One of the latest developments in the accounting industry is Cloud accounting. It allows you to access accounting software through your web browser instead of installing it in your computer. Also, known as online accounting, it facilitates bookkeeping for your business without installing any programs in your computer. This type of accounting relies on a mechanism that is known as Cloud Computing. Here is more about this technology and online accounting.

How the Cloud enables online accounting

The Cloud is an Internet technology where programs can run on remotely located servers instead of your local machine. These programs are accessible by connecting to these servers over the Internet. As a result, you dont have to install them on your computer. Thanks to this set up, you can access the programs from anywhere you want as long as you have an Internet connection. Accounting programs can be hosted on Cloud infrastructure. In this case, they enable online accounting.

In recent times, Cloud accounting stands out as the biggest step forward in this industry. This type of bookkeeping enables business owners and accountants to gain access to the same systems at the same time. This is regardless of where each party is located.

Online accounting saves accountants the effort of having to import client data into their computers before manipulation. Secondly, it prevents the catastrophe of losing client data due to computer malfunctions or viruses. In this way, Cloud or online accounting provides a double solution to accountants and business people as well. There are many other benefits of Cloud accounting.

Benefits of online accounting

Flexibility: With this type of accounting, stakeholders can access business data efficiently from anywhere they are. This means that they do not have to go into the office so as to view or edit the accounting data. With Cloud accounting, they can also gain access to the accounting data at any time they want. In this way, the clients or accountants can view the accounting data even after working hours are over. This gives them maximum flexibility.

It is easier to maintain: Cloud accounting requires less effort to maintain than traditional types of bookkeeping. This is because you do not have to install or routinely update any program in your computer system. The Cloud accounting software provider will be responsible for these activities on your behalf. This keeps the cost of maintenance low on the clients side. It also frees you up to concentrate on actually running your enterprise.

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Security is guaranteed: Individual business enterprises usually do not implement major security mechanisms to protect their data when its stored in the computer. However, Cloud accounting providers apply high-tech security to keep the program and its contents safe from hackers. They implement encryption to maintain the data integrity. They also perform backups of the data on a regular basis. The servers that contain the software are regularly scanned and all internal or external communications are monitored.

Online accounting is the future of bookkeeping. It is a technological trend that is currently being implemented in the business sector. Thanks to its characteristics, Cloud accounting is the modern business persons best friend.

As tax time nears there are terms every person should know before singing on the dotted line. If you are a person that uses tax services, then you need to speak their language or you may be in a risk of receiving an audit. Remember when you sign the tax documents you are stating that you know and understand everything in the documents, which many do not. Learn these basic terms that are used in the accounting world below.

Adjusted Gross Income: This is the total income that you made minus any acceptable deductions. This number is crucial for calculating your tax liability. This will determine which tax bracket that you fall in and how much you can contribute to your tax deferred retirement.

Defined Benefit Plan: Another name that this goes by is a traditional pension plan; this is the type of retirement plan that promises a certain benefit at the end of the month to its participants. The benefits are usually based on the persons age, salary and the number of years that she or he worked for the sponsoring company.

Defined Contribution Plan: This is the more common benefit plan and this type of retirement plan includes both the contributions from the employer and employee. Based on the monies that are made and the value of the contributions of the account will change. There are several defined contribution plans, there is the 403B, the profit-sharing plan, employee stock ownership plan and the 401K plan is all examples of defined contribution plans.

Exempt from Withholding: Exempt from withholding simply means that you do not have any federal income tax being removed from your check. To be excused from withholding you should have a certain income, dependency criteria and tax liability. You will still have to pay social security tax even if you do not have to pay federal tax.

Itemized Deduction: This deduction is for anyone that is employed or self employed and medical, dental, taxes, interest from your mortgage, charitable contributions, investment interest, miscellaneous deductions, and casualty and theft losses are all deductions that can be used as an itemized deduction. When filing, you can only file either standard deductions or itemized but never both.

Tax credit: The tax credit lessens the amount of your tax liability. This credit is given for higher educational costs, child care expenses, and earned income credit for lower income families and for qualifying children.

As tax time nears there are terms every person should know before singing on the dotted line. If you are a person that uses tax services, then you need to speak their language or you may be in a risk of receiving an audit. Remember when you sign the tax documents you are stating that you know and understand everything in the documents, which many do not. Learn these basic terms that are used in the accounting world below.

Adjusted Gross Income: This is the total income that you made minus any acceptable deductions. This number is crucial for calculating your tax liability. This will determine which tax bracket that you fall in and how much you can contribute to your tax deferred retirement.

Defined Benefit Plan: Another name that this goes by is a traditional pension plan; this is the type of retirement plan that promises a certain benefit at the end of the month to its participants. The benefits are usually based on the persons age, salary and the number of years that she or he worked for the sponsoring company.

Defined Contribution Plan: This is the more common benefit plan and this type of retirement plan includes both the contributions from the employer and employee. Based on the monies that are made and the value of the contributions of the account will change. There are several defined contribution plans, there is the 403B, the profit-sharing plan, employee stock ownership plan and the 401K plan is all examples of defined contribution plans.

Exempt from Withholding: Exempt from withholding simply means that you do not have any federal income tax being removed from your check. To be excused from withholding you should have a certain income, dependency criteria and tax liability. You will still have to pay social security tax even if you do not have to pay federal tax.

Itemized Deduction: This deduction is for anyone that is employed or self employed and medical, dental, taxes, interest from your mortgage, charitable contributions, investment interest, miscellaneous deductions, and casualty and theft losses are all deductions that can be used as an itemized deduction. When filing, you can only file either standard deductions or itemized but never both.

Tax credit: The tax credit lessens the amount of your tax liability. This credit is given for higher educational costs, child care expenses, and earned income credit for lower income families and for qualifying children.

Accountants are very special people. They are the doctors of every organization. They know when things are doing well and when they are going down under. Unfortunately they could also be the reason why a company is going down under. You need to keep a close eye on your financial records and there are signs that cannot be ignored.

Have you noticed your finances reducing? Have you noticed that something wasn’t quite right with your finances. Do you think your accountant is stealing money? How do you know if you accountant is stealing money and if they are how can you protect your account?

No matter what you should know your companies finances. Sadly, it is a problem in today’s world that accountant’s are stealing money from their companies. They can steal money easily since you aren’t in control of the day to day finances. You should know some ways on how to protect your account.

Sourced from: http://businessknowledgesource.com/finance/is_your_accountant_skimming_off_the_top_how_to_know_025854.html

We need accountants, not every business person is good with numbers. There are things they ought to do but some things are off limits.

This list is not meant to be all-inclusive, but if any of this rings true for you, run – don’t walk – to your nearest CPA.

You don’t have access to your accounting system. Why on earth would you give someone full control of your finances without maintaining access yourself so you can review their work from time-to-time? These are your records and, I believe, your company’s property, so don’t let anyone tell you that you cannot have access to your accounting system.

Your bookkeeper gets defensive when you start asking questions or requesting information. If you ask to see a profit & loss statement, a bank detail report, or any type of banking or financial document and you get an attitude in response, this is a red flag. No one should be so protective of his or her work that you cannot review it. If you are met with such resistance, the reason is probably because your books are a complete mess and the bookkeeper does not want to get fired. This goes back to #1. You should not even have to ask; you should have full access to your records at all times.

Your bookkeeper does not prepare bank and credit card reconciliations. This is one of the most basic bookkeeping tasks for any business. Why? Because it is your checks-and-balance system. It is the way you know if you have everything in your financial system that should be there – nothing more or less. These reconciliations should be done monthly, and I advise you get copies of them. This shows your cleared and outstanding checks, deposits and all other transactions, providing a great snapshot of your business transactions.

Sourced from: http://iconisgroup.com/5-warning-signs-your-bookkeeper-doesnt-have-a-clue/

Since now you know what an accountant can do intentionally or by accident there are signs that you should know. These are quite blatant and if you turn a blind eye then you have no one else to blame but yourself.

Here are just some of the internal controls King recommends business owners adopt to protect against theft.

1. Open the bank statement yourself.

Review each check for authorized payee, signature and approved electronic payments before handing it over to the bookkeeper.

2. Don’t let your bookkeeper reconcile the bank account.

The person paying the bills should not reconcile the account – that’s how embezzlers cover their tracks.

3. Close the prior period.

Once you produce a financial statement, that period should be closed to reduce risk of hiding a fraudulent transaction in a prior year.

4. Attach scanned images to each transaction.

Most fraud occurs through check tampering, where the bookkeeper changes the payee to him or herself.

Sourced from: http://www.insperity.com/blog/6-easy-steps-to-ignore-if-you-want-your-bookkeeper-to-steal-your-money/