Lisa, Here Are Your Articles for Wednesday, October 03, 2018
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What Your Accountant Can Be Doing for You

 

Evaluating your company's fiscal health is essential to keep you attuned to the state of your business and streamline tax preparation. Accountants assist you in managing your business finances, creating a realistic plan with a budget, recording your transactions correctly and reviewing your results regularly — in short, keeping good records. Make sure you're taking full advantage of their expertise.

Accountants can help you avoid the year-end tax rush by being involved in helping you gather all of the necessary accounting documents and data throughout the year. Hiring a professional at an early stage will mean you get the benefit of his or her financial knowledge and advice right from the start.

An accountant can make life easier for you at each step by:

  • Consulting as you move from a business plan to company formation, and from a loan application to a tax audit.
  • Helping you develop an organized, effective cash flow model that allows you to adjust your operations in ways to help you survive shortfalls, as well as improve receivables and manage payables. By cluing you in to knowing your breakeven point, which is crucial to determining your business's pricing structure and profitability, you'll have a strong estimate of how many products or hours of service you'll have to sell to cover your costs.
  • Analyzing a number of metrics to calculate whether your business is making a profit or suffering a loss, including such in-depth measurements as the ratio of salaries and other employee payments to total revenue. An accountant can help by managing your payroll and producing graphs so you can see how the ratio changes over time.
  • Completing and filing the required legal and compliance documents for your business.
  • Handling your payroll and ensuring that all employees' tax codes and payments are recorded correctly.
  • Tipping you off to potentially irreversible financial missteps and brand-new tax savings opportunities that you might not know exist, such as which tax deductions you should claim and if there are any new tax regulations to take advantage of in order to maximize write-offs.
  • Identifying such tax opportunities as the R&D credit, accelerated depreciation facilities, training tax credits, applicable manufacturing and sales tax exemptions, or a panoply of state and local tax incentives, including tax forgiveness and outright grants or refundable credits, which can be applied for as part of the tax return process.
  • Helping weigh the financial ramifications of certain decisions, such as whether to hire an independent contractor or a full-time employee, buy or rent an office space, and rent or lease a company car. 
  • Estimating your company's fair market value in excess of your tangible assets. An accountant should start by examining your financial plan and then executing a discounted cash flow analysis, a common but effective valuation method. 

Accountants can use their knowledge of tax laws and legislation to suggest ways you can free up cash flow, save money and raise capital for expansion. They're handy folks to have around!

 

 
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McCullough Rossi & Company, Ltd.
McCullough Rossi & Company, Ltd.
Trusted Accountants. Confident Advisors.
2300 Barrington Road, Suite 260
Hoffman Estates, IL 60169-2034
Office: (847) 843-3919
info@mrcltd.com
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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