Is Your Business Remote-Friendly?

As ready as we are to see the end of the Covid-19 pandemic, there are some changes we’ve made as a result of it that we’ll want to keep. One of these is remote work.

During those early days of the pandemic, when everyone was sent home early and forced to work from their kitchen tables, many of us assumed it would be temporary. In a few weeks or months, we would return to our workplaces and things would go back to normal. But we soon realized that this would be our new normal. It became clear that unless your business was an essential service — health care or grocery stores, for example — it could probably be run remotely, from any place that had an internet connection.

While we’re happy to be able to leave our homes again and have some of that old normalcy returning, a great many of us have decided that working from home — or anywhere, for that matter — isn’t something we’re ready to give up. Or, at least, we’ll still want the flexibility to do it some of the time. When the genie is out of the bottle, it’s hard to put him back in again.

Remote work has definitely made my life easier, and it also has given a boost to my efforts in recent years to get my clients to transition to digital accounting operations. For years, I’ve been encouraging clients to transition their QuickBooks or other applications away from desktop computers and into the cloud. The pandemic was a boon to cloud operations.

If you’re still convinced that you need in-house, desktop accounting software, consider the following:

  • A business’ owner can log into an online application securely from anywhere, via laptop computer, tablet, or smartphone. (Think poolside, your back porch, or your favorite restaurant.)
  • With an online app, you are no longer bound by geography for hiring, which enables you to hire the best talent possible, not just the best talent in your local area. Your bookkeeper, accounts payable, accounts receivable, and other vital staff can be located anywhere.
  • An online accounting application, such as QuickBooks Online, can integrate with hundreds of other applications such as timesheets — bye-bye, time cards! Employees can log on via cell phones, providing employers with immediate information about start and stop times, locations, and work performed.
  • Having access to online information increases your chances of looking at it. Business owners often get so busy that they don’t even look at what charges are going through their accounts, and when they do, it’s often so overwhelming that they don’t question it. But when you have access at the tip of your fingers, you’re more likely to keep closer tabs on your revenues and spending, and make wiser decisions because of it.
  • Moving your operations to the cloud could actually improve your business. With all the technological tools becoming available every day, you may actually identify opportunities to blaze new trails in your work. You could discover a feature that would speed up a process or give customers more choice, for example. Once you start, you’ll find you’re constantly learning something new and staying ahead. Meanwhile, the pandemic has revealed that those without online presences are being left behind.
  • NO MORE PAPER FILING! Need I say more?

Many owners of small, local businesses still operate under the assumption that they have to continue their place-based, desk-bound operations to be successful. They’re resistant to the change, concerned with privacy and the data breaches they hear about on the news. And make no mistake, data security is a real concern. But there is no such thing as 100% secure. Even desktop applications are prone to cybersecurity threats, not to mention hardware failures or computer losses or even office fires.

Remember that legitimate, reputable apps like QuickBooks utilize strict security protocols, including password protection. As long as you take these measures to heart and make using them a habit, you’ll be as secure as you can possibly be these days — and you’ll be setting yourself up for a more rapid response if a breach were to occur, thanks to cloud security programs designed to track and guard against threats.

Yes, online accounting apps are usually more expensive. I’m not in any way paid to promote these applications, and I understand the concern about spending more money, particularly in a time when businesses of many kinds have been hard hit by the pandemic. But as I pointed out earlier, it’s an investment in convenience, not to mention a host of features you may have been missing before that could actually grow your business. Plus, by making the transition to online platforms, you could be setting yourself up to pay less on in-office operations, and maybe even the office altogether — and that can save you a great deal of money.

If you’re convinced it’s time to make the switch to an online accounting program but don’t know where to start, contact us! There are so many applications available these days that it can take some time to select the right one for your needs. We can make recommendations based on your business and the features you’ll need most. We can also run comparisons for you on the cost and effort of using certain paper-based or desktop-based features versus cloud-based ones. We can even offer guidance when it comes to taking credit cards or other internet-based processes, such as invoicing. It can also take time to upload your existing data into an online program, and it doesn’t always go smoothly, so having an accountant take charge of this process can be a big help.

Now that tax season is behind us, schedule a mid-year review with us to go over your existing accounting system and discuss methods for moving more of it online, adopting more tools, and adding more features and capabilities. Getting away from paper documents and place-based operations is something I’m very passionate about, and I’m happy to work with business owners to make this transition a smooth one.

Many entrepreneurs today have an almost secret dream to travel the world and work part time, and we’re getting closer to that reality every day. Remote work is here to stay, so there’s no time like the present to make your business remote-ready.

remote work

Setting Up or Closing Up Shop?

It may seem like deciding to open or close your business is the hardest part of the process. In truth, though, you have some important accounting responsibilities to address, and if they’re not done right, the business could either start off on the wrong foot financially or continue to cause you prolonged stress long after you’ve closed it and ceased its operations.

Hanging Your Shingle?

Let’s start with opening your business. Picking out a name, designing a logo and a website, finding a location, and hiring staff are important, but you’ll also have to perform several steps to ensure that your finances are running smoothly. These include:

  1. Select a name for your business and, if necessary file a DBA form (Doing Business As) to begin using your fictitious firm name if it is different from the legal entity name.
  2. Will you operate as a sole proprietorship, an LLC, an S-Corp, or a C-Corp? Selecting your business’ entity and filing paperwork according is an important first step.
  3. Register your business with the Secretary of State.
  4. File tax information to obtain your business’ EIN Number (your federal tax ID number).
  5. File for state or county business licenses.
  6. Register your business with the Department of Taxation and State Unemployment Agency (if you plan to have employees).

Depending on the size and scope of your business, it can feel overwhelming to complete all these steps, and for much of the information you’ll be asked to provide, it can be helpful to have a financial expert who’s familiar with your business and goals to provide consistent, accurate information on all forms.

This is a journey we love to take with our clients. We can help you make decisions about your bank accounts, help you plan and scale your business’ growth, and set up accounting systems that you can maintain for the long haul.

This moment, the inception of your business, is crucial as it determines the course you’ll follow. Even small errors can compound and wind up costing you in the form of IRS and state agencies penalties, not to mention in terms of your reputation with employees and customers. We can help you establish efficiencies right from the start and help you eliminate errors that many new businesses owners make.

Shuttering a Business

The decision to close a business for any reason can be emotionally stressful as well as exhausting. It’s not as if you can simply hang a “Closed” sign and walk away — you still have miles to go before you sleep. And if you don’t follow the proper steps, the business you mean to close can end up becoming an albatross around your neck.

Though states can vary in their requirements, here’s a general breakdown of what needs to happen:

  1. The first thing to address is the money. You’ll need to close all bank accounts related to the business, especially if more than one person has access to those accounts. These include payroll accounts and tax accounts.
  2. After all shareholders or members have agreed to the dissolution, you’ll need to file a Certificate of Dissolution with the Secretary of State in any state where the company did business. It may be called Articles of Dissolution. Some states require that taxes be paid first. Without this paperwork, your business could go into default, which becomes public information and may affect your future business dealings. Note that some states, California as an example with its $800 minimum franchise tax, would expect you to pay for each year until you file that Certificate of Dissolution.
  3. If you haven’t already done this prior to filing your Certificate of Dissolution, you’ll need to file your business’ final tax return as well as your payroll returns, with both the IRS and, if necessary, the state, and they must be marked as final. Nevada doesn’t require income tax filings, but California does, and our firm frequently works with businesses from both states. Note that if these filings aren’t done promptly, it can have financial repercussions. Our firm has worked with clients in California who, for whatever reason, haven’t filed final payroll tax returns, and the state estimated the business wages for year after year, assessing taxes and sending bills that take months to resolve. And if business owners have changed addresses and not notified the California Franchise Tax Board, the agency can retrieve the assessed taxes from any business accounts it finds aren’t closed. Pay particular attention to payroll taxes and make sure no outstanding balances are owed; small business owners may be personally liable for those taxes, and liability protection won’t help in such matters.

As you can see, the steps involved in closing a business can be quite involved, and the stakes are high for getting them right the first time. Minimize the stress inherent in shuttering a business by hiring a certified public accountant (CPA) firm to do this right the first time and ensure as smooth a transition as possible.

Have you dotted all your I’s and crossed your T’s when it comes to establishing or dissolving your business? Contact ustoday and let us answer your questions.

Has Your Small Business Had its Midyear Checkup?

Has Your Small Business Had its Midyear Checkup?

It’s time to examine your business entity.

Now that the year is halfway over, with tax filings mostly behind you and systems (hopefully) in place, it’s a good time to reflect on the months that have passed. What’s working and what isn’t? What’s your plan for the rest of the year?

So many small business owners just run on autopilot, taking the path of least resistance and doing what they’ve been doing because it’s easier. But what if what you’ve been doing is putting you at risk or costing you money?

I recently read that about one quarter (24 percent) of consumers felt they had too many subscription services. The problem is that with all these subscriptions, money is silently draining out of our bank accounts, yet cancellation is often such a hassle that people will pay hundreds or even thousands of dollars for services they rarely use. In this case, the path of least resistance takes a considerable toll.

It’s possible that the legal entity you’ve selected for your business could take a toll on you as well. That’s why this is the ideal time to schedule a midyear legal checkup for your business, to take its pulse and determine whether the entity you’ve established is working for you.

Did you know, for example, that an LLC owner cannot be on the payroll? Surprisingly, about half of the business owners don’t know that. Not only can an LLC owner not be paid through a payroll service, but an LLC owner also cannot issue him/herself a W2. The IRS only allows LLC owners to take guaranteed payments — a rule that very few business owners are aware of.

Facts like this can make all the difference in how your business operates. Especially with the new tax laws that just went into effect last year, it’s even more important to choose the right entity for your business.

Small businesses usually can choose from among the following four types of business:

  • Sole proprietorship
  • LLC
  • S-Corp
  • C-Corp

Each one has its own rules pertaining to liability, tax burden, payroll, and more. There is no black-and-white, one-size-fits-all answer; each of these options has benefits and disadvantages, and depending on the type and size of your business and how it operates, one entity may be a better fit than the others. For example, an LLC often works better for a rental company or a holding business, whereas S-Corp is usually a better fit for restaurants. But the only way to really know what’s right for you is to talk through it with a knowledgeable CPA.

When you schedule this appointment with our firm, we’ll have you bring in just a few pieces of financial information. Then we’ll evaluate your business individually. We’ll consider your revenues, your number of employees, and your future plans, such as how long you plan to be in business and whether you plan to sell later. We’ll also look at how many fixed assets the business has — some companies are asset-heavy, with equipment and buildings, whereas others might only be a single person working on a computer. And we’ll consider your estate or succession plan for the future. We’ll talk through the payment expectations, liabilities, and personal factors; we’ll go through the benefits or disadvantages of employees (W2) and contractors (1099). And we’ll let you know how each choice of entity fits your business in light of the new tax laws.

Once we help you decide on a plan, we can process that paperwork right away and act as your registered agent so we can speak on your behalf with the IRS, taking that extra burden off your plate.

Come talk to us about how your business can start working harder for you.