Just in time for the weekend, the IRS issued Friday-evening guidance about the overly-hyped (at first) payroll tax “holiday”.
There was initial hope that this might be a great shot-in-the-arm for Salt Lake County businesses and employees, but given how the thing is structured, and the limitations of executive action (i.e. it takes a Congressional order for taxes to actually be “forgiven”), my advice is that you carefully consider whether this makes sense for your business.
It’s your choice as an Salt Lake County employer/business owner whether you take this deferral, or pass, and there are plenty of issues if you *do*.
The taxes WILL need to be paid, and the guidance indicates that what this means is that withholding would increase from January 1, 2021 until April 30 to catch up on the difference.
And as an employer, you’re faced with the even-thornier issue of what would happen if you have to let an employee go, or whether you can project cashflow properly to account for these variations. And what if you have seasonal workers?
All of this suggests that actually taking advantage of this program is something only to be seen as an act of short-term desperation, and a BAND-AID®. Because the bill will come due.
We’re here for you if you need to talk this through: 801-278-2700
Something we’ll most certainly ask you about is how are you making these kinds of financial decisions? Do you set aside time to review your actual financial reports, or are you committing “bank balance bookkeeping”?
You know what I mean: checking your business bank account daily as a measurement of your business health.
If that’s you, we should really talk.
And before we talk, read this.
Use These Financial Reports For Business Decisions By Janet Behm
A lie has speed, but truth has endurance. – Edgar J. Mohn
Some business owners never like to “look under the hood” of their finances, and their accountants or financial partners can sometimes encourage that behavior by keeping them in the dark.
Well, I hope that won’t be you.
In fact, with our Salt Lake City clients, we go overboard to provide the kind of insight into financials that they really need to make strong decisions.
One way I’d like to help YOU (regardless of whether you’re an existing client of ours) is by pointing out different reports and metrics that you can find in most accounting software, that business owners or their bookkeepers often neglect. Knowing these numbers will help you avoid an embarrassing flub in YOUR business.
Even if you are using some of these reports, I’m sure you’ll find a few more to add to your repertoire. Of course this is just a very basic introduction, but hopefully it’ll spark some ideas.
1) Profit & Loss Summary Prev Year Comparison: Most business owners rely on the Profit & Loss Summary report, but comparing your results to last year can provide quick insight into whether your revenue is growing or contracting–as well as how fast expenses are rising.
2) Balance Sheet Prev Year Comparison: As with your income statement, it’s important to compare where certain balances stand now versus last year (such as Cash, Accounts Receivable and Payable, etc.).
3) Statement of Cash Flows: Profit & Loss reports enable you to see what you earned, while Balance Sheet reports help you determine what you have–as well as what you owe. (However, neither report necessarily provides a clear picture of where cash is coming from, or going to.) In short, this report shows you exactly what caused your bank balance to increase or decrease during a given report period.
4) Collections Report: Tricky economic times mean it is more important than ever to keep track of your collections. Fortunately, QuickBooks and other platforms make it easy to contact customers with overdue invoices.
5) A/P Aging Summary: Although it’s key to make sure that your customers are paying in a timely fashion, it’s just as important to pay your vendors, too. Unpaid bills can result in phone calls, e-mails, and other unnecessary interruptions.
6) Voided/Deleted Transactions Summary: It’s no surprise that small businesses are much more prone to fraud than large businesses. Small business employees usually wear multiple hats, so it’s often impossible to separate financial duties (bigger businesses can do this with ease). Fortunately accounting platforms make it hard for perpetrators to cover their tracks — you’ll be able to quickly identify any transactions that have been deleted from your books. Granted, this isn’t an end-all solution by any means, but it is a helpful management tool. Plus, if a transaction ends up “vanishing” from your books, you can use this report to see who deleted it.
7) Transaction History: QuickBooks or other accounting software will usually display a report that shows the entire history for a given transaction. Think of this as a “report within a report”, as you can only run it in certain circumstances.
And remember — we’re right here for you, if you need us: 801-278-2700
I have the great benefit of working with some very creative and successful real estate investors. Everyone seems to be watching the economic reports. Most have seen the effects of the 2008 real estate tumble, while many were caught in the crash.
This gives me some inside knowledge. Knowledge I want to share. Real estate flipping is still very active in Utah. So, we are putting together a training course for flippers. Here is a quick description of the training course we are developing. Maybe you will find it interesting and want more information.
FLIP LIKE A FLIPPIN’ ROCK STAR
Managing Your Rehab With Confidence
Here’s the problem…
Profits should be predictable.
You did the math on the rehab and built in your profit.
There are too many things that are unpredictable:
- Time overruns
Just about everything that happens is nibbling away at your profit. It’s frightening!
Luckily for you, there is a solution. Let me introduce you to the course that addresses that critical time between when you get the keys to the flip and when you turn the keys over to the happy new owner.
FLIP LIKE A FLIPPIN’ ROCK STAR, Managing Your Rehab With Confidence. Tyler Jensen, the “7-Day Flip” innovator will be teaching too.
There are only 12-spots in this training
This is a pilot course, which means you will be helping to develop the curriculum and the way material is presented.
You will receive free-trial rehab software. Software that helps with flip analysis & estimation, deal analysis tools & reports, and project management and accounting
One hour of personal consultation time with Janet to strategize your biggest challenges
One hour of personal consultation time with Tyler Jensen, the “7-Day Flip” to strategize your next flip
Six one-hour training sessions, one each week on Thursdays at 1:00 running through the last of September and right through October. You will have access to the Zoom recordings
Worksheets, checklists, and video training supplements
WHEN YOU COMPLETE THE COURSE, YOU WILL:
· Make more accurate estimates of rehab costs
· Know the numbers to track
· Take immediate corrective action if the numbers go off track
· Know the tactics to get the project back on track
· Direct the entire rehab from a plan that will assure completion in the shortest time
· Put the rehab for sale at the best possible price
· Everybody gets paid and you walk away with a predictable profit
If this is interesting to you, we want to send you more information. We want you to be in the loop.
DO THIS NOW:
Call 24-hours to 801-278-2700, give the operator your contact information and the message, “I’M INTERESTED.” OR
email@example.com with contact information. Lynn will contact you.
BE THE ROAR not the echo®
Let’s make smart calls together.
Utah Real Estate Accountants
Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.