are you still on track?

Hello! This is the time in January when the New Year high is winding down, many people are giving up on their goals and resolutions, and the year-end accounting reporting requirements are feeling really burdensome.

I see it a lot in the business owners that I know: they buckle down this time of year to get their accounting administrative work done – but they end up neglecting the business goals that they just set for the new year.

Sound familiar?

The thing you may not realize is that it doesn’t have to be one or the other. The idea of getting bookkeeping help isn’t new to you, but getting more strategic help with your numbers may be.

Because I’m a local business owner myself, I know how important it is for us to keep as much of our hard-earned money as we can. We’re supporting our employees, our families, and ourselves – every dollar counts.

If you’re growing weary of the same vicious cycle every year, I hope you’ll consider talking to me to see if we can help you break out of the exhaustion.

Just click here to set up a complimentary Discovery Call and we’ll discuss your options. If I’m not the resource you need, then I’ll do my best to help you find it.

And don’t forget to check out my new eWorkbook that I sent you after Christmas, “Smooth Business Sailing: 12 Tips to Sustain Your Cash Flow”.  It walks you through the key approaches that can help you keep more of your hard-earned money.

Regards,
Cheryl 

PS – It won’t cost you a cent to chat with me, what do you have to lose to explore your options?

Click here to schedule time to talk. 

How Well Prepared are You to File Your 2017 Taxes?

If you’re like a lot of people, you stuff receipts, donation letters and other tax-related documents in boxes and plastic bags, then attempt to put your financial history in order to prepare for your tax return. This lack of organization and preparation can lead to costly oversights on your tax return, not to mention, it’s stressful and eats up a lot of valuable time. 

Business owners have additional considerations when it comes to tax preparation, including accounts receivable, inventory, financial statements and hard assets. And, they have precious little time to devote to sorting through that infamous box. 

If filing your 2016 taxes was a nightmare, you’ll want to avoid that mess when you prepare to file your 2017 taxes. There’s still time for business owners to get organized and be better prepared (your tax preparer will thank you!). So, get your records out of that box and start getting your company’s finances in order. 

● Financial reports must be run and reviewed. Without these, you lack a road map to guide your business goals and ensure your operation is on track. Tap into your bookkeeping software and run income & expense reports and monthly profit & loss statements, maintain an updated balance sheet, and review all of these with your accountant.  

 ● Missing receipts make it hard to document expenses. This goes back to keeping good financial records every step of the way in your business. You will need receipts to document and corroborate certain types of purchases or other expenses. Try to identify what’s missing and ask the vendor for a copy for your files. 

 ● Reconcile all bank accounts and credit cards. Reconciliations provide a clear picture of where your company has been during the past year. Is all your income properly recorded? Are your business expenses correctly categorized in your accounting program? Reconciling your accounts can also help identify where those receipts you need are missing. 

 ● Address receivables that are past due. This affects your cash flow and profitability and must be addressed. Your business is not a bank; your customers need to pay you on time. Do you have an accounts receivables policy, such as offering a small discount for quick payment, or do you add a percentage to invoices that are not paid within 30 days? It’s never too late to implement one.  

 ● Take a physical inventory of your goods. This should be done on a regular basis (weekly, monthly, quarterly depending on your business) to make sure your inventory levels align appropriately with your sales. Doing inventory will also reveal theft or loss which affect profits.  

○ Make sure you have receipts for what you bought for the company. 

○ If you are in warehousing or manufacturing, do you have an accurate count of what is on your premises, and is this reflected on your balance sheet? 

○ For capitalized expenses for equipment, you cannot depreciate the assets if you don’t know what they cost and when you bought them. 

○ You cannot calculate your cost of goods sold (COGS) if you don’t know what you have and what it cost. 

If emptying out that box and trying to update your reports is causing you stress, CFO Your Way can help. We’ll organize your financial paperwork, identify what’s missing, set up your accounting software correctly, and prepare all the reports you’ll need to make filing your 2017 tax return a smooth transaction. Schedule a Complimentary Consultation to discuss your needs—and see how much easier it is to file your corporate taxes when you work with a virtual CFO. 

Is Your Company Prepared to File Forms W2 and 1099?

The deadline for filing IRS Forms W2 for your employees and 1099-MISC for non-employee compensation is January 31, 2018—but why wait until the last minute to scramble to complete these and put everyone in a panic? You’ll have plenty of other accounting issues to handle at the end of the year so now, as we head into fourth quarter, is the perfect time to prep for these filings. 

Preparing W2s for employees 

The first thing to do is review all your employees’ personal information to ensure accuracy. Are addresses and withholding selections correctly noted on their W4 forms?  

If you use a payroll processing service or practitioner, verify the cutoff date the service requires to process final payroll for the calendar year. Be sure to adhere to the deadlines so that your W2 forms will be prepared on time, without undue stress on any party’s part and without incurring extra fees to rerun. 

Determine whether you will be paying year-end bonuses; these bonuses are taxable income for the employee and will affect your payroll taxes on the employer side. If you are paying bonuses, bear in mind that the timing might make a difference to the employee (even if it does not affect your accounting or operation). Depending on how your fiscal year is structured, you may have flexibility about when to pay bonuses. 

Ask your employee if he or she wishes to receive the bonus in 2017 or defer payment to 2018 for tax purposes. Also ask about withholding; does the employee prefer to have taxes withheld now or assume the responsibility later? 

Thinking about bonuses now means planning ahead in terms of cash flow, so be sure to plan accordingly. Assess whether or not you’ll be in a position to pay that benefit—and also have the benefit to your company of the additional expense that comes off the top. Discuss this with your accountant in advance. 

NOTE: Be sure, if you do plan to pay bonuses, that your payroll processing partner knows this and provides you with deadlines to include this on time. 

Preparing 1099s for non-payroll employees 

A Form 1099 is filed for non-employee compensation. The 1099-Misc is filed a) for anyone to whom you paid at least $600 for services performed by someone who is not a W2 employee, b) to report direct sales of at least $5000 of consumer products for resale anywhere other than a permanent retail establishment, and c) in certain other circumstances (read more here). The deadline for filing is January 31, 2018. But again, why wait until you are trying to gear up for the new year to handle this filing task? 

 As with your payroll employees, make sure that all vendor information is verified. Have a current, signed Form W9 on file with the correct address, a social security or tax ID (EIN) number, and proper business entity selection noted. 

Paying attention to these issues can distract business owners from focusing on their daily operations. That’s why many companies turn to CFO Your Way, a virtual CFO service, to manage their corporate finances.

From professional bookkeeping to preparation of critical financial statements to business strategy, CFO Your Way provides financial management expertise and ongoing guidance without adding an in-house employee. Schedule a Complimentary Consulation  to prepare for filing Forms W2 and 1099 on time. 

Start 2018 on the Right Financial Foot

We’re knee-deep in the fourth quarter of 2017, and business owners and their bookkeepers are busy wrapping up their corporate accounting matters. This is also the perfect time to do some advance planning for 2018 with some bookkeeping tasks that will help put your business on the track for a strong year ahead. After all, you can’t get where you want to be if you don’t know where you’re going. Here are four steps to take now for 2018.

1. Do a yearly budget and financial forecast.
What do you foresee in terms of revenue and business expenses? If you’ve been keeping good records all along, look back at the past few years and develop a reasonable budget based on prior years’ sales, cost of goods sold, controllable expenses and other line items that affect your bottom line.  For example: 

● Is there something unusual coming up that will affect your business, perhaps a seasonal trend (upward or downward) or a trade expo that only comes around every few years?  

● Is there a capital improvement or major purchase or lease you plan to make?  

● Is your rent going up but your sales projection looks stagnant?  

● Is your company in a growth pattern such that you’ll be adding employees (and payroll)? 

● Don’t forget to include your planned marketing spend. 

A clear forecast for all relevant income and expenses will serve as your financial road map and enable you to make nimble course corrections depending on actual sales.

 

2. Run a cash flow projection.
This is directly related to your financial forecast. Work with your bookkeeper or accountant to lay out a cash flow calendar, if you will, by month or quarter, to avoid nasty financial surprises and be better prepared to ride out the low points. It’s all in the planning. Things to consider when creating a cash flow projection (some noted above) are: 

● Projected sales – how much are you planning to bring in at various times throughout the year? 

● Payment terms for accounts receivable – do you have set terms with your customers to pay you for your goods or services within a reasonable time frame? Do you have a policy around deposits and payment in full?  

● What are your fixed costs and variable costs? Take into account rent, utilities, payroll, equipment financing or purchases, supplies, marketing … the list goes on and will vary depending on the type of business you operate. A restaurant’s costs will differ greatly from a law firm’s. 

Remember, the cash flow projection is an estimate—albeit, a very informed one—that will be adjusted according to your actual revenue throughout the coming year.

 

3. Implement internal controls.
Who’s minding the store at your company? Does your bookkeeper or manager have total control over everything related to your business accounting and cash? Of course, you trust your staff … but it is a wise business owner who puts procedures into place to identify fraud and make it more difficult for anyone to fudge the numbers or walk off with the goods.  

● Run sales reports on a regular basis (daily, weekly, monthly).  

● Reconcile your bank and credit card statements. 

● Do a thorough physical inventory periodically (and compare goods on hand against your sales and purchases). Check invoices being paid and orders being placed.  

With so much on the line, it’s vital that you safeguard your assets.

 

4. Set and measure your KPIs.
Every business and business owner have different key performance indicators (KPIs) that help inform the company’s success in reaching stated financial goals. Think about the KPIs for your particular business that you’ll be measuring in 2018 and share these with your team. These may include: 

● Number of sales conversions from incoming sales calls – it’s important to track these all the time to know if your revenues will be in line with your budget and cash flow projections. These figures are a good indicator of how your year is going and you’ll be able to modify your budget (up or down) accordingly.  

● Gross profit and net profit margins – are you hitting these? Do you need to adjust pricing or address controllable expenses? 

● Aging accounts receivables – this goes back to your cash flow projection. Are you hitting your “pay by” dates with every customer? 

● Debt-to-income ratio – your current assets and your current liabilities will determine this.

 

Here’s a fifth step to take as you head into 2018: have a CFO review your books to ensure everything is correctly entered, that your financial reports are prepared properly for your tax accountant, and that you understand all the various pieces of your company’s financial puzzle. CFO Your Way can work with you or your bookkeeper to ensure your financial paperwork is organized, that your accounting software is set up correctly, and help you determine a smart budget for next calendar year based on your actual sales history. And, as a virtual CFO practice, you don’t need to take on another employee to have your corporate finances put in good order. 

Schedule a Complimentary Consultation to discuss your needs. 

Planning for Profitability in 2017 – Yes, There’s Still Time!

Although the fourth quarter is upon us, business owners still have time to make their  2017 plan and adjust for year-to-date fluctuations that may affect profit.

With a few measures in place and an understanding of the various components of your corporate finances, you can indeed plan for profits this year.

    1. 1. What are your expectations about yearly revenue or net income?
      Without a clear picture of what you want your year to look like, you can’t get there; you should have goals set every year for benchmarks you want to hit, like a specific revenue level or net income. These expectations will affect what you pay in taxes, just as your accounting methods will. Review your goals with your corporate accountant or CFO to fully understand how they will affect your tax bill and to ensure your business operation is meeting bank requirements.

2. Cash or accrual – which accounting method do you use?
These two approaches are all about when you recognize revenue (when the income appears on the books) vs. when you are making deposits (and the cash is actually in the bank).

● Cash accounting is based on the movement of cash in your business, plain and simple. Money in and money out, logged accordingly on those dates. When you operate on a cash basis you have more flexibility in terms of when you recognize revenue. Why? Because although your accounts receivables may flow in at a certain time (when you get the checks) you might not deposit them right away if you prefer to show the income at a later date.

● Accrual-based accounting takes a different look at timing of your revenue recognition, based on when it is earned (billed) as opposed to when the invoice was paid. There is no direct correlation with dates of the actual cash transaction. In this case, if you billed a client in December, but did not get paid until January, that income is still on your books for December.

  1. 3. When to pay corporate expenses.
    The timing of your expenses factors into profitability as well, since paying them offsets your gross income. This is also related to whether you are on a cash or accrual basis for your corporate accounting. For example, your staff accountant or chief financial officer may recommend that in order to lower your net profit, your company should pay expenses early or make sure all outstanding expenses are paid before December 31.

4. Keep good financial records.
Know what types of records you must keep in order to make the most informed decisions about your company’s financial health and to meet your profitability goals. These include (but are not limited to):

● Reconcile statements for corporate cash accounts and credit cards.

● Balance sheet

● Profit & loss statements

● A list of company expenses that you paid out of pocket or personally, and should be summarized somewhere for business (on QuickBooks or on an Excel sheet, for example).

5.Hire a virtual CFO.
If any of this sounds a little foreign or if you’re feeling like you’re behind the planning eight ball, don’t panic. CFO Your Way can help you make sense of your bookkeeping, put your corporate accounting on QuickBooks, and work with you to help you reach your profitability goals.

With CFO Your Way, you work with an accounting professional who provides financial management expertise for companies that need the guidance and hands-on assistance to make their fiscal year profitable and to align their financial operations with profitability goals. Contact Cheryl Mucha, CPA at cheryl@cfoyourway.com to discuss your needs—and plan for many profitable years ahead.

Are you an Accounting Professional who is tired of sitting at the same desk every day?

Apply today for our On-site Accounting Manager:

Firm Mission:  We here at CFO Your Way love nothing more than collaborating with small business owners to make their blood, sweat and tears show up as profit in their bottom line.  They don’t know what they don’t know – so we teach them how to use their P&L as a roadmap so they can keep more of the money they make.

Required skills, abilities, and knowledge:

  • Passionate about helping others
  • Professional
  • Trust worthy
  • Strong accounting background (experience working for a CPA firm preferred)
  • Excellent work ethic
  • Strong communication skills
  • Experience working in a small team environment
  • Position and task ownership and initiative
  • Ability/Flexibility to do what it takes to get the job done
  • Ability to travel to different client sites
  • The discipline, focus, and workspace to periodically work from home

Applicable skills, abilities, and knowledge:

  • Extensive accounting knowledge – G/L, A/P, A/R, journal entries, financial reporting – Advanced level
  • QuickBooks – both desktop and online versions – Advanced level
  • Excel – Advanced level
  • Process Efficiency – Assess operating procedures, recommend and execute improvements
  • Analysis of financial statements, budgeting and cash flow projections

Preferred skills, abilities, and knowledge:

  • CPA
  • Desire for stability and longevity with employer
  • Readiness and interest to grow into supervision of staff
  • Experience working in/with family owned businesses, small businesses, and real estate investors/property managers

Forward your resume along with salary requirements to cheryl@cfoyourway.com.

Multi-Site Controller

Employment:  Full time position

Firm Mission:  We here at CFO Your Way love nothing more than collaborating with small business owners to make their blood, sweat and tears show up as profit in their bottom line.  They don’t know what they don’t know – so we teach them how to use their P&L as a roadmap so they can keep more of the money they make.

Required skills, abilities, and knowledge:

  • Passionate about helping others
  • Professional
  • Experience working in/with local and family owned businesses
  • Trustworthy
  • Knowledge to interpret P&L, Balance Sheet, Cash Flow, and Financial Forecasts
  • Ability to make business and financial recommendations based on the interpretation/analysis
  • Excellent work ethic
  • Strong communication skills
  • Experience managing a small team
  • Position and task ownership and initiative
  • Ability/Flexibility to do what it takes to get the job done
  • Ability to travel to different client sites
  • The discipline, focus, and workspace to periodically work from home

Applicable skills, abilities, and knowledge:

  • Extensive accounting knowledge – Financial reporting, Strategy, Business streamlining – Expert level
  • QuickBooks – both desktop and online versions – Advanced level
  • Excel – Advanced level
  • Process Efficiency – Assess operating procedures, recommend and execute improvements

Preferred skills, abilities, and knowledge:

  • CPA
  • Desire for stability and longevity with employer
  • Experience working in/with real estate investors/property managers
  • Experience working for CPA firm

If you see yourself as part of our mission and exceed the skills, abilities and knowledge, please email your interest, including your resume, to cheryl@cfoyourway.com.

The More I Know the More I Realize What I Don’t Know

by Mark Van Grouw, CPA

Determining the precise accounting needs of your business is easier said than done, especially when you are unclear as to what would benefit your company. Do you need a bookkeeper, an accountant, a Controller, a CFO? Should you hire full-time, part-time, or on an as-needed basis? Sorting through what each position offers may help you better understand what would benefit your business would benefit.

A bookkeeper performs the internal, day-to-day accounting functions such as paying bills, making deposits, monitoring receivables and payables, performing bank reconciliations, and ensuring that accounting transactions are completely and accurately entered into the accounting software. This is a vital position in every business that should not be left to the unorganized and inexperienced individual.

An accountant is capable of performing bookkeeping duties, yet has the additional knowledge and experience to take the daily transactional data and verify and analyze this data into meaningful financial reports that small business owners can use to make sound business decisions as well as communicate business operations to key stakeholders. Accountants will have, at a minimum, a 4-year degree in accounting.

A controller essentially is an accountant responsible for supervising the quality of the accounting and financial information of a company, monitoring internal controls, assisting in preparation of operational budgets, performing essential duties of payroll, monitoring future legislation that impacts taxation and operations, recruiting, selecting, and training staff, and more. Controllers should preferably hold a 4-year degree in accounting and have a CPA license and managerial experience, even though a CPA license is not required.

A controller typically reports to the chief financial officer (CFO), although these two positions may be combined in smaller businesses. The CFO gets involved with financial planning, financial data analysis, and establishment of internal policies, procedures, and controls.

Keep in mind that cost is directly correlative to the increase in experience, qualifications, and responsibilities required of each position. Many small to medium sized businesses simply cannot afford to hire a full-time accountant and/or bookkeeper leaving them wondering what options do they have. Fortunately, the option to hire an outside bookkeeper, accountant, controller, and/or CFO is directly at your fingertips and can be found all in one place, namely CFO Your Way.

At CFO Your Way, we are a group of experienced professionals who can offer you a cost-effective solution that will meet the specific needs of your business. CFO Your Way enables your business to have a financial professional on your management team, at your fingertips without having them in your office.

Contact us today for a consultation to discuss your business needs. You can reach us at 973-897-0650 or email Cheryl Mucha at Cheryl@cfoyourway.com.

 

Is Your Business Leaving You Puzzled?

Have you ever challenged yourself to complete a 1000-piece jigsaw puzzle? If you have, you can relate to opening the box for the first time and taking in the jumbled mess of puzzle pieces. Pieces are upside down, right side up – intermingled in one heap of confusion. Where do you even begin?

Spurred on with the desire to convert confusion into a beautiful picture, you dig in and take on the challenge.

If you ever wonder what a virtual accountant / CFO / controller does, think of the analogy just given. Our job is to straighten out the financial books and records of an organization and bring clarity to the mass of numbers that often confuses the business owner. Most owners are visionary entrepreneurs and results driven. What they often forget is that to create a picture and put all the pieces together takes time and diligent consideration.

As accountants, nothing gives us more satisfaction than to dive into the business puzzle box and begin the efficient approach of bringing a company’ financial picture to life. This systematic approach involves the following steps:

Identify the edges of the puzzle. The company’s balance sheet accounts (i.e. assets, liabilities, and equity) are identified and structured according to character and importance. Our goal is to simplify the balance sheet and establish a parameter for moving forward.

Sort pieces by color and/or tabs and blanks. Understand the purpose of revenue and expense accounts for classification and whether there are multiple departments or classes that should be taken into consideration. Categorize activities and accounts according to purpose (i.e. costs of goods, selling, general and administrative) will help segregate key components of the income statement, to further define the financial picture of the company.

Complete different color groups of the puzzle. Trace and agree various account balances to supporting documentation, understand the business transaction’s purpose, and piece together any other items that may impact the account balance(s).

Place completed sections in approximate location of where they should go. Identify the most suitable placement of transactions within the company’s financial statements.

Fill in the gaps. With sizable pieces of the financial puzzle outlined and supported, this step involves filling in the gaps with items that are not significant to the financial statements or finding answers to questions and open items on various areas previously addressed.

Picture comes into focus. At this point, the financial picture of the company begins to come into focus. Decisions become less time consuming and tedious and financial reporting begins to take on a new meaning.

Complete the puzzle. The feeling of exhilaration and accomplishment when the final piece is proudly placed down! There is now clarity in the picture. It makes sense and leads to educated, supported decisions.  Each year may be looked at as a puzzle that requires completion. Although the financial picture of a business is ever changing, the thought of putting the last piece down on any given year is enough to make any business owner happy.

At CFO Your Way, we enjoy opening the financial puzzle box of small and mid-size businesses and placing each piece into its appropriate place. As with any puzzle, the picture doesn’t come into focus without first experiencing the tedious and time consuming work of identifying and assembling various pieces. Patience is key to unlocking the unlimited potential found in accurate, timely, and reliable financial reporting.

Not up to the challenge of conquering your company’s financial puzzle? Give a call today at 973-897-0650 or email us at cheryl@cfoyourway.com to discuss your unique business puzzle.

Tis the Season-Twelve things that should be on your business list

By Mark Van Grouw, CPA

During World War II, pilots coined the phrase “flying blind” when they couldn’t see the horizon and needed to rely on the plane’s flying instruments. Pilots must be able to confidently rely on these devices to guide them. What tools are you relying on to guide you through your business decisions? Are you flying blind, or do you have the right instruments in place to show you the way?

We are already half way through November and the end of the year is quickly approaching. Thanksgiving Day is next week, which means the winter holiday season is right around the corner. December schedules quickly fill and before we know it, we are making our list and checking it twice.

Your November business list should include the following:

  • Year-to-date cash receipts and disbursements summarized into accounting software
  • Bank and credit card accounts reconciled to date
  • Profit & Loss statement and Balance Sheet account activity properly classified
  • Retained Earnings matched to prior year ending balance
  • YTD payroll reconciled to payroll reporting
  • Budget vs. Actual report printed and analyzed
  • Profit & Loss statement and Balance Sheet printed and analyzed year over year
  • Budget and Cash Flow projection for 2017 prepared
  • Estimated taxes paid for 2016 filings
  • Tax accountant called regarding year-end tax preparation
  • Gather information to complete 1099’s
  • Contact CFO Your Way to get you through this list

If these items are not on your business “To Do” list, you should ask yourself “Why not?”. Keeping your accounting records up to date and in good shape is equivalent to a pilot keeping his/her plane in top condition. When the very instruments we rely on are unreliable, we are “flying blind”.

Don’t let running your business stress you out and take away from being thankful this season.

At CFO Your Way, we not only want you to have the time to be grateful for your business and your family, but also be financially prepared to give thanks and provide your loved ones with the gifts of love and gratitude you desire. We offer bookkeeping, financial reporting, and financial management services customized to meet your needs. So, contact us. We will help and guide you thru the list.

Assistance is just a phone call away. Contact us today for a consultation to discuss your business needs at 973-580-9175 or email Cheryl Mucha at cheryl@cfoyourway.com.

Tis the season…not to stress, not to procrastinate, but to be grateful and enjoy our loved ones.