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Remote Working Gains Ground with Support from New Organization

September 12, 2016 / by Leslie Jorgensen posted in Accounting Services

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Leslie-Jorgensen-for-web.jpgWhen we founded Supporting Strategies 12 years ago, we built it around the premise that experts working remotely and using best-of-breed technology would deliver the highest level of client service.

For us, remote working isn't just an employee perk. It's also a core strength of the business, providing a more streamlined process to deliver a full suite of services. The business model has truly taken off — not just for us, but for other businesses as well.

With the telecommuting, or "work-in-place," phenomenon growing increasingly popular, a not-for-profit organization has been founded to help support it. Founders of the organization Work in Place, recently highlighted in The New York Times, are inspired by what they call the "changing geography of work." They're promoting more conversations about the benefits of remote work arrangements, including hosting a Work-in-Place Summit in 2017.

We are proud to have been part of this forward-thinking approach to work and will be watching to see what innovative new approaches come out of next year's summit.

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Should I Use Cloud-Based Accounting Services or an Offline Accounting Service?

February 17, 2016 / by Mark Wald posted in Santa Monica, Accounting Services, Los Angeles

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img-mark-wald.jpgIn an online discussion forum I participate in, a startup founder recently posed this question, “I'm an early stage startup with minimal, but growing, accounting needs. Should I pursue an agreement with a cloud service, or an offline accounting firm using QuickBooks?  Tangentially, my goal is to be seeking venture capital funding within the next 12 months, and I'm wondering if VC's have any preference?”

Most responses from the community included recommendations for a variety of desktop and cloud accounting software and referrals to a handful of accounting services providers. But the most thoughtful and valuable response came from a fellow entrepreneur.  Here’s a summary of what he said (link to the original discussion to follow):

  • 80 out of 100 CEOs interviewed (by an accomplished business book author) from public and large private companies said that “getting an expert business finance advisor” was the first really great business decision they ever made. You don’t get expert financial advice from cloud services. You get that from qualified, experienced people.
  • VCs invest in the founder and what you’ve accomplished—investors don’t care whatsoever which accounting services platform you use to manage your books.

What excellent advice! Sure, if you run a very small professional services business with simple fee revenue and basic expenses you may have your basic bookkeeping needs met by a cloud accounting platform that mostly automates your expense categorizations well enough that your tax preparer can easily complete your tax return. But if you have plans to scale beyond the garage office and are building a business with any measure of complexity, skip past the allure of an all-in-one automated cloud accounting service and find a professional business finance advisor with real management accounting expertise.

Management Accountants understand the essentials of business operations and focus on running the business most effectively through the intelligent use of management reporting.  Remember, the software itself is largely irrelevant—what’s important is who you have on your accounting services team and how they’re aligning your selected tools and business processes to generate meaningful, timely reports that help you run your business. 

Here’s a link to the discussion thread that inspired my blog post.

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Accounting Services 101 | What’s the True Cost of a New Employee?

January 26, 2016 / by Mark Wald posted in Santa Monica, Accounting Services, Los Angeles

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img-mark-wald.jpgAs an employer, the true cost to hire an employee is more than just the wage or salary you offer them. When we build budgets & forecasts for our clients, the additional costs we consider are primarily employer payroll taxes, insurance, and employee benefits. Here are some tips to help entrepreneurs and small business owners budget for the total cost of adding staff:

Employer Payroll Taxes:
Employer payroll taxes are broken down into multiple categories, each with their own tax calculation rates and caps per employee. Estimating 9 or 10% of total wages is a good general rule of thumb for high-level forecasting, but in reality the employer payroll taxes for each employee can vary significantly depending on their individual earnings in each tax year. For example, the combined total employer payroll tax expense for California businesses start at over 12% of gross wages for new hires but then quickly decreases (after the first $7k of compensation per employee) to an average of around 8.5% for an employee earning $50k annual salary. Combined employer payroll taxes can get as low as around 6% of gross wages for employees earning close to $200k but then shoot up almost a full percentage point on an individual employee's earnings in excess of $200k in one year. At the bottom of this post is a nice infographic that summarizes employer payroll costs for CA employers.

Workers Compensation Insurance:
Most businesses with 5 or more employees need to budget for workers compensation Insurance, the cost of which can vary significantly based on the physical risks that individual employees face in their work environment--insuring workers in manufacturing facilities will cost more than clerical office environments, for example. As with any business liability insurance coverage, it is important to balance the coverage limits and exclusions with the premium costs. Plan on $500-$2k for the first year, depending on various factors.

Employee Benefits:
Medical and other fringe benefits are currently optional for small businesses (fewer than 50 employees) but offering these benefits may be an effective part of a small business' talent acquisition strategy and may not necessarily be as expensive as you might expect. Plan on $100-$1k per employee per month, depending on how generous you want your benefits plan to be and what the demographics are of your covered staff.

At Supporting Strategies, we have experienced accounting professionals who understand these costs from a strategic and a tactical perspective. We routinely review what our clients pay for insurance and benefits in case there appears to be an opportunity for significant savings. And we have the experience and skills required to accurately forecast employer expenses to help our clients budget for growth without any surprise costs.

If you have questions about this or any other topic related to business accounting, feel free to contact me directly at 310-625-6262 or mwald@supportingstrategies.com. Check out the infographic here

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Accounting Services 101| The Good, The Bad, and The Ugly of Deducting Entertainment Expenses

January 26, 2016 / by Scott Severance posted in Accounting Services, Fall River, MA

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Scott-Severance-for-web.jpgAll small business owners know that entertainment expenses are a part of doing business. We take clients out to lunch, participate in charity golf tournaments, and try to catch a ball game every now and then. While these may seem like basic business activities, deducting these expenses can be a bit tricky. As an accounting services professional, I frequently get asked to clarify the rules around these expenses, so here’s the basic rundown on the good, the bad and the ugly when it comes to entertainment deductions.

The good part of this discussion is that a 50% deduction on entertainment expenses is allowed by the IRS if a specific business agenda is conducted. Of course, documentation is required. The documentation should include the amount, date/time, place, business purpose, and the names of guests and their business relationship. It is often recommended to keep a journal or diary to capture the details of these events in addition to the credit card receipt.

More good news is that tickets to a sporting event that benefits a charitable organization can be deducted for the full price of the tickets. That means the charity golf tournament tickets are deductible. If you decide to give the charity golf tournament tickets to a client as a gift, you have the option to treat the deduction as entertainment or as a gift, whichever is to your advantage.

The bad part of the discussion is that the environment must be conducive to conducting business if you want the 50% deduction. The IRS once rejected the deduction of tickets to a baseball game because the volume level in the ballpark didn’t allow for a business discussion. Clearly, the IRS doesn’t attend the Tampa Bay Ray baseball games. You can grab a good three-hour nap in the bleachers at one of those games. Similarly, don’t invite your accounting services provider to a rock concert to close your books at the end of the month. You have to be realistic when considering the event to write off and the guest list. A one-on-one lunch with a potential client is a great example of a deductible expense. A boozy dinner with spouses and mutual friends is not.

The ugly part of this discussion is that according to tax attorney Barbara Weltman, author of J.K. Lasser’s Small Business Taxes, this has been one of the most litigated areas of tax law. There is some gray area in deducting entertainment expenses. But don’t despair. Small business owners just need to make sure they approach every deduction sensibly with the proper documentation in place to back everything up. If you’re unsure of something, contact your accounting services provider to make sure.

 

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Accounting Services Tip | What to Do When The IRS Gets in Touch

December 31, 2015 / by Lori Coleman posted in South Shore, MA, Accounting Services

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Lori-Coleman-for-WebRecently I was working at my desk and received an unexpected call. I picked up the phone and was immediately greeted by a brusque and forceful voice recording. “The IRS,” it says, “wants to take legal action against you.” It then urged me to call back and listed a phone number. My muscles tensed, my eyes widened. The jig is up… except… wait… there was no jig. I search my memory for whatever wrong I committed but came up blank. And then I remember a story I heard from a fellow accounting services provider. “I thought the IRS was trying to sue me,” he had said a few weeks back. “It turned out to just be a scam.”

We do not often think about how the IRS actually operates. Being aware of how this agency works and communicates with taxpayers will help you avoid being roped in by scammers. After I calmed down and took a reassuring sip of coffee, I turned to this blog post by Robert Kilkenny on how the IRS actually gets in touch with people, and how to handle it when they do. Here’s what I learned:

1. Don’t Panic

You see a letter in your mailbox from the IRS. It’s definitely not an invitation to a birthday party, but that doesn’t mean the news is bad. You might have a refund coming your way or the IRS might be simply requesting some information, or else letting you know that the processing of your return is delayed. So keep calm and resist the urge to sweep the letter away with the junk mail. You might have to take action on this notice if you owe more than you submitted, or if information is required, or if you need to verify your identity. Don’t delay. There might be a deadline for response.

2. Be Thorough

The IRS is a very thorough agency, so you should be thorough as well. Make sure you read the whole letter through to the end. If something doesn’t add up to you, contact them immediately to ask questions or to clarify. Make sure that when you call (the number should be listed on the letter) that you have your return and all related documents in hand. If you’ve been selected for an audit, refer again to rule one. Don’t panic. An audit doesn’t necessarily mean that the IRS suspects wrongdoing. A portion of audits are selected randomly. All the same, contact your accounting services provider or CPA firm immediately for guidance on how to prepare and what steps to take.

3. Ask Your Accountant

Your accounting services providers have worked with the IRS enough to know the ins and outs. So before you start wiring money over to whoever called on the telephone, call your accountant! This call could be a scam, but it could be something real that needs to be dealt with. Either way, your accountant can help you spot the difference and move forward in either scenario.

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Accounting Services 101| Ensuring Proper Accounting Controls for Your Small Business

December 17, 2015 / by Pete Denholm posted in Northeast Florida, Accounting Services

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Pete-Denholm-for-web-squareI recently came across a shocking news story from Jacksonville, Florida, in which an accountant stole over $300,000 from her employers, Stellar Recovery, Inc, in the course of four years. It is unfortunate but true that these stories continue to be very common in small businesses that do not have the proper controls in place to protect themselves from employee theft. It’s crucial that you can trust your accounting team or accounting services provider, and also that you have in place key controls to protect your business.

1. Know Who You’re Hiring

When building your team, it’s important to hire people you trust. As part of the interview process, ensure that you cover your bases by completing a thorough reference and background check.

2. Put Controls in Place

Putting accounting controls in place is critical. This starts with separation of duties. Dividing up the tasks involved in the financial management of your business is the best way to ensure accountability. The person responsible for accounts payable should not also reconcile the checking account, and the person preparing the checks should not be the one to sign them. If you are running a small business with limited accounting resources, I suggest you personally review your bank statement on a regular basis to ensure that the transactions are valid. We have seen so many small businesses that provide their administrative staff with a signature stamp as they are too busy to sign the checks. While this seems like a great way to make your job more efficient, it exposes you to the risk of employee theft. Also, ensure that you have an approval workflow in place for corporate credit cards, expense reports, and bills so that all purchases are being monitored. Avoid simple online bill pay options that allow your accounting services provider to pay your bills without your approval. If your money is leaving the premises, you should be aware of it. We recommend Bill.com to our clients, which allows for proper controls and allows the bookkeeper to upload and code the bills before routing them through an approval and payment process. This way you’ll get a chance to see what’s being paid, where the money is going, and sign off on it before the transaction goes through. 

Accounting automation tools such as Bill.com and Tallie will provide both efficiency and controls on spending and disbursements.

3. Stay Involved

Small business accounting is a team sport! Ensure that you consistently review the numbers so you are close to your businesses' financial activities. Meet with your team at least monthly to check in and look at the results together. By creating a collaborative culture around the numbers, which includes the questioning, review and in many cases, the approval of transactions, it will not only give you the information that you need to run a healthy business, but will also eliminate the risks of employee theft.

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Accounting Services 101| Understanding the Difference Between CPAs and Enrolled Agents

November 23, 2015 / by Joyce Spanos posted in Accounting Services, San Diego

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BOS_HR_Spanos,-Joyce_Website-Photo_140520While you have likely heard of a CPA, or certified public accountant, you may not have heard of an EA, or Enrolled Agent.  There are only about 48,000 EA’s practicing in the US, compared to over 650,000 CPA’s.  EA’s can be a great resource to a small business with tax-specific issues.  EA’s are typically less expensive than CPA’s, but are also subject to a certification exam, and complete annual continuing education requirements, similar to CPA’s.  EA’s can represent any taxpayer anywhere in the U.S.   Below is a chart detailing the nuts and bolts of a CPA and EA. 

Joyce_Spanos_blog_chart-1

There are so many options out there for businesses seeking different types of accounting services, whether you are looking for a CPA, EA, or even an outsourced accounting services firm.  No matter what the accounting service is that is being provided, a critical success factor is the ability for the business to have a productive working relationship with their accounting services provider.  In addition to working with an experienced and educated accounting services provider, it is important that your service provider develops a first-hand understanding about your business, and that they regularly communicate with you to ensure the best results in relationship with your accounting and tax support needs. 

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Helping Clients Stay Focused on Performance and Profits Through Accounting Services

November 19, 2015 / by Mark Wald posted in Santa Monica, Accounting Services, Los Angeles

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img-mark-waldI recently read an interesting critique of the current state of California's investment culture. And it got me thinking about Supporting Strategies' place in it all.

Venture capitalist Fred Wilson shared a talk by Maciej Ceglowski, founder of the "antisocial" bookmarking site Pinboard. Ceglowski argues that California's VC and founder communities don't focus on "pursuing profit, or even revenue. Instead, the measure of their success is valuation — how much money they've convinced others to tell them they're worth."

It's a provocative viewpoint, and I'll admit there's some truth to Ceglowski's words. Nevertheless, I know of plenty of private investors in the state who value business models that aim to generate and distribute profits for their investors relatively soon after launch.

As a provider of accounting services, I love working with profit-focused businesses like these.[1] My team’s role often involves setting up and managing the systems and processes necessary to accurately and efficiently record revenues, costs, subscribers, inventory, etc. for our clients.  Then we analyze and deliver insightful, actionable reporting on key metrics that are critical for maximizing profits and sustainable growth while also keeping entrepreneurs and their investors appraised of company performance.

 

Case in Point

For example, Supporting Strategies | Santa Monica provides outsourced accounting services to PawPack, a company that ships an assortment of healthy, hand-selected pet products right to your door. Each month, subscription customers receive a newly curated selection of the finest-quality treats, toys and accessories from brands that are committed to the wellbeing of pets.

Behind the scenes, the Supporting Strategies team keeps busy recording and reporting revenue and costs using accrual-basis financial accounting principles. This gives PawPack's owners and investors timely and accurate visibility of company performance and profits.

Outsourcing their accounting services to us provides PawPack with a combination of systems, processes and highly skilled resources, resulting in the insights needed to keep prices as low as possible for its customers — and to operate a profitable business that delivers attractive returns for its investors.

I'm sure Mr. Ceglowski would approve!

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Footnote [1]: Don’t get me wrong, we also support plenty of amazing startups that are pre-revenue and who’s business models are not profit-focused early on. These businesses have bills and staff to pay, bank, credit card, and merchant account activity to reconcile, and a whole host of other accounting-related needs, so our client businesses that fit this “hyper-growth but not yet focused on profits” profile love us as much as we love them too. :) 

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Start-ups Attracted by More Than Just "Southern Charm" in the South

October 26, 2015 / by Brad Stickland posted in South Carolina, Accounting Services

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BStricklandWhen you think about the South you might think about the great food, the friendly people or the accents. But did you know that Southern cities are quickly getting a new association as a great place for scalable start-up businesses? Charleston, South Carolina is a perfect example of this new Southern business climate. According to Digsouth.com's blog, Charleston’s combination of affordable opportunities and friendly business atmosphere is what has attracted the likes of “Boeing, Mercedes, Volvo and Google.”

As a provider of accounting services, I like to keep my eye on trends in the business world. It’s impossible not to notice that certain southern cities are quickly becoming Meccas for start-ups, especially in the tech sector. Because my work deals specifically with accounting services, I can immediately spot a few reasons for this shift: one being that the South is more affordable and has business-friendly tax laws in many of its states. But the article on Digsouth.com highlights other pulls as well.

The article highlights some of the special cultural attributes of Charleston. For one, it is a city that seems to understand inherently that businesses are about people. “In the South, hospitality and customer service aren’t classes taught by human resources, they are bonafide traditions.” This can be the ideal setting for a business that views the welfare of its employees and their work-life balance as crucial both to the employees themselves and to the business.

But as the tech industry benefits from Charleston’s people-centric approach, increasingly people are benefitting from the city’s tech-centric approach. The people, the culture and business-friendly tax structures may have been the initial draw for these big businesses, but now there is a growing tech sector in the South that is providing its own kind of draw for the city. Cities like Charleston, Austin, and Raleigh have experienced huge growth in the tech sector in the last decade.

If you’re looking to move your business, or looking for the right place to start your business, consider the south. Talk it over with some other southern business owners as well as your accounting services professionals. Don’t let those delicious Waffle House restaurants that dot the highways in the South make the decision for you, but don’t write them off too quickly either.

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Accounting Services | Is There a Future Accountant in Your Family?

September 16, 2015 / by Shelby Tutty posted in Boston, Accounting Services

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If you ask any child what they want to be when they grow up, you’ll probably hear “firefighter,” “princess,” or “Spiderman.” A little bit older, and they might tell you they want to be a rock star or a video game tester. But if you think you see a future accounting services provider at the table this Thanksgiving, here’s what they need to know going forward.

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1. Why Work In Accounting Services 

There are a few reasons to work as a provider of accounting services. The salary is good, the demand is consistent, it’s highly transferable, and there exists a wide range of options for specialization in the field. For someone who likes working with numbers, it’s a great profession to get into. An accountant may not be Spiderman, but using your expertise to help others manage their finances feels great. Plus, having this expertise means that you’ll always be a valuable asset, wherever you work.

2. Decide If You’re Interested in Becoming an Accountant or a CPA 

An accountant is anyone employed to work on someone else’s business or personal finances. A CPA (Certified Public Accountant), however, has passed a state certification exam and has necessarily completed a Bachelor’s Degree in Accounting. CPAs may have a greater range of options in employment as specialists and business consultants, but both non-certified and certified accountants will be able to find meaningful work with clients. Both accountants and CPAs are required to take an exam in order to work with tax returns.

3. How to Become an Accountant 

There are a few different types of degree programs that will prepare you for a career in accounting services.  The knowledge and expertise gained from your program is invaluable and which type of degree program you choose will offer a different perspective and set of skills. You can get an Accounting Degree, which can be pursued at the Associate, Bachelor, Masters and PhD levels. This degree will cover financial recording, non-profit management, business management, income tax and government regulations. There are also more specialized degree programs (generally at the graduate level) in accounting such as Auditing, Finance and Taxation.

4. How to Become a CPA 

To become a CPA you will need, as a minimum, a Bachelor’s Degree in Accounting. In addition to this, graduate level work can be valuable as well, though it isn’t required to become a CPA. Depending on which state you live in you will have a certain number of instruction hours before you even sit for your certification test. Check to find out what the specific regulations are in your state, as you may be required to complete a number of instruction hours for accounting as well as for business. After that’s done, it’s time to study for your CPA exam, which will cover auditing and attestation, financial accounting and reporting, regulation, as well as business.

5) What’s the Most Important Thing in Accounting? 

I always tell my kids that the most important thing in accounting is accuracy. Accuracy is of course crucial when you’re working with numbers, but it is not the only virtue for an accountant. The next most important thing, then, is passion. This is as true of accounting as it is of all jobs. So if you love working with numbers, are interested in how businesses work, and want a job providing a crucial and highly valued service to clients in need, accounting could be for you.

We would love to hear from you!  Click below and we would be happy to provide you with more information on this topic. 

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