10 Time-Saving Accounting Automations Every Small Business Owner Should Implement
As a small business owner or freelancer, your time is your most valuable asset. Between managing clients, delivering services, and growing your business, bookkeeping can feel like a relentless time sink. Manual tasks like invoicing, expense tracking, and payroll eat up hours that could be spent on high-value work. Fortunately, accounting automation is transforming how small businesses manage finances, offering time-saving accounting tools that streamline processes and boost efficiency. According to the 2024 Intuit QuickBooks Accountant Technology Survey, nearly all (98%) respondents say they’ve used AI to help clients over the last 12 months, with top applications including data entry and processing (69%), fraud detection and prevention (51%), and real-time financial insights (47%) For small business owners, adopting the best accounting automation for small business can save hours each week, reduce errors, and free you to focus on growth. This guide explores 10 time-saving accounting automations every small business owner should implement. From automating bookkeeping to streamlining tax prep, these tools will help you automate small business finances with ease. Whether you’re a solo freelancer or running a small team, these solutions will keep your finances on track. Table of Contents Why Accounting Automation Matters for Small Businesses Small businesses face unique financial challenges: limited budgets, complex tax rules, and the need to stay competitive. Manual accounting tasks not only drain time but also increase the risk of errors that can lead to costly penalties. A Tech.co survey found that 75% of accountants reported a positive impact from automation, citing time savings, improved productivity, cloud access, enhanced data accuracy, and faster data retrieval as key benefits. Accounting automation uses software and AI to handle repetitive tasks like data entry, invoicing, and reporting, freeing you to focus on strategic priorities. The Rightworks Accounting Firm Technology Survey 2024 revealed that early adopters of automation earn 39% more revenue per employee, proving its impact on profitability. By adopting small business accounting software with automation features, you can: With the right time-saving accounting tools, you can automate small business finances and focus on what matters most—growing your business. ear and leveraging data, you can take your nonprofit to new heights. 10 Time-Saving Accounting Automations to Implement Here are 10 easy bookkeeping automation solutions to streamline your small business finances: 1. Automated Invoicing Manual invoicing demands significant effort and often leads to payment delays due to errors. Automated invoicing tools streamline the process by creating, sending, and tracking invoices instantly, ensuring timely payments. A PayStream Advisors study found that companies using automated invoice processing increased productivity by 33% and reduced processing costs by 42%. 2. Expense Tracking Automation Manually logging receipts requires considerable time and increases the risk of oversight. Small business expense tracking automation syncs bank transactions and categorizes expenses in real time, eliminating manual entry and ensuring accurate, up-to-date records. 3. Payroll Automation Manually processing payroll—calculating wages, taxes, and deductions—is time-intensive and error-prone. Payroll automation ensures accurate, timely payments while maintaining compliance. According to the American Payroll Association, automation can reduce payroll processing costs by up to 80%. 4. Bank Reconciliation Reconciling bank accounts manually is a tedious process that often results in errors. Automated reconciliation matches transactions between your books and bank statements, ensuring precision. According to HighRadius, 95% of reconciliation errors stem from manual mistakes. 5. Tax Preparation Automation Tax season can overwhelm small business owners with complex deductions and filing requirements. Automating bookkeeping for taxes simplifies the process by organizing deductions and generating accurate reports for seamless compliance. 6. Accounts Payable Automation Manually processing vendor bills is inefficient and prone to delays. Accounts payable (AP) automation streamlines bill payments and approvals, enhancing operational efficiency. A Payouts.com report found that automated AP solutions can cut invoice processing times by up to 80%. 7. Accounts Receivable Automation Chasing late payments consumes valuable time and disrupts cash flow. Accounts receivable (AR) automation sends reminders and tracks overdue invoices, improving collections. According to NetSuite, 85% of CFOs at companies with over 50% automated AR processes saw a decrease in days sales outstanding (DSO). 8. Financial Reporting Automation Manual financial reporting is labor-intensive and susceptible to errors. Automated reporting generates real-time insights, such as profit and loss statements, with minimal effort. PWC states that automation can reduce financial reporting time by 30–40%. 9. Time Tracking Integration Manually tracking billable hours is a challenge for service-based businesses, often leading to inaccurate billing. Automated time tracking streamlines invoicing and payroll processes by seamlessly integrating with accounting systems. 10. Budgeting and Forecasting Automation Manual budgeting is complex and quickly outdated, hindering effective financial planning. Automated budgeting tools simplify cash flow projections and performance tracking for agile decision-making. TL;DR: Summary of Time-Saving Accounting Automations The following table summarizes the best accounting automation for small business, highlighting key benefits and time-saving accounting tools to streamline your finances. Automation Key Benefit Example Tools Automated Invoicing Improves cash flow QuickBooks, Xero, FreshBooks, Fynlo Expense Tracking Automation Simplifies receipt management Expensify, Zoho Expense, Receipt Bank Payroll Automation Ensures accurate payments Gusto, ADP, Paychex Bank Reconciliation Enhances data accuracy QuickBooks, Wave, Xero Tax Preparation Automation Eases tax season workload TurboTax, TaxAct, H&R Block Accounts Payable Automation Streamlines bill payments Bill.com, Tipalti, Melio Accounts Receivable Automation Speeds up payment collection FreshBooks, Zoho Invoice, Invoice Ninja Financial Reporting Automation Delivers real-time insights QuickBooks, Sage Intacct, NetSuite, Fynlo Time Tracking Integration Boosts billing efficiency Toggl, Harvest, Clockify Budgeting & Forecasting Simplifies financial planning Float, PlanGuru, QuickBooks What’s Next Implementing these 10 time-saving accounting automations can transform how you manage your small business finances. From automating invoicing to forecasting cash flow, these easy bookkeeping automation solutions save hours each week, reduce errors, and empower you to focus on growth. Ready to streamline your finances? Our time-saving accounting tools offer real-time tracking, seamless integrations, and powerful automation to boost your business. Schedule a call with our team to discover how we can help you save time and grow smarter. [Schedule a Call] For more financial management tips, check out our blogs:
What is Fund Accounting? A Comprehensive Guide for Nonprofit Organizations
Running a nonprofit comes with its own unique set of rewards and challenges. You’re driven by a mission to make a difference, but behind the scenes, managing finances effectively is just as crucial as program delivery. Unlike for-profit businesses focused on the bottom line, nonprofits operate with a different financial framework: fund accounting. You need to track every dollar, ensure restricted funds are used correctly, and show donors their contributions are making a difference. That’s where fund accounting comes in. Fund accounting is the heart of nonprofit financial management—it’s how nonprofits keep restricted donations separate, track grants precisely, and meet regulatory standards. According to NetSuite, compliance and reporting are among the top challenges for nonprofits, making fund accounting essential for success. This guide will break down the core concepts of fund accounting in a way that’s easy to understand, even if you don’t have a background in accounting. We’ll cover why it’s necessary for nonprofits, the different types of funds you’ll encounter, and the key financial statements you’ll need to master. Let’s build a strong financial foundation for your mission-driven work. Table of Contents Why Fund Accounting Matters and How It Drives Nonprofit Growth Nonprofits aren’t like typical businesses. Your goal isn’t to stack up profits but to fuel a mission—whether that’s feeding the hungry, educating kids, or protecting the environment. That mission comes with serious financial responsibilities. Donations often have strings attached. Grants demand detailed reports. And the IRS expects airtight compliance to maintain your 501(c)(3) status. Failing to file an accurate Form 990 could jeopardize your nonprofit’s tax-exempt status. To address these challenges, fund accounting provides a tailored approach by organizing finances into distinct funds for specific purposes. It keeps your nonprofit compliant and transparent, and unlocks opportunities to grow your impact. The National Council of Nonprofits emphasizes that financial transparency strengthens donor relationships and public trust, boosting the chances of securing major foundation funding. Discover how fund accounting safeguards your nonprofit’s finances and fuels its mission-driven success: Beyond keeping your finances in order, fund accounting empowers your nonprofit to earn donor trust, attract funding, and advance your mission. By keeping finances clear and leveraging data, you can take your nonprofit to new heights. Key Principles of Fund Accounting Fund accounting has a few core rules that make it unique. Getting these down will help you manage nonprofit finances like a pro. By segregating funds and maintaining transparent reporting, nonprofits uphold accountability, ensuring regulatory compliance and fostering deep donor trust. Step-by-Step Guide to Setting Up Fund Accounting Ready to get fund accounting up and running? These steps will help you build a system that’s compliant and easy to manage. Step 1: Identify Your Funds Start by listing all your revenue sources and their restrictions. Common funds include: Say your nonprofit has a $50,000 grant for a youth mentorship program, $20,000 in unrestricted donations, and a $100,000 endowment. Each gets its own fund. Step 2: Set Up a Chart of Accounts Create a chart of accounts designed for fund accounting, tying each account to a specific fund. Use a clear numbering system, like: This structure ensures accurate tracking of each fund’s transactions, simplifying reporting and compliance. Step 3: Track Revenue and Expenses by Fund Log every transaction under the right fund. For example: Use tools like purchase orders, timesheets, or expense reports to stay accurate. Manual tracking works for small nonprofits, but it’s clunky and error-prone with multiple funds. Step 4: Allocate Shared Costs Some expenses, like rent or utilities, support multiple funds. Allocate these fairly using methods like: For example, if your rent is $2,000/month and a grant fund drives 50% of your programs, allocate $1,000 to that fund. Step 5: Monitor and Reconcile Funds Check each fund’s balance monthly to ensure spending matches budgets and restrictions. Reconcile bank accounts to catch errors, like a restricted fund accidentally paying for unrestricted costs. Step 6: Generate Financial Reports Create fund-specific reports to stay transparent and compliant, including: These reports are your ticket to donor trust and regulatory approval. Common Fund Accounting Mistakes to Avoid Even the best systems can trip you up if you’re not careful. Watch out for these common mistakes: The right tools can help dodge these pitfalls with features like automated tracking and compliance checks, keeping your finances on point. What’s Next Effective fund accounting enables nonprofits to manage finances with precision, ensuring compliance and maximizing mission impact. The right tools make this process smoother and more accurate, letting you focus on changing lives. Ready to take control of your nonprofit’s finances? Our accounting software simplifies fund accounting with real-time tracking, seamless integrations, and powerful reports. Schedule a call with our team to learn how we can help boost your organization’s success. [Schedule a Call] For more tips on financial management, check out our blogs:
How to Set Up Effective Job Costing for Construction Businesses
Running a construction business is no small feat. Whether you’re a freelancer managing small renovations or a small business owner overseeing commercial projects, every job comes with unique challenges—fluctuating material costs, labor hours that creep up, and clients who want detailed invoices. How do you ensure each project stays profitable? The answer lies in effective job costing. Job costing is the backbone of financial success in construction. It allows you to track every dollar spent on a project, from nails to labor to equipment rentals, so you can price jobs accurately, avoid losses, and grow your business sustainably. According to a 2024 study by the National Association of Home Builders (NAHB), construction firms that accurately tracked job costs saw profit margins improve by an average of 10%. Yet, many small contractors still rely on guesswork or outdated spreadsheets, risking costly mistakes. This guide walks you through setting up an effective job costing system tailored for construction freelancers and small business owners. We’ll cover why job costing matters, how to implement it step-by-step, and how tools like our software can make the process seamless. Let’s build a foundation for profitability. Table of Contents Why Job Costing Is Critical for Construction Businesses Construction projects are complex. Unlike retail or service businesses, where costs are often predictable, construction involves countless variables—material price hikes, weather delays, or unexpected labor needs. Without a clear picture of expenses, you might underbid a job, eat into profits, or lose client trust with inaccurate invoices. Job costing addresses these challenges by assigning expenses and revenue to individual projects, providing a clear picture of financial performance. Industry data suggests that construction businesses leveraging project data insights can achieve significant cost reductions, with some studies indicating potential savings of 13%. This control is crucial for freelancers and small businesses operating on tight margins, where even a single miscalculated job can jeopardize cash flow. Here’s what effective job costing delivers: For example, imagine you’re a freelancer renovating a kitchen. Without job costing, you might overlook $500 in extra drywall costs or 10 untracked labor hours. With job costing, you’d catch these issues early, adjust your budget, and invoice accurately, protecting your profit margin. Key Components of Job Costing Before diving into setup, let’s break down the core elements of job costing in construction. Each component must be tracked meticulously to ensure accuracy. Effective job costing tracks all these elements at the project or phase level, allowing you to compare actual costs against your budget. Contractors who implement detailed cost codes often experience significantly fewer budget overruns compared to those using generic categories, as this granular tracking allows for better monitoring and control of expenses. Step-by-Step Guide to Setting Up Job Costing Ready to implement job costing? Follow these steps to create a system that works for your construction business, whether you’re a solo contractor or managing a small team. Step 1: Define Your Cost Structure Start by identifying the types of costs you’ll track. Create a list of direct costs (e.g., materials, labor) and indirect costs (e.g., overhead, insurance). Use industry-standard cost codes, like those from MasterFormat, to categorize expenses consistently. For example: If you’re new to cost codes, start simple with broad categories (e.g., “Materials,” “Labor”) and refine them as you grow. A 2024 Foundation Software report suggests that contractors using standardized cost codes improve cost tracking accuracy by 20%. Step 2: Estimate Costs for Each Project Before starting a job, create a detailed budget. Break down estimated costs by phase (e.g., foundation, framing, finishing) and cost type. Use historical data from past projects to inform your estimates. For example: Software like ours can pull historical data to streamline this process, ensuring your estimates are grounded in real-world figures. Step 3: Track Costs in Real-Time During the project, record expenses as they occur. Use timesheets for labor, purchase orders for materials, and receipts for equipment rentals. For example: Manual tracking via spreadsheets works for small projects, but it’s prone to errors. A 2024 Knowify study found that contractors using automated job costing software reduced data entry errors by 25%. Our software syncs with tools like QuickBooks to capture costs automatically, saving you hours. Step 4: Allocate Overhead Costs Indirect costs are trickier but critical. Allocate overhead to projects based on a consistent method, such as: For instance, if your monthly overhead is $5,000 and a project takes 100 labor hours out of 500 total hours, allocate $1,000 (20%) to that project. A 2024 industry guide highlights that accurate overhead allocation helps prevent undercharging, ensuring all project costs are covered. Step 5: Monitor and Adjust Budgets Compare actual costs to your budget weekly or per project phase. If costs exceed estimates (e.g., a $1,000 material overrun), investigate why—price increases, scope changes, or inefficiencies? Issue change orders for client-approved additions to maintain profitability. Many account software provides real-time dashboards to flag budget overruns instantly, letting you address issues before they spiral. Step 6: Generate Job Cost Reports At project completion, create a job cost report summarizing: These reports reveal which projects are profitable and why. For example, a 2024 FastEasyAccounting article notes that contractors using job cost reports improved bidding accuracy by 15%. Share detailed reports with clients to build trust and justify invoices. Choosing the Right Tools for Job Costing The right tools make job costing easier and more accurate. Here’s how to choose the best solution for your business: Construction-specific software is tailored for professionals, offering features like job costing, integration with accounting tools, and mobile access for on-site tracking. These tools handle industry-specific needs, such as progress billing and retainage, streamlining processes and improving accuracy. Common Job Costing Mistakes to Avoid Even with a solid system, mistakes can derail your efforts. Here are pitfalls to watch for, based on industry insights: Construction-specific software helps avoid these issues with automated tracking, standardized templates, and one-click reports, ensuring you stay on top of costs without extra hassle. How to Use Job Costing Data to Grow Your Business Job costing isn’t
SECURE 2.0 Act Explained: What Small Businesses Need to Know for 401(k) Accounting
You’re focused on building your business, managing your team (or maybe just yourself), and trying to keep up with ever-changing financial rules. If 401(k) plans feel like something only big corporations need to worry about—think again. The SECURE 2.0 Act is reshaping retirement plans for businesses of all sizes, and it has real implications for how you manage payroll, benefits, and taxes. This article summarizes key provisions of the SECURE 2.0 Act relevant to small businesses. For full details, visit the IRS SECURE 2.0 Act resources at here. Whether you’re offering a 401(k) for the first time or updating an existing plan, this guide breaks down what you need to know, without the legal jargon. Let’s walk through the most important changes and how they could impact your business accounting, your employees, and even your tax bill. Table of Contents SECURE 2.0 Mandatory Provisions Timeline The SECURE 2.0 Act, signed into law in late 2022, introduced over 90 changes to retirement legislation. But don’t worry, you don’t need to understand all of them. What you do need is a clear timeline of what applies to your business and when. Here are key implementation dates, ordered by effective date, to help you prioritize your next steps: Provision Effective Date What It Means Higher startup tax credits 2023 Small businesses can claim larger credits for starting a new retirement plan. Required minimum distribution (RMD) changes 2023–2033 RMD age increases gradually from 72 to 75, affecting withdrawal schedules. Student loan matching contributions 2024 Employers can match student loan payments with retirement contributions. Part-time employee eligibility 2025 Long-term part-time workers become eligible for 401(k) participation sooner. Automatic 401(k) enrollment for new plans 2025 New 401(k) plans must automatically enroll eligible employees (unless they opt out). Retirement Plan Startup Tax Credit Amounts Starting a retirement plan might sound expensive, but the SECURE 2.0 Act makes it more affordable, especially for small businesses. If you’ve been on the fence about offering a 401(k), these expanded tax credits could make it a much easier decision. Here’s what’s new: Why it matters These credits not only reduce your tax burden but also help you invest in your team. Offering a 401(k) becomes a smart move for recruiting, retention, and financial wellness—without a heavy upfront cost. Required Minimum Distribution (RMD) Changes The SECURE 2.0 Act also brings important updates to Required Minimum Distributions (RMDs)—the age at which individuals must begin withdrawing funds from retirement accounts. Here’s what to know: Why this matters for employers While RMDs primarily affect individuals, plan administrators must be aware of the rules to ensure compliance. It may also influence how your employees view long-term planning, and it could affect your recordkeeping and reporting requirements. Accounting note If you provide retirement plan support or resources to employees, consider updating your materials and software to reflect the new RMD ages. Misinformation here could lead to costly mistakes for older employees. Student Loan Matching Contributions One of the more innovative features of the SECURE 2.0 Act is the option to treat student loan repayments like retirement contributions—and match them accordingly. Starting in 2024, employers can choose to match employees’ qualified student loan payments by making contributions into their 401(k) or similar retirement account. Why this matters Many younger employees prioritize paying off student debt over saving for retirement. This provision gives them the chance to build long-term savings without having to choose between the two. For employers This can be a powerful benefit to attract and retain talent—especially if you’re hiring recent grads or younger professionals. Contact your plan provider early to confirm they can administer this feature, as implementation may require verifying loan payments and aligning with IRS guidelines. Part-Time Employee Retirement Eligibility As a small business owner, you may have team members who work limited hours, and under older rules, they may have been left out of your retirement plan. That’s changing. The SECURE 2.0 Act expands eligibility for part-time workers, making it easier for more employees to participate in 401(k) plans. Here’s what’s changing: Why it matters If you have part-time staff—seasonal workers, assistants, or flexible contractors who work year-round but on a limited schedule—you may need to start offering them retirement benefits sooner than expected. Action tip Make sure your payroll system is tracking hours worked per employee per year. That data will be essential for identifying who becomes eligible and when. 401(k) Automatic Enrollment Requirements Starting in 2025, the SECURE 2.0 Act will require most new 401(k) and 403(b) plans to include automatic enrollment for eligible employees. Employees will be enrolled in the plan by default unless they actively opt out. Existing plans are exempt from this requirement. Key details: Exemptions This rule does not apply to businesses with: If you’re launching a plan in 2025 or later, build this into your onboarding and payroll setup from the start. What’s Next In conclusion, the SECURE 2.0 Act introduces meaningful changes for small business owners and freelancers. While expanded tax credits and broader eligibility for part-time employees create valuable opportunities, they can also add complexity to your already full plate. By keeping up with these changes, you not only avoid compliance issues but also create a more competitive and employee-friendly workplace. Feeling overwhelmed by tax rules and bookkeeping? Let us take the pressure off. Schedule a call with Fynlo and get expert guidance tailored to your business.
What is Multi-State Sales Tax Compliance? A Complete Guide for E-commerce Businesses
You’ve built an awesome online store, uploaded those product photos you spent all weekend perfecting, and now orders are rolling in from California to New York. What started as a side hustle from your spare bedroom has turned into a growing business with customers across multiple states. Each notification ping brings both excitement and a new challenge you might not have anticipated: multi-state sales tax compliance. Unlike a local shop that deals with one set of tax rules, your online business potentially faces different e-commerce sales tax requirements in every state where you make sales. One day you’re celebrating a surge of orders from a new region, and the next you’re wondering if you’ve just created tax obligations in another state. Keeping track of when, where, and how much to collect can quickly become overwhelming, especially when you’d rather focus on perfecting your products or marketing strategy. Don’t worry—this guide will break down everything you need to know to stay compliant without losing your mind. Table of Contents Economic Nexus: The Foundation of Multi-State Sales Tax Compliance Let’s start with the million-dollar question: When exactly do you need to collect sales tax in a state? This is where “nexus sales tax rules” come into play. Understanding these rules is critical for every e-commerce seller. Nexus means having a connection to a state that’s significant enough to trigger tax obligations there. Traditionally, this meant physical presence—having an office, employees, or inventory in a state. But the e-commerce revolution has completely changed the game. The Evolution of Economic Nexus With the Supreme Court’s monumental Wayfair decision in 2018 removing the physical presence requirement, states can now require you to collect sales tax based solely on your economic activity there—even if you’ve never set foot in the state. This created what tax professionals call “economic nexus.” Here’s an example: Imagine you run an online boutique from your home in Florida. You have zero physical presence in California—no warehouse, no employees, nothing. But your products are a hit with California customers, and last year you sold more than $500,000 worth of merchandise to California residents. Having surpassed California’s economic nexus threshold of $500,000 in annual sales, you now have a sales tax obligation in the Golden State. You’ll need to register for a California sales tax permit, start collecting the appropriate sales tax on all future California sales, and send those taxes to California’s tax authorities on their schedule. U.S. State Sales Tax Rates & Economic Nexus Thresholds (As of Jan 2025) As of January 2025, economic nexus laws are in place across nearly all U.S. states, but the rules vary widely. The table below summarizes each state’s: Did you know? In most states, exceeding either the sales or transaction threshold is enough to establish nexus. But in Connecticut and New York, you must exceed both thresholds before you’re required to collect and remit sales tax. State Sales Tax Rate Sales Threshold Transaction Threshold Measurement Period Marketplace Sales Included? Alabama 4% $250,000 None Previous calendar year Yes Arizona 5.6% $100,000 None Current or previous calendar year Yes Arkansas 6.5% $100,000 200 Current or previous calendar year Yes California 7.25% $500,000 None Current or previous calendar year Yes Colorado 2.9% $100,000 None Current or previous calendar year Yes Connecticut 6.35% $100,000 200 12-month period ending Sep 30 Yes Florida 6% $100,000 None Previous calendar year No Georgia 4% $100,000 200 Previous or current calendar year No Hawaii 4% $100,000 200 Current or previous calendar year Yes Illinois 6.25% $100,000 200 Prior 12 months No Indiana 7% $100,000 None Current or previous calendar year No Iowa 6% $100,000 None Current or previous calendar year Yes Kansas 6.5% $100,000 None Current or previous calendar year Yes Kentucky 6% $100,000 200 Previous or current calendar year Yes Louisiana 5% $100,000 None Previous or current calendar year No Maine 5.5% $100,000 None Previous or current calendar year No Maryland 6% $100,000 200 Previous or current calendar year Yes Massachusetts 6.25% $100,000 None Previous or current calendar year No Michigan 6% $100,000 200 Previous calendar year Yes Minnesota 6.88% $100,000 200 Rolling 12 months Yes Mississippi 7% $250,000 None Prior 12 months No Missouri 4.23% $100,000 None Reviewed quarterly Yes Nebraska 5.5% $100,000 200 Current or previous calendar year Yes Nevada 4.6% $100,000 200 Current or previous calendar year Yes New Jersey 6.63% $100,000 200 Current or previous calendar year Yes New Mexico 5.13% $100,000 None Previous calendar year No New York 4% $500,000 100 Previous 4 quarters Yes North Carolina 4.75% $100,000 None Current or previous calendar year Yes North Dakota 5% $100,000 None Current or previous calendar year No Ohio 5.75% $100,000 200 Current or previous calendar year Yes Oklahoma 4.5% $100,000 None Current or previous calendar year No Pennsylvania 6% $100,000 None Prior calendar year Yes Rhode Island 7% $100,000 200 Prior calendar year Yes South Carolina 6% $100,000 None Current or previous calendar year Yes South Dakota 4.5% $100,000 None Current or previous calendar year Yes Tennessee 7% $100,000 None Previous 12 months No Texas 6.25% $500,000 None Preceding 12 months Yes Utah 4.7% $100,000 None Current or previous calendar year No Vermont 6% $100,000 200 Prior 4 quarters Yes Virginia 4.3% $100,000 200 Current or previous calendar year No Washington 6.5% $100,000 None Current or previous calendar year Yes West Virginia 6% $100,000 200 Current or previous calendar year Yes Wisconsin 5% $100,000 None Current or previous calendar year Yes Wyoming 4% $100,000 None (as of July 1, 2024) Current or previous calendar year No Important notes: Further Aspects of State E-commerce Tax While understanding economic nexus is crucial, several other factors complicate multi-state compliance. Consider this section your mini state-by-state e-commerce tax guide to these additional complexities: Product Taxability Variations What’s taxable varies dramatically across states. For instance, clothing is totally exempt in Minnesota but taxable almost everywhere else, while New York only exempts clothing below certain price thresholds. Consider these important distinctions: Marketplace Facilitator Laws If you sell through platforms like Amazon, Etsy, or Walmart
What is an Invoice? (And How to Create One)
Getting paid on time doesn’t have to be a struggle! Creating clear and professional invoices is the first step towards reliable income. In this article, you’ll learn exactly what an invoice is and how to create one that helps you get paid faster. Table of Contents What is an Invoice? An invoice is a formal document you send to customers requesting payment for the goods or services you’ve provided. It provides a detailed breakdown of the costs involved, including individual items or services, quantities, rates, and any applicable taxes or discounts. It tells your customer everything they need to know to pay you by the specified due date. It’s important to remember that invoices are different from quotes (estimates of cost) and receipts (proof of payment). Creating an Effective Invoice: A Step-by-Step Guide with Sample Want to get paid faster and keep things running smoothly with your clients? Here are some key best practices to keep in mind, referencing the sections you’ll typically find on a professional invoice like the one below: Top Tips for Smoother Invoicing Want to make invoicing easier for both you and your clients? Here are some key best practices to keep in mind: What’s Next? Invoicing doesn’t have to be complicated or time-consuming, and it definitely shouldn’t stand between you and getting paid. By creating clear, professional invoices and following a few simple best practices, you can reduce delays, avoid misunderstandings, and maintain smoother relationships with your clients. Start creating your next invoice with confidence. Fynlo offers professional templates and flexible editing tools to help you build, send, and track invoices that get you paid faster. Find out more about Fynlo and see how easy invoicing can be.
5 Areas You Need to Automate Your Finance
It’s 9 in the morning, and after that first essential cup of coffee, the busy day begins. You gather all those slips of paper and digital documents, which already feels like a full task in itself. After carefully reviewing every detail, you finally finish creating invoices, recording financial transactions, and confirming payment statuses. Before you know it, it’s almost noon. The tedious accounting tasks have already consumed half your day, and you’re still not finished. Does any of this sound familiar? When you’re handling finances manually, things can quickly pile up, leading to those frustrating errors, the anxiety of delayed payments, and that constant feeling of your valuable time and energy just disappearing. If this resonates with your experience, read on to discover the power of automated finances and invoicing, especially when integrated with your accounting software and invoicing software. Table of Contents Is Your Manual Finance Process a Struggle? Here’s a quick check to see if automated finances might be necessary for you: If you recognize two or more of these pain points, you’ll likely be eager to learn more about what automated finances can offer: Don’t worry, these struggles are common. In fact, you’re like the majority of small businesses and freelancers still navigating the complexities of manual finances. Let’s explore how automation can change that. The Power of Automated Finances and Invoicing Automated finances and invoicing use technology to handle everyday financial tasks. This includes things like creating invoices, sending payment reminders, tracking payments, and managing cash flow – without needing you to do it all manually. It replaces time-consuming spreadsheets, repetitive data entry, and paper-heavy processes with smooth, digital workflows. Essentially, financial automation lets your financial tasks run like a well-oiled machine in the engine room, operating consistently without constant attention. This ensures invoices go out on time, reminders are sent automatically, and financial data is recorded accurately, all without you having to chase. Why It’s Powerful Key Areas of Financial Automation Financial automation goes beyond invoicing. It touches nearly every part of your financial workflow. When routine tasks are handled by smart systems, you save time, reduce errors, and gain clearer insights. Your Action Plan for Financial Automation Ready to move beyond the manual invoicing process? Here’s a simple roadmap to get you started: Ready to Streamline Your Financial Workflow? Let’s talk. We’ll help you find the right automation tools, like invoicing systems that integrate directly with your accounting platform, simplify your process, and set your business up for scalable success.
23 Actual Financial Metrics from Successful Entrepreneurs
You’ve got the vision, the drive, and the determination, but are you working smart, with the right tools and focus? Successful entrepreneurs don’t rely on passion alone, they rely on the numbers. They don’t just guess, they measure. For those just starting their financial journey, understanding some key terms is crucial, so we’ve put together a guide on 20 Common Accounting Terms for Freelancers to help you get started. Now, for those ready to dive deeper, we asked real business owners which financial metrics they track to stay profitable and sustainable. Here are 23 they recommend. Explore the 23 Metrics Let’s dive into each metric, starting with: 1. Operating Margin When you want to see how well your core business is performing, look at the operating margin. It tells you the profit you’re making from your primary operations, before interest and taxes. This is indicator of how efficiently you’re running things. A healthy operating margin suggests your business is fundamentally strong and sustainable. Operating Margin = (Operating Income / Revenue) × 100% 2. Gross Profit Margin This metric measures the efficiency of your production or service delivery. It shows the percentage of revenue remaining after covering the direct costs of creating a product or providing a service. This helps you understand how well you’re managing those core costs. Higher margins generally indicate efficient operations. Gross Profit Margin = (Revenue – Cost of Goods Sold) ÷ Revenue × 100% 3. Net Profit Margin The net profit margin represents the ‘bottom line’ of a business, indicating the percentage of revenue remaining after all expenses, including taxes and interest, have been paid. This metric provides a straightforward assessment of your business’s overall profitability and serves as a key measure of financial success. Net Profit Margin = (Net Profit ÷ Revenue) × 100% 4. Current Ratio This ratio shows if you have enough liquid assets to cover your short-term liabilities, giving you a quick snapshot of your financial health. While a number above 1 means you can generally pay your immediate bills, a current ratio between 1.5 and 3 is often considered ideal, suggesting a healthy balance. Current Ratio = Current Assets ÷ Current Liabilities 5. Average Revenue per Customer Knowing how much each customer spends on average is key for pricing strategies and understanding customer value. It helps you figure out how to maximize revenue from your existing customer base. This represents the average value each customer brings to your business. Average Revenue per Customer = Total Revenue ÷ Total Number of Customers 6. Break-Even Point This is where your revenue and total costs meet. It’s the point where you’re neither making nor losing money. It’s crucial for setting sales targets and understanding how many units or services you need to sell to start turning a profit. Break-even Point = Fixed Costs ÷ (Selling Price per Unit – Variable Cost per Unit) 7. Debt-to-Equity Ratio This ratio shows how much of your business is financed by debt compared to equity. It’s a key indicator of financial leverage. A lower ratio often signals a more stable financial structure, as it means you’re relying less on borrowed funds. Debt-to-Equity Ratio = Total Liabilities ÷ Total Shareholders’ Equity 8. Bounce Rate Bounce rate represents the percentage of visitors who land on your website and leave without clicking through to any other pages. For online businesses, it’s a key indicator of how well your landing pages are performing. A high bounce rate may suggest that visitors aren’t finding what they expected, or that the content isn’t engaging enough to prompt further exploration. This can be caused by slow load times, confusing layouts, irrelevant content, or a mismatch between your ads and what’s actually on the page. Reducing your bounce rate often starts with improving the first impression—through better design, clearer calls to action, and more targeted content. Bounce Rate = (Single-page Visits ÷ Total Website Visits) × 100% 9. Customer Acquisition Cost (CAC) Want to know if your marketing dollars are working hard enough? This metric tells you exactly how much it costs to acquire a new customer. It’s vital for understanding the efficiency of your marketing and sales efforts, and keeping CAC in check ensures your customer acquisition strategy is sustainable and profitable. CAC = Total Marketing and Sales Expenses ÷ Number of New Customers Acquired 10. Cash Flow Cash flow tracks the movement of money in and out of your business. It’s about having enough liquid cash to cover your expenses and invest in growth. Positive cash flow is essential for the day-to-day running of your business. Want to stay ahead? Find out more about cash flow projection here. Cash Flow = Cash Inflows – Cash Outflows 11. Burn Rate Especially important for startups, this metric measures how quickly you’re spending your cash reserves. It helps you understand how long your runway is and plan accordingly. It’s a key tool for managing your finances in the early stages. Burn Rate = (Starting Cash – Ending Cash) ÷ Number of Months 12. Net Working Capital Ratio This ratio looks at your short-term financial health. It compares your current assets to your current liabilities, giving you an idea of your ability to cover immediate obligations. It’s a quick check on your liquidity. Net Working Capital Ratio = Current Assets ÷ Current Liabilities 13. Cash Conversion Cycle This metric measures how long it takes to convert your inventory and resources into cash from sales. A shorter cycle means you’re more efficient at turning your investments into cash, which is always a good thing. Cash Conversion Cycle = Days Inventory Outstanding + Days Sales Outstanding – Days Payable Outstanding 14. Customer Lifetime Value (CLV) CLV is your guide to building relationships that truly pay off. It estimates the total revenue a customer will generate throughout their journey with you, making it clear why focusing on long-term relationships and retention is so important for your business’s bottom line. CLV = Average Purchase Value × Purchase Frequency × Customer
20 Common Accounting Terms for Freelancers
Running a business, big or small, means dealing with numbers. But for many of us with not much accounting background, those accounting terms can feel like a foreign language. Here’s the thing, Go Remotely’s Accounting Statistics say that 60% of small business owners don’t feel knowledgeable about finances and accounting. Don’t worry, you’re not alone. This guide breaks down 20 essential accounting terms every freelancer or small business owners needs to know. Let’s make sense of the numbers together. Your Financial Glossary Let’s dive into each term, starting with: 1. Revenue/Income Revenue is simply the total money your business brings in from sales or services. Think of it as your gross income, before you subtract any expenses. 2. Expenses Expenses are what you spend to keep your business running and generate revenue. Here are the main types: 3. Profit/Net Income Profit is essentially the financial gain your business achieves when your revenue, the money you bring in, surpasses your expenses, the money you spend. To put it simply, it’s what you get to keep. So, for example, if your business generated $10,000 in revenue and you incurred $6,000 in expenses, you’d end up with a profit of $4,000. 4. Loss A loss is the opposite: when your expenses are higher than your revenue. If you spent $8,000 and only made $5,000, you’ve got a $3,000 loss. This trend is not sustainable in the long term. 5. Assets Assets are anything your business owns that has value, from cash and equipment to your laptop or even your website and intellectual property. 6. Liabilities Liabilities are what your business owes to others, like loans, supplier payments, and credit card balances. 7. Equity Equity is essentially your net worth in the business. It’s what would be left if you sold all your assets and paid off all your debts. 8. Cash Flow Cash flow is the movement of money in and out of your business over a period of time. It’s about having enough cash on hand to pay the bills. Even profitable businesses can struggle with poor cash flow. (Check out our blog on Cash Flow Projection!) 9. Accounts Payable (AP) Accounts Payable (AP) represents the money your business owes to suppliers or other creditors for goods or services received but not yet paid. For instance, if you’ve received inventory or supplies on credit and haven’t paid the invoice yet, that amount is considered Accounts Payable. 10. Accounts Receivable (AR) Accounts Receivable (AR), on the other hand, is the money your customers owe your business for goods or services you’ve already delivered or provided. It’s the opposite of Accounts Payable; it’s money coming in. For example, if you’ve sent an invoice for $500 for services rendered and the customer hasn’t paid yet, that $500 is an Accounts Receivable. It’s important to track AR carefully, as it directly impacts your cash flow and ability to cover your own expenses. 11. Inventory Inventory refers to the goods your business holds for sale. It’s the items you have on hand, ready to meet customer demand. In essence, effective inventory management is crucial. You don’t want to run out of stock and lose sales, but you also don’t want too much stock sitting around, which leads to waste and ties up your capital. 12. Depreciation Depreciation is the gradual loss of value of your assets over time, like a restaurant oven getting older. It’s recorded as an expense on your income statement. 13. Cost of Goods Sold (COGS) COGS is the direct cost of producing your goods, including materials and labor. For a restaurant, it’s the cost of ingredients and food preparation. For an online shop selling handmade crafts, it’s the cost of raw materials like fabric and yarn, plus the labor involved in creating the finished products. 14. Balance Sheet A balance sheet is a financial picture of your business at a specific moment, showing what your business owns (your assets), who your business owes money to (your liabilities), and how much you, the owner, have invested (your equity). It’s based on the equation: Assets = Liabilities + Equity. (Learn more about balance sheets here.) 15. Income Statement An income statement shows your business’s revenue, expenses, and profit or loss over a specific period (e.g., a month or a year). It tells you how well your business performed during that time. So, how does it differ from a balance sheet? Well, a balance sheet provides a snapshot of your business’s financial position at a specific moment, while the income statement focuses on your performance over time. They work together to give you a full picture of your financial health. 16. General Ledger The general ledger is the comprehensive record that organizes all your business’s financial transactions. Imagine it as a detailed logbook of every financial event, categorized by type, such as sales, expenses, and asset changes. This organization makes it easy to see the complete picture of your business’s financial activity and is the backbone of your accounting system. 17. Tax Deductions Tax deductions are expenses you can subtract from your income to lower your tax bill. (Want some crazy tax deduction examples? Check out these approved deductions!) 18. Budget A budget is your financial plan for a future period, showing your estimated revenue and expenses. It’s usually re-evaluated regularly to ensure it remains accurate and reflects the current state of your business. 19. Invoice An invoice is a bill you send to your customers for goods or services you’ve provided. It details what they owe you and when it’s due. 20. Bookkeeping Bookkeeping is the essential process of recording and organizing your business’s financial transactions. It’s about keeping a detailed record of every dollar that comes in and goes out, like customer payments and vendor bills. While it used to be done in physical ledgers, modern bookkeeping is largely handled by digital software, making it more efficient and accurate. So, there you have it, 20 accounting terms you need to know as
Restaurant Owners: A Beginner’s Guide to Creating a Business Plan
You’ve got the vision—your very own restaurant! Whether it’s a cozy café, a bustling bistro, or a lively food truck, before you fire up the grill or brew that first pot of coffee, you’ll need a solid business plan. Think of it as your key to success. By working through the hard parts, you’ll gain a clear and focused understanding of what it takes to succeed. With all the right pieces in place, it’s a document you can complete in a day. This guide walks you through the essential steps to create one and includes links to a free, easy-to-use template to help you get started today. Table of Contents What is Business Planning? Before you even think about opening your restaurant, you’ve probably got a million questions swirling in your head: What kind of food are we serving? Who’s our ideal customer? How much is this whole thing going to cost, and when do we start seeing a profit? How are we going to get the word out? You’re basically trying to piece together a puzzle, and that’s exactly what a business plan does: it gathers all those puzzle pieces into one clear picture. Think of it like a roadmap for your restaurant’s journey. It takes all those initial ideas and turns them into a structured plan, outlining the route you’re going to take. With this map in hand, you’re not just keeping yourself on track, you’re creating a reference point for everyone involved. The business plan is also important to our stakeholders, for example investors can access the financial projections, potential partners would understand the direction and consider if they would collaborate. It’s all about showing people the whole plan clearly and align everyone’s expectation. What are the Essential Parts of a Business Plan? Section 1: Executive SummaryAn executive summary is like a strategic brief. It’s a short, compelling preview that captures the essence of your business plan, enticing potential investors and partners to want to know more. It’s a narrative designed to spark interest by highlighting the most compelling aspects. Here’s what you’ll want to include: Section 2: Unique Selling Proposition (USP)This section details your restaurant’s Unique Selling Proposition (USP), articulating what distinguishes it from competitors and why it is poised for success. It addresses fundamental questions: What specific problem does your restaurant solve for its target market? How does it effectively provide the solution? For instance, you might identify an underserved niche, such as the lack of authentic Turkish cuisine in a thriving business district, or capitalize on a recent market shift, like the closure of a popular restaurant creating a demand gap. Therefore, this summary should describe your industry, your restaurant’s location, and its distinguishing features. Will you specialize in gourmet burgers near a sports arena? Feature a family recipe that’s a local sensation? Clearly convey your vision for success to your readers. Section 3: Competitive AnalysisBefore launching your restaurant, understanding the local food scene isn’t just helpful, it’s essential for long-term success. In this part of your business plan, you’ll explain how your restaurant will navigate the competitive landscape. And remember, your competition isn’t limited to just similar restaurants, it also includes meal delivery services, grocery stores with ready-to-eat options, and even entertainment venues that serve food and drinks. Doing your homework like visiting other spots to check out customer demographics, menu styles, pricing, and overall vibe, can give you valuable insights into what’s working (and what’s not) in your area. The goal here is to reduce risk and uncover real opportunities. A solid competitive analysis helps you spot gaps in the market, understand what your potential customers are looking for, and learn from what others are doing—both the good and the not-so-good. Section 4: Food OfferingsNow that you know well about your competitors, it’s time to think of what you’ll sell and how they are priced. Generally, the pricing should balance ingredient costs and what your target customers are willing to pay based on local market conditions. Design your menu for operational efficiency. Utilizing overlapping ingredients across multiple dishes can minimize food waste and reduce overall operational expenses. Consider highlighting high-margin items, such as coffee, beverages, and desserts, depending on your restaurant’s concept. Implement bundled deals to encourage higher per-customer spending. Think of a signature item for your restaurant, like the glazed doughnuts at Krispy Kreme or the fried chicken at KFC. People visit specifically for that standout dish, and often end up buying other items too. Section 5: MarketingWhat are your strategies for getting the word out about your restaurant? Will you advertise with KOLs, run ads on social media, distribute leaflets to nearby residents or offices, or offer special promotions for students? Try to estimate the cost of each marketing channel and the number of customers it may attract. In other words, calculate the customer acquisition cost. Explain why you believe the channels you’ve chosen are the most effective for reaching your target audience. And don’t forget, you’ll want to build a strong brand identity too, something that’ll keep people coming back for more. Once you have written this section, take a step back and read it from an investor’s perspective. Does it inspire confidence? Does it make you want to invest? If the answer is yes, great job. This section is doing its job well. Section 6: Operation PlanThis section explains how you’ll run your restaurant on a day-to-day basis, from setting up the space to managing everyday operations. You’ll want to think through all the important details, including your restaurant layout, how many staff you’ll need, what equipment to purchase, where to source your supplies, and the key costs involved, such as rent, wages, ingredients, and technology. Using the right tools will make life a lot easier. For example, a POS system can help your customers pay quickly and accurately. You might use an inventory system to keep track of stock, a clock-in tool to manage staff hours, and accounting software to stay on top of
