Category Archives: Taxes

CLOSING YOUR BOOKS ON THE FIRST HALF OF 2014: NOW WHAT?

closingthebooksJune 30 is the end of the second quarter in 2014 for most small businesses that operate on a calendar year; July 1 starts the third quarter. Now is the time to assess your results year to date, reassess your projections for the remainder of the year, and put your plans into action.

Assessing results
Has the first half of the year been profitable, or as profitable as you’d hoped? The only way to know is to review your revenue and expenses to date. Compare the results with your expectations from your business plan. What the results mean:

  • If you hit your target, congratulations! You’ve obviously got a good handle on your sales, and expenses haven’t exceeded your budget.
  • If you exceeded your target, determine the reason or reasons why. You must be doing something right and you need to identity this so you can capitalize on it going forward. Did new marketing efforts pay off? Did you implement new technology that significantly cut costs?
  • If you fell short of your target, determine the reason or reasons why. Was revenue too low? Were expenses too high? Did you experience an unusual event, such as a catastrophic storm?

Projecting revenues and expenses
Take the lessons you’ve learned from your assessment, couple that with expectations about customers and expenses, and devise new projections for the balance of the year (or longer).

  • Revenue side. What are you doing to retain customers? Find new customers? Are you seeing any changes in customer buying habits? Quantify your revenue projections based on what you know about your customers specifically and the market in general.
  • Expense side. Look at your expense budget to uncover potential cost increases. For example, if your current health plan is up for renewal, find out if possible what the new premiums will be. This will help you decide what to do about health coverage in light of the new cost and the rules under the Affordable Care Act.

Actions to take
Planning is not merely a cerebral activity. There are actions you can take now:

  • Update your business plan. If you don’t have a formal plan, consider creating one (even if it’s only one page). This will serve as a roadmap that you can follow in the coming months to try to meet your projections. It will also serve as a benchmark against which to assess your efforts at the end of the year. The business plan includes your budget (a discussion of which follows), your marketing efforts, strategic planning, and more.
  • Review your budget. As part of your business planning, you’ll need to check your pricing and see whether changes are warranted. If you’ve experienced price increases in your monthly expenses, you may want to pass on some or all of this to customers; your margin can handle only so much. Also look over your expenses to see where changes can be made. Take advantage of technology to trim expenses (e.g., use videoconferencing instead of traveling distances to customers and clients).
  • Meet with your tax advisor. Now is likely a slow time for CPAs and a great time to meet with yours to discuss tax issues for you and your business. Make sure you’re taking advantage of opportunities that can reduce your tax payments and implement best practices for your company.

Conclusion
You can’t run a business by crossing your fingers and hoping for the best. Realistic planning and follow-up will go a long way in helping you to grow your business, handle disruptions, and achieve your dream.

Written By: Barbara Weltman, Big Ideas For Small Business

Source: http://www.barbaraweltman.com/articles/financial/financial_article_details.asp?id=268

TEN TIPS FOR RUNNING A SUCCESSFUL BUSINESS

1. Determine the type of business entity in which you will conduct your business. The major choices include: sole proprietorship, partnership, limited liability company or LLC, C corporation, S corporation, and not-for-profit organization.

2. Apply for your Federal Tax Identification number with the IRS.

3. Establish a separate bank account for your business.

4. Set up a business accounting system for your business. There are several to choose from but we recommed QuickBooks Pro software to meet your small business accounting, payroll, and financial reporting needs.  As an Advanced Certified QuickBooks ProAdvisor, we can help set this program up for you, train you on how to use it, and help you troubleshoot problems.

5. Set up the forms that you’ll need to track transactions such as invoices, purchase orders, estimates, and statements. These can be set up in QuickBooks Pro.

6. Check to make sure that you have all of the business licenses that you need.

7. Purchase business insurance to protect your financial investment.

8. Market your business through referrals, a website, social media, Internet advertising, and networking events.

9. Make quarterly estimated tax payments to the IRS throughout the year, especially if your business is a sole proprietorship, partnership, or an S corporation.

10. Value your time. Spend as much time as possible working “on” the business and not “in” the business.  Delegate and outsource tasks to experts and to your staff.

Linda A. Stortz, CPA, P.A. is a local CPA firm in Seminole, FL that provides accounting and QuickBooks solutions, tax return preparation services, and business advisory services to small businesses in the Tampa Bay, FL area. The firm specializes in advising small business owners to run a successful business. To find out more about our business services, please call us today at (727) 391-7373.