New York’s Pass-Through Entity Tax (PTET) for S Corps and partnerships

New York’s Pass-Through Entity Tax (PTET) for S Corps and partnerships

New York’s Pass-Through Entity Tax (PTET) for S Corps and partnerships

New York’s Pass-Through Entity Tax (PTET) for S Corps and partnerships

The New York PTET is a relatively new tax elective, which was initially implemented in the 2021 tax year, and serves to help certain individuals bypass the $10,000 federal limitation on personal state and local tax deductions, by making deductible tax payments through the business.

S corporations and partnerships pay an entity-level tax to New York State, which is deductible as a business expense for federal tax purposes. The federal deduction reduces the taxable income passed through to the shareholders and partners and reduces adjusted gross income subject to federal income tax. The tax payment is eligible as a credit on the personal state income tax returns of the shareholders and partners of the entity.

If your New York S-Corporation or Partnership anticipates a profit in 2022, you may benefit from electing into the PTET.

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The deadline to elect into New York’s PTET for 2022 is March 15th, 2022. To opt-in by filing the election, S corporations and partnerships must use their Business Online Accounts with the Department of Taxation and Finance. Note that, only an authorized person can make the election on behalf of an eligible entity. Tax professionals may not make the election on behalf of their clients. Once the election is made it is irrevocable for that tax year.

Electing entities can opt-in on their Business Online Account using the link below:

https://www.tax.ny.gov/online/

For those pass-through entities electing in, PTET estimates will be due on the following dates in 2022:

March 15th, June 15th, September 15th and December 15th.

Estimates must equal 90% of the current year’s tax due or 100% of the prior year’s PTET (if opted in), to avoid underpayment penalties. If you elect to opt-in and need assistance calculating estimated payments, please contact us at rcedenco@fibrick.com.

The due date of the 2022 PTET return is March 15th, 2023, although electing entities can apply for a six-month extension.

For more information on the New York PTET, please visit the link below:

https://www.tax.ny.gov/bus/ptet/#optin

***Updated on May 26th, 2022

News alert: NYS has extended the deadline to make the PTET election for the tax year 2022 until September 15th, 2022. 

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7 Financial Strategies for Future-Proofing Your Business

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7 Financial Strategies for Future-Proofing Your Business

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You’ve worked hard to build your business from the ground up. Things are going well. You are profitable. Work with great clients. Have an amazing team of people by your side. And yet, it’s hard to enjoy your success without constantly questioning it. Will you continue to be profitable? What will your business look like in five, ten, or twenty years?

If you’re a business owner, you probably ask yourself these questions quite often. You are not alone. The world throws a lot of curveballs, and there’s no crystal ball to help you see them coming. But there are some ways to protect yourself if they do. Here are 8 financial strategies you can use to future-proof your business.

Keep Your Taxes In Check

Only speak to your accountant during tax season? It might be time to take your relationship to the next level. Working with a CPA throughout the year can help you mitigate future surprises. Otherwise, you could find yourself in some hot water both legally and financially. 

This means keeping your records pristine. But it could also mean managing and understanding payroll taxes, as well as reporting income accurately against all 1099-MISC forms you receive. No one wants to get audited, and certainly no one wants to get charged back taxes. Other tips to avoid future surprises include keeping your personal and business expenses separate, and making sure your business is correctly classified.

Explore New Revenue Streams

The best way to stay future-forward is to maintain a growth mindset. That could mean expanding your current offering. But it could also mean providing new offerings. You already have a network of people or businesses that turn to you to solve a problem. Now might be the time to ask yourself, “what other problems can I solve for my customers?”

Consider digitizing or productizing a current service you already offer. You could also look at vertically integrating by taking over another level of the supply chain. Speak to your customers and see what they need. By diversifying, you can future-proof yourself against any one of your revenue streams failing.

Find New Ways to Finance Your Business

Maybe you bootstrapped your way through the first few years. Or borrowed money from family members. Or took a loan from the bank. However you got here, you’ll likely need some cash to go further – and you’ll need that cash to be cheap. 

Try restructuring your existing debt by seeking out loans at a lower interest rate. You never know – since taking out your original loan, you’ve likely built up credit for your business. Now’s a great time to use it. You might also consider equity financing through an investor or a new partner. However, you structure your debt, make sure the terms won’t cause you turbulence down the road.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

Mitigate Risk

Of course, there are forces of nature that you can’t control. Factors like a volatile economy and rising interest rates can have a massive effect on how you run your business. However, by investing in the right insurance, you can weather the storm. 

Workers’ compensation can help you and your employees generate income in the event of an accident. Property insurance protects your physical assets from theft or damage. Professional liability insurance can cover your business against negligence. 

Not to be overlooked, business interruption insurance can get you through a natural disaster that forces you to pause operations. Some of these options may seem extreme, but having them in your back pocket can guarantee the longevity of your business. 

Keep A Close Eye On Your Costs

We all know how important it is to manage costs. But that doesn’t just mean rethinking where you order lunch. To really future-proof your business, you need to make sure that your high level expenses are as low as they can possibly be. Failing to do so can cause you cash flow issues in the future.

To slash expenses, try consolidating any services or software you pay for. You’d be surprised how much money you save. Similarly, get vendors to pitch for your business, then regularly review their invoices. You want strong partners, but you also want to make sure you’re not overpaying. On the whole, try to make as many expenses as you can variable instead of fixed. Flexibility is key in times of hardship.

Manage Liquidity

Cash is king. It’s a bit of a cliche, but as much as people hear it, far too many business owners don’t live by it. The reality is, a cash crunch can seriously test the foundations of your business. This is especially true during economically uncertain times. Make sure you’re managing your liquidity any way you can.

The best way to do this? Streamline your cash collection. By developing a system that either automates or otherwise accelerates payments, you can save yourself from operational challenges on the backend. Another tip is to centralize your cash in the event you need to use it immediately. 

Have a Succession Plan

You have probably thought about what you’re going to do when you retire. Have you thought about what your business is going to do? If you are a business owner, drafting a plan is a must for the future success of your company. 

It’s not just about keeping the doors open. A lot of people depend on the success of your business, like your vendors, employees, customers, investors, and community members. Keeping them in the loop about your succession plan will keep them confident in the continued success of your business. There are also a lot of financial and tax implications of turning over a business. Knowing your succession plan well in advance can make this transition a smooth one for everyone.

Conclusion

It’s impossible to know what the future has in store. Even the most successful businesses can fail in the long run if they’re not thinking future-first. It’s just as true with technology as it is with your financial strategy. Make sure you know your numbers and stay close to your accountant to properly future-proof your business. 

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Accounting Software Dashboards: 3 Benefits for Businesses

Accounting Software Dashboards: 3 Benefits for Businesses

Do you long for an easy way to view your financial data without reading a bunch of numbers that don’t make any sense? It’s a good thing that accounting software was developed to aid managers. One of the parts you might use is the dashboard. 

Accounting software dashboards allow you to see how your business is performing. It allows you to clearly see the key performance indicators (KPIs) that can drive your business. It can also reveal your points of improvement. Basically, it helps you save time, improves your decision-making, and offers clarity in your business operations. 

Furthermore, accounting dashboards are interactive and customizable because you can tweak them according to the data you want to see. Also, many are mobile-friendly and intuitive, allowing you to check the data on whatever device you have. Lastly, they are designed to be easy to navigate. 

If you’re still not convinced of the uses of an accounting software dashboard, we will detail three of the most common benefits of utilizing a dashboard:

You can easily customize the dashboard, and it is highly interactive. 

One of the most important features of an accounting dashboard is you can customize the KPIs to suit your business needs. As we all know, not all businesses are the same. Businesses look at different factors to gauge the success of their operations. Customizing it according to our needs and department is essential. 

Many accounting dashboards allow you to keep only the metrics that matter the most. The removal of extra data will help you understand the report better and reduce the amount of time to analyze the performance. You can also filter the information and categorize it into different data sets. 

You can either customize the time frame from quarterly to monthly or edit the KPIs specific to a department. The more organized it will be, the more easily you can interpret data. Lastly, the more interactive it is, the more relevant your insights will be.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

You can use it on any device. 

It’s beneficial that accounting solutions are available on any device. It allows users to easily access the dashboard without the need to open the laptop or computer. Since we are becoming reliant on technology to create an analysis of the future, it is nice to see the business performance easily, especially when making a decision. So, if you want a more accessible mobile accounting solution, you need to invest in mobile-friendly accounting software. 

You can easily navigate and organize information.

A dashboard’s main purpose is for you to analyze data seamlessly. You can’t interpret data when there are a lot of factors displayed. Through the dashboard, you can filter unnecessary data and efficiently remove the clutter. It shows a clean and organized interface, but it creates an excellent visual presentation of data and trends in a given time frame. For example, you can show monthly profits in graphs or directional trends. 

Conclusion

Accounting software dashboards are a great way to show KPIs. It gives you an organized way of determining a company’s health and success. In fact, it can allow you to use KPIs to improve business operations and achieve business goals. 

Do you want to analyze your cash flow? FiBrick is a people-centric accounting firm that offers a suite of services for startups and scale-ups. Contact us today!

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4 Types of Tax Deductions Your Small Business Can Claim

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4 Types of Tax Deductions Your Small Business Can Claim

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Tax is one thing we cannot get away from in life, whether it is on a personal or business level. But while personal tax is one matter, business-related tax is another. The latter can be a bit complex and downright confusing. It can be all the more complicated when you own and run a small business, where you’re required to prepare and file taxes for compliance purposes. But did you know that there are practical ways to reduce your taxes?

In this article, we will share four types of tax deductions your small business can claim:

Home office

Did you know that you can have tax deductions for your home office? Unfortunately, some small business owners are afraid of doing so due to the fear of going through an audit. Keep in mind that this fear shouldn’t stop you from claiming legitimate deductions. As long as you’re running your startup clean, there’s nothing to worry about. Just be sure to file and organize your tax records to take advantage of this benefit. Finally, ensure that your office is apart from your living space and you have only one computer at your home office.

Travel costs

It’s common for small business owners to travel regularly for business purposes. What’s good about business-related taxes is that their expenses are tax-deductible, including your airfare, hotel fees, car rental, and travel expenses such as laundry costs. Even food expenses involved in traveling can be deducted, although this will only be up to 50 percent. Just be sure to keep receipts and records showing the reason for purchases so that you can file these to the IRS as tax reimbursements!

Technology purchase

We can no longer deny the need for tools and technology in today’s business landscape. As a small business, it’s imperative to invest in some of these technologies, such as computers, printers, fax machines, software, and even business vehicles. The good news is that equipment expenses are considered tax-deductible under Section 179 of the tax code. That said, be sure to check this provision and see what types of technology you can file for tax deductions.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

Car donation

When it comes to getting rid of your business vehicle, you have the option to junk it or find a buyer who might be interested in it. However, there’s one excellent choice you can resort to—that is to donate your car. Aside from the ease of disposal and the opportunity to help others, there’s one benefit you can get by doing so. As with those above, you can claim a tax deduction by donating your car correctly and filing for this when applicable!

At FiBrick, we’re specialized in accounting and bookkeeping, tax planning and compliance, as well as fractional Chief Financial Officer (CFO) and advisory. Our tax planning strategies include comprehensive business compliance and return preparation services. If you need a tax specialist to deal with the deductions of your small business, we’ve got you covered!

Conclusion

At this point, we’ve covered four types of tax deductions your small business can claim—home office, technology purchase, travel cost, and car donation. Be sure to consider all these options to see how you can reduce your small business taxes. Most importantly, work with a highly reliable tax professional or small business accountant so that you can save money on your taxes while finding ways to grow your small business!

Are you looking to hire an accountant to handle the taxes of your small business? We’ve got you covered! As an accounting company in New York, NY, we cater to startup companies and small businesses looking to grow their finances and deal with their taxes. Get in touch with us today to schedule an appointment!

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Finding the Perfect Accountant For Your Startup: What to Know

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Finding the Perfect Accountant For Your Startup: What to Know

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When breathing into life your new startup business, you might be tearing your hair out trying to develop your business plan, prepare to meet investors, and just keeping the business afloat. However, there may be one aspect of business that might just be more important than all that which you may have forgotten: the accounting side. 

If you remembered to handle that side, then that is great! If not, then that is okay—it’s a basic mistake that can be rectified if you act quickly. Accounting is not exactly the most obvious aspect of the business, but it is an incredibly important one, as taking control of one’s money ensures the company’s ability to survive, especially during its infancy! As such, it’s best left for a professional to handle.

With that being said, here is how you can choose the right accountant for your startup:

Check their experience 

First things first, always look at their experience. This includes their understanding of cash flow management, ability to work with taxes, and other accounting-related know-how. You will want to find accountants that have gained their experience from the industry that your business will be in, as this will allow you to access accountants with the industry-specific knowledge to fully manage your financial needs!

In other words, make sure their expertise is not only enough, but it also must be relevant to the industry you are in! That’s because different industries will generally have different needs, and having one that has worked in similar companies such as yours will guarantee they know how to work with you properly.

Look at their qualifications 

Experience is essential, and so are qualifications. Being qualified for the job means that they are actually authorized to offer their services in the specific area.

With that in mind, be sure the accountants you work with are fully qualified for the job. This means getting the credentials and certificates they need to prove that they know what they are doing—that they are able to give you the reliable and professional accounting help you expect out of them! 

If you are hiring from a firm, then looking for a trustworthy firm can increase your chances of accessing qualified accountants.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

Set up a meeting with the accountants 

Whether you are hiring from a firm or standalone accountants, you will need to meet with the exact individual you want to work with. If this isn’t possible, then always ask the firm about the exact person you will end up working with, and try your best to meet that person before proceeding. 

During this meeting, you will be discussing your company’s needs and ask them if they have the services you want. Do not forget to ask them for feedback on your business plan. See whether they are comfortable with the plan, and take note of how they approach the matter. This will give you a preview of how they work and how they interact with clients—both factors that will make or break your experience when working with them.

Conclusion

All in all, do as much research as you can and ask all the questions you want the answer to when you meet the firm or accountant you are going to work with. If you like what you hear, they likely are the right accounting firm or professional to work with to set your startup on the road to success. 

On the other hand, if you still have concerns or dislike what you are hearing, it is better to move on and look at other accounting professionals! This may take more time out of your hands, but finding the right individual to work with is the difference between a successful startup and one that’s doomed to failure.

FiBrick is a people-centric accounting firm offering accounting services to startups and scale-up businesses all over the US to secure success. Reach out to us and get accounting services for startups today!

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Get Your Startup Going: 7 Financial Tips for Business Startups

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Get Your Startup Going: 7 Financial Tips for Business Startups

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About to launch a startup? Exciting times, indeed. But there are a lot of things you need to sort out first, especially when it comes to your finances. Let’s face it—building a startup is one of the most difficult things you ever have to do, albeit exciting. A lot can go wrong if you don’t manage your finances right. Therefore, we will share with you some tips to help you avoid these common financial mistakes. 

Prioritize Cash Flow Management

One of the reasons startups fail is poor cash flow management—they just run out of money. And this something you don’t want to happen. Proper cash flow management will ensure you know where every single amount is coming from and where it’s going. Moreover, a part of this is establishing a realistic budget for your business. 

Track and Monitor Expenses

As you launch your startup, you will be dealing with a lot of expenses left and right. Tracking and monitoring your expenses is crucial for cash flow management and tax filing. While hiring an accountant to handle this may be the best choice, the fear of not being financially ready for it as a start-up is real. Don’t fret; there are accounting firms that cater explicitly to startups and scale-ups!

FINANCIAL KPIs opt-in

Learn the 7 KPIs all startup founders should use to assess their company’s performance and take actionable measures to address areas where the company is underperforming.

Put a Limit on Fixed Expenses

At the early stages, it’s essential to keep your expenses low. So, before you rent a huge and beautiful office space, think again. Operate at a low cost first so you can allocate most of your capital to growth that will let you reach your goals quickly. A lot of startups focus on the wrong things and forget that their revenue should always come first. 

Be Prepared

When starting a business, you never know what can happen; therefore, you need to prepare yourself for the worst possible situation. Have reserves for both personal and business in an emergency savings account. You can never be too prepared for bad situations. 

Value Your Time

As a business startup owner, you need to remember that every minute of your time is valuable. Therefore, consider that when planning your schedule and your daily activities. Remember that every second you spend doing something unrelated to your business is time and money wasted. 

Put Focus on Customer Acquisition

Your startup will be nothing if you don’t have customers. So, focus on identifying different acquisition channels and work on optimizing your costs. Indeed, you can’t test every possible acquisition channel at first, which is why you should focus more on lucrative opportunities. 

Pay Yourself

Compensate yourself enough to live. You don’t need to pay yourself a lot of money at first, but it should be enough to put food on the table. Also, your hard work and dedication to your startup are valuable. 

Start It Up Right

Launching a business startup requires careful planning. One of the things you need to focus on is your finances because one wrong move with it can be detrimental to your business. Use these tips to sort out your finances that will set you on the right track. 

Do you need help with your startup business? FiBrick is a people-centric accounting firm based in New York, NY that offers a range of services for startups and scale-ups. Contact us today!

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How to File Your Taxes with an Accountant in Time for Tax Season

How to File Your Taxes with an Accountant in Time for Tax Season

At present, you have a little over a month before the last day of filing for taxes arrives. While you may be starting to feel the pressure that comes with settling your debts, it’s only essential to get it over with or face the consequences and end up paying more charges.

As an entrepreneur or business owner, you must learn to be one step ahead of your taxes to prevent experiencing financial problems along the way that could impact your firm’s growth. Now more than ever, you will require the help of a reliable business accountant.

When you decide to work with a financial expert regarding sorting your taxes, they can keep tabs on your progress and determine if you should maintain your tactics or modify them. You have to make an effort to discuss with your accountant everything there is to keep your finances in check. Keep reading below to find out what to do to ensure Tax Day goes smoothly for you and your business. 

Developing a Reliable Business Strategy

Hiring an accountant allows you to look forward to receiving professional advice on managing your company’s finances. However, you mustn’t leave all the work to them and remember to deal with it together, starting with discussing what kind of tax strategy you’re willing to apply.

Each year, you know how integral it is to start things off with a firm plan, one you wish to accomplish throughout the next several months. It will be best to align your business goals with your financial objectives, and if your mission is to expand your enterprise this year, your accountant has to know about it. 

Telling your accountant your every move when it comes to your business gives them the chance to prepare your finances accordingly. That way, they can offer suggestions on keeping your strategies as they are or changing them to meet your needs.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

Prepare for a Potential Recession

Even though your business is doing well at the moment, it will never hurt to remain cautious and well-prepared in the event of a recession. You don’t have to wait for the economy to crash before you start worrying about your business cash flow and how to survive the following months.

No matter what industry your business belongs to since you depend on your customers that come and go, you need to talk to your accountant about emergencies. When a recession does occur, you have already formed a fool-proof plan to help you weather the obstacles alongside your trusted accountant.

Similarly, you have to protect your credit and address your taxes correctly before you reach the due date. You will also have to keep an eye out for your competitors and fellow business owners, so during a recession, not only do you safeguard your capital, but you also keep the impact to a minimum.

Manage Your Sales Tax Properly

Part of an accountant’s duty is to know all the rules and regulations concerning federal tax laws, including how sales tax works. In line with that, they must have the proper knowledge regarding the 2018 Wayfair Supreme Court decision.

The said law explains that all businesses, whether inside or outside the state, must answer to their sales tax. It doesn’t matter if your company doesn’t have a physical location at that, so long as you are initiating transactions within the US. 

Whether your small business belongs to any state in the US or not, if you continue to do business within the country, you may want to look into your sales tax. With an accountant to guide you, you don’t have to face any liabilities because you know what taxes you need to pay.

Conclusion

Before May arrives, you must schedule a meeting with your accountant to discuss your tax strategies and determine if your current methods are still applicable or you need a new plan. As much as possible, you shouldn’t file your taxes at the last minute to avoid problems along the way. If you want to remain running a stable and successful business, it will help to develop a reliable business strategy, prepare for a potential recession, and manage your sales tax properly in time for the deadline to arrive. 

Are you looking to hire an accounting company in the US for your small business? FiBrick is an accounting firm that provides an array of services for start-up companies and scale-up firms. Get in touch with us today to schedule a consultation!

 

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How to Better Manage Your Cash Flow as a Startup: Our Guide

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How to Better Manage Your Cash Flow as a Startup: Our Guide

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When even established companies find it challenging to do a cash flow analysis, you can expect young businesses to struggle with this task even more. Chances are, you started a business because of your passion for a particular industry, or it could be because you want to show the world your talent and skills or achieve a lifelong dream. But whatever your reason is, one thing is for sure – you want to gain profits!

One of the best ways to gauge your progress is by looking at your cash flow. Yet, it’s not so easy to understand it all. But because you are a business owner, you need to know how to manage your cash flow efficiently and properly. 

Here are four effective ways to manage your cash flow as a startup:

1. Know where the money is coming from and where is it headed.

As a startup company, you need to have a clear understanding of where you are getting your cash from and where you plan to spend it. Don’t make the mistake of overlooking cash flow statements because these serve as your records. You must highlight the inflows and outflows, the average revenue per account, and the operations’ cost.

2. Consider the bigger picture

While the cash flow statements will give you an idea of how your cash flow is going, there may be a few factors that affect them. For instance, there may be a few late payments that are not reflected, and this can give you a false idea of having an excellent financial status. Similarly, a recent big purchase may make it seem that you are financially in danger, but if it improves your productivity and profitability, it’s putting you in a better position. For this reason, you must not solely rely on those statements and always see the bigger picture.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

3. Have a solid cash flow management plan 

One effective way to manage your cash flow is by coming up with a management plan that you can easily follow. But you should not copy from anywhere but make this plan yourself because your business is different from that of others. You also have your own needs and obstacles that you need to overcome. With that said, some features must be in every cash flow management plan, including identifying cash flow obstacles, recording day-to-day expenses, and preparing to improve overall cash flow.

Make sure you have detailed documentation, as this will not only help you keep track of your cash flow but also serve as a great tool to attract investors in the future!

4. Measure all financial metrics

Keep in mind that you must not solely focus on how much income you are making. It is easy to make this mistake because that’s what’s important, right? Well, it is, but so are other indicators. You need to thoroughly understand cash flow as it gives you a clearer idea of how your business is performing!

Conclusion

As a startup company, you might be overwhelmed by all the things you need to take care of. From making sure that your products or services are of high quality to dealing with your customers, it can’t be easy to add more tasks like managing your cash flow. The good thing is, you don’t have to be the only one handling it all. You can outsource your accounting and finance needs to a reputable accounting advisory partner who can help you manage your cash flow and simplify this aspect of your business. This way, you can solely focus on growing the company!

FiBrick is an accounting firm that’s dedicated to helping startups in New York, NY, reach their full potential. We can take care of tasks like cash flow analysis and other things related to your business’s accounting and finance side so that you can continue doing what you do best.

Contact us today to schedule a consultation with one of our experts!

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Cash Flow Analysis: 6 Mistakes Tech Startups Should Avoid

Cash Flow Analysis: 6 Mistakes Tech Startups Should Avoid

If you’re an owner of a tech startup, you should understand cash flow analysis well. Managing a business requires the proper skills and understanding of cash flow management to keep the business running smoothly. In the journey of managing a business, some mistakes can hamper the seamless process of business transactions. As a startup owner, you should be aware of how to avoid them.

Ask every successful business owner, and they will agree that the following mistakes can lead a business to failure:

Overspending

Avoid hurting your cash flow. A lot of business owners can easily be a victim of overspending. In some cases, you might be required to spend more than you need to. However, you should not be too reckless in spending without paying attention to where you are allocating your money. Some expenses may damage your business instead of creating good investments. Forget the idea that you can spend it in any way you want because you are making money. Make sure to instill discipline and formulate careful planning before spending.

Not Following a Cash Flow Budget

Make sure you set realistic expectations when it comes to your future sales. Create an effective strategy to make sure that your customers will pay. Use a cash flow report to keep track of the money that is coming in and out. A cash flow budget should also be created to help you anticipate when you can receive more money so that you can plan during a crisis. 

Without a cash flow budget, you will have to guess where the money should be coming from and may cause you to increase the risk of getting penalties, an overdue bill, and late payments.

Cashflow Video Guide

Learn the simple steps to prepare cash flow projections to improve your business cash flows.

Not Having a Buffer of Cash on Hand

Despite the efforts to protect your company’s cash, still, cash disruptions may happen. It is a reality that every business owner should learn to face. You might think that having a bunch of savings on hand will not make a massive difference. But, it is much difficult for a business to operate with zero balance. When the time comes that there are low sales in a particular month, a disaster can possibly happen.

Not Recognizing Profit in the Money You Earn

Every business should pay attention to the profits it makes. Unfortunately, some companies went bankrupt even before the end of the year without the capacity to pay employees’ wages and liabilities to suppliers.

Every startup should learn the differences among the profit, loss, income, and expense. Every startup needs to recognize the profit from the money earned by the business.

Expecting and Rushing to Create a Sudden Expense

The tech industry is full of companies who have created success stories as a startup. It is an industry that offers massive opportunities for entrepreneurs to find the next million-dollar idea. 

However, this can also be a reason for committing the mistake of rushing too much. There is nothing wrong with dreaming, but when business owners create high expectations without proper action, this is when poor results can happen. 

There are several tech startups with excellent ideals that fail due to poor management or bad timing. They spend a lot without proper planning, resulting in more significant issues after a month or so. 

Failing to Utilize Good Bookkeeping

New startups sometimes fail to understand the importance of good bookkeeping for all business transactions. Some of them think that they cannot afford it. However, proper bookkeeping can help your business to be on the right track financially. There will be better monitoring of your cash flow, expenses, and other transactions. 

Conclusion

A good cash flow analysis is needed for a tech startup to succeed. With proper bookkeeping and cash flow management strategies, your business will ensure clarity and health to its finances. 

To help you manage your cash flow effectively, we highly advise you to work with a reliable team. FiBrick is a people-centric accounting firm that is committed to helping both startups and scale-ups. We provide services to manage your cash flow effectively. Contact us today for more information!

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How Do Professional Bookkeepers Help Small Business Owners?

How Do Professional Bookkeepers Help Small Business Owners?

Businesses need to deal with facts and figures daily, regardless of their industry. Sales margins, profit projections, revenue streams, and payroll amounts are just some of the numerous quantities you need to maintain to run your operation. Although it’s much easier to monitor these as a startup, the difficulty of staying accurate and consistent will gradually increase over time. This is why it’s necessary to outsource bookkeeping services.

Outsourcing and Small Businesses

Investing in B2B and SaaS partnerships is vital in paving the way for a small business’s growth. Since these establishments have limited faculties and access to industry professionals, they’ll significantly benefit from collaborating with firms that supplement essential needs like logistics, marketing management, and even bookkeeping.

In this article, we’ll share three benefits you’ll receive by hiring professional bookkeepers.

1. Manages more efficient cash flows

Not all startups have robust infrastructures, especially in their first few months of operations. This allows a solopreneur or small team to build the necessary skill set of developing their company’s business practices. Unfortunately, any amateur mistakes in managing cash flows can have a long-term impact on a startup’s growth into a small business.

Hiring small business accountants prevents you from committing bookkeeping mistakes that can have dire consequences in the long term. Since they have the industry experience of overseeing a small business’s needs, they can streamline your cash flow and eliminate weaknesses in your operations.

2. Gives you the time to focus on your business

During a company’s early stage, most business owners need to oversee different responsibilities simultaneously. It’s a necessity that stems from not having a capable team at their disposal. This is where a small business attempts to supplement these critical roles as operations become harder to oversee by oneself. Marketing officers, sales reps, and branding experts are just some of the numerous people you should have on your team. Unfortunately, a larger team will require a more significant investment in payroll expenditures.

This is where outsourcing solves many of your issues. For example, connecting with a bookkeeping firm allows you to receive quality output without worrying about full-time pay. It enables you to worry about more crucial tasks in running your business.

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3. Prevents financial pitfalls

Besides handling your cash flow, you also need to ensure that your financing model is sustainable and observant of tax responsibilities. Professional bookkeepers have a much deeper insight into how your finances work, regardless of your industry. This means they’re aware of what practices and business decisions can potentially harm your company’s growth.

Additionally, they ensure that you’re not committing any minor or major violations in filing your tax forms. These small mistakes can gradually build up over time, turning into a sizable amount of penalties and debt if you’re not careful. If you want to mitigate avoidable losses from your company’s credit, you need to ensure that a bookkeeping expert is handling, filing, and submitting this essential paperwork.

Conclusion

It’s not uncommon for people to be reluctant about outsourcing a professional for external operations. There’s always a risk factor in handing over a vital part of your business to another person. However, this is precisely why it’s in your best interest to seek authentic and reliable services for outsourced work. This applies to different aspects of your business, from your material vendors to logistics providers. Being particular about who you partner with will ensure that you’re making the right call.

At FiBrick, we provide a suite of services that are fit for fast-growing businesses. Our team of highly experienced accounting professionals can ensure clarity, scalability, and growth to your business finances. If you need small business bookkeeping in New York, schedule a consultation session with us today.

 

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