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Category: Business Accounting

Deferred revenue is a crucial concept in accounting, representing income received by a company before it provides goods or services. When a company receives payments for goods or services that have yet to be delivered or performed, it records this as deferred revenue. This article will delve into the intricacies of deferred revenue and the journal entries associated with it.

What is Deferred Revenue

What is Deferred Revenue?

Deferred revenue, also known as unearned revenue or unearned income, refers to money received by a company in advance for goods or services that it has not yet provided or delivered to the customer. It represents a liability on the company’s balance sheet because the company owes the customer the delivery of products or services in the future in exchange for the payment received.

The deferred revenue account is used to record the payments received for which goods or services are yet to be provided. It’s a liability account that reflects the company’s obligation to deliver the promised goods or services.

Here are some reasons why deferred revenue is categorized as a liability:

  1. Unfulfilled Obligation: The company has received payment but has not yet delivered the corresponding goods or services. Until this obligation is fulfilled, the company has a debt or liability to the customer.
  2. Legal and Ethical Responsibility: From an accounting perspective, recognizing unearned revenue as a liability ensures accurate representation of the company’s financial position and its obligations to stakeholders.
  3. Matching Principle: Accounting principles like the matching principle dictate that revenue should be recognized when it is earned and matched with the related expenses. When a company receives payment before delivering the goods or services, recognizing the revenue immediately would not align with the principle of matching revenue with associated costs.
  4. Financial Reporting Accuracy: Classifying deferred revenue as a liability provides transparency in financial reporting by clearly indicating that there are outstanding obligations to deliver products or services to customers.
  5. Risk of Non-Delivery: Until the company fulfills its commitment, there’s a risk that it might not be able to deliver the goods or services for various reasons (such as business disruptions, changes in customer needs, etc.). Treating deferred revenue as a liability highlights this potential risk.
  6. Recording Deferred Revenue and Journal Entries

    Debit and Credit in Deferred Revenue Journal Entries

    When a customer pays in advance for goods or services, the company debits the cash account and credits deferred revenue. This journal entry recognizes the liability created by the advance payment.

    Illustrative Journal Entry Example

    Suppose a company receives $10,000 in advance from a new client for services to be performed over the next five months. The entry to record this transaction would be to debit cash for $10,000 and credit deferred revenue for $10,000.

    Recognition of Revenue

    As the company delivers goods or services over time, it can gradually recognize revenue. For instance, if the service contract is for five months, the company could recognize $2,000 in earned revenue per month.

    Impact on Financial Statements

Recording Deferred Revenue

Effect on the Balance Sheet and Income Statement

Deferred revenue affects the balance sheet by increasing the liability side. As goods or services are provided, this liability decreases, and earned revenue is recognized on the income statement.

Cash Flow and Accrual Accounting

In cash basis accounting, revenue is recognized when cash is received. However, in accrual accounting, revenue is recognized when it’s earned, irrespective of cash flow. Deferred revenue exemplifies this difference, as the cash is received upfront but recognized over time.

Managing Deferred Revenue in Business Operations

  1. Recording Deferred Revenue:
    • When a company receives payment in advance from a customer, it creates a liability known as deferred revenue. This represents an obligation to provide goods or services in the future. The company hasn’t earned this revenue yet, as the corresponding products or services are pending delivery.
    • Properly documenting and recording these payments is crucial. The accounting team records this advance payment as a liability on the balance sheet until the company fulfills its obligations.
  2. Aligning with Accounting Standards:
    • Adhering to accounting standards (such as ASC 606 in the U.S. or IFRS 15 globally) is vital. These standards dictate when and how revenue should be recognized, ensuring consistency and accuracy in financial reporting.
    • These standards provide guidelines on recognizing revenue when performance obligations are satisfied, which might occur upon product delivery, service completion, or meeting specific contract terms.
  3. Tracking and Management:
    • Businesses need robust accounting systems or software to track and manage deferred revenue accurately. This includes monitoring the amount of deferred revenue, its aging, and when it’s expected to be recognized as revenue.
    • Regular reconciliations and reviews of deferred revenue accounts ensure accuracy and help address any discrepancies or errors in recording.
  4. Recognizing Revenue:
    • As the company fulfills its obligations and delivers the promised goods or services, it’s crucial to recognize revenue appropriately. This involves reducing the deferred revenue liability and recording revenue in the income statement.
    • Revenue recognition occurs when the company satisfies its performance obligations, aligning with the principles outlined in accounting standards.
  5. Financial Reporting and Disclosures:
    • Accurate and transparent financial reporting is essential. Companies must disclose information about deferred revenue in financial statements, providing clarity to stakeholders regarding the nature and timing of revenue recognition.
  6. Impact on Cash Flow and Planning:
    • Managing deferred revenue also affects cash flow projections and financial planning. Understanding when revenue will be recognized allows businesses to better forecast cash inflows and plan expenditures accordingly.

Vyde, we bring a dedicated team of skilled bookkeepers

Unlock the Power of Seamless Financial Management

Deferred revenue plays a pivotal role in accounting, especially in scenarios where companies receive advance payments. Understanding how to properly record deferred revenue through journal entries and manage its impact on financial statements is essential for businesses to maintain accurate records and comply with accounting standards.

Don’t let the complexities of deferred revenue stress you out. Choose Vyde’s expert services to navigate and optimize your financial landscape effortlessly.

At Vyde, we bring a dedicated team of skilled bookkeepers, CPAs, and tax professionals ready to assist you. Whether through chat, email, phone, or virtual meetings, our flexible availability adapts to your busy schedule.

Experience personalized insights and guidance tailored to your business needs. Let us handle your deferred revenue challenges, so you can focus on propelling your business forward.

Take charge of your financial future with Vyde by your side. Connect with Vyde today and elevate your financial strategies to new heights!”

Frequently Asked Questions (FAQs) about Deferred Revenue and Journal Entries

What is the significance of Deferred Revenue in accounting?

Deferred revenue, also known as unearned revenue, represents the liability a company holds for providing goods or services in the future. It arises when a customer pays in advance for products or services yet to be delivered or performed. This concept is critical as it reflects the company’s obligation to fulfill these commitments.

How is Deferred Revenue recorded within a company?

The deferred revenue account, a liability on the balance sheet, records payments received for goods or services pending delivery. It serves as a clear indicator of the company’s obligation to provide the promised goods or services in the future.

Can you explain the journal entries associated with Deferred Revenue?

Certainly. When a customer pays in advance for goods or services, the company performs a journal entry by debiting the cash account (increasing cash) and crediting deferred revenue (recognizing the liability for services yet to be provided).

How does Deferred Revenue impact a company’s financial statements?

Deferred revenue impacts the balance sheet by increasing the liability side. As goods or services are delivered over time, the liability decreases, and earned revenue is recognized on the income statement. This process gradually transforms the liability into actual revenue.

What’s the difference between Cash Basis and Accrual Accounting concerning Deferred Revenue?

In cash basis accounting, revenue is recognized upon cash receipt. However, in accrual accounting, revenue is recognized when it’s earned, irrespective of cash flow. Deferred revenue epitomizes this difference, as cash is received upfront but recognized gradually as revenue when services or goods are provided.


Starting a small business demands meticulous planning and strategic decision-making. As an entrepreneur, you’re often juggling various roles to ensure the success of your venture. Financial management is a critical aspect that can significantly impact your business’s growth trajectory. One key question many small business owners like you face is do I need an accountant for my small business to manage our finances effectively

Understanding the Role of an Accountant

Understanding the Role of an Accountant for Small Businesses

Importance of Accounting for Small Business Owners

Small business owners often handle multiple responsibilities simultaneously. From overseeing daily operations to managing finances, their plate is always full. Accounting plays a pivotal role in maintaining the financial health of any business, irrespective of its size. Financial statements, tax filings, and cash flow management are essential components that contribute to informed decision-making.

Business Finances Management

For any small business owner, managing business finances is pivotal for sustainability and growth. Accounting serves as the backbone for this aspect. It involves meticulous recording, organizing, and interpreting financial data. With a robust accounting system in place, owners gain insights into their company’s financial health, allowing informed decision-making.

Business Taxes and Compliance

Navigating business taxes can be complex. Proper accounting ensures adherence to tax laws, timely filing of returns, and optimized tax planning. This is crucial to minimize tax liabilities legally. An accountant assists in identifying deductions, credits, and compliance requirements specific to your business, ultimately saving you money and mitigating potential penalties.

Tracking Financial Performance of Own Business

Being a small business owner necessitates keeping a close eye on the financial performance of your venture. Accounting facilitates the creation of financial statements, including profit and loss statements and balance sheets. These reports offer a snapshot of your business’s performance, aiding in identifying areas of improvement or potential concerns.

Implementing an Efficient Accounting System

Establishing an effective accounting system tailored to your business needs is pivotal. This system ensures accuracy in recording transactions, monitoring expenses, tracking revenue, and maintaining financial records systematically. It lays the groundwork for reliable financial reporting and analysis.

Empowering Small Business Owners

Having a clear understanding of your business’s financial standing empowers you as a small business owner. It allows for better business planning, budgeting, and forecasting. With accurate financial information at your disposal, you can make strategic decisions confidently, leading your business towards success.

Do Small Businesses Need Accounting Services?

Many small business owners contemplate whether investing in accounting services is crucial or if relying solely on accounting software suffices. While accounting software streamlines certain processes, it might not cover the nuances and complexities that a certified public accountant (CPA) could handle. A CPA offers specialized tax knowledge and a comprehensive understanding of financial decisions crucial for a business’s success.

Accounting Tasks and the Need for Professional Assistance

Handling tax planning, quarterly financial reports, and ensuring regulatory compliance demands precision and in-depth knowledge. A skilled accountant brings specialized expertise to the table, aiding in accurate tax filings and managing payroll taxes effectively.

The Benefits of Hiring a Professional Accountant

The Benefits of Hiring a Professional Accountant

For small business owners, time is a valuable commodity. Entrusting accounting tasks to a qualified professional frees up time, enabling owners to focus on crucial aspects like business planning and business growth strategies. Furthermore, a knowledgeable accountant can provide valuable insights and advice to make financial decisions that align with the company’s goals.

Expert Financial Guidance

A seasoned accountant brings expertise and a deep understanding of financial matters to the table. They offer invaluable advice and strategic insights tailored to your business’s unique needs. This guidance extends beyond mere number-crunching; it encompasses financial planning, tax optimization, and growth strategies.

Accuracy and Compliance

Accountants ensure accuracy in financial reporting and compliance with various regulations and tax laws. They meticulously handle financial statements, tax filings, and other accounting tasks, minimizing the risk of errors or non-compliance that could result in penalties or legal issues.

Time and Resource Savings

Outsourcing accounting tasks to a professional frees up valuable time for business owners. Instead of getting entangled in complex accounting tasks, they can focus on core business operations, customer relations, and strategic planning to drive business growth.

Cost-Efficiency and Saving Money

While hiring an accountant might seem like an added expense initially, their expertise often leads to cost savings in the long run. They optimize tax strategies, identify potential areas of cost reduction, and help in maximizing profits, ultimately outweighing their service costs.

Strategic Decision-Making Support

Accountants don’t just manage numbers; they interpret financial data to provide insights crucial for decision-making. They aid in identifying financial trends, forecasting, and creating financial projections, empowering business owners to make informed and strategic decisions.

Enhanced Financial Analysis

Professional accountants conduct in-depth financial analysis beyond the capabilities of accounting software. They provide a comprehensive understanding of your business’s financial health, enabling proactive measures to manage cash flow, analyze profitability, and forecast future results.

Customized Solutions

An experienced accountant tailors their services to suit your business’s specific needs. They adapt to your industry, company size, and goals, providing personalized solutions and advice aligned with your objectives.

Accounting Software vs. Hiring an Accountant

Accounting Software for Small Businesses

Accounting software has revolutionized how small businesses manage their finances. With user-friendly interfaces and various functionalities, these tools simplify tasks such as financial reports, customer payments, and maintaining the company’s accounts. However, they might lack the personalized touch and specialized knowledge offered by a dedicated accountant.

Advantages of Hiring a Small Business Accountant

While accounting software automates certain processes, it cannot replace the critical thinking and analysis provided by a professional accountant. Hiring an accountant ensures comprehensive financial analysis, accurate tax planning, and proactive measures to manage tax obligations efficiently.

Considering the Cost-Effectiveness

Small business owners often weigh the costs involved in hiring a full-time accountant versus utilizing accounting software. While a full-time accountant might seem expensive initially, the expertise they bring can save money in the long run by optimizing tax strategies and avoiding costly mistakes.

Vyde: Your Own Accounting Department All Rolled Into One

Embarking on a journey as a small business owner entails numerous responsibilities, and one crucial aspect is managing your finances effectively. Hiring an accountant isn’t just an option; it’s a strategic move towards ensuring the financial health and success of your business.

Many small business owners often have concerns when it comes to hiring an accountant. Worries may revolve around the perceived cost, finding the right fit for their business, and whether the accountant will truly understand their unique needs and challenges.

They might also worry about the transition process, integrating the accountant into their business operations, and whether the accountant will provide the personalized attention and expertise they require.

Benefits of Hiring Vyde as Your Accountant

Benefits of Hiring Vyde as Your Accountant

Vyde stands out as an exceptional choice for small business owners seeking comprehensive accounting services. Our team offers more than just traditional accounting; we provide a full spectrum of financial support and expertise.

Vyde acts as your dedicated accounting partner, functioning as your personalized accounting department. We understand the intricacies of small businesses, offering tailored solutions to meet your specific needs.

Incorporating Vyde as your accountant isn’t just a decision; it’s an investment in the future of your business. Let us handle the complexities of accounting, providing you with peace of mind and the freedom to focus on what you do best – growing your business.

Make the smart choice today. Contact Vyde and experience the difference a dedicated accounting partner can make for your small business’s success.

Frequently Asked Questions

1. Do I need to hire an accountant if I’m using accounting software for my small business?

While accounting software can streamline processes, it might not cover complexities that a professional accountant can handle. An accountant brings expertise in financial analysis, tax planning, and personalized guidance, complementing the software’s functionalities.

2. What are the signs indicating that my small business requires the expertise of an accountant?

Consider hiring an accountant if you face challenges in managing tax filings, financial analysis, or lack the time to focus on strategic business decisions. An accountant’s expertise can streamline these processes, offering valuable insights for growth.

3. How can hiring an accountant benefit my small business’s financial health?

Hiring an accountant ensures accuracy in financial reporting, compliance with tax laws, and provides strategic financial advice. Their expertise empowers better decision-making, cost optimization, and improved financial stability.

4. What services can a professional accountant offer beyond bookkeeping?

Professional accountants offer comprehensive services such as tax planning, financial analysis, regulatory compliance, strategic financial guidance, and personalized solutions tailored to your business needs.

5. What factors should I consider when choosing an accountant for my small business?

Consider their expertise, industry knowledge, qualifications, experience, and ability to provide personalized attention. Seek an accountant who understands your business goals and can offer strategic financial guidance.

In the fast-paced world of ecommerce accounting is the backbone that ensures businesses thrive financially. This comprehensive guide delves into the best practices for managing ecommerce finances, from balancing the books to optimizing cash flow and ensuring compliance with tax regulations.

Ecommerce Accounting Basics

Ecommerce Accounting

Understanding Ecommerce Accounting

Ecommerce accounting is the systematic recording, tracking, and managing of financial transactions related to an online business. Whether you are a seasoned ecommerce entrepreneur or just starting, implementing sound accounting practices is crucial for sustained success.

Importance of Financial Reports

Financial reports such as the profit and loss statement, cash flow statement, and balance sheets are essential tools for understanding your business’s financial health. Regularly analyzing these reports provides insights into your revenue, expenses, and overall profitability.

What Things Do You Need to Start Ecommerce Accounting?

Business Tax ID Number: If you operate as a partnership or corporation, securing an Employer Identification Number (EIN) from the IRS is imperative. This distinctive nine-digit identifier is utilized in tax documentation, for opening business bank accounts, hiring employees, establishing credit, obtaining permits, and various other purposes. Conversely, if you function as a sole proprietor, you have the option to use your Social Security Number (SSN).

Business Bank Account: A common pitfall for new businesses is mingling personal and business finances. While it might be tempting to utilize an existing account, the complications in untangling finances later make it an ill-advised decision. Instead, it is advisable to establish a dedicated business account. Platforms like PayPal for Business or Shopify Balance offer swift setup options, ensuring separation of personal and business financial matters.

Accounting Software: While Excel or Google Sheets may suffice in the initial stages, the growth of your online business warrants the use of accounting software for efficient tracking of sales, expenses, inventory, and taxes. Notable choices among small businesses and experts include Xero and QuickBooks, both popular cloud accounting solutions. Enhance your tech stack by considering the incorporation of accounting automation apps like A2X, which streamlines transaction summarization, saving time and effort by sitting between your sales channel and accounting software.

Ecommerce Accounting Methods: Cash, Accrual, and Modified Cash

Ecommerce businesses, like other businesses, employ different accounting methods to record and report financial transactions. The three primary ecommerce accounting methods are cash accounting, accrual accounting, and modified cash accounting. Each method has distinct characteristics and implications for how revenue and expenses are recognized.

Cash Accounting

In cash accounting, transactions are recorded when cash is exchanged. This means revenue is recognized when payment is received, and expenses are recorded when payments are made. It provides a straightforward view of the actual cash flow at any given time. Cash accounting is suitable for small businesses with simple financial structures, offering simplicity and ease of use.

Accrual Accounting

Accrual accounting, on the other hand, recognizes revenue and expenses when they are incurred, regardless of when the cash is received or paid. This method provides a more comprehensive picture of the business’s financial performance over a specific period. Ecommerce businesses with a larger scale and complex operations often prefer accrual accounting for its ability to match revenues and expenses more accurately, providing insights into the business’s overall profitability.

Modified Cash Accounting

Modified cash accounting is a hybrid approach that combines elements of both cash and accrual accounting. It allows businesses to record certain transactions on a cash basis while using accrual accounting for others. For example, a business might use cash accounting for day-to-day operations but switch to accrual accounting for large purchases or long-term investments. This method offers flexibility and can be tailored to the specific needs of the ecommerce business.

Considerations for Ecommerce Businesses:

Size and Complexity: Small ecommerce businesses with straightforward operations may find cash accounting sufficient, while larger businesses with complex structures might benefit from accrual accounting to capture a more accurate financial picture.

Cash Flow Management: Cash accounting is beneficial for businesses that want a real-time view of their cash flow. Accrual accounting, on the other hand, provides a more holistic understanding of financial performance but may not reflect immediate cash availability.

Compliance and Reporting: The choice of accounting method can also be influenced by regulatory requirements and reporting standards. Accrual accounting is often required for businesses with higher revenue thresholds. Decision-Making Needs: Businesses focused on strategic planning and decision-making may prefer accrual accounting for its ability to provide a comprehensive view of financial performance, aiding in long-term business planning.

Essential Accounting Tasks

Essential Accounting Tasks for Ecommerce Businesses

Streamlining Bookkeeping Tasks

Streamlining bookkeeping tasks involves optimizing and simplifying the various processes related to financial record-keeping, transactions, and reporting. The goal is to enhance efficiency, accuracy, and overall effectiveness in managing a company’s financial data.

For an ecommerce business, this process includes organizing and automating bookkeeping workflows to ensure seamless tracking of sales, expenses, and other financial transactions. It also involves adopting tools and technologies that simplify data entry, categorization, and reconciliation.

Why is Streamlining Bookkeeping Tasks Important in Ecommerce Business?

Real-Time Financial Insights

Ecommerce businesses often operate in a high-volume, real-time sales environment. Streamlining bookkeeping tasks allows for the immediate recording and updating of financial transactions. This provides business owners with real-time insights into their cash flow, sales, and expenses.

Accuracy and Error Reduction

Automation of routine bookkeeping tasks minimizes the risk of human error. Automated systems can accurately categorize transactions, reducing the chances of discrepancies in financial records. This accuracy is particularly crucial when dealing with a large volume of transactions common in ecommerce.

Time and Resource Efficiency

Manual bookkeeping tasks can be time-consuming and resource-intensive. By streamlining these processes through automation and efficient workflows, businesses can save valuable time and allocate resources to more strategic activities, such as business growth and customer engagement.

Better Decision-Making

Access to up-to-date and accurate financial information empowers ecommerce business owners to make informed decisions. Streamlined bookkeeping ensures that key performance indicators (KPIs) are readily available, aiding in strategic planning and helping the business stay agile in a competitive market.

Compliance and Audit Readiness

Ecommerce businesses are subject to various tax regulations and reporting requirements. Streamlining bookkeeping tasks ensures that financial records are well-organized and readily available for compliance purposes. This not only helps in meeting regulatory obligations but also makes the auditing process smoother.


As ecommerce businesses grow, the volume and complexity of financial transactions increase. Streamlined bookkeeping processes are scalable, adapting to the evolving needs of the business without causing disruptions. This scalability is essential for accommodating growth without compromising on the accuracy and efficiency of financial management.

Enhanced Customer Trust

Transparent and accurate financial records instill trust among customers and stakeholders. In ecommerce, where customer trust is paramount, a well-maintained and streamlined bookkeeping system contributes to the credibility of the business.

Cost Savings

While there might be an initial investment in implementing streamlined bookkeeping processes, the long-term cost savings are substantial. Efficiency gains, reduced errors, and optimized resource allocation contribute to overall cost-effectiveness.

Ecommerce Tax Management

Ecommerce Tax Management

Ecommerce businesses often operate in multiple sales channels. Efficiently managing taxes across various sales channels requires a meticulous approach to ensure compliance and prevent financial pitfalls.

Sales Tax Compliance

Ensure adherence to sales tax regulations across multiple jurisdictions. This involves calculating, collecting, and remitting the correct sales tax amounts to relevant authorities.

Business Tax ID Number

Obtain a unique business tax identification number for accurate income reporting and tax return filing, aiding tax authorities in tracking and managing the business’s obligations.

Income Tax Planning

Strategize to minimize overall tax liability through effective income tax planning. This includes optimizing deductions, credits, and exemptions while structuring the business for optimal tax positioning.

Estimated Quarterly Business Taxes

Make timely quarterly tax payments based on expected annual income to cover income tax liabilities. Accurate estimation is crucial to avoid underpayment penalties.

Sales Tax Calculation

Ensure accurate sales tax calculations by staying updated on tax rate changes, understanding product taxability, and integrating precise calculations into online sales processes.

Tax Reporting and Filings

File regular tax reports, including income and sales tax returns, to maintain good standing with tax authorities. Timely and accurate reporting is essential to avoid penalties.

International Tax Considerations

Navigate international tax laws for global ecommerce operations. Understand cross-border tax implications such as VAT or GST, ensuring compliance with each country’s tax regulations.

Technology Integration

Leverage technology, including specialized accounting software and tools, for efficient tax management. Automation aids in accurate tax calculations, tracking legal changes, and streamlining overall tax compliance.

Audit Preparedness

Maintain meticulous records of financial transactions, tax filings, and supporting documentation to be well-prepared for potential tax audits. This ensures effective responses to audit requests.

Generating Regular Financial Reports

Generating regular financial reports in ecommerce is essential for various reasons. Firstly, these reports aid in performance monitoring of an ecommerce business by allowing business owners to assess trends, patterns, and areas that may require attention over time. Additionally, financial reports play a crucial role in budgeting and planning, providing essential data for analyzing revenue, expenses, and cash flow trends, enabling businesses to create realistic budgets and allocate resources strategically.

Generating Regular Financial Reports

The insight gained from regular financial reports is instrumental in cash flow management, profitability analysis, and identifying cost trends, contributing to the overall financial health and efficiency of ecommerce operations.

Moreover, these reports instill investor and stakeholder confidence by offering a transparent view of the business’s financial performance, reducing risks associated with financial uncertainty. Compliance with regulations is ensured through the organized and up-to-date nature of regularly generated financial reports, reducing the risk of penalties during audits.

Furthermore, financial reports empower strategic decision-making in the dynamic ecommerce landscape, providing valuable data for expanding product lines, entering new markets, and adjusting marketing strategies. Lastly, the reports serve as a tool for detecting anomalies or issues and investigating variances, allowing for swift corrective action and preventing financial discrepancies from escalating into more significant problems.

Frequently Asked Questions (FAQs)

How does ecommerce accounting differ from traditional accounting?

Ecommerce accounting involves unique considerations such as sales tax compliance, multiple sales channels, and intricate inventory management, setting it apart from traditional accounting.

What accounting method is best for ecommerce businesses?

Choosing between cash basis accounting and accrual accounting depends on your business’s size, complexity, and financial goals. Consult with an accountant to determine the most suitable method for your ecommerce venture.

How can ecommerce businesses optimize cash flow?

Optimizing cash flow involves managing receivables and payables effectively, negotiating favorable payment terms, and maintaining a buffer for unforeseen expenses. Regularly updating and analyzing cash flow statements is crucial for success.

Finding a good accountant can be the linchpin for maintaining the financial health of your personal finances or business. An accountant does more than just crunch numbers; they can provide strategic advice, help you minimize taxes, and improve your cash flow. In this comprehensive guide, we’ll explore expert tips on how to find good accountant who can be a trusted advisor for your financial journey.

Understanding the Importance of a Good Accountant

Understanding the Importance of a Good Accountant

Before we dive into how to find a good accountant, let’s understand why it’s crucial to have one.

Why You Need a Good Accountant?

1. Expertise in Tax Preparation: One of the primary roles of a good accountant is their expertise as a tax preparer. They are well-versed in tax and regulations, enabling them to accurately prepare your tax returns. This expertise ensures that you comply with it while maximizing your deductions and minimizing your tax liability.

2. Tax Preparer Tax Identification Number (PTIN): A good accountant will have a PTIN, which is a requirement by the IRS for anyone who prepares federal tax returns for compensation. This number signifies that they are qualified and authorized to assist you with your tax needs, giving you peace of mind in knowing that your taxes are in capable hands.

3. Complex Tax Situations: Certified Public Accountants (CPAs) are qualified tax professionals who can navigate complex tax situations. If you have a business, investments, or other intricate financial matters, a CPA’s expertise is invaluable in ensuring your tax returns are accurate and compliant with the law.

4. Year-Round Support: Tax professionals, including CPAs, offer year-round support. They can advise you on tax planning, help you make strategic financial decisions, and guide you in optimizing your financial situation. This goes beyond just tax season; they provide ongoing financial guidance.

5. Minimizing Errors and Audits: A good accountant helps prevent errors on your tax return, reducing the likelihood of an audit. In the event of an audit, they can represent you and provide documentation to support your tax filings, ensuring a smoother process.

6. Time Savings: Tax preparation can be time-consuming and complex. Hiring a qualified tax professional frees up your time, allowing you to focus on your business or other important aspects of your life.

7. Peace of Mind: Knowing that your financial affairs are in the hands of a qualified accountant provides peace of mind. You can trust that they will keep your financial information secure and confidential while ensuring compliance with tax laws.

8. Maximizing Deductions: A good accountant is skilled at identifying deductions and credits you may have overlooked. They can help you legally maximize your tax benefits, which can lead to significant savings.

9. Business Growth: They can provide valuable insights that can help grow your business.

Where to Start Your Search

Referrals and Recommendations

The best place to start is often within your network. Ask business associates, friends, or family if they can recommend a good accountant. Personal referrals can often lead to trustworthy and reliable professionals.

Professional Associations

Look for accountants who are members of professional associations such as the American Institute of CPAs (AICPA) or the National Association of Tax Professionals (NATP). Membership in these organizations often indicates a level of commitment to the profession’s standards and ethics.

Evaluating Potential Tax Accountant

Evaluating Potential Tax Accountant

Credentials and Experience

Ensure that the accountant has the necessary credentials, such as being a Certified Public Accountant (CPA) or a Chartered Accountant (CA). Also, consider their experience in your industry and with businesses of your size.

Services Offered

Accountants offer a range of services. Determine if they provide what you need, such preparation, auditing, financial planning, or business advisory services.


It’s essential that you feel comfortable with your accountant. They should be someone you can trust and communicate with openly.

Interviewing Accountants

Questions to Ask:

When interviewing potential accountants, consider asking the following questions:

  • What experience do you have with businesses like mine?
  • How do you stay updated on accounting and tax law?
  • Can you provide references from clients?

Making Your Decision

Making Your Decision

Choosing the right accountant is a critical decision for any individual or business. The right professional can save you time and money, ensure compliance with tax laws, and provide valuable financial advice. Here’s a guide to help you select the right accountant:

Determine Your Needs

  • For Individuals: You may need an accountant for tax preparation, estate planning, or personal financial management.
  • For Businesses: The complexity of your business transactions, industry-specific needs, and the size of your business will determine the level of expertise required.

Look for Qualifications and Credentials

  • Certification: In many countries, accountants are certified (e.g., CPA in the USA, CA in the UK and Canada, ACA/ACCA in other countries).
  • Specializations: Some accountants specialize in tax, audit, business advisory, or forensic accounting.

Consider Their Experience

  • Industry Expertise: An accountant with experience in your industry will understand the specific challenges and regulatory requirements you face.
  • Business Size: An accountant who works with similar-sized businesses will be more familiar with your needs and concerns.

Assess Their Reputation

  • References: Ask for and check references from the accountant’s current or past clients.
  • Reviews: Look for reviews or testimonials online to gauge client satisfaction.

Evaluate Their Services

  • Full Service vs. Specialization: Some accountants or firms offer a full range of services, while others specialize in certain areas.
  • Technology and Software: Ensure they use up-to-date accounting software that is compatible with your systems.

Understand Their Fee Structure

  • Fee Arrangement: Accountants may charge hourly, a fixed fee per service, or a retainer for ongoing services.
  • Transparency: Ensure that the accountant is clear about their tax preparation fees to avoid unexpected costs.

Assess Their Availability

  • Response Time: Consider how quickly they respond to your inquiries.
  • Proactive Communication: A good business accountant should not only be reactive but also proactive in providing you with financial insights and alerts.

Personal Fit

  • Communication Style: Make sure their style of communication aligns with your preferences.
  • Trust and Comfort: You should feel comfortable discussing personal or confidential business information with them.

Check for Professionalism and Integrity

  • Ethics: They should adhere to a professional code of ethics and maintain integrity in their work.
  • Continuing Education: Accountants need to keep up with changes in laws and regulations, so look for those committed to ongoing education.

Consider Their Network

  • Additional Resources: An accountant with a broad professional network can refer you to other professionals, such as lawyers or financial advisors, as needed.

Look for a Strategic Advisor

  • Beyond Compliance: The right accountant should help you with strategic planning and offer advice to help grow your wealth or business.

Make Sure They Are Future-Oriented

  • Growth Mindset: Choose an accountant who can scale with you as your financial situation or business grows.

Final Steps

  • Interview: Meet with potential accountants to discuss your needs and expectations.
  • Decision: After meeting with several candidates, compare their qualifications, fees, and the rapport you felt with each to make an informed decision.

Maintaining the Relationship

Maintaining a strong relationship with a tax accountant is crucial for small business owners, as it can lead to better financial decision-making and tax compliance. Here are some key practices to maintain a healthy relationship with your tax accountant:

  • Open Communication: Keep the lines of communication open. Regularly update your accountant on changes in your business, such as new revenue streams, changes in business structure, or significant purchases. This helps them provide accurate advice and service.
  • Organized Records: Maintain organized financial records. Use accounting software to track your finances and share access with your accountant. This makes it easier for them to review your accounts and provide timely advice.
  • Understand Your Responsibilities: Know what you are responsible for and what your accountant will handle. This clear division of labor prevents tasks from being overlooked.
  • Regular Meetings: Schedule regular meetings, whether monthly, quarterly, or at least annually. This ensures you both stay informed about tax-related matters and can plan for the future.
  • Ask Questions: Don’t hesitate to ask questions. Understanding the tax implications of your business decisions is crucial, and a good accountant will be willing to explain these to you.
  • Timely Information Sharing: Provide all necessary information well before tax deadlines. This gives your accountant the time they need to work effectively and can prevent costly mistakes or fines.
  • Trust Their Expertise: Respect your accountant’s professional advice. They understand tax laws and can help you make decisions that minimize your tax liability legally.
  • Feedback: Provide feedback about what’s working well and what isn’t. This can help your accountant tailor their services to better fit your needs.
  • Stay Informed: While you don’t need to be a tax expert, having a basic understanding of tax matters can facilitate more productive conversations with your accountant.
  • Long-Term Relationship: View your relationship with your accountant as a long-term partnership. A tax accountant who is familiar with your business history can provide more nuanced and beneficial advice.
  • Referrals and Networking: If you’re happy with your accountant’s services, refer them to others. Accountants value client referrals, and this can strengthen your business relationship.
  • Professional Courtesy: Treat your accountant with the same level of professionalism and courtesy you expect in return. Mutual respect goes a long way in maintaining a positive working relationship.
  • Review and Plan: Use your accountant not just for tax filing but for financial review and business planning. They can often provide insights into improving profitability and managing cash flow.
  • Stay Compliant: Work with your accountant to ensure you remain compliant with all tax laws and regulations. This can prevent legal issues and fines.
  • Payment Timeliness: Pay your accountant’s fees promptly. Just as you appreciate being paid on time, so does your accountant.


Finding a good accountant

Finding a good accountant is a critical step for your financial success. Take the time to do your due diligence, and you’ll find a financial ally who can save you time and money, and provide valuable advice for years to come.

Frequently Asked Questions

How often should I meet with my accountant?

It depends on your needs, but typically you should meet at least annually or quarterly.

Can a good accountant help with financial planning?

Yes, many accountants also offer financial planning services.

What if my business grows?

A good accountant should be able to scale their services to match the growth of your business.

Running a construction business involves much more than just overseeing projects; it requires diligent financial management and accurate accounting to ensure the company’s financial health and success. In the construction industry, where profit margins can be narrow, efficient construction accounting is essential. This article outlines eight crucial steps to help construction companies navigate the complexities of construction accounting effectively.

How Construction Accounting Differs

Accounting for Construction Companies

Accounting in the construction industry presents unique challenges compared to other businesses due to the intricacies of the field. These differences stem from the nature of construction work, specific revenue recognition methods, per-project pricing structures, job costing intricacies, fluctuating operating expenses, and various aspects inherent to construction projects.

Construction companies face a range of distinct requirements, necessitating the ability to meticulously track precise costs, competitively bid on projects, adhere to prevailing wage regulations, and manage a host of other accounting responsibilities. Here are the key distinctions that set construction accounting apart from other forms of accounting:


Construction enterprises operate on a project-by-project basis, often managing multiple projects simultaneously. Unlike businesses where payment typically aligns with the completion of a transaction, construction projects follow diverse payment schedules. Some may require upfront deposits, while others might entail full payment upon completion, or settlements that occur months after project finalization. Consequently, construction companies may find it necessary to generate individual profit and loss (P&L) statements for each project.

Diverse Services

In contrast to conventional businesses that usually offer a limited range of products or services, construction companies provide a wide spectrum of services. This can encompass service work, design services, consulting, engineering, material sourcing, and more. This diversity makes it challenging to track expenses accurately and calculate profits associated with each service category.

Fluctuating Overhead Costs

Construction firms experience fluctuating overhead expenses encompassing insurance, travel, workers’ compensation, materials, subcontractor fees, equipment, and various other factors. These costs must be meticulously considered in construction accounting, both at the project level and for the overall business.

Cost of Goods Sold

Unlike many businesses that primarily record the cost of products sold, construction companies have a more complex landscape. Each project incurs both direct and indirect costs that can fall into a wide array of categories. Consequently, contractors must employ effective methods for monitoring income and expenses while ensuring meticulous reconciliation of every financial transaction.

Long-Term Contracts

Construction companies often manage contracts with varying durations, including both short-term and long-term commitments. This diversity in contract timelines means that income may not arrive at consistent monthly intervals. To effectively manage cash flow and maintain accurate financial records, construction businesses require a flexible yet organized accounting system.

How to Do Construction Accounting

1. Understand Construction Accounting

Construction accounting is a specialized branch of accounting that caters to the unique financial needs of construction companies. It involves tracking construction project costs, managing revenue recognition, handling cash flow, and complying with industry-specific accounting methods and regulations.

2. Set Up Your Accounting System

To kickstart your construction accounting journey, you need a robust accounting system. This system should allow you to track business finances accurately. Key components include:


      • Business Bank Account: Open a separate business bank account to keep your personal and business finances distinct.

      • Accounting Software: Consider using construction accounting software tailored to the industry’s needs. Several options are available that can help streamline bookkeeping and financial management.

      • Chart of Accounts: Develop a comprehensive chart of accounts that categorizes income, expenses, assets, and liabilities specific to construction.

    3. Choose an Accounting Method

    A construction company can use either the cash method or the accrual method for accounting. The cash method records transactions when money changes hands, while the accrual method records transactions when they are incurred, regardless of when the payment is received. Select the method that aligns with your business operations and financial goals.

    4. Implement Job Costing

    Job costing is a fundamental concept in construction accounting. It involves tracking all costs associated with individual construction projects. This includes material costs, labor costs, equipment costs, and overhead costs. Job costing enables you to monitor the profitability of each project and make informed decisions to protect your profit margins.

    5. Recognize Revenue Accurately

    The construction industry often uses two revenue recognition methods: the percentage of completion method and the completed contract method. The percentage of completion method recognizes revenue based on the project’s progress, while the completed contract method recognizes revenue only when the project is completed. Choose the method that best suits your business and complies with industry standards.

    6. Track Project Expenses

    Managing project expenses is critical for maintaining financial health. Keep a close eye on direct and indirect costs, such as labor costs, material costs, administrative costs, and mobilization costs. Accurate tracking of expenses allows you to monitor project profits and make necessary adjustments.

    7. Monitor Cash Flow

    Cash flow management is essential in construction accounting. Since construction projects often involve substantial upfront costs, it’s vital to ensure you have the necessary liquidity to cover expenses. Regularly review your cash flow statements to identify potential cash shortages and plan accordingly.

    8. Stay Compliant

    Construction companies must adhere to various regulations and prevailing wage requirements, which can vary by location. Stay informed about these requirements and ensure your accounting practices are compliant with industry and legal standards.

    Construction accounting plays a pivotal role in the financial success of construction businesses. With accurate accounting, you can track project costs, manage cash flow, and make informed decisions to protect narrow profit margins. By understanding the unique challenges of construction accounting and implementing these eight essential steps, you can set your construction business on the path to financial stability and long-term success.

    Strategies for Effective Receipt Management

    Tips for Managing Your Construction Accounting Processes

    Here are some valuable steps to kickstart your construction accounting journey, ensuring that your bookkeeping and financial management stay on the right track:

    1. Segregate Personal and Business Expenses

    For construction firms, the initial crucial step is to establish a separate business bank account exclusively dedicated to your business finances. This separation streamlines financial management and organization. To initiate a business bank account, you will typically require a social security number or employer identification number (EIN), personal identification (such as a driver’s license or passport), a copy of your business license, and relevant organization documents filed with the state.

    2. Break Down Project Costs with Job Costing

    Given the project-centric nature of construction accounting, adopting a job costing system is essential. Job costing allows you to meticulously track, categorize, and report financial transactions for each project. This method ensures accurate accounting for profitability on a per-contract basis, helping you ensure that your service prices adequately cover all overhead expenses. Job costing involves calculating the cost of labor, materials, and overhead for each specific project, represented as Total Job Cost = Direct Materials + Direct Labor + Applied Overhead.

    3. Record Day-to-Day Financial Transactions

    Use various tools such as journals, spreadsheets, or construction accounting software to document daily transactions, encompassing accounts payable, accounts receivable, labor costs, and material expenses. Ensure that each transaction includes a description, transaction date, and revenue received. Utilizing construction invoice templates can simplify billing for clients and maintain a comprehensive paper trail of all construction projects and generated revenue.

    4. Select Appropriate Revenue Recognition Methods

    Revenue recognition in construction accounting differs from regular business accounting due to the industry’s nature. For companies handling long-term contracts, two primary revenue accounting methods exist:


        • Completed Contract Method: Under this method, contract revenue recognition occurs upon project completion.

        • Percentage of Completion Method: Revenue recognition is based on the percentage of project completion within the fiscal year, calculated by comparing incurred expenses allocated to the contract during the year to total estimated costs. Generally, construction businesses with gross receipts exceeding $10 million must use the percentage of completion method for tax purposes. Those with gross receipts below $10 million can apply the completed contract method for projects lasting less than two years but must use the percentage of completion method for longer projects. Generally accepted accounting principles recommend using the percentage of completion method for financial statements.

      5. Track Business Expenses

      Categorize expenses by service and individual job to facilitate tracking of both income and expenditure. Employ an expense tracker and keep receipts to monitor expenses and project profits for each job. Common construction industry expenses encompass

      • business registration and licensing,
      • bank fees,
      • tools and equipment,
      • travel expenses (including fuel),
      • electronics,
      • trade school tuition,
      • vehicle maintenance,
      • phone and internet costs,
      • lodging,
      • software subscriptions,
      • membership fees (unions and associations),
      • mileage (for tax purposes),
      • insurance, lease payments,
      • safety equipment and uniforms,
      • subcontractors,
      • employee payroll,
      • advertising, and marketing.

      6. Reconcile Bank and Supplier Statements

      Regularly reconcile bank statements with your own accounting records, invoices, and payments. This process involves comparing bank records to expense receipts, identifying any discrepancies, and ensuring alignment between your construction accounting system and your bank account. Address any inconsistencies by contacting your bank.

      7. Pay Estimated Taxes

      Construction companies typically pay estimated quarterly taxes, with various methods available, including Electronic Federal Tax Payment System (EFTPS) enrollment, online payments via the IRS website, debit or credit card transactions, or mailing checks or money orders to the IRS.

      Your choice of a tax calculation approach can include a “completion percentage” method, which calculates taxes based on quarterly income and expenses, or a “completed contract” method, which assesses taxes owed on each individual contract. A reliable accounting strategy should be chosen to minimize confusion during tax time, and professional assistance may be advisable.

      8. Consider Hiring an Accountant (Optional)

      While managing construction accounting independently is possible, the complexities of owning a construction company may lead to costly accounting errors. Similar to having project managers overseeing job sites, employing a professional accountant to handle various transactions across different jobs and services can be beneficial.

      Accountants provide clarity on financial data, manage books, generate reports, estimate quarterly tax payments, maintain cash flow, and safeguard narrow profit margins. 

      9. Leverage Construction Accounting Software

      To elevate your construction accounting beyond manual methods and spreadsheets, consider utilizing construction accounting software. This software streamlines tasks such as online invoicing, expense tracking, payment monitoring, financial report generation, and more. Clients tend to have greater trust in businesses employing accounting software due to its secure and convenient online payment capabilities. Additionally, construction accounting software equips you with the necessary tools to manage accounting effectively and make informed financial decisions.

      Efficient construction accounting is imperative for the success of construction companies. It goes beyond project oversight, serving as the linchpin for financial health and long-term viability in an industry known for its tight profit margins and intricate project intricacies. The unique challenges of construction accounting, from specialized revenue recognition to complex job costing, demand meticulous attention and adherence to industry standards.

      To navigate these complexities, construction companies should adhere to the eight crucial steps outlined in this article, which include understanding construction accounting nuances, setting up a robust accounting system, choosing the right accounting method, implementing job costing, and monitoring cash flow.

      Additionally, practices like segregating personal and business expenses, reconciling statements, and utilizing construction accounting software can bolster financial stability and foster trust with clients.

      Reconcile Bank and Supplier Statement

      Construction accounting is the backbone of a thriving construction business, safeguarding profit margins and ensuring long-term prosperity. By embracing its intricacies and following the prescribed steps, construction companies can fortify their financial foundations and thrive in this dynamic and challenging industry.

      Frequently Asked Questions (FAQs) on Construction Accounting:

      1. What makes construction accounting different from other forms of accounting?

      Construction accounting differs due to the project-based nature of work, diverse revenue recognition methods, fluctuating operating expenses, job costing intricacies, and the need to manage revenue recognition across long-term contracts.

      2. What are the primary challenges faced in construction accounting?

      Construction accounting faces challenges like managing diverse services, fluctuating overhead costs, accurately tracking costs of goods sold, dealing with long-term contracts, and reconciling project-based revenue recognition.

      3. How do construction companies manage project-specific finances effectively?

      To manage project finances, construction companies employ job costing to track costs associated with individual projects, recognize revenue accurately based on project completion, and monitor cash flow meticulously.

      4. Which accounting methods are commonly used in construction accounting?

      The two primary revenue recognition methods in construction accounting are the percentage of completion method (recognizing revenue based on project progress) and the completed contract method (recognizing revenue upon project completion).

      5. Why is segregating personal and business expenses crucial in construction accounting?

      Separating personal and business expenses is essential to maintain financial clarity, streamline accounting processes, and ensure accurate financial reporting, especially for tax purposes.

      Starting a new business venture is an exhilarating journey, but it also comes with its fair share of financial responsibilities and complexities. Proper accounting practices are the cornerstone of a startup’s financial health and success. In this comprehensive guide, we’ll explore essential accounting tips for startups, helping you establish a solid financial foundation and make informed financial decisions.

      1. Choose Good Accounting Software

      Choose Good Accounting Software

      One of the first crucial steps for any startup is selecting the right accounting software. Modern startups benefit immensely from cloud-based accounting solutions that offer accessibility, scalability, and real-time financial data.

      Invest in bookkeeping software (and possibly a bookkeeper). Bookkeeping involves systematically tracking all income and expenses, serving as a crucial element of effective financial management that equips business owners with essential data for informed decision-making.

      Often, small business owners lack the accounting expertise required for this task. Consequently, hiring a dedicated professional or outsourcing the function, especially for smaller enterprises, proves to be a prudent investment.

      Accounting software streamlines the time-consuming and error-prone manual bookkeeping processes, simplifying the retrieval of necessary information for crafting financial statements. Leading accounting software options like QuickBooks Online, Xero, and FreshBooks empower startups to streamline financial transactions, generate accurate reports, and maintain financial records with ease.

      Cloud-based accounting software has gained substantial popularity among small businesses, with over 50% of U.S. respondents in a Robert Half survey indicating the use of cloud-based solutions for accounting and finance. While many businesses initiate their accounting journey with basic software, as they expand and confront increasing complexity, they may find it necessary to transition to an enterprise resource planning (ERP) system.

      An ERP system allows the addition of modules for various business functions, all integrated into a single database, promoting efficiency and cohesion within the organization. The right software can save you time, reduce errors, and provide valuable insights into your business’s financial health.

      2. Separate Bank Account

      To maintain financial clarity and accountability, it’s vital for owners to have separate personal and business finances through separate bank account. Open a dedicated business bank account to handle all monetary transactions related to your startup.

      This separation simplifies record-keeping, ensures compliance with tax regulations, and offers a clear view of your business’s financial well being. Additionally, consider obtaining a business credit card for expenses related to the startup. This separation makes it easier to track and manage business expenses, helping you stay organized and claim tax deductions effectively.

      3. Adhere to Generally Accepted Accounting Principles

      Following Generally Accepted Accounting Principles (GAAP) is essential for accurate and standardized financial reporting. While GAAP compliance may not be legally mandated for all startups, it’s considered best practice. Adhering to GAAP principles ensures consistency in financial statements, making it easier for potential investors, lenders, and stakeholders to understand your company’s financial health.

      4. Implement a Robust Accounting System

      Establishing a sound accounting system is fundamental to startup success. This system encompasses processes, procedures, and controls for recording financial transactions, managing cash movement, and producing accurate financial reports.

      It helps you maintain financial discipline and ensures transparency in your startup’s financial operations. A well-structured accounting system is the backbone of financial stability and growth.

      Monitor Cash Flow

      5. Monitor Cash Flow

      Cash movement is the lifeblood of any startup. Efficient cash movement management ensures you have enough liquidity to cover operational expenses, invest in growth opportunities, and weather unforeseen challenges.

      Regularly analyze your cash flow statement to track the movement of money in and out of your business. Identify trends, anticipate potential cash shortfalls, and take proactive measures to maintain a healthy cash movement.

      6. Prepare Accurate Financial Statements

      Accurate financial statements, including income statements (profit and loss), balance sheets, and cash flow statements, are essential for gauging your startup’s financial well being. These statements provide a snapshot of your business’s financial performance, assets, liabilities, and cash position.

      Keeping these statements up-to-date and accurate ensures that you have a clear understanding of your startup’s financial position, allowing you to make informed decisions and attract investors or lenders.

      7. Properly Record Business Expenses

      Accurate and meticulous recording of operating cost is a foundational aspect of sound financial management for startups. This practice encompasses comprehensive documentation of all expenses associated with your business, encompassing everything from receipts to invoices and payment records. By diligently maintaining these records, startups can harness several advantages, primarily revolving around tax deductions and financial management.

      Firstly, maintaining meticulous records of business expenses is instrumental in reducing taxable income and subsequently lowering your tax liability. This not only ensures that you are not paying more in taxes than necessary but also allows you to take full advantage of available deductions, ultimately contributing to your startup’s financial well being.

      Additionally, it enables transparency and accountability in your monetary transactions, providing a clear overview of where funds are allocated within your business. This information is invaluable when making strategic decisions, as it helps identify areas where cost-efficiency can be improved and resources can be allocated more effectively. In essence, proper expense recording serves as a foundation for a well-organized and fiscally responsible startup, facilitating both tax optimization and efficient financial management

      8. Choose the Right Accounting Method

      Startups can typically choose between two accounting methods: cash accounting and accrual accounting. The method you choose affects when you recognize revenue and expenses. Understand the implications of each method and select the one that aligns with your business operations and goals.

      Choosing the right accounting method is crucial for startups, as it profoundly impacts financial recording and reporting. Startups typically have two primary options: cash accounting and accrual accounting.

      Cash Accounting recognizes revenue and expenses when actual cash changes hands, making it straightforward and suitable for smaller startups. It offers clear insights into cash flow and can defer taxes until payment receipt, benefiting businesses with irregular income.

      Accrual Accounting records revenue when earned, regardless of cash flow, and expenses when incurred, providing a more accurate financial picture. It suits larger or complex startups, though it’s more intricate. Accrual accounting enhances financial reporting accuracy and ensures compliance with accounting standards.

      Factors to consider include business size, tax implications, financial reporting needs, and cash flow management. Consulting an accountant or financial advisor can guide startups in choosing the method aligning best with their goals and regulatory requirements.

      9. Plan for Taxes

      Tax planning is an integral part of startup accounting. Be prepared to handle payroll taxes, income taxes, and any other applicable taxes based on your business structure. Consider working with a tax professional or using tax software to ensure accurate tax returns and compliance with tax laws.

      Tax planning is indispensable for startups, encompassing a comprehensive grasp of various tax obligations, such as income taxes and payroll taxes, unique to their business structure. Collaborating with tax professionals like CPAs or tax advisors is often prudent due to intricate tax laws and regulations, ensuring compliance and minimizing tax liabilities. Additionally, employing tax software can streamline income and expense tracking, tax calculations, and form generation, enhancing accuracy and efficiency.

      Focusing on compliance is paramount in tax planning to avert penalties, fines, and legal complications that can adversely affect a startup’s financial standing. Simultaneously, optimizing tax liability entails exploring deductions, credits, and incentives to alleviate the tax burden, freeing up resources for reinvestment or business growth.

      In summary, tax planning is a multifaceted facet of startup accounting that necessitates understanding tax obligations, professional collaboration, tax software utilization, compliance assurance, and tax liability optimization, collectively fostering financial stability, legal adherence, and capitalization on available tax advantages.

      10. Seek Professional Guidance

      As a startup owner, you wear many hats, but managing complex financial matters may not be your forte. Consider partnering with accounting professionals or firms specializing in small businesses.

      They can offer expert guidance in cash flow management, help with tax preparation, and ensure that your financial records are accurate and compliant with regulatory requirements.

      Seek Professional Guidance

      Effective bookkeeping process and financial accounting is the cornerstone of a successful startup. Implementing these accounting tips for startups can help you establish a solid financial foundation, navigate the complexities of financial management, accounting process and set your business on a path to sustainable growth. By making informed financial decisions and leveraging modern accounting tools, your startup can thrive in today’s competitive business landscape.

      Ready to take your startup’s financial health to the next level? Don’t navigate the complexities of accounting and bookkeeping alone. Get the expert help you need with Vyde! Our dedicated team offers comprehensive business accounting, tax, and bookkeeping services tailored to empower startups like yours. With Vyde’s support, you can establish a solid financial foundation and set your business on a path to sustainable growth. Make informed decisions and leverage modern tools with Vyde by your side. Contact Vyde today to thrive in the competitive business landscape!

      Frequently Ask Questions: 

      How do I choose the right accounting software for my startup, and why is it essential?

      Choosing the right accounting software depends on your business needs. Look for cloud-based options like QuickBooks Online, Xero, or FreshBooks for accessibility, scalability, and real-time financial data. It’s essential because it streamlines financial transactions, generates accurate reports, and simplifies financial record-keeping.

      What’s the significance of maintaining a separate bank account for my startup’s finances, and should I get a business credit card?

      Maintaining a separate bank account is vital to ensure financial clarity and compliance with tax regulations. It offers a clear view of your business’s financial health and simplifies record-keeping. Getting a business credit card for startup expenses makes it easier to track and manage expenses, helps with organization, and allows you to claim tax deductions effectively.

      Why should startups adhere to Generally Accepted Accounting Principles (GAAP), and is it legally required?

      Adhering to GAAP principles is essential for accurate and standardized financial reporting. While it may not be legally mandated for all startups, it’s considered best practice. Following GAAP ensures consistency in financial statements, making it easier for potential investors, lenders, and stakeholders to understand your company’s financial health.

      How can I establish a robust accounting system for my startup, and what are the benefits of doing so?

      To establish a robust accounting system, define processes, procedures, and controls for recording financial transactions, managing cash movement, and producing accurate financial reports. The benefits include maintaining financial discipline, ensuring transparency, and providing a stable backbone for financial stability and growth within your startup.

      Why is monitoring cash flow crucial for startups, and what steps can I take to ensure a healthy cash flow for my business?

      Monitoring cash flow is crucial because it ensures you have enough liquidity to cover operational expenses, invest in growth opportunities, and handle unforeseen challenges. To ensure a healthy cash flow, regularly analyze your cash flow statement to track money movement. Identify trends, anticipate potential cash shortfalls, and take proactive measures, such as managing expenses, to maintain a robust cash flow.


      Are you looking for reliable bookkeeping services for your business? Like many business owners, you may not know where to start. When you are passionate about your business but the numbers are overwhelming and challenging for you, competent and professional bookkeeping services can easily take care of the dollars and cents on your behalf. If you would like to be truly profitable and successful, you have to keep tabs on your business finances.

      As a small business owner, if you do not know where you stand on a monthly, quarterly, or annual basis, your chances of surviving and growing can decrease considerably. There is no doubt that a bookkeeper can help manage your finances, provide valuable insight, and can have a big impact on the trajectory of your small business.

      Here are five things you should consider when hiring the right bookkeeper for your business.

      1. The Right Experience and Expertise

      When you start researching potential bookkeepers or bookkeeping companies, find out about their experience level. It is no secret that every industry has its unique quirks when it comes to financial record-keeping. Check to see if the company or candidate has experience and confidence that they can navigate the ins and outs of your industry.

      In addition, make sure you have the right experience for the right role. Instead of having one person try to tackle all your finances, look for a team of specialized individuals who work well together. Having someone who specializes in bookkeeping focus on your books and an accountant who specializes in tax do your taxes can improve accuracy and save you money.

      While a company website will certainly offer some valuable insights into their experience, you should ask a few important questions. Some of them are:

      • How long has the candidate or company been in the bookkeeping industry?
      • What type of clients do they serve?
      • Do their services meet your business needs?

      Accounting and bookkeeping is not an easy science. So, for a business that is starting out or growing, you need to have somebody who has been successfully doing this job for quite some time.

      2. Communication is Key

      If you are not good with numbers, you need a professional who will help you understand and appreciate the numbers. So, it is important to make sure that your communication style and the communication style of your bookkeeper work well together.

      Some bookkeepers or bookkeeping companies charge extra for financial reviews or consultations. Ask about potential additional costs and be sure to factor those into your budget. It’s good practice to meet with your bookkeeper or accountant at least once per quarter to get a better gauge on your business finances.

      Your bookkeeper needs to present your business finances in a simple way that makes sense and also keeps you informed at both the frequency and level that you prefer.

      3. They Must Have Attention to the Detail

      Numbers can be challenging and tricky to deal with. Keep in mind that even a small error or mistake in figures could impact your company. Look for a bookkeeping company or individual that has a thorough review process so you can have confidence your reports are accurate. A bookkeeper’s ability to give attention to the smallest details can ensure that mistakes or errors are minimized.

      4. Look for Transparency and Trustworthiness

      When it comes to bookkeeping, transparency must be among the first things that you should look for in a candidate. The bookkeeper you choose should be able to give you an instant and reliable quote for their services without any hidden fees that may pop up after several months of working together. There is no doubt that this is the type of transparency and honesty that you need in the bookkeeper who will be handling your business finances.

      Also, note that any bookkeeping professional that you hire should be a reliable and trustworthy candidate. You will entrust this professional with confidential and sensitive financial details of your business. Choosing an individual or company that you could rely on and trust would give you peace of mind.

      5. Up to Date on Tech

      The financial industry is continually evolving, and while the principles of bookkeeping and accounting might not change, there are ways your bookkeeper can make your financial data more accessible and digestible than ever before. Look for a bookkeeper who is open to adopting innovations and can keep up with changing technology to provide you with the best experience.

      The right bookkeeper for your business should be adept at using standard bookkeeping software and tools, and they should also have an innovative mindset to help you have better insight and make informed business decisions.

      There is no doubt that hiring a bookkeeping professional or company can be an important decision for your business. An excellent bookkeeping partner will be with you and help you every step of the way as your company grows.

      One of the perks of being a small business owner is the tax deductions you can take advantage of, including how to write off a business trip or vacation. You just need to know your motives before you go!

      To begin, you need to understand your trip needs to have a business purpose for it to be eligible as a tax deduction. The key element to writing off your trip is that its primary purpose is business.

      When it comes to the topic of how to write off vacations—and all business expenses—the IRS requires your trip to be both ordinary and necessary to be deductible.

      In IRS lingo, ordinary means it’s an expense “that is common and accepted in your business,” while necessary means “an expense that is helpful and appropriate for your business.”

      Keeping those ideas in mind, here are some key tips for writing off your vacation.

      Common Business Activities That Require Travel

      Common business activities that you should consider on your trip include:

      1. Attending a convention or seminar: Take a look at the calendar and see if there is a convention or seminar that would be beneficial for you to attend in an area where you can also enjoy some needed rest and relaxation.
      2. Meeting with clients, partners, or potential customers: As you are traveling to new destinations, consider the customers, potential clients, or partners you might have in the area. Set up times to meet with them to gain new insights for your business.
      3. Meeting with vendors: Research the area to see if there are any vendors or potential vendors or partners you would want to meet with. Then, set up appointments in advance.
      4. Conducting business research: This can be a bit of a grey area, so make sure your reasons are sound. As you prepare for a trip, see if there are any research opportunities you can take advantage of in that area. Traveling to Hawaii just to do some research on Google will not be a compelling enough justification in case of an IRS audit. Scoping out a local market, meeting with researchers, or taking advantage of resources specific to that area will create a much stronger case.

      Business Expenses That Are Tax-Deductible

      Business expenses that are tax-deductible include:

      • Plane tickets
      • Rental cars
      • Gas
      • Taxis or other transportation expenses
      • Seminars
      • Conventions
      • Meals
      • Research expenses
      • Employee expenses
      • Hotel rooms or other accommodations
      • Business activities

      It’s best if you pay for these expenses using your business bank account to avoid comingling your accounts. That way, all your trip expenses are in one place and easy to find. However, if you do pay for some things with a personal card, you can still get the tax deduction. Just make sure to keep good records and keep track of your receipts and notes in case of an audit. Learn what to do after you file your taxes.

      IRS Requirements: Knowing How to Write Off Vacations

      The IRS has several requirements that each small business owner must abide by which are important to know when learning how to write off vacations, including:

      1. Majority: The majority of the days of the trip must be business-related. However, it’s important to note business days include weekends, travel days, convention or seminar days, and days you meet with clients or conduct research.
      2. Planning: Make sure conventions and appointments are planned in advance and meetings with vendors are scheduled. This will help demonstrate the intention of your travel was business. Save emails or documents that could help demonstrate this in case of an audit.
      3. Documentation: Save all your receipts over $75.00 and any lodging expenses (even under $75.00).
      4. Notes/minutes: Hang onto brochures or keep notes of business meetings. These will provide proof that you attended these business activities during your travels.
      5. Reasonable: Keep in mind that all expenses need to be reasonable to write-off.  The main write-offs include travel (plane tickets, rental cars, gas, taxis, etc.), accommodations (hotel rooms), employee expenses, business activities (conventions, seminars, employee activities, etc.), and meals (groceries, restaurant receipts, etc.).

      So you’re probably wondering, “Where does the vacation come in?” Let’s look at an example:

      Enjoying Vacation with Business

      If you wanted to visit a friend in Chicago and stay for a few days, take a look at your schedule.  You could travel by plane on Thursday (business day), attend a seminar Friday (business day), and visit your friend on Saturday (business day) and Sunday (business day) since weekends are automatically considered business days. You could them take Monday, Tuesday, and Wednesday for vacation days before traveling home Thursday (business day). The majority of the days were considered business days and all your flights, meals, and accommodations are deductible.

      • 2 Travel Days = Business Days
      • 1 Seminar Day = Business Day
      • 2 Weekend Days = Business Days
      • Mon-Wed = Vacation Days

      4 Business Days + 3 Vacation Days = Business Trip

      International Vacations and Increased Deductions

      Examine if it would be beneficial for you to travel internationally for your business. You can increase your national network as well as develop your cultural understanding of another country.

      If you are traveling internationally, you may be able to deduct more expenses than a vacation located in your domestic country. International vacations need to have a quarter of the time dedicated to business. However, if your vacation doesn’t consist of mostly business you can still write off a percentage of your trip.

      Taking Your Family on a Business Trip

      What happens if you take your family on a vacation but still attend business activities? Do you miss out on all the tax deductions?

      If the trip still meets the criteria above, you can still take advantage of writing off your trip, but calculating the write-off might be a little trickier. For example, you can write off your plane ticket but not your family’s plane tickets.

      Here are the expenses you can still write off:

      • Your hotel room or accommodations
      • Your rental car, gas, and transportation
      • Your plane ticket
      • Your portion of the meals
      • Convention or seminar passes and expenses
      • Research expenses
      • Employee expenses
      • Business activities

      Other expenses you can’t write off include:

      • ‌Souvenirs
      • Family or friend plane tickets
      • Family or friend meals
      • Family or friend additional hotel rooms or accommodations
      • Excessive expenses

      Again, it’s best if you can pay for business expenses with a business card, so separate restaurant checks or buy plane tickets separately where possible.

      What if a family member is an employee?

      If a family member is an employee and goes on the trip with you, you can write off their travel expenses as long as they attend and contribute to planned business activities. For example, they could attend the convention or seminar, participate in business conversations with clients, engage in research, etc.

      This goes back to the discussion about ordinary and necessary. Would it be commonly accepted for a business in your line of work to send multiple employees to an event like this? Is it helpful and appropriate for your business? If so, then you can write off both of your expenses.

      Common Mistakes to Avoid

      Now that you know the expectations for a business trip and the expenses you can write off, let’s review a few common mistakes small businesses make when trying to take a tax deduction on a trip:

      1. Not having a strong business tie or plan ahead of time.
      2. Not keeping receipts, travel plans, business notes, brochures, and other documentation.
      3. Not using a business bank account to track business expenses. Again, you can still write off expenses paid with your personal account, but this is not ideal.
      4. Trying to write off expenses that are excessive and unnecessary. This can raise a red flag for the IRS.
      5. Not taking advantage of the fact that weekends are automatically considered business days, whether or not you conduct business activities on those days. Extend your trip to include weekends if you want to enjoy a little extra vacation time!

      If you haven’t fully documented your business-related reasons for travel or had a spontaneous lunch with potential clients or business partners, you may still be able to write off some expenses related to that trip. Tax deduction rules allow 50 percent of entertainment and meals to be written off when your vacation has a small portion of business-related activities.

      Instead of thinking, “how can I write off my vacation?” think “how can I add a vacation to my business trip?” As a small business owner, you want to save money, and what better way to save than planning a trip around your business!

      If you have additional tax tips or questions, reach out to our team today or sign up for a 30-day free trial with Vyde! We are here to save you time, money, and stress by handling your small business bookkeeping and taxes.

      Are you looking to build your business?

      As small business owners, it is easy to get distracted by the length of our to-do list and lose sight of the important factors that drive our business’ success. It’s also easy to ignore financial reports when we don’t know how to translate the numbers on the report into key insights about the health and value of our business.

      As a certified public accountant and founder of Vyde, I wanted to provide you with some of these key insights that can drive your business success.

      1. Sales

      Let’s start with the business basics—sales, also known as revenue. As business owners, we understand that the money we generate is our lifeblood. This is what allows us to function from day to day, earn a comfortable living, pay our employees, and invest in growing and improving our business.

      But what do we do with those sales numbers after we see the reports? Increasing sales and revenue is important, but if that is the only number we focus on, we could run into problems in the long run. Driving up sales will not impact the bottom line if we have to increase spending to get there. That’s why the next numbers are important to evaluate as well.

      2. Gross Margin

      When you look at a profit and loss statement, you will see your revenue, your variable expenses (also known as cost of goods sold or cost of sales), your fixed expenses (expenses that don’t change from month to month, such as rent), your total expenses, and your net profit.

      Gross profit is what you are left with when you take your total revenue and subtract your variable expenses. In effect, you are taking your sales and subtracting what it costs to make and sell your product or service. While this is an important number to keep tabs on, a much more telling number is your gross margin.

      Gross margin helps you gauge your efficiency so you can work toward a healthier bottom line.

      You can figure out your gross margin by dividing your gross profit (total revenue minus cost of goods sold) by your total revenue and multiplying that by 100 to get a percentage.

      Gross Margin = (Total Revenue – Cost of Goods Sold)/Total Revenue x 100

      A low gross margin means you will want to make some adjustments to reduce your costs; a high gross margin means you are maximizing your profits.

      Another way you can calculate gross margin is to simply divide your cost of goods sold (or variable expenses) by your revenue. You can then subtract that number from 1 and multiply it by 100 to get your gross margin.

      Gross Margin = 1 – (Cost of Goods Sold/Total Revenue) x 100

      As both your gross profit and gross margin increase, you will start to see improvement in your business. There is no one percentage that represents the ideal gross margin. Driving your gross margin higher at the expense of quality or customer service will have negative repercussions. As you are setting your goals, research healthy gross margins in your industry and look at the ways other businesses improve their efficiency. Understanding these numbers will help you set goals and work toward a healthier bottom line.

      3. Net Profit

      This is your bottom line. Your profit and loss statements should provide you with a net profit, but you can also easily calculate this by subtracting all your expenses (variable and fixed) from your revenue.

      Net Profit = Revenue – All Expenses

      Your net profit is the money you have available to pay yourself and invest in future ventures. It is also the money you will be taxed on at the end of the year, which leads us to the fourth number you should be tracking.

      4. Taxes

      One problem many first-time business owners run into is not properly preparing for their taxes. No one wants a surprise bill come tax season.

      The best way to prepare is to meet with a tax professional to create a plan. We encourage all our clients at Vyde to meet with us twice per year to plan for the upcoming tax season. There are many variables that go into calculating your taxes, including spouses, dependents, what other jobs you hold, self-employment tax, deductions, tax credits, your tax bracket, etc. That’s why you can make a more accurate plan by sitting down with a professional. However, if that is not an option for you, the general rule of thumb is to set aside 25% to 30% of your net profit for taxes.

      As you track these four different numbers over long periods of time, you will start to generate month-over-month and year-over-year comparisons that allow you to identify trends, strengths, and weaknesses in your organization.

      Evaluating these numbers regularly will help you drive your business success to the next level.

      Have questions? We’d love to answer them and talk to you about setting up a financial strategy for your business. Contact us today! 

      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 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!

      Try Vyde Free