5 Signs You Need to Upgrade Your Accounting System

May 2020 Newsletter Feature

To maximize profits in your business, all of your business functions need to run smoothly, including your accounting department. Your accounting system is at the core of your accounting function. If it is old or lacks the features you need, your business may suffer.  Here are five warning signs you can look for to determine if it’s time to upgrade or replace your current accounting system with something more cost-effective. 

  1. Not enough users

If your current system limits the number of users you can have in the system at any one time, this could be a major enough reason in itself to switch to a larger option. Luckily, most accounting software companies include an accountant user for free, so at least this type of user doesn’t have to count toward your total requirements. 

If you’re not sure how many users you currently have a license for, we can help you check on that. It might be as easy as buying more licenses if you’re not at the maximum capacity.  But if you are at maximum, it may be time to look for a better accounting system with room for you and your business to grow. 

  1. Outdated

 If your accounting system runs on desktop-based software that’s upgraded every year and you have not paid for or installed the upgrades, then your system is outdated.  If it’s been sunsetted, that means the software vendor no longer supports the software. You are at major risk for the software crashing, getting buggy, getting hacked, or worse, permanently breaking. 

The cost of getting the system current may be better spent looking for a new alternative, or moving to a cloud-based system where updates occur automatically. 

  1. Lack of functionality or scale

It is commonly the case that your business has grown so much that it’s outgrown your original accounting solution. That’s good news!  It’s time to find a solution that will scale better for your business. 

You might be missing important features that are costing you more time and money than if you were on a system that offered those features. Common time-wasting activities in accounting include too much time spent on data entry and/or Excel spreadsheets to make up for what the accounting system can’t do.

  1. Lack of reporting and analytics

If you’re unable to receive the reports and analytics you want to run your business better from your current accounting system, it may be time to switch. With better data comes better decision-making and if lack of data is costing you money, then it’s time to find a more robust system.

  1. Lack of integrations

Thousands of apps exist to expand accounting systems’ core functionality. If your current accounting system lacks integration capabilities or does not have apps that are built to integrate with it, you may be missing out on additional functionality.  This include mobile apps; it’s quite common now to do much of your accounting work from your mobile phone. 

Does your current accounting system have any of these red flags?  If so, please reach out. We can help you find a best fit for your accounting needs. 

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Categories: May 2020 Newsletter

How the New Tax Law, CARES, Impacts Individuals

May 2020 Newsletter Feature

IRS and Congress have given individuals a number of ways to build up their cash reserves and/or pay less in taxes. Here are a few opportunities for taxpayers.

Stimulus checks from the IRS

Many of you received stimulus checks in the last month as a result of new laws designed to help you weather the economic downturn.  These Economic Impact Payments are not treated as income and you will not owe taxes on your payment. 

If you were eligible for a larger payment than what was received, the IRS will provide an opportunity on your 2020 return (filed in 2021) to make an adjustment to get any additional money you were due.  Conversely, if the IRS finds that someone received a larger payment than what they should have, the taxpayer will not be required to pay it back.

Dipping into retirement

Taxpayers have the ability to withdraw up to $100,000 from retirement accounts without paying the 10 percent penalty if the distribution is COVID-19 related (you need it to care for spouse and dependents or you experience adverse effects of quarantine/not allowed to work) from January 1, 2020 through December 31, 2020.  Income is included over a three-year period, unless the taxpayer elects otherwise.  If the amount is repaid, it is treated as a trustee-to-trustee rollover. 

Not dipping into retirement

Required Minimum Distributions (RMDs) for retirement accounts have been suspended.  If you are normally required to take a minimum distribution from your retirement account, you can skip it during the 2020 year. 

IRS payments for back taxes

If you are on a payment plan with the IRS for back taxes, you can suspend payments between April 1st and July 15th.  Interest on the amount due will continue to accrue.

Tax payments for 2020 taxes

Payment due dates for Q1 (normally due on 4/15) and Q2 (normally due on 6/15) estimated tax payments have been adjusted to July 15, 2020.

Deadlines

Since retirement contributions are tied to the tax return due date, the deadline for making a contribution to your IRA for 2019 has also been extended to July 15, 2020.

HSA and Archer MSA contributions for 2019 must be made no later than July 15, 2020.

Student loans

Federal student loan payments are suspended through September 30, 2020 and will not accrue interest during this time period.

Employers can offer to pay an employee’s student loans and other educational assistance up to $5250 without the benefit being taxable to the employee. 

Charitable contributions

Charitable contribution deductions will be reported differently on the 2020 tax return.  In the past, a taxpayer would have to itemize their deductions in order to get a tax break from making a charitable contribution.  For 2020, you can deduct up to $300 in cash donations without having to itemize your deductions.  Additionally, the maximum limit of how much a taxpayer can deduct has been eliminated.

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Categories: May 2020 Newsletter

November 2019 Newsletter

Article Topics Include:
  • Get Organized with This 32-Item Year-End Close Checklist
  • Due Diligence Requirements
  • The Ten Biggest Money Leaks in Your Accounting System – Free Report Download!

CLICK HERE to view the November 2019 newsletter!

Categories: Uncategorized