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What Do You Mean I Can’t Show a Profit? Nonprofit Accounting.

Posted by on 3:47 pm in General Accounting, Nonprofit | 0 comments

What Do You Mean I Can’t Show a Profit? Nonprofit Accounting.

From youth and community organizations to outreach programs and churches, non-profits help make our neighborhoods and communities enjoyable and livable spaces. Unlike a for profit enterprise, a nonprofit exists to pursue missions that address the needs of society, without worrying about generating profits for shareholders and owners. This vital role is an often-overlooked element in professional services, like accounting, but nonprofits can benefit tremendously from professional partnerships. Accounting for businesses and nonprofits differs in a few important ways.  One difference is in revenue source. A business acquires revenue primarily from selling goods or services. Capital investments also can appreciate, driving income for a business. Nonprofits rely on donor contributions, membership dues, fundraising events, and program fees to generate revenue to fund their missions. With these differing revenue sources comes different reports that fall within generally accepted accounting principles. The function of these reports to the business and nonprofit are the same; evaluating the financial health of the organization. But the documents have different names that reflect their functions to the organizations. Of course, the largest difference is in tax status. A nonprofit holds tax exempt status, meaning they are exempt from income taxes if they are approved by the IRS and maintain approval. While some may assume this means accounting services for nonprofits are less complicated, (no tax preparation, yay!) tax exempt status requires annual filings just like everyone else. Nonprofits still pay employment taxes and may not be exempt from sales or real estate taxes. Helping nonprofits craft annual budgets is also challenging, due to the unstable nature of their revenue sources.  Some revenue sources, like federal or state grants, are subject to sudden changes. And charitable donations can ebb and flow just like sales in a business. While nonprofits can benefit greatly from a host of professional services, those services are not always within a nonprofit’s reach. Larger organizations will sometimes include financial advisors or accountants on their board of directors, ensuring ongoing services from a partner. FNG, LLC is proud to partner with our clients in their goals, from profit-seeking businesses to mission-driven...

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Chaos in Silicon Valley

Posted by on 1:54 pm in Business Book Review | 0 comments

Chaos in Silicon Valley

Antonio García Martínez’s pointed memoir, Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley, highlights the authors journey from east coast to west, starting in Goldman Sachs, moving through 2 ad start-ups (the second one sold to Twitter) and then working at Facebook, before the initial public offering.   There are many memoirs and stories coming from the tech companies in Silicon Valley. Chaos Monkeys differs in tone. From panicked pivots to naked butt-kissing, the day-to-day realities of working within a cult of personality are extreme. But the monkeys in the title aren’t the people. The monkeys are software programs designed to test the resilience of systems, wreaking havoc in effort to discover weaknesses and vulnerabilities.   A chaos monkey, as Martínez explains, is the digital equivalent of a “chimpanzee rampaging through a data center,” destroying the place by randomly yanking cables or smashing boxes. Symbolically, he writes, “technology entrepreneurs are society’s chaos monkeys, pulling the plug on everything from taxi medallions (Uber) to traditional hotels (Airbnb) to dating (Tinder)… Silicon Valley is the zoo where the chaos monkeys are kept, and their numbers only grow in time… The question for society is whether it can survive these entrepreneurial chaos monkeys intact, and at what human cost.”   Readers come to Chaos Monkeys for the spectacle, the behind the headlines view of top names in technology. But behind Garcia’s braggadocio and misogyny lies some truly insightful thoughts on how companies are valued, the role of advertising in the digital world, and how far public policy discussions are from the technological realities of Silicon...

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Accounting Alphabet Soup: What Accounting Acronyms Actually Mean

Posted by on 3:36 pm in General Accounting, Small Business | 0 comments

Accounting Alphabet Soup: What Accounting Acronyms Actually Mean

At FNG, LLC, we’re about partnering with our clients to ensure they are fully informed about their finances and our accounting strategies. This involves a fair amount of education, as accounting, like other professional services, is full of abbreviations. And sometimes, we forget that not everyone knows these common accounting acronyms and abbreviations.   AR (Accounts Receivable) This is money people owe you, plain and simple.   ACCG (Accounting) Accounting is just such a long word, it needed its own acronym. Because ACCT is something else   ACCT (Account) Account typically refers to a record at a financial institution.   AP (Accounts Payable) This is money you owe people. We know – AR is much more fun to talk about.   BS (Balance Sheet) A financial report summarizing your assets, liabilities, and equity at any given time. When you work with a qualified accountant, your BS isn’t BS.   CA (Current Assets) Assets that will be used within a year, like cash or inventory. Contrast with FA or Fixed Assets.   CAP (Capital) A financial asset and its value, like cash or goods. Almost as much fun as AR.   CF (Cash Flow) Revenues and expenses expected to be generated through business activities, like sales or manufacturing.   COGS (Cost of Goods Sold) Expenses related to producing the goods you sell. Could include raw material, parts, and labor.   CR (Credit) Accounting entry that may either decrease assets or increase liabilities and equities.   DR (Debit) Accounting entry that increases assets or decreases liabilities and equities.   FE (Fixed Expenses) Costs to a business that don’t vary from payment to payment. GAAP (Generally Accepted Accounting Principles) A set of guidelines developed by the accounting industry for us to follow when reporting financial data.   GL (General Ledger) The record of financial transactions over the life of the company.   LTL (Long-Term Liabilities) Your company’s financial obligations, payable over a time period longer than a year, like a bank loan.   NI (Net Income) Your company’s total earnings. Also called the ‘bottom line.’   OE (Owner’s Equity) The percentage of company equity that you possess.   PV (Present Value) Today’s value of a future sum of money. Present Value shows us that $100 today is worth more than $100 in the future.   P&L (Profit and Loss Statement) Financial statement that summarizes your company’s revenues, costs and expenses quarterly or annually.   ROI (Return on Investment) Calculated by dividing net profit by the investment cost and expressed as a percentage, ROI measures the financial performance of your decision’s as a business owner.   At FNG, LLC, we add your AR and AP to the GL and review your P&L and CF to determine if your current business initiatives have a positive ROI. And now you know what that sentence...

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Getting a Grip on Your Business, Traction Style

Posted by on 5:37 pm in Business Book Review, Small Business | 0 comments

Getting a Grip on Your Business, Traction Style

Traction: Getting a Grip on Your Business by Gino Wickman is not new. But it is hugely popular in business circles, especially in rapidly growing industries and companies.  And for good reason. The Entrepreneurial Operating System (EOS) is a comprehensive approach to resolving common problems growing businesses face in scaling to the next level in their industries.   Wickman’s book lays out simple, powerful methods to run your company with more focus to gain more traction.  Starting with developing a concise value statement, moving into goal-setting and leadership team accountability, and filtering into a structured communication plan, Traction helps business owners codify their vision to make it a shared vision throughout a company.  Through this shared vision, every leader and department within a company can then be focused on the same set of goals, all working toward common purpose.   It may seem like this is how all companies run, but this is really an ideal rather than a reality.  Based on real-world implementation, EOS seems relatively simple and self-explanatory, but the difficulty comes in the word ‘shared’.   Many owners and entrepreneurs have laser-focus on their vision but lack the skills or follow-through to effectively communicate this vision through an accountable leadership team to an organized effort by all employees. And this chaos is how companies lose traction, slipping through their day-to-day operations and putting forth huge effort without making equally huge progress toward goals.   Practically, EOS could be applied to any level of business, from an independent consultant to an established organization.  After reading the book, the temptation would be to ‘dip’ in and out, taking lessons from individual sections or chapters to institute.  However, as Wickman stresses, the power of EOS is in the entire system and follow-through with the communication schedule and method.  Simply adopting bits and pieces won’t achieve the same results as the real-world examples discussed in the book.   Applications for Your Business: EOS is inspiring, especially if you are feeling your business flounder, frustrated by a lack of progress or an inability to step back from your business as it grows. The first segment, about establishing core values, can be a huge step in the right direction.  And reading EOS can help you articulate larger issues behind smaller problems that you’ve addressed repeatedly.   A major element of the EOS is recognizing the right people in the right seats.  This segment of the system can help you identify individuals within your organization that may be fantastic fits in terms of shared values but are struggling in jobs that are simply not great matches for their skill set.  Alternatively, it can help identify individuals whose differing values are pulling your business away from your vision.  This is not only essential for current employees, but for future hiring.   Another essential element concerns future planning. The shared vision and core values help you and your leadership team focus on shared goals during budgeting and financial planning.  In the real-world examples that Wickman provides, this ends the interdepartmental competition for limited resources.  Because everyone is pulling in the same direction, capital planning priorities become immediately clear to the entire leadership team. Increased accountability ensures that other departments know that capital will be invested wisely in other departments for the good of the whole company....

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How Much is My Company Worth?

Posted by on 2:47 pm in General Accounting, Small Business | 0 comments

How Much is My Company Worth?

Valuing a company is tricky business.  For small companies looking to get an appraisal before sale, this is a black and white view of the years of stress, struggle, and effort they have put into growing a business.  It can be an emotional process for owners and their families.  The best way to start is to talk to an accountant.   Now, a Business Broker or Certified Business Appraiser may have a different opinion.  But they are going to provide different information than an accountant.  An accounting partner will verify the income of your business and evaluate your business ‘on paper’. Something a potential buyer is sure to do.  If your books aren’t in order, that can be a red flag to potential buyers, as you may not even know how profitable your business actually is. In addition, an accountant is invaluable when you are concerned about the tax ramifications of selling your business.   Other professionals take the ‘on paper’ value of your business into consideration, but, much like home appraisers, are more focused on the market value of your business. Businesses are often valued at a multiple of annual revenue or earnings, assuming that current efforts will continue at a similar or growing rate in the future. Be careful with this type of analysis. Many changing factors can affect future revenue or earnings, most of them outside a business owner’s control.   Ultimately, like any other asset for sale, a business is worth what a buyer will pay. So get your books in order and start accounting for everything, from inventory and equipment to staff and...

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Selling is a Human Activity

Posted by on 2:39 pm in Business Book Review, Small Business | 0 comments

Selling is a Human Activity

In To Sell is Human: The Surprising Truth About Moving Others, Daniel Pink presents a convincing argument for his thesis. Selling isn’t an isolated activity undertaken by business development departments, but an essential skill to help all of us move others in our professional and daily lives.   Pink’s book lays out a clear understanding of modern business practices, introducing individuals from all professional walks of life and demonstrating how their daily lives incorporate selling. The US Census Bureau estimates that the American economy has more than twenty-one million “non-employer” businesses—operations without any employees. Some analysts (according to Pink) project there will be sixty-five million independent entrepreneurs by 2020, dominating the American workforce. All this newfound independence in work means that we take on much more of the sales responsibility for our businesses.   And even within businesses, traditional division of skills is breaking down.  With sales ‘departments’ on the decline and elastic skill sets in demand, more and more of us are called to represent our companies to new and current clients. In effect, selling our services on a daily basis.   This rise of ‘non-sales selling’ is challenging our long-held stereotypes of salespeople. Pink explores these (mostly negative) associations and shows how the vast amount of information available today has made customers and clients much more educated in the sales process. Not that dishonest sales practices have disappeared, but that transparency is continually being rewarded by long-term customer relationships.   Fostering the ‘selling instinct’ in all of us is about understanding sales differently. This is about moving people, whether you’re in education, healthcare, or traditional sales. How do we move people toward processes that will benefit them?   Applications for Your Business Pink redefines the ABC’s of sales as Attunement, Buoyancy, and Clarity. These practices of empathy, properly framing a potential client’s questions, and embracing the unique and powerful information the other party brings to the conversation creates an environment where people feel heard.  This environment is what can help individuals move past their thinking to yours, effectively ‘selling’ them on your expertise.   To Sell is Human can help you create action steps within your business to empower yourself and your employees to represent your products and services. Individuals who don’t think of themselves as ‘salespeople’ can suddenly see how their listening skills and compassion for clients is a huge asset to their ability to move others. They become ambassadors of your business, opening doors you didn’t even know existed.   Additionally, thinking of sales in the wider aspect of moving others enables you to take sales practices like pitching and closing into other aspects of your business. Training staff, developing a positive working culture, and customer engagement can all benefit from these techniques. And all of our businesses can benefit from happier employees and customers!   This book review is part of a longer series highlighting recently released business books. To review the entire list and read along with FNG, LLC, click...

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Missing the File Deadline? What To Do Next?

Posted by on 12:52 pm in Small Business, Tax Preparation | 0 comments

Missing the File Deadline? What To Do Next?

April 18th is fast approaching. And even with the extra few days that the weekend and holiday get us, some people will inevitably miss the deadline. If you aren’t going to make it, there are some steps you can   File an Extension. This is by far the easiest way to get a little more time. In fact, if you file an extension, you have until October 16, 2017 to finish and file. Not too shabby.   Stop the Interest and Penalty Pile-Up. You can mitigate the damage by filing (and paying!) as soon as possible after the deadline passes. And, of course, some lucky people receive no penalties because they are owed a refund. But if you owe the IRS, the interest and penalties add up quickly. The faster you file and pay, the better off you are.   Pay As Much As You Can. One of the top reasons for missing the filing deadline is owing the IRS more money than you have. If you need time to save the full payment, pay as much as you can right away. This will lower the interest and penalties that will get tacked on as time goes by.   Make Monthly Payments. Again, if you owe more than you have this year, your best bet is to file, pay as much as you can right away, and then set up direct debit monthly payments to the IRS until you’re paid in full. You can set this up online or using Form 9465. This is about damage control and mitigating the interest and penalties that add up quickly for those who simply don’t pay.   Get an Accountant. And Not Just for Tax Season. We know that running your own small business can be costly and it can seem like an accountant is just another expense. But an accounting partner like FNG, LLC can help prevent this situation in the future. Not just the late filing situation, but the whole ‘owing more than you have’ situation as well.   Planning ahead is essential to a business’s health. It won’t hurt your blood pressure either. It’s a little late for us to get started on your taxes this year, but if you haven’t filed yet, get your extension in place and give us a call. On April...

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Grit is the New Talent

Posted by on 2:21 pm in Business Book Review, Small Business | 0 comments

Grit is the New Talent

In Grit: The Power of Passion and Perseverance, Angela Duckworth lays out a compelling argument for changing the way we predict success, both for ourselves and for our businesses. Duckworth defines grit as a combination of drive and loyalty and highlights many professional examples of professional success won through determination and hard work rather than natural talent.   At first glance, it seems pretty self-explanatory.  After all, isn’t hard work and dedication the core value of entrepreneurship? The very qualities we celebrate as small business owners? And yet, as Duckworth shows, it is talent that, over and over, we celebrate. Athletes, musicians, students and job candidates are all discussed and selected in terms of aptitude and potential. Students are selected for accelerated classes and programs based on aptitude and IQ tests. Job candidates at huge companies are sorted based on SAT scores and asked increasingly difficult logic problems during interviews. But none of these barriers to entry tests the traits that show grit, which Duckworth proves is a much more accurate predictor of success in achieving given goals.   How does Grit work? Instead of talent leading to achievement, grit is a combination of passion and perseverance.   “There are no shortcuts to excellence. Developing real expertise, figuring out really hard problems, it all takes time – longer than most people imagine. And then, you know, you’ve got to apply those skills and produce goods or services that are valuable to people.”   In other words:   “It’s doing what you love, but not just falling love – staying in love.”   Nature vs. Nurture According to Duckworth, grit isn’t a talent of its own. Not something inherited, but a combination of traits developed over time, given the right environment. In fact, when plotted by age, grit is significantly higher for those in their seventies than for those in their mid-twenties.  But before jumping to the obvious “kids these days” conclusions, consider the idea that grit is something gained over a lifetime, a trait aligned with maturity. In that light, grittiness isn’t a generational trait that is missing in Gen X or Millenials, but something gained through a lifetime of experience teaching an individual that talent will only get you so far.   Applications for Your Business If grit is an indicator of success, then it stands to reason that your “A” players need grit to help their talent shine. How do you search for and develop grit in your employees? Help individuals generate defined goal hierarchies. Not just short, medium, and long-term goals, but an understanding of their over-arching career goal and how the short and medium goals can lead toward a single long-term career goal. When evaluating employees, consider evaluations that measure employees not against each other but against each employee’s goals. The grittiest among them will not only make progress, but still be progressing on the same path over time. And when interviewing, ask for examples of achieving long-held goals or overcoming a series of obstacles instead of a single one.   The main benefit of reading Grit: The Power of Passion and Perseverance is the self-analysis as a business owner.  By definition, entrepreneurs must be gritty to achieve long-term success. Duckworth’s self-assessments and tips about recognizing and increasing grittiness in our own lives will help...

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Still Accounting on Paper? Benefits of the Digital Switch.

Posted by on 4:58 pm in General Accounting, Small Business | 0 comments

Still Accounting on Paper? Benefits of the Digital Switch.

Old habits die hard.  And we understand the costs involved in updating an internal system.  As fellow business owners, it can be difficult to justify business costs that don’t seem to have an immediate return to our bottom line. But updating your financial records system will bring a new level of organization and efficiencies that will help you focus on your core business and your clients. Some of the benefits include:   Streamlined Systems When your accounting is only on paper, reports and crucial information can take forever to retrieve. Maintaining digital records within a streamlined system like Quickbooks Online ensures everything is stored in a specific area and organized for easy data retrieval.   Improve Productivity Whether you have internal staff or an accountant working on the books, paper accounts mean they are spending much more time than necessary to manage basic accounting tasks and create reports.  Time you’re paying for.   Increase Security Real life happens and paper financial documents get damaged, destroyed, or stolen. Utilizing digital systems means secure servers with offsite back-ups, ensuring your financial information is safe, secure, and readily available.   Improve Accessibility At times, multiple individuals and departments need access to financial information. Maybe your employees need to submit expense reports or a business development team needs access to financial documents for strategic planning purposes. Paper is bulky, difficult to pass around, and needs to be copied (then shredded) to maintain security. Digital systems can be shared through authorized access levels, either permanent or temporary, to allow your teams to communicate with each other.   Real-Time Data One of the biggest benefits of digitizing your financial information is that you can review and analyze data in real time. With a paper-based system, it might take a bookkeeper over an hour to create a cash flow statement. With a digital system, it takes seconds. The ability to work with real-time financial data is of huge value to your business.   Making the switch may seem like a big project, and it is.  But partners like FNG, LLC are here to help. Contact us today to get started on the...

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2016 Income Tax Checklist

Posted by on 2:22 pm in Tax Preparation | 0 comments

2016 Income Tax Checklist

Taxes can be overwhelming.  At FNG, LLC, we love tax season.  Tax preparation is like the accounting Olympics, and we’re champs. And one of the ways we help our clients save time and money on their taxes is to help them pull everything together. From information to documents, the following checklist will help you get your stuff together for your accountant. When our clients are organized, they save money on their tax preparation. And everyone likes to save money.   Information to Share When you have an ongoing financial partner like FNG, LLC, this is a short list.  In fact, your accountant should still have everything from last year.  And if this is your first year working with an accounting partner, providing a copy of your previous year’s returns also shortens this list considerably.  In fact, you will likely only need to let the accountant know if you have experienced changes in any of the following. Marital Status Address Dependents Childcare Expenses Healthcare Coverage Income Sources Deduction Sources   Documents to Gather Different situations will require supporting documentation.  This is not an exhaustive list, but the most commonly needed forms. If you bought a boat with your railroad retirement benefits and gambling winnings, you’ll need three more specific forms not on this list. W-2s. All of them. 1099s (Other sources of income, from retirement to interest and everything in between) Schedule K-1 (For partnerships and S Corps) 1098s (Other sources of deductible expenses, including mortgage interest and student loan interest)   Every tax scenario is different. And FNG, LLC spends time running a variety of scenarios with the information you provide to ensure your tax liability or refund benefits you the most. The more information we have up front, the easier it is to ensure your tax preparation goes smoothly.   Interested in our services? Download this PDF Checklist to get started. Then contact...

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