Ensuring Money Doesn’t Become A Problem For Your Business

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StrategyDriven Managing Your Finances Article |Money|Ensuring Money Doesn't Become A Problem For Your BusinessYour business is precious, and you need to protect it in any way that you can. Now, this is far easier said than done when there are so many elements that need to be considered. In this article, we are going to be focusing on one in particular, and that is money. You’ve got to be able to ensure that money isn’t going to become a problem for your business, and in this article, we’re going to be showing you how. Keep reading if you’d like to find out more.

Hire An Accountant

First, we suggest that you hire an accountant. If you have a professional on your team, things are far less likely to go wrong. Managing the finances of a business is tough even when it is something that you have been trained to do. If you haven’t had any training in finance, then it is going to be even tougher and more mistakes are likely to be made. We don’t want you to make this mistake, which is why an accountant is going to be a good idea. Not only will you have peace of mind that everything is being handled with care, they may also be able to provide you with some advice on how you can make your business more cost-effective.

The more money your business has, the better off you are going to be. If something is going wrong, an accountant will be able to pick up on it sooner rather than later. This gives you time to fix it before it becomes a problem for you.

However, if you want to get the most out of the services of an accountant, you need to find one with valuable years of experience and reputation. Hence, when looking for an accountant, it’s best to check their qualifications, ask about their availability, the method of accounting they’ll use, and the fees they’ll charge for their services. By doing this, you’ll figure out whether your prospect is the right fit for your business needs. 

Work With A Money Mentor 

While your accountant handles the financial aspect of your business, you may also need to work with a money mentor to make sure money won’t be a problem for your business. Sometimes, as a business owner, it’s easy to think that you can’t make enough money due to some external reasons, such as economic downfall or customers being broke. But, if you also believe that you can’t do anything about these factors, which make the earning process more difficult, it could be a money block that hinders you from making money for your business. 

That’s why, as mentioned, it may be best to consult with a money mentor to help you with the problem. They can also advise you as to how to stop struggling with your money blocks and what you should do to ensure they’ll no longer become a problem for your business. 

If You’ve Got Debt..

While debt isn’t the worst thing in the world, it isn’t the best either and you want to avoid this as much as you can. However, if it’s the case that you already have debt, there isn’t much that you can do. If you have ever skipped out on debt and have used a new name to create your company and a creditor uses batch skip tracing to find you, it could be a problem for your business. The best thing that you can do is pay off any debt that you or your business has as quickly as possible.

Thankfully, there are ways that can help you pay off your business debts. For example, if you’re struggling with funds, you may consider reducing some business overheads to free up some funds for your debts. You may also improve your company’s cash flow by ensuring the customers will pay on time and negotiating credit with your suppliers. 

Once you have enough funds, you can pay off any debt as soon as possible. Remember, the sooner you are out of debt, the safer your business is going to be financially.

Find An Investor

Finally, if you know that money is tight, then you might want to consider looking for an investor. These people give your business money in exchange for a percentage of ownership. Now, you might not want to give up a percentage of your company, but it might be the only choice that you have. Negotiate with your investor and see what you can come up with between you.

We hope that you have found this article helpful, and now see some of the ways that you can ensure money doesn’t become a problem for your business. Good luck, and we hope that this has given you the answers that you were looking for.

Maximize Tax Savings Using This One Simple Trick

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StrategyDriven Managing Your Finances Management Article | Tax Savings| Maximize Tax Savings Using This One Simple TrickThe San Francisco-based tax law firm of Moskowitz LLP explains how to save big using the new aggregation rules of Section 199A

The Tax Cuts and Jobs Act (TCJA) instituted last year could mean substantial tax savings for many American businesses. This year, savvy entrepreneurs, business owners and certain investors in real estate can maximize deductions and save big on taxes by putting one of the best features of the new tax law to work the “aggregation rules.”

These updated rules allow taxpayers to combine their trades or businesses, rather than calculating deductions separately for each entity. By treating them as a single unit, owners can maximize deductions of up to 20% and reap potentially huge tax savings – but not all businesses or trades qualify and careful considereation must be made to determine if this will decrease or increase taxes in each particular case.

Moskowitz LLP offers three crucial questions to help determine eligibility:

  1. Do the entities share ownership? In order to qualify for aggregation, the same person or group of persons must own 50% or more of each trade or business, or (in the case of a partnership), must own 50% or more of the capital or profits.
  2. Does ownership change from year to year? Aggregation applies only to those entities where the ownership remains the same for the majority of the taxable year – including the last day of the taxable year.
  3. Are the entities interdependent? Taxpayers can aggregate businesses or trades which abide by at least one of the following:
    • They provide products, property, or services that are the same or customarily offered together;
    • They share facilities or significant centralized business elements (like personnel, accounting, legal and/ or information technology resources);
    • They operate in coordination with, or reliance upon, one or more of the businesses in the aggregated group (like supply chain interdependencies).

If the answer is “yes” to any of the above questions, the businesses or trades may be eligible for aggregation. Seeking help from a qualified tax attorney is an essential next step, as aggregation may not be the best solution for every unique situation, and many investments don’t qualify for benefits under these new rules. Qualifying taxpayers must also follow certain guidelines annually in order to qualify for (and maintain) aggregate status, and a seasoned tax attorney can help clarify these.

About the Author

Tax attorney, Steve Moskowitz, founded what would become Moskowitz LLP over 30 years ago, offering clients a full variety of services that include domestic, international, and criminal tax law representation, tax planning, and tax preparation of current and delinquent filings. Having practiced as a CPA for a “Big 8” (now “Big 4”) firm, as well as teaching tax, law and accounting in law school, graduate school and university, Steve has served as a legal analyst for top media outlets, where he appears daily on the radio. Steve knows his profession inside and out, and his message is simple: Don’t go it alone against the IRS. Passionate about helping clients navigate the complex intricacies of tax law, Steve practices as the founding partner of Moskowitz LLP in San Francisco, overseeing a growing team of accomplished tax attorneys and accountants. Visit www.MoskowitzLLP.com or call 415-394-7200 for more information about legal services, valuable tax resources, and to request a consultation.

Why Business Owners Should Detatch From Banks

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StrategyDriven Managing Your Finances Article |Detach from Banks|Why Business Owners Should Detatch From BanksAs a business owner, working with your bank to fund, run and grow your business seems like it’s natural right? Well, it is, and it isn’t. Many people believe that entrepreneurism is all about private ventures, that don’t necessarily involve a bank. It can involve investors, the public in the form of an IPO, or even, family members that are backing you. But why not a bank? Well, banks are inherently linked to the Federal government, so one way or another, big brother has their hand in your pocket. Whether you are taking a loan or credit card from your bank to pay for things in your business, you should reconsider this approach.

Business loan vs investment

A business loan is quick and easy. But, it always comes with strings attached. But so does investment money. So what’s the difference? Well, with a business loan that a bank or lender provides, you can rarely ever negotiate the terms. It’s usually on a take it or leaves it basis. The upside is, that you get to have the money in your account in just a few hours. However, with investor’s money, you can set some of the rules. An investor may want a piece of the company, you can negotiate how much of it you can give away and what kind of creative control you will retain. You can also commission growth reports that can stagger or step the amount of investment put into the business in accordance with success, and how much the investor is to receive in profits from the same correlation.

Banks can pull the plug

Bank loans are usually entirely in the favor of the financial institution. This means you are kind of at the mercy of a bank that is also at the mercy of the government. Essentially, the buck doesn’t stop with the bank, so they feel they can abuse their relationship with you. Take a look and read any business loan contract, and you will find clauses that allow the bank to pull the plug and ask for early payments that were not in the initial structure or payment. The Debt to Success System reviews banking scam, and in an orderly manner lays out how the banks have gone to a debt-based ‘growth’ system. As global debt mounts up, banks will be more inclined to pinch their purse strings and that in turn means, being more aggressive in their actions towards business loan recipients. DSS can also help you overcome your debts, with their unique debt discharge system that banks and governments don’t want you to know about.

YOU are the investment

Rather than going to the bank for a loan, they should want to invest in YOUR business. Banks go to corporations like Tesla, Apple, Mercedes and Microsoft, not the other way around. But how could you become like them? You need to show consistent profits and a brand that has the potential to spread like wildfire. Banks will be flocking to you to invest and you’ll be contacted by their investment firms.

Banks are not the savior of any business. They do provide some financial services that are useful, but before you turn to them, exhaust all your other options first.

What Happens If You Make A Mistake On Your Tax Return?

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StrategyDriven Managing Your Finances Article | What Happens If You Make A Mistake On Your Tax Return?

Contractor accounts can be just as complicated as any other kind. There will be incoming money as well as outgoings, and there may even be subcontractors to pay. A tax return accountant will be able to organize all of this into a coherent tax return. You will know it is time to complete a return when you receive a form.

What Happens If You Make A Mistake?

Mistakes can easily be made on a self-assessment tax return if you are not used to completing one. Contractor accounts can be made up of many different elements, and it could be that something is missed out. Something that is easy to rectify – and notice – is if the address on your return is wrong. If you have moved, you should let the government know immediately so that they can update their records. If you don’t, you should let them know once you realize there is an error on the form.

Other mistakes may be harder to identify. If you do realize something is wrong, the government need to know straight away. Otherwise, you could be penalized and if the government believe you used the wrong figures on purpose, you can even get a criminal conviction.

Checking and re-checking your tax return before you send it off is essential. Or, if you are worried that you might make a mistake (and it does happen easily), engage an accountant to complete the return for you. Many people leave their tax returns until the last minute because filling it in is a hard task, and a laborious one too. But getting in touch with a contractor accountant will make the work much quicker and easier, and will prevent you from getting a fine or worse. It makes sense to hire an expert to get the job done, leaving you with much less worry. You would hire experts for other aspects of the business, so why not this one? This is especially important if you have gone through a year of change, for example, if you are in the process of acquiring a competitor or you have a second income coming from a different source.

Is It Possible To Avoid Penalties?

If you miss the deadline for sending in your self-assessment tax return, you will generally be fined. However, if you have a ‘reasonable excuse’ for being late, you may be exempt if it was entirely out of your control. Hiring an accountant should mean you never have to have this problem, but if you do your excuse must be made as soon as possible. Examples of reasonable excuses could include documents being lost due to a fire or a flood. Equally, if documents are stolen and you are unable to replace them, this may also count. If you suffered from a life-threatening illness and you had to stay in hospital and where therefore unable to complete your tax return, this will usually also count. So too does the death of a partner just before the filing date (although you may be asked to show that you had started preparations to complete the return before it happened).

How Technical Debt Opens the Door to Cyber Attacks—and Steps to Protect Your Small Business

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StrategyDriven Managing Your Finances Article |Cyber Attacks|How Technical Debt Opens the Door to Cyber Attacks—and Steps to Protect Your Small BusinessThe virus pandemic of 2020 is severely disrupting the economy and the large and small businesses that drive it. Poor practices such as ignoring safe distancing, insufficient sanitation, and not mandating mask-wearing open the door to infection of customers and staff and threaten the viability of a business.

Similarly, poor practices that allow a business to incur technical debt open the door to cybersecurity exploits that can bankrupt a business financially or through loss of trust and reputation in the eyes of its customers. Leaders of small and medium size businesses (SMBs) often think their size lets them operate under the radar, as less attractive targets to bad guys. But, actually, their lack of robust security strategy and resources make them easier to penetrate. And, sadly, the National Cyber Security Alliance (NCSA) reports that 60 percent of small companies are unable to sustain their business more than six months following a cyberattack.

Years of experience working and advising businesses domestically and internationally has shown that business leaders find it difficult to recognize tech debt and how it exposes cyber vulnerability. As technology has evolved over time from main frame to client server to the Internet and now the cloud, the impact of a new Tech Debt 2.0 has grown stealthier and more sinister. This is especially true for SMBs that lack the resources to apply to cybersecurity. CEOs and CFOs managing technology may not recognize tech debt building up in their SMBs—because it is not revealed in monthly variance reports or other accounting controls. Someone in their organization, without explicit or implicit authority or oversight, may be making decisions adding to the Tech Debt 2.0 load and increasing exposure to cyberattacks. Let’s look at how that might happen and how to prevent it.

Old and Obsolete Infrastructure:

Azeotrope, an aerospace firm in the Southeast, realized they were compromised when a number of clients complained of receiving invoices from Azeotrope that contained confidential information about their client’s orders and projects. Months of investigation by a cyber consulting firm finally determined the source of the vulnerability to Azotrope’s network: a combination printer/fax machine in their testing and QA area that engineers regularly used to fax lunch orders to a local Chinese restaurant. Because the device was connected to the company’s network for printing purposes, it provided network access using out-of-date insecure facsimile protocols. This gave the bad actors access to the company’s customer accounts and valuable data.

“Fax is an ancient technology; the protocols we use today haven’t been changed for the past 30 years,” notes Yaniv Balmas of Check Point Software, a leading provider of cyber threat intelligence. “Fax data is sent with no cryptographic protections; anyone who can tap a phone line can instantly intercept all data transmitted across it. Fax is always sent unauthenticated. There are absolutely no protections over fax.” Balmas advises: “If you can’t stop using fax, segregate the printers, put them on a separate network.”

The Tech-away: Identify and remove obsolete components from your network. Not just equipment with obvious vulnerabilities like fax, but all equipment no longer supported and updated by the manufacturer for cybersecurity risk.

A Stitch in Time . . .

Patches are often created after a software or hardware company has experienced a data breach or recognized a vulnerability that might allow one. The patch is issued to ensure other businesses’ data remains safe. Applying a patch as quickly as possible lessens the risk of your business becoming affected. But it is each business’s responsibility to know a patch has been issued and to apply it promptly. That is patch management—a relatively straightforward process, 10 or 20 years ago. Today, however, the vast proliferation of software and hardware components in our business environment have made patch management a complex, time- and resource- consuming necessity, critical to the cybersecurity of a business’s network. Failure to effectively manage patching is a main cause of accumulating excessive Tech Debt 2.0 and security penetration.

NETGEAR, a highly respected manufacturer of network equipment in data centers, offices, and the homes of hundreds of thousands of people working from home now, and, possibly, far into the future, recently sent an email alert to its customers. An excerpt is below. How would your CFO or CIO handle this?

Hello.

We have become aware of vulnerabilities involving certain NETGEAR products and have issued a security advisory.

We have released hotfixes addressing some of the vulnerabilities for certain impacted models and continue to work on hotfixes for the remaining vulnerabilities and models, which we will release on a rolling basis as they become available. We strongly recommend that you download the latest firmware containing the hotfixes as instructed in the security advisory. We plan to release firmware updates that fix all vulnerabilities for all affected products that are within the security support period.

Until a hotfix or firmware fix is available for your product, we strongly recommend turning off Remote Management in your product. Please follow the steps below to turn off Remote Management immediately. . .

The Tech-away: Take steps to reduce the burden and complexity of patch management. Adopt software and hardware that automatically detect and apply patches. Look for opportunities to shed responsibility for patch management through outsourcing cybersecurity responsibility or utilizing cloud services that provide monitoring and patch management services. Tech Debt accrued through failure to manage patching effectively can fatally compromise your network and business.

People, Policies and Processes

Of greater consequence than obsolescence and patch management to Tech Debt 2.0 and cybersecurity are the people, policies, and processes that make up the culture and collective mindset of a business organization. Properly patched, up-to-date infrastructure is not going to stand in the way of the accounts payable clerk or chief marketing officer who clicks on the attachment to an email from some bad actor posing as a trusted vendor or prospective customer. Equally dangerous is the computer operator who props open the data center door to make it easier to allow the guy who says he’s the A/C maintenance engineer get in and out. Or the CEO who shares her password with her husband and children so they can access her mail and messaging accounts.

Establishing a data security mindset from the bottom to the very top of an organization is a basic essential to safeguarding a business from cyberattacks. Policies and processes must instill in all the company’s people an always-on awareness of their responsibility to protect the physical and digital assets of the enterprise. That mindset needs to be reinforced frequently and backed up by actions that demonstrate commitment and consequence behind company policies and processes.

The Tech-away: Formulate and clearly communicate policies and processes governing any actions that involve cybersecurity. Visibly demonstrate across the organization the commitment to security.

Make cybersecurity awareness a visible priority for every person in the organization.

About the Author

StrategyDriven Expert Contributor |Michael C. FilliosMichael C. Fillios is the founder and CEO of the IT Ally Institute, a nonprofit organization providing small and medium-sized businesses (SMBs) access to knowledge, research, and practical tools to improve their tech bottom line. A senior global business and technology executive with more than 25 years of experience in IT, finance, operations management, and change leadership, he lives in Mason, Ohio. His new book is Tech Debt 2.0™: How to Future Proof Your Small Business and Improve Your Tech Bottom Line. Learn more at www.itallyinstitute.org.