Whether you're looking to organize your new small business, or are just in need of some personal financial organization, an accountant seems like a great idea. They're like the fairy godmothers and fathers of tax season. And they'll come in especially handy when you're flipping through a pile of uncategorized receipts trying to do your taxes. Accountants are cool, but a lot of what they do we can do ourselves. It helps to get an understanding of the best financial practices in order to make accounting a lot more than just a "dismal science."
1. Keep impeccable records.
A wise accountant once said, "You're only as good as the records you keep." Memorize this mantra and write it on a note above your door. Laziness is the enemy of accounting. The best way to keep records is to have both a physical and digital file. Go out to your nearest office supply store and pick up a nice, sturdy file cabinet, hanging folders, manilla envelopes, and some labels while you're at it. Keep it simple. Alphabetical order works best.
2. Develop a bookkeeping system and stick to it.
Expanding on point one, you'll need to employ a process for bookkeeping. As soon as a check comes in, for example, make a copy of it to store in your physical file and digital file, then make sure it is logged out and a receipt is stapled to the invoice. Then deposit it and label the payment appropriately in your bank account, so that it doesn't just say "Deposit." Down the line, you'll likely forget what that random deposit was for.
3. Don't throw out your receipts, file them.
Today, receipts are both printed and digital, so to keep track of them, you should scan all of your physical receipts into a digital file with your emailed receipts. Categorize them. Here is a sample of small business categories that can be customized to fit your business.
4. Use the right software.
While Excel spreadsheets are a great way to stay organized, you may want to invest in an accounting software. Quickbooks is one of the most widely used, and has a convenient online version. With it, you can generate valuable reports, track invoices and payments, and reconcile your accounts. It gives you an organized overview of your revenue, and is a great resource for the small business.
5. Mark on your calendar when payments are due.
Trust your calendar to tell you when you need to get paid, and make sure that you keep a record of "aged" receivables that are overdue. Log follow up emails and phone calls in writing so you can provide evidence of a follow-up when your vendor acts confused about a payment. Written documents will always be on your side.
6. Reconcile your accounts every month.
Account reconciliation is super important. It's a way to make sure what is in your bank account actually matches what is in your records. Quickbooks has an easy account reconciliation step-by-step process. Making sure you do this every month will make keeping your accounts less overwhelming than waiting until the end of the year to do everything.
7. Enroll in a payroll service that automatically withdraws tax and deductions.
If you have employees, a good payroll service will take care of all the tax deductions for you when you set up a W-2. ADP is one of the top companies that handles all of that. For more on them, check out their website.
8. Become best friends with your P&Ls.
As a business owner, it's vital to be able to see the big picture of your company. A profit and loss report will show you all of your expenses categorized as well as your net income. You can compare these P&Ls year over year, or even month over month, to see if certain expenses are staying constant, rising, or falling seasonally. Here's more on how to understand your P&L.
9. Keep up with your taxes.
You'll likely need to make a quarterly tax payment if your company operates in a state with sales tax. For more, the U.S. Small Business Administration (SBA) will help you figure out what you need to pay, and when. You can also use your year-to-date P&L to determine if you owe any estimated taxes for the quarter.
That wasn't so bad, was it? We're not out to put accountants out of business, but by understanding a bit of what they do, you can take control of how you run things. And hey, if you like it, you might want to become a CPA.
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The National Financial Educators Council (NFEC) surveyed young adults in 2017 and asked them what high school level course would benefit their lives the most.
The majority responded that money management was the course that would be most beneficial.
With personal debt is at its highest record and COVID-19 threatening to have the hardest economic effects on youth, understanding money and finances is an important life lesson that should be taught to children at a young age.
The following is a list of the best financial literacy lessons and tips to teach children throughout different life stages.
I thought I had a pretty good handle on my finances out of school. I worked several jobs while attending university and had little to no problem managing my income. However, once I graduated, I realized how much more complicated personal accounting could really be.
There were so many variables I needed to keep track of. Biweekly bills, monthly charges, and general necessities amounted to a heap of confusing numbers that were often impossible to decipher. The funniest part was that I was actually trying to do this by hand (I don't know what I was trying to prove to myself, either).
After messing up for the 17th time, I decided to give Microsoft Excel a shot. I used Excel a bit in school and I knew all the big-wig finance people used it, so what could I possibly have to lose? The answer is about six hours of my precious time. Excel isn't much of an improvement over handwriting and it's still dependent on the user to manually input all of the information. It's like doing everything by hand with the slightest help, meaning that it still required a tremendous amount of time and concentration. Well that was all for nothing, I guess.
It's sort of funny. I was certain that I could manage my personal finances with ease, when it's practically a full-time job. I was already stressed out enough with my first job and I knew I didn't have enough time to give my finances the attention it deserved.
That's why I decided to try out a budgeting app. My best friend told me that he uses an app called Truebill to manage his finances. "What does it even mean to manage your finances?" I asked him. He told me that Truebill was the personal financial assistant I wished I could have. It could aggregate all of my account information into one place and give me specific insights and actions.
I loved the idea of having full control over my finances, especially during a time of financial uncertainty, and I realized that Truebill would be the easiest way to accomplish this. The user interface is incredibly simple and intuitive, so it doesn't even feel like a finance app! Truebill offers a multitude of features, with their most popular being the ability to cancel subscriptions with the press of a button.
Okay, I had no idea how many subscriptions I was still subscribed to. In fact, I wasn't even using a quarter of the subscription services I was signed up for. Subscription boxes, streaming services, my old gym, and even an old subscription to my favorite magazine--it was all there and I was livid. How could I let myself waste all of this money and how did I never catch this? Thank goodness for Truebill.
Truebill also offers bill negotiations. There is a 40% fee based on how much you save and Truebill even claims that there is an 85% chance that they'll be able to lower your bill once a negotiation is requested. Why wouldn't I take them up on this? There was zero risk and I would only have to pay once my bill was lowered (which means that I would be saving money regardless).
More standard features of Truebill include the ability to generate a credit report on-demand and even request a pay advance. I only used the pay advance feature once when I wanted to buy a gift for my mom, but didn't have enough cash in hand and Truebill automatically reimbursed itself when I got my next paycheck.
The credit report is another fantastic feature and practically taught me what good credit meant. Truebill's credit report basically shows you which financial decisions have the most significant impact on your credit score and ways that you can improve your credit month-over-month. I've never had such control over my credit and it feels good.
I'll be the first to admit that I was extremely naive coming out of school. I figured that as long as I was attentive, I could manage my finances with ease. We manage money to some extent throughout our entire lives, but once you're thrown out on your own, it's a completely different story. With Truebill, I've finally been able to take control over my finances and stay on top of all of my responsibilities.
My buddies and I always try to make it out to a game, but we never really care which one we end up at. Obviously we have our favorite sports and teams, but it was rarely about what game we went to or who we saw playing. It was about watching the game live.
In the early months of lockdown, all we had was Korean baseball, and trust me, we loved it. The only issue was, none of us had any idea what the commentators were saying. Even then, a few of my friends weren't huge fans of baseball. They were into sports like football and basketball, ones that moved at a quicker pace with less down-time in between plays.
We decided to see if there were any other events going down and came across horse racing. Yes, horse racing. It was perfect--short, fast-paced, and most importantly, an opportunity for betting.
I had never really considered watching a horse race any time other than the Belmont Stakes, but the prospects of the sport seemed exhilarating. Even better, with horse racing we knew we could still recreate the atmosphere of a race track. Salty snacks? Check. Stale beer? Check. A simple and easy way to bet? Check.
One quick Google search later, we came across TVG, powered by FanDuel. It's an online betting platform that takes you right to the heart of the action. We were a little apprehensive about using a mobile app to place our bets, but TVG's ability to bet on live horse races from all over the world was too good to pass up.
Here are 5 reasons why we are obsessed with horse racing thanks to TVG:
1. Betting has never been easier
Use your phone or computer to watch and bet on live horse races in real-time. TVG offers a bunch of features to make betting even simpler--live odds and handicapping tips leverage recent learnings to help you make your best bet. Not to mention, TVG's exclusive race content and wagering guide offers an under-the-hood look into the strategy behind horse race betting.
2. The biggest selection of horse races out there
If you're looking to drop a little dough on a horse race, chances are your best option is your local race track. But watching the same few horses races over and over again isn't the most exciting thing. With TVG you have access to over 150 tracks worldwide with races happening consistently throughout the day.
3. Get a generous sign-up offer when you place your first bet
Once you register your account, you will be eligible for a $200 risk-free bet. All you have to do is place your first bet and you're covered. If you happen to lose, TVG will insure you for up to $200 as a sort of wagering credit. I may have been a little trigger happy when placing my first bet, so having this insurance was a great perk. There are also a bunch of promotional offers available year-round.
4. Making deposits and cashing out at the touch of button
With a ton of payment options such as PayPal, BetCash, debit/credit, wire transfers, and other third-party services, making a deposit is a breeze. But what about the payout? Depending on your deposit method, your withdrawal will be available in a few days. No more waiting in-line to collect your winnings!
5. Watching live races with your friends while betting is exhilarating
Even when we were watching Korean baseball, Zoom calls with my friends were a little dull.
With TVG, we haven't had this sort of fun in months! Every weekend we'll turn on a race and throw our bets in. After a few races, and quite a few drinks, we'll tally up our winnings to see who won the most! Sometimes it's not even about making money, but just having a good time.
TVG is the perfect way to add a little excitement to an otherwise mundane afternoon. It introduced me to the world of horse racing, a sport I never would have considered otherwise.
The races just keep ramping up and thanks to TVG, I can always get in on the fun.