Latest news with #businessmanagement
Forbes
a day ago
- Business
- Forbes
Why Financial Analysis And Payroll Compliance Are Critical In Business
Bree Manay, Managing Partner & CEO at Manay CPA. Successful business management involves many moving pieces—not only leading a team but also accomplishing short- and long-term business goals aligned with a mission and vision. Within that bigger picture are the critical details, like the crunching of numbers, the analysis of financial performance and the overall health of the business. An effective, successful business runs in the black and takes careful measures to minimize its risk of falling into the red. As a certified public accountant and tax coach, I've seen firsthand the importance of business leaders developing a strong understanding of their company's financial health while making present and future business decisions. This ensures the business is not only compliant with the law but also can remain successful and grow. Business decisions that aim to earn money often cost money first. Before making such decisions, business owners need to evaluate their financial health and position to determine whether their choice will benefit or cost the business. This evaluative process often includes a financial statement analysis, which helps businesses set appropriate budgets and plan for the future. There are three financial documents I recommend leaders familiarize themselves with: balance sheets, income statements and cash flow statements. The balance sheet offers a preview of a business's assets, liabilities and equity at a specific point in time. It is organized so that total equity equals assets minus liabilities. Analyzing the balance sheet helps assess the business's risk, asset liquidity and ability to meet financial obligations. However, since it captures only one moment, it might not fully reflect the business's overall economic health. The income statement, or profit and loss, summarizes a business's total revenue, expenses and net income for a specific time period, usually quarterly or annually, in my experience. Unlike a balance sheet, it focuses on a defined timeframe. There are two primary methods for analyzing the income statement: vertical and horizontal analysis. • Vertical analysis looks at a single column of data, calculating percentages and relationships between line items, such as expenses compared to total operating expenses. This helps identify performance trends. • Horizontal analysis compares line item values over time to reveal trends, highlighting growth patterns and the impact of specific items on financial performance. The cash flow statement outlines the cash moving in and out of a business during a specific period. Reviewing this statement involves looking at cash flows from operations, investments and financing activities to assess the business's ability to generate cash, manage debt and support growth. A positive cash flow can indicate financial stability, whereas a negative flow can be a sign of issues within the business. While financial statements can be evaluated individually, they are often assessed together to provide a clear picture of a business's health. Key metrics include: 1. Liquidity, or the ability to meet short-term debt obligations 2. Solvency, or the capacity to meet long-term debt obligations 3. Profitability, or the revenue generated compared to expenses and remaining cash 4. Operating efficiency, or the effectiveness in managing daily operations Compare these metrics with competitors over time, and take into account market conditions as you do so. Identify positive trends, and be wary of negative patterns that could signal concerns. Investors and decision-makers typically use these analyses to value businesses, and they can significantly impact their willingness to engage in deals. Beyond financial statements, another critical aspect of a business's financial health is payroll. For every employee on payroll, both the employer and employee have payroll taxes, the taxes paid on wages, tips and salaries. Employees typically withhold these taxes from their paychecks to be sent to the government to fund specific programs, and employers match certain tax values and pay their own shares to the government. Businesses must deposit and report all payroll taxes to fully comply with the law. Here are a few of the basics employers should be aware of: Under the U.S. Federal Insurance Contributions Act (FICA), the revenue collected from payroll taxes is used to fund Social Security and Medicare programs, which return the financial and health benefits to the employees later in life. For 2025, the Social Security tax rate is 6.2% each for employer and employee, totaling 12.4%, with a wage base limit of $176,100, according to the IRS. The Medicare tax is 1.45% each, totaling 2.9%, with no wage base limit. For employees who are paid more than $200,000 in wages in a year, an additional 0.9% Medicare tax is imposed on the employee but not the employer, the IRS also said. Employees are subject to the federal income tax, which employers are responsible for withholding from the employee's wages on each paycheck. The amount the employer must withhold from the employee is calculated using the employee's Form W-4, Employee's Withholding Certificate. Under the U.S. Federal Unemployment Tax Act (FUTA), employees who lose their jobs are subject to compensation. The FUTA tax is 6% of each terminated employee's FUTA wages, but this typically results in a net 0.6% tax rate if you qualify for applicable tax credit reductions, according to the IRS. Only the employer pays the FUTA tax, not the employee. Employers often hire more staff to support business growth, which can complicate payroll management. Businesses should budget for payroll expenses—including wages, tips and taxes—and track withholding obligations to ensure accurate and timely payments. Many companies use third-party payroll services to help with this. Employers should also ensure they're working with certified public accountants or financial advisors who are familiar with their industry to help manage finances and ensure their business is compliant with tax regulations. Running a business involves complex financial management that requires a well-organized cash flow system for long-term sustainability. Owners must thoroughly assess their financial situation to ensure well-funded decisions, fair wages for employees and accurate tax reporting, all while maintaining cash flow for daily operations. The information provided here is not investment, tax, or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Forbes
4 days ago
- Business
- Forbes
How To Put Together A Professional Team For Your Small Business
Your time is valuable, and so is doing things right. So get yourself a payroll service, bookkeeper, tax preparer and insurance broker–and keep multiple lawyers on speed dial. When my husband and I opened our law firm, we were confident. We had a name, a business plan, office space, and a website. We had thought of everything—except paperwork. And more paperwork. We had not considered how much time we would spend sorting through canceled checks, bank statements, payroll stubs, and letters from various tax authorities regarding regulations. While, as a tax lawyer, I well understood that taxes needed to be filed quarterly, I hadn't done the math: quarterly filings for federal, state, and local taxes meant 12 separate submissions a year, just for income taxes. We also had to file federal, state, and local payroll taxes (typically also filed quarterly), unemployment taxes, and business development taxes. We were required to register with the state and submit annual reports. When we changed the sign out front, we had to obtain approval from our local authorities and pay a fee. There was even a separate annual fee for having a private alarm company. We needed to maintain business liability insurance, professional insurance, workers' compensation insurance, and health insurance. Did I mention that there were only two of us at the time? Running a business involves more than just flipping the lights on, especially if you want to do things the right way (and trust me, you do). This reality often conflicts with the amount of time you have to spend actually managing your business. What's the solution? Surround yourself with good people. Not just capable employees, but a professional team dedicated to handling all the compliance issues so that you can focus on what you wanted to do in the first place: run your business. It's true that a professional team costs money, something that startups and small businesses are often short on. But consider this: A good tax preparer. The IRS reports that business taxpayers spend an average of 24 hours completing their federal income tax return. This includes 11 hours devoted to record-keeping, five hours for tax planning, and eight hours for completing and submitting forms. That's more than half of one work week—on one form. Taxpayers who sell or perform services across state or local lines face even more complexity, including computing and remitting sales tax. U.S. sales tax rates not only vary by state but also by city and county—according to tax compliance software company Avalara, there are more than 13,000 sales tax jurisdictions in the U.S. And those rates? They are constantly changing. There's also a learning curve. The recent House passed tax bill (now officially named the 'One Big Beautiful Bill Act') weighed in at over 1,000 pages (it's still being worked on). Four years ago, the American Rescue Plan Act of 2021 made changes to Form 1099-K reporting requirements for third-party payment networks (like PayPal, Venmo, etc.) and online marketplaces, impacting small businesses. Since then, the IRS has walked back implementation, leaving some taxpayers confused. Processing all of those changes—and the changes to the changes—can be time-consuming and frustrating. So, you could do your own taxes, but chances are you're too busy with other things. A tax preparer does not need a specific credential to be competent. However, by law, anyone paid to prepare or assist in preparing federal tax returns must have a valid Preparer Tax Identification Number (PTIN). Paid tax preparers are required to sign and include their PTIN on the taxpayer's return. Fortunately, for business taxpayers, it's all tax-deductible. Additionally, a good tax preparer can also flag potential audit issues and point out areas where you might be wasting deductions or credits (you're not still depreciating items that might be expensed, are you?). A good bookkeeper. Bookkeeping, at its most basic, is the recording of financial transactions. However, Nicole Davis, the founder and CEO of Georgia-based Butler-Davis Tax & Accounting, warns that it is more than simply balancing a checkbook, especially for small businesses. It includes recording receipts and expenditures, tracking accounts receivable and accounts payable, as well as potentially managing inventory and loans. That's why every business needs a competent person to manage the books. This might be the same person as your tax preparer, or it could be someone different. Today, there are in-house, fractional, and virtual bookkeeping options, making it easy to find someone to fit your model, timeframe, and budget. No matter how you arrange it, solid record-keeping is important. The most obvious reason to have routine bookkeeping is that it helps you at tax time. If you're organized all year, there's no last-minute scramble. Plus, regularly reviewing the books means you're less likely to miss something. Good bookkeeping also helps you understand the financial health of your business. Just because you're paying your bills doesn't mean your business is on track for success. When we first started our business, our local banker would chirp, 'Cash flow!' We knew it was important, but we didn't realize how crucial it was until a major client, who had incurred a very large bill, was unable to pay due to unfortunate circumstances (a nice way of saying he was sent to prison). Suddenly, those accounts receivable weren't as meaningful because they didn't translate into cash flow. Bookkeepers can generate a lot of reports. Jenny Groberg, CEO of BookSmarts Accounting and Bookkeeping in Utah, recommends that businesses focus on one type of statement: a profit and loss statement (or P&L statement. This is a financial report summarizing your income and losses during a specific period, like a quarter or fiscal year. In short, it shows how much money you're making or losing. As a business owner, I don't want to have to beg clients for money. I'm terrible at it, and I find it awkward to ask for money in one breath and offer legal advice in the next. Bookkeepers can prepare and send invoices and issue dunning letters when clients haven't paid. I know who has paid and who hasn't (and I intervene when necessary), but having a bookkeeper make those requests allows me to maintain a professional relationship with clients. I don't want to spend all of my time in the financial weeds when I need to be building and growing my business. Neither do you. Having someone help keep the books organized is well worth the cost. (You can find more on hiring a bookkeeper here.) Lawyers. I know, people hate lawyers. But you need them. Trust me. And you need lawyers (plural) as part of your team. Think of lawyers as you do doctors: If you're healthy, you don't need to see your doctor every month, but you will require an occasional check-up. Checking in at least once a year with a knowledgeable business lawyer to ensure that you're complying with corporate formalities (like minute books and annual meetings) will help keep your business healthy. Of course, when you get sick, you see a doctor. The same analysis applies to a lawyer. When you have a problem, pick up the phone. Don't wait for it to fester; chances are, like an infection, a legal issue will only get worse without attention. And what about when you have a specific ache? Like a pain in your chest? You see a cardiologist. You don't go to the dermatologist. Ditto for legal services. Your divorce attorney typically shouldn't be handling your trademark issues. Your tax attorney shouldn't be handling your criminal law matter. While it's true that some areas of the law overlap (like tax and business), most lawyers are not one-size-fits-all. The law is vast and complicated. No one knows everything. Lawyers can do more than help you fix what goes wrong—they can help you stay compliant with changing rules and regulations, so that things don't go wrong. For example, during much of 2024, the Treasury Department touted registration under the Corporate Transparency Act (CTA). This year, under the new Trump Administration, Treasury walked back most of the CTA, limiting its scope to foreign companies. Before the revision, however, an estimated 32.6 million companies were potentially subject to reporting requirements, with significant penalties for noncompliance. Having a lawyer stay on top of those kinds of matters as they relate to your business can help you avoid problems down the road. When you're just getting started, it's wise to know a good corporate lawyer, a good tax lawyer, and a good intellectual property lawyer. They might be at the same firm or they might not be; the size of the firm doesn't always correlate to the quality of the work (the best hamburgers are not found at McDonald's). You don't have to pay lawyers to have them in your speed dial, but you do want to be able to call when you need help. Insurance Brokers. I had no idea how much insurance I needed until I started my own business. There was general liability insurance, business premises insurance, professional (malpractice) insurance, health insurance, life insurance, and disability insurance. I began, like many businesses, by making a few phone calls and obtaining coverage in small pieces on my own. But then things changed. We hired more people, bought a building, and moved. I couldn't figure out whether I was overinsured, underinsured, or just right. So, I went to the experts. It's the job of insurance brokers to explain and coordinate different kinds of insurance. They'll work with you to figure out exactly what you need and offer different solutions based on industry, geography, and cost. What about that cost? Ed MacConnell, president of Total Benefit Solutions in Pennsylvania, says that brokers are paid differently depending on the client. When it comes to health insurance, brokers are typically paid a commission by the insurer, which means that it costs you, as the business owner, nothing out of pocket since that cost was already included in the premium expense. Brokers may also be paid on a fee basis, depending on the services. Insurance brokers just don't collect a check for premiums. They can assist with compliance issues, advise on best practices, and help with healthcare reimbursements and settling benefits issues. Retirement Plan Administrators. One of the most challenging aspects of running your own business can be giving up the benefits you once enjoyed. One often-overlooked benefit of a small business is a retirement plan. It can feel like a luxury—one of my fellow small business owners once burst into laughter when I mentioned setting up a 401k ('With what?' she cracked)—and it can be complicated by a host of rules and regulations. While small businesses used to be limited to one or two options, there are now many different kinds of retirement plans for small businesses to choose from. A retirement plan administrator can explain your options (as well as what you're not allowed to do), walk you through the process, and keep you on top of what you need for compliance purposes. That might include flagging due dates for returns, figuring limits and caps for plans, and assisting with filling out annual reports. Retirement plan administrators can also advise on whether plans are subject to the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that governs retirement and health plans, including whether you need to provide certain kinds of notices to your employees. Like insurance brokers, many retirement plan administrators operate on a commission or fee-for-service basis—ask upfront. Payroll Services. Throughout my years of practice, one mistake made by small businesses stands out the most: failing to manage payroll effectively. For wage earners, Social Security and Medicare taxes are called FICA (Federal Insurance Contributions Act) and are taken out of your paycheck. Taxes on self-employment income are sometimes called SECA (Self-Employment Contributions Act) taxes since self-employed persons pay both the employee and employer contributions. If you're a wage earner, your employer collects your Social Security and Medicare payments and remits both their portion and your share to the government (self-employed persons pay the IRS directly). Employers, including small business owners, have a legal obligation to make the remittance. If that doesn't happen on time, there can be serious consequences. For example, a trust fund recovery penalty may apply. The penalty is 100% of the unpaid trust fund tax and may be imposed on those the IRS deems responsible for collecting or paying the tax. That means that the liability becomes personal (as opposed to a business liability) and isn't easily discharged. Even more serious? Those employers and responsible persons who fail to pay over trust fund taxes may be subject to criminal charges. Sentences can result in restitution and jail time. Payroll taxes, including withholding, should be immediately set aside to be paid over to the tax authorities—I always recommend maintaining a separate account for this purpose. However, it can be tempting for some business owners to dip into those funds when cash is low. They often figure that they'll just 'borrow' the money now and put it back later. For many business owners, later never comes. Instead, tax liabilities multiply. The solution for most businesses? Hire a payroll company. Outsourcing payroll to a payroll company can be a significant time-saver for small businesses. Payroll companies will figure out how much is owed for federal, state, and local purposes and can remit payments straight from your checking account. They can also create reports and coordinate with your bookkeeper or tax preparer to help ensure that you, your employees, and the tax authorities get paid on time. Now that you know whom you need, how do you go about assembling your team? Here are some tips: When you identify someone who might be a good fit, set up a time to ask questions about their background, work processes, timelines, and style . As you add members, remember that you're building a team, not a group of strangers. While your team doesn't have to be best friends, you should make sure that the folks you choose feel comfortable communicating with each other. If your bookkeeper won't schedule time to talk to your tax preparer, it creates more work for everyone. And if your tax attorney crafts a great benefits plan for your business but fails to communicate the specifics to your retirement broker, the plan is meaningless. Don't be afraid to explain that you're not happy or let someone go if they're not working out—if they're not willing to be part of your team, they're not useful to you.
National Post
22-05-2025
- Business
- National Post
cieTrade Introduces Automated Payment Processing with Stripe
Article content NORWALK, Conn. — cieTrade, a leading provider of business management software for commodity traders, pulp, paper and recycling companies, is pleased to announce integration with Stripe, a payment processing and revenue management platform. With this new option, cieTrade clients can instantly receive payments from customers by credit card or ACH remittance from Stripe's secure payment portal while fully automating the accounts receivable posting process within cieTrade. This new function is currently available for the cloud platform, but is expected to be introduced for the cieTrade Windows Desktop in the third quarter. Article content Article content To activate the integration, clients must first establish their own Stripe account. cieTrade's integration service is offered free of charge; however, payment transactions are subject to fees charged by Stripe. As payments are received from customers through the Stripe portal, they are automatically made available in cieTrade and can be easily applied against multiple invoices, clearing receivable balances and posting cash to accounting in one seamless operation. Article content According to David Haber, founder and principal at cieTrade: Article content 'Our new integration with Stripe is a significant step forward towards meeting the increased automation demands of our clients. The integration process helps accelerate cash flow and improve accuracy by completely eliminating the need to match invoices and manually post cash receipts, all while providing customers with flexibility to make secure online payments. It's the first of several new productivity initiatives we will introduce in the coming months to help cieTrade subscribers maximize value from using our platform.' Article content cieTrade is used by many of the world's leading recycling and forest products companies. They offer a specialized business management solution for both (SaaS) cloud and on-premise environments tailored to the needs of bulk commodity traders, recycling plants and pulp and paper companies. It supports specialized workflows, business processes, shipping documentation and financial reports that clients need, combined with a support team that offers deep industry knowledge and best practices to help clients achieve maximum value from their platform. Article content Article content Article content Article content Article content
E&E News
21-05-2025
- Business
- E&E News
BLM loses senior budget official
The Bureau of Land Management continues to undergo senior leadership changes. Barbara Eggers, BLM's assistant director for business management and administration who oversees development of the bureau's annual budget, among other things, is resigning as part of the deferred resignation proposal that was offered to staff last month, according to three people familiar with the situation who were granted anonymity because they are not authorized to discuss the matter publicly. She plans to leave the bureau by the end of the month, the people said. Advertisement Eggers appears to be the first senior BLM official to have taken the deferred resignation offer as the bureau undergoes extensive changes to personnel, its top priorities and deployment of resources under President Donald Trump.
Yahoo
08-05-2025
- Business
- Yahoo
Barrett (NASDAQ:BBSI) Beats Q1 Sales Targets
Business management solutions provider Barrett Business Services (NASDAQ:BBSI) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 10.1% year on year to $292.6 million. Its GAAP loss of $0.04 per share was 68.6% above analysts' consensus estimates. Is now the time to buy Barrett? Find out in our full research report. Barrett (BBSI) Q1 CY2025 Highlights: Revenue: $292.6 million vs analyst estimates of $285.9 million (10.1% year-on-year growth, 2.3% beat) EPS (GAAP): -$0.04 vs analyst estimates of -$0.13 (68.6% beat) Adjusted EBITDA: -$2.21 million vs analyst estimates of -$5.5 million (-0.8% margin, 59.7% beat) Operating Margin: -1.4%, in line with the same quarter last year Market Capitalization: $1.06 billion 'BBSI delivered a strong start to the year, highlighted by record gross and net WSE additions and continued high client retention,' said Gary Kramer, President and CEO of BBSI. Company Overview Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ:BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions. Sales Growth Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. With $1.17 billion in revenue over the past 12 months, Barrett is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand. As you can see below, Barrett's sales grew at a decent 5.2% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a helpful starting point for our analysis. Barrett Quarterly Revenue Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Barrett's annualized revenue growth of 5% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Barrett Year-On-Year Revenue Growth This quarter, Barrett reported year-on-year revenue growth of 10.1%, and its $292.6 million of revenue exceeded Wall Street's estimates by 2.3%. We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates. This signals Barrett could be a hidden gem because it doesn't get attention from professional brokers.
