In business accounting, there are two ways to calculate profits and losses. These are cash basis and accrual. Each method has its pros and cons, and it's wise to learn a bit about both before committing to one. Definitions Cash basis accounting is a process where profits and losses aren't booked until money officially exchanges hands. Accrual places profits and losses on the books the minute the transactions are registered.

As a business owner, you have dozens of tasks that require your attention each day. You lack the time in your typical workday to handle practical matters like taking care of your books or filing your taxes. However, you also cannot let these important obligations fall by the wayside or simply not get done. Instead of trying to handle them yourself, you can outsource them to one of the certified public accountants in your area.

All small businesses must face the same question: whether to do their accounting work in-house or outsource it to others. While paying someone else to do accounting for you involves a cost, it also saves money in other ways. How can this move actually reduce your costs? Here are five key ways.  1. Avoid Additional Payroll Costs. The hourly wage you pay someone to do your books doesn't represent the full cost of employing them.

When you start a small business, you likely expect to do much of — or all of — the early work yourself. But hiring an accountant is a good investment to get your new venture up and running. Here are a few important tasks they can help with and how these will add to your bottom line.  1. Selection of Business Entity. One of the first steps toward starting your business is to choose a business entity or structure.

If you are an artist, there is a good chance that you could benefit from working with an accountant. If you don't really think that you need to hire an accountant, consider the different ways that an accountant can help you out. Get Help With Determining Your Expenses It can be difficult to get a true idea of how much you spend on your art. However, between things like setting up your studio and buying art supplies, there is a good chance that you spend a significant amount of money.

As a small business owner, you have a lot going on pretty much at all times. There's inventory to order, employees to train, and customers to assist. One of the most important things you have to do on a regular basis is pay your employees, and running the numbers on this could take up a good chunk of your time if you insist on doing everything yourself. A better idea, though, might be to let go and let a trained professional handle this task.

All businesses have extensive accounting and bookkeeping needs. Unfortunately, small business owners often struggle with meeting these needs or may not be fully aware of what is involved. Appreciate The Benefits Of Proper Bookkeeping Owners and managers of businesses will have to make a seemingly endless number of decisions over the course of managing their enterprise. In order to make sound financial choices, they will need to have accurate information about their enterprise's financial health.

Most people dread tax season. It can get confusing trying to understand changing tax laws as well as what documents and forms you even need to correctly file. When you try to handle taxes on your own, it can create a big and expensive mess that you end up needing to fix later on. The good news is there are tax preparation services available. You can hire an accountant to file and prep your taxes for you so there is less stress.

If you receive an LT16 form from the IRS, it's likely because you owe back taxes from previous tax years. The LT16 form will calculate the full total you owe the IRS (with interest) across all applicable tax years and serves as essentially a final bill before enforcement action is taken. As this notice states, payment arrangement must be made by the stated deadline. If it is not, the IRS will proceed with actions that could include placing a levy on your property or even confiscating funds directly from an income source in order to pay off the back taxes.

If you're the owner of a new business, it's important to understand the importance of good accounting practices. Proper accounting is vital to the survival of your business, and many new businesses fail within a short time due to lack of this. For those who've never run a small business before or hired an accountant, it can be difficult to know where to start. Luckily, it's not too difficult to get your financials in order with the right help.