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Accounting Services | Clinton and Trump Talk Taxation

September 19, 2016 / by Lori Coleman posted in South Shore, MA, Providence, RI

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Lori-Coleman-for-web-square.jpgYou can’t avoid being barraged by news coverage about the upcoming presidential election. Hillary or Donald? Red or Blue? A never-ending stream of opinions, polls and speculations fill the newspapers, dominate water cooler conversation and crowd our Facebook newsfeeds.    

As a bookkeeping services professional, you can bet there’s one issue I’m especially curious about in this election: taxes. Even my clients have begun asking me about the election from an accounting services perspective! 

Luckily, as a bookkeeping services provider I work closely with CPAs and tax experts who have been keeping an eye on the candidate’s tax platforms. A recent article from one of our accounting services partners, Newburg & Company CPAs, gives a full rundown on how tax policy plays into this election.

Taxes are a hot issue in every election, of course, and Donald and Hillary have both articulated their positions a number of times. But in a sensational race like this one, it’s important to take a moment to learn the facts.

I recommend reading Newburg & Company CPAs’ insightful analysis:
Compare and Contrast the Republican and Democratic Tax Platforms


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Supporting Strategies Client Earns Headlines for Life-changing Services

August 22, 2016 / by Lori Coleman posted in South Shore, MA

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torchlight.pngtorchlight has been a Supporting Strategies | 128 & South Shore MA client since 2014, so we're well-aware of the company's important mission. The Boston Globe recently showcased torchlight's work with an article highlighting its online service supporting caregivers of individuals with special medical needs.

The innovative service, which provides caregivers with critical tools and information, is made available as an employee benefit through participating employers. In the Globe article, founder and CEO Adam Goldberg shares some of his own family's story and the experiences that led him to launch the business.

We're grateful to be part of torchlight's success and look forward to supporting them as they continue to improve the lives of so many. As for Goldberg, he appreciates the "truly productive partnership" between torchlight and Supporting Strategies.

"When you eventually get sick of recreating the wheel upon every investor request … When you, at long last, get to hand off expense reports like hot potatoes … When you finally have an exact moving picture of operational performance, you know Supporting Strategies | 128 & South Shore MA has arrived," Goldberg says. "My only regret? Not bringing them in sooner. The Supporting Strategies team has cleared the deck so I can concentrate on growing my business."

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Bookkeeping Services Tip | When and How to Deduct Business Meals

January 4, 2016 / by Lori Coleman posted in South Shore, MA, Bookkeeping Services

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Lori-Coleman-for-WebTo be sure, deducting the cost of meals at restaurants is one of the more delicious parts of running a business. But as a bookkeeping services provider for many small businesses, I get a lot of questions about how to go about deducting these expenses in the proper way.

Generally speaking, you can deduct 50% of the cost of a meal or entertainment which is directly related to, or associated with business operations. But to truly enjoy that deductible meal, and make sure you’re doing things “above the table,” here are some guidelines from Norwood, MA-based QRGA, LLP about when and how to deduct business expenses pertaining to meals or entertainment. Make sure to coordinate the proper tracking and support of these expenses with your bookkeeping services provider.

1. Don’t Show Me The Money

Whether or not a business transaction actually occurs as a result of the meal or entertainment is not, as many think, the deciding factor of tax deductibility. If you take a client or a potential client out to dinner to discuss business, or directly before or after doing so, the meal qualifies as deductible (again, generally speaking 50% of the cost). So even if that potential client ends up not signing, you can still write off half of that lobster he ordered.

2. Plus One is Still Minus 50%

If you’re entertaining business guests and you invite their spouses along (and if your own spouse is present as well) the entire group will be part of this tax deductible expense. On the other hand, if you’re entertaining a group of three business associates or clients as part of your business’ operations, and a group of seven close friends (unconnected to the business) are also in attendance, you may not deduct expenses pertaining to those seven.

3. The Host with the Most (Deductions)

You can also deduct the cost of hosting clients and business associates in your own home. Like at the restaurant, if you have non-business related friends in attendance, you must discount the cost of hosting them from the deductible amount.

4. Keep Track and Keep Records

Make sure you keep accurate reports of the cost, purpose and nature of the business relationships pertaining to these entertainment and dining costs. Your bookkeeping services provider can ensure that these records are maintained properly to substantiate these deductions. Also, make notes of the best restaurants and your favorite things to order. A good restaurant choice might be the difference between landing that new client or not – and if your business is booming, you might just become a regular.

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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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Bookkeeping Services Best Practice: Easy Ways to Capture Your Business' Travel Expenses

December 1, 2015 / by Denise Sheppard posted in South Shore, MA, Bookkeeping Services

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Denise-Sheppard-for-webMany of my clients travel regularly for their businesses, hopping around the country and boarding planes as often as some of us get in a car. But no matter how seasoned a traveller they are, they often turn to me for some guidance about which travel expenses are tax deductible and which aren’t. As a provider of bookkeeping services, I deal with business travel expenses often.

It’s important to know the protocols surrounding business travel expenses to best organize your information for your tax preparer at the end of the year. For example, unless you are opening a spa and need to do so for market research, you probably shouldn't record that lavish hot stone massage as a business expense deduction (no matter how much you needed it after that long plane ride).

The first thing to understand is that your “tax home” is the city in which you do business. That means if you commute to your place of business, this commute will not count as business travel. Only travel from your “tax home” for business purposes will qualify. Naturally you can deduct most of your basic travel expenses. These include your tickets for the plane, train, or bus. If your ticket has been provided for you or if you are riding for free, the cost will be zero. When it comes to car travel, you can deduct for the actual expenses or use the standard mileage rate, as well as any toll fees and parking charges incurred during business-related travel.

When it comes to meals away from home, most of the time you can use a standard meal allowance (which will vary depending on the locale). This will save you from keeping records of all meal expenses and deducting the total. The deduction for business meals is usually set at 50% of the unreimbursed cost. You can consult with your CPA or bookkeeping services provider to get more guidance on what should be tracked as deductible business expenses and what should not.

What is the best way to keep track of all of these expenses? I’m a big fan of the new apps available to help track business expenses while your on the road. For example, check out MileIQ for help with mileage tracking. Tallie is another great tool, as it helps capture business expenses, including attaching receipts to the transactions . Its accessible on your phone (which is always helpful when travelling), is easy to use and integrates seamlessly with QuickBooks. Tallie can be used for employee expense reimbursements and for managing corporate credit cards. Chris Farrell, CEO of Tallie further explains, "Tallie has always been a digital solution that is committed to providing our customers with an automated expense management process that saves businesses significant time and money. Using Smartphone Technology and our QuickBooks integration has allowed us to deliver and update expense data seamlessly giving businesses another powerful tool to help them manage their internal infrastructure and their clients businesses more efficiently."

Speaking of QuickBooks, don’t forget to set up accounts in your QuickBooks chart of accounts for major business travel expenses. This will make it very simple for your bookkeeping services provider to quickly get you ready for tax time!

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Bookkeeping Services Best Practice: 3 Key Financial Reports to Manage Your Business

November 25, 2015 / by Lori Coleman posted in South Shore, MA, Bookkeeping Services

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Lori-Coleman-for-WebAs a provider of bookkeeping services to small businesses, I cannot stress enough how important it is for business owners to maintain insight and understanding into their financial statements. When business owners don’t check in with their own financial statements, they end up operating in the dark. Here is a look at the key reports to look at and how to make sense of them.

The Statements

The three main statements that you want to review regularly are your Income Statement, Balance Sheet, and Cash Flow Statement. Let’s start by taking a look at what each of these reports are for:

Income Statement: the Income Statement (a.k.a., the Profit & Loss Statement) will give you a view of how your business is performing over a period of time by highlighting revenue earned as well as expenses incurred. This statement allows you to see trends in your business' profitability.

Balance Sheet: the Balance Sheet lists all assets (i.e. cash, accounts receivable), liabilities (i.e. payables, loans), and your net equity (i.e. how much has been invested and earned over time). The balance sheet gives you a snapshot of your business’ financial health. Unlike the Income Statement, which gives information for a certain period of time, your Balance Sheet is a summary of key financial information on a given date.

Cash Flow Statement: the Cash Flow Statement will fill out the picture created by the Income Statement and the Balance Sheet by showing whether cash is coming in at a rate faster or slower than the rate at which its going out. Over the period of time for the Cash Flow Statement, you will see the sources and uses of your business' cash flow. Unlike the Income Statement, the Cash Flow Statement will allow you to see the business' total spending, as it will include expenditures on assets such as equipment and inventory.

How to Generate Financial Statement and Who to Turn to for Help

You want your financial statements to be prepared regularly and accurately, as you will be relying on this information to make real-time business decisions. Set up a schedule with your bookkeeping services provider to review these financial statements on a monthly basis. If you’re going it alone you can use QuickBooks as a tool to generate these reports To get started on the right foot, you may consult with a bookkeeping services provider or with a QuickBooks ProAdvisor. If you do use QuickBooks make sure that the QB Chart of Accounts is set up to best support the structure of the reports. More on this here.

In terms of collecting the information for these statements, you should make sure that you have a system in place in which you are closing your books monthly. Here you can get some advice on how best to make collecting, verifying, analyzing and discussing your month-end numbers part of your routine.

Why These Statements Are So Important

Your financial metrics, properly understood, can serve as a roadmap for your business. In examining profitability and cash flow, you’ll be able to spot where the issues are and learn how to address them. This information isn’t just important to your business’ survival and growth (though of course it is) but is also important for making presentation’s on your business plan and business’ financial health to banks and investors. These financial statements serve as a great business tool for you, the business owner, to run and grow a financially healthy organization.

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Bookkeeping Services Best Practice: Tracking & Accounting for Paid Time Off

November 17, 2015 / by Jean Sampson posted in South Shore, MA, Bookkeeping Services

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SSH_HR_Sampson-Jean_Photo_141014One of the first decisions you’ll have to make as an employer will be about vacation and time-off policies. There are a lot of options and, lately, a lot of buzz surrounding the issue as unlimited vacation policies gain popularity. Whatever path you choose, make sure that your decision reflects both your respect for your team’s work-life balance as well as your respect for your business. While the development of the policies may fall to your human resources go-to, we have learned as a bookkeeping services provider, that is is critical to establish a system to record and track employee's paid time off (PTO), and in some cases, depending on your policy, including your accrued vacation time liability on your company's balance sheet.

Having your team prepare for their time off by seeking approval from their managers in advance when possible ensures that your team’s time-off is a healthy and natural part of how your business operates, rather than an unforeseen disruption. By having employees place requests for time-off, managers can help to organize the flow of planned vacations in such a way that they are balanced and don’t interfere with important projects or cause work to pile up on the shoulders of other employees.

In terms of tracking the time off earned, or accrued, you can likely leverage your payroll system (i.e. ADP) to calculate this for you. Using your paid time off policy, you can set-up the parameters in the payroll system and the earned paid time off will automatically calculate for you. To track time taken against what has been earned, your employees can track this using a web-based time tracking system that may be an additional feature you can obtain from your payroll system, or you can use an app like TSHEETS, that will integrate with your payroll system. You then will have the time earned and the time taken recorded in the system to get the paid time balance information. You can also simply use a spreadsheet to calculate what is earned and record what is taken if you have few employees and this is more manageable. The management of this system can fall to your bookkeeping services provider, or the individual within your organization that handles the payroll administration.

If your PTO policy provides for accrued vacation time that may need to be paid out upon that employee's termination, you should carry an "Accrued Vacation Time" liability on your balance sheet and use the reports above to adjust this balance each month when closing your books. Your tracking and reporting of PTO not only allows for your understanding of this liability, but will also highlight If there are any employees who are, intentionally or unintentionally, taking more time off than they have earned, so you can follow-up appropriately.

This is just another instance of how process and reporting are crucial ingredients for your company’s success. Your bookkeeping services provider can help you examine how you track PTO and assist with this process, and help to put the right systems in place to best manage this aspect of your business.

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Bookkeeping Services Best Practice | The When, Why and How of Revenue Recognition

November 11, 2015 / by Dorothy Boyle posted in South Shore, MA, Bookkeeping Services

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Dotty-Boyle-for-blogAs a bookkeeping services professional, I see that many clients become confused when it comes to the issue of revenue recognition. Specifically, the question is when to recognize revenue. Is it when you receive payment or when you start your contract? Or do you recognize the revenue over the course of the contract term?

We have to first take a look at the revenue recognition principle, which is a building block principle of accounting. Here’s a definition of the principle taken from “Accounting Explained:", "The revenue recognition principle tells that revenue is to be recognized only when the rewards and benefits associated with the items sold or service provided is transferred, where the amount can be estimated reliably and when the amount is recoverable." Earned revenue exists when your company has provided the service or product for which revenue will, at a determined point, be received. Realized revenue, however, consists of revenue generated when the company has actually exchanged products or services for cash or claims to cash.

“Matching efforts” is a principle that ensures that your business will not record expenses for production before sales, nor will it record revenue for goods or services it has not yet delivered. This principle helps keep your financial reporting consistent with your actual activities. This is why it is important to discuss your revenue recognition strategy with your bookkeeping services provider. You want to make sure that your financial statements and reports are accurate and consistent as well as transparent. This can be very important to shareholders and investors. For example, revenue on contracts paid in advance are typically recognized gradually over the life of the contract or all at once when the contract is first made.

You can use QuickBooks, or another accounting system, to keep track of your revenue earned on each contract. Set up a "Deferred Revenue" account, which is a current liability account. When you enter the sales receipt or invoice for that contract, enter it against that account. Then, create a memorized journal entry that will automatically adjust this account for the monthly value of the contract over the contract term. This entry will reduce the amount in the Deferred Revenue account, and add that revenue to your income statement. It is also good practice to keep an underlying reconciliation schedule or report that keeps track of your open contracts and the earned vs. deferred balances over time.

Your provider of bookkeeping services can help with this process in a couple of ways. First of all, they can steer you in the right direction as to when you should start recognizing revenue. Secondly they can help show you around QuickBooks.

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How Can Your Business Tap into the Millennial Market?

May 6, 2015 / by Lori Coleman posted in Small Business Advice, South Shore, MA

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QRGA__LLPAs the "Millennial" generation grows up — and expands its purchasing power to rival that of the baby boomers — it's worth considering what sets this group of consumers apart from the generation that came before it.

This article from the accounting and auditing firm QRGA, LLP, highlights findings from the Pew Research publication, Millennials in Adulthood: Detached from Institutions, Networked with Friends. It discusses what's different about Millennials and offers recommendations for marketing your business to them. Beyond the familiar call to "use social media," tips include demonstrating sensitivity to social issues, exploring "sharing" models (e.g. Zipcar) and hiring Millennials as staff members.

It's always useful to have marketing ideas that are grounded in real research rather than simple speculation. I'm sure you'll find the insights and strategies discussed here to be valuable to your business.

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The Season of Giving Also Helps You Save on Taxes

November 21, 2014 / by Lori Coleman posted in South Shore, MA

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As we enter the time of year to give thanks and prepare for the holidays, we see around us many ways to help others in need. Helping your favorite charity this month just feels right so is it naughty that you can also receive an added benefit of tax savings for both on your 2014 return and in future years? Absolutely not!

Here are Individual Year End Tax Planning Ideas & Eight Tips for Deducting Charitable Contributions as recomended by Dalal Associates, CPAs.

 

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