For small businesses, business planning is key. Many studies have shown that small businesses with a business plan have a greater chance of seeing growth and success. However, much like many parts of running a business, professional business planning services can be expensive. Here’s how you can use a business plan to increase your chances of business success, without breaking the bank.  

Know Where You Are Headed

It is best to start your business plan with the goals you have for your company already in mind. This will save you time during the process, and save you money if you hire a business planning consultant. Your consultant can help you understand if your goals are feasible for your business as you go along in the process. Keep in mind that your business plan will grow with your business, so you can always make adjustments later. Ensuring that your business plan and your goals are scalable with your business is also something a business planning consultant will be able to help you with.  

Write the Key Components

If you are planning on applying for small business loans or grants, most lenders (including the Small Business Administration, or SBA) will require a business plan as part of your application. This means that the business plan you set out with needs to include nine key components. These nine components are: key partnerships, key activities, key resources, your value proposition, customer relationships, customer segments, channels, cost structure and revenue streams. You can find more information on each of those components here. Time is money, and you don’t want to waste yours redoing a business plan for a lender. To ensure that your business plan is the strongest it can be, we recommend hiring a business planning consultant with an affordable rate.  

Hire a Consultant from Another Small Business

No one understands the unique struggles of a small business like a fellow small business. Not only are they in the same boat as your business, they also understand that running a business of any size is expensive. This means that they’ll offer personal service and competitive rates that are more affordable than big-time business planning services.   At Better Accounting, we believe that the fact that we are also running a small business helps us understand our clients better. We offer personalized and affordable business planning and tax strategy services to get your business going on the right foot. Whether you have been in business for years or you are just starting out, an expert from Better Accounting will help you set your business in the right direction.

We get it. Tax season is stressful. Did you know it could be a little less stressful with year-round tax services? Your tax accountant can help you manage your business all year—which might take some of the pressure off when tax season comes around.

Tax Preparation

Filing your taxes can be a full-time job. Your tax accountant can not only help you complete your actual filing, they can also help you sort through your records. This way, they can easily hunt down deductions and credits you might be eligible for before you file.

Audit Preparation

It does not matter if you’re keeping your records meticulously organized and color-coded or if you’re keeping your records in a shoebox in the backroom—audits happen. When they do, your tax accountant can help you get ready for them. Using audit checklists and years of experience, they can help you compile the right records, clean up your ledgers and get everything ready for the big day.

Get Caught Up

Many business owners have several years of backdated tax filings they need to catch up on. Between tax seasons is the perfect time to have your tax accountant help you get caught up. They can help you sort through months’ or years’ worth of records, file the right forms, and even apply for late filing fee exceptions through the IRS. Make next year the year you have caught up with your filings.

Payroll

A tax accountant can also help you manage your recurring payroll. They will ensure your business is compliant with tax regulations and manage your income tax with holdings. Many accounting firms also offer discounts on accounting software that will help you with recurring tasks like reconciliation and payroll. Better Accounting also has expert bookkeepers available to complete the payroll process—think of us as your one-stop shop for taxes and bookkeeping. A tax accountant can make running your business easier all year-round, not just went tax season rolls in. Ask your accountant what else they can do for you.

The COVID-19 pandemic has hit businesses hard. To help them stay afloat, the federal government and the IRS pushed the tax filing and payment deadline to July 15, 2020.

There’s Still Time!

For many businesses, tax season is a last-minute dash to the finish—even with the new, later deadline. By this stage, many CPAs do not have the bandwidth to take on new clients and help them file their taxes in time to hit the deadline. At Better Accounting, our expert CPAs and bookkeepers are still available to help you prepare your finances and file your taxes. Our expert tax accountants can get started on helping your business with this year’s tax filings right away.

No Job Too Big

Even if you have multiple years of taxes left to sort through and file, we can help with that! We will help you sort through the IRS’ process for backdated returns, apply for penalty abatement if it’s applicable, and even gather the records you need for each of the years you need to file. Our tax experts will even help you monitor return processing and other compliance processes long after the tax deadline has passed. With Better Accounting, you can make this year the year your business gets caught up on tax filings and starts looking to the future.

Business Owners, Fear Not

We specialize in all tax filings, whether federal or state, business or individual. As small business owners ourselves, we understand that tax season is stressful. It doesn’t matter if your business’ finances are inextricably tied to your personal finances or you just need a little extra help on the personal side. Our tax experts are ready to help you with every tax form you may need to file. Our professional tax accountants also stay up-to-date on tax credits and incentives. If you’re eligible for deductions, credits or breaks, we will make sure to include the proper documentation with your filing.

We Do Tax Prep, Too

If you are not quite ready to file your taxes or you just don’t know where to begin, don’t worry! Our expert accountants also do tax preparation. We will help you get your finances in order before we complete your filing. Our CPAs and bookkeepers will help you organize your records and documentation. We understand that every business is unique, and our tax preparation strategy is tailored specifically to your business. Our tax experts will help you with everything from sorting a shoebox full of receipts to itemizing tax deductions. We use detailed tax preparation checklists to make sure you have everything you need to get started on those filings. The new tax deadline is fast approaching. Get expert tax help from Better Accounting and make 2020 your best year yet. Give us a call today!

What happens in the economy affects all businesses. Small businesses are often the most impacted by the economy, whether it is an upswing or a downswing. In a strong economy, small businesses see an increase in business that correlates to the amount of free income consumers are willing to spend on luxuries. In a weak economy, small businesses are hit the hardest by things like layoffs, conservative spending and over extension.

Economic Impact in an Upswing

All types of business tend to thrive during an upswing. Businesses have higher disposable income to put towards growth opportunities, hiring booms, expanded product menus and more. Since unemployment is lower during economic upswings, consumers also have more disposable income that they are willing to put toward non-essential products and activities. The growth in consumer traffic leads to growth in business opportunities which leads to company growth. The downside to this chain is that when the economy hits a downswing, small businesses that experienced rapid growth are more likely to find themselves overextended. This can lead to business failures and layoffs.

Economic Impact in a Downswing

Small businesses are typically hit the hardest in a downswing. Higher unemployment rates mean that consumers are less willing to sink money into luxury expenditures. They will seek out only the essentials and lower priced items. This means that small businesses see lower profit streams and may seek out financial aid. Lower profit and higher rate of borrowing dominoes into decreased ability to pay off creditors and lenders which can affect long-term financial viability. A downswing that comes directly on the heels of a period of high economic prosperity can also leave small businesses overextended. As mentioned, this results in layoffs and business failure. A smaller workforce leaves small businesses with a reduced ability to serve their clientele. Therefore, further slowing their ability to keep up with their payments or business goals.

Improvise, Adapt, Overcome

Some small businesses actually thrive in bad economies. The small businesses that do thrive often fill a niche in a high-demand industry. However, many small businesses rise to meet the demand of the slow economy. For example, during the COVID-19 pandemic, many businesses filling luxury niches in the economy turned to mask and hand sanitizer production to remain financially salient. The ability to adapt and adjust to the circumstances give small businesses an advantage over larger companies. Small businesses face significantly less red tape when looking to make a change in how they run their business. There is no need for stockholder meetings. The leadership base is smaller, which reduces the need for mass approval when looking to make a change. While small businesses are affected more by shifts in the economy, they also have a greater ability to adjust to the changes as they come.  

What is virtual bookkeeping?

Virtual bookkeeping is a bookkeeping service that happens via a cloud-based accounting software, rather than in-person. Your bookkeeper will maintain your books and keep your financial data up to date, all from an off-site location.

How can a virtual bookkeeper help my business?

The benefits of a virtual bookkeeper are endless. Here are five reasons switching to a virtual bookkeeping service is the right move for your business:

1. Expert bookkeepers without the hiring process
2. Easy data backup

Hiring a full-time accountant is expensive. There is the price of maintaining a job posting, the time lost to the interview process, and ensuring your new employee has benefits, to name a few expenses. In contrast, a virtual bookkeeper will only cost their hourly or by-project rate. With a virtual bookkeeper, you get an expert bookkeeper without the full-time price tag. Most virtual bookkeepers will access your books using a cloud-based bookkeeping software like QuickBooks Online. Cloud-based software will routinely back up any changes to your books for your records. This way, you do not have to remember to maintain a backed-up copy of your financial data, you can be sure you always have one. Using a cloud-based software typically also means that you control which parts of your financial data your virtual bookkeeper has access to. They are not able to view or manipulate any data you do not want them to.

3. Timely reports and financial data
4. Closely manage your company’s finances
5. Save time and money

Curating your financial data is your virtual bookkeeper’s only responsibility. A full-time in-house accounting staff can get bogged down with other projects and reporting, making it difficult to get timely financial data. In many small businesses, the bookkeeping is done by the business owner, making it almost impossible for you to focus on both the business and the finances. Instead, your virtual bookkeeper will be dedicated to ensuring you always have the right financial data when you need it. A virtual bookkeeping service is especially beneficial for routine financial tasks and reporting like month-end close or payroll. Since your bookkeeper will be maintaining your books virtually and often remotely, all interactions with that data will take place via your cloud-based software. This means that all changes made to your financial data and your books will be available to you in real time. A virtual bookkeeper allows you to keep all your financial information up-to-date and at your fingertips so you know what’s happening with your money at all times. Not only will a virtual bookkeeper save you expenses like hiring costs and full-time operating costs, they will also save you valuable time. In most small businesses, the business owner wears many hats. They are the owner, the support staff, even the bookkeeper. It can be overwhelming. It can also result in costly mistakes. You started a business because you are passionate about what you do. A virtual bookkeeper gives you the time and resources you need to focus on what is really important to you: your business.   Read related blogs

Cashflow forecasting is the next step on your business’ roadmap to recovery. Your cashflow forecast will help you determine how to move forward with your business. You can use your forecast make the best decisions for your company and its finances.

What is Cashflow Forecasting?

A cashflow forecast is a comprehensive financial model used to tracks a business’ access to cash. The model shows where your inflows and outflows of cash will be going for the next 13 weeks. Your forecast will be more accurate in the first several weeks than it will be near the end of the forecast. To keep everything up to date, the forecast should be updated weekly. The forecast will track your inflows and outflows, which is crucial to understanding your breakeven point and modifying your business plan to accommodate the new economic landscape. It will also account for any existing debt you have and any interest payments on that debt. This allows for short-term liquidity planning and long-term budgeting. Both are especially crucial when facing down the fallout from the COVID-19 pandemic.

Why Cashflow Forecasting?

With a solid cashflow forecasting model, you can weigh the financial implications of decisions before you make them. Your forecast will account for inflows and outflows of cash, as well as inventory costs, accounts payable and receivable, bill payments and more. Knowing these details will help you set the stage for other difficult business decisions like cutting costs or consolidating debt. By adjusting your forecast to reflect your potential business decisions, you can see everything from how the decision will affect you in the short term to a projection of how it will affect you in the long term. This is especially important in an ever-shifting economy. The forecast can also give you insight on whether and when you need to seek outside funding for your business.

Maximizing PPP Loan Forgiveness

One of the best features of the loans from the government’s Paycheck Protection Program (PPP) is the potential for loan forgiveness. While the federal government and the Small Business Administration (SBA) are still working on guidelines for what allocations will and will not be eligible for forgiveness, we do have some idea of what they will be looking for. The current guidelines state that 75% of your PPP disbursement must go toward payroll costs, which include compensation, benefits and leave time. The other 25% of your disbursement can go to other eligible costs like interest on mortgage payments or rent and utility payments. Your cashflow forecast model can help you determine how you should allocate your PPP disbursement to not only maximize your loan forgiveness, but also help you determine which parts of your business need the money from the disbursement. As you move forward, you will understand how best to use your disbursement funding to help your business. You’ll also understand what implications the disbursement will have on the finances in other areas of your company.

Avoid Money Management Mistakes

Some of the most common money mistakes that business owners make include defaulting on liabilities, overstocking inventory and targeting the wrong market. Your cashflow forecast will keep you from making these common mistakes, especially with high stakes funding like a Paycheck Protection Program loan. You can use the forecast to track your liabilities and make the best decision on when to pay them from which account. The forecast will also help you understand the dynamics of your inventory stock and how to handle them. As the financial outlook in the economy changes, your target market may shift as well. You can use your cashflow forecast to adjust which markets you target and with which funding. You can also get a sense of the effect you are having on your targeted market as you update your forecast. A cashflow forecast sets the stage for the rest of your COVID-19 business plan. In the coming weeks, our Roadmap to Recovery webinar series will also cover setting breakeven points and reestablishing post-pandemic budgets. As you continue to prioritize your business’ growth and stability, your cashflow forecast will be a crucial tool for reevaluating your business plan.

The next step on your business’ roadmap to recovery is maximizing your Paycheck Protection Program loan forgiveness. These loans give business owners the power to maintain their company and keep their employees on the payroll, without worrying about paying the disbursement back in full.

Paycheck Protection Program

As part of the CARES Act approved by Congress on March 26, the government enacted the Paycheck Protection Program (PPP). The program consists of loans worth 2.5x a company’s monthly payroll, up to $10 million. Loans from the PPP offer 1% interest for a term of 2 years. Loans from the Paycheck Protection Program are also forgivable so long as you use the disbursement to keep all your employees on your payroll and use the remaining funds for eligible allocations. The SBA and the federal government have determined what constitutes an eligible allocation.

Approved Loan Uses and Stipulations

The loan disbursement from the PPP can be used for payroll costs, employee benefits, mortgage interest payments, rent payments, utilities and interest on other debt accrued prior to February 15, 2020. While the government has approved several uses for the PPP disbursement, in order to qualify for forgiveness, at least 75% of it must be used for payroll costs. The other 25% of the loan can be used for the other qualified expenses. Eligible payroll costs include:

• Employee compensation, up to $100,000 per employee
• Payment for parental, family, medical or sick leave
• Taxes assessed on employee compensation

Maximizing PPP Forgiveness

In order to maximize forgiveness, your business will need to diligently maintain documentation to take back to your lender after the loan period is up. You’ll most likely need to provide your lender with:

• Employment and Wage Documentation
• Receipts and Invoices
• Official Certification

The government has allowed for partial forgiveness on these loans as well. Proportion of loan forgiveness will decline as headcount of employees declines or as salaries decrease. Employers who have laid off or furloughed employees or employers who have decreased employee salaries have until June 30, 2020 to reinstate the employees to their previous employment status and salary level. The amount of forgiveness the employer is eligible for increases proportionate to the number of employees reinstated.

Tracking Strategies

Tracking the way your business allocates your Paycheck Protection Program disbursement is vital to maximizing the forgiveness of your loan. If your business was also approved for an SBA funded Economic Injury Disaster Loan (EIDL), you must allocate the funding to different expenses. Using the following tracking strategies will help you understand how to apply the funding to your business in the best way possible. Track other Approved Expenses Maintain two separate spreadsheets for tracking Paycheck Protection Program allocations. For one spreadsheet, multiply the amount of your loan disbursement by 0.25. This determines how much of your loan can be used for approved non-payroll expenses. In the second spreadsheet, keep track of the remaining 75% of the loan disbursement for payroll and employee benefit expenses. As you use the funding for approved expenses, separate the deductions by the approved category. Maintain receipts, invoices and records of each of the recorded payments in a single, easy-to-access digital file.

Add Supporting Documentation

In addition to your well-organized spreadsheet, maintain additional documentation that validates the expenses you are recording. These documents include:

• IRS payroll tax filings
• Mortgage/rent agreements
• Utility accounts in the business’ name
• Previous tax returns

Build a Cashflow Forecast

A cashflow forecast is a 13-week financial model that shows where your available cash will be going. The forecast should be updated weekly to ensure that each of your financial decisions is backed financially. The forecast will help you determine how best to distribute your disbursement, whether it’s payroll or utility payments. As you determine how to allocate your funding, your cashflow forecast will also help you decide whether to seek other outside funding, like an Economic Injury Disaster Loan distributed by the SBA. Understanding where your funding is going is vital to making sure you use it wisely and in a way that maximizes your forgiveness.