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.
Accounting Frontier Blog
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.
Bookkeeping is the daily recording of financial transactions so you can tell how much income your business made, how much you spent, and how much was left over. The purpose of bookkeeping is to give you an accurate set of books, so you know how your business is performing. Bookkeeping is one of the things that often gives business owners a lot of heartburn and many view bookkeeping as a necessary evil. You likely started the business because of a passion you have, because you wanted the financial freedom that comes with owning your own business, or maybe it was a combination of both factors. Bookkeeping became a necessary function of your business as you grew but one you would probably choose to skip if you could. It doesn't have to be difficult though and you can learn to love how your accounting helps you monitor your business' performance. There are so many resources and tools that are available to businesses these days and it is easy to set up a business' books in an accounting software like Xero or QuickBooks. In addition to that, there are countless tools available for every industry to help streamline accounting processes, reduce the time involved in bookkeeping, and save your business money.
Before technology and credit cards ruled our lives, cash was king. It was simple to not spend more than you had because if it wasn't in your wallet, you couldn’t spend it. The “envelope system” became a great way for those struggling to get out of debt to plan their monthly expenses and climb out of the financial hole. After receiving a paycheck, you would cash the check and then place money into each of your envelopes representing a segment of your expenses. Examples of envelopes for an individual may include: mortgage, utilities, savings, insurance, and general purchases. The result is that you take control of your money and plan out your finances instead of being a slave to debt. The same can be done in a business!
The future of accounting is in the cloud and the future is here. Before we dive into this topic, you must understand that your approach to accounting needs to change. Gone are the days where you use one accounting system. Cloud accounting applications are designed to be narrower than your traditional “one-size-fits-all” model. Each application has one primary function and they do it with excellence. If you just tried to use that one application, you would have an incomplete system. But if you combine these applications into one single system, you can customize it to meet your needs and still see the benefits we will discuss later. Today, I want to share three reasons why you should consider a move to cloud accounting.