Why Hire An Accounting Professional For Your Business?

Running your own business is a complicated affair with a wide range of different “moving parts” to concern yourself with, but many people don’t realize how many of them ultimately lead back to your finances until it’s far too late.

A large part of your ability to be successful in the long-term will ultimately come down to the rate at which you expand. Grow your business too quickly and you might spread yourself too thin. Grow too slowly and you’ll be passing up opportunities that are rightfully yours, leaving a lot of money on the table at the same time. Your control over your finances will dictate whether you’re able to strike that perfect balance the way you need to.

Marketing, paying vendors, paying employees, managing client relationships – all of it depends on the quality of your bookkeeping. A large part of your success will ultimately come down to your ability to identify when the time is right to stop doing things yourself and bring a professional accounting on board. To do this, there are a few things to keep in mind.

The Warning Signs You Need to Know

Intuit recently released a survey outlining the state of small business accounting in the United States. The results are very telling in terms of when people should bring an accounting professional on board – and what the consequences are of inaction.

Asset tracking, for example, is something that you may not immediately think impacts your bookkeeping, but it does in a fairly significant way. Ghost assets are fixed assets that have either been rendered unusable or are physically missing. However, “out of sight, out of mind” does not apply in this case – they still count toward a business’s tax and insurance liability, thus making it difficult to properly reconcile their books every year.

Of the business owners who responded to Intuit’s survey, 74% indicated that they didn’t understand this, and 49% said that they didn’t even know what ghost assets were in the first place. If you are among those numbers, congratulations on arriving at one of the biggest indicators that you need to bring a financial professional into your business (and also that you’ll likely want to conduct inventory on a regular schedule moving forward).

Other signs that the time is right to bring a accounting professional on board ultimately come down to the most pressing financial issues that most businesses face. 51% of people who responded to Intuit’s survey said that accounts receivable and collections were their most significant business challenge. 44% said that cash flow was always something they were concerned about, and getting a better handle on “money in vs. money out” was always a top priority.

Cash flow troubles are the number one reason why most small businesses fail within the first four years of existence.

Other pressing issues included properly managing paperwork on a regular basis, accurately closing the books each month, and managing payroll. The major thing to understand is that an accounting professional will be able to help with ALL of these things, taking the stress off your plate so that you can focus simply on running your business like you should be. If ANY of these things are ones that keep you awake every night, or you feel these issues are significantly affecting your ability to grow and evolve, guess what? It’s time to contact an accounting professional to get help.

Never Underestimate the Power of Trust

Recently, small business owners responded to a survey outlining all of their most pressing accounting issues. When asked to rank the professionals that they worked with on a regular basis in the order of importance, these business leaders overwhelmingly agreed that accounting experts were one of the single most valuable assets they had. They outranked attorneys, insurance agents, technology firms and even staffing services.

Business leaders know that much of what they’re trying to do each day, along with what they hope to be able to accomplish in the future, would be impossible without the stable foundation that only an accounting professional can provide.

When It Comes to Accounting, Knowledge Is Power

It’s important to remember what may be the single most important piece of advice for small business owners when it comes to accounting: It is far, far cheaper to hire an accounting professional today before things get out of hand tomorrow.

Think about it this way: A large part of the reason why you got where you are today is because you took the initiative and started to do things for yourself. You have a “can do” attitude that just won’t quit, and you’ve built something incredibly successful from the ground up as a result. But there are certain situations where you cannot let pride get in the way of making the right decision, and accounting is absolutely one of them.

You already have a full-time job: running your business. You don’t have the time to take on another one, let alone the expertise to guarantee that you’re making the best decisions at all times. Yet this is exactly what business accounting is – a heavily specialized, full-time job that requires a careful hand and attention to detail that is second to none.

Bringing in an accounting professional will not only help make sure that your business has cleaner books and other records, but it will also significantly reduce the chance that you’ll get hit with penalties for things like late taxes and allow you to be more successful. These types of benefits, to say nothing of the peace of mind that only comes with knowing your accounting is taken care of, are things that you literally cannot put a price on.

If you have any questions about hiring an accountant for your small business, contact our office today.

Source: ClientWhys, August, 2017

If you have questions about starting, growing, protecting, understanding business taxes, or selling your small business, please contact us. As a CPA, Certified Business Advisor, Small Business Consultant, Certified Business Profit Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners and provide tax, accounting, financial analysis, business planning, and small business advisory services. For more information, call (727) 391-7373 or else visit us on the web at http://www.LindaStortzCPA.com.

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Ideas For Growing Your Business

Courtesy: BigStock Images

If you have already successfully started a business and are ready to take the next step, you may be wondering what you can do to help your business grow. The Small Business Administration recommends ten ideas for growing your business. Choosing ideas for growing your business will depend on the type of business you own, your available resources, and how much money, time and resources you’re willing to invest all over again. If you’re ready to grow, review these ten tips.

1. Open Another Location. This is often the first way business owners approach growth. If you feel confident that your current business location is under control, consider expanding by opening a new location.

2. Offer Your Business As A Franchise Or Business Opportunity. Franchising your business will allow for growth without requiring you to manage the new location. This will help to maximize the time you spend improving your business in other ways, too.

3. License Your Product. This can be an effective, low-cost growth medium, particularly if you have a service product or branded product. Licensing also minimizes your risk and is low cost in comparison to the price of starting your own company to produce and sell your brand or product. To find a licensing partner, start by researching companies that provide products or services similar to yours.

4. Form An Alliance. Aligning yourself with a similar type of business can be a powerful way to expand quickly.

5. Diversify. Diversifying is an excellent strategy for growth, because it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins. Here are a few of the most common ways to diversify:

o Sell complementary products or services
o Teach adult education or other types of classes
o Import or export yours or others’ products
o Become a paid speaker or columnist

6. Target Other Markets. Your current market is serving you well. Are there others? Probably. Use your imagination to determine what other markets could use your product.

7. Bid On A Government Contract. One of the best ways to grow your business is to win business from the government. Work with your local SBA and Small Business Development Center to help you determine the types of contracts available to you.

8. Merge With Or Acquire Another Business. Two is always bigger than one. Investigate companies that are similar to yours, or that have offerings that are complementary to yours, and consider the benefits of combining forces or acquiring the company.

9. Expand Globally. To do this, you’ll need a foreign distributor who can carry your product and resell it in their domestic markets. You can locate foreign distributors by scouring your city or state for a foreign company with a U.S. representative.

10. Expand To The Internet. Very often, customers discover a business through an online search engine. Be sure that your business has an online presence in order to maximize your exposure.

Source: Ideas For Growing Your Business. Small Business Administration. https://www.sba.gov/managing-business/growing-your-business/ideas-growing-your-business

If you have questions about starting, growing, protecting, understanding business taxes, or selling your small business, please contact us. As a CPA, Certified Business Advisor, Small Business Consultant, Certified Business Profit Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners and provide tax, accounting, financial analysis, business planning, and small business advisory services. For more information, call (727) 391-7373 or else visit us on the web at http://www.LindaStortzCPA.com.

Hobby or Business? IRS Offers Tips To Decide

Millions of people enjoy hobbies that are also a source of income. From catering to cupcake baking, crafting homemade jewelry to glass blowing — no matter what a person’s passion, the Internal Revenue Service offers some tips on hobbies.

Taxpayers must report on their tax return the income earned from hobbies. The rules for how to report the income and expenses depend on whether the activity is a hobby or a business. There are special rules and limits for deductions taxpayers can claim for hobbies.

Here are five IRS tax tips to consider.

1. Is it a Business or a Hobby? A key feature of a business is that people do it to make a profit. People engage in a hobby for sport or recreation, not to make a profit. Consider nine factors when determining whether an activity is a hobby. Make sure to base the determination on all the facts and circumstances. For more about ‘not-for-profit’ rules, see IRS Publication 535, Business Expenses.

2. Allowable Hobby Deductions. Within certain limits, taxpayers can usually deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is appropriate for the activity.

3. Limits on Hobby Expenses. Generally, taxpayers can only deduct hobby expenses up to the amount of hobby income. If hobby expenses are more than income, taxpayers have a loss from the activity. However, a hobby loss can’t be deducted from other income.

4. How to Deduct Hobby Expenses. Taxpayers must itemize deductions on their tax return to deduct hobby expenses. Expenses may fall into three types of deductions, and special rules apply to each type. See IRS Publication 535 for the rules about how to claim these on Schedule A, Itemized Deductions.

Source: IRS Small Business Week Tax Tip 2017-04

If you have questions about starting, growing, protecting, understanding business taxes, or selling your small business, please contact us. As a CPA, Certified Business Advisor, Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners and provide tax, accounting, financial analysis, business planning, and small business advisory services. For more information, call (727) 391-7373 or else visit us on the web at http://www.LindaStortzCPA.com.

IRS Promotes Specialized Online Services During Small Business Week

National Small Business Week for 2017 runs from Sunday, April 30 through Saturday, May 6. During this time, the Internal Revenue Service will promote many online products to help small business owners and those who are self-employed understand their tax responsibilities.

Here are just a few among dozens of useful IRS products in the spotlight for this year’s National Small Business Week that can be found at http://www.irs.gov:

1. Sharing Economy Tax Center. This special webpage provides fast answers to tax questions, as well as links and forms for the sharing economy. People who use one of the many online platforms to engage in this type of business, such as renting a spare bedroom, providing car rides or providing many other goods or services, are involved in the sharing economy. Topics include filing requirements, rules for home rentals and business expenses.

2. Self-Employed Individuals Tax Center. Taxpayers will find the Self-Employed Individuals Tax Center to be a great resource for sole proprietors and others who are in business for themselves. This site has many handy tips and references to tax rules a self-employed person may need to know. In addition to many other subjects, taxpayers will find information on:

• How to Make Quarterly Payments.
• Requirements for Information Returns.
• How to File an Annual Return.
• Business Structures.
• Qualified Joint Ventures

3. Small Business and Self-Employed Tax Center. This online information center features links to a wealth of useful tools, including Small Business Taxes: The Virtual Workshop and common IRS forms with instructions. Find help on everything from how to get an Employer Identification Number online to how to engage with the IRS during an audit. The IRS Tax Calendar for businesses and Self-Employed is a convenient, at-a-glance resource designed to show key tax dates for businesses.

For more information about how these IRS products relate to your business, please call our office today.

Source: Small Business Week Tax Tip 2017-01 http://www.irs.gov

If you have questions about starting, growing, protecting, understanding business taxes, or selling your small business, please contact us. As a CPA, Certified Business Advisor, Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners and provide tax, accounting, financial analysis, business planning, and small business advisory services. For more information, call (727) 391-7373 or else visit us on the web at http://www.LindaStortzCPA.com.

Five Tips For Starting A Business

businessplanningCongratulations! You’re thinking about starting your own business and are in the process of making initial business decisions. In your planning, understanding the tax obligation of your new venture is one key to business success. When you start a business, you need to know about income taxes, payroll taxes and much more. Here are five tips from the IRS that can help to get your business off to a good start.

1. Business Structure. An early choice you need to make is to decide on the type of structure for your business. The most common types are sole proprietor, limited liability company, partnership, S corporation, and regular C corporation. The type of business that you choose will determine which tax form that you will need to file.

2. Business Taxes. There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax your business pays depends on the type of business structure you set up. You may need to make estimated tax payments. If you do, you can use direct debit to make them. It’s the fast, easy and secure way to pay from your business checking or savings account.

3. Employer Identification Number (EIN). You may need to get an EIN for Federal tax purposes. Search “do you need an EIN” on IRS.gov to find out if you need this number. If you do need one, you can apply for it online.

4. Accounting Method. An accounting method is a set of rules that you use to determine when to report income and expenses. You must use a consistent method. The two that are most common are the cash and accrual methods. Under the cash method, you normally report income and deduct expenses in the year that you receive or pay them. Under the accrual method, you generally report income and deduct expenses in the year that you earn or incur them. This is true even if you get the income or pay the expense in a later year.

5. Employee Health Care. The Small Business Health Care Tax Credit helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. You’re eligible for the credit if you have fewer than 25 employees who work full-time, or a combination of full-time and part-time. The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities. For more information on your health care responsibilities as an employer, see the Affordable Care Act for Employers page on IRS.gov.

Source: IRS Summertime Tax Tip 2016-18

If you have questions about starting, growing, or selling your small business, please contact us. As a CPA, Accredited Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners just like you and provide tax, accounting, financial analysis, management, business planning, and small business advisory services. We can help you to start, manage, and grow a successful small business. For more information, call (727) 391-7373 or else visit us on the web at http://www.LStortzCPA.com.

Is Your Business Prepared?

hurricaneEvery year, hurricanes, tornadoes, floods, and other natural disasters affect the operations of small businesses across the country. A disruption in your business could mean lost revenues and reduced profits. Here are some things that you can do to protect your business.

Review Your Business Continuity Plan
This plan should outline the steps that you would need to take to protect your business before, during, and after a natural disaster. Your plan should include these four steps.

1. Conduct a business impact analysis to identify critical business functions, processes, and the resources that support them.

2. Identify and document what would have to be done to recover critical business functions and processes.

3. Select your team members who will be responsible for managing your plan.

The more detail that you include in your plan, the better. Be sure that your plan specifies your communication and recovery strategies. A natural disaster may force you to relocate to a different location. If so, your plan should list this location and address the means for equipping the space with equipment, power, Internet connectivity, and other resources that would be needed. Your plan should also include recovery strategies for your networks, servers, desktop and laptop computers and wireless devices in order to preserve your accounting data, sales and purchase records, customer and vendor lists, and payroll records.

Review Your Insurance Coverage
Protecting your business involves more than just creating a business continuity plan. You also need to have adequate business insurance. Now is the time to review your business insurance coverage with your insurance agent as well as your own life insurance coverage.

Although it’s certainly not pleasant to think about the consequences of a natural disaster, it’s wise to be informed and to plan ahead so that your business will be prepared.

If you have questions about creating a business continuity plan for your small business, please contact us. As a CPA, Accredited Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners just like you and provide tax, accounting, financial analysis, management, business planning, and small business advisory services. We can help you to start, manage, and grow a successful small business. For more information, call (727) 391-7373 or else visit us on the web at http://www.LStortzCPA.com.

Do You Have A USP?

uspWhen thinking about marketing for your business, you’ll need to start with your USP, or unique selling proposition. Creating a USP will help you to have an advantage over your competition, will differentiate your services from theirs, and will help you to stand out from all the rest.

An effective USP can help to:
1. Include a benefit that your competitors don’t offer.
2. Make a promise that will catch the attention of your potential clients.
3. Set your business apart from the competition by being unique.

In creating your USP, start with asking yourself and your team members the following questions:
1. What business are we in?
2. What is our target market, or our current clients and our desired clients?
3. Who is our competition?
4. What slogans are our competitors using to promote their brand?
5. What makes us unique?
6. What unique benefits do we offer our clients that no one else does?

Once you’ve answered these questions, you’re ready to start creating your USP.

Here are three successful examples that you all have heard before:
1. “The milk chocolate that melts in your mouth, not in your hand.” (M&Ms)
2. “We’re number two. We try harder.” (Avis)
3. “You get fresh hot pizza delivered to your door in 30 minutes or less or it’s free.” (Domino’s Pizza)

So, what’s your USP for your business?

If you need help in creating your own unique USP, we can help you. As a CPA, Accredited Small Business Consultant, and Advanced Certified QuickBooks ProAdvisor, we specialize in working with small business owners just like you and provide tax, accounting, financial analysis, management, business planning, and small business advisory services. We can help you to start, manage, and grow a successful small business. For more information, call (727) 391-7373 or else visit us on the web at http://www.LStortzCPA.com.