Spotting Red Flag Accounting Practices

Spotting Red Flag Accounting Practices

If you’ve ever attempted a quick Google search for CPAs in your area, you’ve probably learned there’s no such thing as a quick search for an accountant. Accounting is all about the details, and when you’re trying to find someone to handle your finances, it pays to be thorough. Your money is at stake, and you should only choose someone who has your best interests in mind. A small amount of accountants have questionable (to say the least) practices, and knowing the warning signs makes a big difference:

Outdated CPA Certificate

There’s a reason many people prefer to work with a CPA rather than a general financial planner: the title requires a higher level of expertise. In addition to years of schooling, CPAs complete exams to ensure a high-level understanding of auditing, business concepts, financial rules and reporting. It’s worth asking for credentials to ensure your accountant has retained their license. (more…)

Bookkeeping Basics: Determining Your Accounting Method

Bookkeeping Basics: Determining Your Accounting Method

When you start a new business, you have to make a decision regarding how you will approach your financial management. Two basic methods are available to you: cash basis or accrual basis. Although the two methods clash, there are also see some similarities.

Cash basis is an accounting method that counts income only after cash or a check is received and expenses are not counted until they have been paid. This method is the most popular accounting method among entrepreneurs and small businesses.

Accrual basis is an accounting method that counts income when orders are placed or services are requested, regardless of payment being received. Expenses are counted when your request for good or services is fulfilled.

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5 Book Balancing Tips for Small Business Owners

5 Book Balancing Tips for Small Business Owners

Are you a small business owner who struggles to keep your books balanced? Do you feel like you’re too busy juggling all the other responsibilities of managing the day-to-day operations? If so, you’re not alone. Bookkeeping can be tedious and intimidating, but with the right tips and tricks, it doesn’t have to be a struggle. We share some of our favorite bookkeeping tips for small businesses, so read on and start getting your books in order!


1. Separate Your Personal and Business Expenses

Mixing your personal accounts and business accounts is asking for trouble. Skip any confusion and create separate bank accounts. Having a dedicated business account provides a clearer picture of your business cash flow allowing you to track expenses more easily. Solely using credit cards for all business transactions is a great way to stay on top of expenses as cash payments can easily be overlooked.



2. Pay Attention to Receivables

Every business likes to get paid but managing those payments isn’t as much fun. Marking an invoice as paid when payment is received seems easy, but all too often customer payments are left to reconcile at a later date. It’s important to keep track of your transactions as they happen. Applying customer payments weekly will save you time and money – and a big headache come tax time.



3. Pay Yourself a Salary

While paying yourself may not be the first thing that comes to mind as you’re building a business, if your business earns enough money, it should be. Paying yourself a salary is an excellent way to keep your business and personal life separate and keep your books in order. Rather than having business pay your personal expenses, have them write you a check that is deposited into an account just for those payments.



4. Log Expense Receipts

The importance of keeping business receipts cannot be overstated, as they help you keep accurate records for your taxes and lend credibility to any tax reporting. Whether it’s buying dinner for a client or paying to create a new logo for your company, all purchases should have some type of receipt with them so you can keep an accurate record of all business expenses.



5. Hire a Professional

Too many small businesses struggle with the day-to-day tasks of keeping their books, and it’s a problem that can be easily avoided. Your business requires your full attention as you grow it into something amazing—outsource these tedious jobs so you have more time to focus on what really matters, making money!


As a small business owner, you have to be mindful of your accounting and finances. These tips will help make bookkeeping less daunting and ensure that your business is on the right track financially.

Why You Should Separate Your Personal and Business Finances

Why You Should Separate Your Personal and Business Finances

When it comes to running a business, it’s important to keep your personal and business finances separated. This reduces accounting and tax problems and makes it much easier to manage your accounting books. Running a business already takes a great deal of effort, so it helps much to not have additional stress by managing your finances with bookkeeping tools and experts. We understand how important it is to properly manage your finances and the peace of mind that comes with it. We have helped over a hundred businesses with accounting and bookkeeping in the Chicagoland area and have gathered some reasons as to why you should separate personal and business finances to have a better understanding.
  • Establish your business
First off, you will want to ensure that your business is incorporated. Whether you choose to present it as an LLC, C Corp, or S Corp, you will want to ensure that it’s established with the right structure. By establishing a separate legal entity for your business, you will be able to protect your personal assets from your business debts, losses and lawsuits.
  • Acquire business credit
By opening business debit or credit cards, you won’t have to use your personal accounts for business transactions, and it’s the easiest way to keep your personal and business finances separate. In addition, a business credit card can help you build stronger business credit scores and could even boost your borrowing power which could help you qualify for business loans with lower interest rates.
  • Open a business checking account
In addition to credit cards, you also want to open a business checking account and only make purchases for your business through it. Doing so let’s you have a clear and complete picture of your expenditures, which is ideal for when tax time rolls around as all you will have to do is review your statements. 
  • Create a salary for yourself
Seeing as you are the boss of your business, you will want to make it official. So, pay yourself. By creating a salary for yourself, you can write checks from your business checking account which can then be deposited into your personal account. This way, you can easily keep track of your payroll finances and ensure that your salary is being professionally handled as it should be.
  • Keep your receipts
One of the most efficient ways to keep your personal and business expenses separate is by keeping your physical receipts. So pull out those old-fashioned folders and place your receipts within them or upload them digitally. This will help with audits if the IRS ever comes knocking on your door, you can feel confident that you will be prepared.
  • Track your shared expenses
As a business owner, it’s important to keep in mind that many of your business expenses are tax deductible and you will most likely have some expenses to write off! As a result, when you make purchases you will want to ensure that they are separate from your personal ones, which can be done by using your business debit or credit cards. Not only will separating your expenses make things easier for your accountant come tax time, but you will also be protecting yourself by keeping a financial record and continuing to keep receipts.
  • Using personal items for business purposes
When it comes to your business, any expenditure that you can legally write off should be written off to save you money when tax time comes around. By working with a tax advisor, you can determine what’s deductible as well as how to keep the right records. Properly managing your business finances is certainly of importance! These are just a few helpful ways to manage them throughout the year. Hopefully, you now have a better understanding of the complexities that are involved with running a business and managing your books. Working with an accountant can help with your bookkeeping, payroll and taxes and therefore make life and work much easier for you. Looking for an accounting solution that’ll provide you with peace of mind when it comes to your books?  Get in touch with us here at Motl Accounting as we would be ready to assist. Our staff at our West Dundee, IL office assist many small to medium sized businesses and we look forward to assisting you.
Accounting Adjustment Tips during Covid-19

Accounting Adjustment Tips during Covid-19

The spread of the coronavirus clearly had an impact on the general business environment. For many businesses the crisis led to some decline in revenue resulting in making necessary adjustments to navigate the times and not put themselves at risk. While there are revenue opportunities for certain goods and services based on the impact of COVID 19 (i.e. masks), there are also opportunities in business operations. One of the advantages to decreased business activity is companies having time to make operational adjustments like back office accounting. If you are looking to make some changes to your accounting operations, here are some to consider that may help your business emerge from this crisis and any other stronger and better than before.

Get accounting online

Moving your accounting operation online is beneficial to your business, and any small to midsize company or organization should be running their accounting software on desktop or server-based software. Applications such as QuickBooks Online, Intacct, Xero, and others provide full accounting software functionality in a secure environment. We have a client portal for our clients at Motl Accounting which provides access for faster and more convenient communication and document exchange. No software installation on your computer is needed and any user from anywhere in the world can access, which makes it easier for your books to be managed anywhere.

Automate accounting process 

Automating your accounting process eliminates the need for data with sensitive information to travel between systems via paper mail. Most online applications have electronic interfaces to banking systems. This eliminates the need to reconcile paper- based banking statements, as the information from your bank is always seamlessly provided to your online accounting system. These applications also connect to other specialized applications for billing and expensing in many instances, therefore reducing the time and effort required to reconcile through paper documents and manual entries.

Outsource accounting

Outsourcing some or all of your accounting operations is a great way to eliminate costs, decrease risk and free up time for you to focus on your business. Accounting firms are accustomed to cloud accounting and are in many instances more savvy in automating your accounting process. With remote access to software, data and a bookkeeper you will have access to a virtual accounting team that is available to you wherever you are.  Beyond current circumstances, there is a sizable benefit to using an accounting firm like ours. Imagine the freedom to focus on actually running your business, confident that the books are right, having access to all your financials and a team of experts in your corner to help make sound logical financial decisions. This we’ve realized provides business owners and managers with peace of mind. Having the experts handle your bookkeeping, payroll and accounting lets you weather storms better. 

If you are looking to automate and transfer your accounting practices online with a reputable accounting firm, we’d be happy to assist. Our team of accountants, bookkeepers and payroll professionals are ready to help you with your financials during uncertain times like these. Stay safe and connect with us via our website, social pages or call us at 847-426-2100. 

 

Why Bookkeeping is Important – Motl Accounting

Why Bookkeeping is Important – Motl Accounting

Why Bookkeeping is Important

Many consider tax saving strategies as the main reason to do bookkeeping but there are actually more benefits to consider. Great bookkeeping can help with decision making, prepare you for audits, help with taxes and more. A business owner who intends to succeed and grow over time can therefore gain much by having a great bookkeeping system in place. Our bookkeeping process at Motl Accounting provides our clients with financial statements, performance graphs, comparatives and payroll reports at the click of a button for their convenience. We also prepare their income taxes on a timely basis to eliminate most tax season worries, so they are always up to date with all the various taxing agencies. They benefit greatly from this and here are a few reasons why:

Audit Protection 

Having a great bookkeeping system or bookkeeper in place can help you when you get flagged for audits by agencies like the IRS. We have helped several clients with audits who in turn have had great outcomes from the process due to our involvement. They end up accepting how rigid of a process it would have been for them to handle alone without our expertise. As your business grows, it’s beneficial to keep good bookkeeping records you can hand over to a bookkeeper or accountant when you realize how big of a task it is becoming. 

Less Stress

We pride ourselves in providing “peace of mind accounting practices”. We understand how stressful it can be when your books are disorganized, there’s a constant nudge to get to it as you know the importance of it being done. The lack of time to get it done on your part typically reflects how busy you are as a business owner and with that might come the inclination to get a professional bookkeeper. Knowing your bookkeeping is handled professionally and constantly lets you have the peace of mind and more time  to run your business. 

Decision Making

Expense tracking, budgeting and good record keeping is helpful for sound decision making. Having a process that keeps you informed on your most important financial information like profits and loss by service or product, sales by client/customer and more can be very helpful in knowing the next logical steps to make for your business. Technology now provides access to reports instantly through web portals and apps so you can make decisions on the fly. There are many insights a business owner can get by understanding their books and even more by having a great bookkeeper that can help keep their books organized while they focus on their passion of running their business. 

Need Help With Accounting?

Keeping all this in mind, would you and your business benefit from bookkeeping or accounting services? Assess your expertise and passion for it and if you determine it’s too much to handle on your own, have an accounting firm like Motl Accounting assist you. We have helped many business owners in the Chicagoland area and we would be happy to assist you. Call our West Dundee Illinois location at 847-426-2100 or contact us through our website.