February 13, 2019 § Leave a comment
As a result of tax reform, pass-though entities will face changes with their qualified business income (QBI) deduction. This video from Nick Finkenauer, Tax Director, covers the standard deduction and also highlights the one-part and two-part tests for pass through taxation. #QBIDeduction #LeadingTheWay #MHCScpa
February 11, 2019 § Leave a comment
As boring as it may sound, my husband and I spend our New Year’s Eve tidying up and purging things from our home. It feels great to start a new year off fresh and organized. With a growing family, I have made it my goal to make my life – at home and at work – a little more organized this year. This seems to be the trend, especially if you are a Netflix lover. Marie Kondo’s show, Tidying Up, has quite the hype and is inspiring many people to get organized. So, I thought I would share five (5) tips to get your business organized in 2019:
Start a Filing System: If you feel overwhelmed by a desk covered in paper, an online filing system can help remove the clutter. Upgrade to a cloud based system. This will tidy up the office and give you access to your important documents, no matter where you are.
However, if online isn’t an option for you, start by organizing your paper documents logically. Keep the most important documents close for easy access. Anything you no longer need should be purged. Be sure to shred all sensitive information. MHCS hosts an annual shred event on May Day. There will be more information on this as the date approaches but it’s a great way to safely dispose of your confidential information if you do not have a regular shredding service.
Clean up Your Email: An overflowing inbox can be frustrating and unproductive. Make it a goal to clean out your inbox daily. If you’ve already responded, file the email in a folder. If you don’t need it; delete it. It feels great and then you can focus on the important tasks of each day.
Use a Cloud Based Accounting Software: Month-end and year-end causes additional stress and work for business owners. What if closing out the month took only a few minutes? By integrating your monthly financial activity online, you can sync business banking and credit card activity. You can review, classify, and enter transactions from your browser or mobile phone with a click of a button. At MHCS, we help our clients convert their accounting software from outdated systems to QuickBooks Online (QBO) and then teach them how to use the platform effectively.
Start Using Apps that Simplify Your Processes: If you are already using QBO, you’re off to a great start! Now take it another step further. Pick an app, you can integrate QBO to streamline your payroll, accounts payable, expense tracking solutions processes, just to name a few. At MHCS, we have worked with Gusto, Bill.com, Expensify, and many others to help make your life easier. The apps save time and create efficiencies so you can focus on what you do best.
Tidy Up Before Going Home: A small, simple task you can do is tidying up your desk before you leave each day. Get rid of the empty coffee mugs and organize your mail. It’s a small gesture that goes a long way to starting each morning fresh and organized.
At MHCS, we can partner with you to create accounting processes that work best for your business. We, with today’s technology, can tidy up your office and declutter your desk, so you can focus on your business, not the paperwork. I hope 2019 brings organization to your business and your life, whether it be big or small.
Tabetha Albrecht, CPA Supervisor
February 8, 2019 § Leave a comment
At the beginning of a new year, individuals and businesses will often look back at the previous year and make resolutions for the upcoming year. However, many companies often have a hard time sticking to their resolutions. In this video, Jonathan Porter, CAS Manager, provides examples of support for business owners so they can continue their resolutions all year.
February 5, 2019 § Leave a comment
The year 2020 sounds like a long time from now, doesn’t it? I have three young children so when I think about the future, I’m excited to think about having two of the three out of diapers by 2020! Besides possibly spending less money on diapers, the year 2020 will be significant for me, as a CPA, since that is the year that the new revenue recognition will become effective for non-public companies.
The new standard requires a five-step approach to revenue recognition; these steps are as follows:
- Identify the contract with a customer
- Identify the separate performance obligations in the contract
- Determine the transaction price
- Allocate the transaction price to the separate performance obligations in the contract
- Recognize revenue when (or as) the entity satisfies a performance obligation
On the surface, these steps don’t seem overly complex and may not seem much different than what is currently done to determine revenue recognition. However, the new guidance requires an evaluation of all existing contracts and focuses on the transfer of control of goods or services. In addition, the new guidance requires extensive disclosures.
The adoption of this new guidance can be time-consuming and cumbersome. The new guidance applies to all contracts with customers, except those within the scope of other standards, such as lease contracts, insurance contracts, financing arrangements, financial instruments, guarantees (other than product or service warranties), and certain nonmonetary exchanges between vendors.
The new standard will not only impact accounting, but may bring changes to the financial statements that could have wide-ranging impact on a company, from bank loan needs to timing for bonuses and other compensation incentives. In some industries, such as health care, pharmaceuticals, and software development, the impact of the new guidance on the timing of revenue recognition may be significant enough for companies to begin to change contracting practices with their customers.
The implementation of the new guidance will be more intensive for some companies than others, depending on the industries they operate within, the size and structure, and the complexity and standardization of contracts.
The new standard introduces new concepts, such as estimating transaction price, that require significant judgment. This will require companies to develop process around these areas to ensure a consistent approach is followed for the various revenue streams and various business functions of the company.
Don’t underestimate the work that is involved with adopting the new revenue recognition standard. Now is the time to contact your accounting professional, develop a plan, and take action to ensure your company is ready by 2020….and I’ll get to work on the potty-training!
Wendy Moran, CPA, Partner