Monday, August 29, 2016

Small Businesses Are Going All-In On The Cloud

From the coffee shop down the street to the local grocery store, a growing number of America's small businesses are using cloud technology in some way, shape or form. Even if they don't realize it.

Small businesses are the country's largest job generators and collectively make the biggest contribution to GDP. It's a highly fragmented market but one that is increasingly being connected by technology. That connection is opening up a world of opportunity not just for technology companies like mine, but also for the entrepreneurs who can work from anywhere, at any time, and access powerful, affordable solutions which were once only in the toy boxes of big businesses.

In a recent survey commissioned by Xero, more than 1,200 small business in the United States were polled on their attitudes and opinions around business priorities, challenges related to where and how they run their operations, as well as the use of technology to support the business.

We found that 71 percent of respondents run one-quarter of their business in the cloud. This number has jumped dramatically from a survey conducted by Xero just 18 months ago, where 23.5 percent of those surveyed gave the same answer. Small businesses are increasingly going all-in on cloud technology to help them run their operations from anywhere, at any time.

Making investments for growth is something that is becoming an increasing priority for small business owners. Our survey found that two-thirds still plan to invest in new technology this year, with 32 percent planning to invest that money in devices like mobile phones, tablets and new laptops.

As we see an uptick in the amount of small business owners running their business in the cloud from mobile devices, the way they work, and expect to work with partners, clients and advisors is also shifting.

Communicating in the cloud

How businesses communicate with their customers is now inherently cloud-based. More than 83 percent of small business owners are using modern forms of communication to talk one-to-one with their customers. These channels include social media, text, mobile messaging or online chat. More than 80 percent use these means of communications weekly, while more than 45 percent use them daily.

With the majority of small business owners using modern communication to interact with their customers, this will give way to the next generation of customer service. Chatbots are becoming increasingly popular across a wide range of industries. Domino's lets you order a pizza through its Facebook Messenger chatbot named "Dom". Even the President of the United States has a chatbot.

Through this innovation in technology, small business will find new ways to find and interact with customers. Cloud technology has taken what was once fragmented - the connection between small businesses, big businesses and government - and connected it.

Priorities and Optimism

The growth of a small business' customer base continues to remain their owner's number one priority. Out of the small businesses surveyed, 68 percent echoed this sentiment; increasing from 62 percent compared to survey results 18 months ago. Managing money more efficiently was the second priority.

Optimism about growth in the year ahead among small business owners is quite promising. A large number of respondents are optimistic about growth, with 88 percent advising they are optimistic about growth. This was followed by 52 percent who were cautiously optimistic and 36 percent who were very optimistic.

Small business owners repeatedly list customers as a key factor to the success of their business, with 60 percent stating they are optimistic about growth because of their loyal customer base.

It seems that once a small business gains momentum, that's when they start to have more confidence about the growth of their business. Larger companies with between six and 20 employees are the most optimistic about growth.

While there is rarely any certainty in business, results seem to show that customers will continue to be a key priority for small business owners. If these survey results are any indication, so too will the adoption of cloud technology to run their businesses.

Image Credit: Getty Images

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Sunday, August 28, 2016

5 Back-to-School Education Tax Tips to Save You Money this Year

Most entrepreneurs know that learning each day is just part of the job description. If you're not improving and growing, you're dying.

If you, your spouse or a dependent are planning to head back to college this fall, some of your expenses may count as education tax credits on your federal tax return. Here are 5 tips that you need to know:

1. American Opportunity Tax Credit. The AOTC is worth up to $2,500 per year for an eligible student. You can claim this credit only for the first 4 years of higher education and 40% of the AOTC is refundable. That means if you are eligible, you can get up to $1,000 of the credit as a refund, even if you don't have any income tax withholding.

2. Lifetime Learning Credit. This credit can help pay for undergraduate, graduate and professional degree courses, including courses to acquire or improve job skills, which is great for executives and entrepreneurs. This credit is worth up to $2,000 on your tax return. There is no limit on the number of years that you can claim this credit for an eligible student.

3. One Credit Per Student. You can't take more than one education benefit for the same student and the same expense. In other words, you can't double-dip on these educations credits.

If more than one student qualifies for a credit in the same year, you can claim a different credit for each student. For example, you can claim the AOTC for one student, and claim the Lifetime Learning Credit for the other, but you can't take the AOTC and Lifetime Learning Credit for the same student in the same tax year.

Also, if you get tax-free educational assistance, such as a grant, you need to subtract that amount from your qualified education expenses.

4. Speaking of Qualified Expenses... These include tuition, fees and other related costs required for enrollment or attendance at an eligible educational institution. This is where it gets complicated, so you may want to have your tax pro help you calculate your qualified expenses to figure out your credit.

Eligible schools include most colleges and universities. Vocational schools or other postsecondary schools may also qualify. If you aren't sure if your school is eligible, check to see if your school is on the U.S. Department of Education's Accreditation database .

5. Form 1098-T. Starting with 2016 tax returns, a new law requires that the school report qualified educational expenses that you paid. You must have a 1098-T, known as the Tuition Statement, to claim your education credits. Your school (assuming it's a qualified educational institution) is required to send this by January 31st.

The amounts on the form may be different from what you actually paid in educational costs. For example, your textbooks may not appear on this form, but you may be able to include those costs for your credit.

It's important to know that you can only claim an education credit for the qualified expenses that you paid in that same tax year.

Not surprisingly, there are additional rules if you are in the U.S. as a nonresident alien, on an F-1 Student Visa. This is where a tax pro well-versed in immigration law can help you.

You also need to know that some of these education credits are subject to income limitations and may be reduced or eliminated, based on your income. Visit and use the Interactive Tax Assistant tool to see if you are eligible to claim education credits.

Along with learning, most entrepreneurs also understand the value of saving every penny. This is your chance to further your education and save dollars.

Call it Smart Money 101.

We're here to help you organize, prepare and manage your small business finances.  Click here or contact us for further information.

Credit Image: Getty Images

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Friday, August 26, 2016

Handy Apps That Will Help You Manage Your Business Finances

As a self-employed worker, you’ll always have a staggering amount of items on your to-do list, but probably will never feel like you have enough time to get everything (or even a fraction of your jobs) done each week.

While it may be tempting to spend your hours on those things which help you drive sales, or the areas which you enjoy working on the most, it’s imperative that you don’t ignore the finances of your venture month after month.

Consider these facts: statistics show that a whopping 90 percent of startups fail; while 96 percent of businesses fail within ten years, primarily because they can’t pay their bills. As well, a CBS study of more than 150 failed startups discovered that one of the most common problems across the board was that entrepreneurs didn’t actually know how they were going to make money in the first place.

As you can see, financial management should be something you always concern yourself with, no matter what industry you work in. When you’re self-employed, you don’t have a corporation behind you to worry about cashflow, so you really need to be proactive and find ways to get a handle on it yourself.

To help make life easier though, you can take advantage of some of the great apps on the market which have been created for business people. Many apps not only help to keep ventures on the right financial path, but can also be seen as increasing productivity for entrepreneurs at the same time. Read on for some top tech aids you should consider downloading today.


Many self-employed people work as contractors or in other roles that require them to keep track of the amount of minutes or hours they spend on each project or for each of their clients every day. If you operate in this way, then it’s vital that you never miss charging for any of the time you spend working, as this can have a big impact on your business finances.

A great app that will not only help you to ensure all billable hours are covered, but that will also help make the process quicker and easier, is Toggl. This time-tracking program will help you maximize your revenue as it tracks your work hours, whether you’re conducting business in the office, at home, or any other spot.

With a simple click of a button the software will record when your tasks or meetings begin and then end. A really handy part of the app is that is doesn’t need to access the internet in order to work, which is perfect if you like to get things done in areas (such as client homes, parks, coffee shops etc.) where Wi-Fi isn’t available. The software simply tracks the time you spend on your work while offline, and then syncs the new data once you’re connected to the internet again.


A task that many self-employed people find rather tedious is putting together their expense claims each month, quarter or year. If you tend to miss out on claiming all the expenses you can because you lose track of receipts or forget what certain charges were for, it’s time to download Expensify.

This app will not only help you to keep track of, record, and upload expenses, but will also make it easier to see where your venture’s budget is at each day. For starters, you should link up your credit and debit cards to the app. Then, when you’re away from the office and pay for something on card (such as a business lunch with clients or new stationery for the office), the system will automatically upload the information to an expense report for you.

If you pay with cash, your paper receipts can also be painlessly taken care of. Simply take a photo of your receipt with the camera on your cell phone, and then sync this with the app. The tech will then automatically extract the relevant data from the image, and upload the information to your report.


The best way to manage your company finances is to regularly take a look at how things are tracking. An award-winning app that makes this quick and easy to do is Mint. Created by Intuit, the makers of the Quicken program that many entrepreneurs use, Mint collates financial business data into a comprehensive analysis that can be seen at a glance via charts and graphs.

The program uses sources such as bank loans, credit and debit accounts, bank accounts and car loans to source the pertinent details, plus users can also enter cash transactions manually to keep the program updated.

Use Mint to set and adhere to a budget; manage cashflow; see where money is being spent; generate reminders for invoices; categorize expenses; and set savings goals. In addition, the app can also be set up to send you regular savings and cost-cutting tips, such as credit cards with lower fees than you’re currently paying, or savings accounts which pay better rates of interest.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Wednesday, August 24, 2016

5 Free Apps to Help You Control Your Finances

In a not-so-distant past, people tracked their personal finances by saving every single receipt and painstakingly balancing a checkbook. Technology has evolved over the decades, and now financial help is literally at our fingertips. Here are five apps I recommend to get your financial life in order:

1. Mint

You can sign up and use Mint for free. It allows you to see all your account balances and transactions together, so you can view your full financial picture, complete with graphs and charts. The app also connects to almost every U.S. financial institution connected to the internet. Mint's app is available for iPhone, iPad and Android.

2. Digit

Digit is a great app because it recognizes spending patterns of the user and moves small amount of savings into another account every few days. Digit allows unlimited transfers and can be accessed anywhere. It is free to use.

3. Goodbudget

Remember using envelopes to learn how to budget and save money? Each envelope had bills, food and other categories listed on it, and whatever amount of money was in it was the limit of how much you could spend on that category. Once the envelope was empty, that was it until it was time to replenish your funds.

Goodbudget is the digital equivalent of that tried-and-true saving and budgeting method. The app stores your budget that syncs between a mobile devices and the web. The app is available on iPhone and Android for free; however, additional perks carry a monthly fee.

4. Credit Karma

It is important for people to know their credit history in order to prevent financial hiccups along the way. This free app is an easy way to stay on top of your credit. It gives you free credit reports, credit scores and daily credit monitoring. Available for Androids and iPhones.

5. PocketGuard

PocketGuard eases the complexity of budgeting by automatically calculating your monthly expenses and income and using data to figure out exactly how much you can safely spend before you get paid again. Data is available in easy-to-read charts. Available for free for Android and iOS.

These digital tools and apps make financial peace of mind more accessible and affordable for all!


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Monday, August 22, 2016

5 Time-saving Accounting Tips for the Busy Small Business Owner

Running a small business is rewarding, but also incredibly time-consuming.

According to a recent Constant Contact survey of small business owners more than 40 percent of small business owners say they don’t take vacations, and 40 say they don’t spend enough time with family and friends.

Despite this, 84 percent of these same small business owners say if they had the choice, they would do it all over again.

Which leaves us with the constant quest to find more time. And while time travel may not be possible, there are many ways you can find more hours in the day by reducing time spent on accounting tasks.

Here are five of our favorite time-saving accounting tips for small businesses:

1. Clean up the books.

Most entrepreneurs aren’t accountants and don’t have an in-house accounting professional, so keeping the books current can become a daunting task.

But if you update your books consistently, you can save time and reduce stress. Up-to-date books, with organized record keeping:

  • Eliminate frantic searches for particular invoices or bills
  • Make invoicing and tax preparation faster
  • Deliver current financial reports, so you can make informed decisions that don’t cost you time and money

The best place to start is by bringing revenue, inventory and expense data up to date in your accounting software. Next, reconcile bank accounts. Then set a regular time each week to keep everything current. You’ll quickly notice the extra time.

2. Automate invoicing.

Month end invoicing can be a time sink, and sometimes an unpaid invoice or two can get lost in the shuffle, which costs you money.

QuickBooks Online accounting software lets you automatically generate invoices, which you can email or print. After you create the invoice, the information is fed into your accounting reports automatically, reducing data entry time.

You can also use an accounts receivable app, such as Invoice Sherpa to help automate the process.

This app sends reminder notices for unpaid invoices and handles late fees, so you get paid faster. Invoice Sherpa also helps you manage invoices by automating the accounts receivable process to send out invoices promptly and automatically.

3. Automate expense reporting.

Data entry for expense reports can also be time-consuming. According to a report by Expensify, the average employee can spend between 30-40 hours per year on expense reports.

But if you automate the process with the Expensify app for QuickBooks Online, employees will save those lost hours, and you will save time tracking down reports, coding receipts, and writing checks because the app takes care of it for you.

As a bonus, employees can snap pictures of receipts via the app instead of entering them manually. That way no one has to worry about keeping track of little pieces of paper.

4. Reduce time spent entering transaction data.

QuickBooks Online users who use the Square merchant services device can connect the Sync with Square app to their QuickBooks account.

Square will automatically import transaction data into your QuickBooks on a daily basis without you spending hours at the keyboard. Depending on how many transactions you have per month, this can save hours of data entry time.

5. Evaluate past due invoices and credit policies.

Collecting on past due invoices can be unpleasant as well as cost you time. Re-evaluate your credit policies. Consider how to enable payment when the service or sale is made, instead of thirty days later.

An accountant or bookkeeper may be able to help you find a better credit policy for your business. If delinquent accounts are an issue, you may also want to consider turning the worst offenders over to a collection agency.

Get time back for your business.

With a little planning, organization, and help from technology, you’ll be able to find more time in your business day.

Use these tips to free up some time, so you can get back to doing what you do best. Or use that newfound time to take a well-deserved break from your business. The choice is yours!


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Friday, August 19, 2016

Cash vs. Accrual Accounting: What’s Best for Your Small Business?

As a small business owner, it’s important to understand the difference between the two main methods of accounting: cash and accrual. Even if you don’t handle your own financial reporting, it’s vital to know how each one works so you can choose the best bookkeeping practices for your business. To learn more about financial reporting, download free customizable financial statements and a free invoice template.

Let’s take a look at the differences and respective implications of each accounting method.

What Is the Cash Method?
With the cash basis of accounting, you record income as it’s received and expenses as they’re paid. This does not take into account any accounts receivable or payable, as it only applies to payments from clients when the cash is in hand, and expenses when the transaction clears your bank account.

For example, if you invoice a client for $1,000 on March 1 and receive payment on April 15, you would record the income in April’s bookkeeping. This is when the money was received and in hand.

Many small business owners choose the cash method of accounting because it’s a simplified bookkeeping process. It’s easy to track money as it moves in and out of your bank account because there’s no need to record receivables or payables.

Additionally, your small business doesn’t have to pay income tax on any revenue until the moment it’s deposited into your bank account.

One downside to using the cash basis of accounting is that it can produce an inaccurate overall picture of your finances. Since it doesn’t account for all incoming revenue or outgoing expenses, it can lead you to believe you’re having a very high cash-flow month, when in actuality this is a result of last month’s work.

For more in-depth information, see our article about the cash method.

What Is Accrual Accounting?

The accrual basis of accounting is basically the complete opposite of the cash method. Income and expenses are recorded when they’re billed and earned, regardless of when the money is actually received.

Using the example from above, and applying the accrual basis of accounting, you would record the $1,000 as income in March’s bookkeeping versus in April when you actually received the funds.

The upside to using the accrual method is it gives small business owners a more realistic idea of income and expenses during a certain period of time. This can provide you (and your accountant) with a better overall picture of how your business is doing and where it’s headed in the future.

One drawback to the accrual method is that it doesn’t account for cash flow or funds that are available in your bank account. If you don’t have careful bookkeeping practices, the accrual-based accounting method could be financially devastating for a small business owner, as your books could represent a large amount of revenue while your bank account is completely empty.

For more information about the accrual accounting method, see our full article here.


What’s Best for Your Small Business?

The cash method of accounting is the easier of the two to use and maintain, since it’s pretty straightforward. The accrual method, on the other hand, requires more bookkeeping because you’re forced to do more recording and tracking.

As a small business owner, you’re free to use either the cash or accrual methods of accounting, as long as your sales total less than $5 million per year. However, if your business must keep an inventory of merchandise to sell to consumers, the IRS requires that you use the accrual method.

The cash method gives you a better picture of the funds in your bank account, while the accrual method accounts for money that’s yet to come in. The cash basis gives you an immediate look at your financial picture, while the accrual basis is more of a long-term view.

Some small businesses can choose the hybrid method of accounting, wherein they use accrual accounting for inventory and the cash method for their income and expenses. If you’re unsure of which accounting method is the best for your small business, speak with your CPA or tax professional. For more accounting tips, check out our accounting checklist for finance-related tasks you must complete on a daily, weekly, monthly and yearly basis.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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Wednesday, August 17, 2016

What Is Cloud Accounting?

Cloud accounting software is similar to traditional, desktop based solutions, with the difference being that it is hosted on remote servers. Data is sent into the “cloud” where it is processed and stored. The benefits to the end user include access to real time data from anywhere with an Internet connection, and from any device–including laptops, smartphones, and tablets. Employees have greater visibility within an organization and can collaborate more effectively. And for business owners, peace of mind comes from knowing that routine maintenance and updates to the software are managed by the SaaS (Software as a Service) provider.

Cloud accounting solutions are often subscription based, and customers can upgrade their monthly or annual plans to meet the growing needs of a business. This pricing model is similar to popular consumer SaaS providers such as Netflix, Google Apps, and Dropbox. Not requiring a long term commitment is another strong reason to consider cloud solutions. There are no contracts to lock you in with a specific vendor or cloud accounting technology.

According to Intuit’s e-book “The Appification of Small Business”, it is estimated that 78 percent of small businesses will rely on cloud technology by 2020. This makes sense when you consider that under the SaaS business model, providers are incentivized to innovate and provide great customer service–all at a competitive price.

The benefits of cloud accounting

For new businesses, starting fresh with a cloud solution is easy as signing up. Established businesses however, will need to plan ahead for migration to ensure that critical data is kept intact and everything continues running smoothly. Fortunately, major cloud accounting providers such as QuickBooks Online allow seamless transition from older, traditional desktop based solutions. Many business owners who migrated to cloud accounting technology have reported cost savings and greater efficiencies in day to day operations.

Here are the top benefits to consider when researching cloud accounting solutions:

1. Safe storage of financial data
Cloud accounting technology can provide a more secure method of storing financial information than desktop based software. Data is routinely backed up to servers in multiple locations by the SaaS provider, and there are no physical hard drives or computers containing sensitive data that can be stolen. Since financial information isn’t kept on-premise, the risks of fires and natural disasters are also mitigated.

2. Sync data automatically
Cloud accounting software does the heavy lifting so you can spend your time on other important business tasks.  Automatically sync your bank accounts so you don’t have to manually import transactions or verify expenses. If 84 percent of businesses using cloud software are cutting their application costs — it’s a good indicator that with the adoption of online accounting, you can too.

3. Pay as you grow
Small businesses often experience growing pains, which makes choosing software with future growth in mind a priority for many. Cloud accounting software allows businesses to purchase what they need and increase their spend as they grow. This includes adding more storage space, users, and more advanced features.

4. Multi user access
Once you reach a point where your business is looking to outsource specific tasks, using cloud accounting can help scale in a cost-effective and controlled manner. The multiuser feature of cloud accounting means you can give different people access to your financial records and bookkeeping process, which they can access remotely. This streamlines workflow, and allows you to ask your advisor or accountant questions directly, all based on the most up-to-date versions of documents. The multiuser feature makes for quick communication, team collaboration and less back and forth.

5. Data accuracy
Cloud accounting programs promote accuracy by streamlining the data-importing process and eliminating double-entry mistakes or other human errors that might occur. TechRepublic praises Saas-based accounting systems citing the “built-in controls that automate identification of duplicate entries, and prevent other errors.”

6. Prevent unauthorized access
The same way you don’t want strangers accessing your pictures or your Google documents, unauthorized users in your accounting software is even more disheartening, and even dangerous. Login credentials for your cloud accounting software enable only designated people to view and access your financial information. Data is completely private and protected.

7. Minimal downtime
As with any online or desktop software, periodic security upgrades and software updates are essential to keep programs running smoothly. Cloud accounting software is no different. You will experience some — though minimal — downtime for such updates, but will be alerted ahead of time.

What can you do with your growing interest?

QuickBooks Online, a leader in cloud accounting technology, offers small businesses a wide variety of features and bookkeeping capabilities. Easily see all of your accounts and financial data, record sales, get paid, and keep track of all your money in one organized place.

QuickBooks Online offers several different plans so you can choose the best service for your needs. The most budget-friendly plan starts at $10 a month and offers the features best suited for self-employed individuals. The platform allows you to customize your plan as you scale.

Connect your bank accounts and credit cards, sync transactions and access operational data from anywhere. If your accounting is taken care of, you can spend the time you save doing things you like — like scaling and growing your bottom line.


Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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