3 Key Skills to Look for in an Accountant

1-3 Key Skills to Look for in an Accountant

Your accountant is going to know every little detail about your finances – a topic that is considered taboo in polite society! How on earth do you choose someone who you need to trust with your short and long-term goals, your legacy, your compliance with tax legislation, your business’s financial performance, and more?

Being in this business has taught us that there are three major skills a great accountant has:

1. CPAs Know the Accounting Basics

This seems too obvious to state, but the accountant must know the basic principles of the profession. A great example is the matching principle. This principle states that the related revenues and expenses must be matched in the same period to link the costs of an asset or revenue to its benefits.

Another is the convention of conservatism, or doctrine of prudence. This is a policy of anticipating possible future losses but not future gains. It states that when choosing between two solutions, the accountant should select the one that will be least likely to overstate assets and income.

2. CPAs Know Tax Regulations Backwards and Forwards

There’s no quicker way for a business to fall on hard times than to run afoul of tax regulations. Tax laws differ from state to state and so it is critical that your accountant is entirely familiar with the tax legislation that is in effect where your business is registered and derives most of its income.

Not only will this keep you out of trouble, but it could also be to your company’s benefit as there may be credits and other advantages of which you are unaware. A good accountant will have a thorough knowledge of the best business practices for your field to ensure tax optimization.

Certified public accountants are as well-versed in tax regulations and loopholes for individuals’ needs.

3. CPAs Provide Customer Service

The old stereotype of an accountant has long ceased to exist in real life. Gone are the days of colorless old men entering numbers into huge books with their sharp pencils. The world of accounting has become exciting and has attracted bright and interesting professionals.

Your accountant needs to interface with the Board of your business and understand the work that you do as well as the people that you are. They also need to understand your goals and the legacy you would like to leave. The financial side of your life should be a joy and not a grudge.

Certified Public Accountants

Discover what superior accounting professionals can do for your business. Contact Georgen Scarborough Associates, PC to help you navigate your personal and business finances.

Financial Statements: Evaluating Key Performance Indicators for Business Health

1-Financial Statements Evaluating Key Performance Indicators for Business Health

Financial statements are records of business activities and a company’s financial performance. Government agencies, accountants, and firms at times audit them to ensure accuracy and for tax, financing, or investing purposes.

What Information Do Financial Statements Show?

Financial statements include:

  • Income statement
  • Cash flow statement
  • Balance Sheet

Because lay people, or potential investors, as well as accounting professionals, analyze your financial statements, it is imperative to design your statements in an easy-to-use and easily understandable manner. Overly complex systems can create misunderstandings that could have vast ramifications.

What are KPIs?

Key Performance Indicators (KPIs) are predetermined data trends. Track these regularly to evaluate the wellbeing of your business. KPIs provide quick, easily accessible, and comprehensible views of how your business is functioning. Not to mention, they help in predicting long-term performance.

KPIs that you keep watch on may be different from those of other businesses; after all, every situation is unique. Having said that, there are five basic data types you can use as KPIs for most businesses. Mold them to suit your purposes:

  1. Revenue: Yes, the obvious must be stated. Track revenue consistently to ensure that your income is steady. Revenue is used as a KPI to track trends such as when revenue dips and why.
  2. Direct Expenses: Track direct expenses in terms of quantity and trends. For example, it could be helpful to have big expenses coincide with times of increased revenue.
  3. Overhead (ongoing business cost): This does not necessarily link to expenses but remains stable most of the time.
  4. Gross Profit Margin is an important indicator of how well you are balancing income and output. Ideally, it should trend upward, but there are factors that upset the trends. This KPI helps you to adjust pricing when necessary.
  5. Net Profit Margin is your profit after all expenses are taken into account. Keeping an eye on this helps you to keep expenses in check.

Have your company’s financial statements taken care of by reliable professionals so that you can focus on running the business. Contact Georgen Scarborough Associates, PC to get your financial statements in order.

How financial statements can be helpful in decision making

2-financial statements make future decisions on the basis of accurate data

Financial accounting and financial statements are a vital part of a company’s operations. Financial statements can be helpful in decision-making on the basis of making good decisions on accurate data. Properly kept and presented financial records allow companies and outside parties to get a complete picture of the organization’s financial health. Financial statements inform decision-making in the following ways. 

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What a QuickBooks advisor can do for you

7-Find out how a QuickBooks Advisor can help you make the most of the program

QuickBooks is an extremely useful tool, and makes it easier than ever for businesses to stay on top of their finances. However, not all businesses use this tool effectively. A QuickBooks advisor is often necessary to help you make the most of this powerful software.

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The IRS’ New 100% Depreciation Deduction and What Write-Offs You Can Look Forward To

100% depreciation deduction

In September of 2019, the Treasury Department and the Internal Revenue Service released final regulations and additional proposed regulations under section 168(k) of the Internal Revenue Code on the new 100% additional first year depreciation deduction. This 100% depreciation deduction is great news for businesses both big and small as it makes it possible for them to write off most depreciable business assets in the year they are placed in service by the business.

Below, we take a look at the depreciation deduction in more detail, along with a brief summary of the types of business assets that business owners will be able to write-off going forward. 

Which Assets Are Included?

According to the final regulations, depreciable business assets that can be written off in the year they are placed in service by the businesses include machinery, equipment, computers, appliances, and furniture, to name a few. However, these assets only qualify as write-offs if they were placed in service after September 27, 2017.

What Are the Additional Proposed Regulations That Have Been Submitted?

The additional proposed regulations include rules regarding:

  • Certain property not eligible for the additional first year depreciation deduction
  • A de minimis use rule for determining whether a taxpayer previously used property
  • Components acquired after September 27, 2017, of larger property for which construction began before September 28, 2017
  • Other aspects not dealt with in the previous August 2018 proposed regulations

I Want to Elect out But Have Already Filed my 2018 Tax Return – What Now?

Do not worry. Taxpayers who have filed their 2018 return already but who still wish to elect out of the 100% depreciation deduction will be granted a leeway of six months from the original deadline, without an extension, to file an amended return. You may wish to elect out if you would like to avoid the expiration of income tax credits or net operating losses.

Looking for professional assistance in terms of the new 100% depreciation deduction? Contact the financial service experts at Georgen Scarborough Associates today!