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Kewho Min

Kewho Min, Certified Public Accountant

How To Work Your Personal Finance In Your 20s

For young adults in their 20s, it can be challenging to understand how to manage personal finances and stay organized after entering the workforce. Some people may be underpaid or are have new bills to pay that they’re not familiar with, which can make it challenging to learn how to stay in control of your finances. If you want to obtain the right advice and get a proper start in your 20s, there are a few essential tips to follow to handle your money correctly.

Begin Investing

Many millennials have a fear of investing due to a lack of knowledge and the risk involved. After experiencing the recession in 2009, they’re afraid of putting any of their hard-earned money into the stock market. If you want to invest but aren’t sure where to start, begin with index funds, which allow you to withstand any negative market fluctuation. Consider it to be a long-term decision that will pay off over time than immediately.

Begin Planning for Retirement

It’s never too early to begin planning for retirement, which will require you to take advantage of a 401(k) plan through, especially if your employer matches the money that you put into the fund. You can also open a Roth IRA, SEP IRA, or a Traditional IRA.

Establish Credit

Building credit is necessary for the future when you’re ready to purchase a new car or buy a house. You’ll need to open a credit card and have discipline with using it. Consider using the credit card for utilities or bills to avoid accumulating debt over time. Make your payments are on time and avoid closing any of your accounts to ensure that you have a history of credit, which will boost your score. Avoid overusing your credit cards, which can harm your score.

Create a Specific Budget

You should follow a strict budget that allows you to have control of every dollar that you earn and determine how you want it to be spent. Your budget should also include miscellaneous expenses that are infrequent, which includes haircuts, oil changes, and gifts for family members or friends. You’ll also want to incorporate payments towards debt that you have into your budget to ensure that you can work towards becoming debt-free in the future.

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The Most Important Goals In Small Business Accounting

In small business, proper accounting is essential to success. If you have great accounting strategies then you can put yourself in a position to succeed. Without them, you risk losing control of the financials of your business which will eventually lead to failure. So to help you get the most out of your company, here are the most important accounting goals for a small business.

Increase Efficiency

Efficiency is crucial in business. This is even more important if you have a smaller company. Large corporations can afford to be loss leaders or have processes that even lose them money. However, when you are still operating lean, being more efficient with proper reporting and communication lines will make or break your bottom line.

Get Organized

Organization should be a top priority for your small business accounting. Without organization, you can’t know which expenses, debits, or credits, are relevant to that moment. When you have a solid system to keep track of your finances, you are able to make better decisions and hand off reports to management so they don’t miss trends that could transform your company in the right direction.

Avoid Taxes Legally

The key word to understand here is avoid, not evade. Evading taxes is illegal by definition. However, there is nothing wrong with making sure that your company is not paying anymore than it has to under your local law. Of course, this may mean keeping better records and even seeking out a specialist in the area of tax accounting. However, this effort will be well worth it in the end.

Ensure that Income and Expense Goals are Met

Without revenue, you can’t grow your company. Of course, if you have all the revenue in the world but your expenses have grown so much that they outweigh it, you are left with zero profit. This can be a crucial problem. Good accounting means that you can make sure your goals are met with constant reporting that doesn’t sugarcoat any of the numbers.

When it comes to small business, you already have a lot on your plate. You need to ensure that sales, marketing, and customer relations are running on all cylinders. However, don’t ignore the important accounting goals above. Put them to use so your company can grow well into the future.

Advice That Investors Should Remember

The stock market crash of 2008 was a monumental event in the economy of the United States. It exposed severe systemic weaknesses and nearly caused the collapse of the U.S. banking system. Unfortunately, many people who were invested in the stock market faired poorly.

But like all stock market crashes, the 2008 meltdown created great opportunities for those who were astute and disciplined enough to take advantage. While most investors were running for the exits, those with a keen eye for value were scooping up the vastly underpriced assets for pennies on the dollar.

When the crowd is running left, right is a solid bet

Ask any longtime value investor what the key to financial success is and the best ones will give you a simple, one-word reply: price. Potential returns are determined by the price that was originally paid for the stock. And this continues to be true far into the future.

What this means, in practice, is that when the hordes of investors are selling en masse, you may be looking at a golden opportunity to buy assets on the cheap. And buying cheap assets is the number-one way to ensure high net returns.

Staying diversified is always a good bet

Although some of the world’s best investors will often advocate a focus investing strategy, essentially forgoing diversification, attempting to follow in their footsteps when one is not a full-time investment professional is a generally bad idea.

If you don’t have 16 hours per day to analyze balance sheets and macroeconomic trends, staying diversified can give you almost the same levels of returns while reducing risk to manageable levels. Even diversified investors who owned companies that blew up in the 2008 debacle, such as Lehman Brothers, GM or AIG, were protected through allocating only a small portion of their portfolios to those firms.

We’re all dead in the long run

As nice as it would be to wait for the madness of crowds to produce fire-sale prices every time we needed to make an investment, it turns out that waiting 20 years to invest is a far worse option than looking for great companies at reasonable prices today.

The most important thing to ensure decent returns is to never overpay and to always invest in great businesses. Follow those rules, and you won’t have to wait for the next crash to make a buck in stocks.

Tips and Tricks On How To Save Money

Human wants are insatiable such that individuals will always struggle to meet their needs. However, purchasing different goods and services drains individual’s income such that they have nothing to save for the future or an immediate expense that is likely to arise. Here are some important strategies that can be used in saving money and making the life of a person simple.

Stop Buying into Fashion Trends
People use much money by following fashion trends. Some people have bought into this idea such that they must buy all the new gadgets that are emerging. Sometimes they purchase new mobile devices while their old phones are still functioning normally. This makes it difficult for a person to save money. Individuals should avoid fashion trends which will help them to save a significant amount of money.

Automate Bills
People tend to forget that they have to pay monthly bills. Electricity, water, and insurance expenses are some of the typical monthly bills that people have to pay. Any late payment of some of these bills attracts penalty fees, which increase the costs that a person has to pay. People should automate their bills such that they can remember the actual dates and avoid penalties, which increases personal expenses.

Cancel Unnecessary Subscriptions 
The digital age has brought a significant number of subscriptions that people have to pay on a monthly basis. Some of the current unnecessary subscriptions include Netflix and other unnecessary podcasts. Canceling subscriptions that an individual does not use is a method of simplifying life that will help in saving significant amounts of money, which can be saved or directed to other essential expenses.

Limit Mobile Usage 
Smartphones are essential gadgets in the lives of human beings as they help in communication and storing relevant data. However, with YouTube and other social media platforms, people are using large amounts of money on data. Others are using large sums of money on unnecessary calls. This will help a person to spend precious time with family members and significantly cut on expenses.

Avoid Impulse Buying
Some individuals are easily attracted to attractive products or services that they don’t need. They end up spending money that they had not planned. People should advocate for a simple life and only plan and evaluate their plans before spending.

Blackline: What Is It?

BlackLine provides a host of services that help businesses maintain better control over financial actions. Additionally, the BlackLine applications streamline activities through enhanced automation. While services like accounts payable, fixed assets, and general ledger are left to other applications, BlackLine is more concerned with maintaining established controls, particularly where it’s vital to ensure closings are accurate and complete.

Additionally, the BlackLine applications are capable of incorporating balances from different subsystems and reconciling the discrepancies. The program can also be used to enhance the sharing of data between legal agencies and other entities, such as ERP systems. This makes financial reporting more efficient than in many other applications from other developers.

To read the full article, written by Kewho Min, click here.

How To Utilize Excel For Accounting

The power of the spreadsheet sometimes escapes small business owners. It is understandable. Modern accounting can be perplexing even for people with unusually high intelligence and drive to succeed. The principles of basic accounting, however, are not all that difficult to understand provided enough time is taken to practice the art of getting all the right numbers into all the right accounts. Understanding which accounts do what also helps quite a bit.

While Excel and other spreadsheet software can’t help with this kind of knowledge directly, it can perform many of the tasks required for double-entry accounting, for example, if it is set up properly and every transaction is recorded in the right place. If you plan to use spreadsheet software for your accounts, here are some things to consider.

To read the full article, written by Kewho Min, click here!

Most Common Mistakes In Invoices

If you are in charge of invoicing for your company, you are probably overwhelmed. There is a lot going on behind the scenes and even out in the open when it comes to payments and how to deal with them. It might feel overwhelming at first, but it doesn’t have to be. Here are ways to avoid the common mistakes that businesses make with invoices:

Publicizing It

Never reveal what you are charging a current client. It is one thing if they authorize you to do so, but many companies want to keep their expenses private for competitive reasons. So if you feel you are in a position where employees are sharing this vital information, step in to correct the problem before it becomes a bigger one.

Typos

Nothing looks more unprofessional than having typos in your invoices. If you don’t take the time to make your billing systems look nice, you could create a negative effect for your brand. Lifelong customers might not say anything, but new ones may get a bad feeling about doing business with you in the future.

Sending It Late

If you want to be paid on time, it goes without saying that you need to ask for payment on time. Sending late invoices communicates that you don’t really care when you are paid. In turn, your customers might let overdue bills sit for days or months before getting around to them. This could really harm your cashflow in the short term.

Not Being Clear on Deadlines

Always get it in writing up front when you have specific milestones and payment release cycles. This helps prevent confusion. It also avoids uncomfortable phone conversations with clients who are late to pay. So have a contract that is signed by both parties, even if it is in a digital form or via email.

When it comes to invoicing for businesses, it is tempting to take shortcuts. It can be a tedious process. However, a small investment in time up front can clarify key outcomes and allow you to really get the most out of your invoicing process. Make sure to avoid the mishaps above and you will be in a better position to grow your brand bigger and better than ever before.

Top 3 New Year’s Resolutions For Small Businesses

Just like individuals, small businesses also need New Year’s resolutions to help them stay on track to their goals. It’s especially important for small businesses to set resolutions at the beginning of the year to make sure their path to business success is clear. Here are the top three New Year’s resolutions for small businesses.

Miscalculations
When invoicing, taking care of single items rarely raises any red flags. Then there are the invoices that can contain multiple lines of items that need to be paid for. One of the most common situations that can happen is making mistakes on one small miscalculation that can throw the entire invoice off. Another common mistake that happens is taking care of taxes and fees. If you neglect to include those in your invoices, it can cause you to foot that part of the bill when your client makes their payment.

Weekly Business Meetings
In order for your small business to continue to grow, planning has to be one of the top priorities to maintain. This is where you are able to access your highs and lows of the given week and implement change. Schedule time to meet weekly to review, rearrange and plan for the future for a more prosperous and lucrative business plan. These meetings help you avoid mistakes that can end up costing you money and wasted time. Weekly team meetings also give you the opportunity to engage with your employees across departments and seniority. They can socialize among themselves which adds to a positive company culture.

Learning and Networking
Learning new skill sets can be very beneficial to the growth of your business and potential business partners. Whether it is related to your business or not, adding a new level of expertise to you skills list can and will open up new doors for yourself and for your business. Don’t know where to start? Try hiring a business coach or consultant who could introduce you to some pertinent contacts to add to your call list. Meeting these new people can become mutually beneficial and lead to landing new business deals or gaining access to new networking organizations. Talking with like-minded people can help you cultivate new ideas, rid or rearrange old ones, and learn from their trial and errors as well.

How to Get Ready for the New Tax Season

For many people, taxes are a touchy, and sometimes difficult, subject. There are several people who struggle to minimize their taxes for a variety of reasons. Before the new year is a perfect time to get organized with your taxes. With the recent passing of tax reform, it couldn’t hurt to learn about all of the new ways that you can save money on your taxes.

Small Business Changes

If you operate a small business, you know how difficult it can be to manage your taxes. Several people struggle to minimize their tax burden due to time constraints. The good news is that the new tax legislation is favorable to business owners. If you are tired of paying a high tax rate, this is a great time for you to learn about ways to save money.

In your business, you need to have a financial plan for the future. Part of this plan should be how you are going to minimize tax expenses in the years ahead.

Investment Changes

Another major change in the new tax code revolves around investing. The new limits on investment deductions were just announced, and they are much higher than last year. When you invest for the future, you can reduce your taxes based on the current tax code. This is a great opportunity to build wealth and to save money on your taxes.

Online Sources

Some people have trouble planning for changes within the tax code because they do not know where to find information. There are many people who use online sources to find new information on the reformed tax code. The IRS has a great website that will list out all of the important changes for you. If you aren’t fully prepared for tax season, it is going to end up costing you much more money over a long period of time.

Future Changes

With the new tax reform, millions of Americans are still trying to learn about the changes to the tax code. Now is a great item to try and formulate a strategy for the coming year. You need to start by taking a thorough financial assessment of your personal life.

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