The post How to judge your business success appeared first on Checkbox Accounting.

Tax Reform Changes - How will they affect you?

When you file your 2018 tax returns – about a year from now – your return will look very different.  Here are a few of the biggest changes that may affect you.

 

Individual Tax

• Individual tax rates will range from 10% to 37%.
• Standard deduction increases and personal and dependent exemptions eliminated
• The Child Tax Credit increased and a new Dependent Credit created.

Disappearing deductions: Beginning with the 2018 tax year, you will no longer be able to deduct:

• State income tax and property taxes above $10,000 per year in total;
• Moving expenses (with an exception for certain military);
• Employee business expenses such as mileage, travel, entertainment, home office expenses, union dues, tax preparation fees, and investment fees, among others;
• Mortgage interest beyond interest on $750,000 of acquisition debt (if you buy a new home); and
• Mortgage interest paid on equity debt (all homeowners).

Some new benefits for individuals include:

• Medical expense Adjusted Gross Income (AGI) threshold will temporarily drop to 7.5% of AGI for 2017 and 2018;
• Alternative Minimum Tax (AMT) threshold increased;
• A deduction for qualified business income for passthrough entity owners;
• Recharacterization to an IRA cannot be used to undo a Roth conversion;
• The estate tax exclusion has increased to $10 million (adjusted for inflation); and
• Annual gift tax exclusion remains the same ($14,000 for 2017 and $15,000 for 2018), but the maximum rate on gifts is 35%.

Small Business Tax

• Corporate tax rate will be a flat 21% for 2018
• Up to 20% deduction from net business income for a sole proprietorship, LLC (excluding those taxed as a C corporation), partnership, S corporation, and rental activity. The rules are complex but there is a lot of planning that we can do to maximize this deduction for you.
• Corporate Alternative Minimum Tax (AMT) repealed;
  
• IRC §179 expensing and bonus depreciation increased;
• Deductible business interest reduced;
• The net operating loss (NOL) carryback repealed, NOL deduction amount limited;
• The domestic production activities deduction is repealed;
• IRC §1031 treatment is limited to certain real property; and
• Entertainment expenses are disallowed.

We are here if you would like to discuss how the changes apply to your unique situation >> Contact Us

The post Tax Reform Changes appeared first on Checkbox Accounting.

This includes the pulse or heart rate, body temperature, respiration rate, and blood pressure. Taken together, these help indicate the state of the patient’s essential body functions.

If any – or all – offer some cause for concern, the doctor can start diagnosing the patient more thoroughly, before suggesting a course of action…

And now we’ve arrived at the part where you’re wondering why we’re discussing basic medical practice.

Well, this idea of ‘vital signs’ is something that can be comfortably extended to your business.

Your company’s financial health should be examined regularly to make sure there are no underlying maladies that will only grow worse if left untreated.

Knowing What to Look For

These financial ‘vital signs’ have many names, some of which may be familiar to you. They include: Key Performance Indicators (KPIs); business metrics; critical success factors; and moneymaking statistics.

No matter the label attached, they are all essentially the same thing: a means of tracking the performance and success of your business.

Just as a soaring temperature or irregular heartbeat will make a physician want to dig deeper in diagnosing their patient, there are a few things you should keep an eye out for when it comes to the health of your business.

For instance, revenue is a clear indicator as to the financial performance of your company. By monitoring your income in comparison to your expenses, you will have an understanding of how much you are making (or not, for that matter), and why.

And when it comes to revenue, consider the various streams. In particular, online sales are simple to measure by implementing sales software, allowing you to spot trends and take action before it’s too late.

Or perhaps you could track the referrals that bring you new business. This will help you determine whether or not your marketing endeavours have been worthwhile, and if your current clients are actively recommending you to their network.

Once you have those customers, think about retention. How many clients are returning to your business over time after first working together or selling them on a discount or offer? Are you maintaining a loyal customer-base, or are you struggling to retain them? The answer will give you an insight into your company’s customer service capabilities.

Take the Pulse of Your Business

These are just some of the Key Performance Indicators – or vital signs – that you ought to look out for as you measure the performance and success of your business.

Understanding how your business is doing at any given moment is crucial to helping you make informed and effective decisions as its leader.

Tracking financial and non-financial metrics can help keep your business healthy. And as with your body, spotting any worrying trends early will make it a great deal easier to remedy than if you leave them untreated.

And it can be tough when you dig deep and track these metrics, only to discover that your business is living on borrowed time. When that happens, you must be ready to evaluate the alternatives; and quite often those alternatives can mean making difficult decisions, such as letting people go, selling the business, or filing for bankruptcy.

Start Tracking Today

Putting a plan in place to track key business metrics is fundamental to the growth and success of your company.

By staying on top of your KPIs, you will be in a much better position as you work with an up-to-date and accurate budget. And by doing so, you will be able to grow and invest in new resources, personnel, or locations, without putting your business under financial strain.

If you’d like to discuss setting up a system to track your key business metrics, please contact us.

The post Is your business ill? appeared first on Checkbox Accounting.

Long days, longer nights, and no-one to talk to when the going gets tough – it can feel isolating and demoralizing.

But there is a solution: speak and share with other business owners.

Many small business owners actively fear working with other businesses, worried that they may take advantage of them rather than offering guidance and advice.

However, the rewards can be terrific. By tapping into your local network of fellow entrepreneurs, you have the opportunity to become more knowledgeable, understanding, and efficient.

Why Should I Reach Out?

There’s no two ways about it; being a small business owner is stressful.

All the responsibility, all the decisions, the planning, strategy, and execution; it all falls squarely at your feet. And it can be quite overwhelming.

That’s why having a mentor – or joining a local group of small business owners – can help alleviate some of that stress. They give you a sounding board with whom you can discuss your problems and share your successes.

And this isn’t a new concept by any stretch of the imagination.

Take a beat and think about the franchises you see just about every single day. Starbucks, Wendy’s, Dunkin’ Donuts; they all share financial data and marketing information with the other stores within their franchise in order to better understand the overall market.

Won’t This Threaten My Business?

You might look upon this arrangement as a threat to your business. Sharing confidential information with a perceived competitor will understandably make you uncomfortable, and it will impact your business.

But, if done right, that impact will be positive, not negative.

By working with your peers, you will improve your understanding of the local marketplace, boost your efficiency and delivery, and oversee a better standard of customer service. This will only serve to drive more business and increase profits.

Where to Start?

If you run an independent small business (i.e. not a franchise) then it can be tough to know where to start when reaching out to fellow entrepreneurs.

Becoming active on social media (Twitter and LinkedIn in particular) is certainly a good idea. This gives you access to a whole host of like-minded individuals, many of whom won’t be swimming in the same waters, and are therefore less likely to appear threatening to your business activities.

But the fact is, nothing beats face-to-face networking.

Search online for local organizations, groups of similar business owners, or an association to join in order to meet and develop valuable business relationships with your peers.

Here are a few in our neck of the woods worth checking out:

Roseville, CA

• Roseville Granite Bay Business Network
• Women In Networking (WIN) Roseville
• Miscellaneous Small Business Meetups – Roseville (Meetup.com)

Sacramento, CA

• Sacramento Business Social Network Group
• Sunrise Business Builders
• Sacramento Area Business Connection

U-Link Network also has a number of local groups meetings listed on their website.

If you can’t find one nearby or relevant to your industry, consider setting up your own. It can be as informal as meeting for a coffee every few months, but just as valuable as an established organization.

And be sure to complement these meetings by fostering professional relationships with business advisers and mentors.

Put Yourself Out There

As your business grows and develops, and you begin to better understand your own key financial data and moneymaking statistics, you will find that you actively want to compare yourself to your peers.

It’s only natural to seek to benchmark yourself against others. In fact, it can become a crucial part of the overall success of your business.

By simply being active in your local business community, you will open up the doors to new and prosperous relationships, promising leads, and a wealth of advice and experience.

And by improving your knowledge of the local market, it will push you to be a better business leader.

Put yourself out there and make it happen.

If you’d like a helping hand in getting started, contact us today to speak with one of our friendly advisers.

The post Don’t Be Afraid to Work Together appeared first on Checkbox Accounting.

No matter your reason for taking the leap as an entrepreneur, you will encounter a number of concerns as you progress. It’s important that you know how to recognize and handle these concerns so as to avoid derailing your business.

In dealing with many small and medium-sized businesses over the years, we have been able to distill some of these concerns down to four of the most common questions.

At some point in your business journey, you will find yourself asking a variation of the following:

1. How will I achieve what I want in my personal life?
2. How will my business help me achieve my goals?
3. Do I really have control over business performance and numbers?
4. How do I get more from my business?

In this post, we will help you navigate these concerns and emerge from the other side a better business owner.

How will I achieve what I want in my personal life?

Running your own business should be about achieving personal freedom.

Freedom to work on what you want, when you want. Finding joy in the day-to-day is the ultimate goal for many entrepreneurs.

So, to get to the heart of what you truly want out of your business – and how it impacts both your personal and professional life – ask yourself the following:

• Why did I start my business?
• How is my business organized?
• Do I feel I am on track with my goals?
• What keeps me up at night?
• What do I do in my spare time?

Once you have a handle on why you’re in business for yourself, and where your passions lie out with your business, you can start working on balancing the two. Otherwise, the business will consume you.

How will my business help me achieve my goals?

In order to achieve your personal and professional goals via your business, you must be the one in charge.

Now, this might seem a little strange given that you own your business; who else would be in charge?

But the truth is, your business can quickly take on a life of its own if you let it.

You must be the one in control, rather than taking a back seat and letting the business drive you. If you’re achieving success almost by accident, then you and your business are driving blind without a strategy or a roadmap.

Your goals will go unfulfilled if you don’t treat your business as more than just as means of making ends meet.

Do I really have control over business performance and numbers?

We know it can feel like you don’t; that your numbers can spiral out of control amidst the day-to-day of running your business.

But you can and you must take control of those numbers, and by extension, the performance of your business.

You should:

• Know exactly what your numbers are for the month
• Have complete clarity on which products or services are selling well (or not)
• Understand what’s in your financial statements, and what those numbers mean
• Know how much tax you’re going to pay, well ahead of the due date

When you do, you can actually look forward to meeting with your accountant!

How do I get more from my business?

When you have a handle on your goals, you’re building a business geared towards meeting those goals, and you’re accurately tracking your numbers at least monthly, you will get more from your business.

It’s really that simple!

You can then look forward to scaling your business, hiring employees (if you want), outsourcing work, spending time working on your business rather than in it, taking a day off now and again, and even taking a vacation.

Let’s Address Those Concerns

If any of those concerns are keeping you up at night, then here’s how we can help:

1. Personal Goal Setting

We can help you get to the very heart of the reason why you went into business in the first place. We will determine what your goals were, and how they have changed (if they have at all).

If your business has taken on a life of its own, we’ll find out why, and how far you are from achieving the goals you had when you started.

By taking you through a personal goal questionnaire and a one-on-one meeting with one of our advisers, we can develop a report that will show you what you want to achieve, what’s missing, and how you can go about accomplishing your goals.

We’ll then help you devise a specific plan of action – one with dates, milestones, and clear responsibilities.

2. Business Planning & Strategy

We want to help you take control of your business. No more autopilot, no more backseat driving.

Together we will develop a business plan and strategy that will have you questioning everything, and testing what you think you know.

We won’t focus solely on ‘best practices’; rather, we will help you find your industry’s ‘next practices’.

What’s more, we want to instil a belief in you, your team, and your mission that will see you carry out this plan to fruition.

3. Monitor KPIs

It’s no use merely glancing at your income statement in order to monitor your business. That’s a bit like watching a hockey game by only looking at the final scoreboard. To get the bigger picture, you must look at the activity within the game.

We will help you map and monitor your progress by focusing on a few Key Performance Indicators.

These will be tailored to your business, meaning no generic indicators or reports. Only valuable and actionable information.

4. Profitability & Cash Flow Improvement

Finally, we will help you get to grips with your profitability and cash flow by getting you up and running on cloud accounting software.

Everything will be real-time and instantly trackable by both you and us, meaning we can spot any potential cash flow issues, so that you can take action ahead of time.

How Can Checkbox Help You Become Great?

In his book, Good to Great, Jim Collins wrote:

“Greatness is not a function of circumstance. Greatness, as it turns out, is largely a matter of conscious choice and discipline.”

We can guide you to greatness. We only ask for your conscious choice to work together, and your discipline to meet, review, and check in.

You can grow a great business. Let us help. Contact us today to get started.

The post The Four Biggest Questions You’ll Ask Yourself as a Business Owner appeared first on Checkbox Accounting.

In particular, the financial aspects of a growing organization require a great deal of attention. And while you may not be in a position to bring someone on full-time to take care of this for you at the moment, that doesn’t mean that you shouldn’t look to delegate these tasks to a professional.

By outsourcing your financials to a part-time CFO (Chief Financial Officer) you can access “big company” resources without the expense.

In this post, we take a look at the benefits of appointing an outsourced CFO.

What is a CFO?

A CFO is a senior executive who is responsible for the financial affairs of a company or other institution.

These responsibilities often include the past, present, and future financial health of an organization.

Typically this involves presenting and reporting accurate and timely historical financial information; addressing the present financial condition of the organization, taking into account risk and liquidity; and economic forecasting so as to ensure the company’s future financial success.

What are the benefits of hiring an outsourced CFO?

There are a number of benefits to outsourcing a CFO’s duties. These include – but are not limited to – the following:

Save Money

An average CFO salary in 2014 clocked in at around $314,000 per year. For a number of small and growing businesses and organizations, this level of expense is simply not feasible.

However, this does not diminish the need to appoint someone to oversee financial matters, and so rather than hiring a full-time CFO (which comes with the need to pay taxes, health insurance, and other benefits) you can outsource the responsibility to a qualified individual for a flat fee. This represents a significant amount of savings, without compromising on the quality of work your organization receives.

Valuable Insight & Advice

When you delegate your financial responsibilities – including your accounting, bookkeeping, financial statements, income projections, tax, budgets, and cash flow management, among others – to an outsourced CFO, you are tapping into a wealth of experience.

What’s more, you will receive a fresh set of eyes ready to address your organization’s challenges and help solve its problems.

And when you’ve hit that metaphorical brick wall, and you don’t know how to go about improving the financial situation of your company, you’ll have a source of expert advice and guidance ready to step in and steer you in the right direction.

Accuracy, Efficiency and Experience

An outsourced CFO can help you make better, more informed decisions as the leader of your business or nonprofit.

They do this by streamlining your accounting systems, doing away with out-of-date methods and processes, so that you’re looking at only the most accurate and up-to-date financial information.

You’ll also have peace of mind knowing that your company’s finances are being looked after by someone with a high level of experience, built up over many years. Your financial statements will be delivered with accuracy, financial analysis conducted with care and consideration, and your records organized so as to be ready when potential investors come knocking.

Are you ready to hire an outsourced CFO?

If you’re still in startup mode, you will find yourself wearing a number of different hats; from sales executive and HR manager, to bookkeeper and marketing director. But there will come a time in every growing business or nonprofit where your time is better spent on the big picture.

And the big picture should always be underpinned by solid financial information.

So, if you’re ready to embrace the growth of your organization, you should begin removing your many hats. Allow them to be worn by the relevant experts and watch your business or nonprofit prosper.

Checkbox can take the strain, providing the tools and expertise necessary to interpret your financials and help you meet your personal, financial and social goals.

As your strategic financial partner, you’ll wonder why you hadn’t outsourced the CFO role sooner.

Contact us today to discuss a customized plan that meets the needs of your business or nonprofit.

The post The many benefits of an outsourced CFO appeared first on Checkbox Accounting.

If you’re looking to borrow money for your business with the express purpose of adding new and improved equipment to your operation, you really ought to consider the pros and cons of buying vs leasing.

You might think that doing one is more savvy than the other, but it really comes down to circumstance and personal preference.

It might just be the case that you are adverse to leasing, preferring to own the equipment outright. But if, for example, you are adding a new vehicle to your business, you should consider how far and how often it will be driven.

More miles tips the scale in favor of owning, while fewer miles would suggest it’s better to lease.

If you do opt to buy the item, you can spread the cost with a repayment plan, however this will typically require a large upfront cost in the form of a down payment.

And remember, by purchasing, the monthly payments will eventually end, but the item will depreciate in value during that time. Lease payments, on the other hand, will continue indefinitely until you either end the contract or can no longer afford them, and you are usually able to upgrade the equipment as part of the agreement.

Business Loans – A World of Possibilities

Short-term or long-term. Secured or unsecured. Bank or SBA. Buying or leasing.

Unfortunately, there’s no one-size-fits-all solution. When faced with the decision of borrowing money, you will have to take into consideration your own unique set of circumstances.

The points raised in this series of posts should help you make a better decision. And if you’d like to discuss the issue further, please contact us at Checkbox.

The post Should you buy or lease your business assets? appeared first on Checkbox Accounting.

SBA loans are partially guaranteed by The U.S. Small Business Administration. They offer a variety of loan programs for very specific purposes, from Small Business loans and Microloans to Real Estate & Equipment loans and Disaster loans.

Depending on where you are with your business, and if you fulfill their criteria, you can borrow money from the SBA for a number of different reasons. These include:

• Purchase of real estate
• Building renovation
• Equipment purchase
• Inventory purchase
• Business acquisition
• Expansion of an existing business
• Business startup
• Refinancing of an existing debt; or
• Supply working capital

SBA loans typically have lower interest rates and fees than the more conventional loans from big banks and other financial institutions. Longer repayment terms can also be negotiated, with the interest rate fixed for a predetermined period of time.

However, you will still need a solid business plan to get a loan from the SBA, so be prepared before you apply.  Can we help? Contact us at Checkbox.

Next month we take a look at the benefits of buying vs leasing business assets. Stay tuned!

The post The Benefits of SBA Loans appeared first on Checkbox Accounting.

Or maybe you’re between boardroom meetings, planning the growth and expansion of an existing company.

No matter where you are in the lifecycle of your business, one thing will always ring true.

You will need cash.

After all, cash is king. But it’s not always readily available.

That’s why it’s fundamentally important that you, as a business leader, understand the ins and outs of business loans.

In this series of three posts, we’ll provide you with an overview of the available loan types; the concerns you may experience as a borrower; the various push backs that can come from lenders; the benefits of SBA loans; and the pros and cons of buying vs leasing equipment.

What Type of Loan Do You Need, and Why?

Before deciding that your business definitely needs a loan, you must first ask yourself for what purpose you are borrowing the money.

Typically, loans can be categorized as short-term and long-term, and will be secured or unsecured (difficult to obtain).

If you’re borrowing money to get started, you will most certainly be asked for a Personal Guarantee. That is to say, you will be required to personally vouch that the money will be repaid, even if the business fails.

It’s also less likely that you will be able to borrow the money and repay it over a longer period of time if you do not have a track record in the sector or industry you are entering with your new business.

However, if you have an established business turning a profit, you’ll find borrowing money on more agreeable terms much easier.

You may still be asked for collateral to secure the loan, which can take the shape of valuable equipment, for example. This would then be seized by the lender to recoup their losses should you fail to repay the loan.

Alternatively, if the loan is unsecured, you may be faced with higher interest rates, meaning repaying a great deal more than you borrowed over the duration of the loan.

Concerns Go Both Ways, You Know

Borrowing money is a big decision, particularly if you’re still at the early stages of your entrepreneurial journey.

You may have some apprehension when it comes to taking on a loan, and that’s understandable. Interest rates and bank fees can be confusing at the best of times, while the fine print of a loan agreement can throw its fair share of curve balls. For instance, you can often be penalized for repaying your loan early, so that’s definitely something of which to be aware.

Your best bet is to shop around, gather all the necessary information, and find a bank or financial institution with which you feel comfortable.

But even if you come armed with all the necessary facts and figures, lenders can still be concerned enough to not offer you a loan.

You ought to be aware that they will question your ability to repay the money you’re borrowing, your collateral, your credit history (personal and business), the cash flow forecast of your business, and even the competency of your management.

With this in mind, you may wish to look at borrowing money from the SBA.  Stay tuned for our next post which outlines the benefits of an SBA loan.

Questions? Contact us at Checkbox.

The post A Guide to Selecting the Right Business Loan appeared first on Checkbox Accounting.

Identity theft is on the rise.  It is now the third most serious crime in our country according to the Federal Bureau of Investigation (FBI).  The federal government is putting pressure on Visa and MasterCard to protect vital cardholder data at the point of sale.  They are doing this by passing this responsibility on to their small business owner clients.  Unfortunately, businesses are not taking this issue seriously because they feel they are too small and “under the radar”.

However, just the opposite is the case as over 80% of all data breaches are from small “Mom and Pop” main street businesses.  These businesses do not have the money to hire the IT personnel needed, or purchase the sophisticated software to help protect themselves and their customers.

Cyber thieves have found a way to tap into credit card terminals and steal data as it is transmitting to the merchant service providers. In fact, even though the older terminals appear to work just fine, they have small hard drives that store cardholder data and when the owners are asleep the cyber thieves are working diligently to download that data.  This also happens with the older point of sales (POS) systems as well.  When that data is on the hard drive it can be taken as easily as receiving a Windows update.  The same “backdoor” that allows upgrades from providers such as Microsoft and other software companies is left open for the cyber thieves.

Due to the pressure from Congress, MasterCard and Visa will soon be seeking out and punishing all business owners that are not compliant placing their customer’s cardholder information at risk. The credit card companies point out that they have been warning business owners about the new regulations for the last 2 years.  Visa and MasterCard typically include a one line warning on merchant statements that refer to the issue and warn business owner’s that compliance with the law is their responsibility.

Businesses found not to be compliant face losing the ability to accept credit cards and may be subject to steep fines.  What many business owners do not know is that if you do not have a compliance certificate and compliance manual you are NOT compliant.

Many business owners operate under the false sense of security that paying “compliance fees” to their merchant card provider keeps them compliant.  Unfortunately this is NOT true.  These fees are really charged by the card provider to offset their own cost to be in compliance.

In addition to being compliant with the regulations is the cost to the business owner if there is a breach of security.  Often the cost to repair the damage done to the business and its customers is tremendous and can even force some out of business.  It would be wise to consider investigating the special insurance policies that cover cyber theft.

For additional information on how to get your business compliant with the current credit card regulations or how to insure your business against these risks please contact our office, we would be glad to assist you.

The post Small Business Identify Theft: Is Your Business in Danger? appeared first on Checkbox Accounting.