Don’t Be Taxed with Not Paying Taxes

Common to many business owners is the concern of paying too much in taxes at year’s end. Consequently, such business owners seek to minimize reportable income in an effort to avoid paying taxes to the federal and state governments. Minimizing your tax liabilities is certainly a commendable practice; however, one should not neglect to notice the benefits that come with showing reportable net income.  Some benefits are as follows:

  • Ability to secure financing to meet business demand.
  • Maximization on collection of Social Security benefits upon retirement.
  • Opens opportunities to take advantage of tax credits.
  • Avoidance of unwanted internal revenue audits.

By not reporting adequate income levels, it will be difficult to convince lenders that:

  • Your business is creditworthy and deserving of a favorable interest rate,
  • You are able to pay back your loans, or
  • Your business is growing and your capital needs are real.

Small business owners need to pay self-employment tax based on reported business income to help cover the cost of Medicare and Social Security obligations. By not paying into the system, the funds may be unavailable or insufficient when you come to retirement age.

Additionally, failure to report income could raise red flags with the IRS that warrant unwanted internal revenue audits of filed personal and business tax returns. Failure to report income could result in various civil and criminal penalties and may even lead to the IRS taking a stance that the business is a hobby rather than an actual business venture.

Reporting income isn’t a bad thing, but it does require you to plan ahead and be mindful of tax implications. An experienced CFO can help ensure that you understand the nuances of reporting your business income while being tax savvy in the process. If your business cannot afford a full-time CFO, consider hiring a part-time CFO such as CFO Your Way.

CFO Your Way is a virtual CFO that helps organizations execute on their business strategy. Our team can help guide you in maximizing financial statement net income to demonstrate financial strength while also guiding you in ways that minimize your tax liabilities. CFO Your Way works with several of northern New Jersey’s fastest-growing companies, giving them the opportunity to get the financial management expertise they require with the flexibility they desire.

If you need a virtual CFO to ensure that your business enjoys the benefits of having this professional on your team—but not necessarily in your office—contact Cheryl Mucha at cheryl@cfoyourway.com for a business consultation.

 

Will Your Year-End Process Be as Seamless as Nature’s Transition from Fall into Winter?

By Mark Van Grouw, CPA

As September marks the end of Summer and beginning of Fall, so October 17th marks the end of another tax filing season and reminds us that winter and the end of the year are drawing near. Take a look outside and you will see the leaves starting to turn into brilliant hues of red, orange, and yellow. The air is turning brisk and soon all the leaves will have fallen from the trees. Nature makes the transition from fall to winter seem so effortless and easy. Will your year-end close process be just as seamless?

Ah, but year-end is still two and a half months from now; let’s not rush the year away; there’s still time to clean things up. Think again!

These last ten weeks of the year can be used to organize your finances, maximize financial statement income, minimize taxable income, budget and plan for the upcoming year. It is a great time to reassess your financial record keeping and determine if your business needs additional support to make the year end close a seamless transition into the new year.

Questions you should be asking yourself at this time:

  • Are my accounting records current in my accounting software?Sunlight breaks through the autumn leaves of the trees in the early days of winter
  • Are all my bank and credit card reconciliations current?
  • Have I paid all required sales tax to the appropriate jurisdictions?
  • Am I current in paying my quarterly estimates for the 2016 filing year?
  • Do I know how much I have in assets and liabilities?
  • Do I know how much income my business reported year-to-date?
  • Have I spoken with my accountant to determine what they expect or need from me?

If you have answered no to any of the above questions, you should strongly consider seeking professional assistance. At CFO Your Way, we work directly with business owners and their staff to ensure accounting records are accurately maintained, financial reporting is timely and useful in management decision making, and that they are well prepared to face tomorrow’s challenges. Our team of professionals are licensed CPAs in the state of New Jersey and are certified as QuickBooks ProAdvisors. We understand accounting and the challenges small and mid-size business encounter. That is why we are here to help guide you through any financial challenges you are currently facing in your business.

Take a moment to consider our services for an effortless transition into 2017 and give us a call at 973-580-9175 or email Cheryl at cheryl@cfoyourway.com for a complimentary needs assessment.

 

 

 

 

Are Your Finances Leaving You All Warm and Fuzzy?

By Mark Van Grouw, CPA

Autumn is a time to give thanks for the bounties given throughout the year which has flown by. The cool brisk air reminds us winter is around the corner and we seek warmth with fall coffee flavors, hot apple cider, hot chocolate, or even the warmth of love that family and friends provide us. With all these means to give us the feeling of warmth, the question arises whether we can say the same about our business. Does the financial performance of your business give you the warmth and satisfaction you desire?

Maybe you have fallen behind on your bookkeeping. The time or resources are just not there to keep up with the mounding piles of bills, invoices, receipts and disbursements that are claiming your desk and drawer space.

Maybe you have someone to maintain the bookkeeping, but can never quite get a handle on where you stand at any given moment, whether from an income or cash flow perspective.

Maybe you, as the business owner, don’t have the time to keep a watchful lookout on your staff responsible for the accounting of your business. You simply just don’t have the time to spare getting into the weeds on reviewing day to day transactions.

Maybe you are realizing that demand for your business is growing and you simply can’t afford to add another full-time employee to help out with the growth.

Maybe you just need that extra push to motivate you to get organized and up to speed with your finances.

If any of these maybes describes you, then you should strongly consider hiring a part-time professional to assist you with your specific needs. Consider a virtual accountant or CFO who can provide you with professional guidance, knowledge, and support. Such professionals are a perfect solution to any of your financial struggles.

At CFO Your Way, our mission is to be the solution to your financial needs. Our professionals can provide you with the necessary knowledge and skills to enhance your business performance and relieve you of the financial stressors that are taking away from the warmth and satisfaction you and your business crave.

Contact us today at 973-580-9175 or email Cheryl@cfoyourway.com for a complimentary needs assessment. It is our pleasure to serve you.

Are Bad Habits Leaving You Stuck in a Rut?

By Mark Van Grouw, CPA

Over Labor Day weekend, I was reading to my kids the book “The Berenstain Bears and the Bad Habit”. Mama Bear’s advice to Sister Bear as they walked down the old garden path struck me. Habits, while they may not be intentional, can have negative consequences. Mama Bear was so accustomed to pushing her wheel barrow the same way down the old garden path that she had created a rut so deep that Sister Bear had to help her get the wheel barrow unstuck. Often, I find business owners experience much the same as did Mother and Sister Bear.

To illustrate, a small business owner recently asked me to help him enter an accounting transaction into an accounting software I’m unaccustomed to, namely M.Y.O.B. Trying to use my accounting knowledge and experience, I did a little navigating through the software and came to realize that this person had no idea what was being reported on his balance sheet or profit & loss statement for that matter. While he knew how to access and generate certain reports involving customer invoices and payments, he had no idea how much the business made in profits for 2016. When I questioned him about his current business profits and the way he accounted for his business transactions, he simply responded, “I do it all at the end of the year when I prepare for my taxes; It’s the way I have always done it; I don’t know any different.”

More than once, I have run into clients who don’t pay attention to keeping up to date on entering business transactions and are shocked at the amount they owe in taxes come the filing deadlines. Their reactions are, “I knew about what I was making, but I didn’t realize I made that much!”.

As we enter into the last quarter of 2016, it is time for business owners to be looking ahead to the end of the year and strategizing ways to minimize their income tax liabilities. Are you guilty of keeping bad habits, especially in regards to accounting and financial reporting?

The above examples illustrate what Sister Bear had to learn – habits, especially bad habits, have consequences that can leave us stuck in a rut. Don’t get stuck in the rut of having to pay off your prior year tax liability when you could be putting away to minimize your current tax liability. Act now and get your books in order so you know where you stand.

Don’t have the time? Feeling overwhelmed? Not sure what exactly to do? Don’t panic, just contact us at CFO Your Way and we will be glad to help you heal your bad habit(s) and get you out of the rut.

At CFO Your Way, we understand what it takes to run a business and the time needed to account for all your business transactions, that is why we offer to assist in performing bookkeeping and internal, day-to-day accounting functions; train and support you and your staff on basic accounting and finance functions, accounting software functionality, financial reporting; provide controllership services so you better understand your financial position and identify ways to run your business more profitability and efficiently; and much more.

As a virtual CFO, we work with small businesses in Northern New Jersey to lend a hand in organizing small-business finances through use of QuickBooks – online or desktop versions and are happy to train on QuickBooks and other accounting processes to ensure the most efficient and effective use of your employee(s).

Contact us today for a consultation to discuss your business needs at 973-580-9175 or email Cheryl Mucha at Cheryl@cfoyourway.com.

Bookkeeping vs. Accounting: What’s the Difference?

Aristotle once quoted, “The whole is greater than the sum of its parts”. This quote speaks of synergy, the interaction or cooperation of two or more parties that produce a combined effect greater than the sum of their individual effects. In context of small business accounting, this saying holds true.

Small business owners often find themselves handling the accounting function on top of everything else that is important to operating a business. Some hire a bookkeeper to assist with the day to day recording of cash receipts and disbursements to alleviate the burden of financial record keeping, while others may look towards hiring an accountant to oversee and verify the accounting data.

A bookkeeper and an accountant both play a crucial role in establishing a strong and reliable accounting environment for your small business. The key difference between a bookkeeper and an accountant is that bookkeepers simply record in sequential order the daily transactions of a business, while accountants take this information a step further 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.

Bookkeepers must ensure that all transactions are accurately and timely recorded into the accounting system. Accountants must ensure that all data entered into the accounting system provides a true picture of the financial health of the business. In order to enhance the individual efforts of the bookkeeper and accountant, your small business needs a skilled professional to properly interpret your accounting information and bring valuable insight to your business.

At CFO Your Way, we are a group of experienced professionals who can offer you a cost-effective solution that will make the whole greater than the sum of its parts. CFO Your Way enables your business to have a financial professional on your management team at your fingertips without having them in your office. We provide financial expertise to many of northern New Jersey’s fast-growing companies, tailoring our services to best suit your needs.

What can QuickBooks do for my business?

Jack be nimble, Jack be…QuickBooks?

Undoubtedly, QuickBooks is the most widely used accounting software among small businesses, but are you maximizing its potential? As an acclaimed small business accounting software, QuickBooks has tremendous functionality and features which can help business owners effectively and efficiently manage their business. QuickBooks is available in both desktop and online versions. With the aid of various online and mobile apps, QuickBooks can transform your business when used properly. It can also streamline bookkeeping and back office work by:

  • Alleviating redundant manual data entry through automatic transaction downloads from your bank or credit card company
  • Streamlining reporting through scheduling routine financial reports to be run automatically
  • Making creation of invoices fast and easy to email to customers to enhance cash inflow
  • Reducing paperwork through use of electronic data transmission that allows you to attach electronic invoices and/or receipts to transaction detail
  • Offering automatic backup of QuickBooks files with advanced security features to ensure all information is safe and secure

While it can do this and much more, it is critical that you have the right people using this amazing business tool. The best way to ensure you are maximizing QuickBooks’ potential is to have an experienced professional at your side to help guide you through the accounting process and provide you with meaningful financial reports to operate your business at its best. CFO Your Way is that experienced professional.

At CFO Your Way, we know it can be challenging for a small business to introduce new technology and gain a full understanding of its usefulness; that is why we make it our focus to help small businesses overcome these obstacles by assisting with their bookkeeping and accounting needs while also providing them with expert management advice.

As a virtual CFO, we work with small businesses in Northern New Jersey to lend a hand in organizing small-business finances through the use of QuickBooks – online or desktop versions and are happy to train on QuickBooks and other accounting processes to ensure the most efficient and effective use of your employee(s).

Working with a virtual CFO gives your business the benefit of having a financial professional managing your accounting and financial reporting needs and providing you the necessary reports to make well informed business decisions. We tailor our services to best suit your needs, that’s why we pride ourselves with our name CFO Your Way.

Contact us today for a consultation to discuss your business needs at 973-580-9175 or email Cheryl Mucha at Cheryl@cfoyourway.com.

Get Real with Your Real Estate Business by Hiring a Virtual CFO

Real estate investment and management companies face a myriad of issues unique to the industry. Real estate investors and property owners need to have an understanding of where to place their financing, how to maximize the value of properties in their portfolio, and what to do with legacy assets that they may have “inherited.”download

A virtual CFO can help real estate companies get real about their business by:

  • Assisting in raising funds (debt and equity) at the lowest cost possible. To this end, a CFO should have a robust network of investment and banking contacts to be able to raise funds quickly when they are needed … and be able to produce the financials necessary to go to the lending institution with confidence.
  • Managing resources such as talent, finances and property. This skill is especially important when a company has diverse real estate holdings with varying property values.
  • Overseeing the entire real estate portfolio to ensure that it is running at maximum profitability. By looking at the whole picture and not just pieces of the business, and by providing an in-depth financial analysis and accurate financial reporting, a CFO can help principals determine the financial levers to adjust to capitalize on the business holdings.
  • Serving as a buffer between various stakeholders such as property managers, tenants, contractors and the business owners.
  • Mitigating risk through the right insurance vehicles for your property management or real estate investment firm.
  • Determining the optimal financial mechanisms for the real estate business and the properties it holds. A great CFO can make certain that your current financing has the best terms, which in turn helps to improve cash flow and long-term profitability.
  • Analyzing financial information provided by property managers and generating reports as appropriate for investors. For instance, while tax advantages on current holdings may be decreasing, there may be other financial considerations that can counterbalance these changes.

The hard reality is that a virtual CFO with real estate industry expertise is a vital part of your professional team, there to ensure that the company’s financials are in order and that real estate investments are as profitable as possible. Don’t miss out on an investment or profitability opportunity to optimize your business cash flow. Get real about adding a virtual CFO to your management team!

CFO Your Way knows what to look for to ensure that your real estate portfolio is operating at maximum financial capacity. With more than 25 years of experience in the real estate investing market, we provide the benefit of a financial professional at a fraction of the price of hiring an in-house employee. No need to add to your company’s headcount or take up additional office space when you engage a virtual CFO.

We offer expert advice with financial management, accurate financial reporting, KPI monitoring, and much more. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of business bookkeeping, financial forecasting, and cash flow analysis.

What Makes a Great CFO?

A great Chief Financial Officer (CFO) is like a sports coach. This individual ensures that the organization makes the best use of its resources, plays by the rules and reaches its full potential. A CFO is not simply a skilled accountant. Rather, a great CFO is strategic and not only asks the right questions but can interpret the answers in a way that creates value for the organization. A great CFO has the ability to interpret the company’s financial information with the company’s objectives and strategies in mind, and then share this knowledge with its business owner(s).

In sports it’s called having “skin in the game.” In business, the CFO sits in on management and planning meetings and looks for ways to ensure that the team is playing at its peak.

A great CFO, like an awesome coach, is one that makes a difference. How? By working closely with the business owners or CEO to run the company more efficiently and get it down the field to its business goal.

What does a great CFO do to help the company score? This person:

  • Has a view of the company’s full value chain from customer needs to back-office support to suppliers’ contributions to competitors’ positioning. This line of sight enables the CFO to identify areas that need attention.
  • Considers how financial transactions will be booked. While an accountant tracks financial statements with client-provided data, a strong CFO plans and strategizes how accounting for data in a certain way will impact the company.
  • Understands the company’s key performance indicators (KPIs) and tracks these metrics to determine trends, risks and opportunities.
  • Reviews the issues, weighs the challenges and counsels business owners, suggesting smart strategic moves.
  • Sees the big picture and helps translate financial statements into business plans, budgets and forecasts. A savvy CFO works to maximize the value of the business.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for that knowledgeable, experienced individual who has the financial management insight they need with the flexibility they desire. With CFO Your Way, you can get the benefit of a financial professional at a fraction of the price of hiring an in-house employee, without the headache of additional headcount and office space needs. We’re on your management team—keeping an eye on the business ball through financial management, accurate financial reporting, KPI monitoring, and more—but not necessarily in your office.

Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of business bookkeeping, financial forecasting, cash flow analysis and all the other plays that a great CFO brings to your team.

 

 

Business Benefits of a Virtual CFO

As the chief cook and bottle washer of your company, it’s often hard to get away from the day-to-day details long enough to focus on the company’s long-term prospects. That’s where a virtual CFO comes in. There’s no shame in getting seasoned assistance. In fact, it’s a very smart business move. Even the most experienced entrepreneur can use some help in forecasting their company’s financial future.

What are the benefits of a virtual CFO for small businesses? A virtual CFO can:

  • Think long term. Where does the company want to go and how will it get there? A virtual CFO knows how to keep an organization on track and can offer deep insight on the key drivers of business growth. For instance, they can create a financial forecast and assist with bank negotiations to establish a line of credit.
  • Generate cash flow. By taking on operational processes such as cash flow projections and breakeven analysis, a virtual CFO can ensure that your company’s finances are running smoothly. For example, if sales are up and profits are not, this accounting professional can review your company’s pricing strategy and determine if there is an issue that is hampering profitability.
  • Establish financial systems. A virtual CFO is a financial whiz—an expert in QuickBooks for small businesses, bookkeeping systems and accounting software. And, he/she can work easily with your corporate accountant to make certain that your general ledger takes into consideration budgetary accountability, departmental spending and tax implications so that the financial reporting is on point.
  • Free up the company’s senior leadership to concentrate on their area of expertise. This skillful number cruncher can let you, your managers and staff do what they do best while providing you access to high-level accounting skills on a weekly or monthly basis, depending on your business’ needs.

Bottom line: A virtual CFO is a cost-effective financial resource that results in greater business success.

In addition to giving your company access to small business accounting and bookkeeping services, this individual is a skilled professional who brings a new perspective to your business. You get the benefit of a financial professional managing your books and keeping an eye on your bottom line, at a fraction of the price of hiring an in-house employee—and without the headache of additional payroll or office space needs.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for the financial management expertise they need with the flexibility they desire. With CFO Your Way, we’re on your management team but not necessarily in your office. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of bookkeeping, financial forecasting, cash flow analysis and more.

The Importance of Being Earnest about Bookkeeping

As a small-business owner, you may think it is important to be customer focused.  However, it is just as critical to be finance focused. Small-business owners need to pay attention to bookkeeping and internal, day-to-day accounting functions such as recording expenses, invoicing and deposits. Bookkeeping is vital to properly managing business resources as well as ensuring that the necessary business records are retained for tax and compliance purposes. Paying attention to bookkeeping in earnest will make certain that you avoid costly errors later.

Bookkeeping is like studying; adopting simple, good habits early in the game is key. No, you can’t keep slips of paper in folders or drawers, or store the financial information in your head. You are building a business and you need a professional to help you manage your company’s financial growth and health.

Consider hiring a virtual CFO to help you set up business policies and procedures. This accounting professional can work with you to:

  • Track your expenses. Record as many details as possible regarding expenses, such as the type of expense, suppler/biller, account number, date the invoice was received and amount owed. In many cases, business expenses can translate into tax write offs. However, you can’t write off what you don’t track. A standardized business process or system can help document car mileage, business-related purchases and receipts for business lunches and meetings. Receipts (paper or electronic) can substantiate your expenses in the event of an audit.
  • Record deposits correctly. It’s great if monies are coming into your business; however, you must have an accounting system in place that details where each deposit comes from. This will ensure that you pay tax on income only. Cash infusions from your personal savings or small business loans are not taxable and risk being put in the wrong category if you do not have strong systems established.
  • Set aside funds to pay taxes. Paying tax on income is inevitable. Be sure to set aside monies each month so you don’t get caught short when it is time to pay the taxman.
  • Keep an eye on invoices. Be sure to provide your customer with enough information for them to be able to approve and process your invoice quickly. Note your payment terms; follow up if you do not receive payment within your required time period. Your cash flow depends on it.
  • Plan for major expenses. Growing a business often means an outlay of funds for big expenditures. Anticipating and budgeting for major upgrades in equipment or increases in staffing costs will smooth out your business’ potential cash flow issues.

Bookkeeping can help you achieve and keep long-term goals, smooth out any seasonal cash flow dips, pay your taxes on time and ultimately, improve your profits. If you don’t have a head for numbers, processes or systems, a virtual CFO can be a cost-effective financial resource to help you put these bookkeeping tips into practice. A virtual CFO can give your company access to small business accounting and bookkeeping services and bring a new perspective to your business.

Many of Northern New Jersey’s fastest-growing companies rely on CFO Your Way for the financial management expertise they need with the flexibility they desire. These companies get the benefit of a financial professional managing the books and keeping an eye on the bottom line, at a fraction of the price of hiring an in-house employee—and without the headache of additional payroll or office space needs.

CFO Your Way is on your management team but not necessarily in your office. Contact Cheryl Mucha at cheryl@cfoyourway.com for a consultation and to discuss your needs in the areas of bookkeeping, financial forecasting, cash flow analysis and more.