• How To Launch Your Startup in Eight Steps

    26 December 2015
    1897 Views
    Comments are off for this post
    startup

    These days, it seems like almost everyone has a startup – and if you have a great business idea, why not join in on the fun? Every year, thousands of entrepreneurs across the nation launch their own business. The internet marketplace makes sales easier than ever. If you’re ready to start your own business, here’s a step-by-step overview of what you need to do to make your vision become a reality.

    1. Start with an Idea and Brainstorm 

    Perhaps you’ve already have zeroed in on a product or service for your new upstart. While having an idea is a good start, it’s important to get your mental muscles turning and brainstorm that idea. Is there a demand for the product or service? Who is your target market? Are there additional related services or products that can be tied into the primary offering? Keep in mind that adjunct services and products are an effective way to increase your bottom line. Thinking about potential problems and having solutions in place will also help your launch run more smoothly. The key takeaway with brainstorming is that it’s a powerful tool which will get you to think critically about your idea.

    1. Draft a Business Plan

    A business plan is the road map of your new business. It defines and clarifies the direction of your business, products or services and a description of your customers. It’s also an effective way to plan for market changes and focuses on your future vision for company goals. When drafting your business plan, be sure to include facts, statistics and figures that support your idea. This will better help attract investors, partners, suppliers and executive level employees for your new venture. The typical business plan averages 15 to 20 pages and includes an overview of the plan, business description, development, competition analysis, management, market strategies and financial information. A business plan is required to secure funding at the start-up phase and your map to the future.

    1. Fund Your Business

    To turn your dream idea into a viable business, it’s going to take money. There’s no magic bullet here, so you’ll have to explore your resources and determine which one is most attractive. You can opt for a credit line of credit or a bank loan. Just keep in mind that you’ll have to have a solid credit history or existing assets to put up for collateral. Another option is to join a startup incubator. Organizations like Y Combinator not only provide free resources to startups, but seed funding. Some startups find funding from local angel-investor groups. Most metropolitan areas have groups of angel investors who are interested in supporting startups and willing to fund up to millions of dollars for qualified startups. Once of the newest ways to get funding to launch a business is to start a crowdfunding campaign online. Online sites like Kickstarter gives you the opportunity to have folks make pledges for a startup. Other ways to garner monies for your new company include getting a small business grant and asking strategic partners, friends or family members.

    1. Select an Accountant and Attorney 

    Both an accountant and attorney should be on your startup team. Entrepreneurs must keep endless amounts of records for tax and legal purposes. An accountant – such as one from Dagley & Co. – can provide you with a wide range of services through the early stages, including business entity selection, expense tracking, business licenses, financial planning, month-end accounting, tax preparation, an accounting system, W2s and 1099s. Outsourcing with our accounting firm lets you focus on your core business instead of non-core business. Accountants are also essential when it comes to raising funds, structuring deals and financial reporting. An attorney adds value to a startup in a variety of ways. Not only does an attorney assist with entity formation, they help you work with the government, third parties and other company founders. You don’t want to violate any laws, and an attorney will keep you on the right side of the law. They help you draft the proper legal documents to control risk with suppliers, protect intellectual property rights, employees and customers. Plus, they can assist multiple founders of a startup in drafting up agreements that outline the rights and duties of each.

    1. Apply for Tax ID and State Sales Tax Permit

    You’ll need to fill out a tax identification application to get your tax ID. This number identifies your business on all types of documents and registrations. As a matter of fact, most banks will require your tax ID before you can apply for a business loan or set up a business checking account. You can apply for a tax ID at the IRS website. Just print out a copy of the SS-4 form. And if you’re selling any services or products that are subject to sales tax in your state, you must collect that tax from your customers and pay it to the state. It’s important to note that if you have more than one location for your business, you must obtain and display a Sales and Use Tax Permit in each location.

    1. Obtain a Business License

    Your new business needs a business license in order to operate legally, even if you’re operating from home. You can find all the information to do this at the SBA website or your city’s business website. You’ll need to know your business code. Different codes require a specific application process, and each city has its own set of rules and requirements. Generally, you’ll have to provide your federal ID number, type of business, number of employees, business address, contact information and the name of the business owner.

    1. Know the Labor Laws 

    Workers compensation coverage is required for businesses with more than three employees. If you have more than three employees, you’ll need to attain workers compensation on a self-insured basis, through a commercial carrier or through the state Workers Compensation Insurance program. Employers are also required by federal and state laws to display posters in the workplace that inform employees of employer responsibilities and employee rights under labor laws. You can easily attain these posters free from state and federal labor agencies.

    1. Choose a Business Location

    Deciding where to set up shop is a critical business decision. The real estate mantra of “location, location, location” has merit for a successful business venture. You’ll want to ensure that the area has the human resources to meet staffing needs. For example, if your startup is focused on detailed work, you most likely wouldn’t want to choose a rural community for its location. Always investigate the available labor pool in your chosen area. Determine the demographic profile of your location. You’ll need to know who your customers are and their proximity to your location. This is important if you’re a retailer or in some type of service business. If you’re customer base is local, you need to ensure that there is a sufficient percentage of the population that needs your product or services to support your business. The community of the location should also have a stable economic base.

    Launching a new business takes a lot of planning and effort, but it can lead to a very rewarding lifestyle. Follow our steps and you’ll be in good shape to tackle the task. Contact us at Dagley & Co. so we may help you with every step of the process – and your business taxes!

    Image via public domain

    Continue Reading
  • Are You and Your Business at Risk for a Trust Fund Penalty?

    15 December 2015
    1622 Views
    Comments are off for this post
    check

    Don’t even think about keeping those withheld amounts for your company!

    Hold on, this article is not about silver spooned “trust fund babies,” but something entirely different. When an employer withholds Social Security and income taxes from an employee, those funds are the property of the government, and the employer must hold those funds in “trust” until the funds are turned over to the government. Failure to do so could lead to the so-called trust fund penalty, which is equal to 100% of the withholding from the employees’ wages. The penalty applies to any willful failure to collect, account for and pay over Social Security and income taxes required to be withheld from employee wages.

    A recent report issued by the Treasury Inspector General for Tax Administration has made recommendations to the IRS for timely assessing and collecting the responsible person penalty, and the IRS is adopting the recommendations. The government has always been very aggressive about collecting trust fund penalties and will pursue collecting the penalty from the “responsible person.” This is where you may be at risk.

    The IRS broadly defines a “responsible person” to include corporate officers, directors, and shareholders under a duty to collect and pay the tax as well as a partnership’s partners, or any employee of the business under such a duty.

    So if you are a person with the power to see that the taxes are paid, you may be responsible. Frequently more than one person is a responsible person, and each one is at risk for the entire penalty. Even though you may not be directly involved with the withholding process, if you discover that trust funds that are due to the government are instead being used to pay a business creditor, you become a “responsible person.” You always have to keep in mind that the trust fund money belongs to the government, and bowing to business pressures to pay bills or obtain supplies instead of transmitting the withheld taxes to the government will be viewed as willful (bad) behavior for purposes of the penalty.

    Unlike some other types of penalties, there are no acceptable excuses for failure to withhold the required payroll taxes or for borrowing withheld amounts to pay other expenses. Even if you have a payroll company collecting and paying over the withholding, and that firm should go belly up, or someone in that firm absconds with the trust finds, guess who is still responsible for paying the government? The responsible person at the business, of course!

    Don’t fall victim to the penalty by allowing a partner or corporate superior to persuade you not to withhold or timely pay over the trust funds to the government. If you are interested in discussing your potential risks and exposure to this penalty, please get in touch with us at Dagley & Co.

    Image via Dagley & Co.

    Continue Reading
  • Save on Black Friday: Hire Dagley & Company!

    27 November 2015
    1648 Views
    Comments are off for this post
    Daley & Co

    On this hot, hot hot shopping and sales weekend, you may be looking everywhere for the best Black Friday and Small Business Saturday deals. There’s another way to save yourself a lot of money – potentially thousands of dollars – and that is by hiring an accountant from Dagley & Company to do the taxes of you, your family, and/or your small business.

    For starters, our founder, Dan Dagley, has an exceptional track record with taxes and clients. He was a top-10 CPA with TurboTax’s Pro program, which is currently undergoing a makeover. You can read hundreds of his glowing reviews on our testimonials page. If you miss this TurboTax Pro service, Dagley & Company can help fill your need. Get started by getting in touch with us; you’ll find our contact information at the bottom of this screen.

    If you’re one of those people who has never filed for taxes and hasn’t heard from the IRS, then it’s probably because you’re leaving money on the table. Each year, the IRS reports about $1 billion in unclaimed refunds for individuals who did not file a tax return – and about half of them are for amounts greater than $600! You could literally turn a profit simply by dropping us an email, so what are you waiting for?

    Many people are handy at filing their own taxes, but our clients who decide to pivot to our team are consistently amazed at the money they save. It’s unlikely that you know all of the tax credits and benefits you are entitled to! There are credits for those who generate their own renewable energy, there are credits for those paying for education, there are credits for those who are taking care of elderly/disabled relatives, there are tax deductions for start-up businesses, and so many more. Let us sit down with you to see just how much of your own money you’re entitled to keep this year.

    Finally, Dagley & Company is about as convenient as it gets. Yes, we are located in Washington, D.C., but we serve clients all over the United States, as well as a few scattered all over the globe. Best case scenario for you and us is you keep good records on Quickbooks or another digital program, and we can help you file the most accurate, succinct tax forms you’ve ever seen. Whether you prefer email or a personal phone call, we’re here to work with you to save you time and money.

    We hope this has helped you make a decision about the best way to file your taxes – and happy shopping on this Black Friday!

    Image via public domain

    Continue Reading
  • How To Claim a Disaster Loss On Your Taxes

    18 November 2015
    1728 Views
    Comments are off for this post
    shipwreck

    It’s been a wild year, weather-wise! With flooding on the East Coast and the wild fires and draught in the West, we have had a number of presidentially declared disaster areas this year. If you were an unlucky victim and suffered a loss as a result of a casualty, your luck may change as you may be able to recoup a portion of that loss through a tax deduction. If the casualty occurred within a federally declared disaster area, you can elect to claim the loss in one of two years: the tax year in which the loss occurred or the immediately preceding year.

    By taking the deduction for a 2015 disaster area loss on the prior year (2014) return, you may be able to get a refund from the IRS before you even file your tax return for 2015, the loss year. You have until the unextended due date of the 2015 return to file an amended 2014 return to claim the disaster loss. Before making the decision to claim the loss in 2014, you should consider which year’s return would produce the greater tax benefit, as opposed to your desire for a quicker refund.

    If you elect to claim the loss on either your 2014 original or amended return, you can generally expect to receive the refund within a matter of weeks, which can help to pay some of your repair costs.

    If the casualty loss, net of insurance reimbursement, is extensive enough to offset all of the income on the return, whether the loss is claimed on the 2014 or 2015 return, and results in negative income, you may have what is referred to as a net operating loss (NOL). When there is an NOL, the unused loss can be carried back two years and then carried forward until it is all used up (but not more 20 years), or you can elect to only carry the unused loss forward.

    Determining the more beneficial year in which to claim the loss requires a careful evaluation of your entire tax picture for both years, including filing status, amount of income and other deductions, and the applicable tax rates. The analysis should also consider the effect of a potential NOL.

    Ordinarily, casualty losses are deductible only to the extent they exceed $100 plus 10% of your adjusted gross income (AGI). Thus, a year with a larger amount of AGI will cut into your allowable loss deduction and can be a factor when choosing which year to claim the loss.

    For verification purposes, keep copies of local newspaper articles and/or photos that will help prove that your loss was caused by the specific disaster.

    As strange as it may seem, a casualty might actually result in a gain. This sometimes occurs when insurance proceeds exceed the tax basis of the destroyed property. When a gain materializes, there are ways to exclude or postpone the tax on the gain.

    If you need further information on casualty and disaster losses, your particular options for claiming the loss, or if you wish to amend your 2014 return to claim your 2015 loss, please get in touch with us at Dagley & Co.

    Image via public domain

    Continue Reading
  • November 2015 Business Due Dates

    1 November 2015
    1499 Views
    Comments are off for this post
    autumn

    It’s hard to believe the end of 2015 is near! Before we list out the tax due dates for businesses, we want to take a moment to remind you to set up a meeting or a phone call with a member of our team at Dagley & Co. so you can get your 2015 taxes squared away. Still not convinced? Read our hundreds of testimonials, compiled by TurboTax from real clients over the last few years.

    November 2 – Social Security, Medicare and Withheld

    Income Tax File Form 941 for the third quarter of 2015. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until November 10 to file the return.

    November 2 – Certain Small Employers

    Deposit any undeposited tax if your tax liability is $2,500 or more for 2015, but less than $2,500 for the third quarter.

    November 2 – Federal Unemployment Tax

    Deposit the tax owed through September if more than $500.

    November 10 -Social Security, Medicare and Withheld Income Tax

    File Form 941 for the third quarter of 2015. This due date applies only if you deposited the tax for the quarter in full and on time.

    November 15 – Social Security, Medicare and Withheld Income Tax

    If the monthly deposit rule applies, deposit the tax for payments in October.

    November 15 – Nonpayroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in October.

    Image via public domain

    Continue Reading
  • Taking Advantage of 2015 with Dagley & Co.

    28 October 2015
    1302 Views
    Comments are off for this post
    Taxes 2015

    All of us at Dagley & Co. have filed away our October 15 extended tax deadline clients, and now we’re looking at finishing the year off strong. Now is a great time to make sure you have your accounting up-to-date, as it sure will make “tax season” easier for everyone!

    If you’re in need of a an accountant for your personal or business finances, think about setting an appointment with Dagley & Co. Don’t just take our word for it: read all of our glowing reviews from our clients over the last two years!

    Solid tax savings can be realized by taking advantage of tax breaks that are still on the books for 2015.

    For individuals and small businesses, these include:

    • Capital Gains and Losses – You can employ several strategies to suit your particular tax circumstances. If your income is low this year and your tax bracket is 15% or lower, you can take advantage of the zero percent capital gains bracket benefit, resulting in no tax for part or all of your long-term gains. Others, affected by the market downturn earlier this year, should review their portfolio with an eye to offsetting gains with losses and take advantage of the $3,000 ($1,500 for married taxpayers filing separately) allowable annual capital loss allowance. Any losses in excess of those amounts are carried forward to future years.
    • Roth IRA Conversions – If your income is unusually low this year, you may wish to consider converting your traditional IRA into a Roth IRA. Even if your income is at your normal level, with the recent decline in the stock markets, the current value of your Traditional IRA may be low, which provides you an opportunity to convert it into a Roth IRA at a lower tax amount. Thereafter, future increases in value would be tax-free when you retire.
    • Recharacterizing a Roth Conversion – If you converted assets in a traditional IRA to a Roth IRA earlier in the year, the value of those assets may have declined due to this summer’s market drop; and, as a result, you will end up paying more taxes than necessary on the higher conversion-date valuation. However, you may undo that conversion by recharacterizing it, which is accomplished by transferring the converted amount (plus earnings, or minus losses) from the Roth IRA back to a traditional IRA. This must be done via a trustee-to-trustee transfer. You can later (generally after 30 days) reconvert to a Roth IRA.
    • Don’t Forget Your Minimum Required Distribution – If you have reached age 70 1/2, you must make required minimum distributions (RMDs) from your IRA, 401(k) plan and other employer-sponsored retirement plans. Failure to take a required withdrawal can result in a penalty of 50% of the amount of the RMD not withdrawn.
    • Take Advantage of the Annual Gift Tax Exemption – Although gifts do not currently provide a tax deduction, you can give up to $14,000 in 2015 to each of an unlimited number of individuals without incurring any gift tax. There’s no carryover from this year to next year of unused exemptions.
    • Expensing Allowance (Sec 179 Deduction) – Businesses should consider making expenditures that qualify for the business property expensing option. For tax years beginning in 2015, the expensing limit is $25,000. That means that businesses that make timely purchases will be able to currently deduct most, if not all, of the outlays for machinery and equipment. Note: There is a good chance the Congress will increase that limit before year’s end and after this newsletter has gone to press, so watch for further developments.
    • Self-employed Retirement Plans – If you are self-employed and haven’t done so yet, you may wish to establish a self-employed retirement plan. Certain types of plans must be established before the end of the year to make you eligible to deduct contributions made to the plan for 2015, even if the contributions aren’t made until 2016. You may also qualify for the pension start-up credit.
    • Increase Basis – If you own an interest in a partnership or S corporation that is going to show a loss in 2015, you may want to increase your investment in the entity so you can deduct the loss, which is limited to your basis in the entity.

    Also keep in mind when considering year-end tax strategies that many of the tax breaks allowed for calculating regular taxes are disallowed for alternative minimum tax (AMT) purposes. These include deduction for property taxes on your residence, state income taxes, miscellaneous itemized deductions, and personal exemption deductions. Other deductions, such as for mortgage interest, are calculated in a more restrictive way for AMT purposes than for regular tax purposes. As a result, accelerating payment of these expenses that would normally be made in early 2016 to 2015 should – in some cases – not be done.

    We hope you will consider Dagley & Co. as the tax season approaches. You’ll find our contact information at the bottom of this screen.

    Image via public domain

    Continue Reading
  • October 2015 Tax Due Dates for Businesses

    5 October 2015
    1581 Views
    Comments are off for this post
    october

    Last week, we covered the October 2015 tax due dates for individuals – and now we’re giving you the deadlines for businesses this month. Be sure to get in touch with us at Dagley & Co. if you need any of these deadlines clarified.

    October 15 – Electing Large Partnerships

    File a 2014 calendar year return (Form 1065-B). This due date applies only if you were given an additional 6-month extension. March 16 was the due date for furnishing Schedules K-1 or substitute Schedule K-1 to the partners.

    October 15 – Social Security, Medicare and withheld income tax

    If the monthly deposit rule applies, deposit the tax for payments in September.

    October 15 – Nonpayroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in September.

    Image via public domain

    Continue Reading
  • The Risks Associated With A Sole Proprietorship

    22 September 2015
    1676 Views
    Comments are off for this post
    new business

    If you want to start a business, you’re probably about get down and dirty with the registration process. The simplest and least expensive form of business is a sole proprietorship. A sole proprietorship is a one-person business that reports its income directly on the individual’s personal tax return (Form 1040) using a Schedule C. There is no need to file a separate tax return as is required by a partnership or corporation (if the business is set up as an LLC with just one member, filing is still done on Schedule C, although an LLC return may also be required by the state). Generally, there are very few bureaucratic hoops to jump through to get started.

    However, we strongly recommend that you open a checking account that is used solely for depositing business income and paying business expenses. You will also need to check and see if there is a need to register for a local government business license and permit (if required for your business).

    If you are conducting a retail business, you will need to obtain a resale permit and collect and remit local and state sales taxes.

    If you hire employees, you will need to set up payroll withholding and remit payroll taxes to the government. Before you can do that, however, you’ll need to apply to the IRS for an employer identification number (EIN) because you can’t just use your Social Security number for payroll tax purposes. An EIN can be obtained online at the IRS web site or by completing a paper Form SS-4 and submitting it to the IRS.

    As a sole proprietor, you can also very simply set aside tax-deductible contributions for your retirement.

    Example: Paul has been working for a computer firm as an installation specialist but has decided to go out on his own. Unless he sets up a partnership, LLC or corporation, Paul is automatically classified as a sole proprietor. He does not need to file any legal paperwork. His business is automatically classified and treated as a sole proprietorship in the eyes of the IRS and his state government.

    However, there is a big downside to conducting business as a sole proprietor, and that drawback is liability. Sole proprietors are 100% personally liable for all business debts and legal claims. As an example, in the case that a customer or vendor has an accident and is injured on your business property and then sues, you the owner are responsible for paying any resulting court award. Thus, all your assets, both business and personal, can be taken by a court order and sold to repay business debts and judgments.  That would include your car, home, bank accounts and other personal assets.

    Other forms of business, such as LLCs and corporations, can protect your personal assets from business liabilities. If you feel that your business is susceptible to lawsuits and would like to explore alternative forms of business, please give Dagley & Co. a call so we can discuss the tax ramifications of the various business entities with you. If you decide on something other than a sole proprietorship, you’ll need legal assistance to formally set up your new business.

    Image via public domain

    Continue Reading
  • September 2015 Tax Due Dates For Business Owners

    2 September 2015
    1395 Views
    Comments are off for this post
    washington-dc-80719_640

    A few days ago, you probably read our post about September tax due dates for individuals. As promised, here are the tax due dates coming up this month for business owners. Please contact us at Dagley & Co. if you need a CPA to walk you through these steps and smooth out the process. You’ll find our information at the bottom of this webpage.

    September 15 – Corporations

    File a 2014 calendar year income tax return (Form 1120 or 1120-A) and pay any tax, interest, and penalties due. This due date applies only if you timely requested an automatic 6-month extension.

    September 15 – S Corporations

    File a 2014 calendar year income tax return (Form 1120S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension.

    September 15 – Corporations

    Deposit the third installment of estimated income tax for 2015 for calendar year corporations.

    September 15 – Social Security, Medicare and withheld income tax

    If the monthly deposit rule applies, deposit the tax for payments in August.

    September 15 – Nonpayroll Withholding

    If the monthly deposit rule applies, deposit the tax for payments in August.

    September 15 – Partnerships 

    File a 2014 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension. Provide each partner with a copy of K-1 (Form 1065) or a substitute Schedule K-1.

    September 15 – Fiduciaries of Estates and Trusts

    File a 2014 calendar year return (Form 1041). This due date applies only if you were given an additional 5-month extension. If applicable, provide each beneficiary with a copy of K-1 (Form 1041) or a substitute Schedule K-1.

    Image via public domain

    Continue Reading
  • Everything You Need To Know About Balance Sheets (And Why You Need Them)

    25 August 2015
    2004 Views
    Comments are off for this post
    books

    Alright small business owner. Let’s talk about balance sheets.

    The best way for small business owners to stay aware of their company’s financial status is to have an accurate, up-to-date balance sheet. By keeping this information up to date every quarter, you can help yourself avoid a lot of problems and surprises down the road.

    A balance sheet provides you with an at-a-glance summary of your company’s financial health as of a specific day. It is broken down into what the business’s assets are, what the business’s liabilities are, and the amount of owner or shareholder equity. The balance sheet gets its name from the fact that the assets must be balanced by and equal to the liabilities plus the equity. Some business owners have found current balance sheets so helpful that they update them every month.

    Understanding the Asset Portion of the Balance Sheet

    When entering assets onto the balance sheet, the business owner needs to include everything that is owned by the business, whether current or liquid assets, fixed assets (http://www.investopedia.com/terms/f/fixedasset.asp), or some other type of asset. Current or liquid assets include:

    • Cash that is immediately available
    • Money that is owed to you (Accounts Receivable)
    • Products currently in stock (Inventory)
    • Expenses paid in advance, such as insurance premiums
    • Money-market accounts, investments and other securities
    • Additional monies owed to you

    Fixed assets are items that can’t be easily sold or moved, including equipment and furnishings, buildings, land and vehicles. In most cases these assets depreciate, or decrease in value. Beyond current and fixed assets, items that are intangible, such as goodwill, copyrights and patents, are also considered assets on a balance sheet. It is important to note that money that is owed to you that you expect will not be paid is classified as a Reserve for Bad Debts, which decreases the amount of the Accounts Receivable on the balance sheet.

    Understanding the Liability Portion of the Balance Sheet

    When entering liabilities onto the balance sheet, the business owner needs to include all of the business’s debts, both current and long term. Current liabilities include accounts payable, sales and payroll taxes, payments on short-term business loans such as a line of credit, and income taxes. Long-term liabilities are those that are paid over a longer period of time, generally over more than a year. These include mortgages and leases, future employee benefits, deferred taxes and long-term loans.

    Understanding the Equity Portion of the Balance Sheet

    When entering information onto the equity portion of the balance sheet, you should include the value of any capital stock that has been issued, any additional payments or capital from investors beyond the par value of the stock, and the net income that has been kept by the business rather than distributed to owners and shareholders.

    In order to be sure that all of the information on the balance sheet is correct, you can double-check your numbers by subtracting assets from liabilities – the result should equal the equity amount. For more information on how to structure a balance sheet, check out this website: “http://www.accountingcoach.com/balance-sheet/explanation/4″>sample balance sheet</a>.

    The Value of a Balance Sheet

    At first glance a balance sheet may look like an incomprehensible collection of numbers, but once you understand all of the various components and how they relate to one another, they will provide you with the opportunity to detect trends and spot issues before they become problems. Your balance sheet can alert you to:

    • Times when inventory is outpacing revenue, thus alerting you to a need for better management of your inventory and production process
    • Cash flow problems and a shortage of cash reserves
    • Inadequacies in your cash reserves that are making it difficult to invest in continued growth
    • Problems with collecting accounts receivables

    The most essential tools that are available to you as a small business owner for gauging your operation’s financial health are the balance sheet, the income statement and the cash flow statement. If you are unsure of how to prepare these documents for yourself or don’t have the time, then let a qualified professional at Dagley & Co. take over and provide the information that you need.

    Image via public domain

    Continue Reading