A Simple Guide to Bookkeeping for Any Businesses

Like any other business function, it is critical for startups & any businesses to keep track of their finances. This is not just due to tax payments, even though that is reason enough. One simple step to telling if a business is doing well or if it is struggling is by looking at their finances. This is when creating, following and adhering to a simple bookkeeping guide comes in handy.

In most cases, the solution lay in the business hiring an in-house accountant or accounting firms to take care of their finances. A range of businesses tend to still operate in this manner. This, however, is not a keen mode of operation for small to medium scale businesses. The cost of hiring an accountant or a firm each month could escalate beyond a company’s budget. This being one reason over half of all businesses fail to complete their first year.

What should you keep in mind when doing the books?

Begin by asking yourself these questions:

  • Do you get stressed and anxious when dealing with bookkeeping?
  • Do you worry about finding time to focus on the books?
  • Do you end up spending more time bookkeeping than you allotted for?

Good news!

A few minor adjustments and you could actually save significant time and effort in approaching bookkeeping.

Below is an easy and applicable to all guide to improving your bookkeeping process. These steps are very much in line with the business owner. Each section of this guide is designed to help you simplify your bookkeeping, save time and put your mind at ease over this aspect of business operations.

  1. Allot specific hours weekly for bookkeeping
  2. Keep Business Transactions Separate from Personal expenses
  3. Create a system for storing receipts
  4. Hire a professional bookkeeper
  5. Using an integrated finance software solution

Continue reading “A Simple Guide to Bookkeeping for Any Businesses”

5 steps I used to build my SaaS product

Software as a service (SaaS) has become hot in demand in the last few years. More companies and users are switching from traditional ways of doing things to the more innovative and technology driven SaaS.

If you are thinking of running a SaaS business, one of the things you would need to do is build your website. In this post, I will take you through the steps you need to build your SaaS product as fast and as efficient as possible. These are the same steps I used to create our accounting and invoicing product ‘Pi.TEAM’.

Steps for building a SaaS Product

This is a catalogue of the tools and skills you will need to get your product up and running. I won’t go in details but if you have any questions just message me anytime.

Step 1: Simple Plan – Asana

The most important step in your business is the planning stage. I repeat. Without a workable plan, you will have nothing to execute. Your plan does not have to be perfect, but it does have to be something you (and your team) can work with. One of the best planning tools out there is Asana. It is completely cloud based. You can either use it through your web browser or as a mobile app.

Asana is so great because it’s so simple. You can create different workspaces, collaborate with your teams and sync it to your email. Best of all, it’s free.

Step 2: Fast Coding – Laravel

 Honestly speaking you can choose any technology, however below are the three reasons I decided to use Laravel instead of using Python, Ruby on Rails & NodeJS.

  1. Extremely simple to use and fast to develop.
  2. Lots of ready plugins e.g. data tables, analytics chart or PDF, excel exports
  3. Laravel Spark: 20-25% SaaS complex billing work is done.

I found that Laravel is the most efficient framework to use. For simple, beautiful and effective code, this framework is the current to-go-to, with a clean user interface.

Note: other technologies such as NodeJS are extremely popular these days and they are awesome but for us development time & speed was more important.

 Step 3: Billing Complexities? – Laravel Spark

Spark provides perfect foundation for your SaaS business. With Laravel spark, more than 20% of the work is already done for you. This version of Laravel and Spark was designed to help you build your SaaS business from scratch and it lives up to that goal. Spark takes care of things such as billing, proration, team/user management etc. With this, you can create a SaaS business that is scalable and sustainable without worrying about underlying moving part of the technology.

  • Step 4: Quick Cloud Deployment – Digital Ocean

The next step would be hosting your SaaS site. One of the best places to do that is Digital Ocean. They provide cloud based computing solutions. If you’re just starting out, you don’t need a big server. A $10 or even $5 server is enough to start. As your business grows, you can easily scale. Click here to get free digital ocean credits. I would also encourage you to learn more about Ubuntu linux. It is one of the best server OS.

  • Step 5: Other Cool Tools but optional

Vue.js: This is a javascript framework that is actually one of the simplest to use. It is very easy to learn and is component based.

Postman: Once you have created your website, you can test, develop and document your API easily using this app.

Chat script: A chat script is essential so you can provide efficient support for your clients.

Landing page: A landing page is a web page which your potential customers see when they come to your site. It does not need to be fancy, but it does need to convert users to customers. I would recommend a site like themeforest.net where you can purchase really good landing pages.

Stripe: Stripe is an easy to use payment gateway, both for managing payment, and integrating it as a developer. I even use it to manage invoice payments from my clients.

HubSpot: HubSpot touts itself as an all-in-one marketing automation software and with all of these features available, it’s hard to argue: Blogging, SEO, Analytics, Land pages, A/B testing, Email marketing, CRM.

Hunter: When visiting a website or a user profile on LinkedIn, this extension can automatically find the email of people mentioned on the page. It gives us the option to save emails in different lists that can be exported later.

Apart from this, there are thousand other tools and services are available that can help you to build your SaaS product, but after doing lots of research and actually using some of them in real life – I found that above list is more than sufficient to get you started.

If you like our article, please do share 🙂 and subscribe to our blog. You can also check our SaaS product – Pi.TEAM – invoicing & accounting simplified. You can create beautiful, professional looking invoices in a seconds and get paid online. You can also manage your accounting, expenses and inventory online using Pi.TEAM.

Twitter: https://twitter.com/piteamofficial

 

Useful Links:

Disclaimer: This post explains more of a backend side to build a SaaS product. However, I would encourage you to first read books such as ‘The Lean StartUp by Eric Ries, StartUpLand by Mikkel Svane, and Rework by Jason Fried’ then and only then start building your product. Trust me, it will save you years of useless product development time (I wish I had read them before I built my previous products 🙂 ). Also, these are not perfect steps, do comment and suggest.

Pi.TEAM – alternative to InvoiceNinja, Xero and Quickbooks

It is important for small businesses to keep track of their finances, and this is not just because of tax season, although that might be enough reason. One reliable way to tell if a business is doing well or if it’s simply limping along is through the finances of that business. This is why a solid accounting system is mandatory.

Traditionally, the solution for many businesses was to hire an in-house accountant or an accounting firm to handle the finances. Many businesses still operate this way. However, this is not a viable mode of operation for many small or medium scale businesses. The cost of hiring or retaining accounting services every month could shoot up the overhead beyond what the business can bear, which is probably one reason why according to the Small Business Administration (the SBA), 50 percent of small businesses do not make it past their first year.

With that in mind, what are your options?

There are several creative solutions, which are making use of technology to disrupt the traditional methods of accounting. More businesses are turning to accounting software to make it easier to keep track of their finances. For small businesses, this seems to be the perfect solution. However, there are a few things to take into consideration. Before we delve into that, it is important to note that we are not dealing with heavy enterprise software often favoured by huge corporations. For this article, our focus will be on online systems that provide cost effective solutions.

InvoiceNinja

First on our list, we have InvoiceNinja. This is an open source invoicing software that provides accounting services for small businesses. This software is self-hosted. What that means is that you can place it on your website and have everything in one place. It is a great option because it is free.

However, there are several problems with this software, chief of which is the installation technicality. Unless you are a techie and a backend developer, you are limited to what you can see and can’t make many changes to the software. Of course, you first have to worry about installing it in the first place, which is no piece of cake.

Secondly, because you are responsible for the hosting, you automatically become the server admin. If the sever goes down, there is no one to call because you are the one responsible. Again, you have to take the trouble to constantly back up your data because if for any reason the site happens to crash, you lose everything.

Xero accounting

This is another online accounting software that lets you monitor your finances and keep track of your accounting. We have already mentioned that it is online, which means that you can access it from any device, anywhere in the world where there is an internet connection.

Xero accounting software is actually a really good one, as long as you don’t have any trouble. Once you have a problem you would have to handle it on your own as the customer support is quite poor. In some cases, it has taken several months to get a reply from the company, which is untenable when you have a business to run.

Besides that, it is a bit costly for small businesses particularly as the price keeps increasing. Moreover, you will quickly discover that in order to get the full functions, you will need to pay for several add-ons, and those do add up in terms of cost.

If you are conduction multiple distributions, you will most likely have a problem with the invoicing as it does not keep track of partial or multiple invoicing. This could potentially be a huge problem. The inventory management feature is also poor.

Quickbooks accounting software

Quickbooks is an accounting software produced by Intuit with small businesses in mind, and has been a favourite for quite a while. Although it has dominated the market, there are so many obvious flaws particularly when applied to small businesses. The most predominant is the cost, which will be a problem for businesses that are just starting and don’t have a lot of capital.

Another problem is the inability to scale. It does not grow with the business and is in fact, better suited to businesses that have already grown. One complaint users have is that although it is a software, it needs to much manual oversight, which defeats the purpose of using an accounting software.

What alternative do you have?

By now you are probably wondering what alternative you have as the owner of a small business. If you are running a business that cannot afford the added cost of hiring accounting services, then you should seriously consider a cloud based service like Pi.TEAM.

Perhaps the most attractive feature of this accounting software is the free model. You do not have to pay anything to sign up and you can take advantage of the trial period. Once that expires, you could start with the $5 monthly fee for the basic service.

Pi.TEAM addresses the several issues that are found in other accounting software. It is easy to use, very affordable and makes it easy for you to manage your financial records in a single place. It handles your inventory, invoicing, accounting payments and reconciles foreign currencies among other features.

The customer support is amazing with quick and efficient response. Best of all, this software grows with your business and allows you to scale. If you are searching for an accounting software that makes it possible for you to effortlessly create clean and orderly financial records, then you should try Pi.TEAM.

 

How Small Businesses Can Keep Track of Finances

As a small business owner, one of the fastest ways to know if you are growing or not is from your finances. You should be able to know from one glance at your records, whether you are running at a loss or if you are making a profit. If you do not have an organized system of record-keeping, that could be very hard to do. The website of the Internal Revenue Service of the US (IRS) shares reasons why you need to keep records; you can read that article here.

So the first thing to do is to keep track of your finances in an organized way, but just how do you do that? Here are some suggestions on how to do just that.

 

Use an Excel Spreadsheet

If you are a whiz at Microsoft suite, you might want to use an excel spreadsheet to keep track of your expenses. It is functional and could save you a lot of money. The only problem with this method is the time it takes to fill in the spreadsheet. It is time-consuming. Another problem with using a spreadsheet is reconciling all the expenses, invoicing, stock and all the other records that you need to keep track of.

 

Hire an accountant

Another option is to hire an accountant. Actually, you will need to get one eventually to help you make sense of your records and handle your taxes. However, you will accrue more billable hours if you do not already have clean records. Having an accountant on your payroll will ensure that your financial records are clean and easy to read. The problem with that is what it will cost you to pay an accountant every month. Small businesses usually cannot afford to have large overhead costs. Hiring an accountant for your day-to-day accounting might be too heavy a cost for your business to bear.

 

Online accounting software

One option which more small business owners are embracing is the accounting software. These are programs that make it easy for you to keep track of your finances so that when it is time to file your taxes, everything is straightforward and simple. There are accounting software, used by large companies that are really expensive. This is often what comes to mind when accounting software is mentioned. They are fast, efficient and make it possible to combine all the tasks necessary for financial record keeping. Although these have traditionally been enterprise solutions, created for large corporations, there are now affordable online solutions for small businesses.

 

Pi.Team Accounting Software

One of such solutions is our accounting software, pi.team which makes it possible for you to track your finances in a convenient and time-efficient way. You can carry out invoicing, track payments and perform general accounting tasks necessary for your business.

We have spent a lot of time researching the best solution for your business and how we can provide this service at almost no cost to you.

Way back in 2014, Fox Business recognized the need for small businesses to use online accounting software and listed several benefits, including easy input. The write said in definite terms, “I encourage all serious business owners to keep their books on computerized accounting software.”

Eventually, as your business grows, you will need to involve more people in the financial side of things and online software makes it possible to add other members of your team. They can pull reports, add changes and keep track of everything. Also whenever you decide to work with an accountant or an accounting firm, you can easily transfer data and records to them.

The Advantages of Accounting Software

The new technologies have revolutionized the way companies understand and manage and in the case of the self-employed could not be less. Having an Accounting software involves not only changing the way you manage a business but also take advantage of advances in computing to optimize the time and money of the self-employed. These are tools that do not need downloading, so the professional can always carry his office with him.

Also, possibly one of its maximum advantages is its easy use, since you do not have to be an expert to use it. There are different types of programs: some without download and others that you need to download on your computer. You can access your office from anywhere. All the data of your business will remain stored in the private cloud of the company that offers the service, which increases the security of the same, although still many people are suspicious of this circumstance.

Features of Accounting Software

One of the main characteristics regarding the use of these programs is that they allow you to issue invoices, whether complete, totally professional, which will contain all the data that you need to include as an autonomous according to the current legislation. Also, you can customize them with the logo of your company and send them directly to your customers via email, without having to resort to external platforms or attachments. As a result, you save a lot of time and optimize the work.

Also, the idea that these programs are invoiced much faster because they allow you to enter all the data of your customers, suppliers, or products that you will include in the invoice with just a click, thanks to the bases of data that allow you to create. And, of course, the software will include the necessary taxes for you, making the total calculation of the sales price, and will allow you to easily see which bills have been collected or which are pending.

Software Accounting

The accounting software is also considered an accounting tool, since every time you indicate that an invoice is charged will make a so-called double note. This means that you will not only consider that invoice is charged but, also, it will add in your corresponding module, both the income and the impact on VAT or IRPF, to meet your quarterly tax obligations. The same thing would happen with your expenses, which you would have to add also with an invoice, but with a supplier, so of course you can calculate very easily and much more controlled your tax deductible expenses as a freelancer.

Management of your products or services

As indicated above, any data can be included in a much faster invoice with accounting software, thanks to the databases that you can perform. If you have several products or services, you will have the possibility to create a tab to each of them, in which you will add all your data, from explaining what it consists of, materials, features, cost price and sale, taxes that must be added, etc. Thus, the software will automatically enter all data so that any invoice can be made in few seconds, however long or complicated.

The software will help you manage these two groups following the same system of product databases, so you can easily include all your data in the invoice. Also, each customer card will allow you to see a list of the invoices that you have issued, differentiating the collected or pending and in each tab of vendor you will see your purchases pending payment with a simple glance.

This type of program allows you to add all the bank accounts that you have linked to your business, as well as methods of payment (credit cards, cash, and checks). You can expand more information with our article use your online accounting software to monitor the progress of your business’s bank accounts.

We recommend using accounting software such as Pi.TEAM, XERO or QuickBooks. Pi.TEAM is a complete program to take the accounting of your business with maximum speed and accuracy. Also, by simply emptying the information of your chart of accounts and the accounting records of the period, you will get all the associated reports automatically: balance sheets, invoicing, major analytics, checking balance, a list of accounts, inventory management among many Other reports that will greatly facilitate your daily work.

Pi.TEAM offers solutions to our many customers around the world to help them become competitive in a global marketplace.

5 reasons you should not use excel for accounting

1. Spreadsheets can’t accurately predict cash flow

More than 80% of businesses that don’t survive cite poor cash-flow management as a primary reason (source). It’s not that these businesses aren’t making money, it’s that it gets increasingly harder to forecast and budget as the company grows.

2. Excel isn’t Actually that Easy (or Intuitive)

It doesn’t matter whether you’re numerically illiterate or not, Excel requires programming expertise especially if you need it for financial reporting. Formulas, filters, data connections, etc. make setting up a spreadsheet to cover your basic accounting needs a nightmare! You may also find that you’re constantly tweaking your template to get the outcome you need – getting it right is downright time-consuming and frustrating. Or you could use accounting software that has all the reports and financial organization tools you need built-in.

3. If you use Excel, it begs the question: who owns the Master Spreadsheet?

How do you know which version of the document is up-to-date? What if more than one person in your business needs to use it at one time? While Excel requires you to email the most recent version back and forth, Pi.TEAM allows you to easily sign in online between devices. It also lets you know the numbers you’re looking at are current.

4. Security Issues Not all data is suitable for everyone in your business to see.

For instance, HR information such as compensation rates, social security numbers, and home addresses shouldn’t be accessible to just any employee. Not only does faulty security put your employees at risk, it also puts your business in danger of a lawsuit or penalty. So what’s Excel’s answer to spreadsheet security? Access password protection. In other words, people can either see the entire spreadsheet, or they’re blocked entirely. Needless to say, this isn’t ideal in situations where users require different degrees of access that fall in between being privy to everything and nothing.

5. Excel Spreadsheets are Error-Prone

Manual data entry, human-error and formula mistakes can seriously mess with your financial tracking and planning. Cloud-based accounting software tools such as Pi.TEAM, Xero, or Intuit QuickBooks limit data entry and record-keeping mistakes because they do most of the hard stuff for you – automatically. You’ll also get a dashboard view of all your financial data, from expense reports to timesheets, budgets to cash flow statements – so much easier than managing a folder full of Excel spreadsheets.

With online software, everything is automatic – data feeds, back-ups to the cloud, syncs with other business apps. Excel doesn’t even come close. You also benefit from new features and updates from the software provider (for free) and without interruption to business processes. It all happens in the cloud, no new licenses or upgrade fees required. Need to access your accounting data on the go? Put away your laptop, cloud-based accounting software services are also accessible from your phone or tablet. You can also give your accountant or bookkeeper access privileges – an excellent way to ensure that everyone is using the same data whereas sharing an Excel spreadsheet quickly opens the doors to version control hell. Worried about Price? Don’t be. Starter packages begin at less than $1 per month while more robust agreements are priced at around $20 per month and most providers offer a free 30-day trial. Are you ready to make the move from Excel? Just click here to continue signup.

 

Better Product — Savings Bank Account or Liquid Funds

With whatever experience I have in Industry, clients always ask me to park funds in Savings Account or Current Account (if client is an individual client then they will have savings account, if client is operating his/her business then they will have current account). Usually client require funds in the short term (say within 6 months). Even at my home, wife usually argues with me when I ask her not to park money in Savings Bank Account. At times it amuses me and at the same time question arises. Do investors know what their banks are up to? Do investors know what is the best possible route to generate returns at the same time maintain liquidity? Do investors know what liquid funds are? Do they know enough about savings bank account?

Let me take you through why savings/current bank account as a product is marketed and why liquid funds as a product is not enough marketed.

For most of the institutions say Bank, savings account acts as a source of money rather than source of income. When someone parks fund in savings bank account, banks normally offer 4% or more than 4% (RBI guideline says that minimum deposit rate should be 4% but banks can offer to pay more), the same fund banks can lend at more than 4% to earn income. Lending for banks include Housing loan, Personal loan and Commercial loan. Cheapest of them is housing loan which is usually offered around 10% (depends on credit history as well).

Let’s say, there are 1000 savings account and each one has balance of Rs. 10,000 so banks has to shell 4% of Rs. 10,000,000 (1 crore) which is Rs. 400,000 (4 lakhs) as an interest payment to account holders. In turn banks lends Rs. 90,00,000 (90 lakhs) (since bank can’t lend all which is present in savings account as a part of regulatory framework). Bank lends at suppose 10% so earning would be Rs. 900,000 (9 lakhs). Net earnings of bank would be Rs. 500,000 (5 lakhs).

Savings account as a product is advertised more because banks get funds at a lesser cost and hence banks can earn more. Current account is another example where cost of fund is practically ZERO for banks as banks doesn’t have to pay anything to account holders for maintaining balance. However current account is not marketed since it is not meant for mass public. Fixed deposits also act as a source of fund but banks pay higher cost for that around 8–9%. Hence the less marketing around that.

Where in Liquid Funds is a kind of mutual fund where the money is invested in debt instruments like commercial papers, sovereign bonds, treasury bills, fixed deposits whose maturity is less than a month. The exit load (penalty for exiting early) over here is zero compared to other mutual funds where it is normally in the range of 0.5% to 2% for 365 days. The expense ratio (charged from investor) is minimal for liquid funds which is in the range of around 0.05% to 0.10% (10 paisa per 100 Rs.). For other mutual funds it is normally around 2.35% to 2.5%. So the question of liquidity doesn’t come here like savings account or FD which is highly liquid as well as one can invest in liquid funds for a day as well (no restriction on minimum day criteria, it is like a zero balance account).

One might argue since Liquid Funds invest in market, and it is risky compared to savings account funds. The above argument holds true when liquid funds invest in longer duration bonds where the price fluctuation happen with interest rates. Liquid funds primarily invest in products like commercial papers, treasury bills, money market instruments whose maturity is largely around 91 days even lesser than that. Also, investment will be in instrument whose credit rating is highest like AAA/P1+ or it is invested in government bills issued by RBI (probability of government defaulting is very low). And within 91 days’ chances are almost impossible that AAA rated company will go bankrupt where company is not able to pay the money.

Question also arises that in savings account I am sure that I will get the interest rate specified by bank which is 4% or 6% depending on with which bank I have the account. But in case of liquid funds there is no surety of return — To that my response would be, there no such surety about the return but once can have sound judgment on what return one will get. One good indicator would be to look at call rates by RBI, which hovers around 7–7.50% so one can expect return around that at least which is more than that of Savings Account and Current Account.

Take an example of HDFC Liquid Fund — the example composition of the mentioned fund is below.

I am a strong believer of generating maximum returns with minimum possible risk. If you have idle funds, why not put them to work in a liquid fund and earn higher returns rather than leaving them in a saving account which would earn a mere 4% interest. And the best part is that you get returns of Fixed deposits with a liquidity and security of a saving account. Do I need say more ☺

[email protected] (Team Pi — Editor)

Committing to a Career in Accounting

The method of committing to a profession path could be terrifying. You’ll have heard that accounting is a superb specialty, however is it the proper one for you? There are such a lot of variables which are out of your management, and you might really feel such as you’re leaping into the sudden.

Don’t fear.

The great thing about an accounting diploma is that it’s extremely versatile. You possibly can simply flex between profession paths, discover new specialties, and migrate into management roles — you’ll be able to even begin your personal accounting apply.

You face a world of alternative with a profession in accounting.

So as to absolutely pursue these alternatives, nevertheless, it’s worthwhile to perceive some key macro-level developments.

The previous few years have been a time of regular financial progress — and the accounting business has been persistently climbing.

IBISWorld explains, “Demand for accounting providers remained comparatively regular in the course of the recession, as demand from shoppers concerned in bankruptcies or company restructuring offset losses.”

The important thing lesson to study is that accounting is a career that weathers any storm. It’s a prepared profession path that accelerates with financial peaks — however can also be robust sufficient to withstand the dips.

What’s essential to remember, nevertheless, is that this progress isn’t astronomical — it’s as quick as the typical for all professions.

So what does this imply?

Accounting is a wholesome profession path, however it gained’t essentially be a high-growth business. Alternatives for development can be robust, however there shall be potential to plateau. For that cause, it’s completely essential that you simply round-out your talent set with a robust technical basis — you could have to pursue progress alternatives in different elements of the enterprise.

Accounting careers ranks #three on the U.S. Information listing of greatest enterprise jobs

General scores are based mostly on 10-year progress quantity, 10-year progress proportion, median wage, job prospects, employment fee, stress-level, and work-life stability.

There’s excessive upward mobility, common stress, and plenty of flexibility.

To not point out, accounting is a specialised talent — which signifies that it’s completely potential to transition into your personal apply.

Demand for accounting grads at an all-time excessive

In accordance with the Journal of Accountancy, there’s a recruiting warfare for brand spanking new expertise. In case you’re a brand new grad trying to achieve a foothold within the workforce, accounting is a superb monitor to pursue.

Remember that you’ll be able to all the time specialize and alter profession paths later — accounting is a good way to start out constructing your long-term trajectory.

Challenges

Regardless of the 4 tendencies listed above, the accounting business nonetheless suffers from two key challenges, in response to the Journal of Accountancy: (1) a scarcity of doctoral professors and (2) lack of variety within the subject.

It’s as much as the brand new era, nevertheless, to vary the established order and affect the result of those tendencies.