Monthly summary of the tax, financial, and business news that may impact your business.

In part two of our series, “Are You Ready to Start a Law Firm” we continue to ask the important questions to assess the readiness of aspiring attorneys/entrepreneurs. Here are some additional considerations from Firm Numbers, a bookkeeping service that has boots on the ground, helping the owners of small law firms be the boss, not the bookkeeper.

Are you an attorney wrestling with the thought of going solo? Starting a business is not just about tolerating risk and “taking the leap”. In Part One of our series: Am I Ready to Start a Law Firm”, we offer more specific questions to assess your readiness to be an entrepreneur.

Business consultants and coaches commonly advise small business owners to use a “trailing 12-month” statement of profit and loss (P&L) to get more value from their financial data which requires some extra effort, usually on the part of a bookkeeper or accountant, to design and populate. The question these business owners commonly ask: is the extra effort worth it?

In business and in life, we can all benefit from paying more attention to where we spend our money. However, tracking business expenses is about more than just saving receipts. There is one basic concept many business owners can be slow to accept when it comes to managing their finances.

The effort spent entering billing can produce valuable insight into the amount and type of revenue one earns. However, to generate practical, useful data, business owners need to consider the critical final step to this process.

Unsurprisingly, the COVID-19 pandemic has forced most business owners to forgo the use of in-house or in-person local bookkeepers. While this transition may not have been comfortable for everyone, it is also great news for small business owners who want professional financial guidance for a lower overall cost.

It is important for anyone with this habit to remember that avoidance of negative financial outcomes will be strongly reduced by the simple act of paying attention. If you can track your finances, you can plan ahead, act earlier, and avoid a slippery slope that would cause greater financial hardship. This is especially true during uncertain economic times when change occurs more rapidly than normal.

The pandemic has forced us to rethink the way we do business and budgeting is no different. A more flexible, out-of-the-box approach can still provide you with a practical roadmap to guide your business.

The Small Business Administration (SBA) has officially released a copy of the Loan Forgiveness Application for recipients of loans from the Paycheck Protection Program (PPP). We recently provided an overview of the PPP loan program, which forgives all or a portion of this loan depending on how the funds are spent. In part two of this series, we will cover the process of applying for forgiveness.

In this first installment of a two-part series, we will address what you can do during your eight-week period to maximize loan forgiveness. The application, along with updated rule clarifications, are providing business owners with a clearer understanding of how to spend PPP loans, and potential financial and legal pitfalls.

Our recent shift to working entirely from home has been a comedy of errors for many Americans, often accompanied by homeschool lessons, toilet paper anxiety, and the unfortunate question posed in every Zoom meeting: “Are you wearing pants?”. Now over 6 weeks and what feels like 435 years later, we are slowly entering the “acceptance” phase where Zoom meetings are a part of our work routine. And like any other part of our work routine, we are slowly making videoconferencing more professional and less concerned with one another’s pants status.

A licensed Certified Public Accountant (CPA) can project your future tax liabilities, update you on changes in the tax code, and protect you from making costly errors in strategic decision making. However, there are a spectrum of tax preparation solutions to choose from and not all CPAs are well-matched to work with a small, growing business.

The idea of creating a budget may feel overwhelming, especially if you’ve already been in business for several years. However, most firms will find that the initial time and effort required to create a proper budget is well worth the decision-making guidance it provides throughout the year.

Not too many business owners give a lot of thought to the construction of their Chart of Accounts. It can be a missed opportunity for those who want to quickly access critical information about their business.