Posts Tagged ‘small business’

It’s Lonely At The Top …

Tuesday, August 23rd, 2016

A Business Advisory Board Can Help

Small Business Advisory Board | Ohio CPA Firm

Excellent leaders seek out excellent advisors and the best advisors for your business are those who fill knowledge gaps within your company. They will also not be afraid to share their opinions and offer differing perspectives. You may not always like what they have to say, but you will be a better leader for hearing it.

It’s not uncommon for small business owners or CEO’s to feel like there is no one they can turn for help, advice or validation.

Fortunately, a business advisory board can help. Business leaders who consult an advisory board not only gain camaraderie, they gain ready access to experts in a variety of fields, such as marketing, sales, financing, and others. Not to mention a valuable multi-perspective approach to your day-to-day managerial duties.

Read Also: 5 Best Practices For Taking Your Business To The Next Level

Business Success Is A Team Effort

Not ready to commit to utilizing a business advisory board in all aspects of your business? That’s fine. Start small instead. Many successful boards are originally formed with a very specific goal in mind – such as the implementation of a new strategic plan.

And you don’t always have to look exclusively outside of your business for help. Consider tapping members of your management team for specific organizational reports. Each advisory board meeting could begin with members of your management team providing updates on assigned areas, such as finances, operations/production, human resources, IT, and sales & marketing. This portion of the meeting will ensure that everybody is on the same page and will encourage your management team to buy into the advisory process. Later in your meeting, set aside time to speak confidentially with your advisory team. Doing so will provide everyone with the opportunity to speak candidly.

Say ‘No’ To ‘Yes-Men’

If you don’t trust the members of your advisory board, the initiative will not be effective. You need to go into advisory board meetings ready and willing to share sensitive information about the business, as well as personal information about yourself. If you don’t trust your board, you are unlikely to tell them everything they need to know to provide you with the best advice possible. Your board should consist of the following experts:

  • An attorney
  • An accountant
  • A banker
  • Experts in Marketing, HR and/or IT
  • Other successful entrepreneurs from other industries
  • Potential customers

Optimally, you should try to keep the group small and close-knit. More than six advisors on your board are not recommended as the productivity of the team is likely to take a hit.

Know Your Limitations

Excellent leaders seek out excellent advisors and the best advisors for your business are those who fill knowledge gaps within your company. They will also not be afraid to share their opinions and offer differing perspectives. You may not always like what they have to say, but you will be a better leader for hearing it. You can’t do everything and you can’t be an expert on every topic or every issue that comes across your desk. But an advisory team will help you get there.

Set Expectations

Even though advisory boards are more informal than boards of directors, it’s important to set expectations and ground rules on any time expectations, responsibilities and duration of service. Consider a written document outlining your board’s responsibilities and logistics, such as meeting frequency, expected time commitment and compensation, if any. Quarterly meetings as a group with individual meetings as needs arise is a good framework.

Remember, your business advisory board does not have authority to make business decisions; it will offer advice that you can either take or dismiss. Speak frankly about your business goals are and explain that you don’t expect them to take on an active management role or assume any liability for your company or for the advice they offer. Providing written indemnification for each participant is appropriate.

The advisory board experience should be interesting and beneficial for all involved. Being on your board will expose members to new ideas and perspectives, and also offers mentoring, networking and social opportunities that make the experience worthwhile. At the very least, you should cover any expenses members incur to attend meetings, and provide meals when you get together. You could also consider a per-meeting fee that might range from a few hundred to a few thousand dollars, depending on commitment.

Email Rea & Associates to learn more ways a business advisory board can help you become a better business leader.

By Chris Roush, CPA (Millersburg office)

Are you looking for more insight into the effectiveness of a business advisory board? Check out these articles.

Getting By With A Little Help From Your Friends

Why It’s Important To Have A Good Banker As Part Of Your Business Advisory Team

This Is An Intervention – Step Away From Your Business

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Phishing Scam Is A Threat To Ohio Businesses

Monday, March 28th, 2016
IRS Phishing Scam - Ohio CPA Firm

You can take a proactive stance when it comes to protecting your company from these scams by encouraging your employees to pay close attention to emails that request sensitive information, such as the names of employees, Social Security numbers, dates of birth, addresses and/or salary information or copies of employee’s W-2 information.

The Ohio Department of Taxation (ODT) is echoing phishing scam alerts made by the IRS earlier this month in an effort to protect businesses and employees state-wide from identity theft and tax fraud.

Read Also: Payroll, HR Departments Targeted By Cyber Criminals

According to ODT, payroll and human resources offices at companies nationwide – including some in Ohio – reportedly received emailed requests that appear to be sent from a high ranking member of the company’s management team requesting confidential payroll data. While the emails appear to be legitimate, they are actually being sent by cybercriminals who are looking to fool employees into sending them detailed payroll and W-2 information. The imposters then use the information to file fraudulent tax returns.

“The scam has worked on more than 30 companies resulting in the theft of W-2 tax information for thousands of current and former employees,” ODT’s news release states. “The W-2 form contains an employee’s Social Security number, salary and other confidential data. This information enables thieves to create a realistic looking, but fraudulent tax return requesting a tax refund that is then filed with Ohio or other states, and the IRS.”

The frequency of tax fraud and identity theft continues to increase at an alarming rate. This tax season alone, the IRS reported an approximate 400 percent increase in phishing and malware incidents – a surge that was addressed back in February.

“If your CEO appears to be emailing you for a list of company employees, check it out before you respond,” said IRS Commissioner John Koskinen. “Everybody has a responsibility to remain diligent about confirming the identity of people requesting personal information about employees.”

You can take a proactive stance when it comes to protecting your company from these scams by encouraging your employees to pay close attention to emails that request sensitive information, such as the names of employees, Social Security numbers, dates of birth, addresses and/or salary information or copies of employee’s W-2 information. You can also let them know that they should never send sensitive information until a conversation takes place, either in-person or over the phone, with the member of management seeking the information. You can also check out the information provided here for general insight from ODT that could be used to help your employees identify phishing attempts and email scams.

If your Ohio business has been the victim of or experienced this or any other type of email phishing scheme, contact ODT immediately at 800.282.1780 to protect against potential tax fraud and safeguard Ohio taxpayer dollars.

Those who are interested in learning more about the increasing threat of cybercrime should check out The Columbus Cybersecurity Series. Presentations are scheduled to take place throughout the year and will focus on ways to help business owners learn more about cyber threats. The first installment is scheduled for Wednesday, April 6. The event is free but registration is required to attend. Attendees will walk away with new insight into these attacks as well as tips and advice that will help you protect your business.

By Lisa Beamer, CPA (New Philadelphia office)

Want to protect your employees from identity theft and tax fraud or need help recovering? Check out these articles:

How Can You Protect Yourself From Tax Fraud

Identity Theft Prevention: Tips To Reduce Your Risk of Becoming a Victim

How To Recover From Identity Theft & Refund Fraud

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The ACA: Small Businesses Are Also At Risk

Friday, February 26th, 2016
ACA Small Business Penalities - Ohio CPA Firm

The “any’ employer changes impacting small businesses are potentially even more costly than the penalties faced by the “larger” employers. Read on to find out what to expect.

Thinking the provisions outlined in the Affordable Care Act doesn’t apply to your business because you are “under the threshold of 50 employees” is a very dangerous assumption to make.

It’s likely that you’ve heard much ado about the significant changes (and the penalties associated with these changes) large employers – those with more than 50 full-time-employees – are expected to make, but small employers are not immune to the ACA. In fact, the legislation also outlines changes that are mandatory of “any” employer.

The “any” employer changes I have found typically aren’t considered a problem for larger employers because they aren’t likely to have the conditions that result in issues with these specific changes. Companies with fewer than 50 full-time employees, on the other hand, are at great risk.

Why small business owners should be aware of “any” employer changes

It’s typical for small business owners to think they don’t have to worry about the changes that resulted from the ACA. Oftentimes, they will point to their smaller size as justification. The only thing that does is leave them vulnerable to the penalties associated with noncompliance.

Listen to episode 5 of unsuitable on Rea Radio to learn more
about ACA changes small business owners should be aware of.

The “any’ employer changes impacting small businesses are potentially even more costly than the penalties faced by the “larger” employers. In fact, you could be looking at a max penalty of $36,500 per employee, per year. In contrast, the max penalty on the “large” employer is only $2,000 per full-time employee, per year.

If you own a business with around 30-50 staff members and you are thinking about dealing with the new health insurance mandates on your own, take a minute to consider whether it’s really worth the risk. I recommend seeking another opinion.  So many people, including you and your family, depend on the general well-being of your business. You can protect this valuable asset by being sure about whether or not you comply with these costly ACA provisions.

Email Rea & Associates to connect with an ACA expert today.

By Joe Popp, JD, LLM (Dublin office)

Need to learn more about the ACA? These articles will point you in the right direction:

Make BIG Changes Or Face BIG Fines

The Cost Of Reimbursing Employees For Health Care

Secure Form 1095-C Help Now And Avoid Penalties

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Are Your Employees Skimming From The Top?

Friday, January 29th, 2016

Fraud Triangle- Ohio CPA Firm Dear Drebit: As a new business without a cash register, what is the best way (accounting method-wise or other) to protect cash receipts from sales against employee theft or dishonest activity? Thanks, “Ernest”

Dear Ernest: Great question! Segregation of duties is essential when it comes to protecting your business against fraud. Here are some tips to help you protect your business from employee theft or dishonest activity.

5 Ways To Prevent Fraud In Your Small Business

  • Your bank activity and all copies of your cancelled checks should be reviewed by someone other than the individual who collected the cash. Similarly, the person who collected the cash should not be the same person responsible for taking the deposit to the bank.
  • Inventory records should be reviewed by the business owner, who should then compare them with the company’s sales totals/collections. While your number probably won’t be exact, it will help you identify large variances. Start by reviewing how much inventory was sold and identify the sales price. Then review that total with the business’s sales totals.
  • Never use the cash in the register to pay vendors for business expenses. All payables should be processed in such a way to provide you with a paper trail. A check or card payment is ideal.
  • Lead by example. Your employees are watching your behavior, which means if they see you removing cash from the till, they will have an easier time rationalizing their behavior to do the same. It’s up to you to set a good tone at the top.
  • If the person responsible for collecting payment from your customers throughout the day is also responsible for preparing a “daily reconciliation” of monies, their work should be double-checked by another employee as well. Again, because it’s just that important, someone other than the employee who collected the money in the first place should be the one to take the funds to the bank. After the deposit has been made, the employee should return with the validated deposit slip to compare with the day’s sales activity.

While you can never reduce the risk of fraud from occurring to zero, any control you put in place – even the perception of oversight – will help deter fraud.

I recently spoke about this topic on our podcast, unsuitable on Rea Radio. If you get a chance, check out episode 3: trust is not an internal control for more insight, tips and general fraud prevention advice.

If you would like more information on internal controls, email Rea & Associates. You may also find the information provided in this video to be helpful.

By Annie Yoder, CPA, CFE, CFF (New Philadelphia office)

Learn more about the impact of occupational fraud, check out these articles:

Where There’s Smoke, There’s Fire: 5 Internal Control Tips That Can Save Your Business From Fraud

Fraud Hotlines Deter Occupational Fraud

Cost-Effective Ways To Deter Fraud

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IRS Gives Business Owners The Gift Of More Time

Monday, January 4th, 2016
Form 1095 Deadline Extended - Ohio CPA Firm

Failure to comply with provisions set forth in the ACA can lead to catastrophic penalties, which is why we have actively sought to inform business owners of their responsibility to file Form 1095-C. Unfortunately, we knew that while we could successfully inform many businesses in advance of the original deadline – some were going to be left behind. Time, it seemed, just wasn’t on our side. But the IRS saw this threat and, as 2015 came to a close, took action to delay the 1095-C reporting deadline - (hopefully) keeping many small businesses intact.

While some taxpayers may be rejoicing after learning that the IRS has delayed 1095-C reporting deadline, it’s important to remember that this late Christmas gift may not be as great as it seems - especially when it comes to meeting the deadline to file your individual tax return.

Read Also: Make BIG Changes Or Face BIG Fines

1095-C Reporting Deadline Postponed

As you may already know, failure to comply with provisions set forth in the Affordable Care Act can lead to catastrophic penalties, which is why we have actively sought to inform business owners of their responsibility to file Form 1095-C. Unfortunately, we knew that while we could successfully inform many businesses in advance of the original Jan. 31 deadline – some were going to be left behind. Time, it seemed, just wasn’t on our side. But the IRS saw this threat and, as 2015 came to a close, took action to delay the 1095-C reporting deadline - (hopefully) keeping many small businesses in tact.

Employers now have until March 31 to provide employees with Form 1095-C and the deadline to file the form electronically with the IRS was moved to June 30. The IRS also extended the deadlines for 1095-Bs to these new dates as well.

Remember, all 2014 large employers are required to file these forms, based on 2015 data. Per employee penalties will accrue for those who file late or fail to file. Some businesses may be considered large employers under the ACA, and not even know it; but there are ways to determine your employer status before it’s too late.

That Sounds Great, Except …

Now for the bad news – there will be some individual tax payers who may not get these forms to us until the first week of April. For most taxpayers, this will simply require some additional due diligence with no delay to filing their tax return. However, there will be some individuals who will likely have to file an extension if they do not get their forms in time. Don’t be afraid of tax extensions. As long as you work proactively with your tax advisor, there is absolutely nothing to worry about. In fact, filing a tax extension could be very helpful. Click here to get “The Truth About Tax Extensions”

You Do Not Have Permission To Do Nothing

You’ve been given extra time. Now let’s make the most of it. Rea & Associates is still accepting new clients for 1095-C Form preparation projects, And, as we have previously stated, the top payroll companies are already booked to capacity with wait lists growing by the day. If you haven’t started on this project yet and know that you should, take advantage of this delay and email me for help. My team here at Rea can also help you determine if your business is considered a large employer – which can keep you from being blindsided when the IRS determines that you do, indeed meet the large employer qualifications.

By Joe Popp, JD, LLM (Dublin office)

Want to learn more about your responsibilities under the ACA? These articles will provide you with more insight:

The Cost Of Reimbursing Employees For Health Care

Obamacare: Discrimination Is Not An Option

Secure Form 1095-C Help Now And Avoid Penalties

 

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How to make your building work for you with a cost segregation study

Wednesday, July 29th, 2015

Have you recently purchased commercial real estate or invested in construction? If so, you might want to look into getting a cost segregation study. The benefits of a study can mean tax savings and improved cash flow. Smart Business recently sat down with me to discuss the benefits of a  cost segregation study.

For example, if you buy a building and it’s all capitalized as one lump sum on a business’s tax return, then it can only be depreciated over 27 to 39 years … But if you break it down into cost components, the business owner can depreciate certain costs over five, seven or 15 years to accelerate tax deductions.

To find out what a cost segregation study could do for your recent construction investment or commercial real estate purchase. Read the full article here or read more about cost segregation studies by clicking on the article links below. 

Learn more about cost segregation studies and how they can help your small business:

It’s No Secret – Cost Segregation Studies Can Save Business Owners Money

Uncork Bottled Cash Flow with Cost Segregation Studies

Uncover Tax Savings in Your Real Estate Through Cost Segregation

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10 Ways To Implement Internal Controls With Limited Resources

Tuesday, July 7th, 2015
How To Implement Internal Controls With Limited Resources - Rea & Associates - Ohio CPA Firm

Putting internal controls to work in your business doesn’t have to be an overwhelming task and you don’t necessarily need to beef up your workforce to get started. Start by simply picking a few key controls that can be easily woven into your daily or monthly processes and begin implementing a few changes at a time.

You’ve probably heard about how critical it is to establish internal controls throughout your business. But if you happen to own a small or midsize company, you may have dismissed this best practice in favor of maintaining your daily operations, optimizing customer service and streamlining your growth initiative. While running a successful business greatly depends on your ability to manage a variety of responsibilities, don’t let yourself become complacent when it comes to protecting your lifework from fraudulent activity. The mistake of ignoring the importance of internal controls in your business could end up costing you greatly.

Read Also: Where There’s Smoke, There’s Fire: 5 Internal Control Tips That Can Save Your Business From Fraud

Who’s Watching Your Money?

Would you be comfortable asking someone to watch a briefcase full of your cash, say $100,000? What if it held $500,000 or $1 million? Are you confident that your money would be there when you returned? Believe it or not, that’s essentially what you are doing every day when you run your business without internal controls – you are willingly handing over full access to your most valuable asset.

How To Address Your Internal Control Needs

Even if you don’t have the resources to implement a comprehensive internal control structure, there are still options available that can effectively provide your business with a level of oversight. Before you get started, be sure to consider the difference between preventative controls and detective controls.

As the owner of a small- to midsize-business, you may want to consider implementing a strategy that takes advantage of detective controls, which are typically put in place for the purpose of reviewing data for human error while ensuring that your assets remain secure. One example of this type of control is when, after your accounts have been reconciled, a reconciliation review is conducted to ensure accuracy.

Because of their size, smaller companies are more likely to give a few individuals full access to their business’s funds. These employees are often in charge of making deposits, issuing checks, managing payroll and performing monthly bank reconciliations. Enacting detective controls will not only provide you with the peace of mind you need, it may help take weight off of the shoulders of a trustworthy employee who would rather not have their trust questioned.

Preventative controls, on the other hand, are established by companies seeking to ensure that something doesn’t happen in advance. An example of a preventative control is when transaction limits and segregation of duties are established. This type of control can be very effective, but are oftentimes more difficult for smaller companies to establish due to the lack of resources they can commit to such a strategy.

10 Ways To Implement Internal Controls In Your Business

  1. Document and re-evaluate your operational processes (at least) annually.
  2. Make sure that more than one employee is familiar with your company’s operational processes to protect your business against unforeseeable circumstances, such as sickness, job loss or death.
  3. Conduct monthly reconciliations of key accounts (i.e. receivables, cash, inventory, payables, payroll costs, etc.) Then have these monthly reconciliations independently reviewed.
  4. Implement an approval process for employee spending.
  5. Establish transaction limits.
  6. Restrict access to your company’s general ledger to only a few key individuals.
  7. Review your vendor lists to ensure that they are current and accurate.
  8. Assign someone to review standard and nonstandard journal entries.
  9. Form a policy for creating credit limits for customers – and review it regularly.
  10. Review whether there are other areas unique to your business where employees may be able to manipulate information and identify how to monitor them.

Putting internal controls to work in your business doesn’t have to be an overwhelming task and you don’t necessarily need to beef up your workforce to get started. Start by simply picking a few key controls that can be easily woven into your daily or monthly processes and begin implementing a few changes at a time. Before you know it, aspects of your internal control strategy will become so commonplace that you may begin to wonder how you ever got by without them.

Email Rea & Associates to learn more about the benefits of an internal control strategy.

By Michaela McGinn, CPA (Dublin office)

 

Related Articles

What Are The Top 10 Signs Your Business’s Internal Controls Aren’t Strong?

Does Your Audit Process Protect You From Fraud?

Does Your Company Have Solid Internal Controls?

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Is Your Cash Flow Ready For Spring?

Tuesday, February 17th, 2015
cash flow - Rea & Associates - Ohio CPA Firm

Cash flow is arguably more important to your company’s success than your bottom line because it takes your past, present and future projections into consideration to arrive at a comprehensive analysis of your financial wellness.

Spring is the season of renewal. It’s the time of year when we emerge from our dens to enjoy warmer weather, the melting of snow and an abundance of greenery as nature appears to come alive. Spring is also an opportune time in the business world. And before we lose ourselves in the hustle and bustle of increased production and revamped initiatives, take this time to review and solidify your company’s cash flow projection.

Managing your cash flow now will help minimize mistakes later – when business and economic trends become more favorable. Still not convinced? Here are five more reasons to consider maintaining your company’s cash flow projection.

5 Reasons Why Managing A Solid Cash Flow Is Just Good Business Sense

  1. A cash flow projection will provide you with the information you need to make better, more lucrative decisions. For example, if you had insight into which of your company’s non-core assets are viable would you make changes to support future growth or would you simply maintain the status quo? With a well-maintained cash flow projection at your fingertips you can make decisions that will help secure a more lucrative future for your company.
  2. If you’re looking for a way to hold you and your team accountable for the company’s success and failures, look no further than your cash flow model. This tool can help you fine-tune your management strategy, which can help you and your team achieve better quality standards, increased production, enhanced efficiency and an improved reaction time.
  3. Your cash flow strategies can empower your team to take further ownership of their work and pride in the company. When they have a chance to see that their actions influence how well the business does as a whole they will be more likely to seek out opportunities for improvement.
  4. When you have a cash flow projection then you have the tool needed to develop timely and attainable goals. When you have a better idea as to how much money is going out and coming in (and why), you and your management team can put plans in place to better manage the company’s cash flow in a more favorable way.
  5. Are you managing cash that you acquired from an external source? Will you manage acquired cash in the future? Stakeholders love cash flow projections because they provide them with the information they need to monitor their investment. Oftentimes banks require you to provide quarterly financial information to prove that you’re complying with the terms of the loan package.

Cash flow is arguably more important to your company’s success than your bottom line because it takes your past, present and future projections into consideration to arrive at a compressive analysis of your financial wellness. Email Rea & Associates to learn more about the importance of cash flow projections and how you can use yours as a valuable management tool.

By Dave Cain, CPA (Dublin office)

 

Related Articles:

How Can My Statement Of Cash Flows Transform My Business?

Cash Flow Is King: Where Do You Need To Focus?

QuickBooks Tips For Managing Cash Flow

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Beware Of Small Business Wire Transfer Scam

Thursday, January 29th, 2015

Late last week, the Federal Bureau of Investigation (FBI) issued a wire transfer scam alert for all small businesses in the United States. According to the FBI alert, between October 2013 and December 2014 a total of 1,198 complaints from U.S.- based companies were received dealing with wire transfer scams. Losses from these incidents totaled more than $179 million. The FBI also reports that the scams can follow a Ransomware incident, and may involve a fraudster contacting a vendor and requesting a change of payment to an alternate fraudster-controlled bank account.

How To Mitigate This Type of Scam

If you’re a small business owner, you may be at risk for this kind of scam. The FBI recommends the following mitigation steps for these types of scams:

  • Keep all of your anti-virus software up-to-date.
  • Educate your workforce about security best practices.
    • Be sure that any changes to payments via electronic transfer are verified with an employee of the bank and at a phone number that you utilize for assistance.
    • Don’t use alternate phone numbers provided via email or by a bank representative contacting you.
    • Always call the institution back and verify that you are communicating with your bank.
  • Monitor all of your business’s financial transactions on a daily basis. Suspected electronic fraud must be reported in a single business work day.
  • Use two-party authorization access to complete all wire transfer transactions.
  • Utilize biometric authentication to verify the identity of authorized users.
  • Use online bank portals that require strong fraud controls to complete all wire transfer transactions.

You can find more information about the FBI’s scam alert here. This site also provides detailed samples of how the scams will be run against unsuspecting businesses.

If you have any specific questions about how this scam might impact you or if would like more information on IT security best practices, email Rea & Associates.

By Joe Welker, CISA (New Philadelphia office)

Related Articles

Could A Cyber-Attack Cripple Your Business In 2015? 

How Prepared Is Your Business For A Potential IT Disaster? 

New Form of Malware Catching Retailers Off Guard

 

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Should I Make a Big Purchase to Cut Taxes?

Tuesday, December 16th, 2014

This is a hectic time for business owners who are working to close their books on the previous year while strategically planning for the year ahead. For me, this is the time of year I find myself frequently fielding questions from clients who want to know if buying equipment will help them keep their taxes down.

Unfortunately, without the proper information, any answer I could provide would be about as useless as seeking business advice from a Magic 8-Ball. Fortunately, the answer really isn’t difficult to find, especially if you have a well-maintained balance sheet.

To determine whether purchasing equipment would be beneficial to your business from a tax perspective, I have to know what your profit looks like. And while it may be easy to pull out your profit and loss statement to find the answer, I would encourage you to take a look at your balance sheet as well. It’s capable of painting a detailed picture of your business and is a great tool that can help you make sound financial decisions for your business.

Before you make any decisions that could impact your business’s financial stability, make sure these six items on your balance sheet are accurate.

  • Cash Reconciliation
    • Check to make sure that all cash has been reconciled and make special note of checks that have remained uncashed for an extended period of time.
    • Verify that all checks – incoming and outgoing – have been recorded, and their status tracked.
  • Collectability of accounts receivable
    • Does your business currently have any bad debts? If so, have you taken the necessary actions to determine that the account in question is uncollectable?
    • Once an account is uncollectable, take the steps needed to prove that determination and receive the benefit from it.
  • Accurate Inventory
    • The end of the year is an ideal time to take a physical inventory.
    • An inaccurate inventory can greatly impact your profit – not to mention your ability to properly manage your resources.
  • New/Disposed Fixed Assets
    • Be sure to add all new assets (equipment, fixtures, etc.) to the correct accounts. Don’t let them become buried in your purchases.
    • If you are planning to sell your company in the next 5-10 years, it is extremely important to keep an accurate record of your assets because they can help determine your asking/selling price.
  •  Liabilities
    • Keep a current record of all your liabilities and update it regularly to maintain accuracy.
    • Make sure that all debts are tracked and recorded.
  • Member Draws
    • Check to make sure that your member withdrawal account is accurate. If there are any expenses you expected to see but didn’t, investigate and find out why.
    • If after year end you happen to find personal expenses that were in regular expenses, your profit increases and so do your taxes.

Your company’s profit is not just a number. Your profit is determined by a wide range of factors – and these are just a few. If you are really want to lower your taxes, make sure your bookkeeping is accurate before developing a plan.

Email Rea & Associates to discover more ways to increase your business’s profitability.

By Joel Yoder, CPA (Millersburg office)

 

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Is Your Business Ready for a Year-End Check-Up?

What Are 5 Things Your Should Do Financially At The Beginning Of The Year?

Should You Maximize Cash Flow or Minimize Income Taxes?

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What Could Ohio’s Small Business Investor Income Tax Deduction Do For Me?

Thursday, February 27th, 2014

In an effort to become more taxpayer-friendly and reduce the effective tax rate, Ohio enacted the Small Business Investor Income Tax Deduction effective for tax year 2013. This tax deduction benefits many of Ohio’s individual income taxpayers. So how exactly does this deduction work?  (more…)

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What Are 5 Things You Should Do Financially Now?

Tuesday, January 7th, 2014

As a small business owner, you probably find the end of the year a busy time. Before you know it, you find yourself into January trying to determine what the New Year will bring. One of the keys to being a successful business owner is taking a break from the day-to-day routine and spending some time doing valuable planning. This is sometimes referred to as working on your business, not just working in your business. To help you with this process, here are five things you should consider doing as a small business owner as you start the New Year.  (more…)

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What Are 6 Things You Can Do To Improve The Health Of Your Business in 2014?

Monday, December 30th, 2013

Are you out of breath from the impact the economy had on your business during the last several years? Is it time to develop some New Year’s resolutions that will make a difference in your business? Adopting a new diet, jumping on the treadmill or committing to run a half marathon are common items on the “personal” resolution menu. However, is it time to add energy and resources to your resolutions in order to improve the health of your business?  (more…)

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So Is It a Tax Credit Or a Tax Deduction?

Wednesday, August 21st, 2013

As you can probably guess if you have seen any courtroom dramas lately, semantics is very important when it comes to the law. One word can totally change the meaning of something, and hence change the thinking or behavior of someone.  Or in the case of tax law, one word can be a “gotcha!” or really change just how useful a provision might be to your business.  Let’s take a look at the small business tax break that is part of the recently passed Ohio budget as an example.  (more…)

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Did You Know that the FASB Wants to Hear From You?

Wednesday, June 5th, 2013

Let’s face it—opinions matter. We all like to be asked for our opinion. And more often than not, opinions help shape decisions and the direction that a group of people may take. (more…)

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When Can I Apply for the Ohio Incumbent Workforce Training Voucher Program?

Tuesday, May 28th, 2013

When will the application process begin for the next round of the Ohio Incumbent Workforce Training Voucher Program? This is a burning question for many Ohio companies these days. While the Ohio Development Services Agency has not yet communicated what date the application process will begin, you can keep an eye on its website for an official announcement.  They are hoping to have the application process open sometime in June, though it’s possible that date may get pushed back.  (more…)

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How Can the Ohio Incumbent Workforce Training Voucher Program Work for Your Business?

Friday, May 17th, 2013

It’s almost half way through the year. When thinking about your employees, how have you helped them develop professionally during the past few months?  Investing in your people pays off. It helps them, helps you, and helps your customers. But, it’s expensive and time consuming – training is one of those things that always seem to get pushed until tomorrow. But now the state of Ohio is taking away one of your excuses – it’s picking up part of the tab. (more…)

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Why is the Timeliness of Employee Contributions Under Scrutiny?

Friday, May 3rd, 2013

The Department of Labor (DOL) has focused on the timely remittance of employee contributions to retirement plans for a few years. And recently, they stepped up efforts during agency-conducted audits, making this a key area of detailed review. The timeliness of your remittances will be under the microscope, and not only the frequency, but also the consistency. (more…)

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Do You Have Any QuickBooks Tips for Managing Cash Flow?

Wednesday, December 26th, 2012

Cash flow management is a struggle for many small businesses.  Unlike revenue, cash flow isn’t easy to quantify or pin down.  It’s up and down and moves around.  But, most small businesses that fail do so because of a lack of cash flow… not revenue or profits. (more…)

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What’s Your “Get Out of Business” Plan?

Friday, May 18th, 2012

You’ve worked hard to build your business and probably can’t imagine a time when it won’t be a major part of your life.  But, someday, you’ll approach retirement and you’ll want to spend more time enjoying your life and less time balancing your books.

Maybe you’ll want to leave your business to your daughter.  Maybe you’ll want to sell it and cash out.  Either way, business transition doesn’t just happen.  It isn’t serendipitous.  You need a “get out of business” or succession plan. (more…)

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How can your accountant help your business get the necessary financing?

Tuesday, March 6th, 2012

Your accountant can help your business get financing in a number of ways.

Preparing documents. Lenders want to receive financial information in a specific format, and also want year-end and interim financial statements on a timely basis. Your accountant can help. (more…)

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How do you follow IRS regulations when gifting a business interest?

Friday, February 17th, 2012

Lately we’ve been surprised by how many people are thinking about filing a gift tax return without a business valuation. We’ve had a few conversations with people who are under the impression that they don’t need to attach a valuation of their business interest to the gift tax return.

Before you file your return without a valuation from a professional, consider the consequences: (more…)

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Is Your Farm a Hobby or a Business?

Friday, February 10th, 2012

Farming is a pleasure activity for some individuals, and for others, it’s how they support themselves. If you farm for profit, how do you prove it to the IRS? (more…)

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Do You Have a Business Pre-nup?

Monday, January 30th, 2012

No one enters a relationship wanting to get jilted. It’s true whether you’re entering a business together or a marriage together – and the consequences can be even more painful if you’re doing both at the same time. (more…)

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Are You Ready for the Next Phase of InvestOhio?

Wednesday, November 30th, 2011

Recently we’ve been telling you about Ohio’s new nonrefundable tax credit program called InvestOhio. Through it, Ohio taxpayers who invest in qualifying Ohio small businesses can qualify for a 10 percent credit against their personal Ohio income tax if they meet certain requirements. In less than two weeks, taxpayers can begin the second step in the application process for this tax credit. (more…)

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How will the Small Business Lending Act impact my business?

Tuesday, October 5th, 2010

Small Business Lending Funding Act Establishes Four Lending Programs

When President Obama signed into law last week the Small Business Jobs and Credit Act of 2010, the new law created a $30 billion lending fund that will allow the U.S. Department of Treasury to invest in small to medium-sized financial institutions that will in turn be encouraged to increase small business lending. Here is a breakdown of the four lending initiatives established by the law.

Small Business Lending Fund. Administered by the U.S. Treasury, the Small Business Lending Fund will award a capital investment to eligible banks with assets under $10 billion. The banks can receive up to a small percentage of their risk-weighted assets, and receive essentially an incentive loan that must be repaid within 10 years. The banks must lend additional funds to small businesses as well as appropriate advertising. The fund also includes a pilot program that will allow non-profit intermediaries to make loans to small businesses at 1 percent interest over a 20-year term. The non-profit intermediaries can loan up to $200,000 per small business through the pilot program.

State Small Business Credit Initiative. A seven-year State Small Business Credit Initiative will be administered by the U.S. Treasury. Treasury will allocate federal funds to participating states with capital access programs. States can qualify for the funds by demonstrating that their capital access programs meet performance and eligibility requirements, including access to capital for businesses with less than 500 employees, minority-owned businesses and those in underserved communities. New programs can also qualify for the federal funds.

Small Business Early Stage Investment Program. The new law amends the Small Business Investment Act of 1958 to establish an early-stage investment program to provide equity investment financing for early-stage small businesses. The program will be managed by the administrator of the Small Business Administration.

Small Business Borrower Assistance Program. Also as part of the Small Business Jobs and Credit Act of 2010, the Small Business Administration is directed to implement an assistance program that provides payments to lenders of principle and interest on qualifying guaranteed business loans of up to $300,000. Every borrower receiving a qualifying small business loan will be automatically enrolled in the program unless the borrower opts out. The SBA’s administrator is required to commit an amount to each borrower equal to 6 percent of the principle disbursed amount of the borrower’s qualifying loan.

The Small Business Jobs and Credit Act of 2010 also contains roughly $12 million in tax breaks and incentives. We will be reporting on the various tax implications of the new law in the weeks to come.

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