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.

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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