Accounting Blog

Advantages of a Third-Party Registered Agent for Businesses

For many businesses, a registered agent is a requirement, not a luxury. Failing to retain a registered agent can result in an LLC, for instance, losing its legal status in the state in which the business operates. Unfortunately, many small business owners do not realize the full potential of having a third-party registered agent for their businesses.

What is a registered agent?

Registered agents, sometimes referred to a statutory agents or resident agents, act as the point man (or woman as the case may be) between your business and state and local government organizations. Registered agents must have a physical presence in the state where your business was formed and must be available during regular business hours in order to properly perform his or her duties to your company and the state.

Why do you need a registered agent?

Most states require it. Without it, some states invoke penalties and fines, in addition to revocation of an LLC’s license. However, there are other benefits and advantages to consider when procuring these services of a third-party registered agent for your small business.

1) It keeps some of the red tape out of your workplace. This means that customers, employees, and competitors aren’t privy to what’s taking place between you and the state. In other words, it adds another layer of privacy around your business.

2) It leaves one person dedicated to this particular job for your company and no other. There is no need to provide additional training or waste valuable time learning skills that aren’t natural to you as a business owner. They are experts in this field and know their way around, whereas you, or someone appointed by your company to fill this role, may miss something very important for the sake of your business.

3) You can move your business location without going through the laborious and costly process of changing your address with the state.

The real secret to success, though, is to find a real gem when you select your registered agent so that your business is well represented and covered with the state. When you do this, you can rest easy without the worry of whether your business is in hot water with the state over some minor paperwork-related technicality.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Tracking Products and Services in QuickBooks Online, Part 2

Last month, we explored the process of creating a product record. Now we’ll look at where they’re used in QuickBooks Online.

Have you been able to create records for all of your products and services? If you have a large inventory, this can be quite a time-consuming process. But we highly recommend that you build complete records, even when you create them as you need them. This is critical if you plan to track inventory items.

You’ll use your product and service records in several areas of QuickBooks, including invoices and estimates, purchase orders, and sales receipts. There’s also an entire set of reports dedicated to products and inventory.

Important: If you’ve tried creating Inventory Items in QuickBooks Online but have only been allowed to set up Services or Non-Inventory Items, you missed a step when you were completing your Company Settings. Click on the small gear icon in the upper right (next to your company name), then on Settings | Company Settings. Click on Sales in the left vertical tab to see the Products and services section. If any of these three options is turned off, click in the box to turn it on.

Figure 1: These three options in Company Settings must be labeled On in order to make use of all of QuickBooks Online’s inventory-tracking features.

This is one of the reasons we recommend that you let us help you set up QuickBooks Online, even if you’re making a transition from the desktop version of QuickBooks. If you don’t visit every area of Company Settings and designate your preferences, you may get frustrated as you start working, thinking that the site isn’t capable of doing everything you need.

Using Your Records

You’ll see why it was so important to build a thorough set of product and service records when you start to enter data in transaction forms. Assuming that you’ve also created records for your customers and vendors, filling out an invoice, for example, is mostly just a matter of selecting the correct options from drop-down lists.

Of course, even if you have a comprehensive set of records, you’ll certainly take on new customers and vendors, and start offering additional products and services down the road. When this occurs, or if you didn’t complete your setup work because you absolutely had to start entering transactions, you can add items as you need them.

Figure 2: When you create transactions, you can choose products or services from a list of existing records or add new ones “on the fly.”

Once you’ve selected a customer and either accepted the default terms and dates or edited them to reflect your needs, you’ll click on the arrow to the right of the first field in the body of the invoice, as pictured in the example above. You can scroll down and find the item that the customer wants to purchase in the list that drops down or click on +Add New.

If you do the latter, the Product/Service information panel will slide out from the right. You can then create a record for the product or service, like we wrote about last month.

A Running Tally

Here is another reason why it’s so important to be conscientious about completing product records. When you enter that number in the Initial quantity on hand field, QuickBooks Online uses that as a starting point for tracking your inventory levels. Every time you process a form indicating that you’re selling x number of widgets, the site subtracts that from the most recent total.

Figure 3: QuickBooks Online helps you keep a close eye on your stock levels in real time.

When you click in the Quantity field, a small cartoon bubble opens above it, telling you how many units are currently available. This keeps you from selling items that you don’t have. It also indicates when you may have too much of a product, and it’s not selling quickly.

Unless you have a very small product list, you may not recognize overstocks. So QuickBooks Online offers several reports that can help you track your inventory. Click on Reports in the left vertical tab, thenAll Reports, then Manage Products and Inventory to see what’s available.

Figure 4: The Inventory Valuation Detail report

Setting up QuickBooks Online for a successful launch can be challenging. So can the concepts involved in tracking your inventory of products. We’re always happy to help with either process – or both

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

What is a PEO?

The acronym PEO stands for “professional employer organization.” These organizations help business reduce costs by allowing them to outsource the management of important company functions, such as workers’ compensation, payroll, employee benefits and human resources. By partnering with a PEO, a company can grow its bottom line and focus on its core tasks, such as marketing, production and customer service, which inconspicuously but effectively contribute directly to the quality of customer engagement of the company.

The Function of a PEO

When a company begins working with a PEO, the PEO takes over many of the company’s most cumbersome human resource responsibilities. In addition to handling everyday human resource tasks, the PEO also assumes some of the employer’s legal responsibility for human resource issues, such as unemployment and healthcare, thus reducing the employer’s level of risk.

Once the employer establishes his relationship with the PEO, the PEO begins functioning as a second employer for its clients employees. Instead of coming to their legal employer with human resource concerns, employees will go to the PEO. The PEO manages all of the company’s human resource dealings on a daily basis, and the company no longer needs to worry about the accuracy of its payroll or whether its healthcare plan complies with federal regulations. Many PEOs even offer a comprehensive benefits package for employees that allows the PEO’s clients to become more competitive within the industry.

Benefits of a PEO

The business industry is always evolving. Congress enacts new laws, such as the recent change to healthcare regulation, and businesses must alter their procedures to comply with the new guidelines. When a company is small, keeping up with the constant changes can be nearly impossible. Instead of focusing on their most important tasks, employees are forced to spread themselves too thin. Furthermore, because employees are inexperienced in these areas, tasks are not completed as accurately and efficiently as they should be.

When a company hires a PEO, most of these problems disappear. Instead of relying on its own overworked and under-prepared employees to handle unemployment insurance claims, payroll tax compliance, workers’ compensation claims and issues with employee healthcare, companies can rely on a PEO’s experts to take care of all of these obligations. Not only are these facets of the company’s operations dealt with more effectively, but employees also find themselves with more time to concentrate on activities that produce revenue for the company. Furthermore, all human resource management tasks are completed with efficiency, and the company’s bottom line improves.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Tracking Products and Services in QuickBooks Online, Part 1

Inventory management requires precision, constant attention, and smart decisions. QuickBooks Online can help.

If you started small with your business, keeping track of your product inventory was probably pretty easy. Maybe you kept your stock in a few boxes or a closet, and it was easy to tell at a glance what needed replenishing.

As you grew, the process of inventory-tracking started to get unwieldy. You were selling too many products in too large a volume; a casual look at your inventory no longer sufficed. And physical inventory counts took a lot of time. So you found yourself with too many of some items and not enough of others.

Keeping inventory items at financially-responsible levels is a delicate balance. If you have too much on hand, you tie up money. Too little in stock, and, well, you know what happens: you wind up with unfulfilled orders and unhappy customers. QuickBooks Online can help.

Building Inventory Records

QuickBooks Online’s inventory-management tools help you:

  • Create thorough records for each product and service that you sell.
  • Fill out sales and purchase forms – like invoices and purchase orders – quickly and accurately using these item records, and,
  • Generate reports that provide the real-time status of your inventory.

Figure 1: You can build a database of product and service records using QuickBooks Online’s inventory management tools.

Here’s how to get started. Click on the gear icon in the upper right, next to your company name, and select Products and Services. Once you start adding records, this screen will display a table containing critical details about your inventory and non-inventory items as well as the services you sell.

Click New in the upper right corner. A vertical pane will slide out of the right side of the screen, asking you what type of item you want to describe. Select Inventory item, and the Product/Service information window opens. Enter the name of your item in the first field and its SKU (optional) in the next. You can upload an image if you’d like, too.

The line below this information reads Is sub-product or service. You should only click in the box in front of it if you have already created a parent product or service and want to put this item in a sub-category of it. In the example above, Writing tools is the parent category and 3 4×6 journals, multi-color is one member of that product category. (Questions? Ask us.)

As you can see, you can modify some options here without completely starting over. If this item should have been classified as a Non-inventory item, click Change type and select the correct one. You can also delete your image or replace it with another.

Figure 2: You need to be absolutely sure that your Initial quantity on hand figure is correct in this window,since it will affect transactions and reports.

How many units of this item do you have right now? Enter that number in the field and then choose today’s date from the calendar that’s available in the As of date field. Your Inventory asset account should be pre-selected to Inventory Asset. Account designations must always be correct in QuickBooks Online.

Warning: If you are unfamiliar with assigning items to accounts, let us walk you through the early stages of setting up your inventory records. We can help you understand the Chart of Accounts and how it relates to various tasks you’ll be doing.

Enter the description you would like to appear on sales forms in the Sales information field. Then complete the Sales price/rate box. This is the price that you will charge customers for the item. If sales tax will be applied, click in the box in front of Is taxable to create a check mark. Sales of Product Income will probably already appear in the Income account field.

Go through similar steps in the Purchasing information fields, keeping in mind that the Cost field should reflect your cost to buy the items you sell, if indeed you do purchase and resell inventory. When you’re done, click Save and close or Save and new.

This is a lot of work, but it’s important work. You’re building the foundation for your inventory management system.

Next month, we’ll look at how you will be using your item information in transactions and reports.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).

Are You Applying Finance Charges? Should You Be?

Assessing finance charges is a complicated process. But if you have a lot of late payments coming in, you may want to consider it.

There are many reasons why your customers send in payments past their due dates. Maybe they missed or misplaced your invoice, or they’re disputing the charges. They might not be very conscientious about bill-paying. Or they simply don’t have the money.

Sometimes they contact you about their oversight, but more often, you just see the overdue days pile up in your reports.

You could use stronger language in your customer messages. Send statements. Make phone calls if the delinquency goes on too long. Or you could start assessing finance charges to invoices that go unpaid past the due date. QuickBooks provides tools to accommodate this, but you’ll want to make absolutely sure you’re using them correctly – or you’ll risk angering customers and creating problems with your accounts receivable.

Setting the Rules

Before you can start, you’ll need to tell QuickBooks how you’d like your finance charges to work. It’s at this stage that we recommend you let us work with you. There’s nothing overly difficult about understanding finance charges in theory: you apply a percentage of the dollar amount that’s overdue to come up with a new total balance. But setting up your QuickBooks file with the finance charge rules you want to incorporate may require some assistance. If it’s done incorrectly, you will hear from your customers.

Here’s how it works. Open the Edit menu and select Preferences, then Finance Charge | Company Preferences.

Figure 1: Before you can start adding finance charges to overdue invoices, you’ll need to establish your company preferences.

What Annual Interest Rate percentage do you want to tack onto late payments? This is an issue we can discuss with you. Too low, and it’s not worth your extra time and trouble. Too high, and your customers may stop patronizing your business. And do you want to set a Minimum Finance Charge? Will you allow a Grace Period? If so, how many days?

You’ll need to assign an account to the funds that come in from interest charges. This needs to be an income account, as stated at https://www.evergreenfunders.com/business-loans-for-bad-credit/. In our example, it’s Other Income.

The next decision, whether to Assess finance charges on overdue finance charges, needs consideration – and some research. This may not be an option depending on the lending laws in the jurisdiction where your business is located. So again, if you want to charge interest on unpaid and tardy finance charges themselves, let’s talk.

When do you want the finance charge “countdown” to begin? When QuickBooks identifies a transaction that has not been paid within the stated terms, do you want the added charge to be applied based on the due date or the invoice/billed date?

Note: If your business sends statements rather than invoices, leave the Mark finance charge invoices “To be printed” box at the bottom of this window unchecked.

Applying the Rules

QuickBooks does not automatically add finance charges to your customers’ invoices. You’ll need to administer these additions yourself, though QuickBooks will handle the actual calculations.

Open the Customers menu and select Assess Finance Charges to open this window:

Figure 2: You’ll determine who should have finance charge invoices created in the Assess Finance Charges window.

Make very sure that the Assessment Date is correct, as it has impact on QuickBooks’ money saving business services and calculations. Being even a day off makes a difference. Select the customers who should have finance charges applied by clicking next to their names in the Assess column. QuickBooks will display the Overdue Balance from the original invoice, as well as the Finance Charge it has calculated.

  • If you choose not to apply finances charges to a customer because he or she has provided a good reason for the late payment, be sure the box in the Assess column is unchecked.
  • If you want to change the finance charge due for a valid reason, you can type over the amount in the last column. This would be a rare occurrence and should be exercised only after consulting with us.

Important: If there is an asterisk next to a customer’s name, there are payments or credit memos that have not yet been applied to any invoice.

When everything is correct, click the Assess Charges button at the bottom. QuickBooks will create separate invoices for finance charges for each customer who owes them.

We can’t stress enough the importance of consulting with us before you start to work with finance charges enough. Keep your company file accurate and your customers happy by getting this complex accounting element right from the start.

…from the Team of Professional at RE-MMAP We are just a click or call away. www.re-mmap.com and phone # (561-623-0241).