MARIELA RUIZ, CPA, PLLC

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Tag: small business

Why Your Business Isn’t Making Money and How to Fix It

January 8, 2024 / / 0 Comments

Businesses may offer outstanding products, maintain satisfied customers, and experience steady growth, but still face challenges in generating profit. This issue is frequently seen in small businesses but it’s not exclusive to them. Even long-standing, well-established businesses can experience this problem. In this month’s blog, we will explore the common reasons businesses struggle financially and provide practical solutions.

Businessman stacking coins with a graph of profit. Business successful growth

Lack of Budgeting and Financial Planning

Failing to plan is planning to fail, especially in business finance. Many businesses don’t have a detailed budget or financial plan, leading to overspending or misallocation of resources.

Solution: Keep a close eye on your finances. Implement strict budgeting and use integrated accounting software to track expenses and revenues. Regular financial audits can also help identify and rectify issues before they escalate.

Related: Learn more about when to consider a financial audit for your startup here.

Inadequate Tax Planning and Compliance:

As a business, it is your responsibility to ensure you’re paying the appropriate amount of taxes specified. Any non-compliance with tax laws can lead to hefty fines and penalties. For instance, in Texas, ignorance regarding the filing of tax returns will result in a 5% up to 20% penalty.

Solution: Work with a tax professional who can help in strategic tax planning and ensure compliance. This may involve tax-friendly business structures, tax deductions, and credits that your business can benefit from.

Related: Learn more about the reasons you need to hire a tax expert here.

Woman accountant use calculator and computer with holding pen on desk in office. finance and accounting concept

Unstructured Financing

Borrowing money or having a line of credit is expected and useful for growing businesses that feel the pressures of tight cash flow. However, what should relieve pressure can become a source of stress if it is not well-structured. High-interest business loans come with high monthly payments, which can tighten cash flow and increase monthly costs.

Solution: Businesses with high monthly payments should seek accountants for professional guidance on how to manage their debts effectively. An expert accountant can assist in creating a customized strategy for managing debt, pinpoint ways to save costs and guarantee the financial stability of your business.

MARIELA RUIZ, CPA, PLLC: Your Partner In Managing Your Business Finances

At MARIELA RUIZ, CPA, PLLC, we help businesses just like you thrive by providing comprehensive financial solutions. Our approach combines personalized financial planning, innovative financing strategies, and cutting-edge technology to empower your business’s growth journey. Visit our website at mruiz-cpa.com or give us a call at (956) 997-0067 to learn more about how we can transform your financial challenges into growth opportunities.

Accounting for E-commerce Businesses: Challenges and Best Practices

December 11, 2023 / / 0 Comments

In the fast-paced world of e-commerce, where transactions are conducted online and businesses operate across borders, accounting becomes a crucial aspect of managing finances. Proper accounting practices are essential for e-commerce businesses to accurately track their revenue, expenses, and overall financial health. However, accounting for e-commerce businesses comes with its own unique set of challenges. In this blog post, we will explore the challenges faced by e-commerce businesses in their accounting processes and discuss best practices to overcome them.

E-commerce Accounting Challenges

One of the main challenges faced by e-commerce businesses is the complexity of sales tax compliance. With transactions occurring across multiple states or even countries, businesses must navigate through various tax regulations and requirements. Determining the correct tax rates, collecting and remitting taxes, and staying up to date with changing regulations can be a daunting task. E-commerce businesses need to invest in robust accounting software that can handle multi-jurisdictional tax calculations and automate the process to ensure compliance.

Another challenge is inventory management. Unlike traditional retail businesses, e-commerce businesses often have large volumes of inventory that need to be accurately tracked. Inventory valuation, including the cost of goods sold (COGS) and determining the value of unsold items, can be complex. Implementing an efficient inventory management system that integrates with the accounting software can help businesses maintain accurate records, optimize inventory levels, and make informed financial decisions.

Furthermore, the reconciliation of online payment platforms poses a challenge for e-commerce businesses. With multiple payment gateways, such as PayPal, Stripe, and Square, it becomes crucial to reconcile transactions and ensure that all payments are properly recorded in the accounting system. Failure to reconcile can lead to discrepancies in financial reports and hinder the accurate assessment of the business’s financial performance. Regular reconciliation, along with the use of accounting tools that integrate with payment platforms, is essential to maintain accurate and up-to-date financial records.

Related: “Accounting Mistakes That Could Harm Your Small Business”

E-commerce Accounting Best Practices

To overcome these challenges, e-commerce businesses should consider adopting best practices in their accounting processes. Investing in cloud-based accounting software that is specifically designed for e-commerce can streamline financial management and provide real-time insights into the business’s financial health. Additionally, partnering with an experienced CPA firm that specializes in e-commerce accounting can provide valuable guidance and expertise in navigating the complexities of e-commerce accounting.

Implementing robust internal controls is also crucial. E-commerce businesses should establish clear policies and procedures for sales tax compliance, inventory management, and reconciliation of payment platforms. Regular audits and reconciliations should be conducted to ensure accuracy and identify any discrepancies or errors promptly.

Related: “Why Is It Essential to Hire an Accountant When Starting a Business?”

Rely On an Experienced CPA

In conclusion, accounting for e-commerce businesses comes with its own set of challenges. However, by leveraging technology, implementing best practices, and seeking professional guidance, e-commerce businesses can overcome these challenges and achieve accurate financial reporting. At MARIELA RUIZ, CPA, PLLC, we specialize in providing comprehensive accounting solutions for e-commerce businesses. Visit our website at www.mruiz-cpa.com or give us a call at (956) 997-0067 to learn more about how we can assist you in managing your e-commerce accounting needs.

Reasons Your Small Business Needs CFO Services

November 1, 2023 / / 0 Comments

Running a small business requires wearing many hats, from managing day-to-day operations to overseeing finances. While you may have successfully handled these responsibilities on your own thus far, there comes a point when your business can greatly benefit from the expertise of a Chief Financial Officer (CFO). In this month’s blog, we will explore what a CFO is and what CFO services can bring to the table for your business.

What is a CFO?

A Chief Financial Officer (CFO) is a senior executive responsible for overseeing and managing the financial operations of a company. Serving as a strategic partner to the CEO and other stakeholders, the CFO plays a critical role in shaping the financial direction of the organization. They are responsible for financial planning and analysis, budgeting, and keeping your business financial records accurate and organized.

Related: Learn more about tips for keeping accurate and organized financial records here.

Enhanced Financial Strategy and Planning

According to new statistics, the failure rate for new startups is currently 90%. The main reason? A poor financial strategy and planning. A CFO can iron out the wrinkles in your financial management and bring a high level of financial expertise to the table. Your business needs an accurate financial strategy to achieve your goals in both the short term and long term.

Related: Learn more about accounting mistakes that could harm your small business here.

Effective Risk Management

Risk is an inherent part of any business, regardless of the industry. All businesses face risks such as market downturns and unpredictability (as we’ve recently seen with COVID-19). A CFO can help you identify and assess potential risks, whether they are financial, operational, or regulatory in nature. By implementing robust internal controls, developing contingency plans, and monitoring key risk indicators, a CFO can safeguard your business’s financial well-being.

Related: Learn more about key considerations and best accounting practices for startups here.

Rely On an Experienced CFO

As your small business continues to grow, the need for CFO services becomes increasingly important. At MARIELA RUIZ, CPA, PLLC, we offer excellent CFO services designed to drive your business toward sustainable growth and profitability. Visit our website at www.mruiz-cpa.com or call us at (956) 997-0067 to learn more about how our CFO services can benefit your small business.

When to Consider a Financial Audit for Your Startup

August 17, 2023 / / 0 Comments

Startups are a world of excitement, challenges, and opportunities. As the gears of innovation turn, there’s one wheel that entrepreneurs often overlook: the financial audit. While it may seem too formal or unnecessary during the early stages, a financial audit can provide numerous benefits to a young company. In this month’s blog, we’ll talk about when and why a startup should consider undergoing a financial audit.

What is a Financial Audit?

At its core, a financial audit is an examination of a company’s financial statements and related operations to ensure accuracy and compliance with accounting standards and regulations. An external auditor, often from a reputable accounting firm, conducts this examination and provides an opinion on the financial statements’ accuracy.

Key Indicators Your Startup Might Need an Audit

At the outset, startups often operate with lean margins and limited resources. Still, as they gather momentum and secure funding or begin to generate consistent revenue, the intricacies of their financial transactions multiply. This is where a financial audit becomes instrumental. Firstly, an audit provides a detailed and neutral view of the startup’s financial health. This is invaluable to stakeholders, investors, and lenders who bank on accurate financial statements to make informed decisions. Secondly, as a startup plans to scale, whether organically or via mergers and acquisitions, having audited financial statements can smoothen negotiations and due diligence processes. Additionally, certain regulatory and contractual conditions may necessitate an audit. For instance, if your startup is looking to raise a significant funding round or go public, potential investors or regulatory bodies might require audited financials.

Related: Learn more about the key considerations and accounting best practices for startups here.

Benefits of a Financial Audit

A financial audit can help founders and managers identify inefficiencies, uncover potential fraud, and streamline processes. The insights garnered can guide startups toward financial prudence, ensuring that resources are optimally utilized. Moreover, an audit fosters a culture of transparency and accountability within the organization. By regularly reviewing and validating financial transactions, startups build a strong foundation that can weather uncertainties and be well-prepared for future growth.

Related: Learn more about accounting mistakes that could harm your small business here.

Hire MARIELA RUIZ, CPA, PLLC For Your Financial Audit Needs!

We at MARIELA RUIZ, CPA, PLLC understand the unique challenges faced by startups. Our expertise is not just in conducting meticulous audits, but also in guiding young enterprises towards sustainable growth. Let’s embark on this journey together and ensure that your startup’s financial roadmap is both robust and transparent. Reach out to us at our Mission, TX office by calling (956) 997-0067 or visit our website at www.mruiz-cpa.com. Your startup’s future is bright; let us help you illuminate its path.

What To Consider Before Getting Accounting Software Implementation

July 10, 2023 / / 0 Comments

Many small businesses reach a point where the traditional manual procedures and fragmented accounting practices that were once used to manage their financial matters become more of a hindrance than an advantage. This calls for the need for personalized accounting software, but the process of implementing accounting software demands careful consideration and planning. In this month’s blog, we will discuss key factors that should be considered when considering the implementation of an accounting software system.

Identify Your Organization’s Needs

Before choosing accounting software, it’s critical to thoroughly evaluate your business’s specific needs and requirements. As your business expands, your financial processes may become more complex, so you want to choose accounting software that offers scalability. Speak to your accountants to gain better insight into what difficulties they face daily with the present accounting software.

Related: Learn more about the importance of hiring an accountant when starting a business here.

Evaluate The Software’s Features and Functionality

While many accounting software options are available in the market, not all will cater to your business’s specific requirements. Therefore, it is crucial to evaluate the features and functionality offered by potential software solutions. You don’t want to pick the wrong software, so check out the basic features such as accounts payable and receivable, financial reporting, inventory management, payroll, etc.  

Related: Learn more about the key considerations and best accounting practices for startups here.

Security And Data Protection

Accounting software often handles sensitive financial information, making security and data protection paramount considerations. However, reports show that small business rank highest in occupational fraud frequency, and you don’t want to be one of them. Evaluate the software’s security measures, including user access controls, and regular updates to safeguard against potential cyber threats.

Related: learn more about how forensic accounting saves your business from fraud here.

Rely On MARIELA RUIZ, CPA, PLLC!

Implementing a new accounting software system is a crucial decision that can significantly impact the financial management of your business. At MARIELA RUIZ, CPA, PLLC, we have been accumulating invaluable insights for many years, having guided numerous clients through successful accounting software implementation. Call us at (956) 997-0067 or visit our website www.mruiz-cpa.com to learn more about how we can help you.

Accounting for Startups: Key Considerations and Best Practices

June 8, 2023 / / 0 Comments

As a startup owner, navigating the world of accounting can be both challenging and crucial for the success of your business. Understanding the key considerations and implementing best practices in accounting is essential to ensure accurate financial records, regulatory compliance, and informed decision-making. In this blog post, we will explore the key considerations and best practices that every startup owner should be aware of to establish a solid accounting foundation.

Key Considerations for Startup Accounting

When it comes to accounting for startups, there are several important considerations to keep in mind. Firstly, setting up a proper accounting system is essential. This includes selecting the appropriate accounting software, establishing chart of accounts, and implementing robust internal controls to safeguard your financial data. Secondly, understanding the financial implications of different business structures, such as sole proprietorship, partnership, or corporation, is crucial. Each structure has different tax obligations and financial reporting requirements. Lastly, tracking and categorizing expenses accurately from the beginning is vital for budgeting, tax deductions, and financial analysis. Proper documentation and record-keeping of all transactions will save time and headaches down the road.

Related: “Best Bookkeeping and Accounting Practices for the Success of Your Business”

Best Practices for Startup Accounting

Implementing best practices in accounting will streamline your financial processes and provide a strong foundation for growth. Regularly reconciling bank statements, invoices, and receipts will ensure accuracy and help detect any discrepancies or errors. Creating a budget and regularly monitoring cash flow will enable you to make informed financial decisions and manage resources effectively. Additionally, seeking professional guidance from a qualified CPA with expertise in startup accounting can provide valuable insights, ensure compliance with tax regulations, and help optimize your financial operations.

Related: “Accounting Mistakes That Could Harm Your Small Business”

Rely On an Experienced CPA

Ready to establish a solid accounting foundation for your startup? Contact MARIELA RUIZ, CPA, PLLC at (956) 997-0067 or visit our website at www.mruiz-cpa.com to learn more about our comprehensive accounting services. Our experienced team is dedicated to helping startups and small business owners navigate the complexities of accounting and achieve financial success. Let us be your trusted partner in building a strong financial future for your startup.

Accounting Mistakes That Could Harm Your Small Business

May 1, 2023 / / 0 Comments

While large businesses may have the resources to bounce back from financial blunders, small businesses, on the other hand, may not have that cushion. For entrepreneurs and small businesses looking to keep their cash flow steady, there are some steps they can’t just skip trying to make the leap. In this blog post, we will discuss some of the most common mistakes that can sink and destroy small businesses.

No Rainy-Day Fund

Failing to save for emergencies is one of the biggest financial mistakes that even the savviest business owners go wrong with their small business financial management. A rule of thumb is to have at least six months of running business expense as your rainy-day fund to avoid any financial shortcomings. The last COVID-19 pandemic did a number on many high-profile companies in the US, and this is a case in point on the importance of saving for emergencies and planning for the unexpected.

Mismanaged Taxes

Going for DIY taxes software to quickly cross off your to-do list can simply lead to costly tax issues. Managing your business taxes is an entirely different ball game than managing your personal ones. You need an expert well-versed in local and business laws to help you with your taxes. As a small business owner, you already have a lot on your plate, which is why hiring a tax expert can be a smart investment for your small business.

Being Oblivious to Fraud

Small business owners often wear many different hats and accounting might be one of their skills. While it’s a good thing that you’re able to handle your small business finances on your own, there is a risk of failing to catch the signs of fraud. Specialized accountants like forensic accountants have keen minds and it’s their job to ensure your business activities are legitimate and everything is in order. In cases of fraud detection, we believe that one can never be too careful. Hiring an accountant will minimize the risk for you.

Related: Learn more about how forensic accounting can save your business from fraud here.

Starting a Business without the Backup of an Accountant

Having your business see the light of the day is a big step. However, 20% of small businesses fail in their first year and being one of them is the last thing you want. That shows the importance of having a good business plan and the backup of an experienced accountant. No business can survive without a solid long-term plan and a vision to execute it.

An accountant can assist you with market forecasting and analyze the current situation to devise a plan for your business’s future. A seasoned accountant can help you put your business plan together and be your key success as you move forward.

Related: Learn more about why it’s essential to hire an accountant when starting a business here.

Let MARIELA RUIZ, CPA, PLLC Help You Reach Business Milestones

Small businesses face unique financial challenges that require careful attention and planning. MARIELA RUIZ, CPA, PLLC is here to ensure that you are well-supported and guided at each stage of the creation and development of your small business. Check our website to learn more about our services or simply give us a call at (956) 997-0067 for further assistance.

Accounting for Small Business Owners

June 30, 2021 / / 0 Comments

One of the most challenging jobs entrepreneurs and small business owners are responsible for is accurately managing their finances and taxes up to legal standards. From payroll services to tax preparations most small business owners find that investing in expert outside help is well worth ensuring meticulous perfection throughout the books. Below we review some key points you or your CPA should be aware of when managing the finances for your small business.

Bookkeeping

It’s crucial for small business owners to keep accurate financial records regarding all aspects of their business through bookkeeping. Bookkeeping can include anything from payroll services and financial statement preparation to reviewing invoices and managing expenses and revenue. It provides vital data that can help with management decisions, taxes, and getting approved for business loans.

Audits

Nearly all successful businesses will perform regular internal and external audits to ensure authenticity and search for any inconsistencies. External audits are more effective than internal audits than because they eliminate any possible conflicts of interest, must be completed by a CPA, and provide impartial results.

Taxes

When it comes to small business taxes there is so much more involved than just the tax preparation itself. Many small business owners benefit from strategic tax planning and audit representation to further ensure their business is safeguarded by the best. Texas is home to the second largest economy in the country and with that comes unique tax conditions for franchise owners, limited liability companies, sole proprietorships and other small business owners.

Final Thoughts

Over the years Mariela Ruiz, CPA, LLC has provided countless business owners in Hidalgo County, TX with affordable and convenient bookkeeping and payroll services including audits, tax preparations, financial consulting, forensic accounting and much more. Visit our website for a full list of our array of services or call (956) 997-0067 for any questions you may have.

Qualities of an Excellent CFO for Your Small Business

August 31, 2019 / / 0 Comments

As a business owner, you understand the importance of making sure your finances line up month after month. Hiring a CFO or chief financial officer to keep an eye on your business’ money is a big step. Keep reading to learn four of the qualities to look for in your ideal candidate in order to ensure a prosperous future for your company.

CFO display.
CFO display.

Knowledge of Your Company’s Industry

Every industry is different and each has different financial needs. Ensuring you choose a financial team member that understands the ins and outs of your company’s financial field is incredibly important. In order for your CFO to be successful in the company they need to fully understand where your clients and stakeholders are coming from to make the best money choices.

Reliability

If you are ready to take the step of hiring a CFO, you’re choosing to hire a leader that you will be able to rely on in any given situation. They will not only be leaders of your accounting and financials but they should also be reliable during difficult times in order to keep the business moving forward.

Problem Solving Skills

No matter what stage your business is in, there are always problems to be solved. Whether concerns faced by small businesses or issues that arise after profitability, you need to trust your CFO will have the problem solving skills necessary to address the issue.

Nameplate with CFO printed on it.
Nameplate with CFO printed on it.

Wide Range of Financial Knowledge

It goes without saying that your CFO needs to understand the ins and outs of finance. However, it would also be highly beneficial to work with someone that understands other aspects of business such as investments and risk management. A CFO with this knowledge would be incredibly helpful for the growth of your company.

Thoughts

Choosing to work with anyone in a financial capacity is a big step, especially if you own a business. These are only a handful of the qualities needed in the perfect CFO for your company. That’s why MARIELA RUIZ, CPA, PLLC prides our self on holding all of these and many other positive aspects that make a good chief financial officer. Visit our website today to learn how we can best help your company keep growing.

3 Types of Small Business Audits

July 25, 2019 / / 0 Comments

All business audits share things in common, but do you know what they entail? The auditor, whether someone within your business or an external auditor, will do a thorough evaluation of your accounting books and financial statements. They usually check an entire year’s worth of financial data, including income and expenses. If you’re a small business owner, or maybe just curious about the auditing process, keep reading to learn about the different audits for businesses.

Internal Audit

An internal audit is a self-audit that’s scheduled and conducted by a representative of your own company. Many businesses do an internal audit once a year to ensure the accuracy of their books and financial statements. An internal audit is for your own purposes, and to check for errors or other issues.

Larger companies usually have audit departments, but a smaller business might employ just one or two people to conduct audits. Internal auditors don’t just check business finances; they also check company policies, procedures, and processes to check compliance with internal guidance and federal, state, and local laws.

External Audit

An external audit, also known as an independent audit, is an audit conducted by someone outside the organization. This is called an independent audit because the auditor has no loyalty or responsibility to the business that could create a conflict of interest. In their report, they’ll have to provide an opinion as to whether your company passed the audit. An auditor might take one of the following stances in a business audit:

  • Clean opinion – The business’s books and financial statements accurately represent the company’s financial position.
  • Qualified opinion – The auditor disagrees with parts of the company’s financial records, but the audit was too limited in scope or access to come to a definitive conclusion.
  • Adverse opinion – The auditor found that the business financial records materially misrepresent the company’s financial position.
  • Disclaimer of opinion – In this type of report, the auditor doesn’t give any opinion on certain financial records.

IRS Audit

An IRS audit occurs when the IRS finds potential errors in your tax return. Usually, the IRS schedules audits for tax returns that were filed in the last three years. A few factors can trigger an IRS audit. For example, if you claim losses for multiple years in a row or report high income levels, you may be subject to an IRS audit. 

Conclusion

As you’ve read above, small businesses go through the audit process to check on financial records and other important documentation. Whether it’s an internal or external audit, it’s best to let a professional do the job. At MARIELA RUIZ, CPA, PLLC, we have the audit services you need to keep your business in check. Contact our team today!

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