Nonprofit accounting is about demonstrating financial stability, so that the Organization will be around a long time in order to fulfil its mission throughout the community.
Reserve Policy for Non-Profits
Nonprofits are allowed to receive more revenues than expenses, which will hopefully produce reserves for a rainy day. Be sure your nonprofit has implemented a reserve policy, specifically tailored to the unique working capital, risk and future opportunity needs of your organization.
ASU 2018-08
All companies are now required to assess all of their major revenue streams that are subject to the new five step analysis of exchange revenues called ASC 606, but nonprofits are also required to adopt a new revenue pronouncement for non-exchange revenues (grants and contributions) called ASU 2018-08. These two new revenue pronouncements will require expanded footnote disclosures and assessment documentation by company management.
Updated Financial Reporting
A recent accounting pronouncement for nonprofits included updated financial reporting, which revises the equity section to account for revenue transactions as either with or without donor restrictions. Donor restrictions are either by time or purpose. This newer standard includes expanded descriptions of expense allocations, makes the reconciliation between the direct and indirect method of cash flows unnecessary, and introduces a brand-new disclosure for liquidity, which is not required for for-profit companies.
Liquidity Footnote
Review the new liquidity footnote in detail. Are the Financial Assets Available for General Expenditures negative, or appear low? When compared to the Statement of Functional Expenses, how many days of expenses does it represent? Nonprofit management have been worried if a potential donor thinks this number is too high, it may impact future donations. Other nonprofit management have worried if the potential donor thinks the number is too low, it may question the financial governance of the Organization. Since this footnote is still relatively new, financial statement readers’ reactions to it are still evolving. The key is educating the reader through utilization of the qualitative portion of the footnote to explain as much as possible about the Organization’s liquidity management.
Uniform Guidance Compliance
If the Organization receives over $750,000 of federal funds, are they in compliance with the uniform guidance? These are audit procedures in addition to the financial audit, which will test federal grant expenditures for proper internal controls around financial reporting and grant compliance. Any findings in this area will be a part of the public record.
Work With an Experienced Non-Profit CPA
Look for a CPA firm that works with multiple nonprofit organizations, so their entire team will have experience in identifying best practices, so they can be shared with all of their nonprofit clients. Marshall Jones. has a long history of providing tax, audit, and advisory services to a wide variety of nonprofit organizations, including charities foundations, churches, private schools, professional and trade associations, cultural, scientific, and government institutions. Contact us today for more information!
Managing real estate accounting is an essential function to further your company’s success. It allows you to track your cash inflows and outflows, evaluate your financial performance and maximize your tax benefits. Good accounting practices give you tools for effective business analysis, helping you stay ahead and move your real estate business forward.
10 Accounting Tips for the Real Estate Industry
At Marshall Jones, we understand how crucial accounting is for the real estate industry. To help provide resources for your success, we’ve put together these real estate accounting tips with some valuable ideas on managing your financial records.
1. Open a Business Account
Although it may seem obvious to some business owners, all real estate professionals should open a separate account for their business, regardless of the size of their company. Business accounts can help you save significant time and money during tax time by making preparation more manageable and efficient. These accounts also reduce personal risk by protecting your assets.
2. Keep Personal and Business Spendings Separate
Besides maintaining a separate business account, keeping all personal spending independent from your business transactions is critical, including credit cards and cash purchases. Letting spending overlap can often cause concern for the IRS and initiate an audit. Separating expenses also allows you to quickly identify your deductions at tax time, saving you money in the long term.
3. Save Your Receipts
Digital transactions make it much easier to lose a receipt. However, virtual records can be incredibly useful if you keep track of them. Maintain a concise daily log of your spending. Travel and meal receipts are especially critical because they typically get the most scrutiny from the IRS.
4. Categorize Expenses
The primary goal of itemizing your real estate business expenses is determining taxable income. Since you’re tracking your receipts and keeping your personal and business spending separate, this process should be relatively straightforward. Knowing which category your expenses fall into can save significant effort during tax preparation.
5. Remember the Balance Sheet
While your income statement is important, make sure you give attention to your real estate balance sheet as well. Take the time to reconcile every balance and account with the supporting documents and schedules, so you have consistent, quality data on your transactions and accounts. Having an accurate record can save you time and effort later on if you or another party needs to access the information.2. Be Clear on Capitalization
6. Be Clear on Capitalization
Having the right capitalization process in place can help you move forward with your business. Go beyond capitalizing costs over a certain amount — it’s critical to maintain clear communication with construction and project managers and understand project progress as well. When you give careful attention to work-in-progress accounts and tenant improvements, you’ll be able to stay knowledgeable about the details of your real estate holdings. Ensure these buildouts have reached completion before you place them in service so your fixed asset schedule will be clean and accessible.3. Equity Is Important
7. Equity Is Important
Take the time to understand the real estate entity structure. After reading through your partnership agreements, special allocations and distribution tiers, make sure you have a thorough knowledge of the conditions and requirements. Keeping track of this data can help you handle operations and transactions more efficiently and make things easier for your owners and tax accountants. With in-depth insight regarding your equity situation, you’ll be able to take ownership of your assets and empower yourself to make strategic decisions in the future. 4. Conquer the Closing Statement
8. Conquer the Closing Statement
Ensure a clean start and finish to a property’s books by creating an accurate and comprehensive closing statement. If the task seems overwhelming at first, take it line by line and make sure you’re tracking each amount on your chart of accounts. Be careful to cover all necessary information, including appraisal fees, inspection costs, property tax deposits and loan origination fees.
9. Use Efficient Software
Accounting software geared toward real estate businesses helps maintain more accurate books than manual entry. Some programs offer scanning applications to track receipts more efficiently than individually entering each transaction into a spreadsheet. These software options also help you manage money owed to your business, preventing delayed and missed payments.
10. Choose a Financial Consultant With Real Estate Experience
If real estate accounting is still challenging after implementing these tips, connecting with the certified public accountants and advisors at Marshall Jones can help. Whether you’re a real estate agent, broker or investor, we can help you address your most critical issues, from offering help in specific areas to handling your books completely. We take a customized approach to your particular needs, allowing you to focus on the core business duties that matter most.
Get Trusted Accounting Services From Marshall Jones
At Marshall Jones, we are always standing by and ready to help at any time. Accounting can be challenging, and we’re here to help you navigate the process successfully and efficiently. We can provide services for tracking and verifying invoices, recording and organizing receipts, handling accounts receivables, billing and many other financial requirements.
Marshall Jones Certified Public Accountants And Advisors are a group of professionals dedicated to serving our customers with integrity. Whatever you may need to manage accounting at your business, we offer trusted financial services so you can have peace of mind as you pursue your business endeavors.
If you’re interested in learning more about how we can partner with you, contact us today for more information.
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If you are involved in the foster care system, an adoption ministry, a home open to adoption, or are interested in adoption, Governor Kemp recently signed a bill that will bring tax relief and encourage families to adopt children from the foster care program.
Currently, in Georgia, there are around 12,000 children in the foster care system
House Bill 114 was signed by Governor Kemp on March 22, 2021, which revises the amount of the tax credit Georgia gives to parents who have adopted children from the foster care system. This revision changes the credit from $2,000 to $6,000 per qualifying child, and gives that credit each year for 6 years after the adoption is finalized. After the 6 years, the credit drops back down to $2,000 per year, until the qualifying child is 18.
This credit will apply to your tax liability. Your tax liability is calculated during tax preparation, and then this credit will apply to how much you owe, but it will not reduce it below zero, which means the credit is not refundable. Any unused portion of the credit will not be able to apply to future or past years, which means it is only applicable in the year claiming the credit.
This credit became effective for adoptions that have finalized after January 1, 2021.
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When a new
year begins, it’s generally not acceptable to make any changes to your 2020 tax
situation since your income and deductions are based on the cash receipts and
payments that end of the previous year.
But there
are still a few things that can be done to lower your 2020 taxes.
Certain
payments and related deductions can be made all the way until October 15, 2021,
the last date for filing your 2020 tax return under the tax extension. The IRS
has extended the deadline to May 17, 2021 however (at this time) if you owe you
are still required to pay by April 15, 2021. This affects the deadline to which
you can make a traditional IRA payment deductible on your 2020 return.
1.Make a Payment to a Traditional IRA.
Whether or not the deadline is April 15 or October, an IRA
contribution gives you a tax deduction while increasing your retirement
investments. IRA contributions can reduce your adjusted gross income for the
previous year by a dollar-for-dollar amount.
2.Contribute to a SEP IRA or Solo 401(k).
With a Simplified Employee Pension IRA, (SEP IRA), the
tax-deductible contribution for 2020 can be made up to $57,000. These
retirement accounts can
both be set up and contributed to up until September
15 or October 15, 2021, depending on the type of entity you have.
3.Health Savings Account.
Many individuals are enrolled
in a high-deductible health plan (HDHP). In order to pay for all of the medical
bill costs that are below the deductible amount, a health savings account may
be the answer. Funds contributed to such an account are tax deductible. And
when funds are removed to pay for medical expenses below the HDHP deductible
amount, the funds are not taxable. If the funds are not used up in a given
year, they roll over to subsequent years and accumulate. Deductible
contributions must be made by the initial filing deadline each year.
4.Eliminate Tax Penalties.
Although the deadline for filing tax returns is May 17, 2021 all taxes owed are to be paid by April 15, 2021 even though the tax return has been extended. For those who received unemployment benefits, there are portions that may still be taxable depending on your adjusted gross income and the amount that you received.
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You’re probably sick of even thinking about the year 2020. But, unfortunately, you probably still have the preparation of your 2020 tax return to take care of.
A lot has changed for the 2021 tax season.
1.The COVID-19 Virus and Your Taxes
The COVID situation in 2020 extended the due date for individual tax return filings. However, in 2021 the deadline has reverted back to April 15, 2021. If you are not able to get your tax return filed by that date, you may request an extension all the way to October 15, 2021, but you must pay any taxes you estimate you will owe with your extension request which must be filed by April 15.
What Effect Does the Coronavirus Have on Your Taxes?
As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you will receive a refundable tax credit up to $1,200 in the form of a refundable tax credit to reduce your taxes owing. The $1,200 credit is not taxable.
Paycheck Protection Program (PPP) Loans
The CARES ACT in an effort to assist struggling small businesses created Paycheck Protection Program (PPP) loans. The proceeds from the loans must be used to pay certain business expenses—payroll, rent, or interest on mortgage payments, and utilities. And as long as the business meets these qualifications, the loan can be forgiven. The loan forgiveness is not included in taxable income, and the expenses are deductible.
For those who were laid off from their jobs during the pandemic, many received unemployment benefits. Those benefits are taxable and those who choose not to have taxes withheld from these benefits will have to do so on their tax return.
2.Tax Rates and Brackets for the 2020 Tax Season
Tax rates and brackets – The percentage of your income that is taxed is based on the tax bracket you are in. Here are the brackets and rates for 2021
2020 Marginal Income Tax Rates and Brackets
2020 Marginal Tax Rates
Single Tax Bracket
Married Filing Jointly Tax Bracket
Head of Household Tax Bracket
Married Filing Separately Tax Bracket
10%
$0–9,875
$0–19,750
$0–14,100
$0–9,875
12%
$9,875–40,125
$19,750–80,250
$14,100–53,700
$9,875–40,125
22%
$40,125–85,525
$80,250–171,050
$53,700–85,500
$40,125–85,525
24%
$85,525–163,300
$171,050–326,600
$85,500–163,300
$85,525–163,300
32%
$163,300–207,350
$326,600–414,700
$163,300–207,350
$163,300–207,350
35%
$207,350–518,400
$414,700–622,050
$207,350–518,400
$207,350–311,025
37%
Over $518,400
Over $622,050
Over $518,400
Over $311,025
3.A Slight Increase in the Standard Deduction for 2020
The standard deduction is an alternative to itemized deductions. Itemized deductions are things like mortgage interest, taxes, medical expenses, and charitable contributions. What you do is to total those deductions and compare them to your standard deduction. The larger of the two is deductible from your Adjusted Gross Income to arrive at your taxable income.
For the tax year 2020, the standard deduction went up slightly to adjust for inflation.
Filing Status
2019
2020
Single
$12,200
$12,400
Married Filing Jointly
$24,400
$24,800
Married Filing Separately
$12,200
$12,400
Head of Household
$18,350
$18,650
4.Itemized Deductions
As indicated above, you may “itemize” your deductions if they exceed the standard deduction. Here is a list of itemized deductions:
Interest Expense
The types of interest expenses that are eligible are mortgage interest for both your primary residence, which includes both your first and second mortgages. Mortgage interest for investment properties. Interest on some business loans including business credit card interest. Student loan interest. Personal credit card interest, auto loan interest and other types of personal consumer finance interest are not deductible.
Taxes
There are four types of taxes you can deduct :
State, local, and foreign income taxes
Real estate taxes
Ad valorem taxes on personal property
State and local sales taxes
Note that these taxes in the aggregate are allowable only up to $10,000.
Charitable Deductions
The CARES Act allows you to deduct up to 100% of your adjusted gross income (AGI), which is your total income minus other deductions you have already taken, in qualified charitable donations if you plan to itemize their deductions. Previously charitable deductions were limited in certain circumstances.
Medical Expenses
You can deduct medical expenses, subject to limitations. You can deduct medical expenses in excess of 7.5% of your adjusted gross income (AGI). Your AGI is the total of your income less adjustments for things like an IRA contribution. If your medical expenses do exceed 7.5 % of AGI, they must be included in your itemized deductions which may or may not exceed the standard deduction explained above.
Business Deductions
If you are self-employed are many deductions you can claim on your tax return—including travel expenses and the home office deduction if you use a part of your home to conduct business.
5.Credits
A tax credit is a dollar-for-dollar reduction of your tax liability. If, for instance, your tax liability is computed to be $2,500, and you can qualify for a $1,000 tax credit, the credit can be used to reduce the amount you owe. In this case, your net amount owing to the IRS would be 1,500.
While there are several tax credits in tax law, the most commonly used credits for individuals are:
The Earned income tax credit (EITC)
This credit is for low- and middle-income workers. If you earn less than $56,844 in 2020, you may be eligible for the credit. The amount of the credit is based on your earnings, filing status and number of children. The maximum credit for 2020 is 6,660.
The Child care tax credit
Families with kids can claim up to $2,000 per qualified child for married taxpayers with taxable income less than $400,000, and $200,000 for single parents.
6.Educational Expenses: 529 Plans and ESAs
Many folks had to pull money from the 529 plan or Educational Savings Account (ESA) during the pandemic. In order to avoid taxes on these withdrawals, the money must have been used for qualified educational expenses. However, a lot of colleges and schools that went remote or canceled classes this year, may have refunded some or all of the expenses you paid for using 529 or ESA withdrawals. In that instance, you have 60 days to return these funds to those accounts or be subject to them being taxable with an accompanying penalty for early withdrawal.
7.Retirement Plans: 401(k)s, IRAs and More
Prior to the CARES Act individuals were not allowed to withdraw funds from their 401 (k)s and IRAs, without penalty, until reaching age 59 ½. The CARES Act eliminated this penalty for such withdrawals up until the end of 2020. Note however that any such withdrawals are taxable.
If you have a traditional IRA, tax laws require you to begin making withdrawals once you reach the age of 70 ½. These withdrawals are called “required minimum distributions” (RMDs). The SECURE ACT pushed back the age for RMDs from traditional IRAs from 70 ½ to 72. In addition, the CARES Act allows seniors to skip RMDs altogether in 2020 without penalty.
The SECURE Act allows owners of traditional IRAs to keep putting money in their accounts past age 70 ½ starting in 2020. And these contributions are tax-deductible.
Finally, if you did take money out of a 401 (K) or traditional IRA in 2020, you will owe additional taxes on those withdrawals. If, however, you are able to put those funds back into those retirement accounts within three years, you can receive a refund of the additional taxes you had to pay.
Contact the Tax Professionals at Marshall Jones
Are you tired of trying to keep up with the ever-changing tax laws? You can contact Marshall Jones to set up an appointment to review your needs.
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Accounting firms help many individuals and companies make financial decisions. No matter what kind of business you run, an accounting firm can offer advice and assistance to help your company set financial goals and develop budgets.
If your law firm seeks dependable financial advice or wants someone to handle your weekly payroll, an accounting firm may be the right choice for your organization. To help you make your choice, we have developed a list of tips for choosing the best accounting firm for your law firm.
Tips for Choosing the Right Accountant for Your Law Firm
Are you wondering how to choose an accounting firm? Your law firm can greatly benefit from hiring an accounting firm, but first, you need to know where to start your selection process. Follow the tips below for guidance in choosing the right legal accounting for your law firm.
1. Review the Company’s Industry Experience
How long has the company been working in the industry? Accountants generally specialize in certain industries to offer clients improved, personalized service. For example, a retail accountant may not be the best choice for a client in the agricultural industry. Ensure that the accounting firm you choose has experience working with law firms.
At Marshall Jones, we have more than 30 years of experience providing professional accounting services to various clients, including law firms, consulting agencies, marketing firms, ad agencies, construction companies and non-profits. We also offer tax planning and preparation for law firms.
2. Consider How Much Control the Firm Has
What level of service does the accounting firm offer? How much control over your bookkeeping do you want to keep or relinquish? If you want comprehensive bookkeeping services, ensure that you find a full-service accounting firm. These firms employ bookkeepers who handle the everyday client transactions. Accounting firms that do not employ bookkeepers may charge more if you need a CPA to handle your routine bookkeeping tasks.
3. Determine Whether the Firm Provides Audit Support
When dealing with the Internal Revenue Service (IRS), it can be reassuring to know your trusted accountant is at your side. An IRS audit can happen to any business or individual, but facing one can be an incredibly stressful situation. An audit is a review of your firm’s financial data, and our audit and assurance services at Marshall Jones will ensure your financial data is accurate.
With some accounting firms, you may be able to use their offices for audit purposes. An accountant will also be present to represent your interests. At Marshall Jones, we can offer your firm feedback for improvement, drive growth, reduce expenses and identify potential new ways to increase your firm’s profitability.
4. Determine How the Firm’s Payments Work
Fees vary from one accounting firm to another. Some accountants charge by the minute, and each phone call between you and your accountant can raise your bill. Other accountants charge a predetermined rate for every financial task performed, like preparing profit and loss statements, filing income tax forms or compiling net worth statements.
5. Ask Fellow Law Firms If They Have Worked With the Company
Finally, ask for references from other law firms. When it comes to receiving references for accounting firms to partner with, nothing beats word-of-mouth. Word-of-mouth is just as valuable today as it has ever been. Speak with business associates and friends to learn which accounting firms they use and whether they would recommend those firms to other law firms.
Why Is Accounting So Important for Law Firms?
Law firm accounting professionals can help your law firm operate more efficiently. An accounting firm can help your attorneys and managing partners get a better grasp on your business, affecting your cash flow, client profitability, staff efficiency, attorney compensation and compliance with your state’s bar association about how you manage your funds.
The role of a professional legal accountant includes the collection, interpretation and use of financial data to help your law firm grow and stay compliant. An accounting firm can handle:
Completing payroll
Recording expenses
Completing tax returns
Managing financial data
Accounting for case costs
Distinguishing between income and revenue
An accounting firm can help you systemize workflows in your law firm, such as tracking billable hours versus non-billed hours. You may also want to consider fixed fees versus hourly fees, as this can create flexibility for your clients and help your attorneys determine the best way to bill clients for affordability and profitability.
Additionally, an accounting firm can help you select the right accounting method for your law firm.
Cash accounting: You may want to choose cash accounting if you want simplicity. With cash accounting, you can easily determine when transactions have occurred, and there is no need to track payables or receivables.
Accrual accounting: The other accounting method you can choose is accrual accounting. You may want to choose accrual accounting if you want a more realistic idea of your expenses and income during a certain period. This form of accounting records expenses and revenues when they are incurred and earned.
Outsource Your Accounting to Marshall Jones
Outsourcing to an accounting firm like Marshall Jones will give your law firm the amount of control over your finances that you desire and take away the hassle of having to do it all yourself so you can spend time working billable hours instead of doing non-billable administrative tasks. For more than three decades, our certified public accountants and advisors at Marshall Jones have been serving the individuals and businesses in Atlanta. We provide exceptional client service with complete integrity and the highest levels of technical competencies. At Marshall Jones, we will:
Provide your firm with a customized experience: We will strive to learn as much as we can about your company and its business goals, which allows us to offer the services you need, like tax-minimizing suggestions and strategic planning. Our flexible strategy ensures that we can deliver the level of service you need, whether that is seasonal help or full-time bookkeeping.
Save your law firm time and money: Our team will handle the time-consuming aspects of bookkeeping, allowing you to focus your time and efforts on running your business. When you work with us, you will not need to recruit, hire, train or onboard an in-house bookkeeping professional.
Allow you to retain control of your firm’s bookkeeping: With Marshall Jones, you can retain the level of control you want when it comes to your firm’s bookkeeping. Whether you want to receive regular reports or leave the details to us, we can accommodate your wishes for control over your bookkeeping.
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Why does an industry whose organizations operate on often tight budgets seem to have the most complex accounting and reporting requirements? It really seems unfair. I’ve worked with many nonprofits of different sizes, many of which simply don’t have the extra funds to throw at an accounting department, and because of this, having a good, clean, easy to understand set of books can be a continuous struggle.
One reason for this struggle is the need to see information pivoted in many different ways; grant activity reports, cash basis budget reports, accrual based audited financials, cash flow projections, donor restricted net asset reporting, and so on.
So how can a budget sensitive nonprofit keep their accounting costs down while still being able to get the reporting they need? Consider the following tips.
Just because nonprofit accounting is complex doesn’t mean your accounting system has to be. There is a lot of software, a lot of it very good, that specializes in nonprofit accounting. The problem is that a lot of the systems are not user friendly, take additional training, and don’t integrate with other third-party applications that might make running your organization more efficient. All of these factors have real and hidden costs. Choosing a cost effective, less specialized accounting software such as QuickBooks is a perfectly good option that integrates well with other desirable low-cost specialized nonprofit software, like donor platforms. A bonus is that QuickBooks is very common and it is easy to find cost effective training or bookkeepers with QuickBooks experience.
2. Don’t put too much burden on your chart of accounts
When you have a lot of different programs, grants, and restrictions to track, it is tempting to just keep adding accounts to your chart of accounts. Resist this temptation! This rarely makes accounting easier and often leads to errors and just more confusion. Keep your chart of accounts simple, and use subledgers or ‘horizontal’ accounting structures such as classes in QuickBooks to let your chart of accounts work smarter and not harder.
3. Leave the accrual accounting for the auditors
This doesn’t mean that you shouldn’t understand accrual-based accounting or not attempt to make year-end entries to make your audit go more smoothly, but cash basis accounting is efficient and perfectly viable to use over the course of the year. Don’t unnecessarily complicate things by trying to achieve GAAP based monthly financial closings if it isn’t required. Another plus is that cash basis bookkeeping usually aligns with a nonprofit organization’s cash-basis budget.
4. Know how to read your financial statements
As an executive director, you don’t have to be the accounting expert of your organization, but knowing how to read your financial statements goes a long way to identifying accounting errors and keeping things on track. Having an executive director that is engaged with the financial statements provides valuable oversight and support for a lean nonprofit accounting team.
Contact Marshall Jones in Atlanta GA, for Your Non-Profit Accounting Needs
Ultimately, overcoming the accounting hurdles for your nonprofit can be difficult, and if these tips aren’t enough to get you on track, know that Marshall Jones is always here to help.
Bookkeeping is an essential component of an e-commerce business. With an online store, your business’ products will be available 24/7/365 to a wide array of customers. With the internet, you can cast a wide net, reaching a large audience and fulfilling drop-ship orders while you maintain a small physical footprint.
While setting up a website and store are critical steps, your store won’t gain traction if you don’t engage in financial planning. At Marshall Jones, we have compiled tips for bookkeeping to ensure your e-commerce business’ success.
Essential Considerations for E-Commerce Bookkeeping
E-commerce bookkeeping can present challenges for business owners. When you understand how these challenges can affect your e-commerce bookkeeping, you can select the best solution for your business.
1. How to Account for Alternative Payment Methods
While most of your customers will make their payments via credit cards, you may also decide to accept other payment types. If you go this route, you may want to equip your e-commerce platform to track these sales. Along with credit cards, payment types may include checks, cash and gift cards, especially if you sell in person, too.
Though this can make purchasing more convenient for your customers, accepting alternative payment forms may make your bookkeeping more complicated. Payments made via check or cash, for example, won’t appear in your books until you deposit this money in your account.
2. How to Document Merchant Fees
When you choose an e-commerce platform to host your online store, you will likely need to pay merchant fees. Using one of these platforms for your e-commerce business can offer benefits from a quick startup to simple search optimization. However, in exchange for these perks, the platform will take a cut of each of your sales.
That can complicate your bookkeeping, as deposits in your bank account will be net sales rather than gross sales. In your e-commerce bookkeeping, note the gross sale, then record the difference between the gross and the net to document your merchant fees.
3. How to Track Inventory Across Platforms
Another challenge you may face in e-commerce bookkeeping is tracking your inventory across platforms. Many e-commerce services offer built-in inventory tracking, making it simple to record and manage your online inventory. However, if you use multiple platforms for selling your product, these platforms won’t track your inventory changes from outside sales.
As such, it is essential to have a central place for keeping up with inventory. An outsourced bookkeeper can use your information to establish an accurate record of sales, restocks and returns in your books.
4. How to Record the Cost of Third-Party Tools and Refunds
You may use third-party tools to process payments, which can also complicate your bookkeeping — particularly when it comes to exchanges and returns. If someone returns a product, for example, did the third-party e-commerce platform track it? Or, did your business bookkeeping record the return?
Additionally, you likely won’t recoup the merchant fee your business paid, even if a customer returns an item. The merchant fee then becomes a loss, which you must reflect in your books.
The Importance of Tracking Inventory Cash Flow
Cash flow is the amount of money that comes in and out of your business yearly, quarterly and monthly. Knowing how much money passes through your business will allow you to maintain a healthy profit margin.
A cost-effective, organized inventory is one of the most crucial aspects of accounting for e-commerce companies. Maintaining inventory means more than stockpiling the items you want to sell. It also entails keeping track of your cash flow.
The costs listed on your document for inventory cash flow should exclusively relate to your stock. You may want to list expenses including the cost of purchasing a product in your inventory, the cost of manufacturing and the cost of maintenance. For example, if you have merchandise that needs to stay frozen, your expenses would include maintaining and running the freezer.
You should be tracking your actual sales and any inventory losses. Losses may result from damage, spoilage and theft. Though you can take measures to prevent these, you should still be ready to deal with them if they occur.
How to Master Bookkeeping for E-Commerce Businesses: What to Do Daily, Weekly and Monthly
You can master bookkeeping for your business by following our e-commerce bookkeeping tips for daily, weekly and monthly tasks.
Daily Bookkeeping Tasks
Every day, take the following financial steps:
Maintain a paper trail, including your paper and email receipts.
Keep track of invoices.
Read and archive relevant emails.
To claim legitimate business expenses and get your full tax benefit, you must be able to support your business expenses via receipts, emails and invoices.
Weekly Bookkeeping Tasks
Every week, take the following financial steps.
Note variable or new expenses: If you have variable or new costs, keep an eye on these monthly to ensure they align with your expectations.
Track your cash flow: Track how much money you have in the bank and what expenses you need to cover for your business.
Monthly Bookkeeping Tasks
Every month, take the following financial steps.
Pay attention to expenses: Each month, review your spending, so you can think strategically about how it fits in your business and how you may be able to increase profitability and cut costs.
Look at your business as a whole: Evaluate your business from a holistic perspective to get an idea of the bigger picture and understand how everything is going. Review your sales, income, expenses and cash position for a comprehensive view of your business.
Looking for an Outsourced E-Commerce Bookkeeping Solution? Contact Marshall Jones
At Marshall Jones, our bookkeeping services involve recording, retrieving and storing financial transactions. We will help you handle billing, record and organize receipts, prepare financial reports, track and verify invoices, oversee accounts receivable, handle employee payroll and pay suppliers and vendors.
While some businesses may attempt to learn bookkeeping themselves or use bookkeeping software, this can lead to inaccuracies and errors. Fortunately, outsourcing your bookkeeping to us at Marshall Jones can lower the risk of mistakes and help your business avoid lost business opportunities and audits. Contact us at Marshall Jones to learn more about our e-commerce accounting services.
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Real estate is a unique industry. There is plenty of opportunity for growth that depends on how well you manage the array of transactions that go through your business. Organization is critical in making the most of your bookkeeping and maximizing your profits, regardless of the size of your operation.
Here are a few of our tips on how to perform real estate accounting.
1. Choose a Method
Some businesses are required to use one method over another, while others have the option of using accrual or cash-basis methods for their bookkeeping. Each offers a different approach to accounting for real estate development.
Cash basis involves recording one entry every time cash is exchanged, while accrual creates two equal entries and records them when the cost is incurred, such as during an invoice, as opposed to being received or sent.
2. Set Time Aside Each Week to Review Finances
Staying on top of your money is essential. Plan on spending some time to go over your records, reconcile your accounts and understand where your money’s going to be. Talk it over with your accountant or business advisors.
3. Separate Personal and Business Accounts
This task is a simple one that can make your life much easier. It will make tax season significantly less daunting and it helps you stay organized.
4. Know Your Laws and Codes
Different regions have different implications for a real estate business. Administrative codes can vary, as well as local tax laws. Study up on them and ensure you abide by the regulations that apply to your company.
5. Maximize Your Tax Deductions
It might sound straightforward, but if you have a thorough understanding of possible tax deductions and write-offs, you may be able to reap the benefits and gather more revenue for growth. Your home office, work computer and gas costs can all earn you a higher refund at the end of the fiscal year.
6. Know Your Workers
If you frequently work with contractors, office employees or repair technicians, you’ll need to know how their status fits into your bookkeeping. For employees, you’ll need to pay employment taxes, including the portion withheld from their paychecks. Contractors, on the other hand, are responsible for their own taxes, so you won’t pay these.
Knowing which category your workers fall under can save you from penalties, back wages and other adverse results.
7. Work With an Accountant
Let’s be honest — you’d probably rather spend your time managing your properties than managing the books, especially if you’re not well-versed in accounting for real estate transactions. Partnering with an expert can help you maximize your profits and stay organized so that you can grow your real estate investments further.
We can help with that last one. When you are running a company in Atlanta, your focus should be on the task at hand, rather than the bookkeeping. Let Marshall Jones handle your real estate bookkeeping services. Contact us today to start working with one of our certified public accountants and advisors!
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Nonprofits have a difficult role to fill. They improve conditions for people, animals and communities, all while running an organization that tends to resemble a commercial business. That means, like profit-making companies, they must adapt to changes in the industry, too.
5 Nonprofit Trends in 2020
As nonprofit organizations adapt to the changing landscape of the economy, their challenges and goals can shift as well. Here are some nonprofit trends to watch in 2020.
1. Investments in Technology
Innovations in technology become tools for the sustainability of an organization. Whether competing for funding or keeping the organization moving, nonprofit technology trends can be a driving force for a lot of the work they do. Without the right equipment, they may struggle to provide their services or keep up with the public’s desire for modern, easy-to-use connections.
Another aspect of technological growth that many businesses are observing is in their cybersecurity practices. Large organizations may be especially wary of security breaches or hacks, and cybersecurity is a priority for them.
2. Joint Ventures
Many nonprofit organizations find strategic partnerships with for-profit or other nonprofit organizations or government agencies. A few organizations plan to pursue mergers, but many nonprofits say they are considering entering a strategic partnership with another nonprofit.
By joining with other organizations, groups can pool their resources and work toward a common goal.
3. Greater Focus on Mission and Priorities
As more and more businesses vie for attention, nonprofit organizations need to make sure their message reads loud and clear so they don’t get lost in the noise. They may need to revisit their focus or ensure their priorities include objectives that are beneficial and appropriate for the group to pursue.
4. Easier and More Fulfilling Donations
Again, donors have a lot of options. Making the experience of donating resonate more with them can help endear someone to your organization.
Some ways that nonprofit organizations manage this is by showing the real-life impact a donation can make. They may share success stories of people affected by the organization or send someone a breakdown of how their contribution gets used.
Another way to make donations a better experience is to make them easier. One popular method is to allow people to donate via text message.
5. Boosting Employee Engagement
Nonprofit organizations aren’t known for their high salaries, but many of them also struggle with other areas of employee satisfaction. Outside of concerns about compensation, many, non-profit workers find that they face a lack of opportunity for advancement. Other concerns include management, benefits and training and development.
Many nonprofit organizations are aiming to boost their employee engagement and create more satisfying workplaces. With this goal, they may be able to retain staff for longer and contribute to a more enjoyable workplace overall.
For More Trends the Non-Profit Industry is Seeing, Watch our Video
Focusing on What’s Important
No matter how your nonprofit adapts to 2020, it’s essential that you and your staff can focus on the big picture. Leave the bookkeeping to us. Reach out today to learn more about the services Marshall Jones offers for nonprofits.
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