Xero: Cloud-based Accounting

Some of the best new tools to help you run your business are cloud-based services. Since these systems are hosted online, you don't have to install any software -- all you need is a web browser. Want to do your accounting in the cloud? We can help, using online accounting services from Xero. The system enables business owners and their accountants to work concurrently on the same database. Why is that important? It lets you run the management financial statements you need for running your business, and lets your CPA access reports for tax planning, estimates and preparation, all at the same time. With Xero, you no longer have to take the time away from running your business to stop and get a copy of your accounting file to your CPA, then wait for the file or the journal entries to be returned, much later after the tax return has been complete. Now you can keep your accounting records up-to-date without interruptions.

Xero automatically updates data from your online banking accounts to ensure that your bank transactions are accurate and always available for analysis. Secure, safe, and reliable, Xero is a remarkably cost-efficient way of running your business finances, and it is a proven system that is easy to use.

We are Xero certified, and we can help you set up your company, work with the product, provide training for you or your staff, and/or oversee your daily accounting needs in all aspects of bookkeeping. Contact us today to learn more!

Excel Tip: Estimating Mortgage Payments

With mortgage rates still hovering around historic lows, you might be wondering whether you can afford to purchase a new home or if you would benefit from refinancing your home mortgage.  Here is a quick way to use Excel to calculate what your new monthly payment would be.  Type this formula into any cell in an Excel spreadsheet to calculate the monthly payment (principal + interest) on a fully-amortizing mortgage loan.

=PMT(interest/12, term, balance)

  • interest = the annual interest rate, entered as a decimal
  • term = the loan term in months
  • balance = the loan balance, entered as negative

For example, for a 110-month loan at 6.5% with a balance of $405,000, you would enter:

=PMT(0.065/12, 110, -405000)

If you determine that your monthly savings from refinancing would be enough to justify the transaction costs, the next step is to determine if you qualify.  For most people that purchased their homes in the last decade, the biggest hurdle to refinancing is not having enough equity.  Fortunately, even people with little or no equity in their homes may still have a chance to refinance, particularly if their existing mortgage is being held by Fannie Mae or Freddie Mac.

If you would like some assistance in determining whether you might benefit from refinancing, or if you would like the name of a trustworthy mortgage professional who can help you explore your options, then your friends at Ghirardo CPA are ready to assist you.