Accounting News and Notes » Atlanta/Gwinnett Bookkeeping Services

Atlanta CPA on Getting Real Life Answers from your CPA

John Dillard — Mon, 19 Jul 2010 15:30:39 +0000

Atlanta CPA on Getting Real Life Answers from your CPA

Providing Bookkeeping Services for Metro Atlanta Business Owners for Decades

Real Life Answers from your CPA should not have to be something that you have to “work for.” A CPA needs to be have both technical knowledge and to be an effective communicator. The below is a recent example of an inquiry we might receive from a client and our response:

I have adjusted my budget for 2011 to match more the real life scenario I have seen in the first part of the year. This is part of the reason for the adjustment to the budget is the changes in the economy. But also my business partners are tight on cash. I changed the emphasis of my marketing so that will generate income for my S Corporation. I have scaled back the plan for an employee, but I still consider getting one end of the year.

How will the pay below agree with the S-Corporation taxing? I would like to build up a $10K cash in the company to be able to make better use of opportunities that will not generate income directly, but in a longer run will be beneficial to my company’s success. I started paying myself a payroll too fast that drained the capital of the company, so I have learned to be most prudent in my business spending.

Below is my response:

So that I might better advise you please use the below categories for your business expenses:

Office Supplies

Cost of Goods Sold

Telephone & Utilities

Travel

Meals & Entertainment

Salaries

Salaries – Payroll Taxes

Advertising/Conferences

Fixed Assets (items over $1000 that you buy to keep in the business)

Please use the form on the recap sheet on the contact page of my web site.

Please also get to me a copy of your year to date wages/payroll stub as well as confirm to me what type of a retirement plan you set up as I had understood you were going to set up a company sponsored plan and you listed an IRA, which is a company sponsored plan.

Also please be reminded that an S Corporation does not pay income taxes and that the earnings from your S Corporation tax return will be added to your personal return at the end of the year. Please do not hesitate to call might you have any questions.

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

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Bookkeeping for Atlanta Business Owners & Entrepreneurs

John Dillard — Wed, 23 Jun 2010 15:47:26 +0000

Bookkeeping for Atlanta Business Owners & Entrepreneurs

Bookkeeping for Atlanta Small Business
Unleash the power of information by learning the ABC’s of accounting for the business and financial operations of your business. To learn the nuances of Small Business Bookkeeping http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
As your financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. To learn more visit http://www.hiscpa.com/financial-statements.html

The Below is a sample letter we might send to a client to help critique and evaluate their internal books and records:

If 2010 is not your company’s first year of operations please bring along the 2009 Balance Sheet and Profit and Loss with you.

In the Interim on your 2010 books:

Review the Opening Balance Equity account as this should either be closed into retained earnings if it is not your first year of operations or most likely a loan from the owners when they initially funded the business and set up the corporate bank account.

If the dollars for listed for $6,000 are a loan from you personally to the business, please close/offset them into the draws account as this would reduce the amount of member draws that you presently have recorded in your bookkeeping.

If the $2000 listed in your Currents Asset Section are for open credit card charges please re-title the account Credit Cards Payable.

If there are any individual items in the Computer Equipment account over $1000, move them to Fixed Assets on the Balance Sheet so that we might capitalize and depreciate them accordingly.

For the Insurance monies please label the type (i.e., Life, General, Medical, Disability etc.)

Please review the detail for the Taxes account. If they are for any personal taxes or Estimated Taxes against your personal taxes, please get to me the dates, amounts and who paid to and re-class the monies to Member Draws.

http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Award Winning Duluth/Gwinnett/Atlanta CPA Advises Atlanta Business Owners on Understanding Nuances of Cash vs. Accrual Financial Statements

John Dillard — Wed, 07 Apr 2010 20:28:59 +0000

Award Winning Duluth/Gwinnett/Atlanta CPA Advises Atlanta Business Owners on Understanding Nuances of Cash vs. Accrual Financial Statements

Using a computerized accounting package which has a balance sheet and profit and loss capability is a great start to being able to track your business transactions accurately and efficiently. Generally speaking for many small businesses QuickBooks is good system and often has much more capability than you will ever need. However this program is not a universal fit for everyone and you should take care to carefully evaluate your needs to ensure that you select a system which will work for you long term. Special consideration, for example, should be given if you need a POS/Point of Sale System, detailed inventory costing/tracking/and valuation, or if your business will require a multiple user system.

Being an expert at running your business does not make you one at the responsibility of accounting for your business. By applying our decades of experience we are well suited to guide you to track the financial and operational affairs of your business. Understanding the differences in the usability of financial statements prepared on a cash versus and accrual basis will do much to help your Atlanta Business have up to date and useful financial information. Below is a sample inquiry we might receive from a client regarding their internal financial statements/tax returns, that were prepared on a cash basis.

Hi John: We are trying to secure a mortgage loan against our building. It’s more or less approved, but the loan officer wants to clear up a few things in case he is asked by his supervisor.

Basically he is looking at our 2008 and 2009 tax returns. He said we started 2009 with negative retained earnings and ended at negative $45K. His question is “what happened”? Any help?

Below is my response:

Your tax returns are prepared on a cash basis, which means they reflect only the changes in the company’s cash balances and therefore does not reflect any open billings or accounts receivable.

To give any kind of initial answer I would have to defer to the cash based tax returns themselves. If we want to give a more meaningful answer for those years we would need to compile financial statements for the last two years on an accrual basis. To do this I would need the open Accounts Receivable and Accounts Payable at the end of the last three tax years for the already prepared cash based tax returns.

Though many business owners will spend substantive time evaluating their cash balance, this alone fails to contemplate other information available that might dramatically impact important operational and strategic issues. Consideration to long-term issues would include evaluation of the business’s current results versus its annual forecast, and a careful review of future sales and profit forecasts. It is also important to evaluate cash balances considering anticipated dates of collection of receivables, payment of ordinary debt, accounts payable, fixed asset purchases, and leases as all of these issues have substantive impact on what your future cash balances will be. The best way to ready yourself for successful evaluation of your financial statements is therefore to prepare your statements on an accrual, rather than on a cash basis.

In light of this information, you are better able to make wise decisions that take into consideration future issues and your ability to satisfactorily balance the varying ebbs and flows that affect not only your present but future ongoing operations and the very viability of your business. Failure to consider each and all of these issues will result in a perpetual array of poor cash decisions, as they are not grounded in fact. Though running a business is indeed an art, it is based upon one’s ability to perceive and properly process and evaluate the facts available that are tantamount to ones success and an accrual statement is your best bet to have the required information to compile needed useful information for Atlanta Business Owners & Entrepreneurs.

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Alpharetta/Duluth/Gwinnett CPA Advises on Tracking Your Atlanta Business Financial Affairs

John Dillard — Thu, 25 Mar 2010 17:20:03 +0000

Alpharetta/Duluth/Gwinnett CPA Advises on Tracking Your Atlanta Business Financial Affairs

A Company’s Financial statements are often misused and abused. They are often ornately presented with accountant’s opinions ranging from audits to compilations. Often we even find a statement of cash flows and financial footnotes. What do these statements tell us? Numbers and data when prettily presented often are an accountant’s representation of the financial status of an entity.

I believe that financial statements without narratives, analysis of trends, and a review of expenditures are nothing more than formal proof that the bank account has been reconciled and that everything balances. Data without thorough critique is useless. Helping a business owner keep and maintain sound internal data and financial statements should be the predominant focus of the CPA. A Certified Public Accountant can do much to guide you to the proper chart of accounts, financial statement presentation and account classification. The below is a sample excerpt that we might forward a client to assist the business owner/entrepreneur in maintaining adequate books and records:

Please make these changes to you corporate books as of 12-31-09. These entries will reflect the adjustments/amendments we made to prior returns and the updates you gave me on the fixed asset schedule.

Debit Accumulated Amortization and Credit Accumulated Depreciation for $1000 to adjust your internal books to the detailed Fixed Asset Schedule.

Re-title the Account Accumulated Depreciation to Accum/Depr/Amort.

To record the new detail of the leasehold improvements you provided, to reflect past depreciation claimed and their transfer to the LLC please debit Leasehold Improvements for $70,000 Credit Accumulated Depreciation for $30,000, and adjust your internal books to equal the Retained Earnings on the Tax Return by crediting the account for $40,000.

To record 2009 Depreciation Expense, Debit Depreciation Expense on the Profit & Loss and Credit Accumulated Depreciation on the Balance Sheet for $16,000.

http://www.hiscpa.com/forensic-accounting.html Georgia Forensic Accounting by Atlanta CPA
http://www.hiscpa.com/budgeting.html CPA Helps Reduce Unnecessary Spending: Budgeting 101 by Roswell CPA
http://www.hiscpa.com/article1.html Atlanta CPA Illustrates Difference Between Planning & Historical Accounting
http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

And this is only some of the information available on our web site. You also have at our blog a host of other varied and timely tax and business management issues you can use.

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Alpharetta/Duluth CPA Provides Bookkeeping/Accounting to Atlanta Business Owners & Entrepreneurs

John Dillard — Thu, 18 Mar 2010 15:20:03 +0000

Alpharetta/Duluth CPA Provides Bookkeeping/Accounting to Atlanta Business Owners & Entrepreneurs

A determined and insightful understanding of your Profit & Loss statement (P&L) is essential and critical. Though a balance sheet is a recap of what has happened to a business’s assets and liabilities to date, a P & L, properly resented/managed/understood is a look into the company’s short as well as its long term viability. A Profit and Loss statement essentially measures how well the business is utilizing company assets, personnel procedures and facilities in its effectiveness of serving customers while keeping a keen eye on profit maximization. By properly gathering and studying one’s operations and its corresponding P & L, one can learn much about a business which is useful for measuring rates of return, detecting both positive and negative trends, taking corrective action, and business valuation.

For all ratios, care and attention should be given to evaluate them in light of company size, maturity, business climate and industry. Though there are many general rules of thumbs for a variety of different industries, there is no substitution for wise and judicious counsel of a wise and trusted business adviser/CPA. They will help evaluate these and many other nuances which make your particular circumstances, operating overhead and unique niche.

Understudying Gross Margin: Making Pricing Decisions

Your business P & L is to carefully evaluate its gross margin. This calculation is done by subtracting the company’s cost of goods sold from sales and by dividing its result by sales. Cost of goods sold is best measured as a percentage and proper care should be exercised to ensure that the periods P & L has properly allocated all direct sales cost to cost of goods sold. Typically most all of these costs will vary proportionally to the amount of product/services sold and delivered. A proper and consistently applied cut-off of accounting data is critical to this evaluation as otherwise the data/margins are unduly skewed to start.

Pretax Margin/Net Income Taxes

What your business nets in dollars and as a percent of sales are an essential part of understanding your business. A business pre-tax margin is determined by subtracting from sales, all cost of goods sold, personnel, sales and operating expenses. Knowledge of this margin is essential as it is a leading indicator of business future assets; liabilities and equity as well as the respective income taxes it/its owners will owe/be required to pay.
Net Margin/Net Income After Taxes

A business net margin is what a business has made off of its base operations/business decisions reached during the year. It is what is earned after paying all of a business P & L charges, depreciation, interest and taxes to both the IRS and the respective states in which a business operates. To maintain a clear and adequate understanding of this in dollars, it is prudent to invest the needed time and resources to ensure that one has an adequate overview understanding of how their business is taxed. To that end, it is wise to be aware of several key components:

• Does the business keep its internal books on an accrual basis and file the tax returns on a cash basis? Are the appending timing differences carefully delineated, documented and understood? For example, business owners might inadvertently neglect to recall that receivables billed and reported in an earlier period when financials are prepared on an accrual basis will have to be reported on a subsequent years tax return when the cash based tax return is prepared.
• Understanding of the company’s effective tax rate, which is determined by dividing one’s federal and state income tax bill by the related sales for the period.
• A company’s marginal tax rate, which is the amount of tax that would be due as a percentage and dollars, on any additional profit. This is a critical component as the IRS tax system is graduated, thus requiring more tax, as a percentage to be paid on additional net income.
Interest Expense

Usually there are several hidden risks in acquiring debt that companies need to contemplate before acquiring debt/line of credit. Any of these issues either individually or collectively can cause irreparable damage to your firm’s ability to operate and continue forward. Often business owners who are flush with cash fail to make wise and judicious cash/debt decisions as they are inclined to believe the good times will last forever. Also before making any large non-recurring cash expenditure, care should be exercised to review the proposed transaction with projected cash needs as detailed in the company’s business plan.

I have witnessed all too often companies spending all of the money they will soon critically need, simply for the lack of proper planning and advisement. An owner will also want to carefully contemplate a proposed line of credit/debt to be sensitive to its flexibility to meet an ever-changing business environment. Attention should be paid to ensuring the debt being requested is adequate as it is always better to have too much credit than too little. Also, the debt provisions should be carefully scrutinized to ensure that all provisions, repayment scenarios, and interest rate calculation and fluctuations are all well understood. Often banks and lending institutions will remove/negotiate several debt provisions in an effort to earn your business.

Contact HIS CPA PC (A Christian CPA Firm) today.

Serving Lawrenceville/Snellville/Norcross/Roswell as an Award Winning CPA for Decades
http://www.hiscpa.com/article3.html Gwinnett/Duluth CPA Teaches Personnel Keys to Managing Business Growth
http://www.hiscpa.com/article6.html Alpharetta/Roswell CPA Teaches the Tax Effects of Entity Choice
http://www.hiscpa.com/marketing-efforts.html Norcross/Sandy Springs CPA on Tracking Marketing Statistics for Your Georgia Business

John Dillard, CPA of His CPA, PC (An Alpharetta CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/ To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304

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Duluth GA/Johns Creek/Suwanee CPA Advises Atlanta Business Owners/Entrepreneurs on Bookkeeping & Financial Statement Issues

John Dillard — Wed, 24 Feb 2010 13:03:13 +0000

Duluth GA/Johns Creek/Suwanee CPA Advises Atlanta Business Owners/Entrepreneurs on Bookkeeping & Financial Statement Issues

Financial statements are often misused and abused. They are often ornately presented with accountant’s opinions ranging from audits to compilations. Often we even find a statement of cash flows and financial footnotes. I believe that financial statements without narratives, analysis of trends, and a review of expenditures are nothing more than formal proof that the bank account has been reconciled and that everything balances. Data without thorough critique is useless.

What do these statements tell us? Numbers and data when prettily presented often are an accountant’s representation of the financial status of an entity. Below is a sample narrative we might send a business owner to help them ensure that their bookkeeping and accounting is both correct and current:

Got your data for your returns and had the below critiques to your internal data:

-Please move the monies in Equipment and Other Depreciable Assets to the Fixed Assets Account.

Please as of 12-31-09 post the below Journal Entries:

-Please debit Depreciation Expense on the Profit and Loss and Credit Accumulated Depreciation for $5000 to record this year’s Depreciation

-It appears that $10,000 of the monies in the Shareholder Distributions account is for the 2008 tax year. If this is so, please Debit Retained Earnings and Credit Shareholder Distributions for $10,000. After you have done this the monies remaining in Shareholder Distributions should be for this year only and the Retained Earnings account should be $2000.

Please be reminded that tax law requires you to take reasonable compensation, in the form of salary, for your services to the corporation. Please forward to me copies of all W-2’s and the W-3 the company issued for 2009.

When you get the above ready please get to me the Standard Balance Sheet and Profit and Loss and I will finish the return ASAP.

Utilizing a payroll service will do much to make this administratively burdensome process more seamless than if you strive to go it on your own. To learn more visit http://www.hiscpa.com/payroll.html

Knowing what is a legal tax deduction and the documentation thereof is essential to sound business management. To see how you can be ready http://www.hiscpa.com/business-expenses.html

Ensure that your workers are properly classified predominantly to ensure that there are no workers, who are truly employees, that you are in error classifying as employees, visit http://www.hiscpa.com/independent-contratctor.html

A Christian CPA Firm: Never Underestimate the Long Term Benefits

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

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Award Winning Duluth/Lawrenceville/Norcross CPA Provides Bookkeeping Advice to Metro Atlanta Business Owners

John Dillard — Mon, 22 Feb 2010 16:59:03 +0000

Award Winning Duluth/Lawrenceville/Norcross CPA Provides Bookkeeping Advice to Metro Atlanta Business Owners

Below is a sample inquiry we might receive from a taxpayer who is looking for financial guidance and support:

Would like to discuss your assistance with monthly bookkeeping as well as helping us stay on schedule when taxes are due, to whom, how much this time, etc. We’ve been having trouble keeping up with all of this and it seems as soon as we have something figured out they change it and we owe more frequently or something along those lines, which causes us to incur penalties if we don’t catch or understand the notice.

We use QuickBooks Premier, and our current accountant does not. They’ve been taking our info and putting it into their books, then sending us a report. They have not been willing to help us keep our QuickBooks system current, so it is definitely out of date (balances on some accounts are wrong, etc, as they have not been reconciled monthly). I’d REALLY like to have our books (in our own QuickBooks) current and I feel it would make the system more useful to us and make me feel more like I have a better understanding of what’s going on around here . In Him!

Below is my response:

-We both work together to ensure that your books and records reflect all of the ongoing business results and operations and that all adjustments are properly reflected and recorded on your internal books and records.

-I recommend that all business owners utilize the services of payroll service as the administrative duties and responsibilities to successfully process payroll to be burdensome. For decades I have known this to be a prudent and wise choice for Atlanta taxpayers.

Utilizing a payroll service will do much to make this administratively burdensome process more seamless than if you strive to go it on your own. To learn more visit http://www.hiscpa.com/payroll.html

Knowing what is a legal tax deduction and the documentation thereof is essential to sound business management. To see how you can be ready http://www.hiscpa.com/business-expenses.html

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

To learn more about addressing IRS Tax Issues and Back Tax Returns visit http://www.hiscpa.com/working-with-the-irs.html

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Atlanta CPA Advises Atlanta Business Owners on Bookkeeping Issues for Small Business Owners

John Dillard — Tue, 15 Dec 2009 14:53:41 +0000

Atlanta CPA Advises Atlanta Business Owners on Bookkeeping Issues for Small Business Owners

All successful business owners either initially or over time become extremely proficient in their field of choice for it is by this growth of knowledge and wisdom which affords them the insight to make prudent decisions. Each and every hour of a business owner’s day, there are a series of insignificant and important thoughts and directions that directly impact the profitability of a business. Continually you are faced with making a positive impact towards bringing your business closer or further away from your goal. A company’s financial statement is the measuring stick by which you are able to gauge a company’s progress along the business continuum and are able to accurately measure the distance between where you are and where you want to be. Below is a sample letter I might use to help a business owner correct and address their internal financial/bookkeeping to ensure that adequate books and records are maintained:

For your Internal Books and so that I might evaluate your withholding vs. your year end 2009 tax liability.

-Please forward to me your year to date gross wages from all companies.

-Please forward to me the financial statements for all of your business interest where you are the active employee/owner/manager.

-Evaluate if you can set up departmental reporting on QuickBooks.

-I have attached the tentative year end depreciation schedules so that you can use when preparing the year-end statements.

-Please adjust Retained Earnings at year end to $10,000, which agrees to the prior tax return.

-Re-class the loans from you personally as a current liability called Due to Shareholder.

-In making copies of your incorporation papers for you new business venture I noted I suggest that:

-You treat all loans, if you can, from you personally, so that we might be able to deduct any tax loss on your Personal Return. Tax law allows losses only to be deducted to extent you have positive basis/loans to the company.

-Several of the pages of your corporate book/incorporation papers are yet to be completed. I suggest you work with your incorporator to ensure that these are correctly done.

As discussed we will address all of the personal tax issues, after we fix and amend your corporate returns.

Bookkeeping for Your Atlanta Small Business
Learn the ABC’s of accounting for the business and financial operations of your business. Visit http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
Financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. See http://www.hiscpa.com/financial-statements.html

Monitoring & Preparing Your Financial For Your Atlanta Business
Month-end control procedures are critical, as any variance to these will negatively impact the reliability of your internal financial. These are just a few of the tips we give clients each and every day. http://www.hiscpa.com/monthend.html

John Dillard is an Christian Speaker/Author and an Atlanta CPA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

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Gwinnett CPA Advises on Startup Issues Facing New Business Owners: What You Don’t Know Can Hurt You

John Dillard — Fri, 04 Dec 2009 13:13:21 +0000

Gwinnett CPA Advises on Startup Issues Facing New Business Owners: What You Don’t Know Can Hurt You

We frequently received and inquiry of a new business owner exploring their options and how to best address their issues and concerns. To assist in guiding other new entrepreneurs I have included my answers after each corresponding question:

What is the least I need to contract work to others (paper agreement)? One of the most maligned and misunderstood sections of tax law centers around proper classification of a worker as an employee or an independent contractor. The fact that you choose to pay someone as an independent contractor, when you treat them as an employee, will not preclude you from payroll tax or general liability issues. A careful review of the tax law, established guidelines, as well as a fair and just review of your own facts and circumstances will more aptly enable you to follow the rules to the letter of the law and also its spirit. This issues of how you are legally required to pay your workers predominantly centers around how you treat your workers, while centering around the issues of control, risk of loss and behavioral issues. In layman’s terms the more you tell a worker how to do a job, the terms and the conditions the more likely the worker is an employee.

What is the overview to become an LLC? Limited Liability Companies (LLCs), Limited Liability Partnerships (LLPs) and General Partnerships are all taxed in the same manner. Choosing one of these types as a business entity would be a poor selection for a business such as a print shop, as they will all result in higher taxes with no additional advantages for the printer. We have developed a mindset that if you do not need to be another entity type then you need to be an S Corporation. For example, generally speaking a printer that was an LLC, LLP, or Partnership will pay higher taxes with no additional advantages as opposed to being an S Corporation. A Limited Partnership is also an option that could be explored when certain partners want to limit their liability and exposure. Below are some of the reasons you might want select an LLC or LLP as your entity choice:

If you were a lawyer or physician’s practice then all of the partners’ personal assets are at risk if one partner does something wrong, while if an LLC or an LLP, only the offending partners personal assets would be at risk. This is because of the professional service statutes for these types of professionals, but these rules do not relate to our printer.

If you were a real estate developer and you had a piece of land that had dramatically increased in value, you can transfer that property to an LLC, LLP, or Partnership without having to pay any capital gains tax. Also with these entity types, you can take shareholder distributions that are not based upon ownership, whereas in an S or a C Corporation they have to be. Again, this does not relate to our printer client.

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

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Atlanta CPA on Getting Your New Business Started: What You Don’t Know Can Hurt You

John Dillard — Fri, 04 Dec 2009 13:11:25 +0000

Atlanta CPA on Getting Your New Business Started: What You Don’t Know Can Hurt You

I’m trying to find out how to become a designer/sole proprietor. Here are my questions:

Is it necessary to register this type of business with the government? If so, what are the fees, where do I go, and what do I need? As a business grows, eventually the need arises to hire and pay employees. Unincorporated sole proprietors may be able get by without employees by filing quarterly estimated taxes and paying the self employment tax at the end of the year with their form 1040. With an incorporated business entity, or when hiring other workers besides the owner, there are specific requirements for tax withholding and information reporting that must be filed. To discover some of the initial filing requirements and fees visit http://www.hiscpa.com/employee-checklist.htm

Is it time consuming and expensive to become an employer? Am I able to use my regular 1040 tax return to file taxes for this? Payroll tax returns and their attendant issues are the bane of many business owners both big and small. Tax law at federal, state and local levels often leaves an entrepreneur feeling both dazed and confused. There is no greater area of need for tax simplification than in the area of payroll tax issues. Payroll tax returns and payments are due to the varying regulatory agencies at differing times, unique and special forms and often what appears to be conflicting reporting styles and forms. To address the many varied administrative issues of payroll I recommend all of my clients utilize the services of a Payroll Service.

Contact HIS CPA PC (A Christian Atlanta CPA Firm) today.

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