What is the maximum amount of revenue you can generate based on your current processes and systems? This answer to the “Maximum Capacity” question should serve as a target for you before making any changes within your business. It also serves as a gauge of when to ramp up staffing and beef up your internal systems and processes.
In today’s post, we’re going to review the concept of a “burden rate” and why it is important. This term may have differing names by industry or have varying calculation methods, but the underlying reason for doing it is the same: you must know the cost it takes you to produce revenue. Let’s look at an example to illustrate this point.
We’ve spent time discussing the structure of bookkeeping and the necessary tools to get a complete and accurate product. In this section, we’re turning our focus to a second layer of tracking called project accounting. This adds another level of complexity to the accounting process, but with the right system, it can be done efficiently and effectively. Often times the success or failure of a project-based business is determined by how well they can execute this process.
The wagon wheel concept is a visual representation of how multiple accounting applications come together to form a unified, customized system. It involves decentralizing the modules of a typical accounting system to gain automation and efficiency from the technology advances. When we talk about the wagon wheel, the primary accounting software sits in the middle of the diagram. Around the spokes of the wheel are all the singular modules that solve a specific problem. The goal with this concept is to leverage the strength of each application to create the best possible accounting system.
Most people are familiar with the online bill pay feature included with their bank, but did you know there are bill payment platforms specially designed for small businesses? These systems not only print and mail checks for you, but they can do direct electronic payments with your vendors as well. The banking profile of the vendor can be managed by the vendor without you ever being involved with it. Wires, domestic and international, can all be handled within this system. And perhaps the best feature is the interaction with the bill payment system and your accounting system. Bills automatically sync between both systems for a seamless experience. This drastically reduces the amount of time for data entry. In this article, we’re going to discuss why you should consider moving away from hand-written checks and move toward a bill payment platform.
When should you consider outsourcing your bookkeeping? What are the benefits of outsourcing? In today’s post, we’re going to share some bookkeeping warning signs and then discuss the benefits of outsourcing your bookkeeping.
Most businesses rely on credit cards to make daily purchases in their company. From inventory to supplies, materials and advertising, almost every purchase makes it on the company credit card. It’s a convenience most people rely on, but it has its challenges as an organization grows. It can be tedious to keep up with all the transactions, but this is vital for the owner to have accurate and up-to-date financial reports. The other challenge is oversight with the team. There are four areas that should be considered for your credit card policy.
In its simplest terms, a budget is a realistic estimate of future revenues and expenses. This is an important exercise for a business to do at least annually just prior to the new year. Budgets should include your normal operating revenues and expenses, but also factor in capital improvements, staff additions, infrastructure investments (like software or equipment), and other long-term purchases. A great budget allows the team to plan future expenditures that align with the mission and vision of the organization.
Now that you have a company credit card, it’s time to implement a system to oversee it. The two big players in the industry are Abacus and Expensify, and both would meet the needs of most businesses. These accounting applications are designed to solve three problems: (1) data entry and efficiency, (2) recordkeeping, and (3) oversight.
So you’ve made the decision to move from a desktop accounting application to the cloud. The next question is, which vendor will you choose? There are many worthy choices out there that will serve most businesses. However, we’re looking for the most optimized solution and there are certain factors that need to be considered. QuickBooks Online is the most widely used and recognized player in the industry. Our firm reviewed QuickBooks Online and Xero, another major player in the could accounting space. After reviewing both QuickBooks Online and Xero, we settled on Xero for these four reasons.