Keying Invoices - Best Practices for Small Biz Owners

Accounting all the invoices and tracking all bills can be tedious for SOHO or small biz owner. If you receiving more than 3 bills a day, then it makes sense to use accounting program, such as Quickbooks. These accounting applications can reduce the cost or processing invoice to under $.35. Well that sound interesting, isn't.

Here're Some basics process you should be doing:

• Mark the data of invoice arrival, due data, and account information
• Every incoming invoice should be field to your accounts payable file
• Credit-card bills should filed as expense on the same day
• Train your staff to file all expenses as per accounting practice
• Make en masse payment for all bills

Double check the payment before sending out checks for your bills. This is one area where I see lot of mistakes due to oversight. Give a second look on check payments.

Virtual Accounts Payable Assistant

About Me

Your search for an accounting expert has reached my corner. If you're looking for a virtual accountant then I can provide personalized & one-to-one support for all your accounts payable issues.

I am a self-driven lady with over 5 years of experience in accounting process related with US and UK clients. During the last few years, I've worked in different programs like Quickbooks, Netsuite. I'm well versed in Excel, work and can handle calls from US and UK.

I've worked in the following domains

• Franchisee accounting for a US client
• Clinical Research Organization (CRO) - UK, US
• Car Rental ( UK)

Instead of my 9-5 job with accounting firms, I'm now pursing a new profession as Virtual accounting assistant for small and medium businesses. I can take complete charge of all your invoice process, accounts payable, bank reconciliation, credit card reconciliation related work.

Please view my Linkedin profile:

Business Work I can handle:

• Manage accounts payable
• Invoice Processing into Quickbooks
• Help Keeping Books and Working with Quickbooks
• Accounting / Bookkeeping Cleanup
• Communicate with staff, suppliers, vendors
• Manage a budget for company expenses
• and more...

My Skill Sets

• Quickbooks
• Excel
• MS-Word

If you're looking for an long-term or short-term virtual accounts payable or virtual assistant to manage your business then I can fit your bill.

But you don't believe what I say

We talk through Skype or I can do "Free" one week work for you before you decide on skills, capability and how I match with your requirement.

What is Form 10-K (Annual Filing)

At the end of each fiscal year, publicly traded companies must file a 10-K report. This includes a thorough overview of their businesses and finances as well as their financial statements. Forms 10-K are due 60 days after the close of a company’s fiscal year.

Why Is the 10-K Important?

Companies are required by the SEC to file Form 10-k annually. Form 10-K usually provides

the most detailed overview of companies’ financial operations and regulations governing

them.

Reduce Invoice Processing Cost

For businessess for any size the cost to process an invoice makes up a big chunk in the cost of maintaining acccouts

In one of the studies it was found that the cost to process a vendor payment ranging from $5 to $26 an invoice. Studies have consistently highlighted the median cost to process a vendor payment across all respondents of approximately $6.00.

Another facet is the correlation between the cost to process an A/P invoice and the size of the company. In order to optimize vendor payment, it's suggested to benchmark your time require to complete a voice and the number of Accounts payable staffer ration.

Total processing time per vendor invoice in your biz should average less than 3 days.

Streamlined invoice process cost will help you to:

• Drive down costs
• Avoid compliance-related penalties
• Increase productivity
• Insure policies are current
• Keep up with AP methods and technologies
• Maintain necessary internal controls

Please contact me for further information regarding cost-effective accounts payable service. Sign-up for a quick call back.

Basic Components Of Journal Entry

Accounting is a wonderful career to choose. It will be existing until we exchange things with cash. It is a clear method that helps us to maintain a frequent cash flow and identifies the ineffective usage of money.

This post gives you a primary tenants of accounting, i.e. journal entry.

Journal Entry:

Basically, journal entry depends on five components. Journal is foundation on which your accounting stands. The main components in a journal include

• Date
• Account
• Dollar amount
• Description of the transaction
• Entry (debit versus credit)

Let us go through the components in detail:

Date:
It is the date of the transaction. This is the date when you've received or gave money (cash, check or draft) etc. Sometimes, you don't pay money immediately, in such cases you put a backdated to the last day of the previous month in order to adjust the journal entries.

Accounting software gives you the option of adjusting the date and allows you to set up recurring journal entry. Hence, the adjusted journal entries will be programmed to post on the last day of each month.

Account:
Account is the specific format of asset, liability, expense, revenue or equity account. Journal entries should be done under the appropriate accounts according to the type of transaction has taken place. For instance, if you received money through the sales you made, it should be entered under the revenue account.

Debit versus credit:
The vital law of accounting states that assets and expenses are always debited to add to them and credited to subtract to them where as liability, revenue and equity accounts are opposite to them always. This is an unchanging rule in accountancy. All the records should be maintained respect to this rule and there is no exception.

Dollar amount:
You should account for the amount of money that is changing hands or you should account for the amount accounted for(accrual method).

Description:
While entering the transaction, you are suppose to write a relevant description stating the purpose of the transaction. This is mandatory for you to understand why you are spending money. It will be required while preparing the financial documents and filing income tax.

A perfect journal entry shows the debit first. For instance, on Jan 1st a retail company purchases the inventory from Abc corp., The total amount of purchase was $1000 and they paid $400 in cash and the rest of $600 was charged on account. Now let us see how the journal entry will look like:

Date: Jan 1st
Debit: Merchandise Inventory $1000.00
Credit: Cash $400.00
Credit: Accounts Payable $600
Description: To record merchandise inventory purchase from Abc corp.

Finally the totality of accounting is accomplished when the debits satisfy the credits. This balancing act of every credit for every debit and vice versa will help you to accomplish fullness in your accounting.

Roles of different people in accounting

Book keepers keep the Accounting Book - Day-to-day normal Account Receivable/ Account Payable entries

Accountant review the work done by bookkeepers and prepare non-recurring journal (e.g. provision for doubtful debt)

Financial controller reviews the work done by Accountant and oversees the financial statement.

CFO oversees and monitors the finance function and ensures the smooth flow of company’s financing.

Accrual expenses

Accrual expenses are expenses recognized in the books before it is paid for. It is a liability, and is usually current. These expenses are typically periodic and documented on a company's balance sheet due to the high probability that they will be collected.

In accordance with matching principle, we make provision for the expenses which have not been billed by our suppliers or the company has not paid out the expenses, if the underlying services are rendered in the corresponding period. Example for accrued expense, include:

1. Accruals for audit fees, tax agent fees
2. Accruals for Payroll, Bonus & CPF
3. Accruals for rental

etc.

The company can make the accruals based on the agreed quoting from the suppliers. The accruals for expense entry:

Dr. Expense ( P & L)
Cr. Accrulas (Balance Sheet- Liabilities)

Small size business accounting

Small business accounting are non-complex and straight forward. The fundamental is that the owner of the small business must develop certain level of undertanding of accounting before they could really appreciate the value and necessities of accounting.

It is important, convenient and cost-effective to use accounting software to perform daily book-keeping.

An accounting software is considered imperative in today business environment.It reduces the time spent on book-keeping and provide the business owner an effective insight of the Company's financial position and results on a timely basis.

Small business owners requires excellent management skills and smooth workflow through various departments. For small biz owners Accounts payable processes can pose challenges such as:

• High invoice processing costs due to multiple participants and manual steps
• Cost of maintaining dedicated staff
• Delays in approval - leading to late payments, double payment, missed discounts and poor relations with suppliers
• Low level of awareness/visibility into accruals and upcoming payments ( leads to difficulty in finance management and planning.

At Easy Accounts payable service, we ensure state-of-the art on-demand accounts payable automation solutions that can help you automate and efficiently manage your accounts payable workflows. Our AP automation solution can reduce the cost of running in-house resources to maintain payment and help you through subscription-based service delivered via the internet.

What can I do for you? Please complete this form and let us know.

Accounting treatment for tax penalty

How should penalty on late repayment for tax been accounted for?

Should it be a tax expense? Should it be other expenses?

Penalty imposed by inland revenue authority on late repayment for tax should not be accounted for as tax expense; it should be accounted for as administrative expense/ other expense.

How much do you spend to process an invoice?

Firms spend from $ 2 to 22 $ to process an invoice. While some in some cases are justifiable, in many instances there are ways to reduce this overheads. New electronic invoicing is one way to reduce the unnecessary administrative cost associated with manual processing.

Invoices can be scanned, coded and entered into auotomated system giving them real-time information on accounts payable. This way you can reduce the accounts payable cost by over 50%.

Another optinon to reduce your accounts payable cost is through outsourcing. This is feasible for small buinsess or for those biz new with automated payable system.

Why easyaccounts payable?

Is your organization utilizing Accounts Payable best practices to stay in control? If you can answer YES to the following questions, you are.

• We know how many invoices we receive on a monthly basis
  
  
• We have defined and well-documented business rules for matching invoices to PO’s and receipts and approval levels that are followed explicitly
  
  
• We catch all duplicate invoices and have very small tolerances for invoices that do not match the PO or receipt
  
  
• We know the number and dollar value of outstanding invoices (liabilities) before they are approved or matched
  
  
• We know how many of our invoices do not match the PO or receipt and why

If you answered 'No' to any of the above questions, you can consider Easy Accounts Payable Services to streamline your business.

Accounting outsourcing opportunities

Many small businesses from developed countries are considering finance and accounting outsource services like accounts payable, account receivable, and general bookkeeping services. As the small business see the value beyond cost savings in large corporations due to higher-value F&A outsourcing, they are considering outsourcing higher-value accounting projects like accounting and financial process innovation, real-time accounting integration, budgeting and forecasting. Some small businesses are considering outsourcing their entire accounting and financial operations to outsource vendors. Increasing confidence in accounting outsource providers skills, availability of tools and technologies, and accounting process standardization are making the shift for the small businesses on outsourcing higher-value accounting projects.

Accounting outsourcing provider maturity in Small Business

Both the accounting outsourcing buyer and the provider relationship has matured for the past several years. Now several small businesses are considering their accounting outsource providers as the strategic partners. They are not using the accounting outsource providers just to save cost but to introduce innovation and efficiency in their accounting and financial business processes. Outsource providers have been continuously improving their service offerings using both technology and accounting business process innovations. These accounting outsource providers have been working with several small businesses and CPA firms for several years, each small business has its own accounting software packages and use different accounting processes to maintain their business transactions. By working with several small businesses the outsource providers learned to standardize and reuse the accounting process improvements across different vertical domains like retailing, manufacturing, and service based industries. As the accounting outsource providers gain accounting business knowledge for a particular vertical industry, now they are started marketing their services to other small businesses on that business domain. As they gain accounting process experience naturally, they are finding their own niche in vertical business domains to sell their services

Deterrents that the accounts payable managers encounter

Deterrents that the Accounts Payable managers often encounter one or more of the following issues:

High Transaction volumes - Organizations struggle to cope with large volumes of transactions that increase geometrically with business growth.

Traceability and accountability - Maintaining a clear audit trail of all activities on an invoice from sending for approval, approver comments, queries, clarifications, final approval and payment is difficult especially when communication on an invoice is through multiple channels – email, phone, etcetera.

Multiple delivery channels for invoices - Unlike purely paper based invoices in the past, invoices may be delivered through email, fax, EDI, or just appear as entries in credit card statements. Processing invoices received through non- traditional channels is a challenge.

Vendor Management - The lack of visibility into current status of an invoice makes responding to vendor queries a difficult task. The challenges are compounded by long lead times for release of payments, inability to define and maintain standard processing times, and inability to estimate expected payment dates.

Document Management - Since vendor invoices could potentially be received at any location, obtaining approvals require the transmission of invoice copies either through email, fax or by mail. There is always a risk of loss of paper documents. Retrieval of supporting documents and approvals during audits puts a huge strain on accounting resources.

Accounts Payable Solutions

Accounts Payable Solution should be focusing on the following areas

1. Invoice recording
2. Invoice payments and reconciliations
3. Document management
4. Compliance (with internal policies and external regulation)
5. Reporting and Analytics Typical

How to Streamline Accounts payable

Best Practices in Accounts Payable at the times of global competition and tough economic circumstances, every organisation needs to lower its operating costs and to streamline its operations. And one of the best ways to do so is creating an efficient accounts payable operation. Inefficiencies cost money, they cost time and they cause a great deal of frustration. But after you adopt the best practices in this solution paper, your organization can quickly reap the following benefits:

• Reduce the costs of processing invoices by 25 to 50 percent
• Improve invoice processing efficiency and accuracy
•  Reduce paper by up to 90 percent  and virtually eliminate lost documents
• Gain greater financial control and visibility
• Speed invoice payments to improve vendor relationships and to receive early
pay discounts
• Resolve exceptions and discrepancies much faster, saving you time and money
(and lots of aggravation)

We have identified six repeatable best practices that, when followed correctly, enable you to:

1. Get rid of the paper
2. Reduce manual and ad-hoc processes
3. Handle exceptions and discrepancies in a timely manner
4. Gain incremental value
5. Measure and benchmark performance
6. Say NO to managing technology and YES to managing the AP process

Check list - To setup a new vendor

Do you check your master vendor file before setting up a new vendor?
Do you check if you have already set up the vendor?
Do you take it one step further?

Before setting up a new vendor do you check to see if you have a vendor already set up with the same address or TIN. Taking this extra step will prevent those few vendors who may have been set up using a DBA or some other name from slipping through. True, you may have two different vendors with the same address, but they won’t have the same TIN. This extra step only takes a minute or two to execute but could save your organization thousands of dollars down the road.

Check list before setting up a new vendor

1.Every new vendor should be verified to approved documents(such as contract amendments,verified correspondance etc)
2.Check for Duplicate vendors on file, be careful about how the vendor name is entered

All new vendor addresses or changes should be carefully verified with the help of Google map or a smiliar site. It is alway easy to check a vendor's office or location.

Genesis of Easy Accounts Payable Service

Welcome to easy accounts payable solutions:

I've a small team of talented accounts payable experts to deliver easy outsourced accounts payable process for your business. We use best practices and high levels of quality to process our client's accounts Payable efficiently and accurately. You can leverage our expertise to transform your payment activity by creating, reviewing, and approving documents related to vendor payment & related activities.

Benefits you win from my Accounts Payable service. You can

• Reduce your Accounts Payable processing costs by 20% to 50%
• Gain better management control over the Accounts Payable process
• Get expert opinion & implement best practices to your company
• Eliminate or reduce the burden of managing in-house staff

Apart from offering back-end solutions for your Accounts payable department, we streamline your process without the headache and expense of deploying additional resources.