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Author: Jake Snelson

Business With Your Significant Other

3 Things to Consider Before Starting a Business With Your Significant Other

If you’re in a committed relationship you may have found yourself considering the idea of starting a business together. And why not? You love each other, you work well together, and if you have to work, why not work alongside your favorite person? Especially if you share a common interest! But, just like you would if you were starting a family or buying a house together, it’s a good idea to consider how starting a business could create challenges in your relationship; especially if you’re really enjoying the way things are now. Here are three things to think about, and discuss, before diving into this great journey together:

1. Home and Work Intertwine

It’s no secret that starting a business from scratch can take an incredible amount of effort. And depending on what industry you’re diving into, the workload can start even before you officially open!

It’s important to consider that work may bleed into your home and relationship. You could find yourselves talking about work or working more often than you’d like. Date nights could turn into business meetings and late-night talks might revolve around your business plans for the next quarter. It can all be exciting at the beginning, but as time goes on, you could find yourselves burning out or losing aspects of the relationship that you used to love.

To combat the potential drain on your relationship, it’s a good idea to determine now how both of you want to communicate about the business. Consider setting boundaries that you’re both comfortable with and that allow you to continue to have a romantic relationship while still being great business partners. You could decide to set aside certain days that are strictly off limits to work, or maybe you’ll determine that work talk is not allowed after a specified time.

Whatever you both determine, remember to respect each other and consider your partner’s perspective the same way you would with a colleague in any professional setting.

2. The Bad Days

Remember that there can be a lot of difficult days in business ownership. If both of your incomes rely on the success of this endeavor, it can become incredibly stressful if it feels like things are a little slow at times.

The good thing is you will have each other, and each of you can provide support when the other starts to feel overwhelmed. Additionally, both of you should keep in mind that you are not alone in this journey; there are countless businesses that are owned and operated by couples. Look to them for guidance and ask for advice when possible. Check out our Keep Going Podcast for inspiration from other business owners who share a similar story, like Suzy and her husband who started Grounds for Coffee in Ogden, Utah together.

The most important thing is to remember that you and your sweetheart are on the same team. When business problems arise, it’s not you and your partner against each other, it’s you and your partner against the problem. Always prioritize having a healthy relationship with each other! Having a good relationship (even if the romance fizzles) will help keep your business afloat for years to come.

3. Set a Clear Outline of How the Business Will Operate

Setting a clear outline or plan of how the business will operate will help if, and when, you disagree about how things ought to run. Business partnerships should share equal responsibility when it comes to management (unless you decide otherwise), but these responsibilities can easily tumble out of alignment.

There may come a point when one of you feels that they are bearing a heavier load than the other, and these business disagreements can easily become a slippery slope into relationship quarrels. An outline will help define all the specifics to avoid potential issues, from who owns what percentage of the business, what responsibilities pertain to each of you, the compensation structure, or what will happen in case of a dissolution.

It can seem tedious and even difficult to outline every aspect of the business with your significant other, but it will save you a lot of time and headache (or even heartache) in the future. When you do have a disagreement, you can refer to the outline to remember the business purpose and how you both decided things would run, then you can correct and pivot accordingly.

Starting a business can be both an exciting and an overwhelming experience for anyone, but you’ll find that being on this journey with your significant other can also be incredibly rewarding to your relationship. The most important thing for both of you to remember is that 1) open and honest communication can make all the difference, 2) neither of you is alone in this, and 3) that mutual respect is the key factor in keeping any business or relationship triumphant.

Are you and your beau ready to start that business you’ve been dreaming about? Eliminate the hassle of dealing with small business taxes and bookkeeping. Just let Vyde take care of it for you! Try our services FREE for 30 days to see what you can accomplish together and let us deal with the IRS!


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Accountant

What to Look for in an Accountant

Accounting and tax software have made it possible for small businesses to get along without having an in-house accountant. Depending on the business’s complexity and the owner’s appetite for accounting tasks, small businesses can thrive for years with just an occasional phone call with an accounting software’s customer support line.

However, as businesses grow, accounting issues get more complex, and tax filings become too cumbersome for owners to handle. That’s when you hire an accountant — either a firm or an employee — to take on the financial tasks that eat up your spare time.

Accountants can alleviate the administrative burden of running a business, leaving owners with more time to focus on doing what they love. But with so many options available for accounting services, how do you know what to look for in an accountant and what’s best for your business needs?

Follow these tips and get your small business accounting in order with the right accountant!

Overview: What Does a Small Business Accountant Do?

With all the help accountants can provide, it’s no wonder why accountants are a business owner’s best friend. A small business accountant can maintain the books, analyze financial results, file business taxes, and consult with owners to expand the business’s bottom line.

Small business accountants are best known for carrying out day-to-day bookkeeping. They track sales and expenses, and keep an eye on cash flow. Some small business accountants also run payroll.

At the end of the accounting period, accountants produce financial statements — balance sheets, income statements, and cash flow statements — to give you an overall picture of your company’s financial health. Experienced accountants use the financial data to prepare your business taxes, a task most business owners would be happy to get off their plate.

Aside from rote bookkeeping and tax filing, the most significant value-add from a small business accountant is financial analysis and teaching basic accounting concepts. Through financial ratio analysis, accountants pinpoint the areas where your business could improve efficiency, boosting your bottom line. Business owners lean on their accountants to suggest changes to the business model that can yield profits.

Budgeting also falls within a small business accountant’s wheelhouse. Integral to creating a realistic growth plan is a financial forecast to reel in your unwieldy dream sequence. A small business accountant tends to be a jack-of-all-trades able to answer most financial questions you have. However, you can find accountants who specialize in the areas that meet your business needs. For example, if you need someone to maintain your accounting software, you’ll want to hire an experienced bookkeeper. If you’ve decided you’re never filling out another tax document, find yourself a small business tax accountant.

4 Things to Consider When Looking for a Small Business Accountant

Ask yourself the following questions before starting your search.

1. What Accounting Services Are You Looking For?

Make a priority list for the tasks you’d like the accountant to take on. Searching for an accountant is easier when you have a job description for the role.

A small business accountant’s task list could include:

  • Audit preparation
  • Day-to-day bookkeeping
  • Accounts payable
  • Accounts receivable
  • Tax preparation
  • Payroll
  • Financial statement drafting
  • Financial planning and analysis
  • Budgeting

Consider not only your company’s current needs but also those in the near future. For example, don’t search for a bookkeeper when you think you’d eventually like to turn over payroll duties to someone else. You can likely combine these two tasks into an accounting clerk position.

2. Hiring a Firm or an Employee

You’ll want to determine whether you want an in-house accountant or a firm to manage your business’s accounting workload. Each has benefits and drawbacks, and it comes down to how much accounting help you need.

For example, hiring an in-house accountant, either part-time or full-time, ensures a certain dedication of your accountant’s time. However, small businesses that don’t have a constant need for accounting work might find that a firm can bring 360-degree service at a fraction of the cost. Hiring an employee can be costly when you add wages, employer payroll taxes, and other benefits.

If you’re unsure which route to take, put your feelers out to firms first. You can test-drive a firm by giving them just a portion of your total accounting workload before deciding whether to continue. Hiring an employee requires commitment.

3. Determining Your Budget

Knowing your budget might also help to answer my previous question. As you search for an accountant, consider how much you’d like to spend on accounting services.

Your budget should reflect the services and expertise your business requires, considering the complexity of its accounting issues. Where your business is located also influence the going rate for accounting services.

Research is the best way to build a budget for accounting help. If you’re looking to hire a firm, get some quotes. When looking for an in-house accountant, check out websites such as Glassdoor.com to see what accountants in similar companies earn. Another way of gaining information is asking a peer or other small business owners and gaining insight through them.

4. How Software Can Lighten Your Accounting Workload

If your business doesn’t already have accounting, payroll, and tax software, now might be a great time to introduce it. Software can take on most of the automated aspects of accounting.

It’s not a perfect solution: There will still be many aspects of your accounting you will have to manage yourself. It might be worth paying extra to have a professional handle your financial statements and taxes to ensure accuracy and save you the hassle.

How to Find an Accountant For Your Small Business

Like in all professions, reputation is paramount. Ask your trusted family, friends, and colleagues for accounting firm recommendations.

Make sure you’re talking to people who have hired these accountants to do similar work. For example, a great personal tax accountant might not have the specialty or interest in running your S corporation’s payroll.

Use the local society of CPAs directory.

If you’re looking for the expertise of a CPA, check out the website of your local society of CPAs. They commonly have directories of local individuals and firms with filters to help you find professionals with a specialization in your industry who can meet your accounting needs.

Search online.

Perhaps nobody you know has a recommendation. You can still find a great accountant for your business with an online search.

If you’re looking to hire an employee, create a recruitment plan and post your job description on a few online job boards.

When searching for an accounting firm, make sure to checkout clients’ online reviews before you call for a quote. But take online reviews with a grain of salt: People usually only find time to share glowing and hateful reviews, with little to nothing in between. But if you find a firm with nothing but bad reviews, consider striking it from your list.

3 Best Practices When Hiring a Small Business Accountant

Keep these tips in mind when hiring your accountant.

1. Look For Experience That Fits Your Needs Now and In The Future

Say you need a bookkeeper today, but you know that tax season is coming up. Hire an employee or accounting firm with the skill set to do both.

You want an accountant who can grow with you and help you tackle any accounting needs that may come your way. When you’re interviewing potential accountants, ask them about the type of accounting software they’re comfortable using and what they do to stay up to date with the latest accounting and tax laws.

Business owners who’ve aced Accounting 101 can ask targeted questions during an interview to assess whether the candidate is ready to take on all they’re looking for.

2. Shop Around

Interview at least three firms before choosing one. Accounting firms can differ greatly on price, and you don’t want to get into a situation where you realize only years later that you’ve been overpaying for services.

Likewise, interview multiple candidates before hiring an in-house accountant. Make sure you’re making the job posting widely available so people from different backgrounds can apply. A diverse pool of applicants is essential in any hiring process.

3. Conduct Background Checks and Check References

Accountants have access to your business’s most private information, from employee records to bank account information. You’ll want to run a background check and ask for references before turning your books over to someone new.

Get Back to Business By Hiring an Accountant

Not everyone is like us at Vyde and loves talking about and practicing accounting. That’s probably for the best. By hiring an accountant, or using accounting services, you’ll be able to get back to doing what you love and have more time to focus on growing your business. If you’re still unsure of where to start, here’s an easy option: try Vyde free for 30 days and see why hundreds of businesses choose our services everyday!


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Small Business Dreams a Reality

How to Make Your Small Business Big Dreams a Reality

Starting a business is a dream that many people have. The idea of creating something that is your own, being your own boss, and being able to turn your passion into a full-time job is compelling. In order to be successful and make your small business idea come to life, you have to take time to figure out all aspects of your business to see if it has potential. While starting a business can be challenging, watching your dream come to life is beyond rewarding. Below, we share some advice on how to get you on your way to making your small business dreams a reality.

Conduct Research

Conduct Research

When building a business, it’s important to do your research. Taking the time to figure out what you want your business to be and where it will fit into a competitive market is vital to the overall success of your business. When doing your research, you should look into the type of companies that currently exist in the market that you’re trying to enter to see if and why they have been successful. Is there so much competition you might struggle to gain your footing? How can you stand out from the competition? You should also look into potential consumers to see how your business can help them.

Take some time to gain more insight as to whether or not your business can make an impact within that industry. Understanding your potential market will allow you to better form your business plan. It can also help to fine-tune your business idea so that you are not starting a business around something that is already well-saturated within that market.

You should also consider your potential competitors.  It’s important to be able to diversify your business, so taking the time to research all aspects of your potential market and competitors will allow you to better understand where your business can fit in and how you can be successful in that space.

Create a Business Plan

A business plan is important because it outlines your overall goals and shows how you plan to achieve them. Creating this plan in the early stages will allow you to better visualize how you want your business to operate, allowing you the freedom to make any changes that you want before fully moving forward in this process.

When creating your business plan, be sure to consider all aspects of your business. A business plan should highlight:

  • Your goals and objectives
  • Your product or service
  • Market  and industry research
  • Competitor research and how you plan to stand out
  • Consumer research and how you plan to solve their pain points
  • Your marketing strategy
  • Your financial approach

It’s important to address all of the major components of your business so that when you are at the financing stage of the process, there will be a clear explanation of what your objectives are and what you plan to accomplish with your business.

A business plan will also help you stay organized throughout the entire startup process.

Determine Your Financial Strategy

Determine Your Financial Strategy

Figure out your finances early on so that you can ensure you get your business off the ground. Without proper financing, it will be difficult to start your business. It’s important to create an outline of what your expected expenses will be so that you can budget your money wisely. Starting a business is expensive and there are many unexpected costs that will come up. It’s just a reality of being a business owner. When making your business plan, you should budget for not only the expected costs but also the unexpected costs so you are not overwhelmed or scrambling when they come up. That will also give you more flexibility when new opportunities arise.

There are many different ways to fund your business. Some people prefer to look into reaching out to investors for assistance, while others may consider taking out a loan.  If you’re someone who is looking to go the route of working with investors, then it’s vital that you have a sound business plan to show potential investors.

If you are considering a loan instead, then it may be worth considering a small business loan. A small business loan is partially guaranteed by the government, eliminating some of the risks for the financial institution issuing the loan, but it can be difficult to acquire. Small business loans have specific requirements that have to be met in order to qualify, but if those requirements are met, then it may be a good option for your small business. If not, another long-term option to consider is looking into refinancing your home to a 30-year fixed mortgage, which will lower your monthly mortgage payment, allowing you to allocate the extra funds toward financing your new business.

Consider Your Accounting and Taxes

Once you figure out how you will finance your small business, you should also consider how to handle your small business accounting and taxes. Having a detailed understanding of your financial reports will help you make informed decisions for your business, and you want to ensure your company does not have any surprise tax bills or compliance problems with the IRS.

If the idea of doing your own accounting makes your blood pressure rise, consider looking into small business accounting options. There are affordable options for small businesses that will take care of your accounting, bookkeeping, financial reports, and taxes. In fact, at Vyde we often save our clients more in their taxes than our services cost for an entire year. Utilizing the help of an accountant or accounting service will save you stress and provide the security of knowing your taxes are done right.

It’s important that you take the time to finalize all aspects of your business idea before moving forward. Starting a small business takes time and is a big commitment. Making sure that you are well prepared with what to expect, can allow the process to run smoothly and your business to be successful.

Consider Your Accounting and Taxes

Vyde Wants to Help

Vyde helps small business startups like yours with all their accounting, bookkeeping, and taxes. Our business is helping you stay in business. We’ve helped over 10,000 small businesses already! Contact us today to see how we can help you.

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bookkeeper if i have quickbooks

Do I Need an Accountant If I Use Quickbooks?

Do I Need an Accountant If I Use Quickbooks?

Yes. Yes, you do need a bookkeeper even if you have Quickbooks.  We understand that you’re a small business owner, and you want to save money where you can. But relying on software alone may cost you more in the long run. Accountants and bookkeepers can offer so much more than Quickbooks.

Why You Need a Bookkeeper Even If You Have Quickbooks

Here are just a handful of reasons that having a human touch is better than relying on Quickbooks alone. 

Catch More Mistakes

No matter how careful you are, mistakes happen. Whether you type the wrong number or write in the wrong column, errors can easily go overlooked until it’s too late to fix them. 

Quickbooks won’t let you know when you make a mistake simply because it won’t realize it either. While the software is helpful, it wasn’t created to see the big picture and can’t account for user error.  

A human being, on the other hand, can scan documents for intent and use logic and reasoning in ways that software can’t. Accountants or bookkeepers who have worked with you for a while are also familiar with your company’s history and processes and will intuit which areas may need careful inspection.

While software can seem like an affordable quick fix, financial mistakes often cost more than hiring an accountant. 

1. Offer Suggestions

Having a human accountant by your side is great because they can look at all your financial data and offer suggestions based on it. 

For example, they can make and share monthly statements with you. These statements will show how you spent your money, how much money you made, and if you’ve been profitable for the month or not. 

By having these monthly reports available, you can quickly fix any issues involving cash flow before they grow too big to handle. These reports also come in handy if there are any issues with the IRS. 

Accountants can also offer strategies to grow your business if you feel stuck. These strategies can include how to get more investors, what risky moves may be worth taking, and who to hire or partner with. 

2. Teach You How Money Works

We know that you know the basics of how money works, but how familiar are you with complex money flows? Many businesses start great but quickly run out of money because of mistakes, poor decisions, and bad luck.

A bookkeeper or accountant can guide you through the process of how money works when you run a business. While you can create a budget that includes products, payroll, and utilities, accountants will add things you may not have thought about.

Plus, their budgets will be much more precise than yours.  

3. Handle Taxes

Yes, it’s time to talk about the dreaded T-word. Doing taxes is already hard enough, but sometimes tax software can make it harder. Whether you’re a new business or a veteran, who doesn’t want support and reassurance that you’ve done everything right with your taxes? 

If your business had complex financial changes like takeovers, mergers, or expansions into a new industry, you’d definitely want assistance from a professional. 

Having a bookkeeper or accountant by your side will not only help you handle the IRS, but accountants will also keep you organized and make sure you receive all your deductions.

At Vyde Tax and Accounting, we bundle your tax filing fee with the monthly bookkeeping and unlimited accountant access. Click here to learn more!

4. Avoid Audits

One responsibility of a bookkeeper is to help you avoid audits. Audits can happen for a variety of reasons, like form mistakes, charitable deductions errors, or changes in tax laws. But they happen at random, too. 

Having an accountant as a teammate is a great asset should you be randomly selected for an audit. Not only will they have all the information the IRS needs readily available, but they will be able to communicate in a language that the IRS speaks, which can help expedite the process.

Give You One Less Thing to Worry About

5. Give You One Less Thing to Worry About 

You’re an overworked business owner with too much to worry about. A bookkeeper or accountant may not solve all your problems, but they can take many financial tasks off your plate. 

Bookkeepers can send and pay invoices, handle payroll, and track sales. They are the perfect partner for small businesses because they allow you to focus on more critical areas of your business. 

Vyde Wants to Help You

While Quickbooks is convenient, it lacks a human touch. Keeping your business on track, catching mistakes, and offering helpful solutions are just a few things an accountant or bookkeeper can assist with. 

Vyde wants to help small business owners like yourself with all their financial needs. We want to be more than just an accountant; we want to be a teammate who inspires you to grow your business more than ever. 

We’ve helped over 10,000 small businesses already! Contact us today to see how we can help yours. 

FAQs:

Why do I need a bookkeeper if I already use Quickbooks?

While Quickbooks is useful, it can’t catch all financial mistakes or offer personalized suggestions like a human bookkeeper can. A bookkeeper provides a holistic view of your finances and can identify areas needing attention that software might overlook.

What suggestions can a bookkeeper offer for my business?

A bookkeeper can analyze your financial data and offer suggestions such as creating monthly statements to track spending and profitability, providing strategies for business growth, and offering guidance on financial decisions like investments and partnerships.

How can a bookkeeper help me understand complex financial concepts?

Bookkeepers can teach you how money flows within your business, helping you understand budgeting, cash flow management, and financial planning in detail. Their expertise ensures that your budgets are accurate and comprehensive.

Why should I rely on a bookkeeper for handling taxes?

Handling taxes can be complex, and software may not always provide the necessary support. A bookkeeper can ensure accuracy, handle complex financial changes, maximize deductions, and help you avoid audits, providing peace of mind during tax season.

How does having a bookkeeper reduce my workload?

By handling tasks like invoicing, payroll, and sales tracking, a bookkeeper frees up your time to focus on core aspects of your business. They serve as a valuable partner, alleviating financial stress and allowing you to concentrate on business growth.

Interested in Learning More?

Schedule a free consultation with our team!

Tax Refund

Do Small Businesses Get Tax Refunds?

In 2021, the average tax refund was $3,039. Small potatoes? Hardly, especially given the economic downturn of the last couple of years.

New small business owners may be hopeful for a tax refund, a small gift to invest back into their operations. Not all types of small businesses can receive tax refunds, however. Is yours one of them?

Do small businesses get tax refunds? It’s one of the most common questions we receive—in the same way that there are many types of taxpayers, you’ll find there are more than a few types of small business tax entities.

Which Businesses Are Eligible for Refunds?

In general, your tax refund eligibility depends on whether you’ve paid more taxes than you owed, at least as an individual. While the same is loosely true for businesses, only C-corporations are entitled to tax refunds in their own rights.

The business entity you choose may influence your tax eligibility significantly, so we recommend choosing yours wisely from the outset. If your entity type passes your income directly onto you, the owner, you’ll be the one receiving the refund on its behalf. Sole proprietorships, partnerships, S-corporations, and limited liability companies (LLC) are all beholden to this convention and, accordingly, are not eligible for tax refunds on their own in any capacity.

If your business is a C-corp, all your revenue is taxed separately from your personal finances. C-corporations that have overpaid payroll or sales taxes, for example, are likely to see a tax refund at the end of the year.

Different Types of Taxes Businesses Pay

Small businesses pay many types of taxes in the United States. Among them:

  • Federal taxes
  • State taxes
  • Local taxes
  • Self-employment taxes
  • Payroll taxes
  • Income taxes, both state and local
  • Excise taxes
  • Property taxes
  • Sales taxes

How to Maximize Your Tax Refund

As a small business owner, there are plenty of ways you can maximize your tax refund every year:

  • Review your bank and credit card statements
  • Prepay upcoming expenses
  • Check for tax credits you may be entitled to
  • Offer matching 401(k) benefits
  • Reward employees generously
  • Check for a home office deduction
  • Track your mileage and other expenses

Business tax credits may be particularly lucrative for your small business. You may also benefit from other subsidies, such as research and development tax credits, credits designed to assist in employee leave, and work opportunity tax credits for those who hire marginalized individuals.

Your Small Business Accountants and Bookkeepers

Do small businesses get tax refunds? The short answer: It depends. For the full answer, consider Vyde for all of your accounting needs.
It’s a lot of ground to cover; that can’t be denied. If you’re an entrepreneur looking for the best possible outcome, we would love to hear more about your story and assist in any way we can.

home office

Taking Advantage of the Home Office Deduction

Are you self-employed and using your home for business? If so, you may qualify for the home office deduction. Here at Vyde, we want to help all of our clients stay compliant, stay organized and save on taxes. Here are some guidelines and tips to help you take advantage of your home office to maximize your tax savings:

Can you claim a home office deduction?

There are requirements you need to meet to qualify for a home office deduction: Do you use an area of your home regularly and exclusively for business? Are you self-employed?

If you answered yes to both questions, you likely qualify. It’s important to note your workspace does not need to be a separate room or even an office to qualify. For example, if you use half of your basement to create and ship custom word-working projects and that space is dedicated to your business, you could claim a home office deduction for that workspace.

How do you calculate your home office deduction?

There are two ways to calculate a home office deduction: the simplified and standard methods. For either option, you will need to know the square footage of the dedicated workspace in your home.

Simplified Method

To calculate the home office deduction for the simplified method, multiply the square footage of your office space by $5. That’s it!

Is your home office 300 square feet? Great! The IRS gives a $5.00 deduction per square foot for any space that is used exclusively for business (maximum of $1,500 for a 300-square-foot space). For example, if you are using an office that is 150 square feet, with the $5.00 deduction, that amount would be $750.00.  It’s that simple!

Standard Method

With this method, you deduct the actual expense of your office. For expenses that only impact your office (such as paint, office decorations, repairs to your office, etc.) you can deduct 100%. For other expenses (such as depreciation, rent or mortgage, property taxes, home insurance, utilities, maintenance, and general repairs), you can deduct a percentage of those expenses. To calculate this percentage, divide the square footage of your office by the square footage of your home. This tells you what percentage of your home your office takes up. For example, if you have a home that is 2,000 square feet and a home office that is 200 square feet, you could deduct 10% of your utilities, rent, repairs, etc.

Still have questions?

At Vyde, we help businesses save time, money, and stress by taking care of their bookkeeping and taxes. If you have additional questions about the home office or other deductions, our team would love to help! That’s our specialty. Reach out to our team or try our services for free to schedule a consultation with one of our accountants.

17 Reasons Why Bookkeeping Is Important for a Small Business  

As a small business owner, you already have a lot on your plate. And while bookkeeping is integral to any business, most business owners aren’t experts. A simple mistake can lead to loss of revenue and investors, and tax filing errors.

Accurate bookkeeping can mean the difference between success and failure for many businesses. So what is bookkeeping, and why is bookkeeping important for a small business? 

What Is Bookkeeping? 

Before delving into why bookkeeping is important for a small business, a core definition is in order. Bookkeeping is creating, organizing, and maintaining a business’ financial records. It is how you track your business expenses and revenue, and is crucial to tax filing, investor reporting, decision making, and more. 

Why is bookkeeping important? Let’s take a closer look at 17 reasons why bookkeeping is important for a small business:

1. Organize Your Business Records

Codifying financial information is perhaps a bookkeeper’s most vital role in your business. Regardless of what’s happening in your business or industry, you need those records to make decisions, interest investors, apply for loans and grants, budget effectively, monitor your revenue and losses, and more. 

2. Make Decisions Easier

Another reason why bookkeeping is important is it impacts your ability to make sound business decisions. Having a clear understanding of your financial records and projections helps you make decisions involving: 

  • Loans and other financing opportunities
  • Identifying and hitting company goals 
  • Hiring and firing employees, as well as their wages and bonuses 
  • Taxes, cash flow, and grants

And those are just a few examples. With a bookkeeper, you can evaluate your records using accurate data to help you make informed decisions. 

3. Create Accurate Financial Records

Your business decisions are only as good as the records you have on hand. It can be difficult for business owners to individually track every expense, loss, and profit. Maintaining accurate records requires a lot of work, even for small businesses. 

For example, do you know how much your business has spent on payroll this year? How about the amount spent on inventory so far this year? Do you know where all your receipts are? 

4. Tax Filing

Business taxes are complex, time-consuming, and can be stressful when trying to do them alone. Bookkeeping services that include tax filing take a lot off your plate come tax time. An expert will know things such as:

  • What forms need to be filed
  • Any deductions or credits your business qualifies for
  • Potential tax write-offs
  • Accurate data for revenue and expenses

If your taxes are off in any way, you’re more likely to be audited. If that happens, you’ll need to supply the IRS with the records your bookkeeper will have readily available.  

5. Budgeting

A bookkeeper provides you with organized and accurate financial records. You can review those records to help budget your expenses, find areas where you can save, see where a supplier may have increased costs, and more. 

6. Attract Investors

Many small businesses need funding, especially when first starting out. One of the simplest ways to receive funding is through investors. But investors require an overview of your business and finances before they’ll want to invest. Not having up-to-date records will likely turn away potential investors. 

7. Better Cash Flow

Bookkeeping can improve a business’ cash flow in many ways. For starters, you’ll be able to manage vendors, customers, and employees more efficiently. That means you can find ways to cut costs and ensure your customers are receiving services on time.

8. Get an Accurate Overview of Your Business

Bookkeepers don’t just provide you with a look at your financial records. You get an accurate overview of your business’ entire operation, including revenue, profit and loss margins, and so on. 

9. Easier IRS Audits

Another reason why bookkeeping is important is to protect your business in the event of an IRS audit. With detailed books, the odds your business will be audited are lower—but it can happen. Should you be audited, you’ll need to provide the IRS with answers to any financial questions they have and provide accurate records. 

10. Easier to Set Business Targets

The goal of every small business is to grow, but that’s a challenge if you have poor financial records. Bookkeeping provides accurate data, so you’ll have an easier time setting business goals rather than making guesses that could leave you disappointed. 

11. Meet Government Regulations

You must comply with federal, state, and local business regulations, including following tax codes, antitrust regulations, and state licensing requirements. An accurate overview of your business will help you ensure your business stays within government regulations.  

12. Get Extra Peace of Mind

With so much riding on accurate records and overviews, a bookkeeper provides peace of mind and reduces the risk of failing, being audited, missing business opportunities, and so on. You’re already spinning a lot of plates as a business owner; the last thing you want on your mind is wondering whether your books are up-to-date and accurate. 

13. Proper Reporting to Investors

Once you’ve secured investors for your business, you’ll need to report to them routinely. Investors want to know whether or not a company they’re supporting is making a profit and how it performs overall. That’s where good bookkeeping records come in. 

14. Track Business Growth

Creating achievable business goals won’t matter if you can’t accurately track your business’ growth. But with accurate overviews and financial records from a bookkeeper, you’ll see the growth over time and be able to celebrate milestones and adjust your goals as necessary. 

15. Meet Proper Record Laws

Businesses are required by law to maintain accurate records. For example, the IRS requires companies to keep employment tax records for at least four years. Additionally, you’ll need to provide your income and deduction records on your tax return. 

16. Learn from the Experts

An easily overlooked reason why bookkeeping is important for a small business is that it gives you the chance to learn from an expert. If you’re interested in knowing how the books work, you can get a better overview of your records, how they are organized, and the data used for them. 

17. Ensure You’re Not Missing Valuable Business Deductions 

Taxes are complicated, and tax laws can change from year to year. That includes business deductions which reduce your tax responsibilities. A bookkeeper will make sure you never miss out on these profitable opportunities. 

Let Vyde Handle the Books 

Now that you know why bookkeeping is important, let us handle the books. Vyde lets you choose the plan that best fits your business at an affordable price. So whether you need help catching up on your books or you’re searching for a reliable ongoing small business booking and tax service, trust Vyde. Don’t wait. Contact Vyde to assist you in all of your small business taxes needs.

Save for Taxes

Tax Guide for Small Businesses: How Much Should You Save for Taxes?

Tax Guide for Small Businesses: How Much Should You Save for Taxes?

Running a small business has its pros and cons. It can be incredibly freeing to be your own boss, but doing your own taxes? That can be intimidating. 

All businesses need to pay annual taxes. If your small business expects to owe more than $1,000 in federal taxes, you’ll also need to pay quarterly taxes. There are several ways to calculate how much (and when) you need to pay. The type of business you are running and the state you live in will affect what you owe.

Let’s look at this in more detail. 

Which Taxes Do I Have to Pay? 

If you are self-employed, you are subject to the following taxes:

Self-Employment Tax

The federal government sets the self-employment tax at 15.3%. This applies to all profits made by self-employed individuals and businesses. 

Federal Income Tax

You will need to pay federal income tax in addition to the self-employment tax. The percentage you must pay in federal income tax depends on which income bracket you fall into. The percentages range from 10% to 37% and are determined by income and your filing status (whether you are a single filer, married and filing jointly, or the head of household). 

Rate Single Filers Married Filing Jointly Head of a Household
10% $0 – $10,275 $0 – $20,550 $0 – $14,650
12% $10,275 – $41,775 $20,550 – $83,550 $14,650 – $55,900
22% $41,775 – $89,075 $83,550 – $178,150 $55,900 – $89,050
24% $89,075 – $170,050 $178,150 – $340,100 $89,050 – $170,050
32% $170,050 – $215,950 $340,100 – $431,900 $170,050 – $215,950
35% $215,950 – $539,900 $431,900 – $647,850 $215,950 – $539,900
37% $539,900+ $647,850+ $539,900+

State Income Tax

Not all states have income tax, but the majority do. The amount varies from 3% in Pennsylvania to 13.3% in California. You’ll need to look up your state’s income tax laws.

State Sales Tax 

Every time your business sells a product, it is subject to state sales tax (for the 45 states that require it). When you charge your clients for the sale of products, you should collect sales tax. 

In most states, you do not need to collect sales tax for the sale of services, but check with your state’s specific laws to make sure you’re compliant. 

Other Taxes

A few other common taxes you may need to pay are: 

  • Property Taxes 
  • Franchise Taxes
  • Excise Taxes

The best way to know which taxes you will need to pay is to contact a tax professional. 

How Much Should a Small Business Save for Taxes?

A common question small business owners have is: How can I know exactly how much I’ll owe until I file at the end of the year? 

The truth is that you won’t know with full certainty.

However, you don’t need an exact number, only a good estimate. The federal government allows you to make estimated quarterly tax payments throughout the year, and at the end of the year, you settle up with your annual filing. 

A Good Rule of Thumb

So, how much should your small business save for taxes? About 30-40% of your net income. 

This is a reliable rule of thumb because, on average small business owners make $66,000 or less, putting them into the 22% tax bracket or below. Add that to the 15.3% federal self-employment tax, and you’re probably right in the middle of that range. 

This doesn’t account for everything you’ll have to pay, and you may want to pay more based on your particular financial situation, but it’s a good place to start. 

What If I Don’t Pay Enough Taxes? 

If at the end of the year you file your taxes and discover you’ve underpaid, don’t panic. 

The government’s Safe Harbor rule states that so long as you paid 90% of the taxes you owed for the current year or 110% of the taxes you owed based on the earnings you made in the previous year, you will not be fined for underpaying your estimated taxes. 

This is why the 30-40% rule of thumb can be a safe way to help small businesses decide how much to save for taxes. However, you will need to pay whatever amount you still owe at the end of the year. 

If you underpaid your taxes (less than 90% of what you owed), you might be subject to fines and penalties. 

What If I Pay Too Much in Taxes? 

There’s no fine for paying too much. If you overpay, you’ll get a tax refund at the end of the year for the amount you’re owed.

Of course, overpaying can hurt your business indirectly, as it ties up money you could otherwise use to run day-to-day operations or make investments. Hiring a reliable bookkeeper, however, can prevent this from occurring. 

Get Professional Tax Help

Taxes don’t have to be stressful. With the help of expert tax and accounting professionals, tax season will just be another date on the calendar. 

Don’t wait, contact Mazuma to assist you in all of your small business tax needs.

Interested in Learning More?

Schedule a free consultation with our team!

How to Catch Up on Bookkeeping in 6 Simple Steps

How to Catch Up on Bookkeeping in 6 Simple Steps

 

Small businesses owners have many tasks to juggle just to be able operate their business efficiently. These tasks can include: daily operations, marketing, sales, products, processes, management and more. Those tasks can quickly become overwhelming for small business owners. While many day-to-day activities of owning a small business differ based on industry, bookkeeping does not.

Gather Your Receipts

Every business involves bookkeeping. Delayed or inaccurate bookkeeping can swiftly become a financial disaster for any business. How can you grow your business, secure capital, or even file taxes correctly without accurate and up-to-date books?

Suddenly, your finances are a mess. You’re wondering how you got here and how to catch up on bookkeeping fast. Sound familiar? Investing in bookkeeping services like Vyde streamlines your bookkeeping processes and helps you grow your business. You can also take steps now to start climbing out of the financial mess into which you’ve somehow fallen. 

Bookkeeping services aside, if you’re eager to learn how to catch up on bookkeeping alone, you can follow these six simple steps to get the ball rolling.

1. Gather Your Receipts

If your receipts are scattered all over, it’s time to call them in. You’ll need to gather all of the receipts, invoices, and other financial documents related to your business, including records like:

  • Bank statements
  • Credit card statements
  • Business expenditures
  • Business revenue
  • Customer accounts
  • Bad debt expenses
  • Vendor accounts
  • Receipts for non-deductible items
  • Deposits / ATM slips
  • Reconciled bank statements

Additionally, if you have customers who are overdue on their payments, we recommend sending out pending invoices to those customers to avoid potential bad debt expenses.

2. Reconcile Bank Accounts

Next, it’s time to double-check your records. Take time to sit down with your credit card and bank statements. These statements should always match your business records, vendor accounts, and customer accounts. 

If you find a discrepancy or if they don’t add up, locate the error before moving on to step three. Unfortunately, discrepancies and human error are common problems for business owners who aren’t using a team of experts. 

3. Separate Personal and Business Expenses

An essential step to knowing how to catch up on bookkeeping is to take measures to prevent your books from becoming messier in the future. If you already separate your personal and business expenses, great. You can move on to step four. If not, you’ll need to separate those expenses to keep your books up to date. 

We always recommend keeping personal and business accounts separate, including bank accounts, credit cards, and other finances. Accounts that are tangled together create unnecessary stress when doing your bookkeeping or filing your taxes. Additionally, you could potentially be held personally liable for any loans for your business. 

If you’re unsure what purchases or expenses qualify as a business expense, review what items the IRS considers to be in that category. 

Separate Personal and Business Expenses

4. Go Paperless 

Going paperless will make your life easier whenever it’s time to update your books. Now’s a good time to start because you’ve already gathered your documents and receipts. Create digital records of all these financial documents independently or by using online tools, software, or a Vyde account.

5. Collect Tax Documents 

Tax season is an important time of the year for all American workers, but most businesses need to file additional forms for the tax year.

Did you pay an employee or independent contractor this year? You’ll likely need to file at least one of the following forms:

Employees: W-2 Forms

You must file a W-2 for all your employees for the tax season.

Independent Contractors: Form 1099-MISC and W-9

You’ll only need to file additional forms for independent contractors that you paid more than $600 during the tax year.

Your independent contractors must complete a W-9 form and return it to you. This form contains their taxpayer information, which you’ll use on the 1099-MISC form. The 1099-MISC form is required to track your payments to independent contractors and ensures they receive their tax documents. Get your tax documents in order, including what you’ll need for the above forms. Then, once your bookkeeping is up to date, keep it updated.

6. Have Everything Reviewed by a Tax Professional 

Now that you know how to catch up on bookkeeping, we strongly recommend using a tax professional. A tax professional removes much of the stress of tax season and can verify your financial information related to your return.

Additionally, using a tax professional will ensure that your business receives the tax deductions to which you’re entitled. Most tax professionals provide guarantees in the event of an audit and will represent you, speaking to the IRS on your behalf.

Catch Up on Your Bookkeeping With Vyde

Catch Up on Your Bookkeeping With Vyde 

As a business owner, you have plenty of obligations outside of bookkeeping, and you’re likely not an expert. You wouldn’t handle your legal work, so why go at bookkeeping alone?

Vyde provides flexible business solutions that fit your needs and budget. We make bookkeeping for small businesses simple so you can focus on what you do best. The peace of mind about bookkeeping and taxes that we provide help you save time, stress, and money along the way. Contact us to start on your path to getting caught up on your business’s bookkeeping today!

Frequently Asked Questions: 

1. Why is bookkeeping important for small business owners?
Bookkeeping is essential for tracking business finances, ensuring accurate tax filing, and making informed financial decisions. Without it, businesses can quickly face financial problems and lose track of revenue and expenses.

2. What happens if I delay my bookkeeping tasks?
Delaying bookkeeping can lead to disorganized finances, missed tax deductions, inaccurate financial reporting, and even potential tax penalties. It’s crucial to stay on top of your books to maintain financial health.

3. How can I prevent mixing personal and business expenses?
Keep separate bank accounts and credit cards for your personal and business transactions. This not only helps in accurate bookkeeping but also protects your personal assets from business liabilities.

4. What documents should I gather to catch up on bookkeeping?
You should collect receipts, bank statements, credit card statements, invoices, and any other financial documents related to your business. These are crucial for accurately recording income and expenses.

5. Should I hire a tax professional after catching up on my bookkeeping?
Yes, hiring a tax professional ensures your financials are reviewed for accuracy, helps you maximize deductions, and protects you in case of an audit by the IRS. A professional can provide peace of mind during tax season.

 

Need Accountant

Do I Need an Accountant for My Small Business?

Why do you need an accountant for your small business? Your business does not have a lot of cash flow or many employees making filing taxes easy, right?

As a small business owner you might think filing your own taxes on top of all the other tasks you juggle will be easy, but filing your own taxes is a huge responsibility for small business owners.

Take it from us, though: after a certain amount of progress as a company, doing your own business accounting isn’t likely worth your time, especially if your background isn’t in finance. The truth is that small mistakes in your finances can add up and may cost you a lot in the long run. Here’s why you need an accountant for your small business and when you’ll know it’s time to find one.

Should I Hire an Accountant for My Small Business?

If you’re asking this question and your small business is already doing well, the answer might be “Yes.” Accounts do much more than just your taxes every year, although that is arguably one of the most valuable services any accountant has to offer your organization.

The world of business finance can be complicated, even if your scope of operations isn’t exactly titanic. Running into trouble with the IRS will usually end up being an absolute nightmare, even for very small infractions—hiring a business accountant early is one way to prevent trouble before your books have a chance to get ahead of you. However, this won’t always be an affordable option for some.

The power of an accountant on your team is undeniable, which then begs the question: when do I need an accountant for my small business? At what point does the payoff outweigh the costs associated with a professional accountant?

When Is the Right Time to Hire an Accountant for My Small Business?

After your business begins to flourish, your finances may become significantly more complicated. This is especially the case as you begin to make more new hires and earn more income—and, of course, spend more money, too.

Your job as a leader is just as important as any job you can delegate to somebody else. Small business owners will usually be excellent multitaskers by nature. Eventually, your stack of hats will become so tall and unwieldy that it’s likely to fall over. 

As soon as your finances begin to overwhelm you daily or weekly—losing track of receipts and invoices, for example, or simply not having time to document every transaction required for a complete account of your company’s activity—the time to hire a dedicated company accountant or bookkeeper has probably come to pass.

You may have an external bookkeeper preparing your finances early on for tax season. However, the investment in a certified accountant may eventually end up paying for itself. An internal accountant will be more familiar with tax codes and regulations and will be worth having if an audit comes along.

Why Do I Need an Accountant for My Small Business?

Are you running your finances for your business on your own? It may seem like a practical role to take on at the beginning of your venture, which is why so many small business owners end up giving it the ol’ college try.

After a certain point, however, a lack of expertise and even simple naïveté may cost you dearly. An innocent mistake may compound into something much more expensive in the long run—why waste your time trying to wade through something an accountant will have no trouble doing perfectly for you?

A business accountant can save you more than money in the event of an audit; they’ll also save you a lot of time as they take the minutiae of your finances off of your plate as a small business owner. 

What exactly does a small business accountant do? Their duties may cover any and all of the following essentials:

  • Bookkeeping: Documenting every fiduciary transaction passing through your small business is an enormous responsibility. All purchases, sales, payments, and paper trails must be maintained and kept up to scratch.
  • Payroll: This may include helping you oversee and carry out payments, filing your employees’ and contractors’ tax documents correctly, and, as mentioned, documenting all of the above.
  • Tax preparation: Unless you would rather outsource the professional responsible for closing out your books at the end of the year, you’ll need a small business accountant to create your reports and prepare your affairs to file. A great accountant will also be a lifesaver in an IRS audit—if you’re following the rules, they’ll be able to find the mistake and rectify it, incurring as few penalties as possible.
  • Insight, analysis, and interpretation: Unless you’re a financial expert, it always pays to have somebody who knows what they’re talking about behind the wheel. They may be able to help you navigate problems like overspending, helping you spot issues in your financial statements throughout the year. You might also find that they have a lot of helpful advice on where you could be investing more generously for the sake of growth and your future.

No matter what line of work you’re in, these generalized responsibilities will apply to any small business, whatever stage of development it’s in. You may know the trade better than anybody on your staff, but without the right partner to guide your hand as you make essential investments in your enterprise, your business might end up not seeing its full potential—or simply fall flat.

The need for a business accountant after finding your place in your industry is more than obvious—what about for brand-new businesses, though? Should start-ups hire a business accountant if they can afford it? To us, it’s simply another way to win.

Do I Need an Accountant for My Small Business Start-Up?

Depending on how established your small business is, your accountant might become a vital part of your organization as you scale. Defining your business goals is one thing—making it all happen realistically and practically is another matter entirely.

A great accountant can offer guidance at these pivotal intersections—helping you choose the right business structure, for example, and ensuring that everything you plan on accomplishing is feasible and compliant with every relevant body of authority (including the IRS!). They’ll also be extraordinary resources to lean on when applying for business loans, working with angel investors and other investments, and perhaps even when applying for small business grants.

A sudden windfall will do nothing for you if you have no idea what to do with it. Business accountants act as trusted confidants and will be able to help you manage your money wisely. Investing in yourself is another critical skill to master. An objective set of professional eyes will lead you to smart financial moves you might not have considered on your own.

What Can the Right Small Business Accountant Do for You?

Why do I need an accountant for my small business? For the same reason, you hire a professional to manage your IT systems. Are your business’s tax problems perplexing you? A small business accountant is almost certainly the solution. The time to delegate has arrived. 

If you’re unsure where to begin, contact us for advice on all things financial. The earlier you get our team involved, the more we’ll be able to do for you once tax season finally rolls back around. 

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Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.

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