Client Accounting Services 101: The secret to working ON your business rather than IN your business

by

You’re probably familiar with the business-owning wisdom of author Michael Gerber — that entrepreneurs build enterprises while technicians build jobs. And most fail because they spend too much time working in the business rather than on it.

The day-to-day operation of a business is a handful, especially if you’re hands-on doing the grunt work or supervising a junior staff member. If you’re like most business owners, financial and accounting responsibilities tend to end up at the bottom of the list of things to do.

Millennial business owners get it. They want to focus on high-value tasks, not mundane work. They understand the value of strategic outsourcing, like Client Accounting Services (CAS), which give business owners more time to focus on business-developing sales and growth strategies.

CAS provide real-time data and accounting solutions to aid business owners in keeping their finances up-to-date while allowing them the time and flexibility to continue to run their business. CAS is convenient and can be customized to meet your business’s specific needs. In today’s fast moving environment. Our cloud-based solutions provide business owners accessibility from wherever they desire. Depending on the service level selected, our services provide for strategic solutions based on what the business owner needs to grow or maintain their business.

From bookkeeping to accounting to payroll to CFO-level services, we help entrepreneurs meet the daily demands of running the business. Using our financial flash reports and dashboards, data is available to you with a click of a button. Best of all, you don’t have to deal with the headaches of training, hiring and supervision.

Magone & Company changed how we provide services to our clients with the advent and progression of cloud solutions. Our CAS was created to take advantage of what the cloud has to offer so we can streamline the accounting and finance accounting for your business and help you operate efficiently. It allows us to collaborate and have interactions with our clients. Your problems are addressed right away, and you no longer have to rely on outdated financial statements.

Some of the examples of how CAS allows Magone & Company to build better relationships are: flash reports and dashboards to see how the business is performing; cash flow analysis for growth; and regular check-ins to address tax and strategic concerns throughout the year.

Advantages of CAS (depending on the service desired):

  • 24/7 access, giving you more visibility into your financials
  • Mobile friendly
  • Designated skilled accounting team member
  • Bill payment, payroll, general ledger maintenance and bank/credit card reconciliation
  • Cash and cash flow management
  • Financial statements
  • Close monitoring and analyzing of Key Performance Indicators (KPIs)
  • Preparation of custom reports
  • Electronic document delivery; less paper to file
  • Easy to read and painless year-end reporting
  • Keeps costs down
  • Enhances profitability and productivity
  • Freedom to work the way you want

CAS changed our business. Want to see how it could change yours?

New lease accounting standards: Planning ahead to protect your organization

by

The Financial Accounting Standards Board (FASB) is gearing up to align U.S. standards with global accounting standards, increasing transparency in financial reporting and altering the way companies account for their leases.

The mandate will become effective for most businesses in January 2019 — a date that might seem far into the future, but preparing to comply might take more time and resources than you think. In fact, 31% of executives feel their organizations are unprepared, according to a recent Journal of Accountancy article.

What’s so complicated about new lease accounting standards?

Under the new rules, you’ll be required to report your leases as both assets and liabilities on your balance sheet. This applies to real estate, vehicles and equipment. What’s more, the rent obligations that your leases reflect are essentially recognized as debt — which could pose a danger to your credit and bottom line.

Current lease accounting treats leases as either capital or operating leases, and there are specific rules as to their classification. But under the new law, the FASB has mandated all leases whether Type A (financing or capital) or Type B (operating) be capitalized on the balance sheet, including the related lease liability.

For example, consider your debt covenants with banks. Many loan documents include various debt covenants, such as debt to equity ratio or debt service coverage ratio as well as prohibitions against incurring new debt. But operating leases, which are currently included only in footnote disclosure, are nowhere to be found on the typical balance sheet.

FASB standards will also require Type B leases to be recorded as an available-for-use asset with a corresponding lease payable. What does that do to your bank covenants, or better yet, for nonprofit organizations? How do you explain the rent in your current grants being reflected as interest?

There’s no better time than the present

Companies will have to take a closer look at what they classify — or fail to classify — as lease agreements. Keep in mind, this includes options to lease for future expansion, which you’ll be required to treat as if they’re reflected on the books right away. It may even motivate tenants to purchase their buildings outright since they’ll be handled the same way as renting — another obligation on the balance sheet.

By preparing now, you’ll gain a clearer idea of what to expect in the coming months, and ultimately, save money and gain peace of mind without the last-minute scramble as the deadline nears. If you haven’t already, set up a meeting with bankers and funding sources and begin a dialogue regarding the possible effects of the new accounting standard on your grant funding and loan covenants. Act now and avoid any surprises from your accountant or auditor in 2020.

New Jersey’s FY 2019 budget: Ramifications for NJ businesses

by

State legislators and Governor Murphy finally came to a budget agreement last week to avert a government shutdown. While most of the discussion centered around closed beaches, NJ business leaders likely had more on their minds.

With the 2019 budget including more than $1.5 billion in new tax revenue for education, the state’s transit system, fulfilling pension obligations and moving toward free community college tuition, plus increases in the Earned Income Tax Credit and Child Care Credit, we’re all asking: What’s changing, and who’ll be expected to pay up?

Here’s a snapshot at some of the major changes expected to fill the revenue gap:

Millionaires Tax
 Though the tax itself will kick in at $5 million rather than $1 million, the rate has increased from 8.97% to 10.75%.

Corporate Tax
Corporations in the Garden State will take a hit with a 2.5% corporate tax surcharge. The tax will decrease to 1.5% after two years, eventually phasing out. By making it a temporary tax, lawmakers hope to insulate companies from having to downgrade their long-term forecasts to shareholders, who might press for cost reductions to compensate, according to NorthJersey.com.

Uber/Lyft Tax 
These rides sharing services will include a new surcharge, charging 50 cents for solo trips and 25 cents for shared rides.

Property Taxes
Currently, homeowners can only deduct the first $10,000 for local property taxes. But under the new budget, that increases to $15,000.

Airbnb Tax
 Going forward, the state will apply a higher tax rate — including existing sales tax and local hotel surcharges — to Airbnb and other short-term stay facilities. However, no sales tax will be imposed for short-term shore house rentals.

Shopping Bag Tax
New Jerseyans without reusable shopping bags will have to pay five cents for every paper and plastic shopping bag handed out at a retailer.

This new $37.4 billion budget brings tax increases and some tax breaks that will be felt around the state, making proactive corporate tax planning more imperative than ever.

Unsure how the new NJ financial landscape may affect your business? Call Magone & Company at (973) 301-2300 — we’re here to help.