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This Month: Accounting Strategies for SMBs!

Unless you are a professional accounting firm, bookkeeping is probably the last thing on your mind. Sure, keeping clean, updated books is important for any business, especially if you need to use those numbers to plan your growth strategy. Unfortunately, too many small businesses make accounting a lower priority, which means they don’t have the intelligence they need to make effective business decisions, and at some point they have to play “catch up” and get their financial house in order. Here are some of the most common accounting problems we run into with our clients:

Quick Tips for Your Business

1. Pay your payroll taxes on time. Even if your cash flow is tight, the penalties for missing payroll tax deadlines are severe. It’s less expensive to take out a line of credit or a small loan at 5% to cover your payroll taxes than pay the penalties.

2. Miscategorizing expenses. We often see this in S Corporations. Business owners make a capital purchase or take money out of the business and put the transaction in the wrong type of account. When the mistake is ultimately corrected, it can wreak havoc with your P&L and can result in income tax on higher net profits. Be sure you understand how to properly track expenses and monitor your P&L and balance sheets regularly.

3. Understand the different between an expense and an asset purchase. Many small business owners will buy an asset, like a computer or copier, and categorize it as an expense rather than an asset. The result often is tighter cash flow and increased taxable profits. Paying cash for equipment you can amortize is not always a good idea. It’s better to finance capital purchases either with a small loan, line of credit, or even a low-interest credit card.

The Changing Role of the CFO

Maintaining the fiscal health of your company is a team effort, and with changing technological capabilities and market conditions, the roles of all the executive team members continue to evolve. The CFO and the controller are the principle players who manage day-to-day financial operations; the CFO is responsible for keeping the company on track by aligning internal operations with external market conditions, while the controller manages the daily operations to keep cash moving in and out to fuel operations. For some companies, especially smaller operations, the functions of CFO and controller tend to blur, so in the next two blog posts we want to outline the roles of CFO and controller as they have evolved today. Read More

The Controller Holds the Key to Your Profitability

The role of the CFO and the controller are very different in today’s business operations. While the CFO is responsible for more strategic counsel and overseeing your company’s fiscal performance as it relates to the market at large, the controller is responsible for guiding operations on a day-to-day basis and keeping the corporate ship running through effective cash management and operations oversight. Read more

An Accounting Parable: Beware Operator Error

No matter what kind of business your own, it’s imperative that your bookkeeping activities not only track transactions in and out of your system, but provide the intelligence you need to understand how your business is doing. QuickBooks, of any other accounting software for that matter, can not only help you run your business more efficiently, but make it easier to prove your financial performance in the event of an audit or an acquisition. Here’s a case in point. Read more


March 2011 Newsletter

February 2011 Newsletter

January 2011 Newsletter

This newsletter is intended to provide generalized information that is appropriate in certain situations. It is not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding federal tax penalties that may be imposed on any taxpayer. The contents of this newsletter should not be acted upon without specific professional guidance. Please call us if you have questions.

Copyright 2011, Pacific Crest Group, All rights reserved.

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