2012 Obama Budget – Business Proposals

Here is some more information on Mr. Obama’s proposed 2012 budget…specifically some business proposals.  Here is an excerpt from the Journal of Accountancy:

Business Tax Proposals

Tax increases:

• Repeal of several deductions and credits used by oil, coal, and gas companies, including expensing of intangible drilling costs;
• Income tax benefit losses described above in “Individual Tax Proposals” that also apply to business owners.

 Tax cuts: 

• Elimination of capital gains tax on investments in small business stock;
• Enhancement and permanent extension of the research and experimentation credit;
• Energy tax credits, including tax credit for energy-efficient commercial building property expenditures (replaces existing deduction) and the IRC § 48C credit for investments in qualifying advanced energy projects;
• Permanent extension of increased section 179 expensing for small business;
• Relevant income rate cuts extended after 2012, as described above in “Individual Tax Proposals.”

 The Administration is also proposing to require certain employers to provide automatic payroll deposit IRAs available to employees and is offering the employer: (1) a temporary tax credit of $25 per enrolled employee, up to $250, and (2) a three-year increase of the startup tax credit (from $500 to $1,000) for a small employer that adopts a new retirement, SEP or SIMPLE plan.

As a small business owner, my favorite item listed above is the permanent extension for Section 179 increases.  This section of the tax code provides a great incentive to spend money…something this economy really needs from our small businesses.  Whether you’re buying a new fleet vehicle, a tricked out color scanner, or a new phone system; the Section 179 expensing means you can write it all off without having to depreciate over several years.  Of course, there are rules and limitations, so be sure to check with your CPA or accountant before any major purchases.  Happy buying people!

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

New Corona, CA Bookkeeping Service

Inland Accounting Services announced today that it has opened an office in Corona, CA. Located in a hub of business activity, Corona is home to manufacturing, consulting services, and land developing companies to name but a few.

“We are positioning ourselves to be a resource for the small and medium sized businesses here in Corona and the surrounding cities” said principal John Mole.

Today’s announcement comes at a time when the economy as a whole seems to be improving. Although the local economy seems to be lagging a bit behind the national, we expect continued recovery and have high hopes for the future. 2011 may prove to be a modest improvement over 2010, but any positive movement in my book is much better than the negative alternative.

Everyone individual that I know who was out of work during the recession is now gainfully employed. And many of the businesses I work with have seen increased sales over the past year…some with dramatic increases in the past 6 months. All of this to say that we at Inland Accounting are here to be a resource for growth.

Thanks for your time.

John Mole – Principal
Inland Accounting Services
www.inlandaccountingservices.com

Inland Accounting Services to Offer Payroll Processing

In an effort to expand our business and reach new customers, we are now offering Payroll Processing.  This new service joins our existing roster of professional bookkeeping services such as providing financial statements, monthly reconciliations, and invoicing.

One client remarked recently ”I was already considering consolidating my accounting functions and having one company do all of it…this couldn’t come at a better time.  My current payroll company is a real pain to deal with.  So far, my rep. at Inland Accounting has been great to deal with and the switch of my books to their system went like clockwork.  I’m glad I made the move.  Now I’m ready to transfer my payroll as well.”

Come check out the difference that our personal service and attention to detail can make for your company.  We specialize in helping small businesses become more effective and more focused on their core revenue producing activities.  By taking the burden of maintaining the books and handling the necessary tax forms, you are more able to concentrate on the tasks that make money.  It’s more affordable than you might think.  Give us a call to discuss the particulars of your business.

Thanks for your time.

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

So. Cal. Housing Market Off Again

In the LA Times today, I read that housing prices and sales dropped last month from the same period last year by 0.6% and 5.9% respectively.  Although the Inland Empire experienced the steepest declines, the DataQuick numbers represent all of Southern California.  Apparently the drop was driven by a shift in buyer preferences for cheaper homes and foreclosures. 

This news just confirms what many of us already know…the economic recovery is tentative at best.  Like much of the past several years, growth in the businesses I serve is only in fits and starts; a little here, a little there, but always with down months in between.  It’s very difficult to hire and forecast correctly when sales from month to month are so inconsistent.  At least, that has been my experience. 

For instance, I know of one small business based in Corona that has experienced exactly the type of growth/stagnation I describe above.  Over the past four years, they’ve seen some good months, but more slow ones.  Overall, they have been unable to reproduce their small victories in a consistent manner.  Their buyers are just wary and don’t seem to be pulling the trigger on purchases.  Apparently it’s the same for home buyers in So. Cal.  Good deals are not always enough.  The deal has to be great…at least in this economy it has to be great!  Good luck in finding a great deal.  Competition is fierce.  There are lots of cash buyers out there looking for the same thing. 

Here’s a thought, consider a good deal instead; add some optimism and perhaps we’ll see some positive movement again.  I’m just saying, if we all were optimistic; then today’s good deal would look great and we would be well on the path to real recovery.  Good luck on finding that great deal…I know I’m still looking for mine   Thanks for your time.

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

Survival By Diversification

I just read somewhere that in order for a small business to survive in this economic climate, it must diversify.  I say that solution is too simple and actually, it misses the point.  Believe me, I’ve seen businesses fail despite their best efforts to diversify.  And I’ve seen businesses continue to trudge along for years with their core business anchoring sales and all diversification efforts not even breaking even.

So diversification though sounding great on the surface is not the solution to your small business woes.  If you want an overly simplified answer, I’ll give you one:  Raise your prices, get more customers, or sell your existing customers more services/goods.  If you must diversify in order to achieve those ends, then by all means do it.  But don’t just diversify in the hopes that revenue will somehow materialize from thin air.

It’s a cart before the horse type argument.  The focus should always be on increasing existing revenue streams, or finding new ones.  To use a fishing metaphor, you must find the stream before you can cast your line into the water…right?  If you’re not even near the water, you definitely won’t be catching any fish

I know it’s not that simple.  In real life, it probably feels like sometimes you just get lucky.  Some things work; others don’t and the reasons for both are sometimes inexplicable.  At least give yourself a fighting chance though.  Don’t diversify just for the sake of diversification.  We’ve all heard of businesses failing because they lost their way pursuing ventures outside of their core revenue stream.  They forgot to serve their core customer’s needs and they let the competition get the better of them.  This slowdown won’t last forever and you want to make sure you (and your business) are positioned in the market to take advantage of the upswing.  Stay focused and if you must diversify, play to your existing strengths and your competition’s weakness.  And of course, hire a professional accountant so you can maximize your efforts!

 

Thanks for your time.

 

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

 

State Payroll Taxes May Be Going Up

According to the Wall Street Journal today, Obama’s budget is proposing a widening of state payroll taxes beginning in 2014.  It’s not actually an increase in the rate, but a “widening” or increase in the amount of money getting taxed.  Currently the first $7,000 of wages is taxed, and the proposal is to tax the first $15,000 (more than double).

This strategy of raising taxes by widening them seems a bit tricky to me, but effective none the less.  This would have to receive congressional approval which doesn’t seem likely in the current political climate.  So perhaps the issue will be moot by 2014…wait a minute, I think I just stumbled on Obama’s strategy.  Make a honest to goodness attempt at fixing something, but make it effective a few years down the road.  Heck, he may not even be in office by then.  The economy could be completely turned around and the state unemployment coffers could be flush once again.  Pretty smart Mr. Obama

In the short term, at least you are trying to offer solutions.  The unemployment system has been a much needed safety net for millions of Americans in the recent past and it needs to be available in the future.  So, the money needs to be replenished somehow…right?  I’m just not sure that making employers (especially small business employers) foot the bill is the best approach.  But what do I know…by the way, this is not a political blog.  This is just the opinion of one person without any political agenda or affiliation…seriously.

Thanks for your time.

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

More People Becoming Self-Employed

I read in a recent article on the LA Times website, that the number of self-employed Americans jumped from 9 million to 14 million per the latest set of employment figures.  That is pretty impressive; however the numbers don’t seem to tell the whole story. 

The article mentions that the BLS just added a new category for this type of employment, but didn’t mention how these folks were accounted for before.  So, is this truly an increase or just moving numbers between columns?  Even questioning the numbers, I do believe the underlying trend that the statistic implies.  It definitely seems like (at least in my experience) more contractors are being brought in to the workplace. 

It’s great that Americans are finding ways to create income with or without a full time employer.  However, is this truly a rise in entrepreneurship or merely another sign that employers are seeking part-time (easily let go) workers?  I’m afraid it’s the latter.  But in case more people are truly going in to business for themselves, some of them will probably need an accountant or maybe a payroll service…which is good news for those of us who serve small businesses. 

And if this is a case of mostly reaction to large employers seeking contract workers, it’s still good news.  More people working, making money, & spending money is good for the economy any way you slice it.  Thanks for your time.

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

5 More Reasons to Hire a Bookkeeping Firm

1) Avoid the headache that is hiring employees.  From placing an ad, to conducting interviews; this process is a pain.  Hiring an outside firm still may require a meeting, but you might meet with two or three firms, not ten or twenty candidates.  This will save you tons of time.

 2) Avoid paying for or dealing with providing benefits for additional employees.  We provide benefits for our employees, you don’t have to. 

 3) Get your receipts and books organized.  Knowing that your business affairs are current and in order will provide peace of mind and the basis for a smooth running business.

 4) Have financial reports ready for your review as needed or on a monthly basis.  The Statement of Cash Flows, or the monthly Profit and Loss Statement are invaluable tools that help you perform vital business forecasting and planning.  If you aren’t used to reviewing financial statements regularly, you’ll be amazed at the sense of control that comes from knowledge…of your business finances.

 5) Your books will already be organized and prepared to go at tax time; your CPA will love it!  If your CPA doesn’t have to do as much prep work, you should pay less for your return.  Happy Savings people!

 Oh, there’s my phone…you’re probably calling looking for a bookkeeping firm.  I guess you agree with my list   Thanks for your time.

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

5 Reasons to Hire a Bookkeeping Firm

5 Reasons To Hire A Bookkeeping Firm (5 More Tomorrow)

 1) Get a professional/outside perspective on your day-to-day accounting routine.  We aren’t just an accounting firm.  We also specialize in project management and business development, so we can offer insight and tips for improving your processes.

 2) Be more focused on your core revenue producing activities.  Do you ever feel like you are being pulled away from the things that actually make money in order to keep your business running?  Hiring an outside firm effectively delegates some of those daily tasks so you can be more productive.

 3) Share the responsibility/risk of your accounting activities.  One strategy of risk management is to share the risk, thereby reducing your exposure.  We are a professional accounting firm and operate as such.  You can rest assured that our quality control process will greatly improve your internal error rate.

 4) Having more eyes on your critical financial documents improves quality and reduces mistakes.  This in turn saves you money and headaches.

 5) Professional bookkeeping firms aren’t as expensive as you think.  Most times, we are less than you would pay an employee (considering benefits, etc.)

 I’ll be adding some more to this list tomorrow.  Thanks for your time!

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com

Business Receipts Get Organized

I know the title of this blog sounds far fetched to some, but trust me it is possible.  I was talking with someone earlier today about entering receipts for their home-based business.  She was describing how finding the time to do it is tough.  Not surprisingly, they tend to pile up.

She talked about how this has stack of paper has become a major source of stress in her life; to the point where just thinking about the build-up and ensuing time to tackle the pile is stressful.  I know I have been there many times before.  We all let things go even though we know it will be more painful later.

I’m not going to discuss the psychology behind this, but rather offer a solution.  Here it is:  Find things in your life that you can delegate to someone else.  Or, better yet, simplify and get rid of some activities altogether.  Knowing what to focus on in your business is half the battle. 

If you find that entering receipts is your thing, but you still can’t stay on top of it.  Then I’d say you need to break it down into smaller pieces.  Do a little bit every day to keep the pile manageable.  The trick is to do a little at a time rather than letting it all pile up.  Not only will the pile be smaller, but you will have more day-to-day knowledge of your affairs.  Knowledge is power.  Most of the stress of a pile is not knowing what’s in there and thinking that you may be missing something.  If you touch the pile every day, then you can’t help but be more on top of it.

Of coure, I would prefer that you just hire my accounting firm to keep your books and be done with it   Thanks for your time!

John Mole – Principal

Inland Accounting Services

www.inlandaccountingservices.com