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Why is Accounting the Most Important Thing for Your Business? | CPA in Baton Rouge LA

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As a business owner, you know that there are a lot of things to keep track of. You need to make sure that your product is high-quality, that your employees are happy, and that your customers are satisfied. But what you might not realize is that accounting is the most important thing for your business.

Why is accounting important?

Accounting is critical for any business, large or small. It provides owners and managers with information that they can use to make sound decisions about the company. Accounting also helps businesses track their progress and performance over time.

There are many different types of accounting, but all businesses should have at least a basic understanding of financial accounting. Financial accounting focuses on the financial statements of a company, which show the company’s financial health. These statements include the balance sheet, income statement, and cash flow statement.

While accounting may seem like a dry and boring topic, it is essential for all businesses. A solid understanding of accounting can help you make better decisions about your company and improve your business’s bottom line.

The benefits of good accounting practices

There are many benefits to good accounting practices. Perhaps most importantly, good accounting helps ensure the financial health of a business. It can also help businesses save money, avoid legal problems, and make more informed strategic decisions.

Good accounting practices are essential for any business, large or small. By keeping accurate records and making sound financial decisions, businesses can avoid many common pitfalls and set themselves up for success.

The importance of financial discipline

Many people believe that financial success is all about making a lot of money. While it is true that you need to have a certain amount of money to be financially successful, it is not the only factor. One of the most important things to remember is that financial success is about more than simply making money. It is also about having the discipline to save and invest that money wisely.

Without financial discipline, it is very easy to spend all of your money and never achieve your financial goals. If you want to be financially successful, you need to be disciplined about how you manage your money. You need to have a budget and stick to it. You need to make sure you are saving enough money for your future. And you need to be willing to make sacrifices in the present to achieve your long-term financial goals.

The bottom line: how accounting can improve your business.

Accounting is critical to any business, large or small. It provides essential information about a company’s financial health and can be used to make key decisions about the future of the business.

While many businesses view accounting as a necessary evil, it can actually be a powerful tool to help improve your business. Our accountant in 70808 says that by understanding the basics of accounting and using it to your advantage, you can make your business more efficient, more profitable, and more successful.

In conclusion, accounting is the most important thing for your business because it provides critical information that you need to make sound financial decisions. Without accurate and timely financial information, it would be very difficult to run your business effectively. If you need assistance with your accounting, please contact our Baton Rouge accounting office today to schedule a consultation.

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808

Effective Inventory Management Tips | Baton Rouge Accounting

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A company’s inventory management is a crucial part of its profitability, but many small businesses don’t practice good inventory management when it comes to the products they sell. The shortage of inventory in some businesses means they are unable to supply enough available products to meet customer expectations. Often, this drives customers away, sometimes permanently to other businesses. 

Alternatively, some businesses go the other way, overstocking items just in case. Although your customers will always have the items they need, this strategy may lead to you losing money. In addition to tying up valuable cash flow, excess inventory also costs more to store and track. 

Inventory management lies somewhere between these two extremes. It takes more work and planning to achieve an efficient management process, but your profits will reflect your efforts.

The following are tips to help you effectively manage your inventory for increased profitability and cash flow.

  1. Determine which items are most important.

Inventory can be classified into priority groups to help you understand what items you need to order more of and more frequently, as well as those that are important to your business but may cost more and move more slowly. Typically, our Baton Rouge, LA accountant suggests separating your inventory into groups A, B, and C. A-group items are higher-ticket items that you need fewer of. The C category includes items with lower costs that sell quickly. B items fall in the middle: they have a moderate price and move out the door more slowly than C items but quicker than A items.

  1. Monitor all product information.

Keeping track of product information is important for inventory management. Information should include SKUs, barcodes, suppliers, countries of origin, and lot numbers. Consider also tracking the cost of each item over time so you’re aware of factors that may affect the cost, like scarcity and seasonality.

  1. Conduct an inventory audit.

Businesses sometimes conduct a comprehensive count once a year. Other companies spot-check their hottest items monthly, weekly, or even daily. Many do all three. Regularly check your inventory to ensure it matches what you think you have, regardless of how often you do it.

  1. Analyze the performance of suppliers.

Inventory problems can be caused by an unreliable supplier. If your supplier is habitually late with deliveries or frequently shorts your orders, it’s time for you to take action. Discuss the issues with your supplier and figure out what the problem is. As a result, you may need to switch partners, or you may run out of inventory due to uncertain stock levels.

  1. Follow the 80/20 rule when dealing with inventory.

80% of your profits come from 20% of your stocks, as a general rule. For this 20%, prioritize inventory management. You should know how many of these items you sell in a week or a month, and closely monitor them. Don’t neglect the items that make you the most money; manage them properly.

  1. Maintain consistency in how you receive stock.

It may seem obvious to make sure incoming inventory is processed, but do you have a standard process followed by all your employees, or does each employee handle incoming stock differently? The tiniest discrepancy in how new stock is taken in could have you scratching your head at the end of the month or year, wondering why your numbers don’t align with your purchase orders. Check that all staff that receives stock does it the same way and that all boxes are verified, received, and unpacked together, accurately counted, and checked for accuracy.

  1. Monitor sales.

Even though this seems like a no-brainer, it goes beyond simply adding up sales at the end of the day. Keeping track of what you sell and how many items you have in stock should be done daily. In addition, this data needs to be analyzed. Are you aware of when certain items sell faster or drop off? Is it a seasonal thing? Do you sell certain items on a particular day of the week? Are certain items always sold together? Maintaining control of your inventory requires understanding not just your sales totals but how items sell as well.

  1. Place your own orders for restocking.

Vendors sometimes offer to reorder inventory for you. The idea seems beneficial at first glance—allowing someone else to manage the process for some of your items can save you time and staff. However, your vendors may not have the same priorities as you. They want to move their items, while you want to stock items that will be most profitable for your business. Check your inventory and order restocks for all of your items yourself.

  1. Invest in inventory management software.

If your business is small enough, you can manage the first eight items on this list manually with spreadsheets and notebooks. However, as your business grows, you’ll spend more time managing inventory than you do on your business or risk your stock getting out of control. Inventory management software makes all these tasks a lot easier. You should make sure that any software solution you choose meets your needs, offers the analytics your business needs, and is easy to use.

  1. Make use of technology that integrates well.

Stock management doesn’t have to be limited to inventory management software. Mobile scanners and POS systems can help you stay organized. Prioritize systems that work together when investing in technology. Having a POS system that can’t communicate with your inventory management software isn’t the end of the world, but you might spend a lot of time transferring data from one system to another, which can result in inaccurate inventory counts.

Inventory management is a crucial part of the financial management of your business. For more helpful information, contact our accounting firm in Baton Rouge, LA to schedule a consultation.

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808

How Accounting Helps You With Business Decisions | Best CPA Baton Rouge

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Accounting and financial reports might seem complicated and time-consuming, but they are crucial to the success of your business. When it’s time to make big decisions, accounting data helps you choose the option that’ll help guide your business.

The following are five ways accounting helps you make decisions in your business. 

Loans for small businesses

Businesses, both new and established, may need to consider a business loan. A startup or an expansion of an existing business might require financial backing. So, how do you know if you need a business loan? It’s all about accounting.

Using accounting information, you can determine whether your company has enough money to fund its venture or if you need financing to do so. Lenders need your accounting information to determine whether you’re a good candidate for a loan. They need to know you can pay back what they lent you, plus interest. 

Your financial data enables creditors to make informed decisions about the amount of money you can borrow. A lender may refuse to extend you a loan if your accounting information is poor, if you lack money or collateral, or if you have already accumulated debt. Regardless, they need to look at your accounting records. 

For business loans, you’ll need the following documents:

  • Income statements
  • Statements of cash flow
  • Business tax returns
  • Balance sheets

Operating a business

By using accounting, you can make better decisions about your general day-to-day operations. Taking a look at your accounting information allows you to determine how efficient and effective your current procedures are. 

To check whether your financial statements are up-to-date, you can compare them with industry standards. If not, you can make the necessary changes to make your operations more efficient.

Your accounting information also shows how profitable your business is, meaning how much you make from the effort you put in (your return on investment). Having a lot of sales doesn’t mean your business makes a profit. When you have a ton of debt to pay off, it might cancel out the money you make from sales (your revenue). Accounting lets you know how well you’re using your assets (items of value to your business) to create your products or services. Accounting allows you to compare your cost of sales to your profit margin. 

Capital investments

In a limited company by shares, investors can buy shares of the company and receive a share of its profits (known as dividends). Potential investors use accounting to decide whether or not to invest in your company—or how much to invest. 

What are the ways investors use your accounting information? The purpose of this is to determine your company’s value and to perform a credit analysis to assess your ability to provide a fair return on investment. Accounting assists investors in making decisions by showing them your company’s financial health. 

As an example, an investor might ask to see your income statement to determine where your income comes from and if it’s consistent. Investors may invest in your company if you show a steady income. Accounting serves to show investors the potential profit and risk of investing in your business.

Creating a budget

Any business needs a budget to prevent overspending and wasting money on non-essential expenses. Additionally, you can use your budget to see where you have spent money in the past and determine if those expenses were necessary to provide your products and services.

Accounting data helps you make well-informed decisions about how to spend your money. When writing your budget, you should use accurate, complete, and current financial information. A CPA can assist you and answer questions like these.

What was your profit or loss last year?

Has the cost of sales gone up or down?

Are there any items on your website that don’t sell that you can remove?

Is it possible to replace items with anything that will be more profitable?

Among the documents you need for budgeting are:

  • Accounts receivable
  • Accounts payable
  • Beginning balances
  • Balance sheet
  • Profit and loss statements

Having these documents available will facilitate the decision-making process when writing your budget.

Marketing

To attract more clients or customers, businesses need to spread the word about what they offer. Both marketing and advertising are essential expenses for marketing your business. 

Accounting shows you how much you need to spend on marketing and advertising. It also shows you how much money you made from those campaigns. 

If you spend a certain amount on a paid ad campaign but don’t see a noticeable increase in traffic or sales, you might need to shift your focus. Alternatively, your campaign might have resulted in a big increase in sales, but the campaign cost more than the revenue increase. 

Accounting plays a critical role in helping businesses define and manage their financial health. Accounting is essential to making informed financial decisions about everything from marketing to business loans. Getting it right is essential! We are here to help you. Contact our accounting firm today to learn more.

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808

Working With a Remote Accountant | CPA Baton Rouge LA

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Before COVID-19, remote accountants might have seemed crazy, but COVID-19 has proven that remote accountants work great and are here to stay. In the last year, several small businesses have had to deal with unforeseen expenses. During various phases of your business’s development and growth, small business accountants can assist.

It is common for small business owners to fall behind in accounting and bookkeeping, but this is the last area where you want to make mistakes. In tough economic times, managing your finances is key to a successful business. Those who work closely with an accountant will tell you that a small business accountant is an absolute necessity. According to a study conducted by Intuit, the maker of QuickBooks, TurboTax, and other financial software packages, 89% of small businesses see more success when they work with an accountant or advisor.

Your company may benefit from hiring an accountant at different stages of its growth. Every step of the way, from a business plan to the formation of a company to a tax audit, an accountant can ease your burden.

Small business owners who want to save money may think they can not afford an accountant. But consider how long it would take you to do certain tasks (such as taxes), and ask yourself, would that be a good use of your time? As a result of the pandemic, especially during uncertain times, it is paramount that you focus on other core areas of your business, such as retaining loyal customers and generating new and creative marketing ideas.

Let’s say it takes you 13 hours to file your taxes and your time is worth $100 per hour. Filing your taxes yourself would cost you $1,300. You always run the risk of making mistakes, especially if you’re multi-tasking like most business owners. Furthermore, there is much more to accounting than just filing your taxes, so the time spent may exceed 13 hours.

In the past few years, remote accounting has become more popular. You must facilitate your remote accountant with the proper records and accounting tools from your side for them to keep your books reconciled and your taxes straight throughout the accounting-from-home landscape. Remote accounting is not only on the rise but is also here to stay.

Consider implementing these trends to ensure your small business’s financial success.

  • Use cloud-based accounting software: Cloud technology has emerged as the most integral component of accounting technology trends. Due to the technology built into cloud-based accounting software, you can share access with your accountant from anywhere.
  • Embrace automated accounting: As a small business owner, you have a lot on your plate. Rather than wasting time on redundant, labor-intensive chores, you can automate them with software and focus on things that matter.
  • Strengthen Your Cyber Security: Hackers target small businesses more often since they are more likely to be at risk. It is important to remind your employees that they are just one click away from a cyber attack. Remind them to use strong passwords and to limit access to networks and buildings.
  • Gain Comfort with Forecasting & Analytics: In today’s business world, small businesses are likely to use forecasting, analytics, and budgeting applications to better understand their cash flow and make better decisions. It will give you better visibility into your business, better operational efficiency, deeper financial insight, and keep you on top of your business.

Although there are many types of virtual accounting services available, there is only one that is right for your business. Choosing a service with experience in your industry will enable them to offer the best advice for your company.

Don’t assume you should do your bookkeeping just because you can. Let us help if financial tasks are taking a lot of your time and are affecting the success of your business. It will free up your time so you can focus on growing and running a successful business. Get in touch with our accounting firm today.

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808

5 Reasons Your Small Business Needs an Accountant | Baton Rouge LA CPA

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It is challenging to run a small business, and there is not always enough time to handle every task effectively. If you are allowing some tasks to slip through the cracks, or if you would like to prevent that from happening, it’s time you considered hiring an accountant. Let’s take a look at the benefits:

It will save you time.

As a small business owner, your most valuable asset is your time. It is possible for business owners to manage and save time by streamlining tasks, assigning the right employee to the job, and working efficiently. If you are responsible for managing all of your company’s accounting and payroll functions, you may be feeling excessive pressure to get everything done. Keeping records may require you to learn a new accounting software program, but you do not have the time to do so. Bookkeeping, payroll, and other general accounting tasks should be performed by a professional to save time and avoid costly errors.

You will save money.

As a business owner, it is understandable that you wish to reduce costs. In the end, that is what intelligent owners do: minimize expenses and maximize profits. However, if you think hiring an accountant will be an unnecessary expense, think again. It may seem as if you are saving money by performing your own accounting, but in the long run, an accountant can save your business a great deal of money. They can reduce the risk of costly tax errors, provide sound advice about business decisions, and help you make the most effective business decisions. 

You will receive valuable advice.

Managing your taxes and payroll is just one aspect of an accountant’s advice. Almost every business decision you make involves financial considerations. Whether you are planning to hire new employees, launch a new product, or expand your operations, you will need to know the projected costs, any additional tax implications, and your potential return on investment. All of these issues can be addressed by your accountant, which puts you in the best position to make the best decision for your business.

Your business plan will be supported.

This is essential for new startups or anyone planning to launch a business. Accounting firms draw upon their experience to assist business owners in understanding how much money their businesses should be generating and projecting out over those first few crucial years so they know what to expect. Information such as this is useful when preparing the financial section of your business plan because it permits you to set realistic goals with respect to expenses and cash flow.

You will benefit from sound financial advice.

An accountant is an expert in financial matters. As long as you are not in the same profession, they are better equipped to make the most of your money than you are. Choose an accountant who has experience working with clients in the same business as yours, so that they will understand what you do and what to expect. This is of particular importance when it comes to making major financial decisions. Using your accountant’s experience, you may be able to minimize risk and achieve a better outcome than if you made uninformed financial decisions.

Remember, you can count on the experts for assistance with the aspects of your business that matter most, such as finance. With the help of a qualified accountant on your team, you will be able to enjoy these benefits and more by freeing up your time to focus on what matters most-running your business-thus reducing your stress levels. Your business will run more smoothly, and there will be a lower probability of errors in critical areas such as taxes and payroll.

Take advantage of the insights we have gained from years of experience working with small business owners. Contact Apple Guerin Company LLC today to schedule a consultation with our Baton Rouge CPA .

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808

What You Need to Know When Buying a Business | Baton Rouge LA CPA

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What You Need to Know When Buying a Business

The process of purchasing a business can be daunting but worthwhile. You can diversify your income in a meaningful way depending on your involvement. In some cases, you may be able to purchase a business and earn a passive income, whereas in others you may need more managerial skills. If you intend to acquire a business, you must carefully examine its financial documents before making the purchase. 

The decision to purchase a business requires careful consideration and extensive research. One of the biggest mistakes people make when purchasing a business is discovering that it is not as successful as they initially believed. You can avoid making this costly mistake by gathering the right information. 

If you are purchasing a business, you must ensure that it has a proper accounting system in place. To estimate the profit of a business, it must be regularly audited and all revenues and expenses accurately recorded. Depending on your relationship with the owner, you may be restricted in your ability to examine these documents. However, every piece of documentation you receive should be thoroughly examined. If you are unfamiliar with these financial statements, you may wish to seek the assistance of an experienced accountant.

In some circumstances, there may be a need to seek the assistance of an intermediary to facilitate the sale of a business. When this is the case, you must ask the right questions to ensure that you fully comprehend the situation. If you believe that the financial statements of a party are not transparent, you may wish to consider taking a different approach. You should consult with your accountant in this situation to ensure that the questions you ask are appropriate.

Once you have concluded your sale, you will also need to accurately report your taxes. When purchasing a business, you will need to gather and report several details. If you wish to learn more about the expenses associated with your business, you would be better served by consulting an accountant. A professional accountant has handled similar sales and can assist you in the process. Using such a service will reduce your stress as well as ensure the proper filing of your taxes.

If you would like to learn more about our services, our Baton Rouge LA CPA will be happy to assist you. We invite you to schedule a consultation with Apple Guerin Company LLC today.

Apple Guerin Company LLC
Phone: (255) 767-1020
6421 Perkins Road, Bldg. A, Ste. 1B
Baton Rouge, LA 70808