Why A Bookkeeper Is More Beneficial Than Bookkeeping Software

Why A Bookkeeper Is More Beneficial Than Bookkeeping Software
There are a million and one tasks that require the attention of a business owner. Arguably, the bookkeeping is one of the more important tasks. Yet, many small business owners are not experienced in managing their bookkeeping, especially with the careful tracking needed for business accounting.

Bookkeeping software seems like a natural solution, but it may not be the best answer to your accounting issues as a small business owner. Instead, choosing a bookkeeping service can free up your time, save you money in the short- and long-term, and many other benefits.

Outsourced Bookkeeping Is More Affordable

It may seem counter intuitive, but outsourcing your bookkeeping can be far more affordable than simply purchasing bookkeeping software to take care of it yourself.

For one thing, there are many different levels of bookkeeping software. The pricing of bookkeeping software can vary widely, but if you opt for more affordable bookkeeping software, you may not have all the features you need. This restriction can leave you without the proper financial tools to manage your business properly.

By outsourcing your bookkeeping to your local Cedar City accountant, you can relax, knowing that our accountant has the best bookkeeping tools available. That way, you don’t have to invest in software that may not be what you ultimately need.

Free Up Your Valuable Time

The time you spend taking care of your company’s bookkeeping may be better spent on some other aspect of your business. From marketing to providing services or products, there are other tasks that take up the time of a small business owner.

But if you are spending hours reconciling bank accounts, balancing the general ledger, chasing down accounts receivable, and other common bookkeeping tasks, you won’t have the time you need to effectively run your company. Even with bookkeeping software, you still have to take care of the bookkeeping yourself, even if some of the processes are streamlined.

Instead, you can leave your bookkeeping in the hands of our qualified accountant and focus your attention on tasks that need your attention more.

Enjoy Human Oversight

As long as there is nothing egregiously incorrect with your bookkeeping, your average bookkeeping software will not recognize the issue. However, there are a number of errors that can slip by software that has no other human oversight than your own. With no one else to review your bookkeeping, expensive mistakes can be made.

By opting to outsource your bookkeeping, you can be reassured knowing that an experienced accountant is reviewing your accounts, and an accounting firm will often have multiple check system to catch any errors.

Accurate Financial Reports

Part of the importance of keeping up with your bookkeeping is that these records help to create an accurate picture concerning the status of your business. But, if you haven’t updated your bookkeeping software with the latest information, you won’t be able to have an accurate overview until you do.

Also, not all bookkeeping software is able to generate the financial reports you are looking for when you review your business. Depending on your needs, our accountant should be able to create the financial reports you need to assess the viability of your company.

Better Employee Payroll And Benefits Tracking

One of the highest predictors of employee satisfaction is being paid on time. However, getting payroll completed on time can be difficult if you have other tasks that require your attention. Even with bookkeeping software, you will still need to input employee hours, ensure that pay rates are correct, review tax withholding’s, and double-check benefits accrual.

As payroll is often every other week, it is easy for this task to sneak up on a busy company owner. Instead of having upset employees due to late paychecks, using our payroll services, you can ensure that your employees are paid on time, and the associated benefits are accurately tracked.

Easier When Tax Season Arrives

Making sure that all your financial records and bookkeeping is successfully transferred to your accountant during tax season can be a massive hassle. It can become even worse if your bookkeeping software is not compatible with what your accountant uses.

Rather than go through all that stress, you can leave your tax preparation and filing in the hands of the accountant who is already taking care of your bookkeeping. That way, you won’t face the same kind of stress that other business owners who DIY their bookkeeping.

Greater Security With Outsourced Bookkeeping

How confident do you feel about storing all your financial information on your home computer or laptop? Considering the ease at which computers are infected with spyware and malware, it is a gamble to use bookkeeping software on unprotected devices.

At an accounting firm, the best security is used to protect client information. Also, as these computers are not used recreationally, there is a far lower chance that they could be potentially infected.

Have An Experienced Accountant On Your Side In Cedar City

If you would like to work with our accountant, and see how our bookkeeping services can improve your business, feel free to contact us. We look forward to helping you optimize your company’s finances.

Tax Talk: 8 Changes For Your 2020 Taxes

Tax Talk: 8 Changes For Your 2020 Taxes
Every year when you prepare your taxes for filing, there are changes to the tax law that should be taken into account. Without accounting for change, you may end up surprised by a tax bill you weren’t expecting.

As your local Cedar City tax accountant, AA Tax and Accounting Services is here to give you a heads up on eight of the tax law changes that you should be aware of when it comes to your 2020 taxes.

1. Changes To Tax Brackets For 2020

To help account for inflation, the Internal Revenue Service (IRS) has made adjustments to the 2020 income tax brackets. Below are the updated tax brackets:

Rate Single Filer Married Filing Jointly Head of Household
10% $0-$9,875 $0 – $19,750 $0 – $14,100
12% $9876 – $40,125 $19,751 – $80,250 $14,101 – $53,700
22% $40,126 – $85,525 $80,251 – $171,050 $53,701 – $85,500
24% $85,526 – $163,300 $171,051 – $326,600 $85,501 – $163,300
32% $163,301 -$ 207,350 $326,601 – $414,700 $163,301 – $207,350
35% $207,351 – $518,400 $414,701 – $622,050 $207,351 – $518,400
37% $518,401 and up $622,050 and up $518,401 and up

2. Expand Tax Exemption For Gift And Estate

Previously, people could gift—or hand down to descendants—up to $5.49 million, tax exempt. However, in 2020, that exemption amount has been expanded considerably. Now, the estate and lifetime gift tax exemption has been expanded to $11.58 million per individual.

This tax exemption does not include the annual gift exclusion, which is not included toward your lifetime gift tax exemption. For the annual gift exclusion, you can give $15,000.

3. Increase 401(k) Contributions Limits

For the first time in years, you can increase your contributions to your 401(k) retirement plan as well as your individual retirement accounts (IRAs). Naturally, these contributions can be deductible on your upcoming taxes. As it stands, your retirement plan contribution limits look like this:

  • IRA contributions – $6,000 limit
  • Catch-up IRA contributions for individuals 50 years old or older – An additional $1,000
  • 401(k) contribution – $19,000 limit
  • Catch-up 401(k) contributions for individuals 50 years old or older – An additional $6,000

4. Remove Individual Mandate Penalty

With the Affordable Care Act, there was a penalty applied if you did not have health insurance, don’t qualify for an exemption or the correct level of coverage. This tax penalty was often called the individual mandate penalty.

With the Tax Cuts and Jobs Act of 2017, this penalty was set to be eliminated, but that penalty removal didn’t come in until the upcoming tax season in 2020. So, if you did not have health insurance during 2019, you won’t be penalized for it on your taxes.

5. No Alimony Deduction Or Income

Another effect of the Tax Cuts and Jobs Act was to eliminate the alimony tax deduction in 2019. That means, should you have gotten divorced in 2019 and need to pay alimony, you will not be able to deduct the amount you pay from your taxes.

It also impacts the party that receives the alimony. They will no longer be able to count the alimony payments as part of their income.

6. Greater Health Saving Account Contribution Limits

If you have a health savings account (HSA), you can increase your contributions a bit more and help reduce your tax burden. The slight changes are reflected below and only apply to these plans:

  • HSA self-only – $3,500 limit
  • HSA family – $7,000 limit

7. Deductions For Medical Expense Higher

For those individuals who itemize their taxes, you may find it harder to do that while preparing to file your 2019 taxes. For two years, deducting dental and medical expenses was only possible after they passed the threshold of 7.5% of your adjusted gross income (AGI).

However, when you go to file your 2019 taxes, your dental and medical expenses will only be eligible to be deducted if they surpass 10% of your AGI. This change can make it more difficult to itemize your taxes, as well as the fact that the standard deduction has risen again.

8. New Tax Filing Form For Senior Citizens

After a lot of talk of creating a simpler tax filing system, the Bipartisan Budget Act of 2018 has lead to the creation of the Form 1040-SR. This form is created for senior citizens to help simplify their tax returns. The main requirements to use this form to file your taxes are:

  • Have to be 65 years old or older
  • Must take the standard deduction (no itemization option)

You can check out a draft of the new Form 1040-SR on the IRS website and see what it will be like to file this form.

Let AA Tax And Accounting Services Help You File 2020 Taxes

Filing your taxes on your own can be complicated, and when you use tax software, you are always left with the nagging worry that something has been overlooked. To have the human touch and insight involved when it comes to your 2020 tax filing, you can count on our accountant.

If you would like to have our accountant’s help in preparing and filing your 2020 taxes, feel free to contact us today to schedule your appointment.

How To Improve Cash Flow To Your Business

Improve Cash Flow To Your Business
It is well-known that little over half of all startup businesses make it into their fifth year of operation. While there are a variety of factors that cause these companies to shut their doors, one of the main issues is problems with their cash flow.

If you want to protect your business, it is essential to always be on the lookout for how the cash flow to your company can be improved. From staying on top of creditors to assessing the viability of a business loan, our accountant here at AA Tax & Accounting Services is here to help.

Keep Tidy Financial Records

Without accurate and tidy financial records, it is next to impossible to improve your business’ cash flow. Accurate records will show you what is doing well and what services or products are not performing as expected.

Also, by tracking the cash flow within your company, it is easier to ensure that all is accounted for at the end of the day. With poorly kept financial records, embezzlement and petty theft are far easier. If you don’t have time to keep up with your financial records, outsourcing your bookkeeping can keep your records in better order.

Review Accounts Receivable

Hopefully, you are up-to-date on your accounts payable. If not, you may want to contact your creditors and set up a payment plan that will allow you to generate cash flow as you repay them.

However, an area where many small businesses struggle is their accounts receivable. It can be awkward to contact debtors and remind them that you require them to pay for your services or products. But, if you are not proactive in pursuing your accounts receivable, then you may find your business underwater before long.

If there is a chance that the business relationship can be preserved, it is better not to take your debtors to court. But, if you would prefer to end any business with a particular debtor and have no expectation of payment otherwise, then pursuing court-ordered repayment may be the best course of action.

Reconsider Revenue Recognition Strategy

Your company’s revenue recognition strategy can impact both your taxes and cash flow. If your current revenue recognition strategy doesn’t work for your business, then it may show greater profits than you actually have in-hand. These skewed profits can cause your tax burden to be greater without the cash to help alleviate what you will owe to the IRS.

For instance, say you provide a software service to a client. Maybe your current strategy is on sales-basis, which recognized revenue the moment you and your client agreed to a contract. But for a long-term project, it may make more sense to switch to percentage-of-completion.

Consider A Business Loan

If you need more time to improve your business’ cash flow, a business loan may be just the thing you need to get you through a hard patch. Shopping around for different business loan rates can help you find the best loan possible and help your company make it through a tough spot.

However, this measure is just a stop-gap. If things aren’t improved elsewhere in your business, you may end up both out-of-business and in further debt. By working with an accountant, you can identify the areas of your company where improvements can be made to improve your cash flow.

Negotiate With Suppliers

When you first agreed to your current deal with your suppliers, you may have been at a disadvantage, especially if you were a new company. Other factors, such as market changes, can allow you to work out a better deal with your suppliers.

Either way, it is worth your time to reach out and see if you can get a more favorable deal on your company supplies. Also, you may want to reach out to other companies that may be to supply your needs and receive bids from them.

Let AA Tax & Accounting Services Help Your Business Improve Cash Flow

What changes your business can make to improve cash flow is highly dependent on your company’s circumstances. While the advice in this post is helpful, our accountant can provide far more personalized advice on how you can improve the cash flow to your business.

If you would like to consult with our accountant for personalized insight regarding improving your business cash flow or other accounting needs, please contact us today to set up an appointment.

Why Every Business Owner Needs To Think About Succession Planning

When business is booming, most business owners aren’t thinking about succession planning. Most owners are focused on the nearer future.

It is understandable, as engaging in succession planning is an admission of mortality and that one day, someone else will be running your business once you pass away.

Yet, if you want to ensure that your business continues on after you are no longer there to operate it, you will need to take care of your succession planning, which is best done by working with your trusted Cedar City accountant.

Potential Consequences Of Neglecting Succession Planning

If you aren’t quite sure that leaving succession planning until later is much of an issue, here are some of the potential consequences of not taking your planning seriously.

The company is vulnerable to disaster – Businesses of all sizes can be significantly impacted with a lack of succession planning. As the owner, you are usually the only one privy to important company details, from your accountant’s contact details to banking information. Without this kind of vital information, businesses can end up shuttered.

Business’ brand identity can become compromised – Often, successful businesses develop their branding and identity along with the overall purpose of the business. Yet, without clear succession planning, your successor may take the company in a completely different direction than what you would have hoped.

Lack of management preparation – Often, small business owners take on the majority of management tasks, with maybe one or two supervisors who assist. However, these supervisors likely don’t have all the needed information.

Say that you were preparing an entity restructuring for your business to help your company grow and not be heavily impacted by taxes. If something were to happen to you, there is no way for your supervisors or inheritor to know your plans or the direction you were hoping to move.

The intended heir may be cut out of the business – You may have been planning for one of your children or a trusted partner to take over your business when you pass on. But without clear succession planning, that future can be contested and may end with your intended heir being completely cut out of the business you grew.

Rather than leave your company vulnerable to these potential consequences—and likely other problems—it is best to tackle your succession planning as soon as possible. You can always revise your plan later, but it is better to have it in place.

How AA Tax & Accounting Services Can Assist In Your Succession Planning

It is possible to take care of your business’ succession planning without the help of an experienced accountant. However, it is difficult to plan for every contingency and cover potential gaps without the help of an accountant. Luckily, you don’t have to take care of your succession planning on your own.

Here at AA Tax & Accounting Services, you can work with our accountant to set your business up for future success. He can help identify potential weaknesses and provide financial insights into how you can leave your company in the best shape possible.

If you are ready to take care of your succession planning with our accountant, feel free to contact us today to set up your consultation.

Tax Talk: Selling Property? Here’s What You Should Know About The Capital Gains Tax

As the price of real estate in Cedar City—and Southern Utah in general—have been going up, you may be thinking about selling your property to ride the housing market wave. But, as with all large sales and earning, you may be wondering if capital gains tax will be applied to your property sale.

Well, you are in luck since AA Tax & Accounting Services is here to tell you all about capital gains, how it applied to your real estate sales, and how to prevent paying capital gains tax.

What Is Capital Gains Tax

Capital gains are a form of income tax that is gained by profiting from the sale of an asset. These assets can vary from things like selling stocks, businesses, or in many instances, real estate.

  • Short-term capital gains – When you own an asset for under a year and make a profit from the sale of the asset, you will have short-term capital gains tax applied. The tax will be equal to your current income tax rate.
  • Long-term capital gains – When you own an asset for over a year and make a profit from the sale of the asset, long-term capital gains taxes are applied. However, the significant difference is that the tax rate can be set at 0%, 15%, or 20%. What rate you are taxed with will depend on your filing status and your current taxable income. As a rule, long-term capital gains are lower than short-term capital gains.

However, when it comes to selling houses, the capital gains rules can differ from what is listed above.

How To Exclude Taxable Capital Gains On Real Estate Sales

When it comes to selling real estate, capital gains tax can be applied a bit differently. At this time, the IRS allows a certain amount of capital gains tax exclusion, dependent on your filing status.

  • Single filers can exclude $250,000 of real estate capital gains tax.
  • Married, filing jointly couples can exclude $500,000 of real estate capital gains tax.

For an example of this exclusion, say a married couple bought a house 8 years ago for $210,000 and sold it for $750,000. The couple would have made $540,000 in profit, and $500,000 of that would be nontaxable. Only $40,000 would have capital gains tax applied.

When Capital Gains Exclusion Doesn’t Apply

While that sounds excellent, there are some things that can cause you to lose out on your capital gains real estate tax exclusion. These factors are:

  • The expatriate tax applies to your taxes.
  • Within the two years before the sale of this property, you have already claimed a real estate capital gains tax.
  • You obtained the home in a 1031 exchange within the last five years.
  • The home wasn’t your primary residence.
  • For at least two of the last five years, you did not live in the house.
  • You haven’t owned the home for more than two years.

If you aren’t sure if one of these exclusions will apply to your property sale, you can always work with your local Cedar City tax consultant.

Ways You Can Prevent Capital Gains Tax On Your Property Sale

There are legal ways you can prevent capital gains tax on your property sale, or at the very least, you can reduce how much you will need to pay.

Keep records on home improvement costs.

To help reduce the taxable income you made on the sale of your home, it is best if you keep good records of what you paid for home improvements.

For instance, say you paid $15,000 for a kitchen remodel. As long as you have the invoices and receipts to prove what you paid for, you should be able to subtract the cost of your improvements from your overall capital gain taxable earnings.

Spend two years in the house as a primary residence.

To prevent a large capital gains tax, you will need to live in your property for at least two years in a five-year period before selling the home. While you don’t need to live in your property for two years consecutively, it does need to be your primary residence for two of the five years prior to selling.

If you sell your property under one year of living in it can subject you to short-term capital gains tax, which is the more expensive form of capital gains tax.

Check if you can qualify for capital gains tax exclusion.

There are uncontrollable circumstances that come up in life, which may cause you to sell your property and lead you to have taxable capital gains. However, there are capital gains tax exclusions that may apply to your home’s sale.

You can check on the IRS website or consult with our tax accountant for advice tailored to your personal circumstances.

If you would like assistance preparing for your property sale and would like a personalized tax consultation with our accountant, feel free to contact us today to set up your appointment.

Does Your Small Business Need A CPA Or A Bookkeeper?

To maximize your business productivity, you may have started to look into outsourcing your accounting needs to a reputable Cedar City accounting firm. But it can be difficult to know if you need the assistance of a certified public accountant (CPA) or a bookkeeper.

To help you determine which of these accounting services your small business may need, below is an overview of what a CPA and a bookkeeper can offer your organization.

CPAs Often Work With Large And Complex Companies

In most cases, CPAs have received an undergraduate degree in accounting and generally require about 150 hours of study to even attempt to pass the licensing tests of a certified public accountant. After being licensed, CPAs need to complete annual continuing education requirements to remain licensed and to keep on top of new regulations and tax laws.

With this high degree of education, CPAs will often work with larger business in a number of capacities. Sometimes, CPAs will act as financial advisors to companies, assisting in entity restructuring when needed, performing income tax planning, verifying the work of company bookkeepers and accountants, and other tasks.

A small business owner can benefit from consulting with a CPA on occasion, especially before taking the next step with their business. However, retaining the services of a CPA may not be cost-effective for a small business that has simpler accounting needs.

Bookkeepers Are Effective With Most Small Businesses

There are no set certifications or degrees for a bookkeeper. However, if someone is offering bookkeeping services, often they will have at least an accounting degree.

Generally, a bookkeeper is focused more on the daily accounting needs of your business, which is often more applicable to the needs of a small, growing company. Whether you work with an in-house bookkeeper or outsource your accounting needs, a bookkeeper will maintain your general financial records.

From updating and reviewing the general ledger, performing bank reconciliations, creating balance sheets, and many other daily bookkeeping tasks, you can feel secure with an experienced bookkeeper managing your financial records.

Consult With AA Tax & Accounting Services, LLC

If you have been considering what kind of accounting service will best accommodate your small business, you can consult with our Cedar City accountant. He has over a decade of experience working as an accountant, and has both a bachelor’s and master’s degree in accounting, giving him a strong educational background to match his experience.

By consulting with our accountant concerning your company, goals, and current needs, you can receive tailored accounting services that make sense for your business. You won’t need to pay for bundled services that you don’t need, and as your company grows, our accountant can re-customize your services.

To consult with our accountant regarding your business’ accounting needs, contact us to set up your consultation today.

30 Accounting Terms All Business Owners Should Know

When you go in to meet with your local Cedar City accountant to discuss your business, there are many business-specific accounting terms that will be used. While our accountant is always happy to stop and explain an unknown term, you may feel more comfortable going into a business meeting with a firm understanding of accounting terms that apply to company operations.

While there are industry-specific terms, below are thirty accounting terms that all business owners should know.

General Accounting Terms

To start off, let’s lay the groundwork for other accounting terms by clarifying general accounting terms. Many of these terms are what business owners will encounter even before they start their company, so it is essential to understand what they mean.

1. Accountant

The term accountant often gets thrown around to describe anyone who deals with numbers. However, this loose definition isn’t quite sufficient.

While the exact requirements can vary to state-to-state, an accountant should have a four-year accounting degree from a higher education institute. They can act as bookkeepers, and with the right certifications, certified public accountants.

2. Accounting Period

An accounting period is a defined time span where all of a company’s financial statements—i.e., balance sheet, income statement, statement of cash flow—are included. By having accounting periods to reference, business owners can quickly find information on how the company financially performed during any set time.

3. Cash Flow

To describe the flow of cash in and out of a business, accountants use the term cash flow. The cash flow is tracked from the beginning of an accounting period and ends with the conclusion of the accounting period. A negative cash flow indicates a business had less money comes in than went out, while a positive cash flow shows the opposite.

4. Allocation

Allocation describes how businesses assign funds to different accounting periods or departments within the business.

5. General Ledger

A whole and complete financial record that keeps track of a business’ financial accounts. This ledger should be maintained on a daily basis, and it is used to help create financial statements.

6. Business Entity

The term business entity refers to the legal structure of your company. For most small business owners, these company formations are usually sole proprietor, limited liability corporation (LLC), or partnership. There are also s-corporations and corporations. Depending on what business entity applies to your company, there are different laws, compliance requirements, and tax ramifications.


Generally Accepted Accounting Principles (GAAP) refers to the basic rules that all accountants follow as they perform their duties. These principals guide accountants so that it is easier for other financial experts to review a business’ financial records.

8. Fixed Cost

Businesses have fixed costs, which are costs which do not change no matter how many sales are made. An example of this would be the rent of a business’ location, which would be a recurring fixed cost. While the rent could be raised over time, it will remain fixed throughout the length of the rental contract.

9. Variable Cost

Opposite of fixed costs are variable costs, which are business operation costs that change with how many sales are made. An example of this would be something like the cost of deliveries. With fewer sales, the amount of business funds dedicated to delivering goods is lower, though costs will go up as more sales are made.

10. Overhead

A business’ overhead refers to the expense of operating a business and is often a fixed cost. That means that overhead often refers to things like business rent, employee salaries, inventory storage costs, and fixed costs.

11. Liquidity

For businesses, when it comes to liquidity, it is a measure of how quickly a business can absorb short-term and immediate financial obligations and debts.

12. Return On Investment

The strict definition of this term refers to the overall profit that a business makes—the return—which is divided by the business’ investment. However, ROI can also be used a bit more loosely to describe how successful short-term projects and objectives have been.

Profit And Loss Statement Terms

When it comes to your company’s profit and loss statement terms—also called income statement terms—you will likely encounter more of these words when using accounting services. To help you stay in the loop when discussing your business’ financial status, here are some of the most common profit and loss statement terms.

13. Income Statement

Let’s start by defining what an income statement is when applied to your business. This financial statement will cover the expenses, revenue, and business profits for a set period of time.

It starts by displaying the company revenue at the top of the statement, then the expenses are displayed to show how much was subtracted. That way, you have a clear idea of where the money was spent. Finally, the income statement displays the net income at the bottom of the report.

14. COGS

COGS—costs of goods sold—is used to refer to the expenses that relate to the creation of your business’ service or product. This term does not describe operating costs; rather, the labor involved in your business’ provided service or the cost of the materials used to make your product.

15. Gross Profit

The profitability of your business in terms of dollars is described by gross profit. This number is reached without taking into account the overhead costs but is subtracted the COGS from the revenue.

16. Gross Margin

After the gross profit has been assessed, the gross margin is next. The gross margin is a percentage of the gross profit. You find this percentage by taking the gross profit and dividing it by the revenue to find the gross margin.

17. Depreciation

This term describes the loss of asset value over time. It does not describe low-dollar value items. An example of a depreciable business asset would be a company van. A depreciating asset is often shown on an income statement as a non-cash expense as it doesn’t directly affect your business’ cash.

18. Net Income

The net income (NI) is the actual dollar amount of profit your business earned. You can find the net income by subtracting the expenses from the revenue for a set period. These expenses should include your taxes, overhead, depreciation, and COGS for that given period.

19. Net Margin

Another term for the profit of your business, the net margin is the percentage of profit as it relates to the revenue. The net margin is found by having the net income divided by the revenue for a set earning period.

20. Expense

When your company incurs a cost, the term for this is an expense.

21. Revenue

Simply put, any money that is earned by your company is considered revenue.

Bookkeeping Terms

Some of the accounting terms that you will run into regularly as a business owner are bookkeeping terms. Many of these terms describe financial matters that concern the day-to-day operations of your company, so it is critical that you understand them.

22. Balance Sheet

A balance sheet is a term that encompasses your business’ financial report that shows all the liabilities, equity, and assets your business has currently. This report shows the balance of this equation: Assets = (Liabilities + Equity).

23. Accounts Payable

This term describes all of the business’ expenses that have not been paid yet. On a balance sheet, account payable is listed as a liability, since the business owes others.

24. Accounts Receivable

To describe the revenue of a business has but hasn’t received the payment, you would use the term accounts receivable. On a balance sheet, accounts receivable is listed as an asset that should become cash soon.

25. Payroll

Considered a standard business liability, payroll is an account that displays the payment of employee wages, salaries, deductions, and bonuses. On the balance sheet, you may see if there are any unpaid wages or accrued paid vacation time.

26. Inventory

A business asset that is meant to be sold to customers is considered inventory. Once inventory items are sold, the account tracking the inventory assets will lower so that businesses can track when they need to restock.

27. Asset

An asset is a term used to define the things owned by the company which hold monetary value. When you see your assets listed, they will be in order of liquidity, with assets like cash as the most liquid, to difficult to dispose of assets like a building being one of the least liquid.

28. Book Value

While you may have depreciating assets—like the example company van—there is a term to describe the original value of that asset, which is when the term book value is used.

29. Liability

A business financial liability refers to the unpaid debts that a company has accrued. Often, your business liabilities will be things like business loans, accounts payable, and payroll.

30. Equity

After the liabilities have been subtracted from the assets of your business, the leftover value is called the equity.

To start working with our accountant concerning your business accounting needs, contact us today to set up a consultation. He will provide you with a tailored accounting plan that will suit the unique needs of your business.

What Exactly Does a Bookkeeper Do?

What Exactly Does a Bookkeeper Do

Business owners are often faced with the decision of whether or not to hire a bookkeeper. Regardless of whether they bring the bookkeeper in-house or outsource their company bookkeeping, it can be difficult to determine the necessity of a bookkeeper when the business owners aren’t sure what a bookkeeper exactly does.

While the exact responsibilities of a bookkeeper can vary depending on the company needs, there are some basic bookkeeping duties that our accountant here at AA Tax & Accounting Service often performs for our local Cedar City business owners.

Daily Duties Of A Bookkeeper

While different organizations will have various requirements for their bookkeepers, there are some standard daily tasks that most bookkeepers perform for businesses.

Accurate Financial Communication

One of the parts of a bookkeeper’s daily duties is providing accurate communication on the various financial matters of the company. Bookkeepers often field questions from employees regarding payroll, update bosses on financial matters, and record transactions with information from coworkers, such as submitted receipts for reimbursement and other issues.

Without a bookkeeper, keeping track of various sizes of expenditure, reimbursement, petty cash dispersal, receipt recording, and other daily financial matters can become lost in the crush of other business matters. When these kinds of financial details slip through the cracks, it can lead to inaccurate reports and issues when it comes to itemized business tax returns.

Manage Financial Accounts And Records

Bookkeepers spend a significant amount of time on managing and maintaining company financial records and accounts. Performing continual financial maintenance by doing things like bank reconciliation and general ledger management can take up a good deal of time.

As well as performing regular tasks, there are various financial duties to take care of daily, such as receiving payments from clients and vendors, creating reports for the appropriate people, and other matters.

Maintain Budget And Inventory

Often, bookkeepers are involved in helping maintain a business’ inventory, as they understand where the current budget and finances stand. Bookkeepers will track what inventory is available, what has become damaged and unsellable, and what inventory sales are made. That way, the revenue is accurately tracked.

Also, with a bookkeeper to track expenditure, projects are able to be kept more on track and within the budgetary constraints. Often, even if your bookkeeper isn’t part of the project committee, they stay in communication with the project lead to ensure costs are accurately tracked and reported.

Other Bookkeeper Responsibilities

The size of your business may also leave your bookkeeper with other responsibilities. These tasks may not occur on a daily or even weekly basis, but they are critical to the operation of your business. Some of the other responsibilities you may turn over to a bookkeeper are:

  • Payroll processing – Ensuring that your employees are paid accurately and on-time is essential to keep up morale and trust. Bookkeepers make sure that the payroll is correct before processing it and ensuring that your workers are paid.
  • Tax preparation and file – With quarterly taxes to pay, it is essential that you have a bookkeeper to keep your taxes on track, as well as ensuring your business taxes are properly prepared and filed.
  • Account reconciliation – Usually a monthly task, a bookkeeper will carefully go over all your accounts to make sure that they all accurately reflect the correct financial statements. If there are any issues, a bookkeeper will research and resolve them to reconcile your accounts.
  • Develop financial reports – Depending on how often you request them, your bookkeeper can draw up financial reports for you. That way, you can receive an overview of your business’ financial status.

Depending on the experience of your bookkeeper, you may have access to more services. So, if you need further accounting services along with your bookkeeping, our accountant can help.

Bring Your Bookkeeping To AA Tax & Accounting Service, LLC

By outsourcing your bookkeeping needs, you can avoid needing to find, train, and motivate an in-house bookkeeper who may not have the experience you need. Instead, working with our accountant provides you with an experienced bookkeeper and accountant who can help keep your financial matters on track.

To set up your bookkeeping consultation with our accountant, feel free to contact us. We look forward to helping you navigate your bookkeeping and support you in your financial endeavors.

For One-Time, Or Continual Use, Here’s Why You Need A Cedar City Accountant

When most people think about accounting services, what usually comes to mind is taxes and maybe things like basic bookkeeping tasks like payroll. While these things definitely fall under an accountant’s purview, there are many other reasons why you need an accountant.

Also, not just any old accountant. By working with a Cedar City Accountant—like our accountant here at AA Tax & Accounting Services—you can receive area-specific accounting.

With this kind of help, whether you need an accountant for a one-time issue or for continual work, you can tackle a range of financial matters. Below, we have covered some of the top things our accountant works on to give you an idea of some of the issues you may want a Cedar City accountant to help you resolve.

More Familiar With Your Local Tax Laws

By working with a local tax consultant like our accountant, you work with someone that is highly familiar with the tax laws that apply to you. For small business owners, having someone with a deep understanding of what local, state, and federal taxes will apply to your company can make a significant difference in your taxes.

Also, by working with a local tax consultant, you can plan for future tax filings as part of your overall business plan, as our accountant can consult with you concerning upcoming business ventures.

If you are an individual or married filer, you can also benefit from working with a local tax consultant. Ones like our accountant will know if there is a local or state benefit that a box-store or online tax preparer may not know about.

Can Help Maximize Your Tax Return

With the right Cedar City accountant, you can enjoy a fully maximized tax return. With personalized help, your tax return will be reviewed to ensure all of the proper tax credits and deductions have been applied to your taxes.

Many people have come in with their less-than-stellar tax return from another tax preparer to get our accountant’s opinion. More often than not, it has turned out that the other preparer did not maximize the client’s tax return, and we are able to help them save more than expected.

Able To Assist With Financial Aspects Of Divorce

Even when a divorce is amicable, untangling finances can be difficult. Our accountant can provide forensic accounting to assist with a fair division of marital assets. With forensic accounting, he will determine the value of the shared assets, help with equitable alimony payment recommendations, child support payments, and other financial assets which can be difficult to split.

Also, when a party in the divorce is fighting against making support payments or hiding assets, working with your local Cedar City accountant can help you find the information you need.

Work With An Accountant On Long-Term Financial Planning

There are many long-term financial commitments that can be difficult to make as they require a significant investment of your time and money. Rather than taking a gamble on your own, you can work with our accountant to help you optimize your long-term financial planning.

Whether you are concerned about your financial portfolio or you have multiple mortgage options you would like a second opinion on, our accountant can help. You can also set up other future financial plans with our accountant, whether you are setting up a trust or senior care planning.

Access Business Consulting With An Accountant

No matter what stage your business is currently at, working with our Cedar City accountant can help. Our accountant has helped startup businesses that wanted a solid financial plan before launch as well as established local businesses who are considering entity restructuring.

Business owners can highly benefit from third-party advice from a local accountant, as the advice is tailored to the area the business is located in, rather than vague projections. Also, the impartial advice that our accountant can provide will be in the business owner’s benefit, while an in-house advisor may promote risky ventures to further their own ends.

Navigate Day-To-Day Business Details

Even if you aren’t looking to make waves and alter your business structure, a working relationship with a local accountant can help to take care of the day-to-day of running your company. Addressing the financial minutiae of your business—from maintaining the general ledger to bank reconciliations and more—can eat into your precious time.

Rather than chasing stray decimal points in your accounts receivable and accounts payable, you can leave that work to our accountant. We can offer tailored bookkeeping and accounting services depending on your business’ needs.

If you are interested in working with our accountant and would like a consultation, please feel free to contact us today.

Are Tax Consultants Accountants?

To maximize your tax return and lower your overall tax liability, having a tax consultant is a critical part of your financial team. By working with a tax consultant, you can enjoy having an expert guide you through the ever-changing tax laws, advise you on investments that minimize your tax liability, and assist you in making financial decisions which can have far-reaching impacts on your finances.

While all this sounds good, not all tax consultants are equally qualified to help you, as not all tax consultants are accountants. If you are on the fence about whether you really need a tax consultant accountant, AA Tax & Accounting Services is here to help you determine your needs.

Why Choose A Tax Consultant That Is An Accountant

First, you should understand that there are actually no strict educational requirements associated with the job of a tax consultant. Some people approach tax consultancy from a work experience angle, and while this isn’t necessarily a bad thing, as these individuals lack the formal education in tax law, finances, and other matters, their advice may not be as encompassing as you would hope.

In many cases, tax consultants are college-educated, with at least a 4-year degree under their belt. Some of the educational paths that some tax consultants take are business, finance, pre-law, and of course, accounting. Depending on your consulting needs, one of these educational emphasizes may be more useful to you.

However, a well-rounded accountant who also has a master’s degree in accounting—such as our accountant here at AA Tax & Accounting Services—can provide more comprehensive services. With our accountant’s greater educational background paired with his experience helping others reach their financial goals allows our accounting firm to provide excellent accounting services here in Cedar City, UT.

What To Look For In Your Tax Consultant

When you are ready to find a tax consultant to help you with your tax liability and future financial decisions, it’s time to be picky. Some of the things you should look for in your tax consultant are:

  • Ensure education and experience – As there are no stringent requirements for claiming the title of a tax consultant, you will want to be sure that your tax consultant has their accounting degree or other educational and work experience you are looking for before committing to working with them.
  • Maximized services – Along with using their tax consultant services, it can be incredibly helpful to have a tax consultant that can work with you on other matters. From financial planning, business entity restructuring, tax filing, and more, working with a tax consultant accountant for all your financial needs can ensure that your financial needs are appropriately taken care of.
  • Clarified fee structure – There are multiple fee structures when it comes to tax consultant work. To ensure that you aren’t surprised by the bill later, be sure you know if your consultant accountant will be charging by the hour, lump sum, completed tax return, or other variations.
  • Check reviews – No matter how flashy the website, what will really tell you the most about an accountant are the reviews from former and current clients. Check to see what people are saying about working with your prospective tax consultant to help you see if they are the professional for you.

Whether you are looking for an ongoing partnership with a tax consultant or have a one-time need to consult, it is critical that you choose a tax consultant who is also an accountant. If you would like to work with our tax accounting consultant, contact us today to set up your appointment.

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