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Cash drives your business operations, and it is critical to growth. Without sufficient cash, you will not be able to pay employees’ salaries; fund marketing and sales programs, acquire and retain customers; purchase equipment and facilities and other day-to-day activities. Business cash flow is a key factor in its potential for long-term success. A business with substantial revenue can easily fail if it is unable to generate cash.
Depends on how much cash your company needs to operate, but you will need to create cash forecast that is based on historical and projected business activities and to effectively plan, you will need to utilize cash-flow management to determine how much cash you will need to keep in the business.
A good an effective cash flow management gives you the right amount of cash on hand to fund business expenses. Every business situation is different, but typically, cash flow level should be about 3-6 months of operating expenses. Things to have in mind when determining an optimal cash flow level are:
For more information on business cash flow, contact our OASyS Team.
You must make sure you have set your sync preferences (unallocated expense, unallocated income, bank account GL, etc.). Only unpaid bills and invoices will sync from QuickBooks online to Bill.com. Bill.com does not sync past paid or partially paid bills or invoices. If multi-currency is not enabled in Bill.com, only USD currency is supported on bills by Bill.com; bills and invoices in other currencies will not sync to Bill.com. Only USD currency is supported on receivables invoices by Bill.com; invoices in other currencies will not sync to Bill.com. Bill and invoice numbers are required in order to sync from QuickBooks Online into Bill.com. Multi-currency preference in QBO must be turned on for international payments. This will let you manage the currencies in QBO and sync those currency vendors and bills to Bill.com. Bills that are $0 will not sync from Bill.com to QBO.
It may occur when a payment is trying to sync from Bill.com to QuickBooks for Windows, but the bill has a payment already applied in QuickBooks (status “Paid”), or when the sync cannot locate the bill in QuickBooks. It may occur when a bill or invoice is trying to sync to QuickBooks Online (QBO), but a list item on the bill or invoice has been deleted in QBO or Bill.com, or the sync connection between the two has been broken. This can be related to any item on the bill or invoice such as accounts, items, classes, customers, vendors or the invoice/bill itself. It may occur when a bill or payment update is trying to sync but it is dated on or before the closing date in QuickBooks. When a Close Date and Password are set in QuickBooks, the password is required for changes that alter the balances for the closed accounting period.
For more information on Bill.com, contact our OASyS Team.
There is no one size fits all when it comes to financial dashboards and KPIs. Dashboards and KPIs need to be curated based on the user and their goals. A well thought out dashboard and KPIs enables leadership to make confident, smart and timely decisions supported with meaningful information. A brainstorming session with the key stakeholders and/or users in determining the meaningful dashboards/KPIs is extremely important first step.
Some of the important KPIs investors generally look at closely in analyzing their investment decisions are Earnings Before Interest, Tax, Debt and Amortization (EBITDA), Monthly Cash burn rate, Cost of acquiring customers (CAC), Customer Retention Rate and Revenue Growth. Depending on the industry you are in, there are additional KPIs that are key. Being able to track these KPIs requires a sound investment in systems and processes.
The general ledger is an essential feature included in an efficient accounting software that serves as a source for all financial data. When selecting a general ledger software for your business, consider the following:
For small businesses and startups, QuickBooks has been the leading accounting software. The two types of software offered, desktop and online, are different but both are very user friendly. QuickBooks also integrates with most banks where it downloads the bank feeds, allowing users to generate rules so that QuickBooks can post the transactions automatically. In addition, QuickBooks also integrates with many applications that will either automate the data entry or provide a paperless solution for your business. Software such as Bill.com, Gusto, Expensify, and Fathom.
Part of the goals of many businesses is to have an efficient process and procedure. However, the focus is often on running the business and making a profit, leaving process and procedure for a project down the line. In many cases, businesses will utilize different applications that may or may not integrate with the main accounting software program as a solution to manage the needs of running the business. If your general ledger software has problems producing essential reports rapidly, and you find that the reports you need have to be created manually on another application, then it’s time to upgrade.
It depends on the type of business. A General Ledger software package can range between $15 and $1500.00 per month. If your company is a Non-Profit, you can join a third-party Non-Profit community and benefit from highly discounted subscriptions for software such as QuickBooks Online. The type and size of the business, the desired features, and cost will impact the final decision.
If cost is not the deciding factor for selecting a cloud-based versus a locally installed software, considering an accounting software could be based on preference and how many individuals need to access it. A Cloud-Based software offers mobility, flexibility for multiple users who may need to access it at the same time, and it is accessible from most browsers and popular devices. During the pandemic, many have found cloud-based software to be essential to continue to monitor their business.
For locally installed software, there is usually a single access within the computer network where the software is installed. It may have the option of multi-installations so that the same company file can be accessed by multiple employees at the same time.
Although cloud-based is easily accessible and is the popular option, some companies prefer the locally installed software, thinking that security may be better. However, that’s not necessarily the case.
Yes. It can prevent changes to previously issued financials. By setting up closing dates after issuing financials, it can also prevent discrepancies.
For more information on General Ledger, contact our OASyS Team.
There are no legal requirements, however it is a best place to do so. Closing the books provides the owner of a startup or any entity a “Monday Morning Quarterback” review of what transpired during the previous month. The results of the close might provide the preparer a trend that requires immediate action.
It depends on the size and scope of your operations and the number of accounting staff. The time to complete your close is also dependent on the number of monthly transactions and whether or not you take advantage of automation to import data into your financial system or need to prepare and enter manual journal entries.
Many economical easy to use accounting systems are available by subscription (i.e. QuickBooks Online and Zero). They come with a pre-populated chart of accounts which can easily be adapted to a company’s industry or organization structure.
Monthly close activities include:
Set up a monthly reporting structure that is easy for others to follow. For example:
For more information on Monthly Close, contact our OASyS Team.
There are many factors to consider when choosing the entity type for your start-up and each has its own advantages and disadvantages. It is best to speak with both a lawyer and a CPA when making this decision. Changes in tax laws from year to year can have an effect on the best entity to choose for tax purposes.
The short answer is yes. If an entity has any activity during its fiscal year this activity should be reported to the IRS, often in the case of start-ups the activity results in a loss that can be used in the future to offset taxable income. A CPA will help you to file all appropriate forms and to claim all appropriate credits and deductions.
As is the case with most tax questions the answer here is it depends. The sales tax laws have been changing dramatically over the past few years and enforcement is still catching up. The Wayfair decision, with its “economic presence” terminology has greatly expanded the sales tax nexus reach for most states. These taxes are an important factor for nearly all businesses and obtaining good advice is highly recommended to avoid tax liability exposure and penalties.
Accountants do much more than audit financial statements and prepare tax returns. The role of a CPA has been shifting to that of a business advisor who can help with many aspects of running a business from the regulatory compliance like income, excise, and sales taxes to providing referrals from everything from legal, insurance, payroll, benefits, human resources, banking, real estate and even where to get a decent meal. Working with an accountant as a consultant rather than the traditional tax return or financial statement engagement allows them to know and understand your business on a deeper day-to-day level and to offer solutions or improvements to your processes or current service providers in an effort to achieve your business goals as well as provide accurate, timely, and actionable financial data that helps management make informed business decisions.
For more information on tax consideration, contact our Tax Team.
What to expect in a Due Diligence Check List
Most painful common mistakes made during this process are:
For more information on convertible note financing, contact our OASyS Team.