What You Need To Know About Debt Consolidation

If you are paying several debts like an auto loan, student loan, and credit card, it can be hard to keep up with payments and balances. Consolidating all these into a single loan makes your work easier. Debt consolidation is the process of using one loan to pay off different loans so as to simplify debt repayment. It becomes easier to pay off debt when it is just one balance instead of multiple loans. In some cases, you can even get a lower interest rate.

Should One Consider Debt Consolidation

Debt consolidation is often a good idea for borrowers with multiple high-interest loans. However, it is only practical if your credit score has improved since you took the original loan. With a good credit score, you can qualify for a loan with a lower interest, meaning it is a good idea to consolidate your debts. It is also good to think about what led to your current debts in the first place. If you do not address the underlying issue, whether it is overspending or poor money management skills, debt consolidation will only become another debt you are struggling to pay.

Advantage of Debt Consolidation

Here are some of the advantages of debt consolidation.

Lower Interest Rates

If your credit score has shot up from the last time you took the other loans, consolidating debts can help reduce your overall interest. This will save you money, especially if you do not consolidate your debts with a long-term loan. To ensure you get a favorable rate, https://prets514.com/ recommends shopping around. Keep in mind, though, that some debts have a higher interest than others. For instance, credit card debts have higher interest rates than student loans. Debt consolidation can lead to a lower rate than some types of your debt and a higher rate than others. Focus on what you are saving in general.

Improved Credit Score

Consolidating your debts can improve your credit score in some way. For instance, paying off your credit card can help lower the credit utilization rate, shown in your credit card report. On top of that, making payments on time and consistently and eventually paying off the loan will improve your score over time.

Streamlines Finances

When you combine multiple debts into a single loan, you reduce the number of payments you have to worry about. This also reduces the chances of making payments late because you are only paying off one debt.

May Expedite Payoff

If you are paying less interest on the debt consolidation loan than what you were initially paying on the other debts, try and make extra payments using the money you have saved. This will help pay off your debt faster.

Reduced Monthly Payments

Your overall monthly payments are likely to be reduced when you consolidate your debt because future payments are now spread over a new loan term. That means your monthly budget goes down.

Before opting for debt consolidation, consider your situation first. Debt consolidation might be for everyone. But for some, it is the light of the tunnel that helps them manage debt. Ensure that when you take this loan, it is going to help you.

8 Accounting Terms Every Entrepreneur Must Know

As an entrepreneur, accounting is one of the tasks you’ll have to deal with, especially when starting out.

Even though accounting is boring and no one likes it, it helps to know a little about accounting to be successful.

We’ll help you understand some common accounting jargon to make you feel less like a deer in the headlights when you’re with your bookkeeper.

Although you might still be bored, you’ll likely find it’s not as confusing as you may have imagined.

Accounting Jargon You Need To Know

Balance Sheet

A balance sheet shows you what your business owns (assets) and what it owes (liabilities).

Assets are anything of monetary value that your business owns and can be:

●      Tangible: land, buildings, cash, vehicles, or equipment

●      Intangible: brand names, copyrights, goodwill, intellectual property rights, patents, franchise agreements, and client lists

Liabilities are the financial obligations your business owes, which can be:

●      Short term/current: paid within one year of incurring them and include employee salaries/wages, and accounts payable

●      Long term/noncurrent: paid over a period longer than one year and includes mortgages, deferred taxes, or other loans lasting more than one year

Income Statement (AKA The P&L)

Remember the accountants in the TV series The Office? One time, $3,000 went missing from Dunder Mifflin, and it was up to them to figure out what happened.

With an income statement, they could’ve traced it back to find out at what point it got lost.

An income statement is a snapshot of your business that shows your revenues, expenses, and profit for a particular period. It shows whether you’re making or losing money.

With a P&L, you don’t have to spend more than you can afford or repeat mistakes like recording depreciation twice, as The Office accountants did.

Depreciation

You probably own business assets like equipment and vehicles that are worth a lot of money and are expected to last more than a year.

Over time, these assets decline in value due to wear and tear. This process of losing value is known as depreciation.

Other assets you can depreciate include buildings, furniture, and computers and software.

You can’t depreciate land, though, because it usually doesn’t lose value.

Bookkeeper vs. Accountant

If you don’t have time to keep your books, a bookkeeper is a numbers wizard who usually has ninja-like skills with Quickbooks, Xero, or Wave (AKA, account reconciliation software). They help you:

●      Collect documentation for each financial transaction

●      Invoice customers

●      Process payroll

●      Balance the general ledger

An accountant is an even nerdier numbers guru and helps you make sense of your financial information by:

●      Analyzing operation costs

●      Generating financial statements and reports and explaining them to you

●      Helping with year-end business tax planning and filing

●      Advising you on the most financially savvy strategies

Tax Credit vs. Tax Deduction

Tax credits and tax deductions trim your tax liability but in different ways. Tax credits are generally more valuable than deductions.

A tax credit:

●      Gives you a dollar-for-dollar reduction in your tax bill. For instance, if you have a $15,000 federal tax bill and are entitled to a $5,000 tax credit, the credit slashes your tax bill by $5,000 to $10,000.

●      Examples of a tax credit include the work opportunity credit, FMLA tax credit, or small employer health insurance tax credit.

A tax deduction:

●      Lowers the amount of your taxable income

●      Includes most normal business expenses, such as depreciation, wages, and rent

Decipher Accounting Acronyms

CPA (Certified Public Accountant)

A certified public accountant is the nerdiest of all accounting professionals. They:

●      Completed at least 150 hours of secondary education and a specific number of annual continuing education hours

●      Has at least two years of public accounting experience

●      Passed the CPA Exam

●      Performs financial audit services that confirm your financial statements and disclosures accurately adhere to generally accepted accounting principles (GAAP)  

●      Prepare income tax filings and perform tax audits

H3: EA (Enrolled Agent)

An enrolled agent or EA is a federally licensed tax professional representing taxpayers in IRS-related matters, including audits, collections, or tax appeals. Specifically, an EA:

●      Has sufficient experience and passed a rigorous IRS examination

●      Advises, represents, and prepares tax returns for individuals, businesses, or anyone else that reports to the IRS

●      Must complete 72 hours of continuing education every 36 months

●      Are subject to a code of ethics and rules of professional conduct

COGS (Cost of Goods Sold)

Cost of goods sold or COGS is the cost of producing a product or service (i.e., direct labor costs and material costs).

COGS doesn’t include indirect costs like marketing and distribution expenses, utilities, or rent/mortgage interest.

The COGS formula is: Beginning inventory + Purchases - Ending Inventory.

Say you had a beginning inventory of $10,000, purchases during the period of $5,000, and an ending inventory of $3,000.

Your COGS would be: $10,000 + $5,000 - $3,000 = $12,000.

Build Your Accounting Vocabulary

Whether you started your business out of necessity or genuine interest, knowing these accounting terms can help you get a handle on small business accounting basics and contribute to your business’s success -- now and as it grows. You may still find it boring, though.

5 Things to Consider Before Making an International Money Transfer

Whether you are sending money internationally for personal or business reasons, today, this can be done in just a few minutes. If you only do this once every two years or rarely, then you probably do not give much thought to the international money transfer service you use. But if you frequently conduct international money transactions, you have to ensure the service provider you are working with has a good reputation. Here are five things to consider when making international money transfers.  

Fees

Even with the growth of digital banking or online apps for money transfer, one thing that a lot of people are concerned about is the transaction fees. Financial institutions and currency specialists charge a fee for every transaction done. Look for someone affordable and reliable. Also, when you notice an institution is charging a flat rate, inquire whether there are hidden costs associated with currency conversion or the bank receiving the money. This ensures you know the exact amount the recipient will be getting.

Speed

When sending money internationally, one of your major concerns is when the money will get to the recipient. Maybe your loved ones need money for a medical emergency, or you want to finalize a deal. In that case, you need the money to get there as fast as possible. You should also check whether there is a cut-off time with the provider when you are making same-day transfer requests. If a bank or currency specialist receives the money after the cut-off time, the payment is processed the following day. Note that there are fees associated with various timelines. An urgent transfer will cost you more than a regular transfer.

Customer Support

Customers need to be informed of the entire money transfer process and get help whenever they face a problem. The Olympia Trust currency exchange in Vancouver reminds clients of the importance of a support team that is available, whether via phone or email. A good team will address any challenges with transfers from sending money to when the beneficiary receives it. Any provider that makes clients wait unnecessarily for long periods should be avoided.

Reputation

Recently, the popularity of currency specialists as an alternative to banks has been growing. However, before doing a foreign currency transaction with any bank or specialist, check whether the institution has been authorized to perform international money transfers. An authorized firm has high safety measures to safeguard a customer’s finances.

An Online Option

People had to have long queues in the bank before making transactions in the past. Not only was this a waste of time, but frustrating as well. However, a good international money transfer company should provide an online platform where a customer can simply conduct a transaction at any time.

When you have worked hard for your money, you need to ensure that your transactions are done reliably. Consider these five factors next time you make an international money transfer for a safe and secure transaction.

Three Great Ways to Start Saving Money

It's never too late to start saving money for the future. Whether you are saving for retirement, a big purchase, or just trying to break the paycheck-to-paycheck cycle having money-saving plans and habits will make it easier and give you some peace of mind. The following are four ways you can begin your money-saving journey today:

Use an Old-School Cash Method

One way to start saving money right now is to use an old-school method. You can purchase a jar or some other type of empty container to use as the storage area for the cash you will save. Throw some cash into the jar each time you have something extra. You'll be amazed by how quickly your funds add up in that jar.

Direct Deposit Some Money

Many jobs use advanced direct deposit features so that their workers can achieve different things with their money. One feature direct deposit has is the ability for a worker to have his or her funds sent to more than one destination. That means you can have a small portion of your paycheck sent to a separate bank account that you'll use as your savings account so that you can live life comfortably in the future. You can set this feature up and then start saving money today.

Start a Thrift Savings Account or 401 K Plan

A thrift savings plan might be right for you if you are a federal employee or military service member. The TSP is the Federal Government’s version of a 401k plan. If you're not eligible for a TSP, you may be eligible for a 401 K plan through your employer. What's great about a 401k plan is that your employer might offer contributions to you. You can use the money your employer adds to your 401k plan to support yourself when you retire. You may want to look into your benefits package to see if your employer provides this option to its workers. If so, you can start small and then add more money to your 401k plan if doing so is comfortable for you.

Get a Cash Back Account

A cashback account can give you a fun and productive way to save money. Those accounts work by giving you a certain percentage back from the money you spend each month on your debit card. Some banks offer high cash-back percentages for their customers. You might be utterly amazed at how much you can get back from one of these accounts.

Try one or several of the options mentioned above if you want to start saving money. You can achieve anything you set your sights on. Don't let anyone tell you it isn't possible.

6 Ways Small Businesses Can Benefit From Reputable Tax Services Providers

Having the right professionals working with you becomes paramount if you own a small business. Be on the safe side with your taxes to avoid conflicts with the authorities. Tax compliance is a major concern for business owners. You need proper guidance to keep your business running and productive. Working with business tax services providers, therefore, becomes beneficial. Tax service providers can benefit your small business in the following ways.

Helps With Documents and Contracts Review

As your business picks up, be ready to handle documents and contracts. While you might have a legal practitioner preparing the documents, a tax services provider will help review the requirements. You need to be keen on business agreements that include possible tax or accounting implications. You need an accountant to analyze the documents and advise on the next and best step. When you avoid the tax implications, you can protect your business and ensure it operates with ease in the market.

You Avoid Audit

Audits can be dreadful for any small business. You need to keep your venture in order, which calls for effective guidance. When you hire business tax services, you will understand the issues that need fixing and how best to meet your expectations. With proper guidance and counsel from an accountant, avoiding audits from the supervisory authorities becomes easier. Apart from mistakes in tax forms, you need to understand your accounts and business performance. Getting early guidance from professionals will help keep your business from statutory problems.

Helps Save Time and Resources

It is important to focus on running your business as an entrepreneur. While you need to solve tax issues fast, the chances of wasting time and resources are higher. The tax services provider you hire understands your business needs and the steps to take. They can highlight your issues and the best steps to take instantly. When you have an accountant handling your business and tax needs, extending your time, money, and resources in the right direction becomes easier. This is also an avenue to learn more about taxes and how they can affect your business productivity.

Helps Make Real-Time Decisions

You need tax service providers to help with immediate and future business needs. It is easier to understand the consequences and implications of your actions when an LLC tax filing professional guides you through the process in real-time. It is a mistake to hire a tax services provider after an incident. You need to find a tax expert early to get a better chance of handling your issues. You can easily budget, monitor your cash flow and go through different business hurdles when you make proper and real-time decisions.

You Enjoy Risk-Free Services

While you might have basic skills in taxes and related variables, the chances of making mistakes are higher. You need to avoid related risks to handle your business tax issues. When you hire a tax services provider, you get risk-covered consultancy. The experts understand what you must do to protect your business. They are proficient and can prepare tax statements without errors. They also cover any errors that might occur or have legal consequences. This means your business gets legal protection and audit assistance whenever needed.

Better Way to Improve Your Record Keeping

Record keeping and bookkeeping are among the services you must exploit after hiring business tax service providers. You need proper recordkeeping to increase your business tax deductions. Proper recordkeeping entails collecting and tracking expenses and cash flow in your business. When you hire a tax services provider, enjoying a safe, organized and accessible recordkeeping platform for your business becomes easy.

Handling tax issues can be a hurdle for small businesses seeking to grow and provide better services in the market. As a business owner, you need information and skills to handle your tax issues. Working with a reputable tax services provider can benefit your business, as explained above.

Simple Ways to Increase Your Cash Flow In Your Business

Not having enough income and revenue in business can be both frustrating and stressful. If you have a lot of responsibilities and are unable to keep them due to lack of finances, or you find yourself using your credit card or lines of credit to keep up appearances, this is going to affect your mental health.

Financial woes are one of the great contributors to stress, and too much stress is extremely damaging to the mind and body. Indeed, it's really not pushing it to say that by sorting out your finances and making your money go further, you will become healthier as a result. Remember that what you have is far less important than what you do with it. 

Be Realistic

A lot of money problems begin with people living up to unrealistic lifestyle choices. This can manifest in many ways from the home you rent, the car you drive, the stories you shop in, the places you eat out, etc. Being realistic does not mean you have to cut out everything you like, but it does mean you have to learn to live within your means.

One of the simplest things is to look for ways to decrease your overhead. Shopping at budget foods stores over high-end ones, or use the second-hand, buy and sell marketplace when you need to make a large purchase. You never know what is out there. It also entails you being aware of your spending and stopping all the unnecessary purchases, like at the local convenience store. The more small changes you can make, the more money you will have in the bank at the end of the month.

Chop and Change 

One of the best things you can do is to chop and change your supplier for utilities and insurance. If you are not one for researching the cheapest rates, then you are probably missing out. Go online and compare your gas and electric, insurance, and even compare credit for a better deal. It is also wise to check out your direct debits and cancel everything that is no longer relevant. So, many people pay gym memberships for a gym that they never go to. Don’t be one of these people. 

Invest your Money and Assets

If you have a bit of extra revenue just sitting in a savings account, then it is very likely that you could be making better use of your money in some investment scheme. Interest on savings is in no way comparable to the potential earnings from wise investment choices. Getting into investments is also a great hobby, and can teach you a lot about the business world and markets.

When it comes to investing, maybe it is a good idea to discuss with a financial advisor, although it is perfectly possible to do it on your own. All you need for the stock market is a share account that you can open at the bank. Remember you are investing in companies, not a graph, so investigate the companies that interest you and work out of they are suitable for along-term investment, for example. It is always a good idea to diversity on the stock market and fully understands what you are getting into.