As COVID-19 Crisis Rages, Ask Your Accounting Firm About Your Options

 

In July 2020, just a few weeks after Nashville started reopening the economy, the White House recommended that the city and other COVID-19 “red zones” in Tennessee adopt tighter restrictions, including closing businesses. For small entrepreneurs in the city, this means the road to recovery may take even longer than expected. 

With this new development, waiting for the situation to resolve itself is simply not enough. It’s time to revisit your options with your accounting firm and take a closer look at what you can do to survive and even thrive in the “new normal”. Here are a few things to consider:

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Ask Your Accounting Firm: How Will the New Rule on Leases Affect Me in 2019?

There may be a variety of leases you depend on to run your business in Nashville. Office space is the least of it; you may also be leasing a vehicle, piece of equipment, furniture, or another type of asset.

If you plan on entering more leases in the foreseeable future, check in soon with your trusted accounting firm. A new regulation on leasehold accounting, IFRS 16, will take effect in January 2019. It can potentially impact your business in the long run and day to day.

What is this new regulation?

To date, companies must classify their leases either as finance or operating. In a finance lease, the asset remains owned by the lessor throughout the lease period (as with anything rented). In an operating lease, the asset could be eventually transferred to the lessee (as with a loan). As such, operating leases are counted simply as expenses, while finance leases can be considered assets or liabilities—items that must be listed in a balance sheet.

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A Financial Review by Your Accounting Firm: How Will It Help Your Nashville Business?

There may come a time when you need a loan or a grant for your Nashville business. Perhaps you’ll be testing a new product; perhaps you’ll need money to buy equipment; perhaps you’ll simply need the extra funding to keep operations rolling. Whatever the case, there’s one thing an accounting firm can do for you: conduct a review engagement.

What is a review engagement?

A review engagement is one form of attestation service – like an audit – that a CPA performs to assure stakeholders that the financial information you present them is fair and reliable. Essentially, it is a vote of confidence for your business.

If all goes well, a review report will state that nothing has come to the accounting firm’s attention to suggest that your financial statements are not in accordance with generally accepted accounting principles. No “material modifications” should therefore be done to them.

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3 Questions to Review with an Accounting Firm as You Set Up Your Nashville Business

It’s easy to imagine working with an accounting firm once you have your small Nashville business up and running. But the truth is, you might need to start consulting an accountant – and particularly, a tax guru – even when your startup is still in the conceptualization phase.

Understanding how your business can be taxed is just as essential as strategizing on how your product or service will turn a profit. Here are three questions you can review with an accountant to help you determine your company’s relationship with taxes and gain an edge for your business.

How will you structure your business?

The type of business you establish, legally speaking, determines the kinds of taxes you will file. For startups, the common forms of business entities are:

Sole Proprietorship
Partnership (general or limited)
C Corporation
S Corporation
Limited Liability Company (LLC)

Sole proprietorships and partnerships are the simplest for small startups, but they come with inherent risks. For example, as sole proprietor, you could end up mixing personal and business funds to support your fledgling company. Alternatively, you and your partners might encounter issues about the distribution of roles and profits. Both scenarios could make tax-time a messy period, which is why it’s essential to clarify the responsibilities attached to each business type.

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Let an Accounting Firm Help Improve Your Business and Its Operations

Running your own business is certainly a dream come true. After making your debut, however, it’s time to get serious and start on real work. Brainstorming, marketing, and operations are all crucial elements of keeping a business afloat. At the core of it all, however, are the finances.

Much in the same way that you needed capital to get the business up and running, making sure that you have enough cash to continue operations is just as important, if not even more so. For every financial transaction your company makes, you should have proper documentation of all receipts, billings and invoicing, purchase orders, and more.

These are important because this will give you a clear picture of your company’s financial standing. While start-ups tend to think that there’s nothing much to account for yet anyway, it would be ideal if you work with an accounting firm as early as possible. Read more from this blog. http://bit.ly/2uMTYes

What Your New Business Can Expect from Working with an Accounting Firm

Running a business is not just about having a good product or service to offer, nor is it just about having a well-planned operations workflow. A great deal of a business’ sustainability relies on its cash flow. Without sufficient resources to allow the company to invest in important materials and equipment, the company cannot grow.

When it comes to the finances particularly, it would be best to work with a professional accounting firm instead of simply doing it yourself. Here are some of the services you can expect to have when you hire an accounting firm. Read more from this blog: http://bit.ly/2q2nkSu