You’ve probably heard the news that a new PPP package was passed this week. Here are the highlights: PPP income is NOT Taxable. And purchases made with the funds are eligible for deductions. New PPP loans are on the way. There is a new tax credit in place. PPP is not taxable The biggest news of all. After the PPP 1.0 rollout, guidance was lacking and there was confusion over whether or not purchases made… Read more
Unfortunately, there’s not a straightforward answer, yet. Within the CARES Act, Congress says that PPP recipients whose loans are forgiven are not required to treat the income as taxable. But the IRS says that expenses paid with PPP funds are not deductible. While not requiring you to pay income tax directly on the PPP money, this is a roundabout way of making sure you will pay taxes on it. Wiping… Read more
Decentralized work is booming. Employees can work from all over the country. At the same time, it’s creating a web of compliance complexity for agencies. “What do I do if I have a remote employee working from a new state?” Rule of thumb – follow the “physical presence” rule. This states you are required to withhold employee taxes in the state where the work is performed. An example: HQ is… Read more
Do your financial reports have too much going on? All of the information is there, but picking out what matters is near impossible. What does the reporting that you send to your clients look like? It’s clear, simple and actionable. It shows them ROI, handpicked performance metrics and how that relates to targets. I also know there is A LOT of information that doesn’t make it onto this reporting. Why… Read more
You’ve likely been handling some work from home. But are you capturing the tax benefits? The home office tax deduction provides serious tax savings to agency owners. Turning otherwise nondeductible personal expenses into big business deductions. But remember, the Tax Cuts and Jobs Act has eliminated deducting these as itemized deductions. Luckily, there is The Accountable Plan. The Accountable Plan When your agency reimburses you through an accountable plan, the payment… Read more
Payroll is the life blood of running an agency, but there’s more to payroll than salary. You pay taxes, health insurance, benefits, worker’s compensation insurance – the hidden costs of payroll. You know your team’s billable rates, but what about the true all in cost of employment by the hour? Unburdened Comp Unburdened comp is simply salary. It’s easy to figure out and is what most agencies use to price clients. Agency… Read more
Many remarkable entrepreneurs, including Warren Buffet, Sheryl Sandberg, and Richard Branson, have credited their success, in part, to the advice of their mentors. An advisory board is an informal group of mentors whose collective business expertise—and objectivity—can help you make better, more informed decisions, thereby accelerating growth. Unlike business consultants (whose fees may well exceed your budget), advisory board members may agree to provide advice pro bono, for a small… Read more
On average, agency owners spend 10 hours each week recording, organizing, and processing financial transactions – everything from accounts receivable and payable, to employee payments, expense receipts and supplier invoices. While the process may be time-consuming (and tedious!), effective bookkeeping is the foundation of sound financial management – which in turn, is the lifeblood of your agency. Feeling overwhelmed by mountains of paperwork and complex calculations? Here are three bookkeeping… Read more
Ask anyone who’s been self-employed for a few years. By and large, the vast majority of clients are great. The less than ideal ones, however, can become a serious liability. Problem clients come in all shapes and sizes. There are the late payers and scheduled “no shows”. The ones who are demanding and don’t respect your time. Remember, just because you need to earn a profit doesn’t mean it’s in… Read more
Managing cash flow is a vital part of running a successful agency. Some agency owners think managing cash flow simply means keeping track of how much money enters and leaves the firm, but there’s actually more that goes into it. Cash flow forecasting, for example, is an incredibly valuable tool that helps you anticipate cash flow issues, plan for days when your cash flow is limited, and show the bank… Read more
The most important part of the CARES Act that will apply to your business is the Paycheck Protection Program (section 1102 p. 9) What is it? It’s a forgivable loan (basically a grant) for you to retain employees. Businesses with less than 500 employees are eligible for this. It’s designed to cover payroll and overhead costs for eight weeks. How much? The maximum amount is up to 2.5x of an employer’s average… Read more