Live out of your imagination instead of out of your memory. – Fortune Cookie Understanding your rules and regulations of sales tax is important for entrepreneurs. It may continue to be one of the most confusing tax for owners selling merchandise via online or as a store front.
Don't be afraid to ask the necessary questions that will keep your business safe from penalties. A key tool to avoiding such cost starts with establishing clear steps and goals around the process. This allows for management and personal to have a reference tool and additional assurance for management the process is being handled as required. The SBA has a great read for all business owners - take time to enjoy it today.
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What are they?Did you know, U.S companies follow one of two methods of financial accounting for petroleum E&P activities: successful efforts or full cost? The successful efforts methods has only the cost of successful efforts capitalized as oil and gas properties. Cost of explanatory dry holes, geological and geophysical (G&G) cost in general, delay rentals, and other property carry costs are expensed. Under the full cost method all property acquisitions, exploration, and development cost, even dry hole costs are capitalized as oil and gas properties. These cost represent fixed assets, amortized on a country-by-country basis using a unit-of-production method based on volumes produced and remaining proved reserves. If a company drills five exploratory wells for $1 million each and only one finds proved reserves, the successful efforts methods recognizes a $1 million asset, whereas the full cost method would recognize a $5 million asset. Continue to follow our blog as we share more about the oil and gas industry process and accounting responsibilities. You can also visit our website for support in establishing policies and procedures for your business. Source: Petroleum Accounting
What Does that Mean for a Business owner?The operating cycle measures how well you manage your cash. The operations of a merchandising business involve the purchase of merchandise for sale (purchasing), the sale of the products to customers (sales), and the receipt of cash from customers (collection). This overall process is referred to as the operating cycle. Thus, the operating cycle begins with spending cash, and it ends with receiving cash from customers. The ability of leaders to understand and manage the company's operating cycle is one of the most important predictors of long-term business viability. To understand this process begins with establishing business policies and procedures. Businesses with longer operating cycles normally have higher profit margins on their products than businesses with shorter operating cycles. For example, it is not unusual for jewelry stores to price their jewelry at 30%-50% above cost. In contract, grocery stores operate on very small profit margins, often below 5%. Grocery stores make up the difference by selling products more quickly. If what you are doing is not moving you towards your goals, then it’s moving you away from your goals. – Brian Tracy Yes, You Can Have A Retirement AccountAs entrepreneurs you have many opportunities to set your finances up for success. Retirement plans and options are available, you just have to plan and set up your business up to include them. An option for some business owners may be starting with a savings account and setting aside an amount you will send to your 401K plan consistently. The important key to the process is being realistic and consistent. Today, we share one option for entrepreneurs and small business owners to get them started on establishing their retirement. "Advantages that a 401(K) has over a SEP-IRA include the ability for the individual to take a loan from the plan, which is not allowed with IRA type arrangements. The maximum total contribution that an individual is allowed to make a solo 401(K) is the same that is allowed for a SEP-IRA ($53,000); however the percentage of income limitation on SEP-IRAs and solo 401(k) plans is calculated differently." Leave developing an extensive step by step guide for your plan and vision to us. Source: PWC:Managing your wealth As a solo owner, the control starts and ends with you. Just as well as procrastination, will start and end with you." - Fontenot & Associates Solutions. Are you Aware of Fraud within your Business?As an entrepreneur, the path to success is busy from the moment you decided to become a business owner. Your thinking about the marketing, websites, social media and how all of these areas will generate revenue for your business. But, when does the entrepreneur slow down to think about fraud prevention within their company? Does this happen after they have built a staff and business is booming? Or does this happen when business slows down and the accountability for revenue is key to the sustainability of the business? As you build your business include the key control of establishing policies and procedures. Having policies and procedures in place will not only be the framework of your business it will also be the additional support in preventing fraud. An example of potential fraud for any business is described below. Lapping occurs when an employee steals cash by diverting a payment from one customer, and then hides the theft by diverting cash from another customer to offset the receivable from the first customer. This type of fraud can be conducted in perpetuity, since newer payments are continually being used to pay for older debts, so that no receivable involved in the fraud ever appears to be that old. Lapping is most easily engaged in when just one employee is involved in all cash handling and recordation tasks. This situation most commonly arises in a smaller business, where a bookkeeper may be responsible for all accounting tasks. If these tasks are split up amongst several people (known as the segregation of duties), then lapping can only be conducted when two or more employees are involved. Lapping typically requires that the person engaged in the fraud be involved every day, and so does not take any vacation time. Thus, having a person refuse to take the vacation time that they have earned can be considered a possible indicator of the existence of lapping. Lapping can be detected by conducted a periodic review of the cash receipts records, to trace payments to outstanding receivables. If there is ongoing evidence that cash receipts are routinely being applied against the wrong customer accounts, then either the cashier is astonishingly incompetent, or there is an active lapping scheme in progress. Controls that can be used to prevent or detect lapping include the following:
Formal education will make you a living; self-education will make you a fortune. – Jim Rohn Source: AccountingTools
As an entrepreneur some of us wish there was this long list of things "not" to do readily accessible before we took the leap in starting our own business. Well, I sure do! This is why I enjoyed reading an article published by Black Enterprise magazine which gives 7 common mistakes entrepreneurs should avoid.
Let's also keep in mind the importance of establishing policies and procedures, it helps give not only yourself the future vision of the company but allows others to understand your vision. Visit our website today to view our services and how we may support you on your road to success. As a womanpreneur I was elated to see an article about grants and more specifically directed to women. Let's face it, the word grant is just an exciting word because it means free money (to an extent). The journey to entrepreneurship may be different for each woman but in this competitive market , it is always great to hear about optional sources to grow and build your dream business. After reading an article published in the Entrepreneur magazine which states, "In 2014, there were close to 9.1 million women-owned businesses in the United States, a 68 percent increase since 1997, according to The 2014 State of Women-Owned Businesses Report from American Express. This percentage increase exceeded the national average of small business growth by 1.5 times" , I am sure my decision to become a womanpreneur will be one the best on my list. Visit here for the full article and learn more about 11 Grants that women need to know about. Please share with your colleagues and other womanpreneurs on their quest to success! Your super-women, of course you can do this." - Fontenot & Associates Solutions Your dedication is not a required conversation because it shows." - Fontenot & Associates Solutions As a part of my CPA world I would like to share and encourage those in the accounting profession or business owners to learn more about aggressive accounting. Aggressive accounting is the use of optimistic projections or gray areas in the accounting standards to create financial statements that present a rosier picture of a company than is actually the case. These actions are taken to give the investment community a falsely enhanced view of a business, or for the personal gain of management. Examples of aggressive accounting practices include:
Visit our website today, www.FontenotSolutions.com, to view our services and get started! Source: AccountingTools
Are you wantrepreneur with ideas to start your own business but lacking the knowledge of how to build capital? Don't be discouraged. This challenge has been faced by many others thus do not allow it to keep you from taking the leap in becoming an entrepreneur. The process of identifying your source of capital should be part of your business plan and initial research. While personal funds and family support are the two general sources of income - other options are available. Entrepreneur magazine has published an article with 6 ways to fund your business. An additional key to a successful start-up is establishing your policy and procedures. It will not only be the roadmap to your future growth but it will also allow you to see the constant growth and to be more prepared. Be the best source of your information and get there by picking up a book." - Fontenot & Associates Solutions
Source: AccountingCoach
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