Tax Reform: The best way to utilize tax savings

The new tax law will offer tax cuts to businesses which raises many questions among leaders as to how to best utilize that capital/ tax savings. Many companies have decided to invest in their people by giving away generous bonuses which embodies the employee-centric philosophy. In addition, to demonstrating your appreciation for your employees you also may find the following tips useful.

  • Set a % amount to be automatically transferred to a high yield savings account
  • Reinvest a percentage of the tax savings into your business
  • Utilize a portion to pay future taxes (again, a high yield savings account dedicated to taxes)
  • Optimize your employee benefits package
  • Invest in municipal and treasury bonds (offer great tax savings)
  • Make those business building improvements you’ve been putting off (another great tax deduction)

I hope you’ve enjoyed these tips!

As always, “Success is continuous improvement!”

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E.O.W (End of the week) Notable Tip: Client-centric Accounts Receivable

Happy Friday!

I hope you’ve had a great week.

Today’s E.O.W is about encouraging your accounting team to embody a more client-centric approach to accounts receivable by asking smart questions that glean insights into what clients value most and what their priorities are. To truly understand that customer everyone must be part of the customer service spectrum because anybody in the company can affect how the client sees the company. This also provides the opportunity to realize areas for improvement, for example, reduction of receivable days and optimized value creation.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

E.O.W(End of the Week) Notable Tip: Quality Costs

Happy Friday!

I hope you’ve had a great week.

Today, I want to discuss quality costs and how they affect your bottom line.

“Quality costs can be found in prevention costs; detection costs (auditing), rework, scrap, downtime and material costs. “

Effective organizations know and pay close attention to their quality costs. They invest in prevention plans to ensure quality is always delivered to the customer and to safeguard their profits.

Hope you enjoyed this short Friday tip.

As always, “Success is continuous improvement.”

Taxes: Depreciation Categories

When buying assets it is important to know the best way to purchase and depreciate to take advantage of tax loopholes. Capital expenses usually include the following assets: buildings, cell phones, computers and software, copyrights and patents, equipment, improvements to business property, inventory, office furnishings and decorations, small tools and equipment, vehicles and window coverings. Below you will find a more detailed account of these depreciation categories.

3 year property:

  • plastics
  • metal fabrication
  • glass

 

5 year property:

  • cars
  • trucks
  • small planes
  • trailers
  • computers
  • peripherals
  • copiers
  • calculators
  • manufacturing equipment (for apparel)
  • construction activity assets
  • R&D equipment

 

7 year property:

  • office furniture
  • manufacturing equipment
  • fixtures
  • oil
  • gas
  • mining assets
  • agricultural structures
  • personal property

Commercial buildings can be depreciated over 39 years while residential rental real estate can only be depreciated over 27.5 years. Expenses incurred for improvements to sidewalks, roads, drainage facilities, fences and landscaping are depreciated over 20 years.

To learn more about Notable Bookkeeping’s tax planning, preparation and research services call us today at 201-937-3428.

Lean Wednesday Tip

 

“To run an efficient accounting department opt for a chart of accounts with less than 180 accounts for improved productivity and financial planning.”

Small Business saves big with Accounting Automation

Automation of general accounting functions is not only for large corporations, small businesses can reap in the benefits as well. One of the most important costs you should be aware of is the cost of an invoice. Are you or your accounting personnel spending too much time creating and inputting bills and/or invoices into your accounting software? There are many tools that can assist in helping you reduce these general accounting costs but today I will be discussing a feature in Quickbooks Online that aids in the automation of Accounts Payable and Accounts Receivable activities.

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Small Business Accounting Automation

Let’s take a look at Quickbooks Online. How much time are you allotting for entering and processing bills and invoices when that time can be used to better serve your customers and increase sales? Did you know that Quickbooks Online has a feature named, “Recurring transactions”, that allows you to automate your fixed bills and invoices. The time saved by using this feature will allow small business owners to optimize their customer satisfaction ratings.

The “Recurring Transactions” feature, allows you to schedule bills and invoices. You can set when you want the invoice to be created and how often it should be distributed (e.g., weekly, monthly, yearly, et cetera ). Great care should be taken of course when creating the template. It is highly advised to only use this feature for fixed bills and invoices.

The benefit for small business owners who use this feature is tremendous. It means less manual entries, which in turn, allows for more time to do more of what they love.

Next time we will discuss the importance of continually assessing your insurance policies to ensure your are properly covered for current and potential business risks.

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