The Benefits of Outsourcing Payroll

Man buried under his payroll paperwork for his small business

Once you go into business for yourself, you discover just how much effort is involved in creating a small business. It can truly be overwhelming at times! From staffing, to equipment purchases, to taxes, there’s no shortage of headaches for a business owner to deal with. That’s why more and more business owners are choosing to outsource where they can. One of the ways you can save yourself a great deal of time, effort and money is by outsourcing payroll. Here are a few of the benefits of doing so:

You’ll save time – and time is money!

When you decided to start a business, chances are it wasn’t because you enjoyed poring over mounds of paperwork for hours on end. Nevertheless, that’s just what you may find yourself doing when trying to work out the finer details of your payroll. While it may have started off simple enough, as your business grew and expanded the payroll became more and more complicated. Every moment you spend ironing out the details of payroll is a moment you can’t devote to other business matters. Not only is this inconvenient for you, it can become downright costly. After all, your time is valuable! Any time you, or one of your valued employees, spends working on payroll is time you can’t devote to bringing more money in.

You’ll reduce errors – and save money that way, too!

Errors in your payroll can prove to be costly for your business. As you know, it’s not as simple as just paying your staff. There’s insurance, taxes (both state and federal) and a bevy of other financial considerations. If you make a mistake somewhere along the way, chances are you will shoulder a serious financial penalty as a result. For example, if you don’t calculate your taxes correctly, or if you are late on a payment, you can get hit with a fine. The easiest way to avoid all this hassle is by outsourcing payroll; put your finances in the hands of seasoned professionals and you’ll greatly reduce the chances of costly mistakes.

You’ll be a lot more adaptable

Part of what makes payroll so complex is its ever-changing nature. Tax laws are always in flux and your staffing needs are always changing too. Some weeks, your part-time employees will work many more hours than others; with every change, you’ll find yourself starting from scratch. A professional payroll service will not face this problem. They are constantly being trained in the latest changes to tax law and they’re also trained to handle a varying level of employee hours. Ensure your company can weather the ever changing business climate by outsourcing payroll.

A payroll service handles more than just paychecks

If you outsource to a reliable payroll company, they’ll do a lot more than just issue your company’s paychecks. Not only can they calculate the amount of money owed to each employee, they can also work out tax obligations for each individual. They’ll allow employees to designate a certain amount of each paycheck to a 401(k), should they wish to do so. A payroll service will also calculate how much your company owes in payroll taxes.

Outsourcing payroll

If, after reading this article, you are considering outsourcing payroll, we think that’s a great step to take for your business! Make sure you do the necessary research and contact any potential companies you are considering using. There are a few questions you should always ask. What is the cost of the service? What services will you get for that cost? How are taxes handled? Make sure to contact a few references, as well. Check to see if the service is reliable and if previous customers have been satisfied.

9 Reasons To Outsource Your Accounting Department

notepad saying your should outsource accounting vs hire

As an entrepreneur, you’re always looking for ways to cut costs and increase profits for your business. No doubt you have learned that managing a small business can be a real headache, with many challenges – some expected, some unexpected! – and you want to get a leg up whenever you can. One way you can do this is by looking for accounting services for small businesses. While you may think that outsourcing your accounting department will end up costing you more money, this doesn’t necessarily have to be the case. In fact, outsourcing can be a great way to save your small business time, money, and bring in extra profits. Here are 9 of our top reasons to outsource your accounting department:

1. You’ll Save Money on Training Costs

One of the biggest expenses incurred by any business is the cost of training; getting your employees familiar with all of their responsibilities, as well as software and other equipment, takes time and money. By hiring an accounting service for your small business, your accountants will come pre-trained and armed with expert knowledge.

2. You’ll Benefit from the Services of a Team of Experts

If you hire an in-house accountant, no matter how good they may be, they will still only be one person. A professional accounting firm will bring years of experience to bear, from a team of seasoned professionals; having extra sets of eyes studying your finances will also reduce the incidence of error, greatly improving your peace of mind.

3. You’ll Save on Software Costs

Another expense that many small business owners grit their teeth and pay for is the cost of the newest technology; after all, it’s important to always have access to the latest software, whether it be QuickBooks or other programs. Hiring an accounting service for your small business will save you from expensive yearly updates; they will always have access to the latest technology.

4. You’ll Free Up Time for Other Projects

The old saying, “time is money,” is an absolute truth – any time you spend trying to figure out your finances is time you can’t spend doing other crucial tasks. If you’re constantly poring over QuickBooks trying to keep track of every dime that comes in and out, you will have a lot less time to handle the other daily aspects of running a business. By outsourcing, you’ll have a lot more time to do those important jobs.

5. You’ll Reduce the Risk of Financial Problems

There are a lot of potential financial problems that can plague a small company. Everything from tax audits to theft can severely impact your bottom line. By having a team of professional accountants keeping track of your money, you will rest easy with the knowledge that your finances are being handled by an impartial group who won’t allow anything to get by them – or you.

6. You’ll Be Able to Make Better Financial Decisions

With a professional team of accountants handling your money, you’ll have access to whatever financial information you need at any time. You will never be unclear on exactly where your business is in terms of income and expenses, allowing you to be better informed when it comes to staffing, equipment purchases, and other major decisions for your company.

7. You Can Change with the Times

Accounting, like anything else, changes with the times and by hiring an accounting firm, you’ll be able to stay up to date. If you have an in house accountant, or handle your finances yourself, you will likely be stuck with the information you had when you were originally trained. By outsourcing, you’ll be able to always have the latest in information, technology, and fraud prevention techniques.

8. Outsourcing Even Helps the Environment

For many businesses, going green is another great benefit of outsourcing your accounting firm. Hiring a professional accounting firm will save you a lot of money on disposables such as paper, printer ink, and other sundry costs. It will also reduce your carbon footprint and benefit the environment.

9. You’ll Be Able to Grow Your Business

By outsourcing to an accounting company for your small business, you’ll be able to upgrade easily once your income increases. Many business owners find themselves defeated by their own success, as your business becoming more popular and busy can leave you and your employees overwhelmed. With an accounting firm, you’ll be able to meticulously track the growth of your business, and adapt as needed. Best of luck in your business ventures!

Top Tax Write Offs For Small Businesses

Chalk board featuring taxes, USD symbol, and piggy bank full of money indicating tax savings and write offs

Every small business owner knows that, come tax time, there are ways to save a fortune in taxes if you are clever. Looking for the right tax write offs for small business owners, however, can be a bit of a challenge and we’re here to help point you in the right direction. Here are a few of the top tax write offs for small businesses:

Travel Costs

If you have to travel for your business, you can almost always write it off as long as it’s distance travel. Local commuting, such as driving from your home to your office, generally doesn’t apply. However, other types of travel might, such as the costs of delivering items locally. But if you have to send someone from your business to a meeting across the country, the cost of your plane ride and hotel stay is almost certainly deductible. To find out whether or not your travel expenses can be deducted, read IRS Publication 463 in full. Make sure you keep a thorough documentation of all of your business expenses, such as mileage and airline receipts.

Utilities

Any money you spend on utilities for your business is deductible. For small business owners, however, this can enter a bit of a grey area as you strive to answer the question of where your personal costs end and your business costs begin. For example, let’s say you work from home and have a landline to receive calls on. Is your phone bill then deductible if you take business calls? If you have only one landline, the answer is no. However, if you set up a second one solely for business purposes, you will be able to deduct the cost of that phone bill. Similarly, if you have a cellphone you use only for business purposes, you will probably be able to deduct it from your taxes.

Home Office

If you work from home, you might have a home office set up in one of the rooms. You can deduct the cost of anything in your home that is devoted solely to your business. This means that if you have a workstation in your bedroom, you cannot deduct the entire cost of your bedroom, but you can measure out the space around your desk and deduct the cost of your mortgage and insurance from that area only. You will have to divide the square footage of that space by the cost of your home to discover the exact amount.

Contract Labor

Often, small business owners don’t keep employees on staff for necessary labor, and simply hire contractors when labor needs to be done. Keep a thorough record of any contractors you employ, because the money you spend on them is usually deductible. If you pay any contractor more than $600 throughout the tax year, make sure they are given form 1099-MISC.

Insurance

If you are self-employed, you are probably paying for all of your own health insurance costs. This can set you back quite a bit, but the good news is that it’s a tax write-off. If you are eligible for insurance from other sources, however, you will not be able to insure yourself and deduct it. Similarly, if your insurance costs add up to more than the net profit of your small business, you will not be able to write them off.

Meals

Business meals are 50% deductible, which means wherever you end up eating you will still pay half! Keep this in mind if you are trying to save money while also wining and dining prospective clients. Check IRS Publication 463 to see how to substantiate the expenses of meals; you will not be able to claim any deductions if you don’t.

Small Business Coaching: Getting Your Startup Started

Green monopoly house game pieces representing starting a small business

You have long dreamt about starting your own small business and, now, you’ve finally got the ball rolling! You have a great idea, and you’ve taken out a startup loan and are now working furiously to make your business a reality. But if a great idea, a little money and a willingness to work hard were all it took to start a successful small business, everyone would be doing it. The fact of the matter is, only about half of small businesses survive for five years! Many people look back on their attempts to start and run a business and wish they’d had more knowledge at the beginning. One way to help navigate the complex world of business is with the help of a small business coach. Here’s what you need to know about hiring one:

What Does A Business Coach Do?

Simply put, a business coach will help you get your business where you want it to be. If you are just starting out, this type of help can be invaluable as you will get assistance with every step of the process. Your business doesn’t necessarily have to be in its infancy to benefit from the help of a coach, either: you can simply be looking to grow an established business or expand into new territories. No matter where you are in your journey as a small business owner, small business coaching can help you reach your goals more quickly.

What Kind Of Coach Do I Need?

Depending on what needs you specifically have, there are many types of coaches out there that can assist you. Perhaps you run a brick-and-mortar shop and are looking into expanding into the online world; a social media coach can help you build your internet presence. On the other hand, perhaps you have been selling your wares online but have the goal of finally opening a physical storefront; a brick-and-mortar coach can help you achieve this goal. With the right coach, you can receive assistance in every aspect of running a business.

How Much Does A Business Coach Cost?

As any prudent business owner should be, you are most likely concerned with the costs of running a business and may worry about how much hiring a coach will set you back. This is a valid concern but beyond the scope of this article since prices vary so widely. Many coaches charge an hourly rate, which can be anywhere from $200 to over $600 depending on their experience and reputation. Others will look to sell you a package at a flat rate; this can include a number of hours of in-person or Skype sessions as well as work you can do on your own. As a general rule, small business coaching shouldn’t break the bank but should be enough of an investment that you take it seriously.

How Do I Find A Great Coach?

When you’re on the lookout for a great small business coach, there are a number of things you should keep an eye out for. As we’ve already mentioned, the costs and the specific type of coaching you need should be high up on your list; you will also want to thoroughly research any small business coach you are considering hiring. Ask for references and don’t be afraid to check them. Talk to other small business owners who have secured the services of the coach you are considering. You want a coach that will keep you accountable, holding you to any commitments you make. You will also want someone who will be honest with you! A good coach will always be positive, but not be afraid to tell you if you are potentially

making mistakes with regards to the direction of your business. Good luck with your search and with your business endeavors!

Cut Costs With A Business Accountant

Small business owner filing 1040 tax paperwork with money saved lining the side

Going into business for yourself can be a lucrative and rewarding venture. However, as anyone who has run a small business knows, it can also be costly. Running a small business comes with a wide array of expenses, not the least of which come from managing the finances. While you may believe that you can save by handling the money yourself, what this will really end up doing is taking up a large amount of your time that could be better spent handling other aspects of your business operations. The more time you spend trying to handle your company’s finances, the less time you can spend on other things; your time is valuable, and you’re trying to cut costs!

Once you are close to having your business up and running, it’s time to consider hiring a small business accountant. Many business owners balk at this idea, due to the fact that hiring an accountant seems like a costly step that they can avoid. However, if you take a step back and look at the grand scheme of things, you’ll find that securing the services of a small business accountant can actually save you quite a bit.
Here are a few ways you’ll save your business money by hiring an accountant:

When Starting The Business

A small business accountant can start saving you money right from the very beginning. One thing you’ll need to consider is your business structure. Will your business be best served by filing for sole proprietorship? Or are you looking for a partnership, or even to start a corporation? Choosing the right business structure for your particular line of work can be critical to saving money in the long run, and a qualified accountant can help you with this.

Once your business gets going, you will of course need to start a business bank account. As with choosing a business structure, you’ll have several options to choose from and your company’s financial future could be at stake. A credible, experienced accountant can give you a lot of help in this area.

Once Your Business Is Up and Running

After your small business accountant has helped you get your business up and running, it’s time to start thinking about managing the day to day finances. Choosing the right finance software can save you a lot of headaches when it comes to keeping track of your income and expenses; this is another thing your accountant can help you with. They can also help train you how to file taxes properly; for example, if your business makes use of independent contractors (as opposed to full on employees), they will need to be classified as such with the IRS. Having a qualified small business accountant can make tax season much less of a nightmare, and help you save money on unnecessary tax expenditures!

As Your Business Grows

Eventually, when all of your hard work pays off and your business begins to grow, you will still find yourself saving money with the help of a small business accountant. If your goal is to reach a certain amount of growth for the year, you will need to budget for that and your accountant will be there to help you create that budget. As your business grows, your costs will go up as you find yourself needing to hire more employees and buy or lease more equipment. Once again, a qualified accountant can be invaluable during this process, helping you to avoid spending any money that you don’t need to.

Hiring an Accountant

With all of the benefits that come along with hiring a small business accountant, now is a great time to start looking for one! Choosing the right accountant, however, can be the true challenge. You will want to vet any potential candidates carefully, making sure they have plenty of experience and all of the proper certifications for your area. Don’t forget to ask for references; you will want to speak to other small business owners who have successfully made use of your potential accountant’s services. Good luck with your future business endeavors!

Why Do I Need A CPA For My Small Business?

Business owner distracted from work with tax forms

As a small business owner, there is a lot you have to take into consideration. The day to day running of your business requires a lot of planning, from licensing and permits to leasing your location and registering all of your company trademarks. Needless to say, a huge part of running any business is the financial aspect, and many business owners find themselves asking the question, “Do I need a CPA for my small business?” Hiring an accountant might seem like something only bigger businesses do, but it’s something you should seriously consider no matter where you are in the growth of your company. Here are a few reasons why:

You Will Save Money

Of course, hiring a CPA isn’t cheap; it can be one of the bigger expenses you incur when you go into business. Even so, securing the services of a good accountant will ultimately pay for itself. First, consider how much time you will spend poring over the finances for your business. Every minute you spend trying to balance your books is a minute that you can no longer devote to other crucial aspects of running a business. If you’re spending hours each day working on tax forms, you aren’t bringing money in. Not only that, you can rest easy knowing that you have a financial expert working to save your company as much money as possible. Even if you yourself are financially savvy, you might find yourself spread too thin as a result of taking on every other job a business owner must deal with.

A CPA Can Help You Deal With The Unexpected

Running a business always come with an element of unpredictability. Especially as your business grows, you may find yourself dealing with problems you never considered. As your business grows, and you hire more employees, contract out more work, order more equipment, and generate more income, a talented accountant will help you to get it all under control. They will also help you deal with any unexpected financial curve balls that may come your way and threaten your business.

An Accountant Will Help With The Legal Aspects

Depending on a number of factors, including your location and the type of business you are running, the laws that govern your company can vary widely. For example, the tax laws you are bound to will depend on what type of business structure you have. Will you be the sole proprietor? Or an LLC? Are you working from home? Or do you operate out of a storefront? But even if you are the sole proprietor of the business, a CPA can help you navigate the tangled web that is local business law. Ultimately, you will need the assistance of someone who is experienced in dealing with businesses of all types and sizes. They can also assist you should you face the unfortunate situation of a lawsuit being filed against your company.

When To Hire A CPA

As a CPA can charge up to several hundred dollars an hour, it’s important to be responsible when securing the services of one. Make sure to thoroughly research anyone you are considering hiring, and ensure that they have all of the proper certifications that a CPA requires. While many small business owners worry that hiring an accountant will be an expense they can’t afford, or force them to relinquish control of certain aspects of their business, the truth is that having a great CPA can increase your savings and your profits while also offering you greater freedom to manage the other aspects of running a business. With all of these considerations in mind, the answer to the question, “Do I need a CPA for my small business?” is almost always YES!

HTW Post-Season News & Upcoming Small Business Webcasts

News Update Huddleston Tax CPAs Webcast
Huddleston Tax Weekly News

Now that we’re past our busiest part of the year, HTW is happy to announce that we’ll be continuing our previous trend of bringing topical, high-quality material to our readers on a regular basis. HTW would like to continue examining the contours of the sixteenth amendment for a bit longer; the reason for this is because we believe firmly that an understanding of this exceedingly important political act is vital to gaining a full picture of our whole tax edifice. But after we explore the amendment in a bit more detail, we’re excited to say that we’ll be moving on to other issues which should be equally interesting to our audience. We will explore more real estate cases, current tax cases, international issues, and plenty of other exciting things.

Small Business Webcast

We’d also like to draw our readers’ attention to two upcoming webcasts which will be hosted from our site, smallbusinesswebcast.com. The first webcast — The Tax Benefits of Real Estate Ownership — will be given by our CPA, Jessica Chisholm. Jessica has given this presentation previously and is well familiar with this specialized area. The second webcast — Tax Reduction Strategies for Small Law Firms — will be presented by our CPA, Steven Lok. Assisting small law firms is one of Steven’s specializations.

As always, these presentations are entirely free to attend. We hope you enjoy these webcasts and the many more entertaining articles HTW has in store!

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What Every Business Owner Should Know About Contract Law

Contract Law Business Owner Element
Contract Law for Business Owners

It is unrealistic to expect every business owner to have a thorough command of contract law. Running a business is a very demanding job, and so unless they are fortunate to have a formal background in law business owners simply do not have the time required to master all the finer points of contracts. But, though mastery may be unattainable, most – and ideally all – business owners should make it a priority to acquire at least a basic understanding of contract law.

Having a grasp of basic contract principles is beneficial to business owners in myriad ways. Business owners can look forward to negotiating deals with other businesspeople with greater confidence; they can confer with business lawyers with greater ability; they will have a better sense of the implications which can follow from discussions with employees. In short, they will be able to run all areas of their business with an increased level of independence.

Business owners can best serve themselves by gaining a firm understanding of the elements of a contract. The elements of a contract are relatively easy to learn; but, as we have seen in prior installments of Huddleston Tax Weekly, tricky things start to emerge when these seemingly straightforward elements apply to complex factual scenarios.

Contract Elements

There are five elements which must always be met in order for a valid (i.e. enforceable) contract to be formed: these elements are offer, acceptance, consideration, legality and capacity. The sixth element of a contract – writing – need only be met in certain rather than all cases.

The rationale of each of these elements is quite straightforward. In order for a contract to be formed, there must be an offer which discloses clearly what the terms of the agreement will be. These terms must be clearly understood by all parties. The terms must be fully accepted by all parties. There must be adequate consideration between the parties – that is, there must be an exchange of things which are of roughly equal value. The terms of the contract must be legal – in other words, people cannot contract for goods or services which are prohibited by law. And the parties of a contract must have the capacity – meaning they are of sufficient age and mental condition – to accept the terms of the agreement.

In cases involving things which are of high monetary value the parties must also put the terms of the contract in writing. However, if writing is not required, a valid contract has been formed when all of the other five elements have been satisfied.

The Enforceability of Promises

Contract law is concerned with determining which agreements (or promises) are enforceable by courts. The elements listed above are required in order for an agreement to be facially valid; however, though this is the case, in certain instances promises may be enforced despite the fact that not all elements were met. For example, the doctrine of promissory estoppel can be invoked when someone relies on a promise to their detriment even though a facially valid contract may not have been formed.

As mentioned above, complexity arises when these elements are applied to real factual scenarios. The factual details of agreements may yield doubt as to whether specific contractual elements were properly satisfied; courts are designed to step in and settle these disputes. Our entire body of contract case law is a record of how parties can have very disparate views of the same facts which surround the creation of a contract.

It is important for business owners to fully understand the elements of a contract; but they must also be aware of how easily disputes can arise as to whether elements were adequately met.

Image credit: Chris Potter

Tax Reduction Strategies for Small Law Firms by Steven Lok, CPA

Small Law Firms Tax Reduction Strategies
Small Law Firms

Huddleston Tax CPAs takes a particular interest in helping small businesses with their tax and accounting needs. Consistent with this interest is our focus on the tax strategies which may assist small law firms. Our CPA, Steven Lok, will be giving a presentation on December 7, 2016 which will discuss these tax strategies.

Among the topics covered by Mr. Lok will be entity selection, client trust funds, accounting methods, deductions and others as well.

The webcast is entirely free to view. Individuals who’d like to attend can sign up (for free) at www.smallbusinesswebcast.com.

The presentation will commence at 10:00 am PST and end no later than 11:00 am PST.

Image credit: jennymcbill

Video introduction to our upcoming webcast

Characteristics of SEO-Friendly Web Content

random assortment of seo terms
Factors of SEO Web Content

Producing high quality, SEO-friendly content for your website is a strenuous task. Creating optimal content requires that you not only develop informative, well written material but also manage this material along generally recognized SEO guidelines. Many of the factors – in fact, most – which characterize SEO-friendly website content are self-evident; however, certain factors depend more greatly on research.

In this article we will describe some of the basic characteristics of SEO-friendly content. Readers should be mindful that this list is not exhaustive and that numerous other factors influence whether content is desirable or not.

Length

This factor likely falls under the self-evident category: material which has more words is generally thought to be favored over material with fewer words. SERPIQ found that content length positively correlated with ranking position. Length is rewarded because length typically denotes a greater amount of effort. Of course, it is not necessarily the case that length indicates quality, but for SEO purposes length tends to send a positive signal.

Originality

It is essential that every individual page of your website features content which is wholly original. Content which is pilfered or clearly derivative of preexisting content on the web will produce a negative algorithm response. What’s more, duplicate content will also cause your SEO to suffer. Original content requires effort and therefore it receives favorable treatment.

Images

As a general matter, adding images to pages tends to improve SEO value. However, when you add images to your page content you can enhance the value they confer by optimizing such images along certain guidelines. When you add images, be sure to pay close attention to their file name, title, description, caption and alt text as these things send relevancy signals.

Freshness

Content which is updated frequently and substantively will receive favored treatment over content which is left unchanged and ignored. Periodic updates signal that your site is well maintained and that your pages are displaying relevant information. As with other factors, freshness denotes effort.

Reading Level

It is well established that Google estimates the reading level of web content. What is less certain is how these estimates affect search engine results. Some SEO specialists feel that more advanced content is favored; others argue that the simplest content is preferred. Though the debate is alive and well, a fair number of SEO professionals feel that the middle ground is the best option. These people feel that both overly simple and overly sophisticated (or specialized) content will fail to attract the largest number of readers and therefore an “intermediate level” is optimal. For most site owners, it is enough to state that your content should be useful but also accessible to your target audience.

Image credit: googlearama

SEO is becoming an increasingly important field for small business owners. To learn more about how small business owners can utilize SEO principles view the following video