Blog

• Introduction to Financial Statements

  Posted on 01/17/2014 in Blog

  You got into business for a lot of reasons.  One of the primary reason most people are in business is to make money.  One of the most important tools you have to understand how your business is doing is an accurate set of financial statements. With a good set of financial statements you will be able to uncover a lot of valuable information on the health of your business.  You will discover what you are doing well and what you need to improve.  I frequently tell people that you have to manage your business by the numbers.  This enables you look at objective data and make decisions based on facts.  People lie, but numbers do not. For a number of people the financial statements can be daunting.  They don’t understand what they are looking at.  This can easily solved with some education. The basic set of financial statements that you want to review on a monthly basis are the balance sheet, income statement and statement of cash flows. The balance sheet will tell you what your company is worth.  It tells you what you own, what you owe and what you’re worth.  All three items are very important. The income…

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• 16 Tax Issues Facing Small Business Owners in 2014

  Posted on 01/08/2014 in Blog

  2014 will be a challenging tax year for businesses and higher-income taxpayers. The following issues are concerns that may impact you and your company’s tax liability in the new year. Small Business Health Insurance Credit – The tax credit to small employers (25 or fewer equivalent full-time employees) that provide an affordable health insurance plan for their employees and supplement at least half the premiums, will increase to 50% of the employer’s contribution in 2014, up from 35% in 2013. For non-profit employers, the credit will be 35% in 2014. Net Investment Income Tax – As part of the Patient Protection & Affordable Care Act (the new health care legislation sometimes referred to as “Obamacare”), a new tax kicked in for 2013 and will continue in 2014 and beyond. It is a surtax levied on the net investment income of taxpayers in the higher-income brackets. And although it is perceived as an additional tax on higher-income taxpayers, it can affect even those who normally don’t have higher income if they have a large income from the sale of real estate, certain business assets, stocks, or other investments. This is on top of the 20% long-term capital gain tax rate now…

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• New IRS Vehicle Mileage Rates for 2014

  Posted on 01/06/2014 in Blog

  This year the standard mileage rate has been reduced by half a cent from 2013.   Beginning January 1, 2014 the new standard mileage rate for business driving is 56 ¢ per mile. The rate for medical travel and moving also declined to 23.5 ¢ per mile. The rate for charitable driving remains unchanged at 14 ¢ a mile. If you are using the standard mileage rate you can also deduct the cost for parking and tolls.

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• Basics of Preventing Employee Fraud

  Posted on 01/03/2014 in Blog

  As a company grows, the business owner typically will delegate duties to staff.  When delegating duties it is important to realize that how those duties are delegated could result in employee fraud and theft of company assets. It’s important to understand fraud and what contributes to fraud.  There are three main things to consider when thinking about fraud: Rationalization – Justification for Dishonest Actions Opportunity – Ability to Carry Out Misappropriation of Company Assets Pressure – Motivation or Incentive to Commit Fraud The first two items can typically not be controlled by the business owner.  You have no control over whether someone else will rationalize doing something dishonest.  You also have no control over whether someone is feeling pressure or wants to commit fraud. You do however have the ability to control the opportunity.  In order to reduce the risk that someone will have the opportunity to steal from you, you must have strong internal controls over your assets and the use of your assets. In developing your internal controls, it’s important to remember that the ARC will protect you from employee theft. What is the ARC? The ARC stands for Authorization Recordkeeping Custody Each of these functions is incompatible…

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• 86,400 is a Magical Number

  Posted on 12/23/2013 in Blog

  86,400 is a magical number.  Boy that’s a big number.  What’s so special about 86,400? That is the amount of seconds that are in each day.  With every passing second we lose the opportunity to have that time again.  Time is our most valuable asset.  How we use our time will determine where we go in life, the accomplishments we get, and the relationships we have.  Everything that we value in life can be obtained by using our time for its highest and best purpose. I’ve read a lot of books about people that climbed to the top of Mount Everest, the tallest mountain in the world.  Many people tried to reach the summit and failed.  Finally on May 29, 1973 Edmund Hillary and Tenzing Norgay reached the roof of the world.  It’s fascinating to read about a pioneer that reaches their lofty goals. I’ve run over 6 marathons and the key to completing a marathon is to put one step in front of the other and repeat for 26.2 miles

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• Be Weary of IRS Telephone Scam

  Posted on 12/18/2013 in Blog

  Internal Revenue Service has issued a warning to all taxpayers.  Information on the scam can be found at http://www.irs.gov/uac/Newsroom/IRS-Warns-of-Pervasive-Telephone-Scam There is a telephone scam currently where thieves are pretending to be IRS agents.  Like any other scam, they are trying to separate you from your hard earned money. Don’t fall for the scam.  The thieves will tell you that you owe money and they’ll tell you that it must be paid immediately. Components of the scam include: Thief using fake names and IRS badge number Telling you the last four digits of your Social Security Number Thief sending you emails from IRS Threats of jail time With any scam, do not believe it.  Your best course of action is to refrain from sharing any of your personal information.  Get off the phone with them.  Call the IRS directly at 1-800-829-1040 and talk with an established IRS employee. If you get emails from IRS, you should ignore these as well.  IRS will not communicate with you through email.  Typically the first contact you get from IRS will be a letter you receive in the mail. You can also report this person to Treasury Inspector General for Tax Administration at 1-800-366-4484.  

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• The Customer You Choose Is Your Most Important Decision

  Posted on 12/16/2013 in Blog

  If you look at an income statement the top line item is always revenue. Think about that for a moment.  The first piece of information on an income statement is revenue.  Why of all the information that could be on the income statement do we begin with revenue? Well the answer is quite simple… Revenue is the engine that brings money into a business.  Revenue is a very important number for a business owner. If you don’t have revenue, you don’t have any reason for being in business. In fact if you don’t have revenue for long enough you have to close your doors. So let’s discuss the all important line item of revenue. Why do we get revenue? We get revenue because we are able to provide a good or service to a customer. In other words Good/Service + Customer = Revenue We have three variables good/service, customer, and revenue. Which one of these three variables is the most important? Many would say that the revenue is the most important.  Others would say that their good/service is the most important. If you guessed either of those items you would be WRONG!! Yes, the customer is the most important component…

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• Instructions on New NC-4 EZ Form

  Posted on 12/13/2013 in Blog

  NC Department of Revenue is requiring all NC employees to submit a new NC-4 EZ or an NC-4 to their employer prior to year end.  Watch this video for instructions on how to complete the NC-4 EZ form. Download NC-4 EZ

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• The Most Important Business Concepts

  Posted on 12/11/2013 in Blog

  Let’s discuss the most important concept in business.  That concept is the break-even point.  This is the point where you break even.  To explain this further.  The break-even point is the point where revenues exactly equal expenses.  There is no profit.  There is no loss. Why is this important?  We want to run a business at a profit.  We can’t afford to run a business at a loss.  At a very minimum a business needs to pay for itself.  The business needs to break even plus provide a profit for the owners. Once you figure out your break-even point, then you can determine how much revenue is needed to earn the desired profit. Under example one, Dunder Mifflin has achieved the break-even point.  Their revenue exactly equals their expenses.  Thus they are at their break-even point.   Now that we know the break-even point we can then determine revenues needed to earn a profit.  So let’s say the owners of the company want to earn a profit of $500.  Then we just simply do some easy math and we determine that revenues need to be $1,500 in order to have a profit of $500.   But let’s not forget that…

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• Got Your New Year’s Resolutions?

  Posted on 11/29/2013 in Blog

  Have you got your New Year Resolutions yet? Why is Damon talking about New Year’s Resolutions?  We’re in November.  Why are you talking about New Year’s resolutions in November? Don’t you know that New Year’s Resolutions are for January? THE NEW YEAR!!! If you’re like most people, you wait until January to set up your New Year’s resolutions.  You’ve just finished the holidays with December.  You’re starting the New Year.  You say to yourself, “Hey this is a New Year and I’m going to do things different.  I’m going to do things better!” If you wait until January to go through the process of developing your New Year’s Resolutions, you are going to be like most people.  You’ll work on your New Year’s Resolutions for about two to three weeks and then you’ll slide back into your old habits and ways of doing things. There is a certain amount of preparation that is needed to work on your New Year’s Resolutions. Here is a better way to work with New Year’s Resolutions. At the beginning of November, review the current year and determine what changes or new things you want to do in the New Year. Throughout the month of…

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