???? ASK THE EXPERTS ????
Questions From: Sam on Thursday, May 17, 2012 at 8:48 AM In business since: 2008 Industry: Professional Service - Software developer Average annual revenue: $500K to $1MM
My CPA's office has given me what I would consider poor customer service. For example, they don't respond to us within 1 to 2 business days. Even an email response would be acceptable if they could just tell me they're working on a solution. Sometimes, I don't get any response at all. They are not proactive in addressing our tax issues. There was no tax review conducted last year to help us avoid this and other tax issues in the current year.
My top 5 challenges in my business are:
1) Finding the right people to service my contract while continuing to expand my business. I want to setup a structure to add employees or contractors. 2) Being proactive about upcoming taxes due and avoiding penalties. 3) I use QuickBooks, but need help in setting it up properly to accommodate business expansion. 4) I have a retirement plan in my business using a SEP. I want to maximize my retirement savings and save on regular basis instead of once a year. 5) Avoiding surprises--like unexpected taxes!
My consulting business has one major Fortune 100 client and is in the process of expanding additional consulting contracts with them. My business currently has about 25% net profit and I pay on a quarterly estimated tax schedule.
I was surprised that my CPA did not file my 2011 LLC (with S. Corp. election) tax return nor file the extension. We are now behind on the filing, including personal taxes. In 2010, we downsized our home and were surprised there were additional taxes we had to pay plus penalty as a result of this.
**** REAL ANSWERS YOU CAN BANK ON ****
Answer From: Author on Thursday, May 17, 2012 at 3:06 PM
Most CPA firms have a service agreement providing in detail how they respond to your requests. Please keep in mind that there is usually a black out period during tax season. It generally starts late January and ends early June. Depending on the type of service you contracted with them, you will get a different response.
To be proactive in avoiding surprise taxes due or penalties, request a tax review meeting around the last quarter of the calendar year--anytime from late October to early December each year. Ideally, you want your CFO to conduct such reviews along with your CPA if possible.
Your CPA can only be proactive if you ask. The example of downsizing your primary resident could be an easily minimized tax liability with many options, including a 1031 exchange if you meet all requirements. Once again, the service agreement should describe if this is part of the service you should receive from them.
Generally speaking, there are three buckets when it comes to accounting and finance in your business, as well as on a personal level. Those buckets are Decision Making, Compliance & Reporting and Historical Data.
A. Decision Making: Based on your historical data and your compliance reports, a CFO (Chief Financial Officer) can then help you as the owner review, analyze, and recommend necessary actions to keep your business in the right strategic direction. Activities may include:
A.1 Financial Performance Reporting and Forecasting in 1) Cash flow, P&L and Balance Sheet; 2) Profitability by customer or by product; 3) Performance by budget or by actuals; 4) Working capital, cash reserve and cash position. A.2 Monthly Monitoring using pre-defined Key Performance Indicators (KPIs) A.3 A set of pre-defined industry Financial Ratio to Benchmark with industry
B. Compliance & Reporting: You or your CPA must file necessary tax returns on federal and state levels, as well as assure compliance by filing your annual report with the Secretary of State. It is your responsibility to record your annual meeting minutes and keep them on record to be in compliance with State and Federal laws.
C. Historical Data: Most small businesses outsource to a certified QuickBooks contractor to keep their books and records up to date. The contractor or outsourced vendor will help set up all the necessary categories to record your income, expenses, assets, checks and reconciliations. This is typically a couple of hours per month and can be a virtual service.
So congratulations on being in the top 30% of privately-head businesses in the U.S. I am so very proud of you!!
Your number one priority right now is to file your 2011 LLC entity tax return right away and pay the penalty. This includes your 2011 personal tax return.
Have a comprehensive personal financial plan and business financial plan completed early in the year. This will help you maximize your retirement savings in both qualified (limited amount based on regulation) and non-qualified (not limited). In addition, this will help you strategically run your business to grow in value, not just in revenue. A qualified advice-fee only CFP (Certified Financial Planner) and experienced CFO in your industry can help you establish such plans.
Your biggest asset now is your business and you must have a dual approach to your business and personal financial plans.
From a practical business purpose, you should diversify your client base. A proper business financial plan can address this both short and long term.
As part of the financial plan, you will then engage your CPA for monthly and quarterly reviews, which will address your tax concerns proactively, as well as your personal long-term financial wellbeing.
Get your accounting setup in QuickBooks online for the ease of record keeping and review at <a href="https://http://quickbooksonline.intuit.com" target="_blank">http://quickbooksonline.intuit.com</a>. This ensures you and your accounting team have access to your accounting data at all times.
File your LLC annual report with the Secretary of State (typically it is early in the year) and in most states, you can file and pay online.
Have an annual meeting for your LLC during the last quarter of the year. Otherwise, you will lose the credibility as an entity and its intended purpose. At the end of the annual meeting you will provide corporate meeting minutes. You can buy a template from an attorney's office or online at legalzoom.com.
Structure your business on a scalable business platform to help expand and grow your business beyond just you. That will help create wealth for you and your business.
Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/finance-and-business.php/413131
Article Added on Thursday, May 2, 2013
|Business And Finance >> Top 50 Articles on Business And Finance|
|Category - >|