Starting a company is not as easy as people think. The first step is determining what type of entity the business is to be structured as. Partnership, limited liability company (LLC), s-corporation, c-corporation or sole proprietorship are the typical choices, but there are other less used types. The choice of entity has great effect on the owners and/or investors taxes as well as liability. Before going any further let me say this is not written by an attorney or accountant and professional advice should always be sought when starting an entity. The choices made in the beginning will affect the start, growth, and exit of the investment so it is important to tie up loose ends and stay on course as the business grows. Liability is a word many people have heard but few fully understand. To be liable for a business essentially means… Read more!
Business owners start companies for a variety of reasons, but at the core is the entrepreneurial spirit of believing that anything is possible. Businesses start as ideas which a person believes will fill a void in a marketplace and provide people with a good or service. Some businesses start out well capitalized and some begin on a shoestring budget, but either way the first years are trying and the light at the end of the tunnel seems to get further away until one day the owner looks up and realizes they have made it. The business cash flows on a monthly basis, the owners can begin to draw salary, pay off debt and eventually the equity owners can earn a distribution or dividend. This is the moment where many business owners look around and try to determine exactly what it is they have created. For some owners the work… Read more!
It seems that every professional practice is now looking at cloud based solutions for their next IT expenditure, but many practice owners do not know where to begin when researching their choices. Professional practices have more scrutiny than other businesses because third party regulators provide additional oversight of their actions. For instance attorneys are scrutinized by the American Bar Association (ABA), accountants must comply with Sarbanes Oxley security standards, and doctors must remain compliant with HIPAA. The additional regulation provided by these agencies can often carry severe consequences for non-compliance in the form of fines, reprimands, or suspension of licenses to practice. Unfortunately, there is no such thing as an IT system that is 100% secure. Clouds will be broken into, computers will be stolen and phones will be lost. However, despite the risks the benefits far outweigh the threats which will cause in-house servers… Read more!
Last week I wrote about the bookkeeping process for businesses and the importance of managing that process. This week we have been working with a client on a project which has a bookkeeping process that requires a large amount of data entry, and more difficult has been the processes which manage the paper inside the business prior to it reaching the bookkeeper for entry. While many businesses are working toward becoming paperless other businesses are required to manage paper invoices through a managerial approval process before the bookkeepers can ever enter them. Invoices which arrive on paper must be kept in order, signed by appropriate managers, and organized for handoff to the bookkeeping department. Making sure the invoices are received, approved, and organized often requires multiple parties all doing one or more tasks in a timely manner. The process seems simple, but for business… Read more!