An Income Statement is one of three major financial reports that every business should create or run monthly to get an accurate picture of how the business is performing. (The other two statements are the Balance Sheet and the Cash Flow statement.) The components of the Income Statement are different from those found on the
THE MAIN PARTS OF A BASIC INCOME STATEMENT Read More »
Every business faces red flags, no matter its size or profitability status; small businesses are no exception. Knowing and identifying red flags that threaten your business is crucial. Ignoring red flags is like walking onto a train track and ignoring an oncoming train. Facing away from the train or ignoring it does not lessen the
FOUR SMALL BUSINESS ACCOUNTING RED FLAGS Read More »
A rule that is typically applied to personal finances but can also be adopted by businesses is the 50/30/20 Rule. Managing cash flow – in or out – is known to be a significant setback for many businesses. Not having a good handle on finances can cripple any company, regardless of the amount of business
A SMART WAY TO MANAGE YOUR CASH FLOW: 50/30/20 RULE Read More »
SMART goals are not just for personal development; they also apply to businesses. Without goals, a business is simply feeling its way around and hoping it will succeed; a terrible way to grow any company. SMART goals provide the boundaries necessary to tell a business what it can and cannot do. The acronym SMART stands
THE SMALL BUSINESS S.M.A.R.T GOALS Read More »
You may have heard the term EBITDA tossed around in business-related conversations and wondered what it is and if you should be concerned about it when it comes to your business. EBITDA stands for Earnings Before Interest, Taxes, Depreciation (and) Amortization. It is a way of analyzing a business’s income statement and is often used
SHOULD I BE LOOKING AT MY EBITDA? Read More »
An essential accounting activity that Small Businesses should never overlook is cash reconciliation, also known as bank reconciliation. And yet, I have repeatably seen businesses skipping the monthly bank reconciliation. This is a process where the bank statement for a given month is compared to the accounting system’s transactions for the same month. Ordinarily, the
ARE CASH RECONCILIATIONS REALLY NECESSARY? Read More »
One important year-end process that should not be overlooked is reviewing the Accounts Receivable balances for accuracy and collectability. If your business uses the cash accounting method, this process will not apply to you. However, if your business used the accrual accounting method you want to make sure that before you run the final year-end
WHAT TO DO WITH UNCOLLECTABLE RECEIVABLES AT YEAR-END Read More »
This is a shorter than normal blog however the topic is one that needs to be understood by all business owners, particularly small business owners who are new in the field or still growing their business. I cannot count the number of times I have heard people state “based on my cash balance, my business
DOES CASH BALANCE = PROFIT? Read More »
When you hear the word “taxes,” other than a CPA, what else comes to mind? For many people tax returns is the first thing they think of. While that is a huge part of tax accountants’ work, there are other areas within the tax world that are of equal importance. Three of these areas are
TAXES: PLANNING, PREPARING, FILING, & CONSULTING Read More »
A question that I often hear business owners ponder is why their CPAs do not always frown when the bottom line at the end of the year shows a net loss versus a new profit. No one wants to see negative totals his or her financial books as they are a sign that the business
NET PROFITS & NET LOSSES Read More »
The decision to lease versus buy a vehicle is not a “one size fits all” decision. The answer depends on many factors. For example, the vehicle type, vehicle price tag, tax savings, availability of cash, the need and usage of the vehicle, and how long the business plans on keeping the asset. If you are not
BUSINESS VEHICLE: LEASING VS PURCHASING Read More »
Business meals are deductible business expenses, or are they? Business meals fall into three categories for tax purposes: non-deductible, 50% deductible, and 100%. Knowing which category your meal expenses fall into is essential, so let’s look at which type of meal expenses fall into each category. Non-Deductible Meal Expenses Entertaining of clients: Back in 2017,
MEALS, MEALS, & MEALS! Read More »
If your business has employees, your business needs payroll services. There are many payroll processing providers in the market, and though it may seem like they are all alike, they are not. So, knowing which company to hire is essential. Wait, don’t accountants run payroll? You are correct; accountants run payroll. They get the hours,
WHAT TO LOOK FOR IN A PAYROLL PROCESSING PROVIDER Read More »
The Work opportunity tax credit is a business tax credit that, in some ways, is different from other credits, and therefore, I thought it would be helpful to discuss it. As I always say, tax credits are every business owner’s friend when it comes to saving money by reducing income taxes owed. Another crucial point
TAX CREDIT: THE WORK OPPURTUNITY TAX CREDIT Read More »
I cannot count the number of times I have been in a room where this question is raised. It is an important question to raise, and the response depends on who you ask. My answer is always “It depends.” This is because the response changes depending on how one defines the two professions – financial
IS MY FINANCIAL ANALYST MY ACCOUNTANT? Read More »
Recently, I got a call from a fellow small business owner who was trying to figure out the best way to quantify her business’s value. Knowing the worth of one’s business is essential as it will come up if you are applying for a business loan, refinancing an existing loan, or applying for a grant;
DETERMINING YOUR BUSINESS’S EQUITY Read More »
A question I often get from clients is, “Do I have to pay estimated taxes?” The answer for most clients who ask this question is, “YES!” Estimated taxes are required for various tax filers, including most small-owned businesses. What are estimated taxes? When are they due? How do I compute estimated taxes owed? What happens
THE WORLD OF ESTIMATED TAXES Read More »
I have often heard business management teams debating if their small businesses can run efficiently in the long run without a fractional CPA. This might work in the short term, but it could cost a business money and time in the long term. Here are seven reasons why running a successful business requires the services
SEVEN REASONS YOUR BUSINESS NEEDS A CPA Read More »
Tax credits are every business owner’s friend when it comes to saving money by reducing income taxes owed. Tax credits are not tax deductions; there is a difference. Tax deductions reduce taxable income, while tax credits reduce income taxes owed. Therefore, one area every business owner should peek into is that of business tax credits.
TAX CREDIT: PAID FAMILY MEDICAL LEAVE TAX CREDIT Read More »
Tax credits are every business owner’s friend when it comes to saving money by reducing income taxes owed. Tax credits are not tax deductions; there is a difference. Tax deductions reduce taxable income, while tax credits reduce income taxes owed. Therefore, one area every business owner should peek into is that of business tax credits.
TAX CREDIT: NEW MARKET TAX CREDIT Read More »
Two common Accounting terms you may have heard over and over are taxes and audits. Most people are familiar with taxes – income taxes, payroll taxes, sales taxes, the list goes on and on. Every business files at least one type of tax annually, usually income taxes. How about audits? A fraction of small businesses
REVIEWS, COMPILATIONS, AND FINANCIAL STATEMENT COMPILATIONS: WHAT IS WHAT? Read More »
Tax credits are every business owner’s best friend when it comes to saving money and enjoying the business’s income profits. Tax credits are not tax deductions; there is a difference. Tax deductions reduce taxable income, while tax credits reduce income taxes owed. Therefore, one area every business owner should peek into is that of business
TAX CREDIT: RETIREMENT PLAN STARTUP COSTS Read More »
The balance sheet and income statement are two of three primary financial statements every business should run and review monthly. One question I often get asked by small business owners is, “What is the difference between a balance and an income statement?” Understanding the difference between the reports is vital as they show differing information
DIFFERENCES BETWEEN THE BALANCE SHEET AND THE INCOME STATEMENT Read More »
With the hustle and bustle of year-end, it is easy for small business owners to forget to take care of the necessary t-crossing and i-doting that come with year-end. Consider these often-forgotten year-end business reminders before you close out your fiscal year.. Year-end DonationsOne way that you can reduce your tax liability is by reducing
IT IS THAT TIME OF THE YEAR, AGAIN! Read More »
Businesses use various factors to measure their performance; one group of factors is called Key Performance Indicators, or KPIs. Different businesses apply different KPIs; however, there are seven accounting-related KPIs that every business should add to their “must have” plate of KPIs. The seven crucial KPIs are; Current ratio, Quick / Cash ratio, Net Profit
SEVEN IMPORTANT ACCOUNTING KEY PERFORMANCE INDICATORS (KPIs) AND WHAT THEY MEASURE Read More »
You may have heard it said that the financial statements tell the story of how a business is performing. That is true. The three primary financial statements accountants use to tell the financial health of a business are the balance sheet, the income statement (also known as the profit & loss statement), and the cash
UNDERSTANDING THE CASH FLOW STATEMENT Read More »
One of the most common questions CPAs get asked is, “When should I change my tax election from a sole, or partnership, LLC to an S-Corp?” The follow-up question is usually, “Why should I make the tax election move?” Let’s first explain the difference between an LLC and an S-Corp. An LLC or Limited Liability
WHEN SHOULD YOU MOVE YOUR TAX ELECTION FROM SOLE OR PARTNERSHIP TO AN S-CORP? Read More »
Tax deductions and tax credits are two confusing tax terms that sound the same but affect a business’s tax return differently. While both are deductions on a tax return, how they reduce the tax due is different. So how do they differ? Tax Deductions Tax deductions are dollar amounts on a tax return that reduce
TAX DEDUCTIONS VERSUS TAX CREDITS Read More »
Starting a new small business can be exciting, especially when it is a business venture that you enjoy. While running a new small business can be exciting, it can also be stressful when important steps are skipped over as the business is being formed. There are several books and articles that provide step-by-step advice on
NEW BUSINESS? IMPORTANT STEPS TO REMEMBER Read More »
At NaRfula Financial Solutions we pride ourselves in being the right company for our clients by providing customized services that help our clients successfully grow their businesses. We serve small businesses, in the; research, technology, engineering, legal, and chiropractic industries. We also welcome government contract projects.
