The life of a business owner brings along the duty to wear many hats each day. Just think, you must juggle the ideas of new projects, the color selection of your office, customer service, the business attire culture, marketing and of course the finances of your business. Finances are the critical aspect of your business and everything else follows suit, wouldn't you agree. If the finances are not managed, reviewed, outlined and budgeted the day to day operations will be a bit more challenging to sustain in a competitive market. Now is a great time to learn more about budgeting and expand on the basics of what it really means to a business minded individual just like you. Budgeting has been a way of life for many of us. Think back -- as a student, you budgeted your study time and your money. Governmental agencies budget revenues and expenditures. Businesses use budgets in planning and controlling their operations. Through budgeting, it should be possible for management to maintain enough cash to pay creditors, to have sufficient raw materials to meet production requirements, and to have adequate finished goods to meet expected sales. A budget is defined a formal written statement of management's plans for a specified future time period, expressed in financial terms. It is known to represent the primary method of communicating agreed-upon objectives throughout the organization. It promotes efficiency and serves as a deterrent to waste and efficiency. Accounting information makes major contributions to the budgeting process. Just think, from the accounting records companies can obtain historical data on revenues, costs, and expenses. These forms of data are helpful in formulating future budget goals. It is time to ask yourself as a business owner, how you plan to measure success? How will you plan ahead for the business? The budget itself, and the administration of the budget, however, are entirely management responsibilities. A great start to the success of this process is by establishing an extensive policy and procedures guide to ensure those responsible for gathering the details of what management needs for reporting and compliance is accurate and retrievable. It is never to late to get started! Success is in the eye of the beholder and Fontenot & Associates Solutions LLC is available to get you started. Visit our website today and join our mailing list to ensure your getting the information you need directly into your inbox. “Success is walking from failure to failure with no loss of enthusiasm.” – Winston Churchill
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Can we all agree that debt is just one of those things that sort of creep up on you? In the beginning phase you feel in control of it all but all along the way you start to notice things like -- invoices are not being paid, revenue is not be posted to the correct accounts or a vendor is being overpaid due to duplicate payments. These are all errors that can and will allow for debt to become your number one priority in business instead of the least concerned aspect of the business as a whole. The first moment many business owners think about the word "debt" is when they are deciding if a business-line-of credit is right for them are when completing their first bank loan application for their business after already consuming huge amounts of debt. While the moment of creating business debt may be inevitable, Fontenot & Associates Solutions, LLC is here to share a few tips on how to handle it and stay on track.
In addition, business owner's should consider determining their debt ratio before committing to more debt. The current formula to this equation is Debt Ratio = Total liabilities/Total Assets. The debt ratio should be compared to competitors and industry averages. Industries that have stable earnings can handle more debt than industries that have cyclical earnings. These are the evaluations business should have consistently in order to know what needs to be improved. If as a business owner, you are unsure of how much of incoming cash flow is used to pay liabilities each month -- than you are to far away from the reality of your business. One of the key tools to improve this starts with implementing extensive policies and procedures. These procedures would be designed not only to ensure accuracy from the staff handling the day to day finances but used also as a great reference tool for management to understand more of the details with-out being hands on into the day to day details. It's never to late to get started with improvements -- choose to start yours today! If you know of a business seeking to identify the allocation of their cash flow and/or improve current processes, Fontenot & Associates Solutions, LLC is here to support with their business needs. “There’s lots of bad reasons to start a company. But there’s only one good, legitimate reason, and I think you know what it is: it’s to change the world.” – Phil Libin, CEO Evernote Analysis is a KeY Tool to Pointing Out A Financial IssueBeyond the belief of many business owners who hire employees with 20+ years of experience, not all professionals are skilled to analyze data without management direction. The skill of analytics has been identified as beyond necessary as well as critical to the compliance and financial position of an organization. The analysis of financial data employs various techniques to emphasize the comparative and relative importance of the data presented and to evaluate the position of the firm. These techniques include ratio analysis, common-size analysis, review of descriptive material and comparison of results with other types of data. The information derived from these types of analysis should be blended to determine the overall financial position. The American Management Association research has shown that analytics are important today and will be even more important in the future."Overall, 58% of company leaders say analytics are important to their organizations now, and 82% say they will be important in five years. Less than 1% of companies say analytics will not be important to their business in five years, an unambiguous indication that analytics will be a ubiquitous part of the business world by the end of the decade." Business owners must remember that financial statement analysis is a judgmental process. One of the primary objectives is identification of major changes (turning points) in trends, amounts, and relationships and investigation of the reasons underlying those changes. Often, a turning point may signal an early warning of a significant shift in the future success or failure of the business. Knowing this, ignites the importance of establishing extensive policies and procedures for staff professional development and process improvements. It's a fact that absolute figures or ratios appear meaningless unless compared to other figures or ratios. Having 60% of total assets composed of buildings and equipment would be normal for some companies but disastrous for others. One must have a guide to determine the meaning of the ratios and other measures. One type is trend analysis which studies the financial history of a business for comparison. By looking at the trend of a particular ratio, one sees whether that ratio is falling, rising or remaining relatively constant. The factors help detect problems or observe good management. A great example of the month to month financial comparison analysis is provided below by Illinois Small Business Development Center. A businesses ratios are more than just numbers to your investors and banks and should mean the same to a companies professional staff. Take the first step in improving the business culture plus the professional skills and knowledge base of staff which can lead to the prevention of costing companies millions due to preventive errors or non-compliance matters by developing an extensive reference guide tool. Click here to let us know when you would like to get started! Embrace what you don’t know, especially in the beginning, because what you don’t know can become your greatest asset. It ensures that you will absolutely be doing things different from everybody else.” Entrepreneurs, let's consider this scenario. Your business has expanded quicker than you expected and payroll needs to be processed in the next two business days. As the owner and key responsible for the processing of payroll, you have been faced with a proposal deadline that you cannot miss. What do you do without a trained back-up person? Ideally, you will immediately contact Fontenot & Associates Solutions LLC to schedule your FREE consultation to develop an extensive procedure guide to ensure situation never occurs again. Realistically, as the owner you going to work day and night to get both jobs done on time. The business process should include a section related to "deductions from employee earnings" which outlines which deductions are allowed and the proper way to set those up for processing. The total earning of an employee for a payroll period, including any overtime pay, are called gross pay. From this amount is subtracted one or more deductions to arrive at the net pay. The deductions normally include federal, state, local income taxes, medical insurance, and pension contributions. A key and critical deduction employers are responsible for is income taxes. Employers normally withheld a portion of employee earnings for payment of the employees' federal income tax. Each employee authorizes the amount to be withheld by completing an "Employee's Withholding Allowance Certificate,"called a W-4. This is the form every employee receives when they start a new job with an employer. A blank form that many people may not understand completely what it means and the importance of it - especially our young college graduates and young entrepreneurs. A question that remains for many employees, is what do the allowances mean and how do allowances work? A simple answer is: The number of allowances you claim controls how much will be withheld from your paycheck. The more you claim, the less money is withheld; the fewer, the more of your salary is sent off to the IRS. If you are a single (not married) individual with no dependents (no children) your completed W-4 form may be similar to the example below. The completion of this worksheet shows Carlie will claim "2" exemptions, mainly because the first questions says you can claim "1" if no one else can claim you as a dependent. This is key for college students who have their own job but the parents are still claiming them as an exemption on their tax return because they qualify. Quick note, if your parents can still claim you on their tax return, the first question "A" should be zero. As an employer, you may also be required to withhold state or city income taxes. The amounts to be withheld are determined on state-by-state and city-by-city bases. Fontenot & Associates Solutions LLC, has the knowledge and skills to develop an extensive guide for employers and their staff to ensure forms such as this are in compliance. Click here to contact us! Source: CorporateFinancialAccounting;IRS.gov Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve.” Accurate Payroll from Their Employer Is KeyEvery time you state what you want or believe, you’re the first to hear it. It’s a message to both you and others about what you think is possible. Don’t put a ceiling on yourself.” - Oprah Winfrey As a business owner your current and future staff depends on you to process their payroll accurately and timely. Therefore it is important for a business owner to decide if this process will be managed internally or externally by a third party. Even if the vast majority of your payroll process in issuing 1099s, their must be a process outlined and defined. In the world of Accounting, payroll refers to the amount paid to employees for services they provided during the period.
A company's payroll is important for the following reasons:
Just think? Salary usually refers to payment for managerial and administrative services. Salary is normally expressed in terms of a month or a year. Wages usually refers to payment for employee manual labor. The rate of wages is normally stated on an hourly or a weekly basis. The salary or wage of an employee may be increased by bonuses, commissions, profit sharing or cost-of-living adjustments. To illustrate computing an employee's earnings, assume Karen Douglas is a office manager employed by Fontenot & Associates Solutions LLC. Karen's regular rate is $55 per hour, and any hours worked in excess of 40 hours per week are paid at 1 1/2 times the regular rate. Karen worked 45 hours for the week ended June 10. Her earnings are as follows: Earnings at regular rate (40 hrs. X $55) = $2,200 Earnings at overtime rate [ 5 hrs X ($55 X 1 1/2)] = $413 Total earnings $2,613 We all can agree that this is one process that can be straight forward or very complex due to the many factors such as taxes, which makes the matter very serious for all employers. Developing an extensive business guide to support the responsible professionals with monthly deadlines and compliance regulations should be a focus for this weeks goals and significant business accomplish. Keeping up with small day to day expenses can become overwhelming for a small business owner. A company often has to pay small amounts for such items as postage, office supplies, or minor repairs. Although small, such payments may occur often enough to total a significant amount. Writing a check for such small amounts in not practical and using your bank card could cause you bank balance to reduce to an unexpected amount and important payments may go unpaid. Thus, instead, a business owner may choose to maintain a special cash fund, called a petty cash fund. Generally, a petty cash fund is established by estimating the amount of payments needed from the fund during a period, such as a week or a month. A check is then written and cashed for this amount. To ensure this special account is managed on a daily basis, business owners will choose a responsible team member to disburse money from the fund as needed. For control purposes, the company may place restrictions on the maximum amount and the types of payments that can be made from the fund. Each time money is paid from petty cash, the responsible team member, records the details on a petty cash receipts form. The petty cash fund is normally replenished at periodic intervals, when it is depleted, or reaches a minimum amount. To illustrate, assume a petty cash fund of $500 is established on June 1. June 1 Petty Cash 500 Cash 500 A key thing to remember is that the only time Petty Cash is debited is when the fund is initially established, as shown in the preceding entry, or when the fund is increased. To support with the control of the petty cash account a business owner should establish clear business goals with the development of an extensive guide. This guide will outline the purpose of a petty cash account, applicable expenses the funds should be disbursed for and how often. An established guide would be a great reference tool. If you need support with reconciling your petty cash account -- we are just a click away. It's never to late to get started, click here to schedule your FREE consultation. Source:CorporateAccounting
Exploration may be carried out either prior to or after mineral leases are acquired. In most cases, if exploration is to be conducted before a lease is obtained, an exploration permit, commonly called shooting rights, must be obtained from the property owner. If offshore exploration is involved, a permit that does not usually require the payment of a fee must be obtained, normally from the U.S. Department of Interiors Minerals Management Service (MMS) now ONRR. In either offshore or onshore activities, permission is required to conduct exploration. Onshore exploration rights may take one of two forms. Under a shooting rights only contract, the rights holder is allowed to enter onto the property and conduct exploratory activities, up to but not including the drilling of an exploratory well. The entry to record would be similar to the entry below: Work in Progress -- Shooting rights & damages 2,300 Vouchers Payable 2,300 The comprehension of accounting expectations in accounting remains a key tool to the oil and gas industry. Extensive documentation supports the operations team with their day to day and monthly deadlines and provide additional assurance of journal entries being recorded properly. Some of the main features of an exploration permit can be reviewed here. Source: PetroleumAccounting
Success is getting what you want. Happiness is wanting what you get. – Dale Carnegie. We are all guilty of the enjoyment of having lunch with a co-worker or a family night out at one of our favorite restaurants. But, what would you say contributes to the enjoyment of your experience? Yes, the restaurant must have remarkable food that we choose to indulge in more than once a week but it also gets your repeat service because of the staff and waiters. When choosing to become an entrepreneur from the ground up or via a franchise investment requires a great deal of planning. One key section of the business plan is staffing. This section should list the staff positions, the number of people needed for each position and the average rate of pay for the position. List any recruiting plans or services you will use to hire your staff. Describe the hiring standards and interview process that will be used. This should not be an intensive project for the business owner, third party support is available by companies such as Fontenot & Associates Solutions LLC. The companies commitment is to understand the culture, attitude and environment a business is trying to develop. Understanding these statistics helps with the recruiting process and creating the business framework. Success should be available to all professionals, right? Of course, this is why Fontenot & Associates Solutions LLC created the newsletter below to give light to the difference a waiter or waitresses makes to a customers experience everyday and to stress the importance of having detailed procedures to set them up for success, starting from day one. It's never to late. Set your team up for success here! Accounting Processes and Your BusinessHow often do you go looking on the web or written publications for the right information to get started with something you have thought long and hard about? Then the next question to yourself becomes how relevant is the information you have gathered to rely on. As always, we are here to share relevant information you, as a business owner, need to know! Accounting processes within your business are relevant because it makes difference in a business plan and decision. Information is considered relevant if it provides information that has predictive values, that is, helps provide accurate expectations about the future, and has confirmatory value, that is, confirms or corrects prior expectations. How you outline your accounting processes today, tells those who come to partner, invest or support the business more about your culture and future plans? Our mission at, Fontenot & Associates Solutions LLC, is to support businesses close process gaps with unique solutions. The process gaps are unique to each companies business so thus should the solutions put in place to close them. When building your brand and establishing accounting processes, here are just a few things the leader should remember and clearly define within the business guide.
It's never too late to get started, start here with us! Formal education will make you a living; self-education will make you a fortune. – Jim Rohn A leader is one who knows the way, goes the way, and shows the way. – John C. Maxwell Accounting may not be your business strength but don't count it out as a learnable business tool. When outlining your business you must consider the monthly expenses which will be incurred as well as the sources of income your expecting to pay for those expenses. But, how are you tracking the financial information? Whether using an accounting system or manually tracking, here's some information you should know. Let's talk about -- what is a (accounting) worksheet? A worksheet is a multiple-column form used in the adjustment process and in preparing financial statements. As its name suggest, the worksheet is a working tool. The worksheet is merely a devise used in preparing adjusting entries and the financial statements. When a company chooses to use one, it prepares financial statements from the worksheet example you see above. The worksheets make it possible to provide the financial statements to management and other interested parties at an earlier date. Fontenot & Associates Solutions LLC offers the professional support to streamline business processes.
What has your company designed to use? Comment on this blog post and share with other business owners looking to build or strengthen their accounting processes. Remember, education is key and the tools to get you started are here. |
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