How Much Mathematics Does a Successful Accountant Need to Know?

Mathematics & Accounting

When most people think about accountants, they usually assume that accountant have to be these highly talented mathematicians in order to do their jobs effectively; however, most successful accountants will tell you point blank that mathematics has little to do with accounting. In fact, most accountings you meet will be the first to tell you that they hate math. So how competent does an accountant need to be in math in order to be successful? Probably just as much math as you know.

The skills that are most important to a successful accountant include but are not limited to:

• Arithmetic
• Quantitative skills
• Industry knowledge
• Accounting software knowledge
• Basic math
• Knowledge of your business expenses
• Knowledge of any of your recent purchases

Out of all of these skills, it’s important to note that you need to have more quantitative experience more than anything else. By having this quantitative experience you will be able to take your company to the next level with little to no true understanding of math as one typically conceives of it.

When looking for an accountant, don’t ever base your hiring decision on whether or not your accountant is good at math. A good accountant is well-rounded and you want to make sure you have a balance of all vital skills in order to be successful.

Still unsure of what skills related to math that your accountant needs? Leave your thoughts and comments in the section below and let us know how we can help take your accounting to the next level.

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What are Non-Cash Assets?

Cash Assets & Non-Cash Assets

The financial success of any business relies heavily on cash flow statements. Cash flow statements are designed to show if and when you will have enough cash available to pay the bills of your business. Cash flow statements, income statements and balance sheets are collectively referred to as the “big three” in terms of financial reporting. In many cases, the end of a cash flow statement is normally the balance of the cash account; however, non-cash assets are also figured into the statement.

Non-Cash Assets

If you take a look at your balance sheet, you will notice that there are sections which show you the assets, liability and equity accounts. The assets portion of the sheet is subdivided into sections, including current and non-current assets. Current assets are assets which will soon convert to cash or expenses in the next twelve months, while non-current assets are fixed assets such as cars, buildings, warehouses, etc. and also investments.

Bank Holds

It is worth noting that banks will often put a hold on several large non-cash items depending on your account history. This time of holding is often referred to as the float. According to investopedia.com, this is the time during which banks have funds available to them.

Don’t Have Doubt

Many people choose not to touch non-cash assets until they fully understand the liability they present for them and their finances. If you are in doubt, or if you be unsure about taking on a cash asset, don’t have doubt. We have accountants available on our team to help you better understand cash assets and non-cash assets so you don’t make mistakes. Our accountants can help you understand cash assets and non-cash assets and also help you ensure that you’re actually organizing them effectively.

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Why You Need to Hire an Accountant before Tax Season

Hiring an Accountant for Tax Season

Whether you be a small business owner or just an individual living out your day to day life, no one likes to deal with the IRS. Most people don’t like dealing with them simply because they are fearful that they may be in violation of one or more of the existing tax rules. Despite whatever trepidation you may have, it’s imperative that you face your issues before they develop into serious problems.

Here are a few reasons why you need to hire an accountant before tax season:

To Help You Avoid Audits

If the IRS decide to audit you, your business should already have undergone a major internal auditing process. Your accountant should be qualified to audit your books throughout the year to ensure you’re practicing good bookkeeping and that you are doing everything you need to do to remain fully compliant.

To Help You Determine Your Filing Status

Not sure how you should file your taxes? Your accountant can help you determine which filing status is best for you and your business. Perhaps you need to file jointly, separately or even as head of household. Your accountant can break down each filing status to help you figure out how you can receive the biggest refund.

To Save You Money

If you know you will owe money to the IRS at the end of the year, have no fear. Your accountant can help you save money from day one by making sure you are having quarterly taxes taken out of your account.

What other reasons do you have for hiring an accountant? Leave your comments below.

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Do I Need an Accountant if I Use QuickBooks?

QuickBooks

Over the last several years, QuickBooks has become increasingly popular. Because of its popularity, many individuals flock to QuickBooks to take care of their business needs without the stress of hiring an accountant. While DIY approach to accounting may seem reasonable, it’s not always a good idea. In fact, QuickBooks should never be used in lieu of an accountant but instead should be used in tandem with one.

Hiring a QuickBooks Specialist

When it comes to QuickBooks, one of the best suggestions is to consider hiring an accountant who specializes in this program. This is great for businesses which have everything already set up in QuickBooks and simply just need someone to manage their preexisting account. It’s also great for businesses which may not be able to afford a full-time accountant.

Diversify Your Approach

Relying solely on QuickBooks can be detrimental to your business simply because anytime you automate your business you run the risk of making more mistakes. If for some reason you don’t feel ready or even feel like you can afford to hire an accountant, consider simply reaching out to an accountant for consulting services to see if perhaps he or she can be of assistance to you at a cheaper cost.

In short, do you need an accountant if you use QuickBooks? It depends on your business, because ultimately you have to do what’s best for you and your particular situation.

Do you use QuickBooks for your business? We’d love to get your feedback. Leave your comments below.

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Can Your Accountant Be Your Auditor?

Accountants & Auditors

Accounting can be a tricky topic, especially when you’re preparing to hire an accountant in the near future. Hiring can get tricky because those who are certified to be accountants are not necessarily well versed in your particular industry. In fact, your accountant can occasionally offer you expertise in areas outside of accounting; however, keep in mind that sometimes you simply have to learn how to draw the line.

One particularly tricky area is auditing. Many accountants work full-time as auditors but it’s important to note that if someone be working as your accountant, he or she cannot work as your auditor. Why, you may ask? It’s quite simple.

Responsibilities of an Accountant

An accountant’s primary responsibility is to make sure your business is functioning correctly in every area of financing. By contrast, an auditor’s primary responsibility is to make sure your accounting records are kept accurately. Your accountant cannot keep your finances in order and also check for accuracy at the same time. If your accountant were to operate in such a way you can be certain that an accident would occur at some point down the line.

What Course Should You Plot?

What’s the best course of action? Choosing to hire both an auditor and an accountant. Hiring both will ensure that your team has the requisite types of capability and it will also guarantee that when tax season arrives you won’t have any unpleasant surprises should an audit take place.

Have you ever tried to hire your accountant to be your auditor? How well did that work out for you? Probably not very well. Leave your comments below.

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Four Characteristics Your Next Accountant Should Have

Characteristics of Good Accountants

Hiring a good accountant can be a challenge because you’re never really sure what you may be getting when you hire a new employee. To eliminate these challenges, we have decided to compile a list of four characteristics your next accountant should have.

 Dependable

When hiring a new accountant, you always want to make sure that you’re hiring someone who is dependable and who can help you at the drop of a dime as it relates to your expenses or even during rare cases of IRS audits.

Trustworthy

When hiring an accountant, you want to make sure that they always have your best interest in mind. In order to do this, it is imperative that your accountant be trustworthy. Being trustworthy means that they keep your confidential information private, and it also means that you’re willing to take their suggestions because you know at the end of the day they’ll have your company’s best interest in mind.

Confidence

Confidence is super important when making a new addition to your team. You need your new accountant to be confident in their job but also confident in what they bring to the table. Many businesses fail year after year because they’re way too many yes men on company teams. Having an accountant who is confident will show you that you don’t have to worry about a yes man.

Productive

When hiring an accountant, it may be obvious that you have to hire one who is productive. But the importance of hiring a productive, diligent accountant is such that mentioning it specifically is worthwhile. Hiring a productive accountant will ensure that no matter what your company has going on, your accountant will always be working toward the success of your company.

What other characteristics do you think are important to your company’s brand? Leave your comments below.

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The Critical Role of Accountants in Society

Accountants in Society

When most people think of the word “accountant” they instantly think of someone who sits behind a computer all day long crunching numbers. While this is a misconception, there is still a lot to be learned about the impact of an accountant. Below are just a few critical roles an accountant plays in society:

Financial Literary

Believe it or not, accountants can play a critical role in developing financial literacy for their communities. This could be in the form of programs, conferences, empowerment sessions, or financial seminars. Accountants are tasked with the responsibility locally to share all they know about finances to their communities in hopes of encouraging financial literacy.

Helping Businesses Grow

Businesses are only able to grow with the help of capable advisors such as accountants. Having a good accountant in your community will help businesses grow and consequently will improve economic conditions in general.

Helping Businesses Make Better Decisions

Helping businesses make better decisions is another critical role of an accountant. One of the primary responsibilities of an accountant is to ensure they watch how businesses spend and earn money. This not only empowers businesses but it also empowers individuals as they learn about proper money management.

Increasing Employment

The more financial literacy your business has, the more growth you should expect to see, both for your business and your wider community. While many may not consider accountants as being able to increase employment, they actually can increase employment in a plethora of ways that you would never be able to imagine.

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How Can an Accountant Help Your Personal Life

Your Personal Life

When most people think of an accountant, the first thing that comes to mind is someone who manages a company’s money. While managing money is certainly one of an accountant’s chief functions, it’s not the only thing that an accountant can help with. In fact, an accountant can help you in your personal life as well.

Here are a few ways how your accountant can boost your personal life:

Recently Married

Were you recently married? If you were, your tax filing status will likely change, and if you’re not familiar with the relevant tax laws, this change may be an issue for you and your spouse. Hiring an accountant will help you as you file under your new status and also help you maximize your savings.

How To Save Money

An accountant can teach you and your family how to save money. Spend lots of money recklessly? No problem. An accountant can easily help you identify what is a need and what is a want. Once that’s been established, they can work with your family directly to ensure you have a budget in place.

How To Spend Money

Nobody likes to be told how to spend money; however, an accountant can literally do just that. They can work with you and your family specifically in determining what may or may not be a good purchase both long-term and or short-term.

How To Earn Money

Struggling with ways to generate an increased amount of income? No worries. An accountant can help you determine ways to earn money and add income to your family’s bank account.

Newborn Children

Children can be hard to save for, but they can be even harder to spend for. Additionally, during tax season, children can also help you receive more money from the IRS; because of this, you will want to make sure that your accountant is equipped with the necessary tools to be able to help you (and your family) receive the most out of your deductions for your children.

What ways have you found an accountant to be helpful in your personal life? Leave your comments below.

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The Many Kinds of Audits

Tax Audits

Tax audits can impose a great deal of stress in anyone’s life, but in order to avoid them you must first learn more about what a tax audit entails. Believe it or not, tax audits can come in all shapes and sizes, and below is just a brief list of various ways you can be audited by the IRS.

Tax Audits by Mail

Perhaps surprisingly, most tax audits are conducted by mail. Most commonly these audits are referred to as “correspondence audits” and typically occur if the IRS has questions about your return.

In-Office Tax Audits

In rare cases, the IRS may ask you to attend an in-person audit at your local office. In general, in-office tax audits are usually employed when the IRS has additional questions for your business which cannot be answered with traditional paperwork.

Field Audits

Field audits can be a nightmare, especially if they be unexpected. The IRS will come to your home or business just to gain more insight into your tax return. These audits normally occur if the IRS has lots of issues which a phone conversation will not resolve.

Tax Audit Outcomes

Many people sadly make the assumption that all tax audits are designed to ruin your business or your personal life. In most cases, the IRS will either accept your IRS return at face value or they will ask for other supporting documentation. In rare cases, your tax audit could land you in jail or have your assets frozen.

Surviving an In-Person Audit

Surviving an in-person audit can be a difficult task; however, it is possible. Keep all of your receipts and have documentation that backs up everything.

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Five Ways to Avoid a Tax Audit as a Freelancer

Freelancers & the IRS Audit

As a freelancer, one of the most frightening things you will ever experience is an audit from the IRS. Audits are scary for anyone, but they are especially scary for a freelancer who may not even realize just how much they’ve been holding back from the IRS. Though it’s a scary process, it’s something which can easily be avoided with a bit of elbow grease.

Here are five ways you can avoid a tax audit as a freelancer:

Refusing to Report Income

Missing income can be a huge red flag for the IRS, especially because according to the IRS, they know when you make money even if you don’t report it. No 1099? Getting paid under the table? It doesn’t matter, make sure you’re reporting it as long as it’s over $400.

Reporting Too Many Business Expenses

As a freelancer you have the opportunity to mark lots of things as business expenses; however, make sure whatever you deem to be business related really is just that. The more business expenses you have, the more red flags you’ll put up to the IRS because they’re trained to notice a fluff of business expenses.

Home Office Expenses

A home office expense is something that most freelancers and business owners claim, making it one of the most popular expenses to deduct. Because of this, the IRS is pretty strict on what you can call a home office, and if you’re trying to deduct a portion of your bedroom or kitchen you may as well forget it because the IRS isn’t going to accept that.

Miscalculations

If you’re responsible for doing your own taxes as a freelancer you are bound to make lots of mistakes, especially because you’re probably not calculating your numbers correctly. Also, be careful not to round your numbers up too high or down too low. The IRS also pays attention to miscalculations, and if you’re making numbers up it is bound to raise red flags.

Yearly Business Losses

If you are supposedly losing money year after year in your business, the IRS will take note. You won’t be penalized for your losses, but it will make the IRS wonder if in fact you are lying about losses just so you can protect your personal assets.

The best thing you can do to protect yourself from the IRS audit is to simply hire an accountant or a CPA to do the work for you. It will save you a lot of time and a lot of money in the long run.

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