Elevate Accounting

05/27/2025

How often do you review your business financial statements?

………

Most small business owners review their financials annually at tax time, or sometimes not at all, with a focus solely on the Profit and Loss statement (P&L).

At a minimum, you should be reviewing the following financial statements monthly.

1. **Income Statement:**
Provides a detailed overview of your business's income and expenses for the month. By analyzing month-over-month data, you can identify trends and anomalies, creating a clearer financial picture of your business.

2. **Balance Sheet:**
The balance sheet outlines your business's assets, liabilities, and equity. It is crucial for business owners to track outstanding receivables (what is owed to you) and payables (what you owe), as neglecting these can lead to escalating business debts.

3. **Statement of Cash Flows:**
This statement tracks the movement of cash within your business during the month. PROFIT DOES NOT EQUATE TO CASH. A business may appear profitable on paper but face cash shortages due to debt repayments or other financial activities.

Regularly monitoring these financial statements on a monthly basis can provide valuable insights into your business's financial health, helping you make informed decisions and maintain financial stability.

Want to dive deeper? Let’s talk.

05/21/2025

Bookkeeping is the backbone of small business.

Without clean books, it’s impossible to:

✅ Accurately track cash flow
✅ Make smart, data-driven decisions
✅ Understand the health of your company
✅ Plan for taxes

Not having a good bookkeeper is costing you more than the monthly investment in a professional.

If you are not 100% confident in your books…

Reach out and let’s have a conversation.

05/12/2025

Not all revenue is good revenue.

Have you ever felt like your business is growing, revenue is up, but your cash seems to disappear?

This is a common trap for growing businesses. Rapid growth without a financial strategy can lead to ballooning costs, shrinking margins, and ultimately, a cash flow crisis. More revenue doesn't always mean more profit.

If you plan to scale your business, here are four tips to help you grow successfully.

✅ Refine your pricing strategy - Ensure your prices reflect increasing costs and deliver healthy margins
✅Prioritize cash-generating revenue streams - Focus on work that pays and quickly
✅Review your financials monthly - Identify trends, reduce waste and make data-driven decisions
✅Forecast major decisions - Understand future cash impacts before committing to hires, purchases, or expansions.

Growth should build stability, not bury you in expenses. Strategic growth keeps your profitable and cash-positive.

Want a partner to help you through this transition? Let's talk.

02/27/2025

Business owners should always track their basis.

One of the most overlooked aspects of being a business owner is tracking basis—especially if you operate as an S Corp or Partnership.

What is Basis?

Your basis is essentially your investment in the company. It determines:
✔️ How much loss you can deduct
✔️ How much in distributions you can take tax-free

Why Does It Matter?

✔️ If you take distributions beyond your basis, you could owe unexpected capital gains tax
✔️ If you don’t have enough basis, you can’t deduct losses—even if your business is struggling

How Can This Hurt You?
A common scenario I see:

You start a new business and go to get your taxes done at year-end. Your accountant recommends taking Section 179 and bonus depreciation to massively accelerate deductions and reduce your taxable income to $0. Sounds great, right?

Not so fast…

If you’ve taken distributions throughout the year, including federal estimated tax payments (yes, these are considered distributions because pass-through owners should pay taxes personally), then you may have taken more out of the business than your basis allows.

Now, that $20,000 you withdrew to cover federal tax payments is taxable at short-term capital gains rates—a nasty surprise that could have been avoided with proper basis tracking.

💡 The Solution? Track basis throughout the year, not just at tax time. If you’re unsure about your basis, let’s connect before it becomes a problem.

02/22/2025

Thinking about starting a business???

Consult a CPA before you do.

I’ve had three clients so far this year that walked in the door who did not realize their LLC was taxed as a partnership.

The result…

❌ Unexpected costs
❌ Missed savings
❌ Having to restructure owner compensation
❌ Missed filings & penalties

We offer small business consultations, where we lay out a roadmap for your potential or new business.

Items discussed:

✅ Legal and tax compliance
✅ Entity structure
✅ Bookkeeping/accounting best practices & software recommendations
✅ Tax planning
✅ Specific Q&A tailored to you

Just wrapped up one of these on Friday and my client ended our session with “I can’t believe every business owner doesn’t do this?!”

Reach out and let’s set your business up for success!

02/11/2025

What are your goals for 2025??

✅ Finally turn that side hustle into a full-time business?

✅ Break through the multi-year revenue plateau to scale your business?

✅ Update 10-year old processes to maximize efficiency and increase your margins?

Most people have goals…few follow through with them. Sometimes we just don’t know where to start.

Follow this roadmap to jump start your growth.

#1 Get your books organized. To us, this means ACCURATE and TIMELY; and sometimes drastically simplifying your chart of accounts…

#2 Review and analyze your financials monthly. If you are only looking at your financials quarterly or annually, you aren’t able to make real-time changes.

#3 Cash is King! Most small businesses fail due to lack of cash flow. Create a 13-week cash flow forecast and update it WEEKLY.

#4 Set goals and track them. Get specific so you can actually measure progress.

#5 Make adjustments and pivot if necessary. Sometimes you try something and it doesn’t work…that’s alright! The whole point of tracking metrics and reviewing financials is to see if what you are doing is working. If it’s not, something needs to change.

02/06/2025

Look for peace of mind this tax season!

If you own a business, stop prepping a DIY tax return every year and find a good CPA.

Your annual DIY filings are ticking time bombs that can destroy your business if done the wrong way for too many years OR you are nowhere near maximizing your savings.

Things to look for….

- Your fee should be at least $750. I charge a minimum of $1,000. Lower fees sound great, but a CPA charging $500 for a business return doesn’t have the budgeted time they need to ask the right questions.

- Your CPA should either be sending you a questionnaire or having a conversation with you every year. Ideally both.

- Look for someone that can offer tax planning for a higher fee. You may not need it now, but you will. At least then you have the option and don’t have to switch to someone new….again.

- Find someone who prepares lots of returns for YOUR entity type. I refer out C Corps and complex Partnerships. I simply don’t have the technical knowledge to accurately maximize your savings there. S Corps…different story.

What did I miss??

02/04/2025

01/30/2025

If you are a business owner I can pretty much guarantee you are leaving money on the table.

The tax code is complicated, and unless you are working with a professional, you aren’t strategizing effectively.

Or worse, not compliant and risking penalities and interest on errors or underpaid amounts.

Three examples of new clients in the past couple of months:

✅ Helped a partnership elect S Corp status and balance salary with distributions…saving an estimated ~$26,000 annually in taxes.

✅ Helped a small business implement an accountable plan to reimburse themselves over ~$12,000 per year in tax-free income AND create a deductible expense for the business.

✅ Helped an LLC who didn’t realize they were taxed as a partnership fix their compliance issues and avoid future penalties and interest on unpaid self-employment tax.

These are just examples. Every client is different, but what they all had in common….

They had never worked with a CPA.

If you are one of the 70% of small business owners that have never utilized an external accountant…reach out and let’s talk.

30-min phone consultations are free.

You may be surprised what we uncover.

01/25/2025

All small businesses should become an S Corp.
….

Just kidding. If anyone says this, RUN the other way.

However, there are a lot of situations where it does make sense and does result in substantial tax savings.

S Corps allow you to split your income between a reasonable salary (subject to payroll taxes) and owner distributions (which avoid self-employment tax).

We help business owners understand their options and evaluate which type of entity makes the most sense for your current situation & future goals.

More importantly, which entities don’t makes sense for your company. An S Corp may not be the best choice if you have….

❌ MINIMAL INCOME: Depending on income levels, the tax savings may not justify the added costs
❌ HIGH REINVESTMENT NEEDS: S Corps require profit distributions proportionate to ownership shares, which can be limiting if you business plans to reinvest earnings unevenly among owners.
❌ FOREIGN OR COMPLEX OWNERSHIP: S Corps have strict ownership requirements that could limit your flexibility.
❌ HIGH REASONABLE SALARY: If your industry cannot justify a low enough reasonable salary, you might not save that much on taxes.
❌ NO LONG-TERM PLANS: If you are unsure of long-term plans, becoming an S Corp may be premature. S Corps can be less attactive to buyers due to certain tax implications at sale.
❌ INCONSISTENT OR FLUCTUATING INCOME: It may be hard to cover your monthly payroll obligations.

Want to explore your entity choice further? Let’s talk!

01/24/2025

What are you looking for this tax season??

❌ guaranteed refunds
❌ lowest fees
❌ high-risk strategies

Then we probably aren’t a good fit.

If you are looking for….

✅ straight forward fees
✅ good communication
✅ compliance
✅ customized tax plans with proven strategies

Let’s talk.