What Do the Trump Tax Cuts Mean for Me as an Individual and a Business Owner?Posted on January 25th, 2019
In the beginning of 2018, new tax reforms prompted changes to many business operations. The details of how it impacts individuals as well as business owners has some surprising benefits and drawbacks, depending on your household income and what type of business you may own. The benefits of the tax reform intended to help middle-income families and small business owners in hopes of decreasing the financial hardships these two groups previously faced.
Tax Changes for Individuals
The largest change for individual tax payers is the changes made to tax brackets. Overall, tax rates are lowered while keeping the seven-income tax bracket structure. Standard deductions are doubled. These changes revert back to the 2017 amounts in the year 2026. Other changes made include eliminating most itemized deductions, though IRA contributions are now deductible and deductions for charitable contributions and student loan interest remain. Another widely debated change was the new requirement that unemployment income is fully taxable.
Tax Changes for Businesses
The biggest change for businesses impacts small business owners and high-income sole proprietorships. Pass-through businesses now face a tax rate of 21%. Previously, no specific business types were excluded from passing through expenses and revenues, though the recent changes include exclusions for accountants, consultants, lawyers, and other solo-venture professional services. Essentially, individuals who are high-earners and previously had the ability to write off much of their expenses will no longer be allowed to do so, as they do not face the same burdens that many small businesses have, such as employee salaries and insurance costs.
If your business makes large equipment purchases, there’s good news for you. While previous business expense write-offs for equipment allowed small business owners to deduct up to $510,000, new regulation allows businesses to deduct nearly twice that at increasing the amount to $1 million.
The 2018 tax reform has made a lot of nuanced changes to previous tax laws and many individuals and businesses are wanting extra oversight of their financials to ensure compliance. If you’re seeking professional tax oversight or personal assistance regarding tax preparation, planning, or resolution, our company is here to help. Contact our team to learn more about how we can help ensure you’re making the most of recent tax reform.
What Are the Benefits of Hiring Accounting Services to My Bottom Line?Posted on December 28th, 2018
Regardless of whether operating a large or small business, there are plenty of efforts that require your attention that don’t directly contribute to improve your services or product offerings.
Smart business owners outsource their accounting just like they would their marketing or administration services. That’s because this frees up the business owner’s time while also allowing for a dedicated professional to overlook the financial operations of the company. This gives owners more time to spend on what matters most: growing their business and improving profits.
Your Company’s Health
The financial health of a company reflects its future outlook for success. As a business owner, knowing the financial pulse of your business is critical. Outsourcing accounting services dramatically impacts your bottom line—that’s because an accountant can implement financial processes to both improve efficiency and allow for an accurate representation of your business. A dedicated financial professional provides you with the information you need to make informed decisions in favor of your business’s success.
One of the most common financial pitfall many business owners fall into is failing to realize where they overspend. Whether related to production costs or administrative tasks, businesses tend to lose a lot of money on unnoticed and wasted spending habits. Additionally, businesses also have a hard time finding where additional revenue can be made on existing services and offerings. With an unbiased third-party reviewing all of your financials, these details can be surfaced, allowing you to increase your bottom line.
Improve Profits with Outsourced Accounting
Outsourced accounting services also allows business owners to focus on the aspects of their company making the most revenue. With an accurate representation of your businesses finances, you’ll be able to make informed decisions that allow you to break through your profit thresholds.
As another cost-effective way to reduce spending, business owners have the choice of a part-time outsourced accountant, which provides most of the benefits of a full-time accountant without the burden of having another employee on your payroll.
No matter the position of your business, our company is here to help you improve your bottom line and enhance profits in a positive way. Our team is willing to accommodate your accounting needs, big or small. Give us a call today to learn more about how we can help you.
What Are the Benefits of an Outsourced CFO?Posted on November 30th, 2018
With so many responsibilities required from a business owner to run a successful company, it’s no wonder why outsourcing can greatly improve business operations. An outsourced Chief Financial Officer (CFO) is one of the more common roles business owners tend to contract because it greatly improves their in-house accounting operations as well as increases their profits.
Of the benefits that come along with outsourcing your CFO, cost-savings is one of the biggest. Part-time outsourced services allow businesses to afford a seasoned financial professional without the burden of paying an employee a full-time salary. This overhead savings can be invested back into the business to further drive financial success in the future.
In addition to cost-savings, many business owners find that an outsourced CFO leads to time-savings as well. Rather than waiting for internal team members to prioritize tasks, the business can have direct access to a CFO that is focused solely on the details of what is being asked. This also frees up internal team members to focus on their day-to-day without worrying about completing additional tasks.
With an external CFO, a business can also benefit from having improved controls and reduced risk. While not all business owners need to worry about trusting their internal teams, a large number do. As an objective third party keeps their eye on the business’s financial operations, you can protect your books from any potential discrepancies caused by mistakes or unfaithful employees. Working with an outsource CFO ensures your financial information is recorded accurately and verified by your accounting system, leaving you with one less thing to worry about.
Financial professionals offer highly seasoned advice. With a lifetime’s worth of experience and knowledge, the right CFO can greatly improve your business’s financial operations and offer advice for the future. An outsourced CFO can provide unbiased and experienced financial guidance on issues that would otherwise contribute to large financial burdens. This advice often lends itself to increasing profits and helping the business operate in an optimal fashion.
Whether looking to clean up your financial operations or break through your profit thresholds, hiring a seasoned CFO can help. Contact our firm and schedule a consultation to learn more about our services.
How Important is Due Diligence When Considering Investments?Posted on October 26th, 2018
Due diligence is the process of researching, evaluating, or auditing a potential investment prior to acquiring it. This process can be undergone for business investments, like the acquisition of another company or an investment in a start-up, or it can be used for personal investing, like with putting money aside for retirement. Making sure to conduct due diligence before contributing towards investments helps to ensure you make the best decisions in favor of securing profits and minimizing losses.
During the due diligence process, there are a number of considerations being looked into, some of which include:
- Analyzing the total value of an investment
- Looking at revenue, profit, and margin trends
- Understanding the competitive landscape
- Determining management and ownership stakes
- Examining balance sheets
- Reviewing historical stock prices
- Scrutinizing short and long-term risks
Due diligence strategies differs depending on the type of business acquisition being considered. Start-up strategy often involves things like planning harvest and exit strategies, whereas the acquisition of a longer-term investment might involve very different tactics.
Many clients question why due diligence is a recommended practice when the acquisition or investment being considered is already profitable. The answer is simple; historical success does not guarantee future success. Due diligence allows a buyer to thoroughly understand the benefits, opportunities, risks, and liabilities of the acquisition they’re considering.
In addition to allowing a buyer to understand all facets of their consideration, due diligence positions them better if they’re considering negotiating for the purchase. If the investment opportunity has weaknesses that you’re able to clearly identify and communicate, these can be used to discuss a more favorable purchase price.
As a whole, the investigation into the investment allows a buyer to validate the selling points presented to them by the seller, as well as discern whether or not this opportunity is the right investment for their business or personal portfolio.
Our company helps businesses, regardless of whether they’re a selling or buying party, understand the history of a prospective investment, as well as look towards their future profits. When considering any investment, our team is here to help you invest wisely and use as much research as possible to resolve your interests. Contact our team today to learn more.
How Accounting Impacts Investment Firms’ Decision-MakingPosted on October 1st, 2018
In the world of investing, researching viable investment opportunities and knowing when to buy or sell is extremely important to ensure a profitable return. One of the more nerve-wracking aspects of working for or managing an investment firm is not having validation to back up your assumptions about the business you plan to invest in.
Fortunately, proper accounting techniques and methodologies specific to investment accounting can allow investors to feel confident in the decisions they make. Reports generated by accounting teams give investors insight into how cash moves in and out of a business and how that can either increase or decrease the valuation of a business. Having a second pair of eyes reviewing your analysis is a great system of checks and balances that many investors miss.
The Benefits of an Accountant
Accounting records can also provide insight into the tricks financial teams can play to polish up earnings and make them more palatable to potential investors. An accountant can make sense of these financial documents and help you make informed decisions about your investments. When you’re able to obtain raw financials, you can perform your own analysis of the true performance of a company. Failing to use these documents to your advantage can cause you to miss out on key information that could influence your investment, either earning you a hefty profit or helping to limit losses.
In many cases, investors want to make sure they don’t miss out on trending publicly traded companies. This could mean making irrational decisions based on emotion. While very tempting, it’s always best to conduct thorough research regarding the company’s history and projected future earnings. Leaning on an external accountant to provide an analysis of the financials is a great alternative to making a blind investment. These professionals are well-versed in the language of business and how account reporting reveals a company’s future. Using these resources, investors can make educated decisions in favor of growing their capital.
Whether you’re a small-time investor or own a large investment firm, it’s never a bad idea to receive assistance from an external resources to validate assumptions about investment opportunities. Our company helps individual investors and hedge funds analyze potential investment opportunities so they make sound decisions that benefit their bottom line. Contact us today to learn how an experienced accountant can help you improve your investment analysis.
How Accounting Aids Multiple-Owner BusinessesPosted on August 31st, 2018
When operating as a partnership, businesses face many personal complications that may hinder profits from reaching their full potential. Multiple-owner businesses and partnerships must heavily consider the type of partner(s) to include and the different personalities that would make up their business.
The truth is, we often engage in business with blind trust that our partner or partners have our mutual best interests at-heart, but this isn’t always the case. Hiring an accountant as a reliable third-party mediator helps ensure you and your partners make unbiased decisions in favor of the success of your business.
What Can Third-Party Accounting Do For Partnerships?
Accounting services are often your best bet at protecting your investments in a dual-ownership endeavor. As a third-party mediator, the accountant can make objective observations about the decisions you and your partner make for your business. That means protecting your business from poor decision making based on emotions or other personal issues.
Because outsourced accountants don’t have skin in the game, they’re holding all involved parties equally accountable. They do not have personal stake towards one party or another, so their decisions and actions are based on doing what is best for the business as a whole. In the same way that multiple branches of government provide checks and balances, multiple partners and an unbiased accountant validate that business requirements are being met and financials are in tip top shape.
When stakes are high, emotions run high, and it’s not uncommon for one or more business partners to let the stresses of owning and operating an enterprise cause them to make poor decisions regarding their business. With an unbiased third-party overseeing the financial aspects of the company and offering objective advice, you minimize the risk of disagreeing with other business partners and increase your chances of success. With an accountant working with both partners, each owner knows exactly what’s going on with their business’s financial performance.
Our goal is to help all of our clients succeed financially, and this includes protecting their investments and their stake in their business ventures. We help protect clients from failure and improve their chances of reaching success. Contact our team today to learn more about how we help businesses like yours succeed.