Papin CPA PLLC

Business driving may come to mind when you think about tax deductions for vehicle-related expenses. However, businesses aren’t the only taxpayers that can deduct driving expenses. Individuals may also be able to deduct them in certain circumstances. Unfortunately, under current law, you may be unable to deduct as much as you could years ago. For 2018 through 2025, miles may only be deductible in limited circumstances. The 2024, the per-mile rate varies depending on the purpose. For business, it’s 67 cents; for medical driving for eligible itemizing taxpayers, it’s 21 cents; for active-duty military moving, it’s 21 cents; and for charitable itemizers, it’s 14 cents. Questions? Contact us. https://bit.ly/2NMIz4g

Many different shortcomings can hold back the growth of a company. One often overlooked is having disjointed or under-supported managers. Make sure you’re following a collaborative approach to setting strategic goals so everyone is pulling in the same direction. To that end, managers need a robust, accessible and technology-driven knowledge base about your company’s product or service lines, organizational structure, market, customer base and operating environment. If you’re unsure where your management team stands, you may want to engage a consultant to perform a formal assessment. Annual retreats can also be helpful. Contact us for help controlling the costs of developing your managers. https://bit.ly/2NMIz4g

Your company’s financial statements should provide keen insights into its financial position. However, long amounts of time can elapse between when you generate those statements. Consider creating flash reports to help you and your leadership team stay better informed. These are brief snapshots of your business’s current financial performance based on a few carefully selected metrics. Flash reports should be simple and comparative, noting significant trends or budgetary deviations. Because they provide a rough measure of financial results within a short period, these reports can be misleading and generally shouldn’t be shared externally. Contact us for more information and assistance. https://bit.ly/2NMIz4g

Your business should be able to estimate its future sales accurately. This practice is called sales forecasting, and doing it well is key to managing your company’s financial performance. Generally, you can use two broad models. Quantitative forecasting involves gathering numerical data and applying statistical methods to generate revenue estimates. In contrast, qualitative forecasting relies more on the input of trusted individuals inside and outside the company. (Many businesses use both.) Best practices for sales forecasting include defining a time frame, choosing the right data points and leveraging technology. Contact us for more information and assistance. https://bit.ly/2NMIz4g

An employee stock ownership plan (ESOP) is a type of qualified retirement plan that invests solely or mainly in the stock of the business sponsoring the plan. However, an ESOP can also help business owners with succession planning because it facilitates the gradual transfer of ownership shares to heirs or employees in a tax-advantaged manner. Contrast this with a buyout, which usually occurs suddenly and demands a substantial amount of cash to change hands. ESOPs do have their challenges. Only C or S corporations can create one, substantial administration and compliance costs are involved, and independent plan valuations must support ESOP transactions. Contact us for more information. https://bit.ly/2NMIz4g

Family businesses often start out small, with casual operational approaches. However, informal (or nonexistent) policies and procedures can become problematic as such companies grow. If you’re ready to take your company to the next level, take aim at these four areas: 1) Performance management; write job descriptions, provide training and implement an equitable employee performance management system. 2) Business processes; document and enhance every process to reduce manual effort and redundancies. 3) Strategic planning; build a leadership team, hold regular meetings and share goals with staff. 4) Information technology; work on integrating your systems and fortifying cybersecurity. https://bit.ly/2NMIz4g

One way that growing businesses can invest in their employees is by sponsoring a qualified retirement plan. But picking the right one isn’t always easy. For example, there’s the ever-popular traditional 401(k). Available to all employers, it offers flexibility in plan design but challenging administration. Another option is sponsoring SEP-IRAs for participants. Any business can do so, and administering these accounts is less complicated. But you must fund SEP-IRAs entirely. If your company employs 100 or fewer employees, consider sponsoring SIMPLE IRAs. You must fund these as well, but there are a couple of different ways of doing so. Contact us for help picking the right plan. https://bit.ly/2NMIz4g

When generating financial statements, classifying information isn’t always easy. This holds especially true as growing businesses’ financial transactions become more complex. Take your statement of cash flows. Under U.S. Generally Accepted Accounting Principles, it’s typically organized into three sections: 1) cash flows from operating activities, 2) cash flows from investing activities, and 3) cash flows from financing activities. That may sound simple enough, but classifying various transactions into those three buckets can get tricky. What if a transaction involves more than one type of activity? Contact us for help with this or any other aspect of your financial reporting. https://bit.ly/2NMIz4g

Does your company operate in the business-to-business (B2B) marketplace? If so, your marketing initiatives must reach the companies you serve and speak to the right people at those organizations. To accomplish this, you’ve got to choose the right channels. For example, well-written and optimally distributed press releases remain a viable way to announce new products and services or other big news. You (or qualified employees) can also write bylined articles for industry publications. And then there’s digital marketing. Devise a strategy to regularly push out quality content on your optimal channels. These may include your website, blogs, one or more social media platforms, or podcasts. https://bit.ly/2NMIz4g

Companies that suffer unexpected downtime of key IT systems can incur substantial revenue losses. They also may face regulatory fines, blown IT budgets and elevated insurance premiums. The good news is your business can address the threat proactively. Begin with a formal risk assessment to identify the most likely causes of IT failures based on the distinctive features of your systems and users. From there, explore or enhance strategies such as tracking incidents carefully, investing wisely in cybersecurity, training and upskilling employees, establishing a disaster recovery plan, and reassessing and stress testing regularly. Contact us for help managing your technology costs. https://bit.ly/2NMIz4g