One of the main factors that will determine the success or failure of a business is how they manage their finances. Business finance can be very complex at times—well, most of the time unless that is your area of expertise—and there are a lot of different aspects to consider within this general theme. As with all things that are so crucial to the longevity and prosperity of your business, it is always wise to utilize your local resources when it comes to the financial side of operations.
A financial planner is an excellent tool for individuals and businesses; anyone who is interested in making smart investments and knowing exactly how their money is both managed and working for them at its maximum capacity. Even small businesses aren’t just small investments, and you are taking a risk when you make any decision without knowing all of the information and possible outcomes. Jason Peplinski of FP Wealth Management explains, “We help businesses and employers evaluate all of the various options in order to help them grow their business into the future with the use of various financial services. Furthermore, we keep them aware of ways to help protect their assets so that they stay in business and continue running day-to-day the way they’ve grown accustomed. For example, retaining a quality workforce is a major asset to any business. At FP Wealth Management, we specifically work with companies to advise them regarding benefits and executive bonus plans that will help them get, and retain, the best employees. These benefits show the employee how much they are valued by the employer, and also help the company to retain those employees from loss to their competition because they’re providing superior benefits packages. It can range anywhere from a simple payroll deduct option into a Roth IRA for the employees, with our services to guide the employees on making decisions with investments in this plan, to more complex plans that provide benefits to the key employee above and beyond a traditional 401k plan. Making sure a key person is properly insured is also an area where we can help businesses. This way, they can be sure that if the unforeseeable happens to an employee (i.e. become disabled or die), it won’t set the company back or slow them down without that person at their full typical support for the business. A competitive edge against a business’s competition is often obtained through quality employees doing quality work. Knowing what wins those employees over, and not overlooking what it is they bring to your business and what they’re looking for or need in their own life when comparing employers, can help a business get the talent that puts it above the rest.” *Securities by Licensed Individuals Offered Through Investacorp, Inc., A Registered Broker/Dealer, Member FINRA/SIPC. Advisory Services Offered Through Investacorp Advisory Services, Inc., A SEC Registered Investment Advisory Firm.
In addition to financial professionals, legal professionals will also help you protect your assets. Much like business planning, this requires a financial strategy supported by legal documentation. Christine Vanderford, of Vanderford Law, PC LLO advises, “A business owner should utilize professionals to create a financial strategy for growth, as well as a marketing strategy and a business succession strategy, whether the succession of ownership of the business is based on death, disability of owners and/or shareholders, or sale of the business. It is especially important for businesses to plan for and take care of these matters, not only to ensure the growth and success of the business but also to achieve the ultimate goal of getting the most out of your business as possible. As most business owners put a majority of their assets and effort into making their business sustain itself long term, it is of the utmost importance that they have the professional guidance so they are moving in the right direction and are free of costly errors and setbacks. Without proper legal advice, a company can get set up incorrectly, or without proper liability protection, threatening the future of the business. Ongoing legal support of the company can ensure the growth of the company continues to flourish with tax efficient strategies and limited liability.” She adds, “It is also imperative for business owners to review their estate plan periodically to ensure their estate planning documents reflect the current status of their business. This is essential to protecting the family, financially and otherwise, if an unexpected death of the business owner occurs. It is really important that the estate plan of the business owner reflects any business succession plan and changes that might be made over time.”
Human resources is an area that greatly impacts a business’s finances. In addition to offering employees an attractive benefit package and suitable insurance coverage, payroll is another aspect that should be handled by a financial professional. Among the most frequently outsourced financially-related aspects of businesses are payroll and taxes, which allows business owners the relief of knowing they are done right so they can focus on running their businesses instead. Paychex offers best-in-class solutions that help you run your business better. Joan Kurtenbach of Paychex advises, “A major benefit of utilizing a payroll company such as Paychex is that the liability for timely payment and filing of payroll tax returned is transferred from your business to us. This allows our clients to focus on growing their business and pursuing their passions, as well as providing them with peace of mind. Many clients also choose outsourcing to ensure confidentiality of their payroll data. Clients also tell us that they love our online platform and their employees appreciate both direct deposit and accessing their payroll data online. Essentially, we help business owners with compliance and cash flow. Through our basic service, we help ensure Federal & State Tax Compliance, Workers Comp, DOL, OSHA, and a multitude of human resource compliance issues. Our tax payment service simplifies money management, ensuring a consistent cash flow for our clients. We help our business owners manage their cash flow by budgeting their tax deposits with regular frequency. In addition, we help our clients manage their unemployment claims to reduce their unemployment tax rate. We also aid in preparing for work comp audits to ensure there are no unexpected demands on our clients’ cash reserves.”
She adds, “While business owners carry a huge burden of responsibility, the best advice I could offer would be to focus on your strengths and hire experts to carry the burden in the other areas. While all of our business owners are capable of doing every aspect of their business, our most successful owners are strategic is choosing the right partnerships to streamline their business processes. Most of our business owners are most concerned about the ever changing tax structure and maintaining compliance to avoid penalties. Second to tax concerns, are concerns over legislative changes that financially impact their businesses.”
Of course, among the professionals that assist businesses with their finances, it is crucial to have a good working relationship with your financial institution (bank, credit union, etc.) and accountant. Both are committed to helping their clients with short term and long term planning, from maintaining day-to-day operations to achieving continuous growth and the highest return on their investment(s). At the same time, they also help clients protect their assets, avoid costly setbacks, and navigate various situations that arise. As a trusted resource, these professionals are crucial to the development, stability and success of your business.
SP Group P.C. is a local accounting firm that offers the following financial tools for businesses, which can be accessed via their website at www.spgrouppc.com, in addition to their other services and resources offered to business clients:
Breakeven analysis – Find out how many and what price you must sell your product at to make a profit.
Business Debt Consolidation Calculator – Should your business consolidate its debt? Use this tool to help you find out.
Business Valuation / Discounted Cash Flow – This tool calculates a business valuation based upon the discounted flow methodology, illustrating how changes in projected growth rates and capital assumptions impact the Net Present Value of your business.
Cash Flow Calculator – Having adequate cash flow is essential to keep your business running. This tool can be used to help you determine the cash flow generated by your business.
Commercial Loan Calculator – Use this tool to estimate your debt service coverage with a new loan. If your debt service coverage is high enough, including your loan payment, you have a good chance of being approved.
Debt Service Coverage – This tool calculates debt service and illustrates how debt service coverage ratios are impacted by changing income and capital assumptions.
Equipment Buy vs. Lease – Should you lease your equipment or finance it? Find out with this calculator.
Financial Ratios – This calculator helps you to zero in on areas of your business that may need attention, such as solvency, liquidity, operational efficiency and profitability.
Inventory Analysis – Use this tool to determine how much inventory you should hold, and for efficient timing of your inventory orders.
Like-Kind Exchange – This tool is designed to calculate the recognized loss, gain and the basis for Like-Kind Exchange. A like-kind exchange under United States tax law is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset. A like-kind exchange can involve the exchange of one business for another business, one real estate investment property for another real estate investment property, livestock for qualifying livestock, and exchanges of other qualifying assets.
Net Operating Loss Carryback/Carryover – If you are a sole proprietorship or have a net operating loss (NOL), use this calculator to determine the carryback/carryover of this loss to another tax year.
Profit Margin Calculator – This tool can help you determine the selling price for your products in order to achieve a desired profit margin.
Repossession of Personal Property From a Deferred Payment Sale – If you have repossessed personal property with installment payments, you can use this calculator to determine the gain or loss.
Repossession of Real Property – If you have repossessed real property, you can use this calculator to determine the gain or loss as well as its new bases.
Working Capital Needs – Working capital is essential to running your business. This calculator assists you in determining your working capital needs for the next year.
Along with these convenient and helpful tools on their website, the accountants at SP Group, P.C. offer a range of tax, accounting, and consulting services to assist business clients. Matthew Westenburg, CPA at SP Group, P.C. adds, “We gauge our worth by the personal and business successes of our clients. We can help your business identify areas negatively affecting profitability and growth and develop solutions that are practical and technically sound. In addition to acting as a sounding board for management, we provide comprehensive, flexible strategies that address the financial issues affecting your business.”
Financial professionals are by far one of the most precious assets for businesses, as they work closely together in order to understand their clients’ unique situations and goals. This allows them to use their industry-specific knowledge, skills and expertise to help their clients work through obstacles that may stand in the way of building a solid financial future. It also provides the business owner with peace of mind that everything is in order at all times. It is important for businesses to have a financial strategy, and we encourage you to utilize local financial professionals every step of the way.