Should I Stay or Should I Go Now?

Admit it, you have probably daydreamed about what it would be like not to have to show up for your job and to be more in control of your life. So just quit and be free! I know, let’s get real. Few of us have the money to live without the income that our current job provides. Ok, we need the money, but besides that, what is holding you to your job?

From the time that you were a kid, if you are like most people, your life plan probably included education so that you could get a "good job". What makes a job good? Perhaps it is a great income to do the kind of things that you like to do in your off-time. It may include good health benefits, retirement, or other company perks.

What Keeps You At Your Job?

To know if the job you are at is really where you ought to be, first you have to know why you are there in the first place. If the reason that you showed up for work today is because that’s where you went to work the day before, maybe it’s time to analyze what’s in it for you to stay. For many, a traditional job strikes a balance between risk and reward that they are satisfied with. Note that I didn’t say "happy with". It pays the bills and gets one by, but maybe that’s all it does.

When you know what holds you to your present job, you can also know if you are staying for the right reasons. Maybe you are, so let’s find out.

Income

Probably the number one reason that one stays at a job is that it supplies the income necessary to pay the bills. Hence the term, "It’s a living." So the question to ask is, "Am I staying here because the income is what I want, or because I don’t have another income source presently."

Are you really making the kind of money that you would like to make? When you get a raise, does it really get you closer to your financial goals? In a previous article, it was shown that if you get a 5% raise each year, which is considered very good in most companies, once you factor in inflation, 10 years from now, you will only earn about 10% more in today’s dollars than you do now. Is 10% enough to change your lifestyle? Is it likely that your expenses 10 years from now might be 1/10th more than they are today? Probably.

So again, are you getting the money that you want and deserve, or is your employer paying you just enough to keep you?

Stability

A popular reason for staying with a company that may not be meeting your needs is the perceived stability of working for a single employer for a long period of time. Your grandfather might have lived in a time where you put in your 40 years and got your gold retirement watch, but those days are not much more than a memory today. Fewer and fewer employees manage to work their entire career for a single company and retire with them.

The landscape of business has changed. Corporate layoffs, restructuring, downsizing, and reorganizations make the likelihood of a single-company career very unlikely. Companies of any size are often slaves to their own shareholders. They are required to make decisions to affect this quarter’s profits. Often the ordinary working person is the one to pay the price.

If you stay with your present employer because of employee loyalty, just realize that your employer may not feel that same loyalty to you. Earlier in my career, I worked for Hewlett Packard for about seven years. HP was well-known as one of the best companies in technology to work for. Most employees that I knew there felt secure that there had not been a layoff at the company in the traditional sense for many years. As long as you were willing to relocate to another division, you pretty much had a job for life. At least, that’s what the expectation was. When I left HP to pursue a promotional opportunity that I couldn’t get within the company, my co-workers thought I was crazy. Nobody left the security that HP provided willingly. Well, that was then. The division of HP that I left has since all but disappeared, leaving many of the employees with very uncertain futures. The employees were loyal to the company, and many of them passed up opportunities elsewhere, clinging to the perceived security of a big company.

Insurance

Especially if you have children, one of the biggest benefits that a company often provides is health insurance. It can be expensive to purchase your own insurance, so many employees feel that they don’t have a choice but to stay where they are at. However, you may want to consider how many companies are reducing their health insurance benefits and buying into plans with less coverage and higher co payments and deductibles. Many are paying a lower percentage of the premium costs as well, passing on a higher percentage of the total premium to be paid by the employees themselves.

For the self-employed, there are many options for purchasing your own insurance. In many states, you can buy into group coverage with organizations for the self-employed. When I worked as a free-lancer, I didn’t have my own insurance, but I was able to find discount plans that often rivaled insurance once I considered the co payments. One in particular that I used gave up to a 50% discount on various services and medications. Also, for uninsured patients, one can often get deals with a hospital’s billing office of up to 50%. In one case, I actually paid more with insurance for one surgery than I would have paid with an uninsured patient discount. While there are many considerations, health insurance involves more than "yes you have it" or "no you don’t". Still, for many of us, good health insurance is a big consideration. Just know that you have options, even if self-employed.

Promotional Opportunities

Many large companies provide "move up" opportunities within the company. Some of the companies that I have worked for have "hire from within" objectives as encouragement for employees to stay. As long as you are not passing on opportunities now for ones that might happen later, this can be a motivator to stay right where you are. Just know that others are likely shooting for that position as well, so keep your options open.

You Enjoy What You Do

The fact is that I am one of these people. With a million dollars in the bank, I would still do the kind of work that I do now. If this fits what you do, this may be the strongest motivator to stay where you are. Just take into consideration that you might be able to do what you like to do and get paid better for it or to have an even better work environment. If you love what you do, you are doing better than most, so I hope this is the case.

Why Might You Want to Move On?

One could take the topics above (income, stability, insurance, etc.) and create reasons why not to stay based on their opposites (not enough income, instability, etc.). In addition, there are a few more that may apply.

No Say In What Happens at Work

It can be very frustrating to see a problem and have no power to fix it. If you do not occupy a management position in many companies, your ability to affect positive change can approach zero. When you work for yourself, one of the biggest advantages that many find is that they can see a problem and fix it. No committees, signature loops, no board meetings. You can be assured that your ideas get implemented when you work for yourself.

Work Annoyances

These include personality conflicts, undesirable work shifts, company policies, work environment, or dozens of other factors. When weighing these kinds of very objective factors, it all comes down to how badly they irritate you. Is this something that you can accept and live with, or will it continue to fester and cause more and more problems. Sometimes these issues can compound until they become unbearable, while other times, you just accept that you can’t change them and move on. The key is to know yourself and to take a hard look at whether these issues are a bump in the road or if they will make you miserable over time.

Commute

If you commute an hour per day, five days per week, fifty weeks out of the year, that comes to 250 hours of time spent each year. Is your commute affecting the quality of your day adversely? Some people commute up to double that amount, which can really cut into their personal and family time. Even at an hour per day, that adds up to six full workweeks of potentially unpleasant time each year that you don’t even get paid for!

So, Stay or Go?

If you want to know whether you are where you should be or not, weigh the pro’s and con’s of your current job. Even if the negative aspects of your job outweigh the positive ones, you have to be honest with yourself and try to be as objective as possible. Some people will never leave the safety (or perceived safety) of their present job, no matter how they hate it. For others, the good simply outweighs the bad, so they stay.

Either way, know yourself and what you need to accomplish to be truly happy over the long run. Sometimes you have to leave what you know to find something better. As long as you have weighed your options and choose to stay where you are at now, you will know that you are doing so because YOU chose to, not because you were forced to stay.

Income Options

It might not surprise you to find that we are selling something. 😉 The Professional Bookkeeper (PB) course teaches you how to start your own successful Accounting and Bookkeeping service. The PB program teaches you how to make $35-$75 Per Hour helping small businesses manage their money, and you can get started without quitting your current job. If that kind of income is appealing to you and you can find the drive to make a change, we will show you the step-by-step process that thousands of our graduates have followed to financial success.

They love the freedom of working for themselves and making a great income. Maybe you would too.

Learn More About Starting a Successful Accounting Service With the Professional Bookkeeper Program

Why Do You Want to Work For Yourself?

Signumd Freud summed it up many years ago when he stated that there is a reason behind every action that a person does. So if you are considering starting your own business, you must have a reason. There are many benefits, or reasons, why you might want to start your own business. So let’s examine “What’s in it for you?”

MONEY!

One thing that makes starting a business really rewarding is . . .  the rewards! If you are like most people, you have worked most of your life putting money into your boss’ pocket. Chances are that your boss probably drives a nicer car than you do, goes on more expensive vacations than you do, and lives in a nicer house than you do. Is this fair? It could be said that it is fair because it is what we agreed to, but maybe it is time for you to make a better deal for yourself. Starting your own business is an invitation to change your life in a meaningful and rewarding way. Is $30-$60 Per HOUR rewarding enough? If making that kind of income would make a positive impact upon your life, we have a proven system for starting an Accounting and Bookkeeping service that will make that kind of cash for you and your family.

When you start your own business, you own something of value that pays off now and is an investment in your future that you can pass on to your children. It will provide for you in your retirement years because your established business is valuable to investors that may not have the courage that you do to build a business. They would rather purchase an investment that is already generating proven income. Our secret is that our system is so proven by thousands of our graduates, that there is little risk.

One graduate of our training started her small business two years ago and is now selling her practice for $100,000 and moving to Australia. Your Accounting and Bookkeeping service provides up to $80,000 or more per year working full-time, but isn’t it nice to know that if you decide that you would like to follow another path that you can cash in at any time? If you work for someone else, when you quit, your income stops. When you build a business, you build equity in something of redeemable value!

Learn How Much Your Earning Potential Will Grow

Be Your Own Boss

Have you ever taken a day off on a whim, just because you felt that you needed it? Without calling in sick, do you have that kind of flexibility? Does the owner of the business that you work for? When you own your own Accounting and Bookkeeping business, you set your own hours and work the days that you want to. If you just want to take a play day with friends or family, the only one that you have to convince is YOU. Who wouldn’t want that kind of freedom? Many of our graduates work out of their own homes and enjoy the ability to work in formal business attire or in their pajamas. While that may not be your style, isn’t it nice to know that you could?

Stability

You likely don’t equate starting your own business with stability, but let’s put it this way: If you work for someone else and they have financial trouble, who is the last person out of a job? If you said the business owner, you would be correct. The facts are that most home businesses succeed and our graduates are proof. We have received literally thousands of testimonials from our graduates that rave about how the Professional Bookkeeper™ program changed their lives and put control of their financial future in their own hands. We know that our marketing system works because so many of our graduates have proven it through their own successful Accounting and Bookkeeping services.

Prestige

If someone tells you that they are a small business owner, they are saying something about themselves: that they have the courage to create something, to be more. We often respect those that have the fire inside them to really achieve their dreams. It has been said that the real tragedy is that most of us die with our music still in us. We have great ideas and ambition, and with the proven direction of the Professional Bookkeeper™ program, you have a roadmap to success that thousands testify to.

Tax Benefits

Once you own your own business, there are so many things that you are legally entitled to deduct on your taxes. Examples of things that will be completely or partially tax deductible when you start your business are your car, your business attire, a home office, and most business costs that you incur. These are all legal and appropriate deductions that will lower your tax burden and let you keep more of the money that you make.

PB – Professional Bookkeeper Program
Learn More

Training Included:

Accounting Made Easy – – Course Module 1
Master the tools, procedures, and underlying principles that make up the bookkeeping processes of all businesses. Understand the core building blocks of Accounting and Bookkeeping. — 9 Videos & Manual. See Sample

Practical Small Business Applications — Course Module 2
Apply your understanding of the core accounting principles to specific industries. You will learn to set up books from scratch, do payroll like a seasoned pro, and much more. — 6 Videos & Manual.See Sample

Advancing your “Account-Ability” — Course Module 3
Sure ways to set up complete bookkeeping systems and manage the books for a variety of more sophisticated industries. — 9 Videos & Manual.See Sample

Building a Successful Accounting Service — Course Module 4
Learn the steps to finding paying clients. Start and Grow an accounting practice following a proven program tested and perfected since 1979. — 7 Videos & Manuals.See Sample

Two Additional Months Follow-up Support (Free Promotional Offer)
1 month support is included for each module plus 2 months extra for a total of 6 months follow-up support

Customized Web Site (Free Promotional Offer)
With your purchase we will create a custom Web site for your business and host it for you for free for 6 months. Your Web site will become a valuable part of your marketing; in many cases you may only need to refer prospective clients to your site and it will sell your services for you. See CustomUniversal Accounting® Website

Two Additional Practice Sets (Free Promotional Offer)
Practice makes perfect. The modules already contain practice sets for nine different businesses. With your purchase you’ll receive two more practice sets, giving you eleven in all. This will give you even more confidence and experience in various industries and the opportunity to work with additional types of clients.

Professional Bookkeeper Testing (Free Promotional Offer)
Certificate of completion (final grade greater than 65%)
Certified Professional Bookkeeper (with 90% or better grade)

Course Countries (US, Canada, etc)
Course intended for US, Canada, and anywhere people have accounting needs.

Professional Bookkeeper Guarantee
If, after completing the course, you feel the course didn’t live up to your expectation, simply return the materials to Universal, for a 100% refund of any monies paid.

PB – Professional Bookkeeper Program
PB - Professional Bookkeeper Program

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We will customize a program for you based on your career goals, experience level, and budget.

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Why Accounting is Critical to Success

There are three primary reasons accounting is critical to the success of every business:

  • Tax Planning
  • Cash Flow Management
  • Management Information

Lets go through each of them in the order above.

Tax Planning

How would you like to be the coach of a basketball team, but were not allowed to see the score, nor the statistics until the end of the game? Does it surprise you that many small business owners run their businesses this way?

Many small business owners just collect all their financial information in a box during the year. After the year is over, they will drop these on a tax preparer’s desk, and hope the tax person can figure the assortment of papers out. The tax preparer then does his/her best to sort through the materials, and arrive at the information the IRS is looking for. Then a phone call to the wearied business owner will notify him/her of the damages.

It doesn’t take much imagination to realize that this is no way to manage a business. With information available throughout the year, a business can take advantage of tax deductions and tax planning concepts that will reduce taxes for the owner. It’s not unusual to save the business more on taxes than you charge them in fees for a year.

Cash Flow

Every business owner knows that cash is the “life blood” of the business. Without it, the business suffers and in many cases is forced to close. On the other hand, with proper cash flow management, a business owner can make the best use of his/her cash and anticipate cash needs in time to arrange for financing, if necessary.

Furthermore, knowing the bank balance is not enough. A business can have a sizable bank balance, but be in terrible shape. Our role is to go beyond the bank balance and see further cash needs and resources.

Not only will you be able to provide the business owner with accurate lists of cash resources (current assets) but you will also assist them in collecting accounts receivable, reducing their tax burden, and acquiring financing through preparing all the necessary documentation for the bank, investor, or finance company. The fact that you are helping them with their accounting will improve the chances of them getting a loan as banks deeply recognize the value of good financial record keeping.

Management Controls

Would you ever drive your car blind-folded? Of course not, that would be not only foolish but probably have tragic consequences. Yet, so many businesses have the blindfold on when they operate their business. They have no idea where they’ve been, where they’re at, or where they plan to go. Is there any wonder why one-third of all businesses close in the first 6 months of existence?

This is where you should use a presentation book. A presentation book is a sample of complete books of accounting for various types of businesses. You can create one, or Universal has such a book you can buy. Show the business owner what type of information you will be able to provide that will help him/her in running their business.

Review each journal. Identify the value of knowing how much sales a business had each month and where the money was spent. Emphasize that payroll will no longer be the fearful subject it now is as you take over the burden of maintaining it. If they already have a payroll service processing their payroll, congratulate them and offer to help them understand payroll even better.

Show them an income statement and balance sheet. The income statement provides the monthly “score” for the business. By comparing the current month to prior months a business can not only determine if they are improving or not, but also why profits were up or down.

The balance sheet provides information on financial resources and obligations. This will help to determine the strength and solvency of the business. By tracking key indicators, such as current ratio, you and the business owner can identify potential problems before they become insurmountable.

In each of these benefits, you want to emphasize that information is power. The more information you can provide to the business owner the more capable they will be at running their business effectively.

As you’re finishing, ask the prospective client if these benefits are appealing. If he/she says “Yes,” then you will want to negotiate a fee that will be fair for them and fair for you at the same time. If not, this would be a good time to thank them for their time, leave your card, and move on.

For information on how to calculate a fair and worthwhile fee, see the article entitled How to charge your Accounting Service Clients

For more infomation about getting started successfully with your own accounting and bookkeeping service, check out our courses.

Tax Advantages of a Home-Based Business

Home Based BusinessWhat Kind Of Tax Advantages Do Home-Based Businesses Enjoy?

You have probably thought of many of the benefits of running your own successful accounting and bookkeeping service. From the independence of working for yourself to making better income than you may currently make, there are many reasons that starting a home-based business might be right for you. One consideration that you might not have taken into account is the tax advantages that you will enjoy with a business run out of your home. Let’s explore these qualifying deductions, starting with the better-known ones.

The Home Office Deduction

The deduction that likely comes first to mind that home-based businesses can take advantage of is the “Home Office Deduction”. The Home Office Deduction allows you to deduct some or all of the expenses of your office at home and related expenses.

To qualify for this deduction, your home office must be the principal place where your business is done. Secondly, the office space must be used exclusively for business use to qualify. For example, if you use your kitchen as your primary workspace, it is likely that you cannot take the home office deduction, assuming that you use it for personal use as well. To be on the safe side, set aside a room as your home office where possible. This will keep you on the safe side should the home office use ever come into question.

Detailed explanations of who qualifies for the Home Office deduction are defined in detail by the IRS themselves.

Building-Related Expenses

Repairs and improvements to your home office are completely deductible. For example, painting your home office is an expense that relates directly to doing business out of your home, so it is deductible in full.

Mortgage interest is deductible as a percentage of the total mortgage paid for your home. For instance, if your home office makes up 200 square feet of your home’s 2,000 square feet total, you can write off up to 10% of the mortgage interest for your home as a business cost. Similarly, if you rent your home, the percentage of your home used exclusively for business use would also be deductible.

Property taxes paid for your home also qualify at the same percentage rate as the mortgage.

Furthermore, if you own your home, you can depreciate the appropriate share of the home over 39 years.

Note that home expenses not related to your business, such as landscaping costs, cannot be deducted, even if you are beautifying the appearance of your home to enhance its appearance for business purposes.

How Much Total Can You Deduct?

You can deduct at most in home expenses for your home-based business what its net profit is. Thus, if you don’t make much net profit, neither will you be able to deduct many home office expenses. This covers expenses specific to your home itself, such as mortgage/rent and property taxes.

Security

You may deduct the business cost of security devices and monitoring fees as a percentage of the protected area used for business use of the entire protected area (normally the entire home). This is considered an indirect cost of doing business.

Insurance

If you own your home and pay home owner’s insurance, you may deduct a percentage of that expense, as with mortgage or rent expenses. If you have additional insurance coverage that covers things specifically for the business, you may deduct these expenses in full as direct business expenses. This may include special riders on your insurance policy to protect business equipment used exclusively for your business.

Additionally, if you incur a loss that is not covered by insurance, if it is equipment used exclusively for your business, you can deduct the entire loss. If the property lost is for things used both for personal and business use, you may deduct just the percentage of business use.

Utilities

Using the same percentage that you can write off of your home calculated above, you can write off utilities such as electrical, gas, and other utilities as business expenses.

Transportation

If you work primarily out of your home, you can typically write off the transportation expense of getting to and from your clients’ places of business and other business-related transportation costs. For the 2004 tax year, the standard cost per mile that the IRS allows you to deduct is 37.5 cents per mile.

Transportation as a deductible cost is one area where detailed records is critical. Typically, you will want to record the odometer mileage of your car before and after your trip to determine the number of miles traveled. Alternately, if you have places that you often travel to, you can just record the number of miles once and then multiply by the number of trips to determine total mileage This will prove much easier than recording each trip’s mileage

Moving Expenses

If you move, you can deduct the business portion of the move. For example, if half of the items to be moved were business-related, you could deduct 50% of your moving expenses. Note that moving expenses apply to sole proprietors, LLC’s, and S-Corporations only. They do not apply to C corporations.

If you have business-related moving expenses, use form 8829, “Expenses for the Business Use of Your Home” to report them.

Phones and Communications

For a home business, the first phone line into your home is considered by the IRS as a personal expense. Additional phone lines for business use, including cell phones used for your business, are tax deductible. Internet service provider fees or broadband costs such as high speed cable connections are deductible as a percentage of business use to total usage.

Meals and Entertainment

If you take a client or prospective client out to lunch and talk about your business, it is often tax deductible as a cost of doing business. If you are doing business out of town or at your convenience on a business-related task, you can typically deduct the amount of meals. If you are entertaining a client, the expenses related to the meeting are deductible if they have a business purpose.

Meals and Entertainment is one area that is often abused by small businesses, so if you plan to take deductions for these kinds of expenses, be sure to keep receipts. Also keep records of what the money was used for to avoid any kind of legal entanglements later on. As with most business deductions, as long as you stay within the IRS guidelines for what is allowed and keep good records, you can take this deduction safely.

You can only deduct 50% of the cost of meals and entertainment.

Tax Preparation Expenses

Though not specific to home-based businesses, the expenses that you incur to have your tax return itself prepared may be tax deductible.

Also, if you use tax-preparation software to prepare your own business’ tax returns, the cost of the tax preparation software is possibly deductible.

Software

Software used for business purposes are deductible as a business expense. Note that for software packages in excess of $500 in value, you may need to amortize (write off over a period of time) the software over 3 years. If you have purchased software that costs more than $500 per piece of software, consult the IRS guidelines for software deductions.

Educational Expenses

Educational expenses incurred directly to learn industry-specific skills needed for your business are often tax-deductible. For example, if you purchase the Professional Bookkeeper™ course to learn Accounting and Bookkeeping skills to start your business, this expense is tax deductible as a start up cost once your business is underway.

Record Keeping

Many small businesses let themselves get cheated every year by not taking deductions they are legally entitled to on their taxes for fear of being audited. As long as you stay within the IRS guidelines for what is and is not tax deductible and keep receipts and good records, you are safe to take the deductions you are legally entitled to. The Home Office Deduction in particular is a deduction that many have wrongly assumed makes them a target for an IRS audit.

If ever in doubt, go directly to the source, the IRS themselves. They publish many articles defining exactly what deductions you are entitled to so that you can be sure that you are in compliance with the law.

It may be advisable to consult a tax preparer for specific questions regarding what would or would not be deductible, and to what extent. For a thorough understanding of tax preparation for your own business or to prepare taxes for other businesses or individuals, you may want to look into training such as Universal Accounting®’s Professional Tax Preparer™ program. For many individuals and businesses, they save more on their taxes over a year or two than they spend on the course itself. Plus, they have the assurance that they are doing their taxes correctly and doing proper tax planning to reduce their tax liability.

A Great Home Business

As illustrated above, running a home business gives many tax advantages and deductions. One of the best home-based businesses going is starting your own successful Accounting and Bookkeeping service. You will make between $30 and $60 per hour out of your own home in a relaxed environment. The Professional Bookkeeper™ program teaches you step-by-step how to make a great income helping businesses manage their money.

Home Office Tax Advantages

For more infomation about home-based business advantages: Please look at our Professional Bookkeeper™ Course.

First steps for marketing your service

This article examines essential marketing and identity elements for your startup homebased business- your business cards, letterhead, and envelopes.

Business Cards and Letterhead are important to all business professionals. To many, your business card might be the only thing with which they have to judge you. For that reason, it’s a good idea to spend a little bit more and get something that favorably represents you. On the other hand, the costly, foiled, raised print might be all right for the lawyer and real estate agent, but it isn’t necessary for the accountant. Something in the middle will be suitable.

Today, you can purchase business cards from the corner copy store, or from professional print shops. Or, if you have the right equipment you could even make them with a computer and printer.

At the copy store, you can view books of card samples. Most cards start at $15 for five hundred cards, and go up. Again the cheapest isn’t necessarily the best. Pick out the best sample that fits you. The printer will then help you place your information into the format of the card.

If you want to be more creative, a print shop will help you design the card. They also have samples.

One more thing: Don’t clutter your cards with too much information or gimmicky graphics. Put the most critical items on the face of the card. If you feel there is still more you would like to say on the card, then have it printed on the backside.

Letterhead and envelopes should be attractive and professional. Use a high-quality bond paper, not standard weight copy paper. Again, a few extra dollars can usually go a long way in impressing your clients.

If money isn’t an issue, and you don’t mind spending a few extra hundred dollars for just the right image, you can contract a graphics artist to design a unique card and letterhead just for you. Most people don’t take this step, nor do they need to.

For more infomation about getting started successfully with your own accounting and bookkeeping service, check out our courses.

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