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​Hoods Tax &
Accounting Blog


​​​THE INFORMATION IN THIS BLOG IS INTENDED TO PROVIDE GENERALIZED INFORMATION DESIGNED FOR A BROAD SEGMENT OF THE PUBLIC; IT IS NOT PERSONALIZED TAX, INVESTMENT, LEGAL OR OTHER BUSINESS AND PROFESSIONAL ADVICE. YOU SHOULD ALWAYS SEEK THE ASSISTANCE OF A PROFESSIONAL WHO KNOWS YOUR PARTICULAR SITUATION FOR ADVICE ON YOUR TAXES, YOUR INVESTMENTS, THE LAW OR ANY OTHER BUSINESS AND PROFESSIONAL MATTERS THAT AFFECT YOU AND/OR YOUR BUSINESS. ​

Bookkeeping Basics Part III

10/15/2021

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Hello, readers! Welcome back to the Hoods Tax & Accounting blog! We’re delighted to be able to share up-to-date information about taxes, bookkeeping, and accounting—giving you the tools you need to meet your short and long term goals. Whether you’re managing taxes for your small business or wondering how to take advantage of certain tax credits, we’ve got you covered! Our second to last post and the first installment of this ‘Bookkeeping Basics’ series introduced the concept of what bookkeeping is, what it's used for, why it’s important and how to begin. From the old “general ledgers,” which used red and black ink, to ultra-modern digital programs, understanding the basics of bookkeeping is an essential part of running any successful small business. As a precursor for accounting, bookkeeping provides an accurate basis for evaluating the health of your business and planning for financial growth. For these reasons, accurate bookkeeping is paramount. 
 
The first part of this series explained the difference between single-entry and double-entry bookkeeping methods. As well, we went through the various types of accounts (i.e. assets, liabilities, revenues, and expenses), as well as their underlying subtypes (e.x. accounts receivable, utilities expense, interest income, etc.). We gave you a few options as far as setting up your accounts (e.g. Excel spreadsheet vs. digital bookkeeping software) along with their corresponding pros and cons. We explained the difference between a debit (Dr) and a credit (Cr) and trust us, it’s not what you think. Finally, we gave a few best practices tips concerning bookkeeping to keep your books organized and accurate. Therefore, it’s in your best interest to read our first article (if you haven’t already) before delving into this second part!
 
In the second part of this series, we continued our exploration into the world of bookkeeping. We discussed balancing books, preparing financial reports, and a few more best bookkeeping practices. How do you know when you’ve reached the adjusted trial balance? What’s the equation for determining your books are balanced? What’s the difference between a P&L statement and a cash flow sheet? And, how often should you be setting aside time to bookkeep? We answer all of these questions and more in our last article. We highly encourage you to go check out Part II! 
 
Today, we come upon the final installment in our Bookkeeping Basics series. Our aim is to answer the most commonly asked bookkeeping questions. You should leave this series feeling confident in your understanding of bookkeeping principles and ready to pursue bookkeeping yourself (or invest in an experienced professional). If you reach the end of the article and still have questions, reach out to us! Now, without further ado, here’s Part III!
 
Is cash-basis accounting the same as single-entry bookkeeping?
 
Technically, yes. Cash-basis accounting includes recording a single entry for every transaction which includes the making or receiving of a payment. If you read Part I, you’ll recognize this definition as single-entry bookkeeping. This type of bookkeeping is preferable for small-scale businesses with straightforward transactions (i.e. I make the product and you buy the product). Double-entry bookkeeping, in a similar manner, also goes by the name accrual accounting. Accrual accounting includes recording two entries for every transaction even if the transaction does not include making or receiving a payment. This type of bookkeeping is preferable for larger, more complex businesses with multiple forms of transactions (i.e. I make various products and offer store credit and sell products from other businesses.) 
 
Is there a difference between bookkeeping and accounting? Do I need to hire a bookkeeper in addition to an accountant? 
 
There is certainly a difference between accounting and bookkeeping—and a distinct difference at that. Bookkeepers manage the ever-evolving ledgers of their clients. As transactions accrue, further data must be integrated into the bookkeeping system. Bookkeepers must categorize revenue and expenses, generate financial statements, reconcile discrepancies and continuously review the ledger for accuracy. A bookkeeper’s job is never done, and accounting is actually an extension of bookkeeping. Accountants use the financial data and statements generated by bookkeepers to prepare income tax returns and give tax planning advice. This doesn’t mean an accountant and a bookkeeper cannot be the same person. Many small businesses operate with a single individual fulfilling both positions. However, the obligations of each should not be conflated and, should you choose to outsource, you may have to hire both an accountant and a bookkeeper. 
 
(Keep in mind: Hoods Tax & Accounting offers both bookkeeping and accounting services!)
 
I’m still confused about the difference between debits and credits. How do I know which to put in my books? 
 
Simply put, debits and credits are inversely related. This means each debit corresponds to an equal credit and vice versa. In this way, the books remain balanced. Which means you’ll always put both. Remember: the equation which dictates a balanced ledger is Liabilities + Equity = Assets. Which means if any aspect of this equation changes, the other aspects must change as a result. As a rule of thumb, debits increase asset and expense accounts, while decreasing liability, equity, and revenue accounts. While credits increase liability, equity, and revenue accounts, while decreasing asset and expense accounts. Notice how they mirror each other? 
 
What’s the difference between accounts payable and account receivable? 
 
This distinction will only apply if you use a double-entry, or accrual, bookkeeping system. Accounts payable is, as the name suggests, money which needs to be paid. Or, in other words, a liability. This might be an expense purchased on business credit, which will need to be paid off later (and potentially with interest). Accounts receivable, therefore, is money which needs to be paid to your business. Or, in other words, an asset. This might be a customer purchase made on credit, which they will need to pay off later (and potentially with interest). Both accounts payable and accounts receivable are accounts which you can and should record transactions within. 
 
Why should I invest in a professional bookkeeper? Isn’t it cheaper to simply do the bookkeeping myself? 
 
Do you remember eighth grade math? Do you remember “showing your work,” going through all of the right steps, and still arriving at the wrong answer? Bookkeeping can be a bit like eighth grade math sometimes. The purpose of these articles has been to show you bookkeeping isn’t as complicated as it may initially seem, but that doesn’t mean bookkeeping is easy. Minor mistakes or even procrastination can lead to major confusion. Misplaced entries or inaccurate figures can leave you wondering where money went and wasting precious time trying to find it. No small business owner wants to realize they’ve been doing things wrong when payday comes or tax season rolls around. That’s why you should invest in a professional bookkeeper. Who knows? The investment may end up paying for itself in the long run. 
 
You can hire out to a dedicated bookkeeping and accounting firm (like Hoods) or hire an in-house bookkeeper for your business. If you’re certain you would like to bookkeep for yourself but are hesitant about making beginner mistakes, invest instead in a bookkeeping software. At Hoods, we have QuickBooks ProAdvisors who can train you how to use the software for your businesses bookkeeping needs. 
 
What’s the most common bookkeeping error?
 
There are so many… Primarily, failing to track receipts for minor purchases. We understand, these things can slip the mind, but due diligence ensures you’re able to receive the best return come tax season. More generally, business owners tend to take on too much regarding bookkeeping. As previously discussed, it’s better to avoid mistakes and invest in a professional than do things yourself and make grievous errors. Develop your bookkeeping skills over time by working closely with a professional and, when you feel ready, take on the responsibility. This way you cover your bases and save yourself trouble!
 
Thank you for coming along on this bookkeeping journey with us. Again, our aim was to illuminate the entire bookkeeping process and impress upon you the importance of accurate bookkeeping. Whether you’re off to do your own bookkeeping or investing in a professional, we wish you the best of luck! As always, we’re happy to be able to provide you with the most relevant, up-to-date tax information for you and your family. From savings plans to tax credits to business acumen, the Hoods Tax & Accounting blog is your one-stop shop for everything you need. We offer tax preparation, bookkeeping, payroll, and QuickBooks services. If you have any questions or are interested in a consultation, please reach out! We do offer virtual consultations over Zoom, as part of our effort to accommodate everyone in these trying times. We look forward to hearing from you! Until next time, thank you for reading! 

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Bookkeeping Basics: Part 1

9/17/2021

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Hello, readers! Welcome back to the Hoods Tax & Accounting blog! We’re delighted to be able to share up-to-date information about taxes, savings, and financial literacy—giving you the tools you need to meet your short and long term goals. Whether you’re managing taxes for your small business or wondering how to take advantage of certain tax credits, we’ve got you covered! Our previous posts delve into the benefits of a 529 savings plan and just what cryptocurrency is. If you’re saving for your education or your child’s education or would like to understand the recent tax provisions concerning cryptocurrency, our latest articles will tell you everything you need to know! 
 
Bookkeeping has come a long way since the “olden days,” when business records were recorded in ledgers. That said, electronic bookkeeping systems still refer to account sheets as “General Ledgers.” Personally, we think bookkeeping would be much cooler if it were still done in red and black ink! When you boil bookkeeping down to its basics, that’s what it’s for: determining whether a business is in the “red” or the “black,” as well as just how far a business is in either debt or profit, respectively. 
 
Bookkeeping is an essential part of any small business. From online-only stores from the living room to full-fledged brick and mortar shops on busy streets—bookkeeping allows businesses to reach their full potential and make informed decisions. Understanding the moving mechanisms of your business on a basic level enables you to assess the overall financial health of your business and improve spending. 
 
So, what is bookkeeping? 
 
Bookkeeping is the precursor to accounting. Bookkeeping is the detailed input of financial data into a system which allows for oversight, review, and analysis. You might feel intimidated by P&Ls, cash flow statements, and balance sheets, but the truth is that bookkeeping is done one transaction at a time. It doesn’t have to be complicated, which is why today we’re taking the time to explain some of the basics. 
 
Questions Bookkeeping Can Answer
 
Where does a majority of the money your small business brings in come from? How much did you spend on office supplies last year? How does your last quarter compare to the quarter prior? Where is your company hemorrhaging money and, more importantly, how can you staunch the losses? Bookkeeping can give you the means to answer these questions. 
Habitual expenses, such as automated purchases and services, can eat up a budget and add to expenses. As you isolate the areas where money is being wasted on things your business no longer requires, you can begin to tighten the purse strings. Adjusting your budget and applying new numbers allows you to think ahead and plan for the future. 
 
Only 2.5% of small businesses are audited, which means you aren’t likely to receive a visit from the IRS, but you should be prepared to answer potential questions nevertheless. In an audit, the IRS will want to know about profits, losses, tax deductions, and tax returns. All of these figures and more are underneath the bookkeeping umbrella. Which means, if you’ve been keeping accurate records, you can answer the IRS’s questions and send them on their way without delay! 
 
Then, when tax season rolls around, you can use the data you have from bookkeeping for your tax write off. Exact figures are often better than using the IRS’s substantiation rates. Bookkeeping can help you determine quarterly tax returns, to ensure you’re paying the adequate amount throughout the year. 
 
If there are mistakes with employees or customers, bookkeeping provides an accurate reference to clear up discrepancies. 
 
As a small business owner, you can anticipate certain seasons when expenses will need to temporarily increase. Bookkeeping will allow you to assess whether your current assets will stretch far enough or you need to apply for a business credit line or loan. 
 
Types of Accounts
 
Bookkeeping is split up by account types. The five types of bookkeeping accounts are: assets, liabilities, revenue, expenses, and equity. Assets are resources which add value to your business. Liabilities are obligations which take value from your business. Revenue is another way of saying income, while expenses are another way of saying spending. Finally, equity is the value left over after the liabilities have been subtracted from the assets. Here are some examples of common subtypes of accounts within these categories: 
 
    Assets
  • Accounts Receivable
  • Cash
  • Equipment 
  • Inventory
  • Real Estate
  • Supplies
 
    Liabilities
  • Accounts Payable
  • Interest Payable
  • Unearned Service Revenue
   
    Revenues
  • Interest Income
  • Rental Income
  • Sales Income
 
    Expenses
  • Insurance Expense
  • Interest Expense
  • Rent Expense
  • Salaries and Wages
  • Supplies Expense
  • Utilities Expense
 
How To Set Up Accounts
 
Now you know what the account types are, you’ll need to go ahead and set up the accounts in a system. As we mentioned at the beginning of this article, at one time, businesses kept their records in a ledger. Now, there are numerous options available online. You could use a spreadsheet, like Excel, although it’s not recommended. There are dedicated bookkeeping platforms, such as QuickBooks, which allow businesses ease-of-use when bookkeeping. That said, outsourcing a bookkeeper is much more time- and cost-effective than having an in-house bookkeeper. Paying someone to set up and manage your accounts ensures everything is done right and you can rest easy knowing a professional is handling your bookkeeping. 
 
However, you should still understand the basics of bookkeeping, even if you outsource. This is your business, and being able to understand the numbers will help you make decisions. 
 
Before you set up your accounts, you’ll need to decide which type of bookkeeping you’re interested in doing. Single-entry bookkeeping is just as it sounds—you enter each transaction just once. This type of bookkeeping works best for simple business with few cash transactions, little inventory, and even less equipment. An example of single-entry bookkeeping would be for an earring shop on Etsy. The owner makes the jewelry to order. When she buys supplies, she places a single value in the Supplies Expense account. When she receives an order, she places a single value in the Sales Income account. See? Simple. 
 
Now, double-entry bookkeeping is a bit more complicated, but it's actually the more commonly used method of the two. This type of bookkeeping works well with complex businesses, with lots of moving parts (e.g. employees, inventory, multiple forms of transaction). With this method, as the name suggests, you would record two entries for each transaction. The first entry is entered on the left-hand side of the account and is referred to as the debit (Dr). The second entry is entered on the right-hand side of the account and is referred to as the credit (Cr). Don’t think of debit and credit in their normal way. Here’s an example: A lawn care business invests in a $3000 lawn mower. They’ll enter a $3000 debit on the left of the Equipment account, and a $3000 credit on the right of the Cash account (since $3000 has been taken from the businesses assets to add to their equipment). Because each value is balanced by an opposite value, you know precisely when profits are beginning to drop off. 
 
Record Everything 
 
Data is no good if the numbers aren’t right. Accurate information will allow you to make the best decisions for your business and anything else could send you spiraling down the wrong track. This is why it's important to invest in a professional if you aren’t confident in your record keeping capabilities. Bookkeeping isn’t the time or place to guess, or estimate. Here, you want precise figures which correlate to real life sales and expenses. Do not leave out expenses because they’re small and “don’t count.” Every dollar counts (as the IRS would say)! Expenses include materials, services, payroll, and income from both clients, customers, investments, and dividends. You may not even be this meticulous with your personal finances, but bookkeeping for your business is a different endeavor altogether. Hopefully, booking for your business will inspire you to pour the same attention into your own finances! As well, you want to make sure you enter everything in the proper account and (if you’re doing double-entry) the proper corresponding account. This helps to ensure your books stay balanced, which we’ll discuss in more detail in the next part. 
 
 
We hope you’ll tune in for the next part of this series on Bookkeeping Basics! As always, we’re happy to be able to provide you with the most relevant, up-to-date tax information for you and your family. From savings plans to tax credits to business acumen, the Hoods Tax & Accounting blog is your one-stop shop for everything you need. We offer tax preparation, bookkeeping, payroll, and QuickBooks services. If you have any questions or are interested in a consultation, please reach out! We do offer virtual consultations over Zoom, as part of our effort to accommodate everyone in these trying times. We look forward to hearing from you! Until next time, thank you for reading!

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How to Start Saving for College; Even When The Sky Is Falling (Part Two)

11/18/2020

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In part two of this blog series, we will be finishing up our list of tips on how to start saving for college, even while we are all dealing with a very difficult year personally and financially! 

Welcome back Goose Creek readers, friends, supporters, and those new to the blog! We are so thrilled that you came back to read the second installment of this blog about how to save for college even when it feels like the sky is falling. We know that this hasn't been an easy year personally or financially for our Goose Creek community, and we know that saving money might be the last thing on your list of priorities right now. We do urge you to continue saving for important things like retirement, college, and for a rainy day as much as you can for the rest of this year if you are able. We know that treating yourself on the holidays and throughout random days throughout this year has made you feel better. Please take it from us that while this can be a temporary salve, this can be a hemorrhage to your finances and your bank account. This year might put us through many challenges, but defeating your bank account does not have to be one of them. You can stay strong both financially and personally, while still being able to find joy in the last few weeks of 2020. We know this has been a very difficult year for our parents, both with first-time students and students heading off to college. We've seen your struggles, we understand them, and we are here for you. With that in mind, let's finish up our list of some of the best tips to save for college even when it feels like the sky is falling. 

TIP FOUR: Keep On Trucking! 
While you want to have as much money saved for when you or your child goes off to school, you don't have to have every penny saved before the first day of class. Having four years of college tuition ready to go on day one of Freshman year? Sure, that's a dream come true, but it's not the reality. You can pay year by year or even semester by semester. There is no one way that you have to pay for college, you have to move with the ebb and flow of what works best for you and your financial journey. We also urge you to continue saving for college and other college related things even after your child has started school. Even if you've saved up enough to pay off tuition and loans, these extra savings can help contribute to continued education for your child, it can help them start off financially after they graduate, or you can add these funds back into a 529 account for a different child. This option of continued savings can help when you're looking at or planning to pay for multiple tuition's for multiple children. 

TIP FIVE: Calling In The Big Guns: Loans and Financial Aid 
One of the very first things your student or you will need to do to get the paperwork rolling to go to school is filling out your Free Application for Federal Student Aid, or FASFA. Based on a number of questions and information about your investments, income, and savings, this will allow you to know how much aid you are eligible for from the federal government. This will also give you options for grants, and both subsidies and unsubsidized loans. This is a yearly process for every year that you or your child is in school, so please keep up with it. FASFA can be a lifesaver in more ways than one. Then, of course, you can apply for student loans, but please do your research. Some student loans come with an extreme interest rate while others can come with a very high monetary price tag. You'll need to keep up with these loans, or you can damage your child's or your personal credit for years. There are three different types of loans you can look into: 
  • Private loans. These you can get from banks, credit unions, and third-party lenders. These have very high interest rates and the individual whose name is on on the loan is fully responsible for it. 
  • Unsubsidized loans. These are federal loans available to anyone that needs them, no matter how much you need to borrow. You are responsible for all interest accrued by this loan. 
  • Subsidized Loans. These are loans from the government for those in need. The U.S Department of Education will pay your interest if your loan goes into deferment six months after you graduate. 

TIP SIX: Where You Least Expect It! 
Sometimes looking for college funds feels like digging for quarters in your overstuffed couch. Everyone has done it, but sometimes these funds might be found in some of the most surprising places! 
  • Work: We briefly mentioned this in part one of this blog, but according to Student Loan Hero, many people don't spend the time searching out loans or support for college from their workplace. This money might not be something that you negotiate in your contract, but something that is already established within your company. All you need to do is approach your company and ask if they have scholarships for your dependents. According to WorldatWork, almost 85% of employers do offer benefits like tuition reimbursement. 
  • Churches: Not everyone is involved or connected to a religious organization, which we understand. For those who are, your Church can be a great place to look for educational support and funds. For example, according to Student Loan Hero, both the Episcopal Church and the United Church of Christ offers many different kinds of grants and scholarships to families in their congregations. The United Methodist Church offers more than 40 different kinds of scholarship opportunities. 
  • Unions: Many of our towns and companies still have strong operating labor unions and other professional associations. For family members of retired and active members of multiple unions, there are scholarship funds and money waiting to be claimed. The railroad, which has one of the oldest operating unions in the United States, offers scholarships to member's children and grandchildren. 
  • The Military: This might not be an unknown source of college funds, but the amount of scholarships and the opportunities available to prospective students is incredibly substantial. If you are apart or have been apart of ROTC, are a veteran, or are related to a veteran, there are so many different assistance programs, service organizations, and scholarships waiting to be claimed for your service or in thanks to the service of your loved one. 

There you have it! Six of the top tips and tricks on how to start saving for college or receiving college funds. Remember, with any savings situation, you have to find what works best for you and your family. While you're saving, you still have to find a plan that allows you to still lead a successful and happy life. There are also so many ways to start saving and preparing for school, these are just some of the many options available to you. We encourage you to go out there and do your research. If you have any questions or need help, we are just a phone call or click away! Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!


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How to Start Saving for College; Even When The Sky Is Falling (Part One)

10/28/2020

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Even though the school year has started, it's never too early to start saving for college! With how strange this year has been, give yourself and your fiances something to look forward to!

Hello, Goose Creek! We hope you're doing well. From our family to yours, we continue to be so thankful for your love and support during this crazy year, after tax time, and while the world is still a little strange. We are always here to help you and your family prepare financially for whatever goals or challenges you might be wanting to reach or overcome. 2020 has taught us to prepare for the unexpected, and we are here to continue facing this year head-on with you. It's not over yet, so who knows what it could bring!

In our last two blogs, we talked about saving money when it comes to buying school supplies and other necessary things for the school year. Saving as much as you can right now, we understand, is very important to all of our Goose Creek friends and families. While finances might be a little more secure than they were six or seven months ago, we are all aware that this could change in an instant. We hope our last two blogs helped calm you a little and prepare you for this current school year, or even the next. In this two-part blog, we are going to go a step beyond. For many parents and students, our last blog might have been outdated because many of them are planning on heading to college next year. Some of our adult readers might be thinking about going back to college or have the time time to finally go to college, too. While everything is so unknown, education is still an important expense and one that shouldn't be taken lightly. So, we wanted to dedicate this blog to all of our readers and their family members who are thinking about college or are finally taking the steps to go back to college! These are some of the top tips and suggestions on how to save money to pay for your college tuition.

There is so much that goes into applying and getting into college that can make the process very overwhelming and daunting. We don't want money to be one of them. We at least want to take that heavy burden off of you as best we can. You or your children have worked hard to get to the day where you submit your applications, and you deserve the best ways to make your dreams possible, not be prevented due to financial burden. Think about it, according to Forbes, the average cost per year for tuition ranges between $10,000 to $22,000 for public state schools, while private universities can range between $36,000 to $55,000 and more every year. Add on all of your textbooks, living expenses, and possible travel expenses, and this can become quite a hefty bill. For our parents, you need to make sure that your financial standings and responsibilities are in place before turning your attention to a college savings fund. This can help you get the loans you need and be financially prepared while still being able to care for and provide for your family. If you are paying for school on your own, this all still rings true.

TIP ONE: Start Saving!
You can begin saving for your child's higher education from the moment they're born or from the moment you decide it's time to go back to college. According to the New York Times, one of the best savings accounts to use is a 529. It's a simple plan to use and to understand. You take the simple steps of opening one up and then you decide how your money is going to be invested. You can contribute as much taxed income as you'd like to this account over as many years as you'd like. What is really appealing is that your investment will grow tax-free and can be withdrawn without capital gain, as long as the money is used to pay for higher education. Also, a 529 can give you a state tax benefit on all the contributions you make to the plan in 34 states, according to the New York Times. You can begin automated payments to the account once it's open, you can ask friends and family members to contribute, you can ask your employers to match your contributions as part of your contract, and you can even earn cash for your plan by spending money. Certain credit card companies will pay into your 529 when you spend certain amounts on their card or reward you with cashback options into your 529! Starting to save is always a great starting place, and there are many ways to do so. You just have to find the plan that works best for you.

TIP TWO: Scholarships & Grants
The burden of saving for college doesn't have to be on your shoulders alone as a part or as an individual. You support and push your child to succeed in school, have them participate in after school activities, and have them give back to the community. All of these attributes can pay them back in the form of scholarships and grants. Also, have them take AP or International Baccalaureate classes to help them get larger scholarships and grants based on their GPAs, college credits so you have less time at school to pay for, and the opportunity to go to a better school more affordably. You can also do the research together and see what scholarships and grants are available to your child. There might be more out there than you think. You can even go outside the box of the internet and talk to your child's guidance counselor. They are more than happy to add their help to the mix. If you're an adult heading back to school or going to college for the first time, don't think you are excluded from these options. Do your research, you will be surprised at the number of potential scholarships and grants that are just out there waiting to give you money. You just have to put the effort into looking for them.

According to Capital One Bank, more than 80% of students who go to college receive some kind of grant, aid, or scholarship. This can help the money you've saved stretch even further. Plus, leaving your child with as little debt or loans to pay back after they graduate allows them to have a healthy and successful opportunity to grow and build their finances as an adult.

TIP THREE: Reasonable Challenge
No matter when you start saving for college, you honestly don't know how much you'll end up owing until you have to sign on the dotted line. When sitting down with your budget and savings plan, make an honest and reasonable goal for how much you and your family can save and how much you want to save by the time you or your child is ready to go to school. You will still need to pay for everything in between now and then, and it's important to make the most of your life before, during, and after you or your child goes to college. Don't beat yourself up if you need to slow down your contributions for an emergency or two. You can pick up from where you left off. Just don't give up on saving once you've hit a bump or challenge.

How is your saving process going so far? Have you started to consider saving or having you already been saving? Are these new ideas to you or are they going to help the road you're already on? We'd love to hear from you about that in the comments below. If you have any questions or comments about saving for college between now and the second part of this blog, please don't hesitate to reach out. We are here to help you and your family be as financially prepared as possible. Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Smart Budgeting For The School Year (Part 1)

9/30/2020

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Staying within your budget for 2020 has new meaning and power over your finances. With the school year in full bloom, it's time to stay smart when learning your p's and q's! 

The school year is back, and even though it might look very different than last fall, we know this time of year still has the potential to be exciting and fun. There is nothing like the fresh smell of school supplies on the first day of September! Even with e-learning and distanced learning, and all the different kinds of learning that we are seeing here in Goose Creek, we hope all of our parents and students have a very special school year! While there are already so many things to be worried about this year, your finances might be the heaviest burden of them all. While your children are back to hitting the books, we wanted to offer some tips and suggestions on how to save as many nickles and dimes as possible this school year. There is no one fix it all solution for everyone when it comes to adjusting to this school year or how to make the most out of your finances as you do so. In this two-part blog, we are going to be offering you some suggestions and options that might make your budget work for you and how to remove some worry and stress from the rest of 2020! 

1. Hitting the Harddrive
This year's school spending looks very different than your 2019 school budget. When you went shopping last year new clothes, pens, backpacks, and books might have been on the list. This year, things are looking a little more technical. With so many distance and e-learning classes on your child's schedule, you might be looking into buying new computers, tablets, and software. You might also be looking into paying for more childcare or private tutors to help make your professional schedule work around your family's schedule. In all honesty, it looks like your back to school budget might have to be a tad bigger than last year's. This might be a hard pill to swallow since due to shortened hours or continued furloughs, your family's income might be taking quite a hit.

According to Dave Ramsey, parents are spending an average of $70 more than they did last year on electronics. Add on headphones, traditional school supplies, hand sanitizer, masks, and new furniture, Ramsey goes on to explain that parents could be spending up to $790 for all necessary school supplies this year. With every challenge you and your family have already gone through this year, how is this even possible? What makes it even more difficult is that your children need these items now, and the best time to buy it all is as quickly as you can. Your children will need all of these resources to get the most out of their education, to stay on top of their lessons and homework, and to stay connected with their friends and teachers. Take a deep breath, and don't worry. We are here to help! 

2. Plan It (Part 1) 
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Be reasonable about your budget and what your family is currently making. What are the bills you have to take care of, and how much does this leave you for school supplies? Sit down and make a plan. How much can you spend on each child? Figure out this number and stick to it while you're shopping. Remember, a lot of the electronic devices that you could be in the market for can be purchased refurbished or secondhand. They do not have to be brand new and straight out of the box. Many companies from Apple to Best Buy all offer some excellent refurbished and refinancing options. Also, remember to check out stores that you might not exactly expect to have great deals on electronics. Costco and Sams Club are already known for excellent deals on their products, and this does include electronics. 

When you do plan your budget and start your research on where to shop, spend time on it. Do not rush. Also, it might be best to stick to the school list and what you absolutely have to buy and not to what your kids are asking for. We might also suggest that they stay at home when you make your school supplies shopping trip. It's easy to say yes to fun add ons that they slip into your cart while you're out and about. A lot of the time these fun items go unused and add up your bill very quickly! While during your research, make sure to learn what all of your needed products are worth. This will come in handy when sales do start to pop up, you'll be able to recognize what is actually a good deal and what just looks to be a good deal. 

We know this has been a stressful time for all of our parents, teachers, and families. This is why we are here with this blog to offer you some tips and suggestions to make this year and maybe even some of the next a little less painful. Try and enjoy the school year, getting back into a schedule, and watching your children blossom in their studies. In our next blog, we will be continuing with more tips and suggestions, and we hope to calm your stress about staying within your means. Remember, if you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!
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Choosing Necessary Payments During A Pandemic

9/15/2020

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Keeping a watchful eye on your finances is always important. During these uncertain times, it is more important than ever.

Keeping a close watch on your purse strings is a necessity. With so much unknown about this year, knowing exactly where your finances stand and how to keep them stable has become a huge priority for most Americans. Since March of this year, over 3 million Americans have filed for unemployment, according to Forbes. Juggling how this pandemic has affected your income and how it will affect your daily and monthly spending could become a huge focus for you and your family. While staying healthy and figuring out new school and work scheduled are our first priorities, it is easy to get overwhelmed with how to deal with these potentially drastic changes in your finances. How do you decide what to cut out? How can you change your spending? What are the necessities that can't be cut out, and how do you make these decisions with the best outcome for your family?

According to Forbes, an estimated 49% of the American population was living paycheck to paycheck even before the pandemic hit. This left no room for extra savings or a nest egg to fall back on. Unemployment has helped, but even that has seen a drastic change since its first wave with the national stimulus checks. Many people have been left without enough to cover their basic needs. The first stimulus check and the additional $600 from the government added to unemployment checks were just short term solutions. What can we do now to help make our bills, keep a roof over our heads, and keep food on the table?

THE NEW BUDGET
You sit down every month and track what you're earning and what you're spending. You create a solid budget based on your calculations that takes care of your bills, your family's needs, and hopefully goes towards a little fun. If your paycheck has been hit or changed due to the pandemic, your budget will have to be retooled. Try and figure out how much of a cut your salary has gone through and try and cut that much out of your monthly spending. Please remember that while you're cutting your budget, your retirement planning and savings still needs your attention. If you can keep paying into those, that is ideal. If you are unable to do so, don't panic. Instead of adding to them, try not touching them unless you have to. Consider what you have in savings during this time, too. If it is needed, remember these funds have been put aside for an emergency.

While the stimulus check will not be part of your 2020 taxes and is being treated as forgiven money, the additional $600 and the now $300 added to your unemployment checks will be taxable income. If you've taken the highest amount in unemployment without choosing to take any taxes out, please prepare for what you will owe in your 2020 taxes. If you can, choose to take out some taxes to make your next tax season a little less painful. Also, try and avoid the temptation of online shopping and avoid making 'panic purchases". Instead of using your extra time to scroll through your favorite shopping sites, sit down and create a brand new long term financial strategy. We have no idea how long this might last, so planning ahead is going to be your best bet.

NEGOTIATIONS
Everyone owes money every month, even those who collect it for a living. We all have bills to pay, there's no exception to that. If you can sit down and take the time to talk with your landlord, your credit card companies, your insurance company, and discuss your current circumstances it could be a huge relief to your bank account. Be honest and ask if they can give you some kind of break or pause in your payments, a break or pause in accruing interest, and if you can negotiate your interest rates. According to Business Insider Apple, Chase, Citi, American Express, and Capital One offered their clients emergency support during the first few months of the pandemic.

THE DINNER MENU
Part of your monthly budget includes your grocery bill and funds set aside for going out to eat. As much as we all want to support our favorite local restaurants, eating out adds up just as quickly as it did before the pandemic. Tack on delivery fees to this bill, and it can be even more expensive. The dangers of panic purchasing delivered meals three times a day is very easy thanks to our favorite food apps. Meal planning is going to be just as important as budget planning. You'll need to stick to both to feed your family and save as much money as possible. We understand a few delivered and take out meals, but try and avoid them as much as possible.

THE (UN)ESSENTIALS
The pandemic has done a good job keeping us at home and helped us save money on group activities like going to concerts, going to the gym, and getting our hair and nails done. While things are getting back to normal and these services are slowly becoming available, that doesn't mean you need to jump back into using them again. It's best to wait and do so when your income is back to normal. You've survived without them up until now, and you can continue to do so a little while longer. If you have a lawn care service or a maid service that helps you care for your home, it might be beneficial to pause these services. As essential as they might be, they aren't as important as many other things in your budget. Making these decisions is difficult, but they are possible. You just have to keep going back to the drawing board when things get tough.

We know the last thing you want to hear right now is that you have to sacrifice more than you already have just to hang on. You've given up so much already, changed plans, and lost out on promised opportunities. The truth is, you can keep going. If you continue to make these hard decisions to save your finances and protect your family, the light at the end of the tunnel will become much brighter. If you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!

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Quickbooks And Your Small Business

9/2/2020

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Running a small business can be a dream come true and very daunting. If you use all of the correct tools to help you run your company efficiently, it will be the dream you've worked for. 

Starting a small business in 2020 might sound crazy, but more have popped up nationally than you might think. So many people have lost their jobs, been put on furlough, or are unable to do their jobs virtually that they had to do something. With the unemployment rate at an incredible high, many Americans have been forced to creatively do the pandemic pivot. With so many of us at home with nowhere to go, the birth of honing new or rusty skills and crafting abilities had the opportunity to flourish. People started posting their goods and wares on social media and out of the blue, they have a whole new little business operation running out of their homes.

 Some people were already deep in the process of building their small business when the pandemic hit, while others found solace in being hired by one after their corporate jobs were eliminated. Whatever the situation, small businesses have become quite the lifesavers of 2020. To keep that success and productivity as safe and possible, every small business needs the proper tools to stay productive, organized, and financially stable. What is the best tool out there for these situations? Quickbooks! 

We use Quickbooks ourselves and we offer classes to help small business owners and anyone out there grow and manage their money. One of the biggest reasons small businesses fail, according to Forbes, is because there is no business plan. Poorly managed bookkeeping can sink a business before it even had the chance to grow. Admittedly, bookkeeping is difficult, time-consuming, and very meticulous work. This is why working with a company like ours and using Quickbooks is so imperative. We both make sure that every part of your bookkeeping is done in a properly organized manner, allowing you to get back to the business of your business. 

Quickbooks pro was created specifically for small businesses, and it is very user friendly. It does so much of the work for you, that it's hard to get yourself overwhelmed. With a small-ish price tag of $300, it's a very small price to pay for the huge benefits it gives you. Tax season, after using Quickbooks, should no longer be something you dread or fear. Everything will already be taken care of. It even comes with tutorials to help you get started, and the Quickbooks team is also available to help you when you need it. There are so many benefits just waiting to be used. 

[START UP]
  • Everything you need to run your bookkeeping and a majority of your business is in one place in Quickbooks. It will save you time, money, and sanity. 
  • It keeps you organized, and you can see your business growing and change in one place. 
  • It can help you with everything from income and expense tracking to cash flow management and more. 
  • It allows you to accept credit cards and bank transfers from where ever you are. It lets your business be on the go, never restricting your plans or goals. 
  • It can help your employees. You can do your companies payroll in minutes. It even gives you the option to upgrade and let the QuickBooks professional bookkeeping team take care of your payroll. 
  • You will no longer need to worry about manually tracking your employees. You can track their hours, overtime, and add that into payroll anytime and on any device. 
  • If you need more, Quickbooks is there to help. You can connect and partner with a member of their professional bookkeeping staff if you want, and whenever you want. 

[BENEFITS]  
  • Money Management. Quickbooks allows you to pay bills, ask clients to pay you, and tracks all of your due dates for bills. You can print checks directly from the program, every transaction is recorded right into the program, and you can link your bank accounts to the program. You no longer need paper statements. 
  • Billing. The program will record every expense, no matter the size. You can organize your billing by the client and by type of spending. You also no longer need to reconcile your books manually. 
  • Invoicing and Reporting. The program tracks all of your sales automatically. It can create receipts and invoices at the touch of a button. It allows you to bill your clients individually or in large batches which helps when billing multiple clients for the same service. If you have merchant services through Quickbooks, you can accept credit card and debit charges. You can easily scan and deposit checks into your accounts. You also can create all kinds of financial reports including expenses, trends, year over year income, and more. 

[MORE]
  • You can use Quickbooks with other software and programs you're already using. You can import documents from Excel and export data from Quickbooks to make tax preparation and filing extremely easy. 
  • Security is also an added layer of comfort that the company offers, according to The Visual Communication Guy. Quickbooks data centers are monitored 24/7 and are under constant watch to make sure all of your assets are kept safe. It also comes with its own security so no one can just log into your accounts. It is also the leading software company in safety and the adaptation of new technology. 
  • It allows you to customize your business plan for each client so they know that their business is a priority to you. It allows you to nurture relationships with your clients by being able to send messages, notifications, and custom reports through Quickbooks. 

Coming to the point where you can own your own business is a huge accompaniment and celebration. Let that celebration continue and use all the right tools to help you and your company grow and stay organized. If you are looking for the best accounting services in Goose Creek, the best tax preparation in Goose Creek, business consulting in Goose Creek, bookkeeping in Goose Creek, or payroll services in Goose Creek, we are here for you! Our phone lines and inboxes are waiting for you. Don't hesitate! Please stay safe, everyone. We will see you soon!
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