Top 5 To-Dos for Small Businesses to Complete by January 31st

Written by Natasha Goncharova on . Posted in Accounting, Blog, Finance, HR

The important date of January 31st is almost upon us, the day when the IRS requires all businesses in the US to mail W-2s and 1099s to their employees. To make sure you’re on time each year, follow these few simple rules:

1. Collect SSNs or EINs (Employer Identification Number) and current addresses from your employees and contractors.

2. Reconcile books and payments via cash, checks, and direct deposits.

3. W-2: In most cases, your payroll service provider should automatically create W-2s so you will just need to check them, print, and mail. Otherwise, you will need to use Intuit Forms and print them.

4. 1099: Instead of using pre-printed 1099 forms and wasting time on positioning them correctly in your printer, consider using one of these services:
Intuit — $39 for an unlimited number of 1099 forms
Wagefiling.com — $3.49/form
• If you search for 1099 on the IRS page of the recommended e-filers, you will find other options, most of which will be more expensive if you want to e-file in addition to printing the 1099s.

5. Be aware of Form 1099-K

Beginning with tax year 2011, the IRS requires businesses to exclude from Form 1099-MISC any payments made by credit card, debit card, gift card, or PayPal. For information about the IRS requirements, review the IRS Final Regulations on Payment Card Reporting.

This means the amount you record on Form 1099-MISC must equal the total amount you paid the contractor minus any portion you paid by credit card, debit card, gift card or PayPal.

Any amounts you paid using these other methods of payment must be reported to the IRS, not by you, but by the credit card company, the debit card company, gift card company or PayPal using Form 1099-K. You do not need to report these amounts on Form 1099-MISC.

The deadline for this year is only one day away so if you haven’t started yet, get going!

Accounting Solutions in the Cloud

Written by Michael Tauscher on . Posted in Accounting, Blog, Productivity, Thumbs up, Workflow

A quick Quora search for ‘accounting solution’ or ‘accounting tools’ will turn up a bevy of queries and responses all seeking to answer the same enigmatic question: What is the SaaS accounting solution for a small business?

The answer, as becomes quickly apparent while sorting through the most upvoted responses, is not unanimous. Quite often the best way to approach a potential change to a new software is to ask yourself whether this new solution will be more effective and efficient than your current solution — not whether this new software will singlehandedly perform all accounting functions effortlessly. Here then is a list of the best programs in the market right now, software that will provide a solid backbone for your accounting processes until the next great thing comes along or you outgrow your current services.

InDinero


Free; Plans start at $19.95/mo

Essentially InDinero is a financial advisor and visualizer. It downloads your bank records and organizes them in a number of ways to help better understand your company's finances.

Intacct

$25/user/mo base; Additional cost per application used

Intacct offers a cloud financial management and accounting system with a pay-as-you-go model for additional accounting tools

Kashoo

$9.95/mo

Double entry accounting that supports multiple currencies and integrates easily with FreshBooks.

LessAccounting


$30/mo

LessAccounting is lauded for its intuitive, easy-to-use UI good for small businesses.

Outright

 

Free; Plans start at $9.95/mo

From Quora, "[Outright is] great for sole proprietors/freelance workers who want to spend minimal time on bookkeeping."

QuickBooks Online


Plans start at $12.95/mo

QuickBooks is good for companies with a dedicated accountant familiar with the full capability of the application however because of the secondary market of supporting software it can easily be used for small business accounting.

Saasu



Plans start at $25/mo

Saasu has a ton of features, so many that one person on Quora called it, "quite hard to use," which means you should expect a learning curve.

WaveAccounting

 

Free

A full-featured application including double entry accounting and a price so cheap it's free for life.

Xero

 


Plans start at $19/mo

Xero requires a little technical knowledge like Quickbooks, but also integrates well with other web apps like Shoeboxed

Yendo

 


Free; Plans start at $9/mo

Yendo was recommended for a brand new business as its services are free for one user and upgradable as your business grows.

Wrangling Receipts – A Step To A Paperless Office

Written by Natasha Goncharova on . Posted in Accounting, Blog, Finance, Productivity, Thumbs up, Workflow

The question of how to file receipts at small businesses is a common one. In this case, small business owners and startup founders want to make sure there is an audit trail in case of an IRS audit. At Finance Alpha, we are big believers in paperless operations with access to paperless receipts being an integral part of a paperless office. These are our experiences with the services that provide receipt scanning and online receipt management.

1) Shoeboxed.com (http://shoeboxed.com/pricing)
   We give Shoeboxed preference over all other available services for their cost/benefit & value. We have been using Shoeboxed.com for over two years and have yet to be disappointed. We send them receipts of all shapes and forms, wrinkled and not, and somehow they are able to scan them all and make them available online.

For a $300 annual plan, we have no labor on our side other than to put all receipts in pre-paid envelopes. They prepay and track envelopes, and can mail back the physical receipts (for free) if the customer desires. Customers can also scan receipts with smart phones and email them to Shoeboxed on-the-go.

Their search can be improved, but it is not a deal breaker — you can always find the receipt you are searching for if it had been mailed to them and scanned.

It should be said that they do not scan anything but receipts and business cards. You have to use another service or a scanner at your home/office to scan other documents.

2) Expensify (http://expensify.com)
   Expensify goes hand in hand with shoeboxed. They are complementary services, not substitutes.

Expensify is more useful for expense report submissions / reimbursement record keeping, not for scanning all your receipts. Similarly to Shoeboxed, however, you can scan your receipts with the Expensify mobile app. Both Shoeboxed and Expensify are semi-integrated with Google apps (you can use one login to all of them) which allows you to have them available on your team members’ dashboards and saves time on receipts submission. Expensify has a beautiful, easy to use UI and it is simple to integrate this service within a small business or a startup.

3) Neat (http://store.neat.com)
   The Neat scanners look neat, but I have not been able to justify the price of these scanners (plus our labor to scan) when compared with the Shoeboxed.com pricing.

I once saw a Neat scanner being used at a doctor’s office to add a scanned copy of a patient’s card to the patient’s records so perhaps there is value in the Neat scanner if you perform such specific tasks regularly.

4) OfficeDrop (http://officedrop.com/pricing)
   OfficeDrop allows you to mail everything to them for processing. They are more expensive than Shoeboxed, and we have not used them as a result. (Note: Office Drop was formerly Pixily)

5) There are many apps that enable mobile phones to scan receipts. Here is an example: http://www.appbrain.com/search?q=receipts. If you are not using any of the options listed above, you will have to try different apps to see if any stick with your team to be diligent in scanning and e-mailing you all their receipts.

If all else fails, go with Shoeboxed.com! :)

Disclosure: I have no association with any of the services listed above other than that I use the first two on the list.

What’s on your keychain? Integrated Google Apps That Make Life Easy

Written by Michael Tauscher on . Posted in Accounting, Admin Tools, Blog, Customer Management, Document Management, Finance, Google, Productivity, Project Management, Workflow

This is the second in series of posts about Google Apps, to learn more about Google Apps for Business see our first post

The number of apps integrated with Google Apps has exploded recently and many are available for free or for a nominal fee (especially if you’re a small business using them among your team members).  At Finance Alpha our goal has been to find the best tools for intuitive and flexible collaboration, which has meant testing tools with a wide variety of intended uses and keeping an eye out for those that operate well in tandem across all members of a team.

These are the tools we have picked so far:

  Insightly: We ran across Insightly (insight.ly) while looking for an intuitive task manager integrated with Google Apps. Google’s own Tasks function has the advantage of being a proprietary and thus extremely integrated product, however we found that there wasn’t enough room for description within the tasks themselves and that tasks could not be easily shared or delegated. In the case of an ongoing task, Insightly allows you to add progress updates, assign a number of statuses (Not Started, Waiting, In Progress, Deferred, Completed), assign tasks to other team members with email notification, and can even act as a CRM. Integration with Google means that you can save an email transaction with a click of a button from Gmail into Insightly and the person’s contact information will automatically be saved in addition to the email exchange itself. Insightly is free up to 3 users and has plans starting at $29/month for more.

MindMeister: Ever heard of or used mind mapping? MindMeister is intended to allow you visualize one aspect of your life / project and its constituent parts. As an example, the standard Personal Tasks template shows how it might be helpful to conceptualize how your Home, Work, Car, Shopping, and Other personal tasks are related. Furthermore, individual nodes and tasks can be prioritized, tagged, flagged, highlighted, and even set up for email notification. Not only is MindMeister affordable ($9.99 per month for unlimited maps and users) but can easily be used for other purposes like project management and flowcharts. It is worth mentioning that like most great services, MindMeister is immediately comprehensible: whatever you think that button does, it does. We wrote earlier that we chose MindMeister over other flow chart tools.

Expensify: Expensify is already a brilliant tool for expense tracking that includes the ability to import credit card and bank records, create expense reports, upload receipts, and even integrate with Quickbooks. The service as a Google App (free for 2 users, $5 per user after that) seems little more than a convenient link from your Google account but nonetheless it saves you the extra login and makes Expensify more accessible if you want to use it from a mobile device.

GetHarvest: Harvest is powerful because it does one thing extremely well: time tracking. For employees Harvest presents a minimal, intuitive interface to quickly categorize and track time. On the accounting side, Harvest makes invoicing and report generation both instant and elegantly presented. A full business account (including unlimited users) is going to cost you $90 a month but if you’ve got a large team working on a variety of tasks, it simply can’t get any simpler.

Shoeboxed: Not unlike Expensify, the Google Apps extension of Shoeboxed is little more than the ability to log in from your Google account however this shouldn’t discount what a valuable tool it can be for your team. Shoeboxed allows you to send physical receipts, upload photos of receipts, and basically transmit any other record of a transaction to them for processing. In return you’ll have access to a clean record of your transactions perfect for substantiation in the case of an audit. Also, if you don’t import transactions from your bank into Quickbooks (or any other accounting software), Shoeboxed can help you there too. They offer prepaid envelopes in addition to receiving standard mail with just a little extra effort (you have to provide your email address on the outside and inside of the envelope). They’ll even dispose of your receipts safely or send them back to you if you’d rather hold on to the physical copies. The $300 annual price tag might seem high at first (includes 150 docs/month and 500 uploads) but the peace of mind it brings means never having to worry about providing a record of your transactions. Besides, who wants to sort receipts when you can mail them off in a crumpled ball?

Check out our example workflow of this process in flowchart form here

What third party apps integrated with Google Apps do you find most useful in your work flow? Let us know in the comments!

A Complete Web Based Accounting Process for Startups

Written by Natasha Goncharova on . Posted in Accounting, Blog, Workflow

This solution would work for startups using investment funds (spending cash in the bank and not invoicing for services) and for cash-based businesses with a small number of clients and invoices.

Here is a full description of how to set up a complete web based accounting process at your startup or small business.

See an example workflow of this process in flowchart form here

So your startup has investors, now what?

Written by Natasha Goncharova on . Posted in Accounting, Admin Tools, Blog, Productivity, Workflow

In response to this question on Quora: ”Our startup just got a $100,000 check from an angel investor and it is in the bank account. How do I keep track of expenses, pay employees, keep my books for tax purposes, etc.? I’m totally lost here. We know how to code and how to sell but we have never kept books before. How do I pay the payroll and Medicare tax? How do I do tax withholding? Where do I withhold it to? I’m totally confused and terrified.”

Focus on your product, not on finances.

Here is a full minimum solution that will take you through until the next round of financing or until your startup goes to a dead pool.  I have personally used all of the services below.

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