under bookkeeping. However, bookkeeping is more than just keeping organized records of your business expenses. Every record you store is essential in tracking and improving your business's overall financial health.
Fortunately, you don't have to be a bookkeeping expert to handle your business's bookkeeping needs. But still, many small business owners can't do their bookkeeping properly. So here are some fool-proof accounting tips for small businesses to handle your books properly.
Getting paid is the most exciting part of running a business. But managing your accounts receivables is not as fun as getting paid. It is important that you list as soon as your customer pays you so you can monitor if they still have any outstanding balances.
However, as your orders increase and you receive more payments, keeping up with your receivables will be more difficult to accomplish. So when it's time to balance your books, you'll often encounter a lot of discrepancies, especially if you forget to log those receivables.
Make it a weekly habit to record all your receivables. So by the end of each month, your transactions won't pile up and get lost.
Bookkeeping is manageable if you do it routinely and in parts. Even though it is tempting to cram everything right before tax season, you'll thank yourself for handling bookkeeping better and more promptly. In addition, spending more time on bookkeeping means your data is much more likely to be accurate.
For small business owners, here are basic bookkeeping tasks you should accomplish every week:
Even if you're no professional bookkeeper, it is still important that you put effort into understanding how accounting works. The more you understand what the numbers you see means, the easier it is for you to do several accounting and bookkeeping tasks.
After ticking your monthly bookkeeping checklist, you should consider making cash flow statements. This financial statement gives you a better understanding of your company's cash position. It lets you see the cycle of your income and expenses. With this, you can properly plan and allocate your business's finances.
It's a common mistake for business owners to forget to make copies of their business transactions, leading to several accounting issues. Being diligent with compiling receipts of your business transactions is important for accurate bookkeeping.
Additionally, several bookkeeping software will help you track and store your business receipts. They have features that let you take a snap of the receipts and instantly log any expenses or sales in the software so that you can record every last one of your transactions.
Aside from having more organized books, keeping track of your transactions can also save you money. One example is by logging business expenses which you can write off on your taxes.
If you're still confused about the expenses you can claim as business expenses, here are some examples in different categories.
The list of business expenses goes on and is not limited to these three categories. As long as they are not expenses for personal use and you have the receipts to prove it, you can log them as a company expense.
Bookkeeping software is there for a purpose, so maximize them. Accounting software can automate several tasks so you can focus on other parts of your business. Invest in software that can simplify tasks for you. Here are some accounting tasks you can consider for automation:
These are just some of the tasks that will benefit greatly from automation. Other advanced software can do more, so make sure to invest in a software your business needs and one that fits within your budget.
Almost all businesses today use accounting software for their bookkeeping instead of recording in physical books. However, if your small business cannot afford software yet, understanding and knowing how to do double-entry bookkeeping is best for your accounting processes.
In simple terms, double-entry bookkeeping records the transaction's expense and gain. For example, you buy 2 kgs of lip gloss base for $30 for your cosmetic business. You will record -30 on your expenses but record +2 on your inventory gain.
This bookkeeping style will help you assess your business performance and make better financial decisions.
Receiving cash payments for your business is exciting, but tracking them is not as fun as it sounds. In bookkeeping, keeping track of cash payments is tedious.
Unlike other methods like online payments, bank transfers, debit, and credit cards, which leave a trail when the transaction is complete,cash payments don't leave proof unless you write them down. So when your business accepts cash, make it a habit to give receipts at the end of each transaction. In addition, you should have a receipt book so you can give your customers a copy of the receipt and have one for yourself.
Preparing for your business's future is great for bookkeeping. There are two ways you can plan ahead for your business. First, have plans for major expenses. There's no telling when you need to stock your inventory big time or replace a piece of expensive equipment. In these cases, sudden expenses can disrupt your cash flow.
Next, use your financial statements to anticipate your business's financial position. Cash flow statements, expense records, income statements, and other reports help you project your budget for the next few months. If you are always on top of your financial management, you'll handle bookkeeping duties easier.
The best accounting tips for small business owners all boils down to choosing the best software. Unfortunately, most small business owners are still reluctant to invest in software, thinking it's too big of an expense.
But in reality, there are several free accounting software that can perform basic accounting tasks that small businesses may need. So before dismissing the thought of getting an accounting system, look for options that will fit your budget. You'll be surprised by the tons of options you can choose from.
One thing is sure, accounting is not for everybody. So if you think that bookkeeping tasks are too much for you and your time is better spent on other parts of your business, outsource it to a professional.
As your business grows, accounting tasks will be more demanding and time-consuming. However, with a professional bookkeeper, you're sure that your finances will be in order. Furthermore, you’re assured that everything they do is accurate and valid.
The foundation of good accounting is organized and proper bookkeeping, and as a business owner, it starts with you. We hope these accounting tips help you manage your bookkeeping tasks properly.
If you need professional help with your bookkeeping needs, Unloop offers professional accounting help for your ecommerce business. So check out our different services and book a call with us today!
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.
