New team member

Garrett Raibble, originally from Prairie Village, KS is a graduate student in the KU School of Business pursuing his M.S. in accounting on the advisory/consulting track. During his undergraduate Garrett obtained B.S. degrees in accounting and finance. His past experience includes internships with Koch Supply and Trading, Deloitte Tax, and EPR Properties. Upon graduating, Garrett plans to sit for his CPA and CFA before starting his career. In his free time, he enjoys to golf, hike, climb, and be outdoors in general. He is excited for this opportunity and looks forward to interacting with all of you. If you have any questions please feel free to reach out!


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Day’s end

Stuff.  My son-in-law is from Poland and he commented on American’s use of the word stuff.  We use this word in so many ways to refer, well, to all sorts of stuff.  Yet we know what we’re talking about.  He said it was one of the hardest words to understand the meaning.

I think about stuff all the time.  The stuff I need to get done is always at the forefront.  I have read all sorts of books about time/task management and I’m always drawn back to two books – Getting Things Done: The ABC’s of Time Management by Edwin C. Bliss and Getting Things Done by David Allen.  Both authors encourage us to write stuff down.  Yet it is never enough to just write it all down.  Mr. Bliss recommends ending every workday by doing the following three things:

  1. Tidy up. He says never sentence yourself to start the next day with ultimate downer, a messy desk.
  2. Evaluate your day. He suggests asking the following types of questions:
    1. Was I proactive or reactive?
    2. Did I establish a major goal for the day and did I reach it?
    3. If I could live this day over, what would I do differently?
  3. Plan the next day’s activities.

I hope that everyone has a very wonderful Labor Day weekend.  Take what you like and leave the rest.

Posted in Business Tips, Cost-Savings Tips, Customer Service Tips, Decision-Making Tips, Management Tips, Profitability Tips, Time Management Tips | Tagged , , | Leave a comment

Suggested reading

Joe Woodard, the host of Scaling New Heights, encouraged us to have a goal for our conference.  He probably suggests this every year and this time I decided to set one.  Mine was to meet some of my mentor-heroes.  This year’s speaker schedule was full to the brim of those mentor-heroes – Ron Baker, the guru of value pricing, Les McKeown author of Predictable Success, Stephen M. R. Covey author of the Speed of Trust, and Mike Michalowicz author of The Toilet Paper Entrepreneur, The Pumpkin Plan, Profit First and Surge.

Several hosted break-out sessions and I was as happy as a kid who gets the new phone book and looks up their name – I know nerdy – one of my kids would tell I shouldn’t say things like that in public.  I love reading, and gathering new ideas.  I’ve read all of Mike’s books and most of the others.

We connect with stories. Mike is a gifted story teller.  He just tells it like it is.  It can be rough running a business, wearing so many hats, having the funds on time to cover payroll.  The failure rate for small businesses is very high but did you know that if you work with an accountant that you are 225% more likely to succeed?

A timeless money tip that I like to share with a prospective client is what to do with a dollar.  I learned this from reading many Jim Rohn books.  When you get a dollar give ten cents to charity, save 10 cents for retirement or long-term savings, and then invest the remaining 10 cents into an enterprise that will pay you a stream of income.

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Meeting Dawn Fotopoulus built a bond for my business and others’

I attended Scaling New Heights, an Intuit-centric conference for QuickBooks ProAdvisors (accountants) and those who work with them, hosted by Joe Woodard last month at the Disney Coronado Resort.

This was my third SNH.  It’s all about making connections and learning about the latest in technology.

Last year I met the most incredible woman – Dawn Fotopoulos, author of Numberphobic.  This year I had lunch with her.  I shared with her how much her program, which increases profits for small business owners by 50% in four weeks, had impacted my business.  We cried, we hugged, and we confirmed that her life’s work is transformational.  My business is living proof.

Money is the last taboo subject.  We don’t talk about it.  We’re not honest about it.  I have heard many times over “show me your checkbook and I’ll show you what is truly important to you.”  And it’s true we tell our life story through the choices we make with our money – personal and business.

We all started a business with a dream of our future; all those things to be, do, and have. I took a huge leap of faith last year, I met Dawn Fotopoulos and she has forever transformed my conversation with my clients.  I ask you tell me about your dreams.  And then I help you put a plan together to achieve them.

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A small business guide to financial statements by Glass Consulting, LLC

A wonderful feature of most accounting systems is the financial dashboard. The dashboard gives you a quick assessment of your business by providing key pieces of information at a glance. You’ll see vital statistics regarding accounts receivable, expenses, and a graph of your income statement. The home screen will also alert you to issues with downloaded bank transactions that need your attention.

Another delightful feature of an accounting system is the ability to run basic financial statements. A basic set of financial statements consists of a Balance Sheet, an Income Statement, and a Statement of Cash Flows. The Balance Sheet gives you a snapshot of your business at a point in time showing you the amount of Assets, Liabilities, and Equity. An Income Statement shows you whether your business was profitable over a given period of time such as a month, quarter, or year. The Statement of Cash Flows shows you how much money is coming into and going out of your business.

To be successful in business, every owner must answer these three questions:

  • Are you making a profit?  See the Income Statement.
  • Do you have enough cash to pay the bills?  See the Cash Flow Statement.
  • Are you building net worth or destroying it?  See the Balance Sheet.

Schedule 30 minutes every month to go over your basic financials. At Glass Consulting, we’d be happy to help walk you through that process. Call (785) 838-3708 to speak with Edwina Glass today.

Glass Consulting, LLC owner, Edwina Glass, mentors small business owner about financial statements.

Posted in Bookkeeping Tips, Cloud Accounting, Decision-Making Tips, Profitability Tips, QuickBooks Help | Tagged , , , | Leave a comment

Home Mortgage Interest and Unmarried Couples

Article Highlights:
• Home mortgage interest can generally be deducted only by a person who is legally obligated to pay the mortgage.
• An exception to the preceding general rule applies for interest paid on a real estate mortgage when a person is a legal or equitable owner of the real estate, but is not directly liable for the debt.
• If the person making the mortgage payment is not liable, or is not an equitable owner, then that individual is not allowed the interest deduction, nor is the individual who is liable on the debt.
It is becoming increasingly common for couples to live together and remain unmarried, which can lead to potential tax problems when they share the expenses of a home, but only one of them is liable for the debt on that home.
Home mortgage interest can generally be deducted only by a person who is legally obligated to pay the mortgage (in other words, a person who is named as an obligor on the mortgage document). However, there is an exception to the preceding general rule for interest paid on a real estate mortgage when a person is a legal or equitable owner of the real estate, but is not directly liable for the debt.
For example, if the one who is not liable on the mortgage makes the payment, that individual is not allowed to deduct the interest portion of the payment, nor is the other person, because he or she did not pay it. This can lead to some complications where one of the couple earns significantly more income and would benefit tax-wise from an interest deduction, but the other person is the liable party on the loan. It is not uncommon for couples who both work to share the mortgage payments in the mistaken belief that they can each deduct their share of the mortgage interest on their individual tax returns.
Although state law governs what constitutes equitable ownership, equitable ownership can generally be established if both parties are on title to the property, even if only one is liable on the loan. The premise behind equitable ownership is that an individual is protecting his or her ownership in the home by making some or all of the mortgage payments.
This position was upheld in a 2011 Tax Court decision where the court denied a taxpayer’s home mortgage interest deduction that she paid until she became co-owner of the property with her boyfriend and was legally obligated to make the mortgage payments.
If you are in a similar situation and have questions related to sharing potentially tax-deductible expenses, please give this office a call.

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Did You Collect the Needed W-9s?

Article Highlights:
• The IRS Form W-9 is used to obtain independent contractors’ tax ID numbers.
• Tax ID numbers are required when filing 1099s.
• 1099-MISCs must be issued to independent contractors that are paid $600 or more during the year for performing services for a trade or business.

If you used independent contractors to perform services for your business or trade, and you paid them $600 or more for the year, you must issue them a Form 1099-MISC to get the deduction for their labor and expenses and avoid potential penalties. (This requirement generally does not apply to payments made to a corporation. However, the corporation exception does not apply to payments made for attorney fees and for certain payments for medical or health care services.)
It is not uncommon to have a repairman out early in the year, pay him less than $600, then use his services again later and have the total paid him for the year exceed the $600 limit. If this happens, you may overlook the information needed to file 1099s for the year. Therefore, it is good practice always to have individuals complete and sign the IRS Form W-9 the first time you use them. This eliminates oversights and protects you against IRS penalties and conflicts.
Many small business owners and landlords overlook this requirement during the year, and only realize in January that they have not collected the required documentation to issue 1099s.
If you have not collected W-9s throughout the year, do so as soon as possible, so you will have them available when it comes time to prepare 1099s for the year. It is sometimes difficult to acquire contractor information after the fact, especially from those contractors with no intention of reporting the income, so it’s always better to get it up front.
Form W-9 provides entries for the contractor’s name, contact information and tax ID number. It also includes a signature block for the contractor, certifying the information and insulating you against penalties if he or she provides an incorrect or phony ID number.
If you have questions or need copies of the Form W-9, please call this office. This office can also assist you with your 1099 filing requirements.

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Last Minute Tax Moves

Article Highlights:

• Year-end Tax Strategies
• Prepay Taxes if Not Subject to the AMT
• Pay Off Medical Installment Payments
• Advance Charitable Deductions
• Be Cautious of Overall Itemized Deductions Phase Out
• Prepay Tuition Expenses
• Fast Write-Offs For Business Purchases

Year’s end is rapidly approaching, but there are still some tax-advantaged moves you can make before the New Year. If you itemize deductions, you might prepay the next installment of your property taxes, pay off medical bills, and pay the fourth quarter state-estimated tax payment in advance. You might prepay college tuition to maximize education credits, and purchase business equipment to take advantage of the more beneficial write-offs available in 2013.

Prepay Next Installment of Property Taxes – Usually, property taxes are billed in a fiscal year and can be paid all at once or in multiple installments. If you have been paying the current tax bill in installments and one of those installments is due in 2014, you can pay it before year’s end and take the deduction on your 2013 return instead of on 2014’s return.

Pay State-Estimated Taxes in Advance – If your state has a state income tax, the state income tax paid during the year is deductible as an itemized deduction on your federal tax return. The fourth quarter estimated installment for 2013 is due on January 15, 2014 for most states. If additional state income tax payments in 2013 can benefit you as an itemized deduction, paying that January installment before year’s end would allow it to be deducted in 2013.

Caution: Taxes are not deductible if you are subject to the alternative minimum tax, and prepaying state income and property taxes might not provide any benefit.

Pay Off Medical Bills – If you are paying medical expenses on an installment plan, you itemize your deductions, and your medical expenses for 2013 will exceed 10% of your adjusted gross income (AGI), or 7.5% for tax filers aged 65 and over, it could be beneficial to pay off the balance you owe. You can pay off those medical expenses, even with borrowed funds, before year’s end and increase your deductions for 2013.

Make Charitable Contributions – The holiday season is historically a time for making charitable contributions to qualified organizations, and if you are itemizing your deductions, the donations you make before the end of 2013 can help to reduce your 2013 tax bite. If you regularly tithe to a house of worship, you might even prepay part of your 2014 commitment and deduct it in 2013. This can be beneficial for those who only marginally itemize their deductions.

Caution: Beginning in 2013, higher income taxpayers will have their itemized deductions phased out, so if you are subject to the phase-out, these planning suggestions may not provide the benefits expected. The income threshold for the phase-out is $300,000 for joint filers, $250,000 for singles, $275,000 for heads of household, and $150,000 for married individuals filing separately.

Prepay College Tuition – If qualified tuition is paid during 2013 for an academic period that begins during the first three months of 2014, the education credit is allowed for those expenses in 2013. Thus, if your higher-education tuition expenses for yourself, your spouse, or your dependents to date for 2013 have not been enough to maximize your education credit for 2013, you might consider prepaying the tuition for the first quarter of 2014.

Purchase Business Equipment – If you have a business, and you anticipate purchasing additional equipment for the business, it may be appropriate to make the purchase(s) before the end of the year to take advantage of the bonus depreciation deduction and/or the Sec 179 expensing deduction. Equipment includes machinery, computer systems, communication systems, office furnishings, etc. Unless extended by Congress, the bonus depreciation will end after 2013, and the maximum Sec 179 deduction will decrease to $25,000 from the current $500,000.

If you have questions related to any of the suggested strategies, please give our office a call, 785-838-3708.

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Five Best-Practice Accounts Payable Tips for a Smoother Cash Flow

Watching the cash balance is one of the most frequent activities of a small business owner.  Besides making sure you have enough cash for payroll and bills, there is another huge opportunity you can benefit from: lowering the cost of processing your bills.  It can be expensive and time-consuming to process bills and handle the paperwork involved.  We’ll take a look at a couple of the many ways you can streamline your accounts payable processing costs in this article.

Opportunity #1:  Go Digital

The Intuit Payment Network (IPN) is a best-kept secret when it comes to sending and receiving money.  It’s free to set up your account, and it’s also free for your receiver to set up an account.  All you do is add your bank account, and you can easily transfer funds between the two accounts just by knowing the receiver’s email address.

The receiver of money only pays 50 cents per transaction, so when you have a large transfer of funds, it’s totally worth it.  It saves you postage, check stock, envelopes and the related mailing labor.  You could even increase your payment by 50 cents so that your receiver receives exactly what you owe them.

Another way to go digital is via PayPal.  Fees vary, and are usually paid by the receiver.

Opportunity #2:  Get Control

When it comes to finances, it’s never a good idea to mix business and personal, especially when it’s coming out of the same bank account.  Keep separate accounts for business and personal, and your bookkeeping costs will go way down.  Do the same thing for credit cards as well.

If you’re comfortable with credit cards and you can maintain control of your spending, it saves accounts-payable time when you can charge everything you spend on business to your credit card as long as you pay it off every month.  Using your card is faster at checkout than writing a check these days, so you’ll save time on errands as well.

Opportunity #3:  Automate

Put recurring expenses such as utilities, rent, accounting, and other monthly bills on bank draft or autopay if the vendor has that option.  This will save you a huge amount of time, supplies, and postage.  You can also be more accurate with the timing of the payment which will allow you to keep your money for as long as possible until the due date arrives.

Opportunity #4:  Verify

We hope you never pay bills that aren’t yours, but it can happen.  To avoid it as much as possible, implement a three-way matching process on all your payables, especially those related to inventory.  The three-way part refers to the three documents involved in accounts payable:

  • The purchase order
  • The packing slip
  • The invoice

Before any invoice is paid, these three documents should be matched line by line – for quantity, price, and description — to ensure you ordered and received what you paid for.  Only then should your bill be approved.  This will ensure that you don’t pay a fraudulent bill, you don’t pay for out-of-stock that didn’t ship and that you paid the correct price you agreed to in the first place.

Please feel free to reach out and ask us about this if you’d like to know more.

Opportunity #5:  Tell Yourself a Little White Lie

There’s an old saying:  “robbing Peter to pay Paul.”  If you’re always moving money around form one checking account to another to cover bills and payroll, you’re not the only small business owner who juggles funds.  It takes up valuable time to make all these transactions, and then it costs to record them and track them.

Reduce all that by telling yourself a little white lie about your bank balance.  If your bank balance is $10,000, tell yourself it’s only $5,000 (or whatever amount makes sense for you).  That way, you’ll always have a cushion in your account that will help you reduce transfers.  There are several ways to set this “little white lie” up in your books.

More A/P Ideas

These are only five of many ways you can reduce your processing costs and save time on accounts payable processing.  Give these five accounts payable ideas a try, and if you’d like to know more, please reach out and let us know.

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