Category: Accounting and Bookkeeping

Cannabis Accounting

As cannabis bookkeepers, numerous new cannabis entrepreneurs have endeavored to get their permits and, however, need a lot of help with the real running of their business.

If you are handling calls from a cannabis accounting person, you might have found that they have a composed field-tested strategy. Though, they don’t constantly see how to utilize it.

They’re swimming around in their funds at different times without understanding how to expand their benefit, settle proper taxes, and read what the numbers in their books mean for their general productivity.

Since so many new cannabis entrepreneurs have lots of inquiries, you can assist planned clients with understanding the methods in which bookkeeping experts can uphold their organizations.

Services for Cannabis Businesses

You might require more than one lawyer to guarantee that your cannabis accounting business complies with relevant guidelines.

Additionally, since many cannabis guidelines are fluid, you want to have a lawyer to keep steady over the latest guidelines. For instance, new bundling guidelines will become real.

There are numerous things on dispensary retires that will require new bundling to be agreeable with these new guidelines.

You might need a patent lawyer if you’ve made an item where you wish to safeguard your intellectual property (IP).

You might require a preliminary lawyer if a claim arises from a client, a contender, or a displeased representative. Request that all workers sign a compulsory intervention provision in their agreement before beginning business.

That will save your time and cash if there is an issue eventually. Recruiting a legal group with great experience with the cannabis business is an unquestionable requirement.

Bookkeeping Services for Cannabis Businesses

As you might know, consistency is a basic variable in being permitted to keep working legitimately in states. Maintaining accurate records of each cost and exchange is important in your business, yet considerably more so with a cannabis business.

Getting a good public bookkeeper who has worked with cannabis sector customers for a long time will help you stay on track and avoid overpaying your taxes.

A bookkeeper can also do an internal review which will permit a cannabis entrepreneur to identify and examine extortion, protect organization resources, and guarantee that financial reporting is ideal and exact.

Cannabis Consulting Services

Many cannabis organizations are going from development to assembling to dispensaries. These organizations can profit from employing cannabis business advisers.

An experienced cannabis business specialist can assist you with the application interaction, audit, and refine your marketable strategy.

Introduce you to potential key cannabis speculation accomplices and other potential colleagues, including other auxiliary service providers, and guarantee that you are following the right steps in the exact order to expand your opportunities for progress.

Consulting firms will additionally inform you on the best techniques for organizing your business to maximize tax productivity and safeguard your resources.

There are many sorts of cannabis specialists. Some specialize in assisting cultivators with accomplishing the most extreme yield while limiting misfortunes. Others specialize in raising funds or shipping a certain item.

Some cannabis consulting organizations offer a spectrum of services from seed to sale.

Recruiting the correct cannabis expert might increase your chances of accepting your cannabis license because they have experience going through the licensure procedure with various clientele.

Eventually, recruiting the right cannabis advisor will save your time and cash. It’s critical to vet likely advisors. Ask any cannabis advisors you consider employing to give references and tributes from previous and current clients.

Real Estate Professional

What sort of cannabis bookkeeping might you want to begin? The land is essential.

You will require either an indoor or outside space to develop weed. Also, you will require space if you plan to work in an extraction facility, fabricating facility, or testing lab. To start a dispensary, you’ll need retail space.

Recruiting an experienced land broker can save you valuable hours you could’ve spent looking for the right land for your business.

You can have an extraordinary product, a good team, more money, sophisticated extraction procedures, and a strong brand for a successful business.

You don’t have anything without real estate zoned appropriately and agreeable to state regulations.

Instructions to begin a Cannabis bookkeeping business

When you are going to start your business, you need to consider all the following steps:

• Pick an Ideal Niche to Focus on For Business
• Make a unique plan for your business
• Characterize your brand identity
• Research your business competitors

Essential legal necessities

Regardless sort of business you’re keen on, there are fundamental legal necessities you should follow. Although these may vary depending on your area and industry, a few common needs are here.

• Business arrangement: Incorporating your business or framing an LLC with the state is significant because it safeguards your resources from any possible obligations and liabilities that emerge from your business.
• Tax ID number: This is your government tax recognizable proof number, additionally called an employer ID number (EIN). The IRS involves this number to distinguish your business from anything connected with taxes.
• General Business License: This license, re-established every year, will permit you to work in your city or area legitimately.
• DBA Filing: Your (DBA)Doing Business As will permit you to direct business utilizing a name that is not the same as the name remembered for your incorporation papers.
• Sales Tax Permit: This tax is suitable only for retailers of all types of products or administrations, and they can use it both online and offline. You want this grant if you need to gather state and local sales taxes.
• Permits: Different organizations need varying licenses. For instance, you will require one with the wellbeing department if your business requires food arrangements. Organizations may also require licenses for signage, zoning, and land use.

A home-based or online business frequently requires a similar level of consistency as a traditional blocks and-mortar business foundation.

Common Accounting Problems That Cannabis Businesses Face

There are now $52 billion in sales in the cannabis industry. The number of people who want to use cannabis for medicine and fun is growing.

This is why now is the perfect moment to start a cannabis business. However, accounting is a significant obstacle for budding cannabis business owners. 

Accounting for cannabis is done differently than accounting for a traditional business. The marijuana business is still pretty new.

This makes keeping track of money even more of a pain. But it’s best to find these problems as soon as possible.

Here are some of the most typical accounting challenges faced by cannabis business owners. 

Difficulty getting a bank account for a business

It’s not easy to legalize cannabis. Some states let people use cannabis in any way they want, while others are even stricter about CBD use.

Opening a bank account for cannabis business can be difficult depending on the state. This also implies you have limited options for obtaining funds, such as company loans. 

What ideas do you have?

Many businesses that sell cannabis feel like they can only keep cash on hand. Find out what else you can do first. Choose a local bank or a credit union instead of a federal bank account.

The fact that marijuana isn’t federally legal makes it hard for big banks to open accounts for cannabis businesses. But state-wide banks might be willing to open an account for you. 

Not tracking your sales

More money is being made in the marijuana business. But this doesn’t mean anything if you don’t keep accurate sales records. It’s important to know this if you want to know if you’re making or losing money.

You can get help from a cannabis accountant, which is good news. They will keep track of your sales and business costs and advise you on how to save money for your business and which deductions you can or cannot use for your cannabis business. 

Performing cannabis tax laws

7 states tax the sale of cannabis. This makes it more difficult to determine how to tax cannabis. Even though federal taxation is still being discussed, marijuana is still a Schedule I drug, which means that the IRS keeps an eye on cannabis businesses.

A cannabis accountant should be consulted. An accountant can verify tax documents and can prevent government fines and audits.

More likely to be audited

As was already said, the federal government is still debating how to tax cannabis. Tax audits are more likely to happen at businesses that sell cannabis.

This is why you should work with a cannabis accountant. They know the most common reasons for cannabis tax audits and can help you avoid making these mistakes when you file. 

Neglecting accounting software

Everything is digital, including the accounting and finance software for your business.

This software lets you put in your financial information, make financial documents, and better manage your cash flow. Still don’t have enough time to do your books?

Using the software, an accountant checks that your financial and tax information is correct. But there is more financial software that you can use in your everyday business tasks, like a POS system that has been updated. 

Difficulty finding payroll professionals and bookkeepers

Your accountant will not be the only financial professional considered by your cannabis business.

Every business needs a bookkeeper, people who do payroll, people who handle merchant processing, and other people in this group. Even though people are becoming more aware of marijuana, many businesses still don’t want anything to do with the cannabis industry.

A cannabis accountant will help with this. If the accountant cannot assist you, they can refer you to other financial professionals eager to work with and specialize in marijuana businesses. 

Protecting your finances and inventory

Even though crime and violence related to drugs are going down since marijuana is legal, this doesn’t protect marijuana businesses, especially dispensaries.

If they can’t find a bank, many pot shops have only to accept cash, which puts them at risk of losing the money they need. Robberies also force dispensaries to give up their money and marijuana products. This hurts not only your current profits but also the profits you’ll make in the future.

This is why it is so essential to protect not only your money but also your stock. A cannabis accountant can tell you how to keep your money safe, especially if your dispensary only accepts cash. 

Few tax breaks for business

Tax advantages for businesses are beneficial, but many cannabis businesses may only deduct a limited amount.

IRS limits when a cannabis business can deduct the cost of its supplied goods.

But the good news is that a cannabis accountant can help you learn about business tax deductions and other ways to save money on your taxes. 

Unforeseen expenses

Starting a business in the cannabis industry costs more than usual. Prices for these can be anywhere from $250,000 to $750,000. But you have to pay more.

Like any other business, the cannabis business could lose money because of unexpected costs, such as a rise in the price of goods or even a lawsuit.

A cannabis accountant can help you save money and keep extra cash on hand in case of these things. Additionally, improved cash management will help you earn more money over time. 

How Hard it is for Cannabis Companies to Set up Their Business Structures

What kind of corporate structure should I choose? This is the first question business owner of cannabis should consider. Should you create a “C-Corporation”? An S-Corporation? This is a complex subject, and the answer is unique to each company’s objectives and risk profile.

For different reasons, different business structures are desirable. A C-Corporation has a complicated filing process, and shareholders may have to pay taxes on what they got from the company.

This is a big downside, but C-Corporations have become popular structures for Cannabis businesses because they reduce risk.

A C-Corporation makes the business a separate legal entity from its shareholders. It also has stronger protections against overall debt, which gives shareholders more protection than LLCs can. 

On the other hand, only the shareholders of an S-Corporation are taxed, not the business as a whole. This puts more risk on the shareholders, in any case. Any costs that can’t be deducted (remember code 471) can be passed on to shareholders.

Which does the best job for you? It’s an important question, and a quick guide can’t give a simple answer to it. It is advisable to sit down with investors and a company attorney to discuss the advantages and cons and how they will impact your firm’s future.

Thus, they can assist you in selecting a structure that meets your current and future demands.  

Controls and corporate governance

We know business owners can’t wait to run their businesses and sell their products, which is the fun part. Don’t act too quickly. There’s much more to set up before you start making daily sales.

Even though corporate governance is primarily concerned with accounting, business owners should at least be familiar with it to guarantee that their internal controls and standard operating procedures are adhered to.  

Simply put, corporate governance is the business’s philosophy and set of rules for how to act ethically. This is performed to prevent fraud and other illicit acts.

They say how a business’s finances will be handled and to what standard. This is more than a policy or talking point; it is the foundation that prevents errors, omissions, and money from leaking out the door.  

Along with the overall corporate governance standards for a Cannabis business, successful businesses also need internal controls. Consider corporate governance as the “what” and internal controls as the “how” of your actions.

In practice, your corporate governance may stipulate that your organization will close its books on a given date, and your internal controls may take the form of a comprehensive checklist of the measures you will take to reach that goal.

Your company’s objective may be to maintain accurate records; however, internal controls, such as a monthly sales cut-off to ensure transactions are placed in the correct accounting period may assist you in achieving this objective. It is not as easy as simply being strict.

Having protocols will prepare you for any audits, investors, lenders, or exits.

Additionally, it prevents fraud and theft. The IRS will have a field day auditing you if you don’t have tight controls in place that are always followed.

As a business owner, you can ensure your business is safe by helping set up and enforce the controls and standard operating procedures (SOPs) that will keep you in compliance.

Cannabis cultivators and business owners who are just getting started shouldn’t scoff at the horrific dispensary case studies, but they shouldn’t live in fear. If you know what is expected and allowed of Cannabis businesses. Then,  get ready for it, and your business will run smoothly from the start.

Working with a Cannabis accountant who is not only knowledgeable about the sector but also about cultivation businesses and can guide you through the intricate procedure will give you a head start.  

FAQs

Q1. Will any accounting firm accept my marijuana company as a client?

Due to the increased risks associated with the cannabis sector, many conventional accounting companies refuse to work with cannabis enterprises. Utilize a specialized cannabis accountant that is well-versed in compliance, payroll, and bookkeeping for cannabis firms. 

Q2. Do you currently represent cannabis-related businesses? How long have you worked in this field?

The cannabis sector is not normal and functions differently than most other industries. Businesses that have been in the cannabis industry for several years and have a diverse clientele have more expertise in navigating the problems and obstacles inherent to a cannabis business.

Regarding compliance, it is crucial to choose a cannabis accountant with experience, as the rules and regulations are constantly changing. Frequently, compliance concerns can result in substantial fines from the IRS; therefore, selecting an industry expert will prevent you from these consequences.

Q3. Why is it essential for businesses that sell cannabis to track their income and costs carefully?

Some businesses that sell cannabis, like dispensaries, only take cash. Because of this, inadequate cash flow management could be the death of your business.

Unison Globus can help you make a cash flow projection. Also, it can help develop good ways to get paid, collect money, and more.

Q4. Do businesses that deal in marijuana have unique banking needs?

Getting a bank account for a business that deals with cannabis can be more challenging than in other fields. This can be different in each state.

Before giving you money, a bank or other lender will probably want to know more about your business.

You will have a better chance of getting a loan if you show a detailed business plan that includes how much money you expect to make and spend.

Q5. What does my business have to do with IRS Code 280E?

Section 280E of the Internal Revenue Code (IRC) says that you can’t take deductions or credits for the money you paid or spent on trafficking controlled substances (as defined by Schedules I and II of the Controlled Substances Act) in a way that is against federal or state law.

Q6. Why should I hire an accountant for cannabis?

Businesses in any industry need to have an accountant, but the cannabis industry needs it even more.

Constantly shifting state rules and regulations make it difficult for dispensaries and cannabis businesses to maintain a legitimate financial structure. This is especially true if the company operates in various states with varying legal requirements. 

Q7. How is payroll different for businesses that deal with cannabis?

The cannabis business is complicated in many ways. The payroll of the cannabis business is one of them.

For state regulations, it is important to keep accurate records. If you try to do your payroll and don’t record everything perfectly, you can have a lot of money.

If you run a business with multiple locations and many employees, payroll will only get harder, so you should hire someone else to do it before you lose control.

Bottom line – Cannabis Accounting

If you are beginning your Cannabis accountant business, you need to know about the service needs for a successful business. Check out here accounting and bookkeeping services here.

Finance operations share many similarities across sectors and geographies. Accounting books, financial reporting, and accounts receivable are often the responsibility of finance and accounting (F&A) departments.

Over the years, using software to do traditional accounting activities has improved productivity, accuracy, and compliance. Organizations that are slow to adopt accounting automation solutions will notice lower productivity and efficiencies.

What is Accounting Automation?

When one can use software to automate critical financial procedures, then it is accounting automation. Accounting software allows accounting procedures such as account reconciliation, financial data updating, and financial statement preparation without the need for human intervention.

However, despite the fact that computerized accounting is not a new concept, current technological developments like AI, robotic process automation (RPA), and big data Analytics have dramatically improved these systems’ capabilities. Using AI, accounting software can do everything from data tracking to data recording.

AI eliminates repetitive operations like data entry and calculations, allowing analysts to focus on more important work. Automation technologies can assist in reimagining the entire accounting process. Modern solutions require little human intervention and do tasks without error. It allows CPAs to focus on more important duties like budgeting or investment planning.

Advantages of Accounting Automation

Quicker Turnaround

Accounting automation saves your accountant time and work. You can now provide results more efficiently and quickly. This opens the door to accepting additional clients and extending your market presence.

Data Precision

Even meticulous professionals might occasionally overlook minor details or enter incorrect data. The error could be as simple as forgetting a decimal point or misplacing a number. Data accuracy is crucial for financing operations and keeping a good client reputation. Accounting automation reduces the chance of errors and improves accuracy.

Cost-cutting Measures

Accounting automation software automates routine clerical duties, allowing you to save money. Automation reduces Record-processing time and costs. You do not need to invest in a considerable accounting workforce to perform transactions using accounting software.

Thorough Examination

Accountants and AR analysts require relevant and reliable data to analyse trends, detect fraud, and generate various indicators of a company’s financial strength. Automation can help in data collection and compilation. Self-service analytics tools in automated accounting solutions enable non-IT personnel to quickly build reports and visualize data.

Increased Security

Traditional accounting systems require a lot of paperwork, including massive ledger books, journal entry records, and other account management materials. Some of these papers are at risk of being misplaced.

Furthermore, because they are not backed up or replicated, there is a very low probability of regaining your work, resulting in inefficiencies.

Accounting tools that are automated can assist keep your accountants’ desks tidy while ensuring that data is structured and safely kept in the cloud or on-premises data centers.

Rapid Data Retrieval

Those of us who grew up in the pre-computer era may recall how many cabinets were needed to store stacks of paper documents and books. To find a document or file, you had to dig through reams of paper. This is a time-consuming method of searching for information.

Finding and retrieving data is simple with automation solutions. If you know the file’s name, the owner’s name, or other metadata, you can search for it easily. Accounting automation systems make archiving data more manageable and less expensive.

What are the Drawbacks of Accounting Automation?

Difficult Software Interface

Specific accounting software may be too complex or pricey at times. This extensive software may be difficult to understand and navigate. However, accounting automation solutions enable CPAs to select from various tiered plans based on their needs.

Technical Difficulties

• IT Support: Technical issues can arise due to your operating system, internet connection, or software fault. Although the program is designed so that the system can address any such technical challenges, some IT support is still necessary to resolve the issues.
• System Downtime: Software servers may occasionally go down due to technical reasons, preventing database access.

In such cases, system downtime impedes operations and makes work more difficult.

Difficulties with Data Integration and Movement

The accounting software may not always be able to read your database correctly or may pass over specific sections, resulting in discrepancies in the freshly migrated database. It’s also possible that it doesn’t share data with your ERP or CRM.

Issues With Regulatory Compliance

If your accounting software is inaccurate, it may generate a less accurate regulatory report, resulting in legal infractions, fines, and punishments.

Top 6 Accounting Procedures to Automate ASAP!

Salary

Payroll and payout management is a critical function of finance teams. It necessitates a high level of attention to detail. Payroll analysts review employee tax data and rates to generate accurate reports.

Payroll automation can save your staff a lot of time and work. It also ensures payroll report accuracy, which leads to fewer conflicts and improved employee satisfaction.

If you have employees you pay on a set schedule or hourly freelancers, automation solutions can help you move funds straight into their bank accounts and compute pay.

They can also help you connect with time-tracking software and handle payroll taxes. Also, Payroll processing services for small businesses can be a great help.

Purchase Administration

When you buy goods or services, they typically have to deal with much paperwork, ranging from purchase orders to contracts. Automation of purchase orders ensures that nothing is lost. Also, it ensures that all paperwork is done. Though, you can also avail Virtual Administrative Assistant Services.

Accounting automation software includes buying management tools that successfully automate repetitive, low-value procedures like purchase order creation, payment processing, etc.

You can reduce the procure-to-pay cycle by automating your purchasing process, saving money on people, and eliminating errors.

Financial Administration

Like monthly financial close, tax season is a stressful and labor-intensive time for businesses. As everyone rushes to acquire the open accounts, tasks mount up quickly.

The following are some of the most prevalent difficulties encountered at this time:

• Detection, verification, and rectification of errors
• Maintaining tax deduction compliance
• Identifying anonymous payments
• Retrieving missing invoices and receipts lost after data movement from one system to another

These processes can be automated utilizing native capability in your software or automation solutions.

Expense Control

Collecting expense receipts from coworkers is frequently as challenging as tracking down overdue clients. Some may have misplaced their receipts, while others may have incomplete ones.

Automation software facilitates the collection, transfer, and monitoring of expenses. Expense and receipt data can be automatically captured by integrating corporate credit cards with expense management software. Employees can scan and upload receipts to the site.

The tool then extracts and transmits the data to your accounting software, allowing your finance team to terminate the accounts effortlessly.

Accounts Payable (AP) and Account Receivable (AR)

The company’s cash flow is heavily influenced by accounts payable and receivable. The cash flow statement includes both of these components.

Mismanaged AP costs the company money and gives them a negative reputation with vendors. On the other hand, if you don’t properly manage the AR, you run the danger of not getting paid on time, which can have a negative impact on the working capital.

Manage accounts receivables, track outstanding payments, remind clients to pay on time, and prioritize high-risk customers for collections. You may automate these and other AR processes using accounts receivable software, decreasing your effort significantly.

Cash Forecasting and Visibility

Accounting experts have access to critical firm information and assist shape strategic decisions. As a result, their capacity to gather and convey data to management teams is critical.

Another crucial issue organizations must consider when making strategic investment decisions is cash visibility.

Modern accounting software systems should be used by finance teams to estimate cash flows, generate trend reports rapidly, and track key indicators such as aging accounts, sales forecasts, and expenses. Software solutions can swiftly compile data from many sources, allowing you to create well-rounded reports.

So, Will Accounting Automation Replace Traditional Accounting or CPAs?

According to some research, accounting is one of the most vulnerable jobs to automation, such as this one. However, the study refers to “Accounting Clerks/Bookkeepers.”

Many top accounting software vendors, such as Xero and Intuit, incorporate AI technology in their software to handle basic accounting activities such as bank reconciliations, risk assessment, audit, review and compilation processes, etc.

So, indeed, there is a risk of being replaced by automation when it comes to data entry and repetitive jobs. However, this study fails to recognize that accountants spend essential time on data entry and repetitive activities to accomplish real work.

Because of this, more time one can spend on accounting or bookkeeping tasks that aren’t simply data entry.

Concerned accountants worry about AI and automation’s impact on their billable time.

However, AI will revolutionize accounting rather than replace accountants.

Undoubtedly, AI technology can execute many basic accounting jobs more quickly, efficiently, and without human mistakes. As a result, this doesn’t suggest that AI technology can replace all CPAs. Accounting and CPAs will have to evolve.

Furthermore, companies will always require human CPAs to examine and comprehend AI data.

The Final Takeaway!

Technology enables businesses to flourish. Because of automation, CPAs now have a simple means to undertake better data analysis and reporting.

Ideal accounting tools enable CPAs to monitor the complete success of their client’s business. Choosing an accounting automation system can help you develop the business and stand out from the crowd.

Automation allows you to stay on top of the competition. With the help of an accounting automation system, you can rapidly get your finger on the firm’s pulse.

• Accounting automation deployment for SMEs to satisfy the market’s ever-changing demands.
• Accounting automation is a practical option for any business owner in the modern era.

This is why accounting automation has become so vital for businesses. Integrating current technology into business processes allows CPAs to keep up with the newest developments.

At the same time, it will allow them to expand the business and better serve their clients. Small businesses always look for a cost-effective and efficient strategy to boost their profitability and business success.

Accounting automation appears to be the most effective solution for addressing their difficulties and assisting them in growing their organization. Switch to accounting automation and watch your company thrive with Unison Globus – Professional Accounting and Tax Services.

FAQs

Q1. What is an automated accounting system’s approach?

Automation software is in charge of automating operations like bookkeeping and accountancy.

By analyzing invoices, forms, and bank accounts for anomalies using artificial intelligence (AI) one can achieve automated detection of discrepancies in data.

Q2. Is it possible to automate accounting fully?

By removing boring procedures like data entry and accountancy, automation allows CPAs to focus on more vital activities. However, there is the need for the human touch to motivate actions based on insights.

Q3. How can one use the latest technologies in accounting?

Firstly, Automated software solutions rely on cutting-edge technology. Secondly, one can process invoices, payslips, and bank statements automatically. Thus, using Data and Science, you can make financial reports including trial balances, income statements, and profit and loss statements faster and easier.

Q4. How does automation affect accounting?

Automation software saves you time, prevents costly mistakes, and keeps all vital documents at your fingertips. It also improves cash flow management, visibility, month-end closing efficiency, and data quality.

Quick and Effective Process of Accounting Client Onboarding

It is the process of welcoming new accounting clients into your practice and moving as quickly and effectively as possible to a working relationship that is both healthy and smooth.

The following stages can be broadly categorized as being part of the Accounting Client Onboarding process:

1. Sign the NDA

The proposal, the act of signing the engagement letter, and the process of arranging payment for the work are all included in the contract.

2. Collect Basic + Valuable Information

Collecting information means acquiring everything you need to get started on the work.

For example, the company information, contact information, paper records, or system passwords needed to access the accounts that your client has provided to you.

3. Arrange Meet-ups

Whether conducted in-person or online, a meeting will take place to introduce the team, foster rapport, set expectations, and provide training if needed.

4. Follow-Up for the Meet-Up

A month after the kick-off meeting, call your new client to provide any missing information, answer questions, and outline the next steps. Calling your new client is a great way to collect any missing information.

Onboarding builds customer relationships.

Setting expectations, writing goals, and educating clients upfront will save time and effort later (if the client stays long enough to give you that opportunity).

You must understand your client’s motivations during onboarding.

Your worth is proportional to the problems you solve.

Beyond submitting accounts on time, ask about their personal and financial goals.

The process of accounting client onboarding reveals their concerns and communication styles.

Knowing your client will help you build a strong, purposeful relationship quickly. This will reduce client churn from unmet expectations.

By pleasing your customer, you’ll boost profits.

You’ll need a system that records and organizes your company’s cash flow while managing a business to determine whether you’re profitable or whether aspects of your organization may need reevaluating. A chart of accounts, abbreviated as COA, comes in handy in scenarios like proper bookkeeping and re-evaluations.

A COA can assist you in tracking everything from delinquent invoices to office supplies you buy, giving you a financial perspective of your organization.

A chart of accounts is a handy tool for chartered accountants as it provides them with a bird’s eye view of the company’s financial health. This also allows them to show which parts of the organization may require additional attention to become more successful and efficient via proper maintenance of the books.

What is a Chart of Accounts?

COA, generally known as a chart of accounts in the accounting language is a centralized index of all of the company’s financial activities.

Chart of accounts is generally categorized and divided into the following sub-area:

• Assets
• Expenditures
• Liabilities
• Equity
• Revenue

Each sub-area provides information on your company’s day-to-day operations, including where funds come from and how they are spent.

Each sub-area usually includes information such as the account name and item description and a reference number that you can use to identify the item. A COA for a small firm will differ from one for a huge corporation, and some companies may go even farther with sub-categories and sub-accounts.

However, in general, having a broader view of a company’s financial records can help you and others find profitable areas and inefficiencies that need to be addressed. For example, if your accounting staff is spending much time dealing with clients’ past-due invoices, you may need to invest in a better accounts receivable process.

You can detect issues like this, gain perspective on the broader picture, and make informed business decisions using a chart of accounts.

What is the Sole and Role of Chart of Account aka the Purpose?

As stated above in the initial paragraphs, a chart of accounts is separated into different sub-areas like assets, equity, expenditures, liabilities, and revenue.

These sub-areas are usually included in the order in which the accounts appear on the company’s financial statements.

For instance:

Consider the items that are regarded as part of the balance sheet on a financial statement, such as revenue and expenses. These are included before those considered to be part of the income statement.

Various templates are available online (Quickbooks) to make any company’s COA. A chart of accounts is pretty helpful and valuable to any chartered accountant and is typically used to summarise an accounting period, a specific time such as a fiscal year or quarter.

Below is an example of a chart of accounts. This will include the following specific accounts-

Assets:

• Inventory
• Fixed Assets
• Cash
• Accounts receivable

Liabilities:

• Payroll liabilities
• Company credit card
• Accounts payable

Equity:

• Retained earnings
• Common stock
• Preferred stock

Revenue:

• Investment income

Expenses:

• Payroll tax
• Sales tax
• Utilities
• Rent
• Cost of goods sold

Some firms, particularly larger ones, may mandate that each department create its chart of accounts with the same components. If each department, such as sales, operations, and marketing, has its budget, it can be easier for a business to acquire a clearer picture of how they operate individually.

It’s critical to ensure that your data can be read and interpreted easily when creating a chart of accounts.

Outsourcing accounting, for example, can help chartered accountants streamline the process and free up time so they eventually can concentrate on gleaning and acting on insights from the chart of accounts.

What are a Chart of Accounts (COA) Advantages?

A chart of accounts is a tool that helps you see where your business stands financially, right down to the department level. These insights might point you in the right direction, whether you need to devote more time and resources to enhancing the efficiency of a department or bolstering an existing thriving sector of your business.

This may be especially useful for stakeholders, investors, and business owners since it gives them a sense of how your firm operates daily and may even boost their confidence in your company’s long-term success.

A chart of accounts can also aid in the compliance of your financial statements with legal requirements.

Best Practices for a Chart of Accounts (COA)

COA aids in the organization of the general ledger and serves as a foundation for financial statements. It’s critical to have a well-organized chart with a logical layout that reflects the business’s actual organizational structure. The following are some best practices:

Use a suitable hierarchy to organize your accounts

Make a hierarchical structure containing accounts and sub-accounts, or parent-child accounts, and logically connect them. Here, the parent accounts are kept the same, and the sub-level accounts are added as needed.

Limit the number of levels to three or four at most, as an out-of-control hierarchy will do more harm than good. Also, rather than creating a separate account for each item on your ledger, consolidate accounts and group them together.

Use a transparent numbering scheme to organize your accounts

Accountants need to use four-digit account numbers to keep the COA well-organized. Also, working your way down from the parent-level accounts, assign the first digit.

Example:

1000 – Assets

1100 – Fixed Assets

1110 – Real Estate

1112 – Vehicles

1200 – Accounts Receivable

To learn more about these COA examples, let’s delve deep into them as all the accounting software for charts of accounts is grouped together in a specific way.

Why?

Because this numeric range specifies the types of accounts. These then help CPAs to understand where to report these account types in the financial statement.

Below is how unisonglobus.com prefers to group its chart of accounts for ease of account maintenance.

Cherry on top, Quickbooks also uses somewhat a similar methodology.

 

 

 

 

Organize your chart of accounts well to get the most out of your accounting software

Different bookkeeping platforms approach the same functions in different ways. Therefore, the accountants need to keep in mind that it’s critical to align the COA structure with the accounting software’s capabilities well. Organizing the COA is although, less expensive and more efficient than migrating to a new accounting system in general.

Let’s Look at How to Improve the COA of the Company

Consistency is crucial.

Why?

Consistency is the key.

Consistency is used while creating a chart of accounts. Prepare a chart of accounts (COA) that won’t change for a few years so you can compare results more quickly.

Comparing your financial data over time will get progressively challenging if you keep adding additional accounts.

You should also evaluate the chart of accounts regularly to see if any accounts include unnecessary data. If this happens, disable these accounts to keep the chart manageable.

Make Industry-specific Charts of Accounts

The financial success of every firm begins with properly setting up the Chart of Accounts, as every accountant and bookkeeper knows. Regardless of industry, COA acts as the backbone for all of your clients’ operations and procedures—however, the setup varies from company to company.

Even if they share some fixed and variable expenses or revenues, property management, construction, rents, brokerage, real estate development, flips, and even syndication all have their own demands.

Your customer should have a Chart of Accounts that matches their specific accounting demands, whether they are a new or current business.

Assess your client’s requirements before proceeding:

• Are they having trouble establishing their Chart of Accounts?
• Are they expecting precise reports in a matter of seconds?
• Is it necessary for them to reconcile their files?

If your answer is “YES” here to any of the above-mentioned questions, then there is no doubt that you are at the right place!

Creating a new company file and automatically having COA prepared for you is the best way to ensure you’re using the correct specifications for your client’s industry.

You can add, alter, or delete accounts from a corporate file to better meet your client’s specific needs, whether you’re working with an existing list or developing a new one. But, for now, let’s start at the beginning:

Start with the Create a new company button, go to the Menu Bar, select File, and then New Company.

If your customer is a first-time user, it’s better to choose the Express Start option and select the industry closest to what they do. This ensures that they have a default account list set up.

As soon as your customer logs in, the app will urge them to identify their business, walking them through the process of creating a chart of accounts, setting up the app, and using the wonderful features.

Unison Globus Recommends Chartered Accountants to Learn the Following Before Diving Headfirst Into the Industry-specific COA:

• Understand the fundamentals: The 25 most commonly used accounting terms
• Examine the reports/documents: Learn about the financial reports that will help you understand where your company stands.
• These free apps can help you regain your sanity.

Customize the Accounts for Your Business

Every firm has its unique operating methods, frequently mirrored in the Chart of Accounts. That is why it is critical that you assist your clients in editing the Chart of Accounts beyond the settings provided by Unison Globus.

Click on the links below for a thorough description of the Chart of Accounts (COA) for each industry. Here is the industry-specific chart of accounts, and how you may make them better fit your company:

• Bookkeeping
• Advertising and Public Relations
• Agriculture, Ranching, and Farming
• Art, Writing, and Photography
• Automotive Sales and Repair
• Religious and Church Organisations
• Construction Contractors
• General Contractors
• Accounting 
• Construction Trades such as Electricians, Plumbers, HVAC
• Architecture, Design, and Engineering
• Financial Services except Accounting and Bookkeeping
• General Product-based Business
• General Service-based Business
• Hair Salons, Beauty Salons, and Barber Shops
• Information Technology
• Insurance Agency and Brokers
• Lawn Care and Landscaping
• Legal Services
• Lodgings, such as Hotels and Motels
• Manufacturer Representatives and Agents 
• Manufacturing
• Medical, Dental, and Health Services
• Non-Profit
• Property Management and Home Associations
• Rental Residential for Real Estate Investors
• Repair and Maintenance
• Restaurants, Caterers, and Bars
• Retail Shops and Online Commerce
• Sales: Independent Agents
• Transportation, Trucking, and Delivery
• Wholesale Distribution and Sales
• Vacation Rental for Property Management

How May Unison Globus Assist you With a Chart of Accounts – Summing Up!

Almost all financial reporting is driven by a successful chart of accounts structure, either directly or indirectly. Many firms, however, neglect this fundamental notion and struggle to meet expectations.

Unlike other core issues, a chart of accounts may be streamlined quickly. A well-executed redesign can usually be completed in less than a month and immediately impact financial reporting.

Because most businesses (and CFOs) only set up a chart of accounts once every decade or so, it’s an excellent assignment to outsource. If you’d want help taking this simple but powerful step in taking your company to the next level, contact unisonglobus.com.

Read More: Quickbooks 101: Here is the Simple Formula for Success 

FAQs

Q1. What is a chart of accounts (COA)?

A chart of accounts (COA) is a tool or software that assigns unique numbers to all of the accounts in the general ledger. It makes it easier to locate them in the proper accounting book. Stakeholders can find the source of spending and earnings by consulting the COA, balance sheet, and income statement.

Q2. What are the five different account types?

Assets, equity, and liabilities are the three chart of account types. Expense and income are the two income statement account types.

Q3. What are the different forms of Statutory Accounting Principles (SAP) chart of accounts (COA)?

The following are the COA categories in Statutory Accounting Principles:

1. Country-Certain chart of accounts

This COA is beneficial for MNCs and is used to keep accounts following the legal requirements of a specific country.

2. Operating chart of accounts

It consists of spending and revenue accounts that are used to record routine company transactions.

3. Group chart of accounts

It consists of standard accounts that all business units must use at the corporate level.

Q4. Is the chart of accounts and the general ledger the same thing?

The answer is NO. The chart of accounts lists the accounts into which accountants record transactions. The general ledger keeps track of all transactions that occurred in each account in the list.

Outsourced Bookkeeping Companies for CPA firms

Accounting is a crucial service for any organization, whether large or small. Many firms invest a significant portion of their profits to establish an in-house accounting team, recruit the right resources, and complete their financial tasks. However, with the rise of outsourced bookkeeping services, businesses now have a cost-effective alternative.

Why Outsource Bookkeeping?

When it comes to accounting needs, companies have several options. It’s essential to evaluate these possibilities and choose the one that offers the best value without breaking the bank. Outsourced bookkeeping solutions provide numerous benefits, including:

• Cost Savings: By outsourcing, firms can save on overhead costs associated with hiring and training in-house staff.
• Expertise: Bookkeeping service providers offer specialized knowledge and skills, ensuring accurate and efficient financial management.
• Focus on Core Activities: Outsourcing allows businesses to concentrate on their core activities, driving growth and innovation.

Choosing the Right Outsourced Bookkeeping Firm

Selecting the right outsourced bookkeeping company is critical. Here are some factors to consider:

1. Client-Centric Approach: Look for firms that prioritize their clients’ needs and offer personalized services.
2. Global Presence: Companies with a global footprint can provide services across different time zones and understand diverse market requirements.
3. Commitment to Diversity and Inclusion: Firms that value a diverse workforce and inclusive culture often bring innovative solutions and perspectives.
4. Sustainability and Social Responsibility: Choose companies that are conscious of their environmental and societal impact.

Top Outsourced Bookkeeping Companies for CPA Firms

Here are a few outsourced bookkeeping companies that CPA firms can rely on for non-core tasks:

1. Bookkeeping Firms: These firms specialize in providing comprehensive bookkeeping services tailored to the needs of CPA firms.
2. Hire Bookkeeping Experts from India: India is known for its skilled accounting professionals who offer high-quality services at competitive rates.
3. Remote Bookkeeping Services: With advancements in technology, remote bookkeeping has become a viable option, offering flexibility and efficiency.

Here are a few outsourced bookkeeping companies for CPA firms from Ecosystem to rely upon for non-core tasks.

7. Outsourced.ph – Outsourced Bookkeeping Company

Outsourced was founded by Australian CEO and Director Mike Larcher who has 20+ years of business experience. Mike created Outsourced Philippines offshore staffing to deliver services for some of the world’s leading organizations including D-Link, Rio Tinto, Yamaha, HP, and ANZ.

From Accountants and Bookkeepers to Financial planners and Auditors can source highly skilled professionals to be a part of your offshore team in the Philippines.

They also have experience building teams of debt collectors, underwriters, mortgage specialists, claims processors, and mortgage brokers. Whether you need remote home-based or office-based staff they have the experience to build a quality offshore finance team in the Philippines for you.

 

6. DV Philippines – Bookkeeping Outsourcing firms

D&V Philippines is a premium professional services firm catering to the finance and accounting requirements of small- and medium-enterprises (SMEs), CFOs, accounting services, and locally-based shared services centers. They offer solutions that are tailor-fit for your business.

They bring in financial expertise and relevant accounting technologies that help their clients’ accounting and bookkeeping processes. Their seasoned CPAs will help your CFO make better business decisions by fulfilling management accounting functions, handling the payroll process, credit control, and bookkeeping systems, as well as providing support in financial planning and analysis.

5. Auxis – Consulting & Outsourcing Bookkeeping Company

Founded in 1997, Auxis Consulting & Outsourcing is offering a different alternative to the traditional consulting model.

They focus on three primary areas: Finance & Accounting, Customer Service, and Information Technology. Throughout the years, they have served hundreds of firms. They’ve built a unique, innovative delivery model that is focused on customization, and flexibility.

4. MBO Service – Outsourced bookkeeping for CPAs

MBO provides bookkeeping outsourcing in Costa Rica which is performed by high-level accounting and bookkeepers. They are focused on advisory, assistance, management, and outsourcing.

In detail, they provide accountable processes, financial/accounting transaction processing, optimization of processes, controls, and training of companies’ teams. These processes are delivered by designing alternative solutions based on the commitment with their clients in order to allow them to reach their own objectives.

Their offices are located in Costa Rica, Nicaragua, Honduras, El Salvador, and Guatemala. They are providing specialized advisory services in such areas as multidisciplinary financial consulting, corporate restructuring analysis, tax compliance, administrative assistance, alternative solutions design, accounting outsourcing, and IT solutions.

3. RSM Global – Outsourced Bookkeeping Company for CPA firms

RSM Global serves public sector organizations, private individuals, listed companies with overseas operations, and owner-managed businesses.

The Company delivers services such as audit and assurance, tax, consulting, restructuring, transaction advisory, risk advisory, outsourcing, and specialist services comprising legal advisory and wealth management.

2. Mazars – Bookkeeping Outsourcing Services for Business

Mazars is an international audit, tax, accounting, and bookkeeping outsourcing and advisory firm. Operating as a united and integrated partnership, they work as one team to provide tailored and exceptional services in accounting, audit, tax, financial advisory, consulting, and legal services.

They are committed to helping their people and clients succeed by respecting and understanding who they are and how they work, and adapting our approach accordingly. They have come a long way since Robert Mazars founded his accountancy firm in Rouen, France, in 1945. As a result, the diversity of their offerings, clients, and talent have prospered as they have grown.

Read also: Revealing How much does it cost to hire a professional CPA

1. Unison Globus – Top Outsourced Bookkeeping Companies for CPA firms

Unison Globus is one of the leading accounting firms in India, is in lieu of incorporating modernized accounting solutions while guiding the CPA Clientele bases with world-class tech-supported accounting & Tax solutions with efficiency and catering to the aid of EA firms throughout countries.

It delivers top-notch remote accounting and bookkeeping, Payroll, and Auditing services. By assuring observance of US GAAP they help Small & Medium-sized enterprises. Unison Globus is excellent outsourced bookkeeping for a CPA firm that aims to increase expertise and precision in addressing clientele’s diverse accounting needs by converting your time-consuming financial duties into accounts.

Unison Globus is an immediate blend of optimized elasticity and cost-efficiency. Their objective is to help companies grow by focusing on revenue-generating functions instead of transactional and time-consuming procedures. Unison Globus’s team of qualified CA/CPAs/EAs, tax specialists, and bookkeepers offer unimaginable operational efficiency. They have a strong understanding of the software, and workflow planning.

One of the most unique USP of Unison Globus is bespoke training modules, designed by their very own director and renowned academician Uday Ranpara. Constant encouragement and Motivation By managers like Ishan Bhavsar.

Unison Globus provides complete online accounting and bookkeeping services by combining cutting-edge technology with high-quality deliverables under the strategic leadership of Vijesh Zinzuwadia. Unison Globus has a team of experienced accounting and bookkeeping professionals.

Their skilled accountants and bookkeepers assist you in meeting all of your finance and accounting department’s needs. Depending on your needs, they may provide accounting and bookkeeping services for short-term or long-term projects.

How to Pick an Outsourced Bookkeeping Company for Your CPA Firm

Choosing the right firm is critical, whether you are a company in need of comprehensive accounting services or an individual seeking tax assistance. Here’s a guide to help you make an informed decision.

Reputation and Experience

When selecting an outsourced bookkeeping company, it’s essential to approach a firm with a solid reputation and extensive experience in the industry. Ensure they possess the necessary expertise in accounting administration. Research their market standing, certifications, and client testimonials to gauge their reliability.

Timely Completion of Work

Outsourced bookkeeping service providers must deliver high-quality results promptly, regardless of the task’s complexity. Effective communication with the provider is crucial to ensure they understand your needs and can meet deadlines consistently. Assess their track record for timely delivery and responsiveness.

Data Safety

Handling sensitive financial information requires strict privacy measures. Ensure that the bookkeeping outsourcing firm you choose can back up their promises with secure IT systems. They must demonstrate their ability to manage your accounts without compromising data security. A robust contract can help safeguard your company’s confidential information.

High-Quality Processes and Workflows

Both internal and external personnel will be involved in the bookkeeping process. It’s vital to establish clear communication channels between teams to ensure a smooth workflow. Proper coordination helps prevent issues and ensures the final product meets client expectations.

Comprehensive Financial Accounting Services

A reputable bookkeeping service provider should offer a range of services, including financial management, auditing, cash flow analysis, and succession planning. Partnering with a single organization for all your financial needs is more efficient and can provide valuable financial guidance for your business.

Bottom Line: Outsourced Bookkeeping Companies for CPA firms

Finally, firms like Unison Globus have earned a well-deserved reputation in accounting. You can receive the same level of expertise and superior service from mid-sized regional outsourced bookkeeping companies for CPA firms at reasonable prices. Although it takes time to research and find the ideal service provider, the effort is worthwhile to free up your personnel for essential tasks and business growth.

Ready to streamline your accounting processes and focus on growing your business? Partner with a trusted outsourced bookkeeping company today. Contact us to learn more about our comprehensive bookkeeping services tailored for outsourcing for CPA firms. Let us handle your financial tasks so you can concentrate on what you do best. Get in touch now and take the first step towards efficient and secure bookkeeping!

Bookkeeping Tasks for Small Businesses in 2023

Business owners have plenty of things to consider, and it’s easy to put off tasks that don’t seem important at present. Allowing certain responsibilities, such as bookkeeping, to pile up can leave small businesses vulnerable to cash shortages, late payments, and inventory disruptions.

 

 

Bookkeeping activities must be completed on a daily or weekly basis. Making small modifications to your routines to stay on top of weekly bookkeeping responsibilities can be as simple as devising a system that fits your work style and schedule.

You may be aware that small businesses account for more than 90% of all businesses around the globe. And the majority of them have developed an interest in strategic accounting. However, not every business is adopting a digitalized accounting system at the same rate. Accounting software is used by more than 64% of small businesses.

70% of small-business accountants believe their consulting roles will become more strategic in the future. Small businesses commonly outsource tax preparation (71 percent), payroll (50 percent), auditing (48 percent), tax planning (30 percent), personal finances (16 percent), and bookkeeping services (14 percent). To maintain your small business finances, it is important to actively perform some basic bookkeeping tasks.

Keep Your Taxes Prepared

To laws and regulations, Tax deadlines are extremely strict. Because bookkeeping is rarely a top priority for many small firms, one can easily overlook deadlines. A bookkeeper will provide your records as proper, so you are always ready for tax. This will keep you happy and prevent you from paying any additional fines.

Read More: 7 Outsourced Bookkeeping Companies for CPA Firms You Need To Know

Accounts Management daily

Bookkeeping services can help align an organization’s resources properly by regularly tracking sales and purchase transactions. To know exact cash inflow and outflow amounts, bookkeepers must record business transactions into the specified accounting software without fail.

Payroll Management

Bookkeepers must work with the HR department and handle payroll accounts for each employee depending on various employment conditions and legal employment regulations. While preparing payroll once a month, it is essential to actively tally payroll accounts throughout the month to ensure timely payment for your employees.

Bottom line – Bookkeeping Tasks for Small Business

The scope of bookkeeping services is extremely broad, and it covers several important tasks. One must complete those tasks regularly to keep your firm afloat. As a result, whenever you choose a bookkeeper for your business, be sure the person is fully qualified and competent to handle all the tasks.
If you can’t find a professional bookkeeper locally or don’t have the resources to manage bookkeeping in-house, you can approach Unison Globus services. We can help you keep your business running smoothly by managing all your accounts and payroll management. So, you don’t want to get worried about your accounting management.

Role of Al in Accounting

Artificial intelligence has a huge impact in the accounting and finance world, just as it has in every other business. Artificial intelligence has recently become available in accounting software. It is having a huge impact on the accounting and finance industry, just as it has on every other area.

Accounting procedures that used to take hours or days, AI can finish those now more correctly in no time. AI in accounting and finance solutions will help out finance experts and their companies stay spirited. Also, it’s a magnet for the next generation of employees and customers. Because it saves time, and money and gives insights.

AI in the accounting market should record a 30% CAGR during the forecast period (2022-2027) according to the Mordor Intelligence statistics report. In response to the pandemic, work from home scenario has increased and digital payments have become more popular.

How is Al used in Accounting?

You are all aware that new technology is transforming the way people work in every field. Customers’ expectations are altering as a result of engaging with AI firms. Artificial intelligence can certainly assist accountants in becoming more productive and efficient.

Human accountants will be able to focus more on their clients if the time it takes to complete duties has an 80-90 percent reduction. Artificial intelligence in Accounting will improve the quality of accounting functions as well.

When compared to making daily reporting more doable and economical, AI gives the real-time status of financial concerns by processing documents using natural language processing and computer vision. Internal business, local, state, and federal accounting regulations must all be obeyed.

By comparing documents to regulations and legislation, AI-enabled solutions assist in auditing and ensuring compliance. AI aids in the prevention of probable fraud or suspicious behavior. Fraud costs companies billions of bucks every year if it is detected.

Can Al replace Accountants?

• While there is little doubt that AI technology will be able to handle many common accounting activities faster and more efficiently in the future, this does not mean that accountants will be obsolete.
• At the other end of AI technology, there will always be a requirement for the human intellect. Indeed, according to experts, AI is expected to create more jobs than it will eliminate, giving people, such as accountants, more options.
• Accountants do not need to be concerned about AI taking over their jobs anytime soon. Accountants who can evaluate and comprehend AI data and give consulting services will always be in demand by businesses. Instead of replacing an accountant’s job, AI will revolutionize the tasks that accountants conduct.
• They will have a better time focusing on other areas of their jobs, such as consulting and data analysis because AI and machine learning will handle many mundane, repetitive tasks. For many accountants, this is good news.
• Accountants of the future will be able to use and evaluate AI data to deliver smart business solutions to their clients instead of spending hours on mundane activities. AI will assist accountants in various ways. Accountants’ liability risk will be reduced as a result of AI technology.

How does Al reduce costs in Accounting?

Instead of reconsidering employee remunerations, decision-makers should investigate automation-driven cost-cutting strategies as technology continues to take control. Across all company verticals, AI has the potential to reduce operating expenses by up to 20%.

Optical Character Recognition is a time-honored method of capturing and extracting data from both physical and digital documents. OCR is the most effective example of how AI reduces indirect data entry costs because machine learning techniques support it.

Businesses can now use AI-OCR to automate eKYC, purchase order and receipt digitalization, digital onboarding, and other time-consuming processes. On the other hand, OCR’s inability to operate with sophisticated page structures, layouts, and languages renders it useless for modern corporate applications.

Why are the Big 4 investing in Al accounting?

• The Big Four accounting companies such as Deloitte, KPMG, Ernst & Young, and PwC are redefining how they function and their very identities, thanks to a record-breaking investment of billions in technology.
• The technological fight is about more than just automating routine audits and accounting tasks. Accounting’s top players are making technology part of their DNA by focusing on artificial intelligence, data analytics, and extensive tech training across their companies.
• According to the study, the four organizations’ investments focus on three areas like building new cloud-based technology, generating new products, and educating their employees to use the new technology. Since 2015, it has been progressively increasing its worldwide competence in all three areas, with a network of foreign centers to develop new products, train employees, and stimulate tech collaboration between the company and their clients.
• PwC declined an interview, but it stated in September that it would invest $3 billion over the next four years to train all of its 276,000 employees worldwide to take advantage of new technology.
• Deloitte LLP has not released a global technology investment figure. Still, Bruce Braude, Deloitte Legal’s chief technology officer, said the firm invests extensively and sees technology as critical to the division’s future.

The function of Artificial Intelligence in Finance and Accounting

With adaptive responses to changing demands of customers, suppliers, vendors, and partners, new technology is influencing Industry 4.0 in every field. Automation allows workers to save 80-90 percent of the time they used to spend doing divergent and repetitive jobs by automating them. It also improves output quality by minimizing human error.

• You can almost automate all accounting tasks, including payroll, tax, banking, and audits with AI. It is upsetting the accounting industry and causing a significant shift in business conduction.
• While increasing transparency and auditability, AI improves productivity and output quality.
• AI opens up many possibilities and frees up the finance team’s time to explore new avenues for business expansion.
• You can forecast financial accounts more accurately with AI. Finance experts can forecast future trends using machine learning based on historical records.

Final Thoughts – AI in Accounting

Accounting and finance AI and automation are only getting started. However, technology is improving, and the number of tools and systems available to help account is rapidly growing. AI brings up the opportunity for significant cost savings, increased productivity, and improved data accuracy. Also, it brings precision to enterprises when hiring Outsourcing for a CPA from Unison Globus. It can remove manual accounting activities that are time-consuming and repetitious.

Successful people also have fear, doubts, and worry, but they don’t let these sentiments stop them from achieving their goals. Therefore if you have any of these feelings, call our Unison Globus services immediately to get the best.

Intercompany reconciliation of a group of corporations can act as a source of worry for accountants everywhere. It stands among the top aspects that accounting professionals spend considerable time for the yeare-end finalization process.

Even the stats showcase the same fact. As per a BPM international survey, 72 percent of corporate ventures have to devote a large chunk of time to resolve intercompany transaction differences.

Undeniably, we need to understand how to smoothen the intercompany reconciliation (ICR) process. So, team Unison Globus is here to assist you in this endeavor.

What is Intercompany Reconciliation (ICR with example)?

Intercompany reconciliation refers to reconciling figures between two successive branches or legal entities under the same parent institute after a transaction. So, let us take the example of Facebook, which has two subsidiaries Instagram and Whatsapp.

 

One branch acts as a vendor, while the other acts as a purchaser. It means that under the same corporate roof, one legal entity pays the other.

You can bifurcate the ICR transactions into three categories:

1) Transaction in the Downstream: The transfer of ownership from the parent to the subsidiary.

2) Upstream Transaction: In an Upstream transaction, the transfer of ownership from a subsidiary to its parent corporation.

3) Transaction on the Side: A lateral transaction occurs when a parent business has two subsidiaries.

Why is ICR necessary, and how can it benefit you?

With a rise in the number of its subsidiaries, the intercompany reconciliation of its trading balances has become a formidable problem. Also, if the number of subsidiaries is small, spreadsheet tools can be used to manage them manually.

Large multi-subsidiary firms must reconcile and settle inter-company balances on a daily or weekly basis to meet obligations such as:

1. Monetary constraints and regulatory reporting, Liquidity report,
2. Currency management and optimization, Cash planning, and treasury operations
3. Improve the efficiency of your resources and procedures.
4. Recognize and evaluate the various sorts of transactions and parties engaged within your group firm.

The reconciliation procedure is used to guarantee that master ledgers of subsidiaries and various bank accounts match up.

It entails deleting the inter-company transactions that will no longer be a component of financial statements. Externally filed transactions should not be included in the reports.

The intercompany reconciliation transaction can benefit a multi-subsidiary company in a number of ways.

• At month’s end, every subsidiary AND corporate accounting saves a significant amount of time and money.
• At year’s end, auditors will spend less time reconciling ICs.
• Subsidiaries can focus their time and effort on resolving data mismatch concerns rather than on data gathering.
• The ability to store all Accounts Payable (AR) and Accounts Receivable (AP) items, combined with reporting capabilities, provides auditors and management with an invaluable view of the entire intercompany position and its evolution.

How does Intercompany Reconciliation work?

Intercompany reconciliation involves any one of three ways:

G/L Open Items Reconciliation (Procedure 001): If the account receivable and payables get posted to the G/L accounts, this process reconciles open items (items that remain open on the Open Item after the posting process).

G/L Account Reconciliation (Procedure 002): This procedure gets used to reconcile records on accounts that do not have open time management, such as profit and loss accounts.

Open Items Reconciliation (Procedure 003): This process is used to reconcile open things (items that must be reconciled manually) and can be utilized for most account receivables or payables associated with customers/vendors’ accounts.

What are the challenges and problems with Intercompany Reconciliation?

The issue is that an invoice recorded in one subsidiary’s Accounts Receivable (AR) is frequently not recorded in the payer’s Accounts Payable (AP) on time, correctly, or at all. It results in significant discrepancies, which generate issues in the consolidated accounting.

1) Accounts Payable mismatches due to delays or improper booking (AP)

2) It’s unclear who should be contacted to resolve disputes.

3) One needs manual adjustments for the consolidated balance sheet.

4) There are inaccuracies in the drafting of the P&L account.

5) At the end of the month, there is a lot of time pressure.

6) Every subsidiary and the corporate level use manual processes.

7) Corporates don’t store frequently reconciled data and paperwork centrally.

How to carry out Intercompany reconciliation?

Intercompany reconciliation is essential for more effective and timely financial reporting and analysis. Below are four critical actions that one should fulfill in order to function their IC reconciliation processes properly.

Step 1: Create a set of trade rules that are consistent.

Companies are spending a substantial period of time deciding on a diverse variety of reporting practices. If the corporation categorizes and tags its transactions one way and the subsidiaries do it another, your accounting teams shall have to face yet another data jumble.

Thus, we eliminate the need for counterparties to book and correct intercompany transactions by formalizing well-defined governance and policies and then automating the established norms.

Step 2: Bringing data from various sources altogether

Using financial software that works with many data types eliminates the need to transform data into a specific format before importing it.

With live integration and comprehensive matching capabilities, you can rest assured that your intercompany reconciliations are thorough, accurate, and completed on time.

Step 3: A well-defined process

A company that follows standard workflow, and executes all intercompany reconciliations in a precise sequence eases the process.

Businesses can handle conflicts using permitting process, supervision, and administration of settlement all the way through to rectification, including routing to the appropriate employees to determine which legal entity is liable, thanks to workflow and controls.

How to improve Intercompany reconciliation?

Intercompany reconciliation becomes a severe issue in terms of efficiency, resource, accuracy, and risk management as the number of organizations and subsidiaries grows.

Many factors contribute to the lack of data accountability and make the procedure unpleasant.

Here are three methods to make your intercompany reconciliation better for all of your teams.

1) Create a specific approach for deciding on a transaction as a group before one organization submits an invoice to another.

2) An organization must have a process for dealing with and resolving conflicts between intercompany trade agreements.

3) Developing a workflow and approval procedure to address disputes will significantly decrease the constraint in reconciling intercompany finances.

4) Setting up a calendar to receive any confirmations or disputes and closing them by a specific date during the month will help the organization perform effectively.

What are the tools you need for Intercompany reconciliation?

When you’re searching for an intercompany reconciliation solution, here’s a list of things to check for, depending on your requirements:

1) Account structure mapping capability

2) You can map intercompany trading partners.

3) Ability to create auto-posting rules

4) Extensibility

5) Flexibility and adaptability

6) Customer Care

7) Consultation and recovery

Accounting for intercompany reconciliation and resolution is not difficult. Though, building an accurate, cost-effective, and controllable solution across multiple subsidiaries has proven to be a challenge for giant firms.

Establishing uniform corporate guidelines, merging data from multiple sources, specifying a straightforward procedure, and increasing visibility may all aid in the development of a more robust intercompany reconciliation transaction process. Besides, that process is flexible, adaptable, and expandable to your needs.

Manage your periodic reconciliation of intercompany transactions more expediently with better expertise!

Hire Unison Globus for unbeatable outsourced accounting and bookkeeping assistance!

CPAs can often find dealing with affairs like ICR a true challenge. Team Unison can enable you to tackle the hassles effectively. Contact us to know more now!

Digital bookkeeping is a profession that has the potential to offer much more than the offline industry. This emerging territory has recently become the talk of the town as an online bookkeeping activity that does not demand any specific qualification.

If you are a meticulous observer and have an ardent love for numbers, you can become a bookkeeping professional in no time. Moreover, you will become an integral part of a business venture and handle their essential financial data.

But what strains most people is the marketing strategy behind online bookkeeping. As you feel confined to your home spaces, reaching out to clients from various sectors is arduous.

So, in this article, we address how to get bookkeeping clients? Amidst growing competition, we will look at where to find bookkeeping clients.

How to get your first bookkeeping client?

If you are a qualified CPA or EA and thinking of starting your own bookkeeping business from home, this guide is for you. To start a business from home, you need a solid online presence.

Hence, we begin with building an online website with all the information about your services, contact number, and business cards. It can be a single or double page, depending on your wish. What is vital is communicating effectively to avoid any diversion. Once established, you are free to proceed.

But remember, the tedious process hasn’t started yet. Clients will not approach you as soon as the site is live, even if you have a great website and all the must-haves.

So, how to get bookkeeping clients? Well, it depends on your ability to spread the word or what we call marketing. But before you make the next move, try to define your ideal client! You can determine the qualities of a perfect client by seeking an answer to the following questions:

• What industry are you targeting?
• Which business size are you looking for?
• How much can you dedicate to a client?
• What are the fundamentals of their bookkeeping needs?
• How much is the standard budgets of companies?
• What are their services?
• Where is the location of your clients?
• What can you do to improve their present condition?
• What are their business philosophies and mission?

Once you have cleared this, the next thing is to find a bookkeeping marketing expert. Building a customized site will surely improve your traffic and attract more people to your business. Make sure your site ranks well in Google and utilize various online platforms to market your site.

How to find bookkeeping clients?

1. Create motivational strategies to get referrals from clients

If the question lingering in your brain is how to find bookkeeping clients, we recommend you conduct an incentive program for your present clients.

This will benefit you by obtaining referrals from them to optimize your portfolio and create value for your business. Additionally, this also helps in boosting your relationship with clients and creating an image of an overall positive workspace.

2. Speak at a public event

Do you wish to get more attention to your business? Well, grab any opportunity to speak at a local business club or conference. You can go to a gathering and start canvassing and spreading words to get your targeted goals.

Besides, one thing that can get the recognition of clients is an expert explanation and validation of your business. Only through building trust and establishing relatability can you find the potential customer.

3. Write blogs

Are you wondering how to get bookkeeping clients? Marketing using blogs and articles can easily amplify your traffic. Most customers lack knowledge about the changes happening in the financial industry.

Hence, you can start writing about tax compliances, and new updates and facilitate reliable information to create an advanced platform. Additionally, doing this shows your resilience and confidence in handling your business.

4. Communicate using LinkedIn

Another question that worries most is where to find bookkeeping clients? As the current industry has the boons of various omnichannel and online platforms, you can advertise your business literally anywhere.

One such professional platform is LinkedIn. Daily, thousands of companies all over the country post jobs related to various bookkeeping activities.

Hence, you can connect with these employers simply by researching them and building an attractive profile. You can spend a few hours communicating with clients and building networks. Consult with our business development team to know more about it.

5. Go local

Apart from stepping the game ahead, it is also preferable to seek the assistance of the local vendors. These will be the people you know and those who already have an established relationship with you.

Providing outsourcing services to local businesses will help you build a community and grow your network.

6. Paid promotional activities

Are you running out of options to market yourself locally? Are you worried about how to get bookkeeping clients? Then, you can move to more advanced prospects – Paid promotions.

For this, you need to find a framework via Google, Twitter, or Facebook. You may be a regular user of these social media sites.

However, doing promotion is an entirely new paradigm. Multiple paid promotional service providers can back you with meaningful campaigns.

7. Volunteering

Meeting someone new every day is crucial for your scalability. This requires not just online work but also your physical presence.

To build a foundation for your business, you can volunteer in a non-profit organization and get to know your clients and your locality. Along with this, you can even offer a teaching program to local schools.

Teaching is an underappreciated way of gaining the attention of new clients. Schools and universities always welcome people with skills and knowledge to create opportunities for their students.

8. Conduct webinars

Webinars, video presentations, seminars, and lectures are good ways of communicating the technicalities and your exclusive services to a broader circle.

It can help build your image as a professional and an expert in the field. If you are puzzled about where to find bookkeeping clients, this can be a starting point to build a name for yourself. You can get a free consultation from our experts to learn about platforms for these webinars.

9. Connect with your past clients

Growing your network means creating pipelines to establish a long-term connection with clients. Forgetting clients soon after you finish a business is not an ideal trait of professionalism.

Instead, it is vital to consistently maintain good communication with your past clients so that they can even introduce you to their networks.

As you are already a part of their internal niche, you can review their current process and build a portfolio to tell them how you can improve their current status.

10. Find your place in directories

Are you puzzled about how to get your first bookkeeping client? An efficient way to promote your business is getting your firm listed on different reliable directories.

It is necessary because when people need bookkeeping services, they will search for the best bookkeeping services near them. In such cases, finding your name in additional sources will improve your possibilities.

Following these ideas will boost you if you seek alternative ways to create a promotional channel. Whatever your approach is, measure your results quantitatively to understand if your adopted strategy is effective or not.

Get enhanced backing to rope more clients for your bookkeeping practice with Unison Globus!

Are you in a dilemma regarding how to get bookkeeping clients? Unison Globus can be your ally. We have helped numerous accounting practices to scale their business in the US. You can approach our masterly team of CPAs to understand how to find bookkeeping clients online. Reach out today!