Bookkeeping vs. Accounting: What’s the Difference?

Aristotle once quoted, “The whole is greater than the sum of its parts”. This quote speaks of synergy, the interaction or cooperation of two or more parties that produce a combined effect greater than the sum of their individual effects. In context of small business accounting, this saying holds true.

Small business owners often find themselves handling the accounting function on top of everything else that is important to operating a business. Some hire a bookkeeper to assist with the day to day recording of cash receipts and disbursements to alleviate the burden of financial record keeping, while others may look towards hiring an accountant to oversee and verify the accounting data.

A bookkeeper and an accountant both play a crucial role in establishing a strong and reliable accounting environment for your small business. The key difference between a bookkeeper and an accountant is that bookkeepers simply record in sequential order the daily transactions of a business, while accountants take this information a step further and verify and analyze this data into meaningful financial reports that small business owners can use to make sound business decisions as well as communicate business operations to key stakeholders.

Bookkeepers must ensure that all transactions are accurately and timely recorded into the accounting system. Accountants must ensure that all data entered into the accounting system provides a true picture of the financial health of the business. In order to enhance the individual efforts of the bookkeeper and accountant, your small business needs a skilled professional to properly interpret your accounting information and bring valuable insight to your business.

At CFO Your Way, we are a group of experienced professionals who can offer you a cost-effective solution that will make the whole greater than the sum of its parts. CFO Your Way enables your business to have a financial professional on your management team at your fingertips without having them in your office. We provide financial expertise to many of northern New Jersey’s fast-growing companies, tailoring our services to best suit your needs.

What can QuickBooks do for my business?

Jack be nimble, Jack be…QuickBooks?

Undoubtedly, QuickBooks is the most widely used accounting software among small businesses, but are you maximizing its potential? As an acclaimed small business accounting software, QuickBooks has tremendous functionality and features which can help business owners effectively and efficiently manage their business. QuickBooks is available in both desktop and online versions. With the aid of various online and mobile apps, QuickBooks can transform your business when used properly. It can also streamline bookkeeping and back office work by:

  • Alleviating redundant manual data entry through automatic transaction downloads from your bank or credit card company
  • Streamlining reporting through scheduling routine financial reports to be run automatically
  • Making creation of invoices fast and easy to email to customers to enhance cash inflow
  • Reducing paperwork through use of electronic data transmission that allows you to attach electronic invoices and/or receipts to transaction detail
  • Offering automatic backup of QuickBooks files with advanced security features to ensure all information is safe and secure

While it can do this and much more, it is critical that you have the right people using this amazing business tool. The best way to ensure you are maximizing QuickBooks’ potential is to have an experienced professional at your side to help guide you through the accounting process and provide you with meaningful financial reports to operate your business at its best. CFO Your Way is that experienced professional.

At CFO Your Way, we know it can be challenging for a small business to introduce new technology and gain a full understanding of its usefulness; that is why we make it our focus to help small businesses overcome these obstacles by assisting with their bookkeeping and accounting needs while also providing them with expert management advice.

As a virtual CFO, we work with small businesses in Northern New Jersey to lend a hand in organizing small-business finances through the use of QuickBooks – online or desktop versions and are happy to train on QuickBooks and other accounting processes to ensure the most efficient and effective use of your employee(s).

Working with a virtual CFO gives your business the benefit of having a financial professional managing your accounting and financial reporting needs and providing you the necessary reports to make well informed business decisions. We tailor our services to best suit your needs, that’s why we pride ourselves with our name CFO Your Way.

Contact us today for a consultation to discuss your business needs at 973-580-9175 or email Cheryl Mucha at Cheryl@cfoyourway.com.

Get Real with Your Real Estate Business by Hiring a Virtual CFO

Real estate investment and management companies face a myriad of issues unique to the industry. Real estate investors and property owners need to have an understanding of where to place their financing, how to maximize the value of properties in their portfolio, and what to do with legacy assets that they may have “inherited.”download

A virtual CFO can help real estate companies get real about their business by:

  • Assisting in raising funds (debt and equity) at the lowest cost possible. To this end, a CFO should have a robust network of investment and banking contacts to be able to raise funds quickly when they are needed … and be able to produce the financials necessary to go to the lending institution with confidence.
  • Managing resources such as talent, finances and property. This skill is especially important when a company has diverse real estate holdings with varying property values.
  • Overseeing the entire real estate portfolio to ensure that it is running at maximum profitability. By looking at the whole picture and not just pieces of the business, and by providing an in-depth financial analysis and accurate financial reporting, a CFO can help principals determine the financial levers to adjust to capitalize on the business holdings.
  • Serving as a buffer between various stakeholders such as property managers, tenants, contractors and the business owners.
  • Mitigating risk through the right insurance vehicles for your property management or real estate investment firm.
  • Determining the optimal financial mechanisms for the real estate business and the properties it holds. A great CFO can make certain that your current financing has the best terms, which in turn helps to improve cash flow and long-term profitability.
  • Analyzing financial information provided by property managers and generating reports as appropriate for investors. For instance, while tax advantages on current holdings may be decreasing, there may be other financial considerations that can counterbalance these changes.

The hard reality is that a virtual CFO with real estate industry expertise is a vital part of your professional team, there to ensure that the company’s financials are in order and that real estate investments are as profitable as possible. Don’t miss out on an investment or profitability opportunity to optimize your business cash flow. Get real about adding a virtual CFO to your management team!

CFO Your Way knows what to look for to ensure that your real estate portfolio is operating at maximum financial capacity. With more than 25 years of experience in the real estate investing market, we provide the benefit of a financial professional at a fraction of the price of hiring an in-house employee. No need to add to your company’s headcount or take up additional office space when you engage a virtual CFO.

We offer expert advice with financial management, accurate financial reporting, KPI monitoring, and much more. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of business bookkeeping, financial forecasting, and cash flow analysis.

What Makes a Great CFO?

A great Chief Financial Officer (CFO) is like a sports coach. This individual ensures that the organization makes the best use of its resources, plays by the rules and reaches its full potential. A CFO is not simply a skilled accountant. Rather, a great CFO is strategic and not only asks the right questions but can interpret the answers in a way that creates value for the organization. A great CFO has the ability to interpret the company’s financial information with the company’s objectives and strategies in mind, and then share this knowledge with its business owner(s).

In sports it’s called having “skin in the game.” In business, the CFO sits in on management and planning meetings and looks for ways to ensure that the team is playing at its peak.

A great CFO, like an awesome coach, is one that makes a difference. How? By working closely with the business owners or CEO to run the company more efficiently and get it down the field to its business goal.

What does a great CFO do to help the company score? This person:

  • Has a view of the company’s full value chain from customer needs to back-office support to suppliers’ contributions to competitors’ positioning. This line of sight enables the CFO to identify areas that need attention.
  • Considers how financial transactions will be booked. While an accountant tracks financial statements with client-provided data, a strong CFO plans and strategizes how accounting for data in a certain way will impact the company.
  • Understands the company’s key performance indicators (KPIs) and tracks these metrics to determine trends, risks and opportunities.
  • Reviews the issues, weighs the challenges and counsels business owners, suggesting smart strategic moves.
  • Sees the big picture and helps translate financial statements into business plans, budgets and forecasts. A savvy CFO works to maximize the value of the business.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for that knowledgeable, experienced individual who has the financial management insight they need with the flexibility they desire. With CFO Your Way, you can get the benefit of a financial professional at a fraction of the price of hiring an in-house employee, without the headache of additional headcount and office space needs. We’re on your management team—keeping an eye on the business ball through financial management, accurate financial reporting, KPI monitoring, and more—but not necessarily in your office.

Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of business bookkeeping, financial forecasting, cash flow analysis and all the other plays that a great CFO brings to your team.

 

 

Business Benefits of a Virtual CFO

As the chief cook and bottle washer of your company, it’s often hard to get away from the day-to-day details long enough to focus on the company’s long-term prospects. That’s where a virtual CFO comes in. There’s no shame in getting seasoned assistance. In fact, it’s a very smart business move. Even the most experienced entrepreneur can use some help in forecasting their company’s financial future.

What are the benefits of a virtual CFO for small businesses? A virtual CFO can:

  • Think long term. Where does the company want to go and how will it get there? A virtual CFO knows how to keep an organization on track and can offer deep insight on the key drivers of business growth. For instance, they can create a financial forecast and assist with bank negotiations to establish a line of credit.
  • Generate cash flow. By taking on operational processes such as cash flow projections and breakeven analysis, a virtual CFO can ensure that your company’s finances are running smoothly. For example, if sales are up and profits are not, this accounting professional can review your company’s pricing strategy and determine if there is an issue that is hampering profitability.
  • Establish financial systems. A virtual CFO is a financial whiz—an expert in QuickBooks for small businesses, bookkeeping systems and accounting software. And, he/she can work easily with your corporate accountant to make certain that your general ledger takes into consideration budgetary accountability, departmental spending and tax implications so that the financial reporting is on point.
  • Free up the company’s senior leadership to concentrate on their area of expertise. This skillful number cruncher can let you, your managers and staff do what they do best while providing you access to high-level accounting skills on a weekly or monthly basis, depending on your business’ needs.

Bottom line: A virtual CFO is a cost-effective financial resource that results in greater business success.

In addition to giving your company access to small business accounting and bookkeeping services, this individual is a skilled professional who brings a new perspective to your business. You get the benefit of a financial professional managing your books and keeping an eye on your bottom line, at a fraction of the price of hiring an in-house employee—and without the headache of additional payroll or office space needs.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for the financial management expertise they need with the flexibility they desire. With CFO Your Way, we’re on your management team but not necessarily in your office. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of bookkeeping, financial forecasting, cash flow analysis and more.

The Importance of Being Earnest about Bookkeeping

As a small-business owner, you may think it is important to be customer focused.  However, it is just as critical to be finance focused. Small-business owners need to pay attention to bookkeeping and internal, day-to-day accounting functions such as recording expenses, invoicing and deposits. Bookkeeping is vital to properly managing business resources as well as ensuring that the necessary business records are retained for tax and compliance purposes. Paying attention to bookkeeping in earnest will make certain that you avoid costly errors later.

Bookkeeping is like studying; adopting simple, good habits early in the game is key. No, you can’t keep slips of paper in folders or drawers, or store the financial information in your head. You are building a business and you need a professional to help you manage your company’s financial growth and health.

Consider hiring a virtual CFO to help you set up business policies and procedures. This accounting professional can work with you to:

  • Track your expenses. Record as many details as possible regarding expenses, such as the type of expense, suppler/biller, account number, date the invoice was received and amount owed. In many cases, business expenses can translate into tax write offs. However, you can’t write off what you don’t track. A standardized business process or system can help document car mileage, business-related purchases and receipts for business lunches and meetings. Receipts (paper or electronic) can substantiate your expenses in the event of an audit.
  • Record deposits correctly. It’s great if monies are coming into your business; however, you must have an accounting system in place that details where each deposit comes from. This will ensure that you pay tax on income only. Cash infusions from your personal savings or small business loans are not taxable and risk being put in the wrong category if you do not have strong systems established.
  • Set aside funds to pay taxes. Paying tax on income is inevitable. Be sure to set aside monies each month so you don’t get caught short when it is time to pay the taxman.
  • Keep an eye on invoices. Be sure to provide your customer with enough information for them to be able to approve and process your invoice quickly. Note your payment terms; follow up if you do not receive payment within your required time period. Your cash flow depends on it.
  • Plan for major expenses. Growing a business often means an outlay of funds for big expenditures. Anticipating and budgeting for major upgrades in equipment or increases in staffing costs will smooth out your business’ potential cash flow issues.

Bookkeeping can help you achieve and keep long-term goals, smooth out any seasonal cash flow dips, pay your taxes on time and ultimately, improve your profits. If you don’t have a head for numbers, processes or systems, a virtual CFO can be a cost-effective financial resource to help you put these bookkeeping tips into practice. A virtual CFO can give your company access to small business accounting and bookkeeping services and bring a new perspective to your business.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for the financial management expertise they need with the flexibility they desire. These companies get the benefit of a financial professional managing the books and keeping an eye on the bottom line, at a fraction of the price of hiring an in-house employee—and without the headache of additional payroll or office space needs.

CFO Your Way is on your management team but not necessarily in your office. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of bookkeeping, financial forecasting, cash flow analysis and more.

How Your Company Could Benefit from a Virtual CFO

As a business owner or entrepreneur concentrating on growing your business, your main focus is likely to be on managing operations, attracting new customers, and recruiting and retaining talent. Often the company’s finances get overlooked. How would you like to have a virtual CFO working in conjunction with you?

What’s a virtual CFO?

A virtual CFO is a seasoned professional with financial expertise who can facilitate business growth, increase bottom line profits and help interpret financial information. But, rather than working full time in your company in the C-suite, the virtual CFO is a valuable outsourced professional with the financial know-how you need, on an as-needed basis that you determine together.

The ideal virtual CFO has integrity, a big-picture vision of your operation, and the ability to translate data into simple terms that you and your management team can understand and take action on.

The benefits of hiring a virtual CFO:

  • Strong knowledge of all things financial – Ability to help you make informed decisions on the right accounting software package or bookkeeping system.  Can also work knowledgeably with your tax preparer.
  • Insight into the drivers of business growth – Aptitude for cash flow, considerations around budgetary accounting, expenses, and tax implications of reporting revenues. This individual will help manage financial planning, accounting records and reporting as well as assist in determining when to take calculated risks.
  • Access to an experienced and skillful number cruncher – Keeps business on track by establishing a corporate budget that formalizes goals, identifies key performance indicators (KPIs) and sets milestones. Also, the individual can help control expenditures and acquire capital for a low cost.
  • Flexibility to accommodate growing businesses – At the ready to provide financial assistance when business needs dictate. Your virtual CFO is a quick phone call or email away, able to provide expert perspective on the financial implications of any business situation.
  • Cost-effective resource – Hire a virtual CFO at a fraction of the commitment it would be to hire an in-house employee. Savings are realized since there is no need for extra office space, computer equipment, payroll taxes, and benefits.

Many startups and mature companies fail, not because the business concept is poor but rather the execution is lacking, particularly from a financial perspective. Most small, mid-sized and large businesses can benefit from an experienced CFO to ensure that they are on the right track and stay that way.

CFO Your Way offers many of Northern New Jersey’s fastest-growing companies an opportunity to get the financial management expertise they require with the flexibility they want. If you need a virtual CFO to ensure that your business enjoys the benefits of having this professional on your team—but not necessarily in your office—contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs.

 

 

What is a CFO?

An organization is like a ship—the chief executive officer (CEO) is the captain and steers the company towards its goals; while the chief financial officer (CFO) is the rudder who works with the CEO to ensure that the company is financially sound in order to meet its business goals.

In essence, the CFO holds the top finance position in a company and is responsible for the financial affairs of an organization. A CFO is different from an accountant or a person who does bookkeeping. This individual is an accessible advisor, trainer and educator, who serves as an expert resource enabling organizations to make smart business decisions.

The CFO is in charge of the accounting department, budgeting, reporting, audits and financial business practices. All of these duties should be performed with integrity and undertaken in compliance with industry standards. Serving in an advisory role, the CFO will help develop and guide the finance strategy of the company based on market trends, projections, forecasts and in consensus with other senior members of the company.

Some organizations rely on the expertise of a CFO to handle the investments of the company as well. The CFO reports to the CEO and may be a part of the board of directors. For publicly held companies that report out to analysts, the CFO is the key driver and accountable to the Securities and Exchange Commission (SEC).

Small, mid-sized and large businesses can all benefit from an experienced CFO who has knowledge of QuickBooks, accounting principles, and key performance indicators, also known as KPIs. Most CFOs have their CPA certification and are highly skilled liaison to an external accounting partner when it comes time to prepare corporate tax returns.

CFO Duties
Treasury–presenting the company’s financial condition. This includes deciding how to invest the company’s money, taking into consideration risk and liquidity as well as the best mix of debt, equity and internal financing.
Controllership—reporting accurate and timely historical financial information about the company.
Economic strategy—forecasting the company’s financial future by identifying and reporting where the company is most efficient and how it can capitalize on this information.

CFO Your Way offers many of Northern New Jersey’s fastest-growing companies an opportunity to get the CFO management expertise that they require with the flexibility they want. Keeping tabs on your company’s cash flow, budget vs. actual income and expenses, forecasting and planning for the company’s future are all vital aspects of what a virtual CFO can bring to your business, whether based in New Jersey or out of state. After all, by offering “virtual” services, CFO Your Way need not work on your premises, especially given the convenience of Cloud computing.

If you need a CFO to help you ensure that your business only has a smooth sailing, contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation.

Things to Consider When Investing in Real Estate

Is Your Real Estate Portfolio Working for You?

Real estate investments can significantly impact your investment portfolio. However, adding real property is not necessarily an easy task. As with any investment, you need to do your homework and stay on top of your holdings to be sure your portfolio will yield you the best possible return.

Here are a few considerations:

  1. 1.  Make sure you know the market you are looking to invest in. You need to have a good sense of how properties in your market are priced. This is important to know when a good deal is approaching, according to U.S. News and World Report. If you buy at market price, you won’t make a great deal of money. You need to buy when a property is underpriced. In addition, make sure you really understand your investments in terms of geography, population trends and the needs of the community. This will help you determine if it is a viable asset, how long to hold onto it, and when to sell while the iron is hot.
  2. 2.  Rental properties can nicely bolster your portfolio. But they are not as simple as they seem. If you are not experienced with owning rental properties, you need to learn about property management, or hire someone to do it for you. In addition, you need to very carefully vet who you are renting to. Nightmare renters can turn your portfolio into a money pit very quickly.
  3. 3.  Consider a wide variety of real estate investments–commercial, warehouse, office, retail, medical, residential. It is also important for you to understand the level of involvement in each type before you take the plunge. Do your research.
  4. 4.  Carefully inspect your properties periodically. Make capital improvements as necessary. This will not only increase the value of your properties when you decide to sell, but also warrant higher rents.
  5. 5.  If you place financing on the assets in your portfolio, you will be in a better position to leverage your portfolio and expand your holdings.
  6. 6.  You can use a 1031 exchange to your advantage. The 1031 exchange allows investors to dispose of property and reinvest the proceeds in a new property in order to defer taxes that would otherwise need to be paid at the time of sale.
  7. 7.  When making financial decisions, examine your portfolio as a whole, not just each individual investment. Consider eliminating any individual asset that may be dragging the portfolio down.

Do you need help with your real estate portfolio? I can help you understand your real estate needs and make educated investment decisions. Contact CFO Your Way at 973-580-9175 to set up a consultation.

Wrapping up 2015 while planning for 2016

With the start of a new year, take the time to get your business’s financial affairs in order. If you haven’t been keeping track of things like payroll, subcontractors, your 401K or other retirement plan and credit card payments you made that may have tax ramifications, now is the time to look into this information.

W-2s

IRS Form W-2, the Wage and Tax Statement, is due to any employee you have paid wages to between January 1 and December 31, 2015. Besides salary, the form must also include tips, bonuses, sick and vacation payments, to name a few, a worker received. Employees must receive this form by January 31. It is important that as an employer, you make sure your payroll service has all the necessary information before processing for the year.

1099s

These forms must be completed and distributed to any subcontractor, independent contractor, or freelancer who has received more than $600 in payments in 2015. Just as is the case with W-2 forms, these must be given to their recipients by January 31, 2016. Any subcontractor who receives this form should have completed a W-9 form when you contracted with them.

SEP Plans

For those who are self-employed, consider a contribution to a SEP plan.  There are higher contribution limits than a traditional 401K, and you have until the date you file your tax return to make a contribution.

Tax Deductions on Credit Cards

Finally, go through your credit card payments for the year. Some of what you paid on them could be eligible as tax deductions, including payments for medical bills, legal fees, and contributions to charities.

While you’re doing this, prepare for the end of 2016 by setting up files and organizing this information now.

If you need help with financial planning for your business, reach out to me at cheryl@cfoyourway.com. Wishing you all the best for 2016!