Payroll

Managing payroll for a small team of 5 to 10 employees can be challenging, especially if you have limited knowledge. If managing payroll becomes too complex or time-consuming, consider outsourcing payroll to a professional service provider. This can help ensure accuracy and compliance while freeing up your time for other business tasks.

Understand Payroll Taxes and Compliance
• Basics of Payroll Taxes: Our specialists are familiarized with federal, state, and local payroll taxes, including income tax withholding, Social Security, Medicare, and unemployment taxes.
• Stay Compliant: Ensure you are compliant with labor laws, including minimum wage requirements, overtime rules, and employee classifications (e.g., full-time, part-time, independent contractor).
Accurately Track Employee Hours and Compensation
• Recordkeeping: Keeping detailed records of employee hours, pay rates, and any bonuses or commissions. Accurate record-keeping is essential for payroll processing and resolving any disputes.
Communicate Clearly with Employees
• Provide Payslips: Issue clear and detailed payslips to employees with each payroll, showing gross pay, deductions, and net pay. This transparency helps employees understand their compensation.
• Address Questions Promptly: Be available to answer any payroll-related questions or concerns your employees might have. Clear communication builds trust and reduces misunderstandings.
Set a Regular Payroll Schedule
• Consistent Schedule: Decide on a regular payroll schedule (e.g., weekly, bi-weekly, monthly) and stick to it. Consistency helps employees plan their finances and reduces confusion.
• Deadlines: Be aware of deadlines for submitting payroll information to avoid late payments and penalties.
Additional Tips
• Backup Data Regularly: Ensure all payroll data is backed up regularly to prevent loss of important information due to technical issues or errors. We got you covered!

Set up a Budget

Setting up a budget is essential for financial stability and growth.
Steps to Set Up a Budget:

1. Define Financial Goals

• Short-Term Goals: Monthly and quarterly targets for revenue, expenses, and profit.
• Long-Term Goals: Annual financial targets, expansion plans, and savings goals.

2. Identify Revenue Streams

• Client Fees: Income from therapy sessions, consultations, and group sessions.
• Insurance Reimbursements: Payments received from insurance companies.
• Grants and Funding: Any grants or external funding received.
• Workshops and Seminars: Revenue from conducting workshops, seminars, or training programs.


3. List All Expenses

• Fixed Costs:
• Rent/Mortgage: Monthly rent or mortgage payments for the practice space.
• Salaries and Wages: Payments to therapists, administrative staff, and other employees.
• Utilities: Electricity, water, internet, and phone services.
• Insurance: Professional liability insurance, property insurance, and health insurance for employees.
• Variable Costs:
• Office Supplies: Stationery, therapy materials, and other office supplies.
• Marketing and Advertising: Costs associated with promoting the practice.
• Professional Development: Training, workshops, and conferences for staff.
• Technology: Software subscriptions, electronic health records (EHR) systems, and hardware maintenance.
• Miscellaneous: Any other expenses that may arise unexpectedly.


4. Estimate Monthly Income and Expenses

• Revenue Projections: Based on historical data and expected client volume
• Expense Projections: Based on past expenses and any anticipated changes.


5. Implement Budget Tracking Tools

• Accounting Software: Use accounting software to automate tracking of income and expenses.

OVVE SOLUTIONS has the tool for you when you sign up for monthly services.

6. Monitor and Adjust the Budget

• Analyze Variances: Identify any significant differences between the budgeted and actual figures.
• Adjust Projections: Modify the budget based on changes in revenue or unexpected expenses.
• Financial Reports: Generate monthly financial reports to keep track of the practice’s financial health.

7. Plan for Contingencies – most important step

• Emergency Fund: Set aside funds for unexpected expenses or revenue shortfalls.
• Cost-Cutting Measures: Identify areas where costs can be reduced if necessary.

Petty Cash Reconciliation

Here is the Step-by-Step Guide to Petty Cash Reconciliation

1. Gather Necessary Materials
– Petty Cash Log: The record of all petty cash transactions.
– Petty Cash Vouchers: Receipts and vouchers for each expenditure.
– Cash on Hand: The physical cash remaining in the petty cash box.

2. Verify the Opening Balance
– Confirm that the opening balance for the petty cash fund is accurate according to the previous reconciliation.

3. Count Cash on Hand
– Physically count the cash remaining in the petty cash box.

4. Summarize Receipts and Vouchers
– Collect all receipts and vouchers for petty cash expenditures since the last reconciliation.
– List and total all expenses documented by these receipts and vouchers.

5. Calculate Expected Cash Balance
– Formula: Starting Balance – Total Expenses = Expected Cash Balance.
– Ensure the starting balance matches the last reconciled petty cash balance.

6. Compare Cash on Hand to Expected Balance
– Check if the physical cash on hand matches the expected cash balance calculated.

7. Identify and Investigate Discrepancies
– Discrepancies: Note any differences between the expected balance and the actual cash on hand.
– Investigation: Investigate any discrepancies by reviewing receipts, vouchers, and the petty cash log.

8. Adjust the Records
– Correct Errors: Make necessary adjustments to the petty cash log for any errors found.
– Update Log: Ensure all transactions are recorded accurately in the petty cash log.

9. Replenish Petty Cash
– If the petty cash is running low, prepare a request to replenish the fund to its original balance.
– Record the replenishment in the petty cash log.

10. Document the Reconciliation
– Reconciliation Statement: Prepare a reconciliation statement that includes the starting balance, total expenses, actual cash on hand, and any discrepancies.
– Approval: Have the reconciliation reviewed and approved by a supervisor or manager.

Tips for Effective Petty Cash Management

– Regular Reconciliation: Perform petty cash reconciliation regularly, such as weekly or monthly, depending on the usage.
– Secure Storage: Keep petty cash in a secure, locked location.
– Detailed Records: Maintain detailed records of all transactions, including dated receipts and vouchers.
– Clear Policies: Establish and communicate clear policies for petty cash usage and documentation.
– Training: Ensure employees handling petty cash are trained in proper procedures and documentation.

Bank reconciliation tips

Bank Reconciliation

Bank reconciliation tips

Here are the steps for performing a Bank Reconciliation.

1. Extract Data: Obtain the bank statement and cash book for the period.
2. Match Transactions: Tick off transactions that appear in both the bank statement and cash book.
3. Identify Discrepancies: Highlight transactions that do not match or are missing.
4. Adjust for Outstanding Items: Account for outstanding checks and deposits in transit.
5. Correct Errors: Adjust any errors in the cash book or bank statement.
6. Calculate Adjusted Balances: Ensure the adjusted balances in the cash book and bank statement match.
7. Document: Prepare and review the reconciliation statement.

Tips for Effective Bank Reconciliation

Regular Reconciliation: Perform bank reconciliations regularly, ideally monthly, to maintain accurate records.
Automation: Use accounting software to automate data entry and reconciliation where possible.
Detailed Records: Maintain detailed records of all transactions, including receipts and payments.
Clear Policies: Establish clear policies and procedures for recording transactions and conducting reconciliations.
Training: Ensure staff involved in the reconciliation process are well-trained and understand the importance of accuracy.

Steps to reconcile account receivable

Accounts Receivable Reconciliation

Steps to reconcile account receivable
Steps to reconcile account receivable

Step-by-Step Guide to Accounts Receivable Reconciliation


1. Gather Necessary Documents

Accounts Receivable Ledger: This is a detailed record of all transactions involving customer invoices and payments.
General Ledger: This includes a summary of all financial transactions, including those related to accounts receivable.
Customer Invoices: Detailed records of amounts billed to customers.
Payment Records: Records of payments received from customers.
Credit Notes: Records of any credit adjustments given to customers.

2. Prepare for Reconciliation

Period Selection: Determine the period you are reconciling (e.g., monthly).
Reconciliation Template: Use a reconciliation template or software to help organize the data.

3. Compare Balances

Opening Balances: Verify that the opening balances for accounts receivable in the ledger match the opening balances in the general ledger.
Ending Balances: Ensure the ending balances in both the accounts receivable ledger and the general ledger match.

How to find missing transactions

Finding missing transactions in your financial records can be a meticulous process, but it’s essential for accurate bookkeeping and financial management.
Here’s a step-by-step guide to help you locate and resolve missing transactions:


1. Gather All Financial Records

Bank Statements: Collect all your bank statements for the period in question.

Receipts and Invoices: Gather all receipts, invoices, and any other relevant financial documents.

Accounting Software Records: Access your accounting software or spreadsheets where transactions are recorded.

2. Reconcile Your Accounts

Bank Reconciliation: Compare your bank statements to your accounting records.

Cash Flow Management

Effective cash flow management is crucial for the financial health and sustainability of any business.

Here are five tips to help manage cash flow effectively:
1. Forecast Cash Flow Regularly
• Create Projections: Develop weekly, monthly, and quarterly cash flow projections based on historical data and future expectations. This helps anticipate periods of high and low cash flow and plan accordingly.
2. Optimize Receivables
• Invoice Promptly: Send invoices immediately after services have been performed to reduce the time it takes to receive payment.
• Implement Clear Payment Terms: Clearly define payment terms (e.g., Net 30) on invoices to set expectations with clients.
• Follow Up on Overdue Invoices: Actively follow up on late payments. Consider offering early payment discounts or using automated reminders to encourage prompt payment.
3. Manage Payables Strategically
• Negotiate Payment Terms: Negotiate longer payment terms with suppliers to keep cash in your business longer.
• Prioritize Payments: Prioritize payments based on due dates and the importance of the relationship with each supplier. Pay critical suppliers first to avoid disruptions in business operations.
• Take Advantage of Discounts: If your cash flow allows, take advantage of early payment discounts offered by suppliers.
4. Control Expenses
• Monitor Expenses Closely: Regularly review all expenses to identify areas where costs can be reduced or controlled without compromising quality or customer satisfaction.
• Implement a Budget: See Ovve Solutions prior posts.
• Cut Unnecessary Costs: Identify and eliminate unnecessary expenses. This might include renegotiating contracts, finding cheaper suppliers, or reducing discretionary spending.
5. Maintain a Cash Reserve
• Build an Emergency Fund: Maintain a cash reserve to cover unexpected expenses or periods of reduced income. This can help avoid taking on high-interest debt during financial shortfalls.
• Save Regularly: Set aside a portion of profits each month to build up your cash reserve gradually.
Additional Tips
• Use Financing Wisely: Consider short-term financing options, such as lines of credit, to bridge temporary cash flow gaps. Use financing strategically and avoid over-reliance on debt.
• Review Pricing Strategies: Regularly review your pricing strategies to ensure you are charging appropriately for your products or services, and adjust prices as needed to reflect market conditions and cost changes.