The Pulse of Your Business
Unfortunately, many small business owners do not fully understand their cash flow statement. This is shocking, given that all businesses essentially run on cash, and cash flow is the lifeblood of your business.
Some business experts even say that a healthy cash flow is more important than your business’s ability to deliver its goods and services! That’s hard to swallow, but consider this: if you fail to satisfy a customer and lose that customer’s business, you can always work harder to please the next customer. But if you fail to have enough cash to pay your suppliers, creditors, or employees, you’re out of business!
What Is Cash Flow?
Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers. The inflow only occurs when you make a cash sale or collect on receivables, however. Remember, it is the cash that counts! Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest.
Outflows for your business are generally the result of paying expenses. Examples of cash outflows include paying employee wages, purchasing inventory or raw materials, purchasing fixed assets, operating costs, paying back loans, and paying taxes.
Note: An accountant is the best person to help you learn how your cash flow statement works.
Cash Flow Versus Profit
Profit and cash flow are two entirely different concepts, each with entirely different results. The concept of profit is somewhat broad and only looks at income and expenses over a certain period, say a fiscal quarter. Profit is a useful figure for calculating your taxes and reporting to the IRS.
Cash flow, on the other hand, is a more dynamic tool focusing on the day-to-day operations of a business owner. It is concerned with the movement of money in and out of a business. But more important, it is concerned with the times at which the movement of the money takes place.
Theoretically, even profitable companies can go bankrupt. It would take a lot of negligence and total disregard for cash flow, but it is possible. Consider how the difference between profit and cash flow relate to your business.
Example: If your retail business bought a $1,000 item and turned around to sell it for $2,000, then you have made a $1,000 profit. But what if the buyer of the item is slow to pay his or her bill, and six months pass before you collect on the account? Your retail business may still show a profit, but what about the bills it has to pay during that six-month period? You may not have the cash to pay the bills despite the profits you earned on the sale. Furthermore, this cash flow gap may cause you to miss other profit opportunities, damage your credit rating, and force you to take out loans and create debt. If this mistake is repeated enough times, you may go bankrupt.
Analyzing Your Cash Flow
The sooner you learn how to manage your cash flow, the better your chances for survival. Furthermore, you will be able to protect your company’s short-term reputation as well as position it for long-term success.
The first step toward taking control of your company’s cash flow is to analyze the components that affect the timing of your cash inflows and outflows. A thorough analysis of these components will reveal problem areas that lead to cash flow gaps in your business. Narrowing, or even closing, these gaps is the key to cash flow management.
Some of the more important components to examine are:
- Accounts receivable. Accounts receivable represent sales that have not yet been collected in the form of cash. An accounts receivable is created when you sell something to a customer in return for his or her promise to pay at a later date. The longer it takes for your customers to pay on their accounts, the more negative the effect on your cash flow.
- Credit terms. Credit terms are the time limits you set for your customers’ promise to pay for their purchases. Credit terms affect the timing of your cash inflows. A simple way to improve cash flow is to get customers to pay their bills more quickly.
- Credit policy. A credit policy is the blueprint you use when deciding to extend credit to a customer. The correct credit policy – neither too strict nor too generous – is crucial for a healthy cash flow.
- Inventory. Inventory describes the extra merchandise or supplies your business keeps on hand to meet the demands of customers. An excessive amount of inventory hurts your cash flow by using up money that could be used for other cash outflows. Too many business owners buy inventory based on hopes and dreams instead of what they can realistically sell. Keep your inventory as low as possible.
- Accounts payable and cash flow. Accounts payable are amounts you owe to your suppliers that are payable some time in the near future – “near” meaning 30 to 90 days. Without payables and trade credit, you’d have to pay for all goods and services at the time you purchase them. For optimum cash flow management, examine your payables schedule.
Some cash flow gaps are created intentionally. For example, a business may purchase extra inventory to take advantage of quantity discounts, accelerate cash outflows to take advantage of significant trade discounts, or spend extra cash to expand its line of business.
For other businesses, cash flow gaps are unavoidable. Take, for example, a company that experiences seasonal fluctuations in its line of business. This business may normally have cash flow gaps during its slow season and then later fill the gaps with cash surpluses from the peak part of its season. Cash flow gaps are often filled by external financing sources. Revolving lines of credit, bank loans, and trade credit are just a few of the external financing options available that you may want to discuss with us.
Monitoring and managing your cash flow is important for the vitality of your business. The first signs of financial woe appear in your cash flow statement, giving you time to recognize a forthcoming problem and plan a strategy to deal with it. Furthermore, with periodic cash flow analysis, you can head off those unpleasant financial glitches by recognizing which aspects of your business have the potential to cause cash flow gaps.
Choosing the Right Representative: A Re-post
Rob Teuber is an attorney with the law firm Weiss Berzowski Brady LLP and author of the tax law blog www.federaltaxlawforum.com.
I deside to repost this as it would seem the information has been forgotten.
Choosing the Right Representative to Help You with Your Federal Tax Problems.
When you or your business is faced with tax problems it is a good idea to consider hiring a professional to help you navigate through the complex tax laws and procedures. The problem is often finding the representative that is right for you. Questions you may have include: Should I hire an accountant or lawyer? Do I need a local representative or does it matter where the person is based? What is the lawyer’s/accountant’s reputation?
As a lawyer myself, I will answer these questions in typical lawyer fashion: “It depends.”
First and foremost, you should choose a representative that is right for you. The personal relationship that you form with a representative is one of the most valuable criteria for hiring someone. It is important that both the representative and client trust one another, be on the same page as to the desired resolution of the problems and agree on the way to approach the IRS.
Accountant or Lawyer.
Generally, both accountants and lawyers are permitted to practice before the IRS. This means that either may help you in handling a tax audit, appeals of audit findings and tax collection matters. However, subject to certain exceptions, only lawyers can represent a client in court. Therefore, when making a decision on whom to hire, consider how far you are willing (or can afford) to push a case to get the resolution you are looking for. In moving through the process, having a lawyer involved will increase the risk to the IRS that litigation will actually occur. This may encourage a more favorable settlement. Further, if you think you will need the protection of the “Attorney – Client Privilege” while pursuing your case, you may want a lawyer instead of an accountant.
Do You Need a Local Representative.
In days gone by (before the IRS Restructuring and Reform Act of 1998 ) most tax related issues were handled by local IRS offices. The Restructuring Act, however, changed a lot of this by centralizing certain functions in different regions of the country. As such, local representation is less relevant than it used to be. Due to these landscape changes much of the work can easily be managed through conference calls and correspondence.
Knowledge and Reputation.
Of course, when choosing a representative to help you with your tax problems, you want to be sure that he or she has both the knowledge and reputation that can help you. Investigate the person to find out more about who you will be dealing with. If you are reading this post, you are likely already using the internet as a tool to find out more.
Most representatives will have a website. While informative, don’t rest completely on the representations made on that website. The website will list the accomplishments of the attorney/accountant and provide information on their skill set. Start here to find out if the person can do for you what you need. But don’t stop here.
Find out if the prospective representative has a blog. If so, spend some time reading through the blog to see if you are impressed with their knowledge of the tax laws and procedures. If so, this may be the right representative for you.
Use search engines to find out what you can about the representative’s reputation. While you won’t find a website called “here is a list of representatives and what the IRS thinks of them,” you will be able to find out whether the representative has written scholarly articles in industry magazines or business journals. This may be the best way to find out about one’s reputation. If a reputable journal will publish their work, there is a greater likelihood that the author has a good reputation.
Be mindful however, that specific and direct recommendations for a particular representative will likely be hard to come by. Most people don’t want to broadcast to the world that they or their business has had tax troubles.
The Ultimate Goal.
Ultimately, the goal is to find someone that is right for you. When doing so, consider the points made above. At the end of the day, you want to be comfortable with your choice and have confidence that you have hired the right person for the job.
Rob Teuber is an attorney with the law firm Weiss Berzowski Brady LLP and author of the tax law blog www.federaltaxlawforum.com.
10 things
Below is a list of 10 practices that you should run-through, and 10 practices you should avoid. In an effort to get this information out to my readers, I have taken this list and edited it to where from my outlook as owner of a small business accounting firm with our knowledge and experience makes a better working sense. Working on your business can be a challenging task if you are unprepared. Please keep in mind that I have edited this for my readers, my clients, and my own commercialism.
10 things you should be doing
- Even if it’s likely you’re not going to be managing most of the financial aspects of your business, learn basic accounting concepts yourself, such as what a profit and loss statement is, what a balance sheet is, and what a cash flow statement is, just so that you’re in the know. As the owner, you need to know why and how things flow the way they do.
- Hire a small business accountant who is going to be familiar with your industry to manage the financial assets of your business. If you are starting your own pluming business and your accountant doesn’t know how to turn a faucet on anything else about the plumbing industry, find one that does.
- All Accountants will offer programs that can certainly help you do your job better, find out which ones work best for you, and then use them. Make an informed decision on the services you engage and the products you use.
- Update cash flow control spreadsheets at least once a month, but preferably at least weekly.
- You should have internal controls in place whereby you know that your business has received all of the income you have coming. If you don’t know how to do this yourself, hire someone who is a small business accounting professional to help you.
- When you first start, your business, it is likely to be small; because of that, you can probably manage your own bookkeeping tasks (QuickBooks Pro and Premier Conveniently come in Download Versions and are Easily Upgradable. Buy Now and Save up to 20%!). (see number one in this list) Do this if you can so that you can learn how bookkeeping works, and how to manage the finances of your business (please note, as you grow, you may/will have to turn these tasks over to someone else later).
- Prepare financial statements at monthly:
- Income statement
- Owner’s equity statement
- Balance sheet
- Statement of cash flows
- Reconcile your bank account immediately when your monthly bank statement is received. Bank reconciliations are extremely important. Unfortunately, many small business owners do not realize this, because they do not even reconcile their own personal checking account. They just figure they can look on line for a balance and as long as there is money in the account, they are fine. The issue is, bank reconciliations are a must because they are the final way to be sure all entries are made into your books and that there are not any double entries.
- Keep business and financial records separate, and don’t intermingle the two.
- Outsource your payroll and payroll accounting to a payroll service provider. (On-line payroll service provider, this is a less expensive choice.)
Top 10 “should not”
- Don’t brag or over-inflate your numbers; be modest about your sales projections, and don’t underestimate what expenses are going to be.
- Never put your personal and business assets together.
- Don’t hand over control; make sure you retain the authority to assign all of your checks, and DON’T delegate this job to someone else.
- Don’t touch money that’s been withheld for tax purposes like payroll or sales tax and use it for anything else — even if you’ve got an “emergency.”
- Never pay an invoice without matching it to your purchase order.
- Don’t have someone else do cash flow projections analysis for you.
- Don’t hire a small business accountant and/or a lawyer to help you with financial matters, only to ignore their advice. They are trained and experience in what they do. Yes they make a mistake or two. You pay them good money; listen to what have to tell you.
- Verbal agreements are fine, but get everything in writing, too — including purchases.
- Never assign to others your relationship with your lending sources.
- Don’t wait to establish credit resources when you need financing. Instead, do it well in advance.
Okay some good advice that has been around the internet awhile. Remember while you work in your business you will need to also work on your business.
The Income Statement (Profit & Loss) Part 1
The Income Statement is one of the three main financial statements. (The other two being the Balance Sheet and Cash Flow Statement.) The important thing to remember about an income statement is that it represents a period of time. As opposed to the balance sheet, which represents a single moment in time.
The income statement is sometimes referred to as the profit and loss statement (P&L), statement of operations, or statement of income. In QuickBooks it is the P & L.
This financial statement indicates changes in the financial position of the business for a particular period of time, i.e. month, quarter or year. The portion of the income statement that deals with operating items is interesting to investors and analysts alike because this section discloses information about revenues and expenses that are a direct result of the regular business operations. The non-operating items section discloses revenue and expense information about activities that are not tied directly to a company’s regular operations. For example, if the sport equipment company sold a factory and some old plant equipment, then this information would be in the non-operating items section.
An Income Statement is related with the Balance Sheet in the terms of net result for the period, i.e. profit or loss for the period from this financial statement goes to the Balance Sheet as an increase or decrease in Retained Earnings (result not distributed to the shareholders as dividends).
The Items Included in
Considering the structure of Income Statement, it is important that this statement indicates not only net result for the period, but also fundamental parts, which make this result. So this statement will include the following:
Revenue:
amounts earned for the goods sold or services provided
Cost of Sales:
cost of goods sold or services provided. In case only goods are being sold, this items will be called Cost of Goods Sold. Here all the cost which are directly related to the revenues earned are included
Gross Profit:
difference between two mentioned items, which indicate how much business earns from the main operations
Operating Expenses:
this items consists of the expenses which cannot be directly related to the cost of goods sold or services provided. Examples can be salaries of accountants, administrative office space rent and other
Operating Profit:
difference between Gross Profit and Operating Expenses
Interest Expenses:
these expenses are shown separately to indicate financial costs the business incurs and whether it earns sufficient profit to be able to pay interest on time
Net Profit (Loss):
this is the net result for the period. If it is positive, we have a profit. If it is negative, we have a loss.
Important to notice, that the Income Statement is usually prepared on the accrual basis, i.e. income and related expenses are recognized despite the fact that cash was not yet paid or received, but based on the obligation from customers to pay for goods sold or services provided and based on the obligation of the business to pay its liabilities.
It is very important to format an income statement so that it is appropriate to the business being conducted.
Income statements, along with balance sheets, are the most basic elements required by potential lenders, such as banks, investors, and vendors. They will use the financial reporting contained therein to determine credit limits
It may look like this:
A little Professionalism, if you please.
Earlier this past week I noticed a post(1) from a blogging colleague. I mention this as although his said intentions were set and designed to inform taxpayers, I found not only a few things wrong with the post, but also felt like the post was an attack. The attack was not to just a good blogging friend and colleague, but to other such professionals as well. Moreover, I am not just referring to tax professionals.
Please, let me explain better.
There has been an ongoing, somewhat group, discussion about the pending and upcoming regulation of tax preparers. In the post referenced above it is clear that the subject is surrounding this topic.
It is clearly pointed out “Although these tax preparers may in some cases be quite competent. . . in the author’s own right, he continues with “. . . the fact is (the highlight is mine) they are unregulated and not answerable to a direct regulatory authority or held to an objectively determined set of standards.”
I argue this. I argued this point a while back and do so still today.
I have written many posts, and a series of posts and guest post, covering the topic at hand, hiring a competent professional preparer. (2) However, taxpayers, we are finding, still manage to find those preparers who, well for the sake of not having a longer post than necessary, are plain unworthy.
However, let us back up a bit. First, to be clear, what/who that is being discussed, is what the IRS classifies as an “unenrolled tax preparer”. (Defined below)
Now then, let us correct the highlighted statement above. It says clearly, “. . . they are unregulated and not answerable to a direct regulatory authority or held to an objectively determined set of standards.”
Yes they are.
Let me say that more informatively, quoting from IRS Publication 470 Limited Practice Without Enrollment:
First lets understand what IRS Publication 470 is:
“The purpose of this revenue procedure is to prescribe the standards of conduct, the scope of authority, and the circumstances and conditions under which an individual preparer of tax returns may exercise, without enrollment, the privilege of limited practice as a taxpayer’s representative before the Internal Revenue Service, pursuant to section 10.7(a)(7) of Treasury Department Circular No. 230”
Okay as I read the above, IRS pub 470, and revenue procedure 81-38 has a purpose. This purpose – to “prescribe the standards of conduct, the scope of authority, and the circumstances and conditions under which an individual preparer of tax returns may exercise, without enrollment” By all rights, that should end the argument there, but no, let’s keep going.
For a moment lets go back to our highlight, is says unenrolled preparers are unregulated. Since definitions are important –by way of Merriam-Webster Dictionary
Regulated means:
1 a : to govern or direct according to rule
b (1) : to bring under the control of law or constituted authority (2) : to make regulations for or 2 : to bring order, method, or uniformity to
So unregulated would be the opposite of the above quote box, accurate?
If I put this all together, I see that according to this IRS publication, Unenrolled prepares are regulated by the IRS as prescribed within Publication 470. Therefore, to say they are not is, well, not accurate.
Surely, we can all agree that the IRS is a regulatory authority. Humm, I would think yes.
Thus, one may conclude that the IRS is the regulatory authority over all unenrolled preparers. Yes?
“Sec. 3. Applicability.01 This revenue procedure, issued pursuant to section 10.7(a)(7) of Circular 230, applies to all unenrolled individual preparers of returns who seek to represent taxpayers, within the United States, before examining officers in the Examination Division of an Office of a District Director of Internal Revenue or in the Office of International Operations.”
Clearly, this publication applies to all unenrolled preparers.
“.02 This revenue procedure does not apply to attorneys, certified public accountants, or agents who are enrolled to practice before the Internal Revenue Service. The rules governing the practice of such persons before the Service are contained in the provisions of Circular 230.”
Clearly this publication does not apply to attorneys, certified public accountants, or agents who are enrolled to practice before the IRS.
So now we know what this publication is for and who it is for.
Okay, so if you turn to page 2 of this publication, Section 7 is titled, Ethics and conduct. But wait according the post (1) unenrolled preparers have no such guidance.
Sec. 7. Ethics and Conduct .01 An unenrolled preparer shall act in such manner as not to commit any act of disreputable conduct. Disreputable conduct includes, but is not limited to, the items contained in section 10.51 of Circular 230.
Wow, unenrolled prepares are held to the same ethics and standards of conduct as all those who are regulated by Circular 230 Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, Enrolled Retirement Plan Agents, and Appraisers before the Internal Revenue Service.
My point here? Well, the post that questions unenrolled prepares does so with the premise that unenrolled preparers are not “held to an objectively determined set of standards.”
Although IRS Publication 470 Limited Practice Without Enrollment is out dated and needs to be updated, the premise of what it states is clear, within this publication are the rules and guidelines for which unenrolled preparers are being held to an objectively determined set of standards.
And within that document, if one is truly in the know about IRS rules and regulations, they know unenrolled prepares are held to the same high standards in Circular 230 as those for whom it was written for, prepares of tax returns.
When I first read the post, I asked the author, “Are you Serious?” The response: “I am dead serious. What part of what I wrote do you disagree with?” Well, I think above I covered much of what I disagree with. He continued with “What is your definition of a “profession?” Now in the post, he defines this for us by way of Merriam-Webster Dictionary:
1 a : of, relating to, or characteristic of a profession b : engaged in one of the learned professions c (1) : characterized by or conforming to the technical or ethical standards of a profession (2) : exhibiting a courteous, conscientious, and generally businesslike manner in the workplace.
Lets add his other definition:
Investor Words.Com defines profession as, – An occupation, especially one which requires an advanced education.
A profession is indeed an occupation. A professional then would be one who held an advanced knowledge of his/her profession. Yes?
Now here is where he and I will bump heads so to speak. Could the forklift operator of 30 plus years be a professional, because he does his/her job, proficiently? He/she may have been trained, yet he/she may have many years of experience doing this job. If experience were the best teacher, would not years of doing the same thing repeatedly, at some point, make him/her a professional fork truck operator?
My colleague says no. “The reason for this is simple and obvious: No impartial third party regulatory body has determined his core competence.” Really? What of the dancer, the actor, or musician and comic? So what of the landscaper? What of the carpet cleaner? Are they truly not professionals because no “impartial third party regulatory body has determined there core competence”? Not the same thing? I beg to differ, it is. These are all professions, and they all are called professionals.
By what he is saying, Paul McCartney is not a professional. Disagree? Then please point out for us what impartial third party regulatory body has determined his core competence in music. Remember he says “impartial”
Going back to Merriam-Webster Dictionary:
impartial – not partial or biased : treating or affecting all equally
Sadly, I fear my colleague sees only white-collar professions, by the definitions that are posted on his site.
Yet my biggest problem of all, this post drags a good friend and colleague, down to mist of the idiots. He will not see this and that is fine.
My grandmother is very much as he is, really the only difference in the two, is she is over 90. I have to wonder then if he, like her, believes that one should not wear black all the time.
She told me once that professionals do not wear black all the time, in her mind only convicts and truck drivers wear black all the time. That very same year Jeff Goldblum (a professional actor), in an article voiced that he always wears black.
Hummm that story should be for another time.
Anyway, I felt obligated to share the post with my friend. In turn he wrote “I AM A PROFESSIONAL!”
And in good debate-like a lawyer form, this post was written Professionalism: The Cafone’s Rebuttal.
For which I asked him, “Was this really necessary?” referring to did he really truly feel he needed to continue the professional insult to our colleague, my friend.
The reply:
\”Bruce, I suppose nothing I write is \”necessary.\” But I thought it was appropriate given the recent proposals by the IRS to regulate unlicensed tax preparers.
And in response to your email, I didn’t personally attack anyone. You and Robert, more than anyone else should want IRS regulation of preparers so you can differentiate yourself from all the shmucks’ out there who call themselves tax pros. I never once said or implied that Robert or you are NOT excellent tax preparers. After reading your blogs, I’d refer clients to you myself.rt, more than anyone else should want IRS regulation of preparers so you can differentiate yourself from all the shmucks out there who call themselves tax pros. I never once said or implied that Robert or you are NOT excellent tax preparers. After reading your blogs, I’d refer clients to you myself.\”
I politely thanked him for any referrals sent my way and left it at that other to let him know I would be writing this post. (This can be seen on my facebook page)
Before I was able to get this post out, two more post were published. Profession Defined is a post that in a clearer manner, explains or defines the word “profession”. Then this, Beware the Unlicensed Preparer.
Sadly, I found this in poor taste. Believe what you will about “the unregulated or unenrolled preparer”.
Try this:
I challenge any attorney, tax or otherwise, CPA, EA, or what have you, whom are clearly defined in Circular 230 and not living in California, Oregon, Maryland and New York (After 01/01/2010), or other such States – show me your license to prepare tax returns.
Well?
Humm.
I wonder, if you are following the words being said;
“IRS Commissioner Doug Shulman says the agency is working on a series of recommendations that are meant to increase taxpayer compliance and improve the work of tax preparers. Those recommendations may include a call for all paid tax preparers to be licensed in the hopes of “reducing mistakes and combating fraud.”
That includes everyone, CPAs, Attorneys, EAs, and unenrolled preparers alike. Then at that point, those who will be licensed will be all of it. Meaning, the unenrolled preparer is going to be added to the list of folks who “are” allowed to represent taxpayers100%.
Or is that why some of you are so defensive and abrasive to those who are unenrolled? Your pissed because not only will you, the Tax Attorney, or you, the CPA, or you, the EA may have to get a license (maybe, the ground rules are still not set), but you’ll no longer have the market on representation of taxpayers before the IRS.
News flash, monopolies are illegal. Taxpayers need to know the truth about the misconceptions within those ranks. Others are just as / can be as capable of taking the tax classes being held at those reputable universities. Earning CPE in taxation, and as pointed out, ethics.
Aside from the required CPE that Attorneys and CPAs are required to take, there are only a few true differences between what they can do and what an unenrolled preparer cannot.
I would also point out that the Attorney isn’t required to take CPE in taxation. The CPA isn’t required to have taxation CPE. The only ones in the IRS group of specialist that are required to take CPE in taxation are, EA’s.
For those of you in those ranks whom I have or may have or may later offend, I am not a part of your click, been there done that, unimpressed.
Don’t like it?
FO!
Learn to be civil.
(2) Choosing a preparer – this link will take you to post that appear here (this blog) covering this. There are 24 in all.
Reference material:
-
Publication 4019 page two. It is not a list per say but will show plainly the “differences” of form 2848 and form 8821.
Definitions:
- unenrolled tax preparers – An individual who prepares and signs a tax return as the preparer, or who prepares a tax return but is not required to sign the tax return.
- Practice before the Internal Revenue Service – comprehends all matters connected with a presentation to the Internal Revenue Service or any of its officers or employees relating to a taxpayer’s rights, privileges, or liabilities under laws or regulations administered by the Internal Revenue Service. Such presentations include, but are not limited to, preparing and filing documents, corresponding and communicating with the Internal Revenue Service, rendering written advice with respect to any entity, transaction plan or arrangement, or other plan or arrangement having a potential for tax avoidance or evasion, and representing a client at conferences, hearings and meetings.
Passing the week
Last week I got a few letters complaining that I wrote a post instead of doing my end of the week re-cap. Guess I won’t do that again.
This past week has been a bit busy in my office with several new clients and their related issues. I haven’t done a lot of surfing this week but let’s go. . .
First, one of my new clients is an inventor and I want to share with you his biz. For those of you who take your biz to clients (or they come to you) this is something you need.
For years, I have toyed with the idea about going out to clients and this device is pushing my idea along. Please visit USB Swiper .com.
My post History/Origin of piggy banks has gotten great reviews so I wanted to bing up that it is there.
In this weeks WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – post from The Wondering Tax Pro he writes:
” * When I discover a new tax or related blogger one of the first things I do is to check out their various blogrolls to look for more new tax or related blogs. That is how I came across STUFF ACCOUNTANTS LIKE by pfi and the post “Acronyms, What are Your Favorites?”.
I have always been a big user of acronyms. Clients and readers of TWTP are aware that GDE is God Damned Extensions and that the “clean” version of DFB is Damned Fool Bureaucrats.
I checked through the 92 comments to the post for some new ones. Here are some I liked –
CRAP – Conveniently Rationalized Accounting PrinciplesCPA – Cut and Paste Artist (I always thought CPA stood for Constant Pain in the Arse)
JFDI – Just F**king Do ItSWAG: Scientific Wild Ass Guess
DILLIGAF- Does It Look Like I Give A F**k (I expect I will be using this a lot in the future)
WITTB – What it takes to balance.
I was glad to see others used WTF (2 related meanings – I used it above) and FUBAR.”
This is great, and I can assure all that I’ll be using several of the acronyms from the post. {In my office SNU is a regular occurrence.}
50 Actions You Can Take Right Now to Pay Off Debt is a post from a site I found via my intro to Blog Rank. from Invesp Consulting. ( I wrote about this earlier in the month in my post New Blog ranking). The blog is called Consumerism Commentary: (It is a PF blog.) It is indeed worth the read. While you are there be sure to check out some of the previous post.
Here is a list of other great post from my favorite bloggers:
- From No Debt Plan
- From Living Almost Large
- From Don’t Mess With Taxes
- From Cash Money Life
- From Saving to Inve$t
- From IRS – Hitman
- From Roth & Company, P.C.
- From Tax Policy Blog
- From TaxDollarsAndSense – yes they are from a while back, read ‘em anyway.
- From The Tax CPA
- From The Tax Lawyer’s Blog
- From The Wandering Tax Pro
- From Tick Marks
Please keep in mind that this list is not an order of favorites, nor is it all-inclusive. I visit a great number of sites/blogs, tax and Personal Finance.
Dear student of accounting
I am passing on “Passing the week” this week so that I may speak my mind to a comment from an accounting student.
A new blogger to the world of tax blogs also has another blog titled Confessions of a CPA. In her recent post, Accountant’s Got Talent she addresses a readers comment to her post America Thinks It’s Got Talent. (The reader is a student of accounting.)
This post is addressed to that student and others who feel the same way.
To the accounting student who is concerned that you may not have the talent or skill required to actually be successful as a working “Accountant”.
Balderdash!
Listen to Monica, she speaks very wisely. I wish I had heard the words she has spoken to you.
- Maximize your strengths
- Learn to minimize your weaknesses.
- Find an area in accounting that interests you
- Network (in person or online) with people who share your professional interests
- Never stop learning
With great emphasis on the last, never stop learning.
A few other notes:
If you are a junior or senior accounting student, you are almost certainly contemplating your work options after graduation. Before interviewing with prospective employers, ask yourself the following questions:
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(1) Do I want to work with a small, local firm or a large national firm? And more specifically, do I want a clear, fast path to advancement, or am I willing to wait awhile, until a path opens up?
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(2) Do I prefer a regular, nine-to-five workday, or am I willing to work additional overtime and weekends on a normal basis?
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(3) Do I prefer to do more mundane, yet essential tasks, or do I want diverse and complicated assignments?
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(4) Do I prefer an “easygoing” office environment or would I be able to handle an “intense” one?
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(5) Do I prefer to work at the same office location all the time or am I willing to travel regularly?
Be honest with yourself when answering these questions. To be paid well but to be unhappy with your job is a mistake.
What can you expect when you walk through the doors for your first day is before you go directly to work, you will need information – and it doesn’t just come from a book!
You may have to access the computer, acquire source documents, run reports, and do research in books, periodicals, journals, and other secondary sources.
Beyond that, you may need to interview the people you work with for valuable information.
Key Areas for Accounting Careers
- Audit: Audit is at the core of accounting work.
- Budget Analysis: develops and manages an organization’s financial plans.
- Financial: Financial accountants draw information from the general ledgers to prepare financial statements. They also take part in the business’s important financial decisions involving mergers and acquisitions, employee benefits planning and long-term financial projections.
- Management Accounting: work in companies and contribute to decisions about capital budgeting and business analysis.
- Tax: corporate and/or personal income tax statements. They also prepare strategies for deferring taxes, when to expense items, how to approach a merger or acquisition, etc. You need to have a thorough understanding of economics and the tax code.
Finally, please understand -
Accounting is – the study of how businesses track their income and assets over time.
Accountants engage in a wide variety of activities besides preparing financial statements and recording business not to mention there’s a lot to get out of an accounting position. Most importantly perhaps, you will learn how business works.
To me an accounting job offers stimulating and challenging work that is constantly evolving. Because accountants spend a lot of time looking under the hoods of businesses they really learn the nuts and bolts of business.
It’s also worth bearing in mind that accountants are in continuing short supply. Accounting jobs are plentiful even in this current weak economy.
Remember – taxes, audits, and bookkeeping will always need to be done.
A personal story:
I would like to point out a story of a young man whose grades were so high in his accounting studies he was approached by several local accounting firms, including the Largest National firm in the country.
In his eagerness to please family members he chose the road to greatness, accepted the offer from the big National Corporation. First internship, then a full time position right out of college. (His head was so swollen he barely fit through the doors but managed.)
The first year of his employee, he’d been passed around to a great many departments. He tried desperately to keep up with others in the office in every department, those who have been around. Only to be frustrated, time and time again. He had done so well in school, yet here he was unknowing and inexperienced in the workings of real life of accounting.
Ready to quit, he approached his “lead” to express his concerns. She told him, that in the past year they had been trying to evaluate where his strengths were. He had worked so hard to keep up with every task they thrown at him they had no clue where to place him. They were looking to find an area of accounting where he fit. Something he enjoyed something that he excelled in over other areas. AP, AR, Audits, Corporation areas, payroll, just everywhere.
After a very long meeting with his “lead” and a few of the various partners, he was placed in “Individual Taxation”. And this worked out for him to a point, until he realized that he wasn’t happy in a corporate environment.
At this point he had lost his way, wondering about the time he’d spent in school, was it worth it. For several years, he learned and attempted other lines of work but remained unhappy with the choices. He got back into the accounting field but in an office that was much different from that of the major accounting firm.
He enjoyed this place very much but was crowded by the owner who held his problems on his sleeves and his knowledge on those who worked for him.
Eventually he learned that he could do things better on his own. He took the CPA exam and passed wonderfully. Open his own accounting business and went to work. Having his CPA license he received business a plenty. Just not the kind he enjoyed until January rolled around. When the end of April hit he was very disappointed.
You see, his heart and happiness came only in that while doing tax work. His strength was in the preparation of tax returns for individuals. Those around him noticed that he was happiest when deal with tax issues.
From this, he learned and ventured into the specialization of Individual tax preparation. In this he is prospering well.
What does all this have to do with you? If you don’t know – read the top part again.
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