Any business owner or manager who has ever made a collections call has done first party collections, whether they realize it or not. First party collections means collecting on your own accounts, so any request for payment by phone, letter or in person qualifies as first party collections.

You\’re considered the \”first party\” because you were involved in the original transaction, while the debtor is known as the \”second party.\” A \”third party\” doesn\’t enter into it unless you hire a separate debt collection agency.

First party collections are most common early in the debt collection cycle. As soon as your regular accounts receivable staff become aware that a bill is past due, they can pass it on to first party collections without a time lag. First party collections people are often more cognizant of the need to attempt to keep on good terms with the debtor in order to get more potential business in the future.

First party collections attempts are often seen as friendlier or more understanding than activity from third party collections agencies. Your client may rely on your service or product for his business to run, and if so he will be just as amenable to staying on good terms as you are.

In addition, first party collections are not governed by the Fair Debt Collection act, believe it or not. This is because under the law the first party or its subsidiary is considered the lender rather than a collector and it means you can do some things that a third party debt collector can\’t by law. There are still state and federal laws that apply, though, so make sure you are familiar with all applicable regulations if you go this route.

The rule of thumb for first party collections no matter what the industry is to keep trying to collect for 2-3 months. When you reach that milestone and haven\’t yet collected, it\’s typically a good idea to engage an outside agency or sell the debt, which means someone pays you up front for the right to collect on the debts.

First party collections are best handled by people or a staff dedicated entirely to collections. Having other members of the staff like your sales force or accounting department is not a good idea. They won\’t have the skills, time or motivation to successfully pursue collections as well as collections professionals will.

Instead, if you\’re insistent on first party collections, hire someone whose sole job is to do that, or if you\’re large enough to support it, consider having a collections department or subsidiary. Dedicated collections professionals will know the best collection techniques, including how to find deadbeats, negotiating settlements or payment plans, and even disguising collections activity as audits. First party collections can be effective if you structure it the way a third party agency would.

David P. Montana has published extensively and served as a business consultant in debt recovery services for three decades. David gives more beneficial tips and information about outsource billing service solutions.

Lots of businesses undergo through bankruptcy and liquidation since their accounting practices are improper. An accountant plays an important role in an organization since money management is one of their key roles in addition to keeping proper accounting records for each and every activity. The reasons why a business needs an accountant are plenty and the following are some of them:

Accountants make sure that financial statements comply with the International Accepted Standards (IAS). Preparation and presentation of financial statements follows a number of accounting standards which are accepted worldwide. An accountant makes sure that these standards are adhered to while preparation and presentation of the financial statements is being done. This ensures that the figures that are presented in the financial statements give the accurate financial position of the business.

The management as well as the control of funds within a business falls under the jurisdiction of the accountant. An internal control mechanism to control funds is developed by an accountant as well. The main task of the system is to stop or prevent the misuse as well as the embezzlement of funds in businesses. It offers guidelines on the modality in which transactions will be handled; this locks out any loopholes which might lead to funds embezzlement. These internal controls normally assist the business to attain certain objectives, tasks and goals. Systems of funds control are crucial for the long term survival of the business and thus they are a must for them to be developed by the accountant.

Business taxation makes the services of accountants’ all the more necessary for a business. Tax planning let businesses to formulate plans for any expected revenues. This normally assists in the management of funds which makes the business to maximize the benefits of taxation. A number of the benefits include time savings out of which the time saved could have been used in focusing on other income generating activities by the firm. The filing of tax returns can also be done in the correct time frame resulting in avoidance of penalties and other late payment fees which might prove costly to the business. Proper tax accounting can also prevent money from being tied in form of tax refunds to the business since the correct amounts will be paid.

Budgeting along with forecasting of business revenues is capable of being prepared properly by accountants. This is attributed to the actuality that the accountants have vast knowledge of operational costs as well as the flow of business revenues. The above processes of forecasting plus budgeting permit the businesses to formulate projections of revenues into the near future. These formulations can lend a hand to the business to institute its growth predictions in addition to planning for whichever anticipated disruptions that may occur in cash flows. This practice is usually founded on the concept of going concern which is part of the Generally Accepted Accounting Principles that each and every accountant is required to follow in the accounting profession.

The above discussion demonstrates that accountants are important in whichever business in view of the fact that they ensure that the flow of cash is monitored strictly. It is understood that the person who controls or manages the funds of a business is the ones who is in control of a business. It is sensible given that profit maximization forms the major aspiration of a large amount of businesses plus this may prove to be difficult to attain without any accountants being in control of the funds. As a result, flourishing businesses are the ones which have accountants.

Learn more about accountants in Tucson. Visit Flowers Rieger and Associates.

While retirement plans benefit from special tax advantages, they are also restricted by special tax regulations. For example, you are allowed a tax break if you contribute to a retirement plan and you are able to have your retirement income grow free of taxes (for a certain period of time). However, annual contributions, the total size of each contribution, and the frequency of contributions are subject to restrictions. It is important that you carefully consider your options before deciding on a retirement plan. There are generally two categories to choose from, IRAs and employer-sponsored plans.

Before you can start planning, review the retirement plans that are currently available to you. Generally, there are two categories into which all plans can be sorted: IRAs and employer-sponsored plans. IRAs are perhaps the most widely used retirement plans because they’re easy to set up and maintain. You can open up one yourself it doesn’t have to be sponsored by your employer and you can contribute as much (or as little) as you want, whenever you want, provided you don’t exceed applicable annual limits. Following are descriptions of the three main types of IRAs:

Traditional IRA Options. IRA assets grow tax deferred, meaning that you owe no tax on the earnings until you withdraw funds.

Contribution eligibility depends on earned income, statutory limits, and age. You can only contribute, at a maximum, as much as your earned income. Earned income is defined as income from wages and self-employment income in the period of one year. Earned income does not include investment income. If you are age 50 or older then you may also be allowed to contribute what are called catch-up contributions. Additionally, your spouse can also use your income to make contributions of his or her own. However, you and your spouse are only eligible for make contributions if you have not reached age 70 at the end of the year of the said contribution.

Considering other options besides the traditional IRA may be in your best interest.

The deductibility of your contribution is one factor that may make you lean towards once type of IRA over another. Your income level, along with other factors, will determine if a contribution to a traditional IRA will be fully deductible. If both you and your spouse are able to participate in a plan that is sponsored by one of your employers, you are automatically able to deduct your contribution, regardless of how much income you earn. However, your adjusted gross income (AGI) might make your deductions value reduced or even worthless.

If you aren’t eligible to make a deductible contribution (or a Roth IRA contribution), you may wish to make a nondeductible one you’ll still enjoy the benefit of tax-deferred growth. And, when you withdraw the funds after age 591/2, only the earnings will be taxed. You can withdraw your nondeductible contribution without tax.

Roth IRA. A Roth IRA and a traditional IRA have the same contribution amounts. The difference between these two plans is the eligibility rules. A Roth IRA has no age limit with respect to contributions. However, you are only allowed to escape the age limit if you meet the earned income requirement.

You also must remember that the total annual contributions to your IRA may never exceed the defined limit. In order to get around these limits you are able to split your contribution between a traditional and Roth IRA.

The Roth IRA also differs from a traditional IRA in that you won’t be able to claim a deduction for your contributions. But all Roth IRA earnings can be withdrawn tax free after age 591/2, provided you’ve had the account for at least five years. (You can withdraw amounts up to your total contributions tax free at any time.)

There are other differences as well. Traditional IRAs have required minimum distribution rules that must be strictly followed. Roth IRAs have no distribution requirements during your lifetime.

The exact formula for calculating the contribution amount is very complicated. However, if you were to use 20% of your net self-employment earnings as a guess it would be a close estimate.The formula for calculating the exact contribution amount is too complex for our purposes, but a rough estimate of 20% of your net self-employment earnings is a good start.

Simplified Employee Pension SEP IRA. A SEP IRA is made for entrepreneurs. It enables them to make larger contributions than would otherwise be allowed by a traditional or Roth IRA. The tax rules for a SEP are the same as the other two types of IRA?s.

This data is distributed for informational purposes only; Doeren Mayhew is not rendering legal, accounting, or other professional advice or opinions and assumes no legal responsibility. Contact Doeren Mayhew for more information.