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The Stimulus Package Is Here

March 25, 2020 by Art Goudey

The U.S. government has come to an agreement regarding how much money will be involved in the proposed $2 million stimulus package and where it will be spent. The exact details are yet to be defined, but here are the main points.

$250 billion will be made available to individuals and families directly
$350 billion will be made available for small business loans
$250 billion will be available for unemployment benefits
$500 billion in loans for distressed companies

In some detail, the direct funds for individuals & families of $250 billion will be divided as follows according to adjusted gross income:

Individuals who earn up to $75,000 will get $1200
Married couples earning up to $150,000 will get $2400
Couples with children will get an additional $500 per child
The benefits will continue but cap off at $99,000 for individuals & $198,000 for couples without children

The $500 billion for loans to distressed companies will be spent in accordance with an appointed oversight board recently created, however the airline companies will receive the requested $50 billion.

The $350 billion funds for small business loans was made in an effort to guarantee the SBA could ensure loans up to $10 million dollars to small businesses. Be sure to check out the SBA if you haven’t already.

The $250 billion made available for unemployment benefits will be distributed by state, but this new bill will also extend unemployment to self-employed individuals.

While these are scary times economically, Compass Consulting is here is you need any advice.

choose the right pricing for your business

March 18, 2020March 17, 2020 by Art Goudey

Do you have a product or service based business? Both types need to ensure your income is worth the time and expense you have invested. The first step in achieving this is to choose the right pricing for your business. There is more to choosing what your product or service is worth than making a calculation and more to selling that price than just displaying it. Here is a guide to choosing the right price for your business.

Part 1: Choosing a price

What to consider when choosing a price

Gross Profit Margin – Your gross profit margin is the amount of revenue remaining after the cost of buying or manufacturing a product. This margin is represented as a percentage. The Formula is (price-cost)/price. Research what the generally accepted target is for your industry.
Consumer Maximization – Of course you want to make the best profit margin you can, but be mindful of what is reasonable for your consumers to pay. Take into consideration: desirability, market competitiveness & uniqueness or you product or service.
Study Competition – It is easy to try and play the game by having the lowest price, but be sure to stay in the market. Depending on what you are trying to sell, having the lowest price is sometimes a red flag to quality.
Adjust Accordingly – Every business changes pricing. If you are a supplier and you change your price, your buyer is probably also changing their price. Do not be afraid to track your costs and ensure you stay within your profit margin.

Part 2: Marketing A price

Here are some tips for marketing your prices

Display pricing in smaller font size – The value of your product should outweigh the price
Don’t use commas – This implies a large price
Use words that are related to small magnitude – low maintenance, fewer hours, less time
Display prices in red to men – Psychology will have to explain this one
Expose people to any higher number – This makes the price seem smaller in comparison
Add slight price differences to similar products – Having multiple options available betters your chance of a sale
Use frequent price increases – This will keep consumers from noticing price increases
Position sales prices to the right of regular prices – We read from left to right. This creates the illusion of a funnel making the price smaller

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Discontinuation of QuickBooks 2017

July 22, 2020January 10, 2020 by Art Goudey

QuickBooks accounting software will discontinue version 2017 effective May 31, 2020. General use of the program for bookkeeping will still be functional, but live services will no longer be available. Read below about the Discontinuation Of QuickBooks 2017.

Discontinued services are the following:

Live Technical Support
Replacement software & Manuals
Updates
Online Services
- Merchant Services
- Recurring Payments
- Payroll Updates
- Bill Pay
- Online Banking
- Exchange Rates
- Online Backup
- E-Invoice
- Tax Updates

This applies to all versions of QuickBooks 2017. If you rely heavily on these services, consider upgrading.

If you need assistance moving your files to a new version of QuickBooks, or would like to set up new services, contact Compass Consulting today!

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Business Laser Checks vs. Credit Cards

January 6, 2020January 3, 2020 by Art Goudey

Money. Cash, checks, debit/credit cards, they all fuel small business. When looking at the advantages of laser business checks and credit cards, what combination best fits your needs?

Credit Cards

Credit card companies offer incentives such as; no annual fees, airline miles, low interest rates, reward points, and cash back. Most importantly credit allows small businesses to make large purchases without cash on hand. However, this convenience also makes it easier to exceed financial boundaries. For instance, the fine print may put your business in some uncomfortable conditions long term, once the initial perks expire.

Credit card safety is also a major concern. Credit card fraud totals $5.55 billion worldwide. Online theft requires credit card holders to be cautious. Additionally, keeping business and personal expenses separate is an important part of being a business owner and is harder to track with a credit card. When lines are blurred, bookkeeping becomes complicated and could place personal assets at risk.

Alternatively, business checks are a safe, efficient, and effective solution.

Business Laser Checks

Many small businesses use business laser checks paired with accounting software like Quick Books. Laser checks are created in the accounting program and printed on-demand. All financial transactions are immediately logged into the system and all records are updated in real-time. This process saves time, money, and boosts financial accuracy.

In the digital age, it may seem that paper checks are less convenient than credit cards. Unlike credit cards, checks are directly tied to a business identity, branded with a company’s logo, and are harder to steal. Also, while credit card transactions are often separate from financial records, laser checks provide an instant financial snapshot with each transaction. An accurate view of the current financial standing is simplified in real time.

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How to make a qualified charitable distribution

March 11, 2020December 9, 2019 by Art Goudey

Money from a traditional individual retirement account (IRA) can be donated to charity as non-taxable income. This is accomplished by making a Qualified Charitable Distribution (QCD).

Under most circumstances a distribution from a traditional IRA is taxable, since the account holder didn’t pay taxes on the money as it went into the account. However, taxpayers who are at the age of having Required Minimum Distributions (RMD), can make a contribution directly from a traditional IRA to a qualified charity. This will also lower the donors adjusted gross income, and count as an RMD.

Here are guidelines for executing this transaction

Each person can donate the full amount of their RMD up to $100,000
Work with your IRA custodian to conduct a QCD
Inform your tax preparer that you made a QCD
You can make a QCD that exceeds your RMD for a given year
You can distribute the money to multiple charities
Donors cannot receive any charity benefit for making a QCD
Deadline to make a QCD is December 31^st
The charity organization must be a 501(c)(3), or exempt from federal income tax
The first money out in a given year is considered to be the RMD

For guidance on making a Qualified Charitable Distribution

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Filing Deadline for Form W-2, W-3 & 1099-Misc

March 11, 2020December 4, 2019 by Art Goudey

Income Reporting Deadlines 2019

Since the “Protecting Americans from Tax Hikes” act in 2015, employers must file their copy of Forms W-2 & W-3 with the Social Security Administration by January 31.

Form 1099-MISC, reporting of non-employee compensation, also must be filed with the IRS by this deadline.

By verifying the income taxpayers report on their returns, the IRS can detect refund fraud, while still administering refunds as quickly as possible. This is the need for an early deadline and is the reason for the PATH act.

We recommend using e-file to file these forms. Filing on time and without error is the best way to avoid penalties.

As the end of the year approaches employers should verify the following:

Employee/Contractor name
Employee/Contractor address
Employee/Contractor Social Security or individual taxpayer ID number
Your account information with the Social Security Administration

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