5 Financial Variables to Improve your Business or Brand’s Bottom Line

Tuesday, December 31st, 2019

Want to see improvement in your business or brand’s bottom line? Pay attention to your company’s Financial Variables and discuss these influences with a qualified accounting professional to determine if your revenues can be improved, or to learn more.

Five financial variables that can improve your bottom line are:

1) Look at your Profit & Loss Statement  

When was the last time you looked at your Profit and Loss (P&L) statement? This document lays out your revenues, expenses, and costs during a determined period of time. 

All public companies are responsible for issuing these statements quarterly, as well as at the end of the fiscal year. Reviewing and understanding a P&L statement can help you evaluate your business’ fiscal health.

2) Know the Shape of your Finances  

Over half of small businesses are negatively impacted by late payments; how are your finances? Make a resolution to pay invoices on time and save late fees and charges. These expenses impact your cash flow and bottom line, over time.

3) Get Familiar with Your Cash Conversion Cycle  

The cash conversion cycle (CCC) measures the amount of time that it takes to move inventory, get paid, and, in turn, pay your own creditors. This cash flow determines how long between payments as well as how quickly you can turn-over your product. 

A familiarity with your CCC can indicate if you have a healthy cash flow as well as how long your company can survive in tight times. 

4) Become More Aware  

Part of your business self-awareness comes from checking out your financials. Develop and revisit a cash flow forecast and business budget for your company. 

It makes good sense to set aside a time, such as the end of the fiscal year, to review all your management practices and financial habits with a reliable and reputable accountant. Don’t have an accountant? Make now the time to retain one.

5) Tally Cash on Hand  

Do you know how much cash and liquid assets you have on-hand? It may surprise you; sometimes, companies don’t have as much readily available capital as they think – and need- which could put you in a bind if business is slow. 

Don’t risk the fiscal health of your company; take time to count up what you have on hand for liquid assets, i.e. cash, and begin to think about setting up a rainy-day fund.

Making changes or deciphering financials for your business can be confusing; make sure to discuss your options further with your accountant before altering the way you operate your company. These industry experts may be able to help guide and advise you on the best ways to reach a better bottom line.

Want to learn more about these financial variables, or other ways to enhance the condition of your company? Talk to the accounting professionals at BMH Accounting; they are familiar with financial variables that can make a significant difference in the overall value of your business investment.

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How a Year-Round Accountant Benefits a Small Business

Saturday, November 30th, 2019

It makes sense to consider Hiring an Accountant for year-round provision, rather than just at tax time. There are numerous benefits of hiring a year-round accountant for your business, and the cost is a prudent investment to make in your company, brand, or business.

Some benefits of hiring a year-round accountant include:

Managing Money

One of the specialized accounting services that accountants offer is money management. When you are in business, how you manage money can make or break your success. An accountant is a shrewd and smart resource that can help you manage money well.

Business Planning

The first step in starting a business is typically a business plan. Consult with an accountant for their input at this very critical phase of your company. An accountant can help outline the financial parts of the plan- and make sure that your investment is a pragmatic one with potential returns. They will be able to explain and navigate the processes associated with business loans and financing, too.

Setting-Up

Just getting started? An accountant can make sense of a wide range of bookkeeping responsibilities that you may not even realize you have. You will need to set up an accounting system and appropriate accounting software to implement this. An accountant can make the transition for you.

Growth

You may find that you are in over your head trying to maintain books as your company grows and becomes larger. An accountant can set-up payroll, benefits, and reporting systems so that it runs smoothly as your business burgeons. They may also advise you as to the best strategies to keep your company fiscally healthy.

Retirement

An accountant is an excellent ally when you are planning retirement. They can help you prepare in the years, months, or weeks leading up to leaving your job, and help advise you on your retirement plan options. They may also be able to guide personal investments that can grow and mature into your retirement savings. If selling your business in order to retire, they can be an invaluable resource during that often-complex process, also.

Tax Time and Audits

Naturally, you want an accountant on your team at tax time. An incidental audit can tie you up for weeks and cause you undue hassle and headache. Accountants are familiar with the process and can stay abreast of the most recent tax info that might make a difference for you at year’s end. Let your accountant deal with the IRS and you can focus on your business.

Consider the benefits of having a year-round accountant and talk to the professionals at BMH Accounting to learn more. From specialized accounting services to a tax time audit, don’t go it alone. Rely on the expertise of a reputable accounting firm; call to learn more today.

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Proactive Tax Planning is Key to Avoiding Tax Liabilities

Friday, November 15th, 2019

When it comes to Tax Planning, being proactive pays. Being vigilant and precise with your tax reporting and expenses can minimize your tax liabilities- and save you money at year’s end.  Tax prep and documentation should not be something that only occurs at tax-time; proactive tax planning is something that happens year-round to avoid nasty penalties and maximize deductions.

Some tax planning tips include:

Provide Proof

Prepare to be vigilant about keeping track of business expenses- which can be a bear! A good rule of thumb is that if you plan to deduct an expense, you will need some sort of proof of the purchase, like a receipt, invoice, or canceled check. You can also use bank records, if needed, to document purchases related to business that you do not have an actual receipt for when it comes time to complete or file your taxes and reports.

Document Diligently

Always save invoices or receipts for all your business-related purchases. It helps to write and attach a note explaining the purchase for documenting later, when you may have forgotten the specifics surrounding the expense.

Segregate Accounts

Make sure to keep personal accounts separate from business accounts whenever possible. It can make accurate record-keeping nearly impossible and you could suffer by missing out on certain business deductions this way.

Classify Carefully

Don’t misclassify your workers as the income-tax withholding and employment taxes are quite different. While you do withhold federal income tax and FICA taxes from your employees, you also are responsible for unemployment taxes and your own share of FICA. When you are dealing with staff that are actually independent contractors, you are not required to withhold taxes, making the individual responsible for their own self-employment tax liability. This also eliminates the need to pay separate FICA or unemployment taxes.  Talk to your accounting professional to learn more.

Pay Promptly

Pay the employment taxes that you collect from the wages of your employees and staff for federal income tax and FICA (Social Security and Medicare) taxes promptly. The IRS is not tolerant of delayed payment and noncompliance penalties can be severe.

Industry experts offer tax tips for small businesses, including that you need to be careful and cautious when making tax deductions. This may look suspicious and trigger an audit, further reinforcing the need for organized documentation. The IRS frequently assesses business tax deductions, like vehicle use and travel expenses, to ensure you are sticking to their guidelines and limits.

Consider Hiring Help

Take the worry out of your business taxes with some professional help from BMH Accounting. If you own or operate a company or brand, outsourcing your financials and tax reports to a certified accountant makes good business sense. Don’t risk penalties and fines by going it alone; hire a tax professional today.

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