The deadline for implementing the FASB’s new leases accounting standard, ASC 842, is fast approaching. Many private companies are only just now realizing that they need to examine their leases in light of the new requirements to bring most leases on-balance sheet. Adding right-of-use assets and corresponding liabilities could change important ratios and impact lending agreements, and more.
If you haven’t already, now is the time to think about how you will ensure compliance in 2020.
Overview of the Standard
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How to accept payments for your business is always of great concern to businesses. Of course, you need to accept credit card payments so that you can offer your products or services to a broader range of customers. But there are many different options for accepting credit card payments. It’s important that you understand how the options compare with each other so you can ensure that you’re using the best choice for you and your customers.
Why Credit Card Payment Options Matter
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Getting a divorce can be one of the most stressful times in your life. In addition to the emotional toll, it costs, on average, $15,500. As you split your assets, including cars, homes, and retirement accounts, don’t forget to think about the financial implication of your custody decree.
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In business, risk is anything that could negatively impact your revenues, reputation, or future operations. When you try a new vendor, you take on risk. Their products or services could be below your standards, and cost you customers. When you expand an existing business line, there’s the risk that new products and services could not sell. Think of business risk in terms of exposure to anything that could cause your company to fail.
Risk is an evitable part of running and growing a business, but smart business owners try to minimize and hedge against it.
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If you ever want to apply for a small business loan, the lenders will want to see your business plan. Your business plan gives lenders a concise snapshot of your business model. Having a small business plan also gives the owner added benefits. Often, business owners refer back to their business plan to ensure that they are holding true to the foundations of the business. A well-written business plan can help you stay on track to reach business goals for years to come.
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In these days of the gig economy, more business owners are leveraging the affordability and convenience of hiring freelancers (independent contractors) instead of regular employees. It makes sense. There are some tremendous benefits to hiring independent contractors (ICs), including not having to pay for insurance and payroll taxes. Another huge benefit to hiring ICs is that business owners can’t always predict busy times and downtimes. When seasonal shifts in business necessitate extra help, the business owner can bring on more staff without making any long-term commitments.
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Just because there’s a positive balance in your checking account doesn’t mean that your business is making money. Checks that you’ve written for expenses may not have cleared yet, or customers could have paid in advance. Relying on a positive balance to determine if your business is solvent could be dangerous.
Cashflow represents the movement of cash in and out of your business. Cashflow management seeks to match the inflows and outflows so that you’re never short-handed, though sometimes business owners must borrow to cover gaps.
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Discounts have become a way of life in the American marketplace. You can’t drive down the street without seeing a sign in a retailer’s window blaring, “50% off!” Coupons arrive in your inbox offering discounts for every occasion – even National Cheese Day.
If you’re a business owner, long-standing customers might have asked for a reduction to your goods or services to reward their loyalty. While you might be inclined to say “yes,” think about the pros and cons of discounts first.
Pros of Offering a Discount
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Does it sometimes feel like your accountant is speaking an alien language? You hired a CPA in the first place so you could benefit from their many years of experience and expertise. Obviously your CPA knows more than you do when it comes to taxes and taking advantage of the most beneficial financial strategies. But at the same time, you do want to understand what they’re trying to help you with and what they need you to do on your end of the finances.
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If you own your own business you already know the joys of being your own boss. You may even have thought about bringing your spouse and/or children into the fold. There are definitely some benefits to hiring your spouse or children. Here are some to consider.
Tax Advantages of Hiring Children Under 18
There are several tax benefits when business owners hire children under 18, as long as the child is still a dependent. If the child is 18 or older and not a dependent, they’re treated no differently than if you hired a job candidate off the street, tax-wise.
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It may be the first gorgeous day of fall, but it won’t be long until April 15 comes knocking. Be prepared for next year’s tax deadline by beginning your preparations today. That means, as a small business owner, now is the perfect time to begin organizing receipts, collecting owed payments and deciding on year-end purchases. Do it now, and you won’t have to dread facing it in the spring. And if the task seems too overwhelming, remember – we’re just a phone call away to help you get through it.
Clear Outstanding Invoices
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Small strategies make big impacts when it comes to figuring out the year’s deductions. Sadly, many small business owners never get the help they need because they’re simply unaware of the many tax deductions available to them. This is where a good, knowledgeable CPA is invaluable. And since you’re hiring your CPA to help you organize and prepare your taxes – he or she becomes a deductible business expense, too. Tons of little-known, obscure strategies will help pull you out of the hole come tax time; it’s just a matter of discovering what they are and how best to take advantage of them.
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Financial Considerations in Refinancing your House: Pros and Cons
If you’ve owned your home for a couple of years, you might have started thinking about refinancing. Maybe interest rates have dropped, and you want to save money, or you want to tap into your home’s equity to remodel your kitchen.
Learn about the pros and cons of refinancing your house and how it could impact your financial situation so you can make the best decision for your family.
Pros of Refinancing your House
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Which Items are Tax Deductible when Selling a House?
When you list your house on the market, you’re probably thinking about how much money you’ll make or where you want to move next, not about your taxes. A home sale does have tax implications which can either help or hurt you in April.
Find out everything you need to know about selling a house and personal income taxes before you plan on spending the profits from selling your home.
Which Common Home Selling Costs are Deductible?
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Change is a constant part of life. With each change, adjustments have to be made. Certain changes in our lives puts us in a different tax category or changes how we need to file our taxes. Legally, we may come under different rules and requirements. There are tax advantages or credits that come with some of life's changes. Below are a few events that can take place in your life where you may need some professional guidance with the filing of your taxes.
Getting Married
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A non-profit organization can have several definitions depending on the perspective of the people discussing the matter and the context of the discussion. To the layman, the term generally means a charitable institution or perhaps a church, or an organization which provides assistance to the community which isn't provided by the government.
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To succeed in business, small business owners must keep a close eye on expenses. Poor expense management can destroy your profit on a project or business venture. A component of expense management is expense tracking.
If you’re not keeping track of your expenses, it’s easy to go over budget. Even if you’re still making a profit and don’t think you need to pay close attention to them, if you don’t have good records you won’t be able to take all your allowable deductions on your taxes.
How important is it to Track Business Expenses?
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Going into business with a partner can be a great way to spread risk, to draw on each other’s skill sets, and to combine resources to grow your business. But, at some point, the partnership may not be serving either you or the business well. It might be time to dissolve it.
Dissolving a partnership is a delicate affair. It should be done in a respectful but efficient manner, and in a way that won’t hurt the surviving business.
Signs that it’s Time to Dissolve a Partnership
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Many small businesses open business credit cards to help meet their capital needs. Roughly 67% of business owners have business credit cards, but less than half of them use them as their primary spending source.
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Don’t Mix the Personal and the Business; Keeping Finances Separate
When you launched your business you might not have paid much attention to keeping your personal and business finances separate. If a vendor needed to be paid you grabbed the closest checkbook and wrote out a check, even if it was a personal account. It’s not a big deal since it’s all yours, right?
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Travel and entertainment are legitimate deductions, but few business owners take full advantage of them. One reason may be that they fear that the deduction will be challenged by the IRS and they’ll have to undergo the scrutiny of an audit. Another reason may be because the owner is unsure of how to take the deductions or what’s allowed and what’s not allowed. To be clear, travel and entertainment are allowable deductions. the IRS understands that much of business is conducted over drinks, meals or on the golf course. Travel is also an obvious necessary to conduct business.
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A recent study confirmed that over 16 million people were the victims of identity theft in the span of one year in America alone, which resulted in $16.8 billion in stolen money. Identity theft is dangerous to your wallet and to your credit. Identity thieves use your information to take out loans, obtain credit cards, make purchases, get apartment leases and much more.
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If you’re a small business owner struggling to make payments on credit cards and loans you might have been wondering if consolidating your debt would be a good idea. Debt consolidation companies often target those with high balances, sending letters and calling with promises to lower your monthly payments and save you money.
But do these companies really do what they promise, and can they help your business? Here’s everything you should know before applying to take out a debt consolidation loan.
What is Debt Consolidation?
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Most small business owners hope to, or plan to, grow. When you open one café you may have dreams of a nationwide chain. The first product you use to launch your manufacturing business could be one of many designs you have mapped out.
But how do you know when it’s actually time to open that second café? Or start ordering the supplies to make that new product? Actually taking that step can be nerve wracking, but knowing what signs to look for and how to prepare for growth can make the growth process a lot less scary.
What are the Signs it’s Time to Grow?
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When it comes to getting work done in your business, you have the option of hiring independent contractors or traditional employees. Both types of workers can get the job done, but there are pros and cons of each that you need to be aware of.
Pros of Hiring Employees
There’s a reason why most companies make the commitment to hire traditional employees over independent contractors. Most companies need the stability of having the same employees day after day, in addition to the following three benefits.
Higher Qualifications
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Does your company have problems getting paid on time? Certain industries are more vulnerable to this than others, but every business owner has experienced it at least once. There are effective strategies for always getting paid on time that really work. If you put these into place in your company, you may find that you have fewer and fewer overdue payment issues as time goes on.
Don’t Let Receivables Age Too Long
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Two of the biggest concerns of those who are investing for retirement are not running out of money and maintaining regular cash flow. It can be difficult to switch from a bi-weekly paycheck to carefully timed withdrawals from a retirement account. Market fluctuations cause balances to rise and fall, leaving an investor with less in their account than they’d planned.
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Small business owners quickly learn the importance of monitoring their cash flow. The flow of money in and out of your business can impact everything from the stock you have to sell to keeping the lights on. In a perfect world, your cash flows would align.
All of our customers would pay their bills before your invoices came due. Or you’d pay the food vendor after a busy weekend of full tables in your restaurant. But this isn’t always the case.
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The percentage of tax returns being audited each year has steadily declined, due in part to dwindling government resources. Still, if you’ve been notified of a pending audit, those percentages don’t mean much. The only thing that matters is the situation that you’re now in. There are two kinds of audits; in person and by mail. It’s disconcerting to receive an audit notification, no matter what kind. If you find yourself in this situation, here’s how to handle it.
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Managing your company’s accounts receivables is one of the most critical aspects of fiscal health. Yet, many business owners fail to effectively handle their accounts receivables, either directly or indirectly. Poor accounts receivables policies can lead to a bevy of problems involving client relations, cash flow, tax return complications and even legal issues. Seven of the biggest mistakes in handling accounts receivables are outlined here, with advice about how to avoid each one.
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