For many of us, just the thought of financial record keeping, budgets or tax returns, gives a chill up our spine. But the truth is, a lack of proper financial management within an operation can lead to un-informed decision making and your bottom line can take a real hit.

I was recently surprised to meet business people who still use the “shoebox” method of financial management. You know, take one or more shoeboxes, fill them with all of your operation’s receipts, check stubs, and invoices, etc. At the end of the year bring them to your accountant and await your completed tax return. While this method satisfies Uncle Sam, it does nothing to help you track your operation’s profitability, efficiencies, or the true financial picture of your operation. Wouldn’t it be great to know how profitable each business segment really is? If you are like most businesses, you probably have more than one enterprise within your operation. Is one of those entities weighing down your whole operations net profits?

With just a couple clicks of a mouse and easy-to-use accounting software, you can generate information that concerns every aspect of your operation. When it comes to using financial management software, by entering your data once, the ability to analyze data and generate in-depth reporting is limitless. You can personalize your reports, profit centers, accounts, inventories and track data specific to your operation or its entities. I know you’re asking yourself, “Why would I want to use financial management software? My shoebox has fulfilled all of my needs?”

You likely work with a banker, an accountant, consultant, family members, and let’s not forget the government. Like it or not each of these are partners in your operation and reporting to them requires some element of financial record keeping. Financial accounting software can provide unlimited analysis to those members in your operation. For instance:

• When you decide to make a major purchase for your operation, most often that requires a visit with your banker to take out a loan or a draw from your line of credit. You may be your banker’s top client or even dearest friend; you will still be required to produce a financial statement or balance sheet.
• How about that accountant? If you’re currently using the “shoebox accounting” system, at best your accountant can give you the basics: a 1040, or cash accounting information within your general ledger, etc. However, by utilizing a computer and accounting software, you can find out so much more about the elements of your operation.
• Is your operation run by you and members of your family? Nothing can be more rewarding than running a family-owned operation providing everyone is on the same page and in agreement on all aspects of the operation. If you and your family members have a hard time making decisions regarding the operation, chances are there are personal feelings involved in the decision making and the process can be more personal rather than business oriented. When you have your operation’s finances on the computer and you can access current and historical data to analyze where the strengths and weaknesses are within the operation, it will help take the personal element out of the process and sets the tone for better business decision making.
• One of the responsibilities we all have as individuals and business owners is to pay taxes to the government. The federal and state governments require us to file tax returns as well as pay taxes. Depending on where you live, you may also be responsible for paying a local tax. When you have your financial data on the computer, all of the information you need to file a taxtax return is quickly available.

In today’s competitive market, every business owner should have computerizedrecords. Good financial data gives you the competitive edge and the confidence needed to make the best decisions for your operation’s profitability and efficiency. Decisions that will affect your future and that of your family for years to come. Go ahead; recycle the shoebox, the path to sound financial management is but a mouse click away!

Drilldown is a convenient tool built into most modern accounting and business software programs.

Most of the time you run summary financial reports to evaluate business performance. When reviewing this information oftentimes certain numbers standout as unusual. Other times you just want to see what made up the summary number.

That is where drilldown becomes a very useful tool. Clicking on the row in question will open up either a more detailed report or the actual transaction, keying on the specific data for analyzing the summary number in question. Without this drilldown capability, you would have to open another report and set your parameters to get the detailed information you were looking to analyze.

Another effective use of drilldown is for editing erroneous transactions. For example, in reviewing a daily sales report, you find an entry error. Instead of having to go to an edit utility, find the transaction and edit it, drilldown gives you the capability to click on the report row and edit the transaction.

I do have one word of caution regarding programs that have drilldown capabilities. Report users may need to see certain summary information, but you don’t want them to see sensitive detail data or edit transactions. That is where you want to a select a program that offers security to prevent them from drilling down to information you don’t want them to see.

Direct deposit is a payroll software tool that helps companies save time and money by depositing pay electronically into employee bank accounts. Many businesses are now going a step further and publishing and distributing their company's pay advices electronically instead of printing the pay stub on paper and handing them out or mailing them. Here are some great reasons for you and your business to try publishing pay advices electronically instead of printing them on paper.

1. Easier distribution

   When you publish pay advices, an email notification is sent to employees, and from there they can click on a link to sign in and view their pay information. There is no longer a need to walk around with envelopes and distribute to each employee or pay postage and mail them. Distribution happens as soon as you send the email notifications, saving you the time associated with finding employees and handing them the paper documents, and you save money by cutting out the postage.

2. Reduced paper and ink costs

   Pay advices typically use a sheet of paper and an envelope each. How many envelopes and paper would you save each year by eliminating the need for this paper each pay day? If you have 50 employees and they are paid every two weeks, it amounts to 1,300 envelopes and 1,300 sheets of paper. Help the environment and your bottom line by publishing electronically instead!

3. Easy ongoing employee access to pay information

   Publishing pay advices allows the company to save pay data and make it available to employees, which in turn provides a secure place for employees to access their pay data with just a login name and email address. This saves the HR department time, and also lets employees know there is a central place for them to access their pay data any time they wish.

Using a publish pay advice application can help your company save time and money, and can also keep employees happy.

If you are involved in managing inventory, you are aware of the hassles that can arise due to purchasing issues. Having far too many of an obscure item or running low on a bestseller, are sure clues that you and your company can benefit from a more robust purchasing and inventory management tool. Technology has advanced over the years, such that you no longer need to keep track of purchasing activities on paper. Consider these benefits offered by software programs of today.

Order suggestion

A major benefit of using software is it can easily collect and analyze data, a task that would take an employee much longer to do manually. Look for a purchase order system that can analyze past demand, and suggest which orders need to be placed based on that knowledge. You can then use the report as a starting point, and use your own judgment on which purchase orders to create for which items. A purchase order system should also track who the item has been purchased from in the past and automatically order it from the last vendor and default the cost to the last cost paid for the item. If you aren't ready to make the jump to having the system recommend what should be ordered, look for a system that will allow you to simply enter a list of items that need to be ordered. The system will then assign the vendor and last purchase cost, so the purchase order is quickly and easily generated.

Flexible item ordering

Your business likely has its own set of product numbers that are different from your vendor's part numbers. Since your vendor is typically unfamiliar with your item numbers, it's best to place orders using their numbers. Some purchase order systems allow you to create and print purchase orders using both numbers, which is extremely helpful to you and your vendor. Another flexible purchase order tool is the ability to place orders in multiple units of measure, in case you need to purchase the item in one unit of measure and sell it in a different unit of measure.

Minimum and maximum quantity setup

This handy purchase order tool allows you to set up minimum and maximum amounts by item. This allows you to run a report to see which items are running low and need to be ordered, or which are overstocked and may need to be liquidated.

Drop shipment

Most businesses do receive requests for drop shipments, at least every now and then. If you need to order items and have your supplier ship them directly to your customer, a tool for handling drop shipments is a must. Handling drop shipments means that the system will allow you to specify a ship-to address that is different than your own address. Without this tool you will end up manually entering ship to data which results in wasted time and increased margin for error. This feature is crucial for those who drop ship large quantities of items. It should also allow you to identify the sales order to the purchase order, so that the sales order can automatically be invoiced as soon as the vendor communicates that the order has shipped.

Receive partial orders

As we all know, sometimes the orders we place are not always delivered in full. In these cases, it's helpful to have the choice of whether to receive the partial shipment and keep the rest of the purchase order open, or to simply receive the items and cancel the remainder of the items. Sometimes the vendor will notify you that they have shipped what they have and the remainder of the order will be canceled. A proper purchase order system will include an option that allows the user to cancel the remainder of an order, instead of having to manually cancel each line.

All of these purchase order software tools can help you keep your inventory stocked with the items you need, and lean on those that you don't. They also help you manage purchase orders more efficiently, saving your company time and money.

This post is by Bruce Senti of Aatrix State and Fed Payroll Reports

State and Federal eFiling requirements are mandating more businesses to eFile payroll reports and payments every year.

More than a dozen states either lowered the threshold for employee count requirements or outright mandated that businesses eFile wage withholding, unemployment, and new hire reports.

The federal government requires virtually all employers to make withholding payments electronically.

The efficiencies provided government agencies by requiring eFiling will continue the trend towards requiring business to file reports and payments electronically.

Electronic tax administration is the foundation for a modernized IRS that provides secure, convenient, timely and accurate services to taxpayers, and to the tax professionals and IRS employees who serve them. (IRSOB-E report 2010 page 9)

The full vision for a modern ETA environment goes beyond just e-filing and seeks to make electronic interactions among taxpayers, tax practitioners, and the IRS the norm. These electronic interactions include the entire range of pre-filing, filing, and post-filing tax activities which taxpayers and their representatives may engage in with the IRS, including the ability to resolve taxpayer account issues over the Internet. (IRSOB-E report 2010 page 9)

The Board emphasizes the need to substantially increase the e-file rate, particularly among businesses filing employment tax returns, because it is crucial to the IRS to achieve the strategic 80 percent electronic filing goal. ( IRSOB-E report 2010 page 39)

“It’s good news for taxpayers as well, whether they be commercial or private filers, most experts agree, businesses that utilize e-filing have a 99 percent accuracy rate,” said David Deeter of Frazier & Deeter LLC.
Source: E-filing Hits Record High | Atlanta Business Chronicle

It is clear that the movement towards electronic filing is more than a trend. It is inevitable that virtually all reporting to taxing authorities will be electronic.

What to look for when choosing an eFiling solution.

With more and more agencies providing an eFile portal online which allows businesses to file reports electronically for free, you may wonder why would an efiling solution have any appeal.

You should look for a solution that has dramatic advantages over the use of the agency sites.

Simplicity

• The interface is very simple. Choose any form from one screen, review/edit onscreen, and simple steps to eFile
• One administrative account to track all confirmations, filings, and payments

Efficient

• eFiling is completed within the payroll solution without additional exports, typing, and logging into multiple sites
• Reports are filled in automatically with no need for manually transcribing
• Reports are time-stamped and saved on your machine and accessible anytime for review or audit

Accurate

• Reports are completed using the data within the payroll solution you use
• The solution must guarantee compliance with all legislation, eFile requirements, and form changes.

Affordable

• The solution should be offered as a subscription service which covers all your filing requirements for a single price. It should include all state and federal agencies you file with.
• It should offer a W-2 eFiling service which allows you to complete all filings as well as employee distribution for less than $4 per employee (the average in-house cost).

eFiling More Than a Trend...

Electronic filing is not going away. In fact, it is the future for virtually all business activity. State and federal agencies are being legislatively and budgetary driven to take advantage of the efficiencies and cost savings eFiling affords them. Take great care in choosing a solution that meets all your needs and has the ability to grow and meet your future needs.