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What to do Before You Start Your Business

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Are you interested in starting a new business? Make sure you do plenty of research and have a firm business plan ready before you take the plunge.

Rikard & Neal CPAs, PLLC, a Memphis area CPA Firm, knows how to work with new and growing businesses to help simplify business formation and incorporation procedures. Take a look at some of the things you should do before starting a business below, then learn more about our Entity Selection and New Business Advisory services.

Making the Transition

If you have signed a non-compete or confidentiality agreement with your current employer, review it carefully to make sure it won’t hamper your startup efforts. If your new venture is in the same industry, be careful not to burn any bridges when you leave your current job. Scout out your opportunities. Buying a franchise or an existing business is much different than building a new business from the ground up.

Growing Your Business

Where will your customers come from? You may have one or two great prospects, but that may not be enough. Can you count on referrals from current business associates? Take a good hard look at opportunities for expansion that exist.

Figure Out Financing

Even with great prospects, it may take some time until cash starts coming in on a regular basis. Do you have enough of a financial cushion to get you through? If your spouse has an outside job, your spouse’s earnings and benefits may help provide stability during the startup period. If you need funding, where will it come from? Have you considered looking for a partner or investor? Having a trusted Memphis CPA firm on your side can help answer a lot of these questions and get your new business on the right track with a strategic business plan.

Getting the Word Out

How much marketing and advertising will be required? Put together a comprehensive plan along with cost estimates. And, unless you’re familiar with the less traditional marketing and communication opportunities that today’s new media offer, you may want to enlist the help of someone who is.

Make a Budget

List every expense you can think of: rent, payroll (if any), phone and Internet service, computer equipment, website design, insurance, transportation costs, self-employment tax, etc. Then draw up a budget. Once your venture is up and running, you can use the budget as a guide in managing your finances. You can also lean on the support of a trusted Memphis CPA firm like Rikard & Neal CPAs, PLLC for all your business financial consulting needs.  We can assist with budgeting and strategic businesses planning.

Contact us today for more tips on how to ensure you’re following business best practices, and let us help you with your new business.  We offer a free initial consultation to new business owners. Let us know how we can help, or give us a call at 901-685-9411.

How to Get Your Business Costs Under Control Today

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Increasing your profits requires selling more and/or spending less. While building up your sales may require an extended effort, business costs are often very ripe for a quick trimming. Our Memphis area CPA firm recognizes that businesses today face many complex challenges when it comes to maximizing profits. That’s why Rikard & Neal CPAs, PLLC offers Memphis area businesses the expertise of a CPA to help you achieve your business goals and grow your business through Business and Finacial Consulting and Business Accounting Solutions.

Here are some ways you can start getting your business costs under control today:

 

Supplies and Other Purchases

Usually, in any business, relatively few items represent a very large share of all outlays. The first step in cutting expenses is, therefore, to identify your highest costs. You may be able to trim many of these costs by making sure you always bid out significant purchases or by more actively seeking less expensive alternatives.

For many companies, inventory carrying costs are a very significant expense. Focusing on matching your inventory quantities more closely to your short-term needs could result in significant savings.

Telecommunications and Other Services

The ongoing services you buy may also offer the potential for cost savings. Revisit your choice of telecommunications vendor and your usage.

Look carefully at your costs for financial services. If you borrow or maintain a line of credit, always compare the rates from more than one financing source before you commit. Make sure you are not paying higher-than-necessary fees for your company’s checking and deposit services.

Cash Management

To control cash outlays, take advantage of discounts for early payment whenever possible. And look to delay payments for as long as you can without giving up discounts.

On the receiving side, deposit all receipts daily. And always actively pursue collection of any invoices that are past due. To help control your working capital needs and, therefore, your credit costs, try to match any new liabilities to your anticipated cash flow.

Fixed Expenses

One other category worth examining is fixed expenses that are long-term commitments. While you usually can’t change these quickly, be aware of when a window for change will open and prepare well in advance by considering lower cost alternatives.

To learn more ways to control your business costs give us a call today at our Memphis or Marion accounting firm. Our trained staff of professionals are always available to answer any questions you may have: Memphis- 901-685-9411, Marion- 870-739-8664. Or, learn more about our business accounting services for Memphis businesses and request a free consultation online.

Here are the Documents You Need when Deducting Business Expenses

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Memphis TN CPA | Business Tax PlanningDiligent planning is essential to keeping tax obligations low for all kinds of small businesses. You don’t want to wait until the very end of the year to start planning next year’s tax strategies.  Rikard & Neal CPAs, PLLC, a Memphis, TN CPA, is highly experienced in tax planning and compliance for small businesses.

Most ordinary and necessary business expenses are deductible as long as you have the proper documentation. If your return is audited, the IRS may require that you show the type of item purchased and that payment was made. Here are some examples of acceptable documentation.

Checks

A canceled check can be used as proof of payment if it has the name of the payee and shows the cancellation on the back. The IRS also accepts highly legible images of checks if you don’t have your checks returned.

Credit/debit card transactions

You must have an account statement that shows the amount of the charge, the transaction date, and the name of the payee.

Electronic funds transfers

The IRS requires an account statement that shows the amount of the transfer, the date the transfer was posted to the account by the financial institution, and the name of the payee.

Invoices 

You must have an invoice or some other form of documentation showing what you purchased. Canceled checks, credit/debit card statements, and records of electronic funds transfers only provide proof of payment.

Cash register receipts

If you receive a receipt with no details of the items purchased, write a description of the items on the slip. As long as the purchase is for a relatively small amount, the IRS should accept it.

If it’s not self-explanatory, make sure you write the business reason for your purchase on the invoice or receipt so you’ll be prepared for any questions from the IRS. And be aware that there are separate substantiation rules for travel, entertainment, and auto expenses.

Whether you need individual or business tax advice, give us a call at 901-685-9411. We’ve got the business tax planning answers you’re looking for, so don’t wait.