CPA los angeles Archives | Page 11 of 11

Strategic planning tips when buying a company

So you found the perfect company to buy! That’s great, but are you going to sleep at night? Here are a few strategic planning tips you should consider when buying a company:

Do your due diligence. Investigate the trends of Accounts Receivables, Cash, Accounts Payables, Officer Loans, Sales, and Cost of Goods Sold over five years. The trends will tell you a lot about the past, present, and possibly the future of a company. If these trends look bad, ask the hard questions, and demand support for their responses.
Create a Strategic Plan. Most new owners do not know what this means. The main point is to visualize where your company is in relation to its industry and where you want it to be. The strategic plan will include your internal strengths and weakness. Be honest and don’t look at the business through rose-colored glasses. An honest strategic plan before you buy the business can alert you of business aspects that you overlooked.
Plan for technology. Technology can help you monitor your strategic plan. Along with your budgeting plan, strategic plans have benchmarks that a company wants to meet. Use technology as a “thermometer” of your business health. A few troubling metrics can signal a bigger problem down the road. Also, how will social networking and search engine optomization help you in achieving your goals?
Cash is king. Always capitalize your company adequately and properly. Sometimes the best capitalized companies are those who squander their resources, while the poorest companies may have the best ideas but no capital to get there. Again, your strategic plan along with your maketing and budget plans should give you an honest idea of what it will cost to finance your company. Many feel that once you arrived at that number, multiply it by three because your sales will usually lag behind your estimates for a lot longer than you think.
Consult experts: There are many forms of strategic planning. If you have a good grasp of you industry, you can solicit the help of a strategist and business plan professional to help you organize the plan. Never venture out in a new direction without professional help. A couple of hours of consulting with a CPA or an attorney can save the business down the line.

Personal Accounting: What to do when you are financially in over your head?

So you just added up your credit card statements, and you got that sinking feeling. What will I do now?

Our society is run on consumerism. We have seen in the last year, that without it, the US is sunk. But what if you spend more than you make? What can you do in personal accounting habits? Here are a few tips:

Change credit cards. If you still have good credit and receive zero interest credit card teasers in the mail, it could be a good thing. Try rolling over your debt onto a zero interest card, temporarily. This personal accounting move can give you a little time in paying off the debt before accruing more interest. However, there is a danger. If you do not change your spending patterns, you will be worse off than before. Use the new card in your personal accounting strategy to eliminate your debt, not incur more. So, this means that you may have to cut up all the other cards until you arrive at a zero debt level.
Pay cash and stop using credit. Pay cash for as many things as you can without running your bank balance into your overdraft account. This personal accounting strategy can really teach you how much you spend each month, and on what items. There are few things more sobering than seeing your cash disappears out of your wallet.
Try to cook most of your meals. Yes, yes I know. You can’t cook. But, the internet is full of quick recipes that can make you a real chef Boyardee in no time. If you must go out, go to restaurant.com and get discount coupons, or buy an Entertainment Book. This way you could cut your dining cost in half, and still enjoy yourself. In this economy, even 5 star restaurants like Lawry’s the Prime Rib are offering deals. Look for them.
Don’t borrow money from friends and family. They don’t need your problems, and it may be the last time they talk to you for a while. This of course may not apply in catastrophic circumstances where families pitch in to help each other.
Make a personal accounting cash flow statement. Schedule out your expenses each month, and consider where you can cut. Be honest with yourself. You want to be debt-free before the holidays, in which at that time you can spend responsibly on gifts.

Cash has been and always will be king.

So what have we learned about the financial demise of Nicolas Cage, and his entertainment accountant?

You hear the story all too often, High profile entertainer goes broke. Or Entertainer blames entertainment accountant for bad tax advice. The first question the public asks is how? Doesn’t this entertainer earn $20 million a movie? That is more than ten people make in a lifetime. What did his entertainment accountant do with it? Steal it? Invest it in speculative investments?
I have worked as an entertainment accountant, aka business manager for entertainers for over twenty-five years. The public doesn’t see the view of the entertainer that we do. In fact, the persons usually in the inner circle are the entertainment accountant, attorney, agent, and publicist. Remember, the artist’s image is everything, and if that image conflicts with reality, something is bound to surface at times. Look at Charlie Sheen, or Tiger Woods. Their personal inequities surfaced because it is extremely hard to cover. The same is for the finances. A good entertainment accountant knows when a client is spending beyond their means. I have seen entertainers’ buys real estate all over the world, planes, boats, and rare art. As an entertainment accountant, my position is sound the alarm when a client nears a crucial financial point. That alarm gets louder as their situation gets more desperate.
So, did Nicolas Cage’s entertainment accountant sound the alarm? Did the entertainment accountant contribute to such a travesty? The court records may have told us the answers to these questions.
So what should you learn from this? Well, many of you may not be celebrities, so you wouldn’t hire an entertainment accountant. But, you can act as your own accountant by looking at your financial situation objectively. That is what entertainment accountants do. We don’t look at the things that a client wants, but at the relationship between what the client earns and spends. We also look at the future, and how they will survive when they aren’t hot anymore.
So how to you start?

Act like your own entertainment accountant. Look at your credit cards first. Are you paying them off each month? If not, cut them up live off cash at least for two months. You will see what you really need to survive in your budget.
Are you paying your taxes concurrently? One of the biggest worries of entertainment accountants, is to come to the end of the quarter, or year and not have any funds to pay taxes because the client has spent it. If you are self-employed, think about paying your taxes weekly. You can do this by opening a separate bank account.
Are you using your house as a piggy bank? As an entertainment accountant, the first thing I look at when a client needs to borrow money from their house is why, and what return should we expect. Don’t borrow to spend lavishly. Have a plan on paying it back.

So, if you cannot afford an entertainment accountant, or if you are even not an entertainer, be smart.

Health Care Act Tax Credit: The Problems of Misclassifying an Employee as an Indepedent Contractor

Health Care Act Tax Credit

Business Accountant Los Angeles

Business Accountants, we just want to be loved

So what is a business accountant anyway?

Like the word LOVE, the meaning of business accountant may change depending on one’s level of commitment. Love could refer to a relationship that is casual, sexual, or even metaphysical. Such is the case with the business accountant. No, I don’t mean that you should have a steamy relationship with your business accountant; that would give a whole new meaning to the term of double-entry accounting. What I am getting at is how much to you utilize your business accountant to further business or financial life.

Many would be surprised to learn that business accountants, especially the business management types, act as the “orchestra conductors” of the business world. When lawyers, insurance brokers, real estate agents, or pension consultants need information, they think of calling the client’s business accountant. That is because we have our finger on the financial pulse of clients and know where to find answers. We are not saying that the average business accountant has all the legal, insurance or real estate knowledge necessary to answer your every question. But, we are saying is that a good business accountant serves as a compass to direct you to other professionals who can navigate among a company or client’s historical information.

So many business transactions involve the changing of money. Who else knows records? The ever–increasing speed and capacity of technology helps the business accountant to sift through information and report it with faster speed than most other players.

But how else could you use your business accountant? Many businesses restrict their interaction to taxes or financial statements. We perform those functions, but they deal with historical data. Better yet, we as business accountants, act as strategic planners. We can use your historical information to plan and propose a plan of action for growing your business. The starting point of predicting your financial potential is to have your business accountant lay out your financial history and adapt it to changing market conditions. Your business accountant can then work with your marketing persons, productions staff, and sales people to carve a future where your business can break new ground. This process can transform your business into a leader in new technology, services, or products.

Does your business stand out from the competition? Does your business accountant provide you with the necessary information, processes, and tools to set your business apart and allow it to make money? Is your business accountant committed to your company by using creative ways to reinvent your business?

Cost of CFO and Bookkeeping

Many business owners who retain such individuals fail to look at all the components. To compute the real cost of a CFO or bookkeeper, a business owner must add their salaries, payroll taxes, worker’s compensation charges, sick leave, vacation leave, training, parking, to name the basics. Then, you may send your CFO or bookkeeper to seminars or outside training. That’s a double-whammy.

But now comes a cost of an internal CFO or bookkeeper that is new to smaller owners, health insurance. Under the new laws, most smaller businesses will be required to provide health insurance. Even with the credits, probably not available to a company for a CFO, the cost will take a chunk out of the bottom line.

Now some businesses need an internal controller, a CFO, or a bookkeeper. They function quickly with inventory shipments and cost analysis. But many companies don’t need both a CFO and bookkeeper because of the advancement of technology and the web.

Many business owners are not familiar with paperless and remote accounting technology. As a firm that provides outside CFO and bookkeeper services, we do. We fill that gap for the business owner, usually at a fraction of the cost of a CFO and bookkeeper.

How do we do it? Our bookkeepers are trained like the staff accountants. They provide the small business owner with the skill set to manage the bookkeeping function while being guided by our accountants who act as outside CFOs. A client does not need the constant skills of a CFO and bookkeeper if they have other employees, like an office manager that fills the day to day functions. As outside CFOs and bookkeepers, we provide a specific skill set that targets the needs of the business owner from bookkeeping to accounting, and tax services to strategic planning. As outside CFOs and bookkeepers, we help manage your business. Our business connections provide a whole host of referrals for such things as insurance, financial planners, pension consultants, etc. Our skill set provide the business owner with much more than an accounting function like a CFO or bookkeeper, we provide a whole business startup and operation specialty.

But we don’t stop there. Within our function of acting as an outside CFO or bookkeeper, we help owners increase their top line by strategic planning. Unlike a CFO or bookkeepers who restrict themselves to historical information, we look to the horizon and strategically help the business owner grow their business. Yes, we provide the usual function of a CFO or bookkeeper in this manner, but how does that help a business owner grow his or her business?

The time has come of age for the external CFO and bookkeeping staff for many companies. The cost of keeping such a staff in house does not make sense for the on-hands business owner who is trying to get to the next level.