New HRA offers small employers an attractive, tax-advantaged health care option

In December, Congress passed the 21st Century Cures Act. The long and complex bill covers a broad range of health care topics, but of particular interest to some businesses should be the Health Reimbursement Arrangement (HRA) provision. Specifically, qualified small employers can now use HRAs to reimburse employees who purchase individual insurance coverage, rather than providing employees with costly group health plans.

The need for HRA relief

Employers can use HRAs to reimburse their workers’ medical expenses, including health insurance premiums, up to a certain amount each year. The reimbursements are excludable from employees’ taxable income, and untapped amounts can be rolled over to future years. HRAs generally have been considered to be group health plans for tax purposes.

But the Affordable Care Act (ACA) prohibits group health plans from imposing annual or lifetime benefits limits and requires such plans to provide certain preventive services without any cost-sharing by employees. And according to previous IRS guidance, “standalone HRAs” — those not tied to an existing group health plan — didn’t comply with these rules, even if the HRAs were used to purchase health insurance coverage that did comply. Businesses that provided the HRAs were subject to fines of $100 per day for each affected employee.

The IRS position was troublesome for smaller businesses that struggled to pay for traditional group health plans or to administer their own self-insurance plans. The changes in the Cures Act give these employers a third option for providing one of the benefits most valued by today’s employees.

The QSEHRA

Under the Cures Act, certain small employers can maintain general purpose, standalone HRAs that aren’t “group health plans” for most purposes under the Internal Revenue Code, Employee Retirement Income Security Act and Public Health Service Act.

More specifically, the legislation allows employers that aren’t “applicable large employers” under the ACA to provide a Qualified Small Employer HRA (QSEHRA) if they don’t offer a group health plan to any of their employees. Annual benefits under a QSEHRA:

• Can’t exceed an indexed maximum of $4,950 per year ($10,000 if family members are covered),
• Must be employer-funded (no salary reductions), and
• Can be used for only IRC Section 213(d) medical care.

QSEHRA benefits must be offered on the same terms to all “eligible employees” (certain individuals can be disregarded) and may be excluded from income only if the recipient has minimum essential coverage. There is a notice requirement and employees’ permitted benefits must be reported on Form W-2.

If you’re interested in exploring the QSEHRA option for your business, contact us for further details.

© 2017

THERE’S STILL TIME TO SET UP A RETIREMENT PLAN FOR 2016

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Saving for retirement can be tough if you’re putting most of your money and time into operating a small business. However, many retirement plans aren’t difficult to set up and it’s important to start saving so you can enjoy a comfortable future. So if you haven’t already set up a tax-advantaged plan, consider doing so this year. Note: If you have employees, they generally must be allowed to participate in the plan, provided they meet the qualification requirements. Here are three options: 1. Profit-sharing plan. This is a defined contribution plan that allows discretionary employer contributions and flexibility in plan design. You can make deductible 2016 contributions as late as the due date of your 2016 tax return, including extensions — provided your plan exists on Dec. 31, 2016. For 2016, the maximum contribution is $53,000, or $59,000 if you are age 50 or older. 2. Simplified Employee Pension (SEP). This is also a defined contribution plan that provides benefits similar to those of a profit-sharing plan. But you can establish a SEP in 2017 and still make deductible 2016 contributions as late as the due date of your 2016 income tax return, including extensions. In addition, a SEP is easy to administer. For 2016, the maximum SEP contribution is $53,000. 3. Defined benefit plan. This plan sets a future pension benefit and then actuarially calculates the contributions needed to attain that benefit. The maximum annual benefit for 2016 is generally $210,000 or 100% of average earned income for the highest three consecutive years, if less. Because it’s actuarially driven, the contribution needed to attain the projected future annual benefit may exceed the maximum contributions allowed by other plans, depending on your age and the desired benefit. You can make deductible 2016 defined benefit plan contributions until your return due date, provided your plan exists on Dec. 31, 2016. Contact us if you want more information about setting up the best retirement plan in your situation.

Gambling on Hollywood: Will Nevada’s Film Tax Credit Help or Hurt Our Economy?

Beginning in 2014, Nevada will offer a new incentive to entice film productions into the Silver State: a tax credit worth up to 19 percent of a film’s total production costs. With $20 million earmarked for these incentives, Nevada is making a big gamble. Will it pay off, with successful productions boosting the economy while increasing appreciation for our state’s natural beauty? Or will the credit – as it has in some other states – cost more than it brings in?

Incentive Fever

With California as a next-door neighbor, over the years Nevada has often been the starring backdrop for feature films. However, the entertainment industry has been hard-hit by the economic downturn; production companies have started looking not just at the visual aspect of a location, but of its financial viability. As a result, states offering incentives have been bringing in the bacon, while Nevada has seen its industry income decrease by 43 percent since 2001.

 

A striking example of the intense competition for Hollywood bucks can be seen in New York, a state whose reputation is partly written on film. NY offered an incentive of 5 to 10 percent – but a few years ago, neighboring states decided they wanted a piece of the Big Apple’s pie. Massachusetts and Connecticut put up tax credits of 25 to 30 percent, and within one year, New York had lost a staggering $750,000,000 in revenue. The state immediately boosted its own credit up to 30 percent, and regained its income plus 19,000 jobs.

Meanwhile in the West, every state but Nevada has created its own film tax credit, grabbing up the movie money while leaving us high and dry. That’s a significant concern for a state badly in need of economic diversification, not to mention an image makeover. In 2009, Las Vegas visitor volume had dropped 7 percent – until “The Hangover” was released and visitor numbers jumped right back up to normal. Since then, the only film to feature Nevada was “The Muppets” – which styled Reno as a backwater burg for a washed-up Fozzie Bear.

What’s In the Film Tax Credit

The Nevada Motion Picture Jobs Creation Act allocates $20 million from 2014 through 2023, and will accept applications through 2017. Qualifying projects include films, TV series, Web series and even video games. To earn the credit, a project must have a budget of at least $500,000, and spend 60 percent of that in Nevada. The most a single project can write off is $6 million.

That’s a lot of dough, and some have speculated that, thanks to Nevada’s low taxes, the credits awarded will greatly exceed films’ actual tax liability. “The film-tax credit is essentially a financial bribe from Silver State taxpayers,” claims the Nevada Business Magazine.

The counter-argument is that these projects bring in much more benefit than cost. Another “Hangover” could only add to Nevada’s cultural revitalization, and a big film project could employ communities that are still waiting for a jobs rebound. But are these benefits enough to justify the $20 million price tag?

A Risky Bet?

This summer, as Nevada was signing its film-tax credit into law, Connecticut announced a two-year moratorium on projects that could draw from its own coffers. Yes, the state that was stealing business from New York has suddenly put the brakes on film spending. Were its generous incentives costing more than they were worth?

Louisiana and Ohio have both discovered that film-tax credits are losing taxpayers money – in Ohio, the loss may be as much as 79 cents on the dollar. Meanwhile, North Carolina reported a gain of only 55 to 70 new jobs. “The film credit created 290 to 350 fewer jobs than would have been created through an across-the-board tax reduction of the same magnitude,” legislative fiscal staff reported.

New Mexico, on the other hand – location for the massively popular TV series “Breaking Bad” – is reporting earnings of $1.50 for every dollar spent. Projects like “Breaking Bad” create name recognition and a positive image, as well as long-term job opportunities and the accompanying economic boost. Could Nevada experience a similar uptick? We are about to find out.

Overall, the expenditure is risky, but it appears to be an economically-driven necessity. If Nevada wants to compete for Hollywood dollars, we’ll need to play the game. If we don’t, New Mexico and other Western states will soon have the market cornered, and Nevada’s link to the entertainment industry might disappear entirely.

There is no argument that Nevada is late to the film-tax incentive party: 42 states have similar programs, and film incentive fever has been raging since the early 2000s. At this late date, our state’s decision to offer the credit seems more like jumping on the bandwagon out of necessity, than taking a risk that could bring in huge profits. Whether this move helps or hurts our economy may be a moot point: in the long term, reinvigorating Nevada’s relationship with the entertainment industry may be a smart investment, not a risky gamble.

Dyson Sues Samsung: Patent Infringement Problem Here’s Some Advice

Recently Dyson, which makes vacuum cleaners, sued Samsung, claiming that Samsung’s new line of vacuum cleaners uses technology that is copyrighted by Dyson. This has been a troublesome year for Samsung, as Apple won a patent ruling against Samsung in August, banning U.S. imports that infringe two Apple patents.

 

 

From a consumer’s standpoint, when does enforcing a patent become too much? It makes fiscal sense for a company like Dyson or Apple to sue Samsung for patent infringement, but will patent enforcement make new technology fewer and farther between?

Companies should not be able to “steal” ideas; but it would be superb if companies could improve upon an existing technology without fear of reprisal, especially if they were able to provide a royalty or some sort of benefit to the originating company?

Both of these lawsuits prove that when you have an idea, you should complete the research to ensure that idea does not already exist; otherwise you can find yourself facing a lawsuit.

Business people can be hard pressed to protect ideas themselves; most patents are for physical items. The following are some tips to ensure your idea stays within your hands.

  1. Patents. One of the top ways to get your idea protected is to file a patent; but your idea needs to be fairly detailed before you’re able to file a patent on it. You cannot file a patent on a general idea, such as a flying car; you need to have specific details on how that car will work, what type of engine it will have, what the materials are made out of. Keep in mind, as well, that patents cost money, and depending on the type of patent, can from hundreds to thousands of dollars. They also come with continuing payments in the form of filing and maintenance fees,  on top of the upfront payment.
  2. NDAs. Non-disclosure agreements are an excellent way to protect your idea. By getting employees and potential vendors to sign this agreement, they are legally bound to keep your idea a secret. If they fail to do so, they can be sued for disclosing the information.
  3. Mine! Mark any paperwork with your idea as “confidential,” “trademarked,” or “copyright 2013” – even if you don’t plan on filing for trademarks or copyrights. These labels show that you consider the idea as your own, and that you do not want anyone else copying it. This might be enough to deter someone wishing to steal your idea.

Ideas are the genesis of any company, and are extremely important to becoming a successful entrepreneur. Ensuring that no one steals your idea is not only to make sure you get the credit, but also to cut down on competition. If you have an idea that improves upon an existing technology or product, and you are serious about marketing it, the best solution would be to go to a lawyer to investigate if that technology has already been thought of. Good luck in your brainstorming!

What the Affordable Care Act Means for Your Small Business

Finding accurate information on the Patient Protection and Affordable Care Act of 2010 (ACA) can be cumbersome, especially when you’re already short on time. At Forbush and Associates, we are committed to making sure our clients are up-to-date on new laws that affect their business.

With 2013 half done, we take a look at how the law has and will affect our self-employed and small business clients.

What 2013 Brought

Medicare Assessment on Net Investment Income

Self-employed individuals and small businesses may have noticed a hit on their bank accounts when the new Medicare assessment on net investment income began this year.  In January, a 3.8% tax was placed on all net investment income such as taxable capital gains, rents, dividends, and royalties.

For singles, the interest for those with a Modified Adjusted Gross Income over $200,000 will be taxed. For married joint filers, those with a MAGI over $250,000 will notice the additional tax.  Income not affected by the new tax: wages, unemployment wages, Social Security benefits, operating income from a non-passive business, self-employment income, alimony, and-tax exempt income.

Open Enrollment for Health Insurance Marketplace

In October 2013, individuals and small businesses will be able to participate in the open enrollment in the Health Insurance Marketplace. The Marketplace is designed to ease the burden of finding insurance plans that are within your budget. While more information will be released in October, healthcare.gov provides a good checklist to prepare for the coming changes:

  1. Understand how insurance works.
  2. Learn about different types of insurance.
  3. Set your budget.
  4. Determine when you will start your new coverage.
  5. Get organized.
  6. Develop a list of questions to ask before it is time to choose your health care plan.
  7. Seek help from insurance brokers with whom you already have a relationship.

Self-employed individuals will be able to join open enrollment for the Health Insurance Marketplace. You will be to choose from four different plans that differ by the percentage of costs the health plan covers. Some may be able to qualify for tax credits and subsidies based on a sliding scale.

Let’s talk about 2014.

Next year is perhaps the biggest year for the Affordable Care Act for small businesses. From 2010-2013, the maximum tax credit was 35% for small businesses and 25% for tax-exempt organizations.  On January 1st, 2014, the Small Business Health Care Credit will become effective, meaning an increase to 50% and 35%.

To be eligible, your company must cover at least 50% of single health care coverage. Your company must have fewer than 25 full time employees who earn less than $50,000 per year. This is where it gets a little tricky.

Let’s say you have two part-time employees. According to the ACA, they count as one full time employee.  So if you have 20 part time employees, you will count 10 full time employees.

To determine wages, divide the total you pay in wages by the number of full time employees. Your tax credit may change depending on your final number. For more guidance, the IRS provides a step-by-step guide.

Transitional Reinsurance Program Fees

Designed to help stabilize premiums for coverage, this three-year program will run from 2014 through 2016.  It reimburses insurers in the individual insurance Marketplaces for high claim costs. This reimbursement will be paid by self-insured employers whose plans provide major medical coverage, including retiree programs.

In 2014, HHS estimates that the fees will be $5.25 a month (or $63 for the year) for each individual covered under a health care plan, with the required fee for the following two years to be somewhat lower.

Reporting

We saw that grimace. Unfortunately with new rules comes new paperwork. Employers with self-insured plans must submit reports to the IRS detailing information on each covered individual starting in 2014. These reports must be filed by 2015 and the IRS will be providing more information in the coming months.

While the list of changes the Affordable Care Act grows, we’ve identified several of the changes that may take a little more time and money depending on your situation. As always, feel free to contact us with questions about the law or if you need advice on the best steps to take for you and/or your small business.

 

Would you like to pay less Taxes Next Year?

Just when you thought you could tuck away the thought of taxes for while … here we are talking about it again.  Relax.  It’s all good and simple information that will make your tax season that much easier the next time around.

So how do you that?  Here are a few ideas from Forbush & Associates that will lower the stress and increase your success for holding on to more cash this year than ever before.

Celebrate the end of tax season.

You made it. Your taxes are done, the IRS is paid, and you can stash your shoe box full of receipts in your favorite spot for another year. Nuff said.

Start over. Really.

There’s no better time than now to take a good look at what your final net income was this past year and start to plan on how you can keep more money in your piggy bank next year. Think of it as New Year’s Day when you and your friends toss out new resolutions to make your life ahead a little better.  Use this time to set a new budget for yourself, household, or business.  There are lots of simple steps to make this process actually enjoyable.  For a good guide, you might want to invest in the book “All Your Worth: The Ultimate Lifetime Money Plan.

Think 50/30/20

We like the idea that is outlined in that publication so much so we’ll share our own insight on how to make saving money a simple process this year, and in years to come.

The 50% Rule ~ Your total expenses for the year on household goods, groceries, healthcare and personal care should not exceed 50% of your total gross income.  Take a look at your budget from last year and total up all of those expenses – and highlight them if you need to.  Then, review where you think you can cut while you save some income for the more critical life-supporting elements (re: health care, etc.)

The 30% Rule ~ Here’s where it gets real personal.  I call this ‘needs v/s the wants”.  Do you really need flowers or a few nice bottles of wine every week?  What about the cut of steaks:  do you really need Filet or can you enjoy a nice BBQ of New York’s instead? The fact is, once you review your standard purchases, we’ll bet you can find some things you really don’t HAVE to have every week. Try to trim these costs to just 30% of your income.

The 20% Rule ~ Ideally, you should designate 20% of your income to cover debt and increase your savings.  As noted in the book, a mortgage payment or minimum payment on credit card debt is actually a need (which counts toward your 50 percent), but anything beyond that is an additional debt repayment, which qualifies towards this 20 percent. You can learn more about that here.

Don’t wait. Plan now.


We realize that you are probably done with analyzing your finances for a while.  So take a month off – yet no more.  The longer you wait to evaluate your income v/s expense, the shorter the time you have to truly decide what you ‘need’, ‘want’, or ‘have to have’ to survive 2013 while you enjoy life along the way.

Need help?

At Forbush & Associates, we think like this all the time. In fact, we actually enjoy reviewing spreadsheet after spreadsheet.  Honestly, it’s an art to us.  If you can’t even fathom the thought of reviewing your expenses again, just give us a call.  We’d be happy to use our creative juices and professional insight to help you save money next year, and in years to come.

Call Forbush Associates today at 775-337-6001.

Who’s got your back?

Why small businesses should secure consultants in today’s economic times.

I don’t know if you have ever seen the movie “Blindside” yet there’s a great underlying theme about how the most successful teams take care of its players.  In today’s small business world in particular, nothing could be more important.  Long gone are the days of full-time Directors of various departments.  Today we need to seek out the best in the business and partner with those who do their job best.

Who Should You Have on Your Team?

Ideally, a well-rounded small business should have a hit list like this one to be the caregivers of its operation.  Sure, it’s important to have the contacts yet to be most successful, it’s critical for the owner of the business to develop and maintain close working relationships.  You never know when you may need to reach out and touch their talent; often it is when you least expect your need for advice.  Some team members are obvious, others are not: all are vital in today’s complex business world.

  • employees
  • a banker
  • an accountant/tax specialist
  • a lawyer
  • a sales and marketing professional
  • an IT specialist

The Employee

You’ve certainly heard the saying: “The customer comes first”.  I’m OK with that infamous business mantra yet fully believe it’s the EMPLOYEES that must come first.  They are the face of your company. This relationship could be the most important of all of the relationships for the owner of any business to cultivate.  The time and effort that you invest in your employees can be the best return on investment that a small business can make.

The Banker

Do you really know your banker?  Would he or she recognize you from a distance?  If not, it’s time to repair that relationship gap and get to know the person who can make or break your business in the best or worst of times.   Sure, the day to day banking support is a given, but what about when you need some serious cash for a capital investment, make a significant commercial real estate purchase, or need to get your credit in line?  Make your banker your best business friend.

Accountant or Tax Specialist

If you have a knack of balancing your own books, that’s a bonus when running a small business. Yet what time do you really have to allocate to this critical component of  your business operation?  Having an accountant and/or tax specialist in your back pocket is one of the best investments you can make. It also helps your credibility with your bank and other financial partners.  When you have an accountant that you can trust to handle the intricacies of your day to day operations, you’ll have more time to focus on your  future.  And that alone is worth the partnership with a financial specialist.

Lawyer

I know lawyers in general don’t have the best rep, yet they should. They have brought some of the best advice to our business and can do the same for you.  Be it a liability attorney, business lawyer, or legal firm, find one that fits your personality and business style and keep their number handy.   With all of the challenges that come with owning your own business, it just makes good sense to have a friend who can offer some sound legal advice when you need it most.
A Sales and Marketing Professional

Many of the world’s largest companies continue to trim from the top and with that, many of the finest sales and marketing professionals in the world have opened their own consulting firms.  And that’s a great thing for the small business world.  Today you can contract with someone who used to hold a Chief Marketing Officer position, spend a few hours a month to tap their brain and voila ~ you receive their professional opinion at a fraction of the cost that you would have paid if they were a full time employee. Run, don’t walk, to partner with a marketing consultant today.

An IT Specialist 

With the ever-changing world of information technology (IT), you’d have to be extremely savvy in the art of IT to handle your computer needs in-house.  Similar to the situation just noted above, there are endless professionals in the field who can make your life a lot easier. From the basics of keeping your computer alive and on-line, to elements that are just as crucial to keep your business competitive, your operating costs in line, and productivity in full motion, IT specialists can watch your internal operations so you can continue to concentrate on your company’s external products and services.

So Who’s Got Your Back?

As a small business owner, it seems like the list of “must haves” to succeed are never-ending.

Don’t let this short list stop your progress.  In fact, when you have business specialists by your side to do their best on your behalf, you will have more time to do what you do best. And isn’t that why you got into your business for in the first place?

We do.

When you’re ready for some more advice about how small businesses are truly succeeding in today’s challenging business times, call us at Forbush and Associates.

 

 

 

HOW HEALTHY IS YOUR BUSINESS?

With the holidays now behind us, and 2013 in full swing, it’s the ideal time to put your business in fast forward and focus on the health of your business.  At Forbush and Associates, we’re finding that our clients are tapping into our resources as Chartered Global Management Accountants and what we can bring to their table to ensure sustainability this year, and in years to come.

What’s the big deal about our certification?

The Chartered Global Management Accountant (CGMA) is a globally recognized professional designation that underscores the financial and non-financial skills and experience that CPAs bring to critical business decision-making and strategic management.

How do you benefit?

Management accountants are trusted to guide critical business decisions and drive strong business performance.  As such, we combine our financial expertise and business insight to achieve sustainable business success for our clients.

In a nut shell, we understand how the different parts of the business need to come together.

How does your business benefit?

While many CGMAs around the world work in the finance department, others put their broader business training to use across the organization, including the roles of Board Director, Chairman and CEO.  Depending on the organizational structure of your business, we have the wherewithal to evaluate many of the intricacies that make your company tick.

We evaluate your business strategy.

Is not uncommon for us to explore our clients’ approach to business and recommend improvements to streamline their systems, safeguard their finances, or advise them on major business decisions.  Some examples of our services follow:

  • Analyze the corporate environment
  • Evaluate strategic options
  • Design and run performance management systems
  • Apply risk management techniques to your IT and IS environments
  • Model and forecast cash flows and other finances

We assess your management practices.

This is where we take a look at your business from a personal level. Our review may include the review

of your company’s personnel or marketing practices. In this assessment, we ask questions:

  • How recently have you analyzed your competitive environment?
  • How do plan, set-up and execute projects?
  • Does your staff negotiate and communicate effectively?
  • How do you evaluate the performance of your team members, and company overall?

We review your operations. 

Your day to day activities are the heart beat of your company’s health.  As such, we always

recommend a review of the internal operations. Some of the subjects we evaluate include:

 

  • Staff awareness of efficient and quality issues
  • Systems for evaluating capital expenditures
  • Key marketing issues and competitive trends
  • People management
  • Management of short term finances
  • Preparation of basic tax computations

Want more advice?

According to CGMA’s official definition:

Management accountants are trusted to guide critical business decisions and drive strong business

performance. Their skills encompass a mix of operations, management and strategy.”

Quite frankly, that pretty much wraps it up.  When you’re ready to take a real good look at the health

of your company’s operation and strategic direction, we’re here to help.

CALL US TODAY

775 337 6001

www.forbushandassociates.com

Cliff Notes for Small Businesses “ there’s change in the air”

With a new year comes the opportunity at Forbush and Associates to pull up our shirt sleeves and get down to work especially on the Fiscal Cliff and the American Taxpayer Relief Act (“Fiscal Crisis Bill”) and what they really mean to small businesses in particular.

 

Are we worried? Not in the least. In fact, if we all live by the advice of Charles Darwin, we should be just fine by the time that ball drops again in NYC.

 

“It’s not the strongest species that survives, nor the most intelligent that survives.

 It is the one most responsive to change.”

Things will change in 2013 and as your advisor and friend; I’ll go out on a limb for you to shed a little light of some of the highlights of what all this chatter is about – for small businesses in particular.

Tread lightly.

In today’s economy we never recommend that any business make any great leaps and bounds to change their business operation.  And today that couldn’t be more important.  Yet we never advise any company to remain stagnate and stale. We live by the saying that if a company is not growing and changing it is dying and shrinking.  Start with your employees; ask them things that could be improved to increase efficiency, sales, and profit.  I guarantee they have great ideas they have held back on.

To bring some positive options into the never-ending gloom and doom of the media, here are a

few pieces of forward-looking advice from our home-grown 50+ years of experience as CPA’s in Reno, Nevada, who live and breathe the opportunity to help small businesses prosper.

 

Stay Conservative

If you had planned to expand your staff, extend a lease or make a purchase on a significant piece of equipment, stand by the numbers. Often times decisions becomes based in emotions instead of the business case. The path that has kept the business strong and alive today began by analyzing the decisions based upon the business case with the tax effect as a calculated variable.  We always recommend analyzing the business case and never make the decision based purely upon the tax consequence. Thanks to the law passed on January 2, 2013, Congress left us a little wiggle room when it comes to tax variables.

 

If you can’t live without that new technology upgrade, there may be some hope. Section 179 allows small businesses to deduct rather than depreciate the cost of many types of equipment, at $500,000 for 2013. Thank Congress; it was scheduled to fall to $25,000.

If you still need some personnel assistance, consider part-time, staffing agencies or even temp hires can be a good alternative between now and then. If business continues to grow into the second quarter, we might offer some altered advice. 

Watch The Net

We’ve all heard that money is not necessarily the guiding light to keep your staff happy.  However, the payroll tax holiday that was scheduled to expire January 1st was not extended, causing a 2-percent point increase in the Social Security payroll tax withholding which means an employee who is earning $50,000 a year will have $1,000 less in take-home pay. Keep an eye on morale. We have fielded many questions from our client’s employees as to why their net pay decreased.  Be proactive explaining the change to your employees.

In addition, as a small business owner, be aware that many people will respond to this cut by cutting back on discretionary spending.  Keep an eye on your sales as you might be indirectly affected.

Conversely, the bill extended long-term unemployment benefits which will keep those who seek work seeking goods and services to keep their heads above water and life moving forward as best as it can.

Watch your Wake

With all the unsettled news about which axe will fall next within the world of economics, it’s important as leaders in your business to remain strong, calm and collected around the water cooler.  Much like the wake of a large boat, business leaders should be aware of the wake that they leave when they depart a room or business meeting.  Your impact may be much larger than you think.


Still on Edge?

You’re not alone. There are pounds of pages that we have absorbed on your behalf so take advantage of our offer.  For cutting-edge advice on how to run a better business or see a better bottom line in 2013, call us today for a free consultation

CALL NOW

 

775 337 6001

www.forbushandassociates.com

IS YOUR BUSINESS READY FOR 2013?

Ahh, the holidays … a time when money may be going out the door faster than it’s coming in.  If you have planned for this, you’re on track and are probably enjoying what the holidays are all about.  If you have not, it’s time to look forward now and build your budget for 2013 before this year is over – so you can relax a bit as you enter the new year knowing where you expect to be next year at this time.

Building a Small Business Budget For 2013

The first thing you need to realize is that most of the information you are going to need to build your budget for 2013 may in fact be sitting next to you, or at least close by.

The second thing you should recognize is that your budget can be as simple or as complex as you want it to be – as long as it makes good financial sense.   If this all seems overwhelming to you, no one ever said you had to build the entire budget in one day. 

Much like a good ball game, the best results come from single and double plays.  Don’t think you need a home run in 24 hours.

At Forbush and Associates, we have been helping businesses just like yours with accounting, bookkeeping and overall business consultation for more than ten years to help our community grow and prosper.  As our gift to you, we are offering these guidelines to jump-start your business in 2013.

Ready. Set. Go!

The easiest way to prepare a budget is to build it step by step – or perhaps just quarter by quarter – if that makes it easier for you to get through the process.

1)     Look at your business from the 30,000’ level.  With over 30 years of experience in providing financial advice to small and mid-size businesses, we have found that it’s common for our clients to be way too close to their businesses.  That’s why we always recommend that before you start the budget process, you take a global look at your future.

This first step is all about R & D: collect all the data you will need to help you project what your company may look like 365 days from today.

  • Look inside: Ask your staff for their insight: How do sales/expenses look for 2013?
  • Look outside: Is there a new competitor setting up camp down the street?
  • Look around: Has your product/service outlived its attractiveness or purpose and if so, what does your company need to do to meet your financial goals next year?

2)     Do your homework.  I know, you thought you got rid of that word years ago. However, it’s critical to completing the project at hand. Make a list of your common annual expenses and revenues.

Estimate your costs for insurance, rent, utilities, office supplies, payroll, etc.  Review the list with those who are closest to the subjects to see if you need to plan for any radical change. Ask questions. Is there a need to hire more staff?  Will new health care laws impact your employee expense?  What about marketing and advertising? And don’t forget to include costs and depreciation for your property and equipment.

And then there’s our favorite part: the revenue.  Work with your sales team to get a good birds-eye-view of what your revenue may look like for 2013.  Don’t forget to include dividends, interest and any other sources of income.

3)      Identify your ‘bell-curves”.  It’s not uncommon for businesses throughout the region to be dependent on tourism or weather.  If that’s the case with your company, you should build your expenses and revenues according to the seasons or reasons that guide your bottom line.  Plan for the obvious and chart your numbers accordingly.

4)     Do the math.  Although building a budget can seem overwhelming, it’s really just collection of pluses and minuses.  If you have done your research, completed your home work, and reviewed all of the content with a good ‘reality check’, the final step of building the actual budget may be the easiest step of all.

Remember:  A budget is simply a forecast of all of your business cash inflow and expenditures. It’s not set in stone yet it is a dynamic and vital component that will serve as your future’s guideline to success.

5)     Keep it handy and Compare.  Once you have completed the budget, make sure to keep it nearby.  Input the budget into your accounting system so you can easily track what is actual happening to what you created in the budget. Alas, don’t be afraid to change the budget in the middle of the year if there are significant changes, whether growth or reduction, in your business. Using the budget and making it a living, changeable document will help provide clear management insight into the success of your business.

Overwhelmed?  Need a little more advice? At Forbush and Associates we provide our clients with valuable business insight and solutions. In fact, we often learn about our clients’ companies so intimately, we become an integral member of their management team. And because we work with such a variety of businesses across so many industries, we see an evolving array of what works, what doesn’t and how to avoid potential obstacles.

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  775 337 6001

www.forbushandassociates.com