CPA’s and Realtors: A Match Made in Heaven

As a CPA, I work with all kinds of business clients helping with both tax preparation, tax planning and identifying how to maximize tax benefits. Over the years, we have also had great success in working with real estate agents and their business planning.

A solid business plan will include a strategy around taxes keeping you in compliance and in good financial health. A CPA can demystify the current rules and guidelines for state and federal taxes. When you are working in a commission only industry and not enjoying an employer handling details around tax withholding it’s a great benefit to have someone provide insight about the best way to make sure you don’t get caught by surprise. If you are in business for yourself, you are an independent contractor and have the ability to claim business deductions on your tax return but this will involve planning and the tracking of allowable expenses.

We also work with our clients to analyze their overall financial picture. A financial review will offer insight to monthly expenses and opportunities for business deductions. We have helped figure out reserve accounts and know how to find ways to save on future obligations. There are a myriad of business discounts afforded to you as a realtor from car insurance, to office tools, technology and marketing services. We can offer decades of experience in helping you develop a solid financial business plan. It’s true that taking the time to write a plan and then following it is not always the most exciting part of owning your own business, however it is the critical component to your business that every successful realtor will tell you to include in your business.

Our firm has helped to navigate and align all the components of planning your business structure (sole proprietorship, LLC, etc.) to your internal processes of budgeting and planning (startup costs, operational costs, stabilizing your personal income and more). CPA’s can help you plan for cash flow bringing stability and growth to your business. Invite your CPA to help you develop your real estate business plan. You will soon realize it’s one of the most important and affordable investments you can make.

2016 Finance Planning – 3 Challenges to Local Fire and Water Districts

Just because you cannot control Mother Nature or bureaucratic red tape doesn’t mean you cannot control your fiscal planning. A CPA just might be the secret to helping you manage through the current conditions in the state of California.

Challenge #1 The Drought

It goes without saying, California needs water! Thankfully this year we are seeing storm systems pass through but we are a long way from being out of a drought. Through my audit work this year, I saw the tough realities of the drought, cost of water, reduced revenues, crops that cannot be planted because there is not enough water. These are all actual factors that must be worked through in order to successfully financially manage local services. Our firm works closely with its small district clients all year long. We work together to forecast best and worst case, looking at all the financial angles for the district to create a workable and successful plan.

Challenge #2 Benefits and Pensions

In 1999 Governor Davis was informed by CalPERS that increases in income would not pose any problems for the long term when it came to retirement, pensions and benefits. Well, looking in the rear view mirror, we know that revenue has not kept up and now tough discussions have become the norm across the state.

Many special districts have had to take on long term debt and issue bonds to cover current benefits. Adding pressure to the situation is the strength of the labor unions and their need to continue benefits at the same level for their members. All of this ends up in a very serious discussion about government being able to fund nothing other than benefits and no longer be able to fund basic public infrastructure like parks and potholes.

The media often exacerbates the situation by accusing government of being secret organizations, behaving in a non-transparent manner and behaving in an unregulated manner.

And sometimes it’s true. Some cities are paying outrageous salaries but what is more often the case is that for every city out of bounds on salary, there is a dozen small communities trying to make things work with volunteer elected officials working for the public good with no health or pension benefits. Adding complexity to the matter is sometimes state oversight is involved adding costs to the bottom line.

Challenge #3 LAFCo (Local Agency Formation Commission)

The broad goals of the Commission’s directive in 1963 to ensure the orderly formation of local governmental agencies and consolidate services was a great goal at the time but the recent work to further consolidate has the potential to ruin a true democratic process making it difficult for people to get involved through service by getting involved in boards and commissions. There are looming discussions around fire departments and other first responder services like ambulances. The consolidations and planning obviously impact the finances of special districts.

There is HOPE!

A beginning point to solve all of these challenges is financial reporting. Financial reporting should not be an annual event, it should occur all year long. There should be quarterly reviews. Boards should have regular access to accurate financial statements that include a discussion about the current rates and service costs, cash on hand in the bank, pending costs of benefits and infrastructure upgrades. Many of our counties have overwhelming challenges in front of them but the first step to solving them is by confronting the true financial picture. It boils down to the simple principles of planning and not being afraid to tackle the issues.

CPA’s are a great resource to give insight to the true financial picture and offer ideas and fresh perspectives.

 

Don’t Let Your Accountant Get Lonely

Hopefully you hired a CPA whose business arrangement with you offers you the opportunity to call whenever you want. Your CPA should not be someone you see once a year as you drop of a box of receipts and copies of your ledger sheets. Don’t let him get lonely! The two of you should be checking in throughout the year, making sure that you know everything about your business fiscal health. You should be able to see monthly financials helping you to forecast revenue and your accountant will help you make sure you are making full use of any tax advantages. Your accountant can help you see trends in your business.

Bob Johnson and his team is always available for any kind of inquiry. Many clients also take advantage of Bob’s willingness to train you and your staff to demystify accounting terms and actually reveal new ways to make your company run better. This is all covered in your existing fees. The firm is designed around service and is affordable.

Look at what one of Bob’s clients has to say:

Before meeting Bob we were involved with a few different CPA firms, so I speak from experience when I say he is more than just a CPA. Other companies were more interested in keeping the secrets to the “magic” of the accounting world a secret to the mere mortals and charge based on 15 minute increments! Bobs philosophy is to “Teach” his clients as much as they want to learn about the numbers and where they come from. As a business owner I didn’t have time to go to school, but needed to learn to keep my business alive.
– William Buxton, Jr., Buxton Transportation

Accounting is Small Business Secret to Success

Many people consider accounting to be simply mathematical in nature, black and white, a profit and loss conversation. And they consider accountants to be in the same genre, dull, cold, dull, uninteresting. However, accounting is much more about analytics, about predicting future outcomes for your business.  It looks at all the financial pieces of a business and works with income, expenses, commissions, and liabilities to create a financial picture. An accountant uses this data to create strategies to improve profitability, manage expenses and estimate cash flow. And if you find the right accountant, you will find a partner for your business who can help you predict outcomes for your company’s fiscal health. You might even find someone with a sense of humor AND who can demystify taxes, payroll, and equipment amortization. Who wouldn’t want that in a business partner? In any partner?

Selecting an accountant is like selecting a partner for life. Fine someone who is patient, knowledgeable, dependable, and who is a good listener.

Payroll Tax Solutions for Small Businesses

As a small business owner it is important to understand the in’s and out’s of payroll taxes. Unfortunately, since small businesses seem to be a significant source of uncollected taxes, the IRS targets small business owners for payroll tax compliance.

There are simple steps you can take as a business owner to avoid IRS payroll tax audits. A CPA can help train your payroll staff to avoid common pitfalls like:

• not filing payroll information in a timely manner
• borrowing against withheld payroll taxes
• failure to pay

Not only can the business be at risk but the IRS can also come after business owners for payroll tax evasion and the penalties can be very stiff. Penalties can increase tax liability by over 33% plus interest along with seizing company assets.

It’s easy to protect the financial health of your company with the right expert CPA advice and staff training.