Tag: small business

Why We Run Quarterly Payroll for Our Clients

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For many of our clients—especially those structured as S-corporations—quarterly payroll isn’t just a convenience, it’s a strategic and compliance-driven necessity. At Incline Business Essentials, we’ve developed a quarterly payroll model that aligns with IRS requirements and supports proactive tax planning. Here’s why we do it and how it helps your business.

S-Corporation Owners Must Pay Themselves a “Reasonable Wage”

One of the core requirements of an S-corp structure is that business owners who actively work in the company must be paid a reasonable salary through payroll. This salary is subject to standard payroll taxes, and it’s critical to stay in compliance with the IRS. Skipping this step can lead to audits or penalties.

By running quarterly payroll, we help ensure owners are consistently paying themselves a fair wage in a timely manner, while also simplifying the administration of payroll for smaller teams who may not need or want a monthly cadence.

Strategic Tax Planning: Avoiding Year-End Surprises

Another major advantage of quarterly payroll is the ability to strategically manage federal and state tax obligations. We work closely with you and your CPA to estimate the total amount you should be paying into the IRS and your state throughout the year—not just from wages, but including pass-through income that may affect your tax bill.

Once these estimated totals are calculated, we set up additional withholdings through payroll to help ensure you’re on track. This approach:

  • Helps smooth out tax payments over the course of the year
  • Reduces the risk of underpayment penalties
  • Minimizes the shock of a large year-end tax bill
  • Provides peace of mind for business owners who prefer to pay taxes incrementally

Our Process: Collaborative and Tailored

Each quarter, our team:

  1. Coordinates with your CPA (or uses our best estimates based on past tax performance and current year projections) to determine estimated tax obligations.
  2. Runs payroll to deliver your reasonable salary and any additional withholdings needed.
  3. Files and remits taxes to federal and state authorities, keeping your compliance on track.
  4. Monitors and adjusts withholdings as needed throughout the year to reflect changes in business performance or tax policy.

The Bottom Line

Quarterly payroll isn’t just about ticking a compliance box—it’s about using payroll as a tool to manage your cash flow, reduce surprises, and make smart, informed financial decisions. If you’re an S-corp owner, this cadence allows us to keep you aligned with IRS rules and on track for smoother year-end filings.

If you have questions or want to revisit your withholding estimates, let’s talk. We’re here to help make your financial systems work for you—not the other way around.

5 Clever (and Hilarious) Ways for Businesses to Slash Overhead Costs

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remote work

Looking to save a few bucks in the business world without going into panic mode? Here are five cost-cutting ideas that are both smart and just a little bit witty.

1. Ditch the Fancy Office Space

Who needs a corner office with a view of… more offices? With remote work now mainstream, let your team work from their couches, or the coffee shop around the corner. Not only will you save on rent, but your employees might even thank you for letting them trade in suits for sweats.

Tip: Got a hybrid setup? Downsize the office to something a little more “cozy.” Maybe that tiny space next to the coffee machine?

2. Outsource Like a Pro

Need bookkeeping support or graphic design? Don’t feel compelled to hire someone full-time. Instead, outsource to freelancers or service providers who come with their own laptops and don’t eat up your coffee supply.

Tip: Focus on outsourcing non-essential roles, unless you really need someone dedicated to making coffee runs.

3. Turn Down the Thermostat

Energy bills heating up? Lower the thermostat a couple of notches—or, if you’re remote, let everyone handle their own home heating and air conditioning costs. It’s both eco-friendly and budget-friendly!

Tip: Just don’t go so far as to create an Arctic Tundra vibe. You want savings, not hypothermia.

4. Negotiate With (Almost) Everyone

Have a favorite supplier? Great! Tell them they’re your favorite, then ask for a discount. Loyalty deserves a reward, right? And if they say no, remind them that you’ve been loyal enough to ask!

Tip: Don’t forget to drop phrases like, “Can we work something out?” or “Let’s talk about savings for both of us!”

5. Automate Everything That Moves

Does your team spend precious hours on menial tasks? Get software that will do the data entry, invoicing, and reporting for you. This way, your employees can get back to the truly important things… like watching Ted Lasso.

Tip: Some automation tools are free. And let’s face it, they probably won’t ask for a raise anytime soon.



Accounts Receivable and Cash Flow: The Financial Love Story

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Accounts receivable (AR) and cash flow are two essential pieces in a business’s financial puzzle, but let’s be honest—they sometimes act more like a mismatched couple trying to figure things out. AR is all about patiently waiting for clients to pay up, while cash flow has no time for nonsense and just wants to keep the bank account full and happy. Here’s a humorous look at how these two frenemies work together to keep the business running smoothly.

Accounts Receivable: The Optimistic (and Slightly Naïve) Romantic 🌈💌

Accounts receivable is that friend who’s constantly loaning you $20 with a cheerful, “Just pay me back whenever!”

It represents the money your customers owe you for products or services they haven’t quite paid for yet. AR is like a hopeful romantic, always expecting clients will keep their promises to pay on time… eventually.

AR’s Motto: “I know they’ll pay soon! I mean, they said they would, and I trust them!” 😇

Why We Love AR: It boosts your company’s value by promising a steady stream of incoming funds… someday.

Biggest Weakness: Sometimes, it’s a little too trusting. It counts as an asset on the balance sheet, but if customers drag their feet paying, your cash flow might feel like it’s auditioning for a survival show.

Cash Flow: The No-Nonsense Realist 🚀💵

Cash flow, on the other hand, is that practical friend who’s all about action. Cash flow doesn’t believe in “eventually.” It’s the money moving in and out of your business, keeping the lights on and the rent paid. Think of cash flow as the “let’s get this done” type—focused, efficient, and slightly annoyed that AR is always so, well… hopeful.

Cash Flow’s Motto: “I’ll believe it when I see it in the bank account.” 💳

Why We Love Cash Flow: Positive cash flow means the business has enough money to cover expenses, invest in growth, and avoid borrowing. It’s the steady, reliable friend who keeps things together.

Biggest Weakness: Cash flow isn’t very patient. It gets nervous when too much money is tied up in AR, constantly reminding AR, “Good vibes don’t pay the bills!”

The Clash (and Cooperation) Between AR and Cash Flow 🤝🔥

AR and cash flow have a classic push-pull relationship, with AR wanting to “believe in people” and cash flow saying, “That’s great, but how about we get paid already?” If customers delay payment, cash flow gets grumpy, even though AR insists the check is “definitely in the mail.” 

Here’s how AR and cash flow work together when they’re not driving each other crazy:

Cash Flow Timing Delayed payments from AR can lead to cash flow headaches. Cash flow needs to buy groceries now, not next month!

Collection Strategies: With a strong collections policy (automated reminders, anyone?), AR can keep cash flow happy by bringing in cash more regularly.

Cash Flow Forecasting: Cash flow relies on AR for an accurate picture of future income. This way, it doesn’t get blindsided when there’s less cash in the account than expected. It’s like planning a party when AR actually RSVPs on time!

Tricks to Keep AR and Cash Flow in Harmony 🎩💡

1. Send Invoices Like You Mean It: The sooner you invoice, the sooner AR can give cash flow the boost it needs. And yes, that means no “gently nudging”—let’s make those invoices clear, assertive, and friendly.

2. Set “Encouraging” Payment Terms: Clear payment terms are your best friend. Offer a discount for early payments, or (politely) hint at late fees if customers take their sweet time.

3. Use Automated Reminders (Cash Flow’s Favorite): AR might feel a little awkward nagging customers, so let an automated reminder system handle it. This way, cash flow doesn’t lose sleep over unpaid invoices.

4. Consider AR Financing: AR can occasionally fast-track cash flow by using AR financing or factoring (where you get an advance on AR, but with a slight fee). Cash flow loves this idea—as long as you don’t overdo it!

The Happily-Ever-After

When accounts receivable and cash flow finally learn to work in harmony, it’s a beautiful thing. By actively managing AR, businesses can boost cash flow, avoid emergency “cash shortage” panics, and focus on growing with confidence. Remember: AR might be a dreamer, but cash flow is the real deal—keep both in check, and your finances will live happily ever after.

1099 Procedure

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1099s are forms that need to be issued in January to your vendors and subcontractors. Please watch the video or read below for more info.

Who Should Be Issued 1099s?

Your company is required by law to issue 1099s to any subcontractor who performed a service for your company within the calendar year they were paid more than $600, and the individual or a company that you paid is not registered as an S corp.

Subcontractors

Subcontractors can vary wildly. Fo example, maybe you hired a person to help you with your website, and you paid that person more than $600 in a year. Or if you hired someone to come in and help you with some carpentry, so they were acting as a true subcontractor. This is another example of someone who would need a 1099. Again, these, these would be issued to companies or individuals who are not an S corp who were paid more than $600 within a calendar year for a service they performed within your business.

Rent and Lawyers

In addition to this, we are also required to issue 1099s to an entity that you are paying for rent. So if that entity or individual is not an S corp, we will issue a 1099 to that entity or individual. We are required to issue 1099s to lawyers regardless of how much you’ve paid them

1099s Only For Checking Account Payments, Not Third Party or Credit Cards

One other piece of clarification is that 1099s are required to be issued for payments that have run through your checking account. For example, if you’ve written a check to a subcontractor or you’ve paid cash to a subcontractor.

We will not be issuing 1099s for subcontractors that you paid via credit card or any other third party payment platform. So like PayPal, for example, if you’ve paid someone through PayPal, we will not be issuing a 1099.

We cannot issue 1099s to your subcontractors that you’ve paid through a third party app because the third party is required to give some reporting to the IRS and if we were to issue a 1099 to those vendors, then the income would end up being double reported.

So it’s very important that we not issue 1099s for these kinds of third party apps. So again, if you have any questions about this, feel free to reach out, but just know this is how we will be handling it. As we approach end of year, please again, assist us with any W9s that we may need to collect on your behalf.

How to Avoid the Wrath of the IRS by Understanding the Difference Between Contract Labor and Employees

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It’s tax season, and you know what that means… lots of businesses are scrambling to get their paperwork together to avoid any unwanted attention from the IRS. We’ve all heard the term “contract labor,” but what does that mean, and how does it differ from an employee? Don’t fret, my small business owners – I’m here to break it down for you in a way that’s actually kind of fun (I know, controversial statement when we’re talking about taxes). Grab a cup of coffee (or a stiff drink), and let’s dive in.

The first thing you need to know is that the employee vs. contractor classification is based on several factors, not just one. Here are a few questions you should ask yourself to determine whether your worker is an employee or a contractor:

Who controls the work?

If you have the right to control the worker’s actions on the job (when, where, and how they perform their duties), they’re likely an employee. If the worker determines those aspects, they’re more likely a contractor.

Who provides the tools?

If you provide the workers with the necessary tools and equipment to perform their job, they’re probably an employee. Contractors usually provide their own tools.

Is there an ongoing relationship?

If the worker is hired for a set period of time or project, they’re more likely a contractor. If there’s an expectation that their employment will continue indefinitely, they’re probably an employee.

Overall, the more control you have over when, where, and how the work is performed, the more likely the worker is an employee. If the worker has more control and autonomy, they’re usually a contractor.

Now, let’s talk about why this distinction is so important. When you hire employees, you must withhold certain taxes from their paychecks (like Social Security and Medicare) and pay the employer portion of those taxes. You’re also responsible for paying unemployment insurance and worker’s compensation insurance. When you hire contractors, you don’t have to withhold taxes or pay insurance – the contractor is responsible for those things.

However, just because you call someone a contractor doesn’t mean they actually are one in the eyes of the IRS. The consequences of incorrectly classifying workers can be severe – you could be on the hook for back taxes, penalties, and interest. So, always make sure you’re following the rules!

Another important factor to consider is how much control you have over the worker’s rate of pay. If you negotiate a rate with an independent contractor and don’t try to dictate what they charge, you’re likely in the clear. However, if you set a specific hourly wage or salary for a worker, they’re probably an employee.

One final thing to note: some workers are considered “statutory employees,” which means they’re treated like employees for tax purposes even if you consider them contractors. Examples of statutory employees include drivers and delivery personnel who work for you using their vehicles, as well as certain kinds of home-based workers. It’s important to know the rules for each type of worker to make sure you’re in compliance with the law.

Phew, that was a lot of information! The bottom line is this: determining whether someone is a contractor or an employee isn’t always clear-cut. It’s important to consider all the factors and make a well-informed decision. If you’re unsure, consult with a tax professional who can help guide you through the process. Remember, getting this right can save you a lot of headaches (and money) in the long run. Happy tax season!

How to Prepare and File Quarterly Payroll Reports

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Every quarter, small business owners must submit payroll reports to their state and the Internal Revenue Service (IRS). These reports are essential for keeping accurate records of employee salaries, wages, and taxes. In this blog post, we will discuss the information required in these quarterly payroll reports and how to prepare them.

What Information is Required?

The information required in a quarterly payroll report varies by state but generally includes:

  • data on employee wages earned each quarter
  • employer contributions made during the same period
  • taxes withheld from employee paychecks

The report will also include detailed records of each employee’s gross wages (wages earned before any deductions) and net wages (wages after deductions have been taken out).

Additionally, employers should provide information on all employees, including their name, address, social security number, and job title/position held at the company or organization.

How to Prepare the Reports

Incline Business Essentials outsources payroll to a specialized payroll provider like Gusto or Quickbooks.  These payroll providers ensure that the reports are remitted to the various jurisdictions in an accurate and timely fashion. Quarterly payroll reporting is included in the service we provide to ensure your company is compliant.

Filing quarterly payroll reports is an important part of running a successful business or organization. The process can be time-consuming, but we ensure this is handled on your behalf.

PCI Compliance 101 – A Beginner’s Guide to Secure Payment Processing

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Cyber-security and payment protection are top of mind for small businesses and consumers.  Small businesses are becoming increasingly vulnerable to data breaches and cyber-attacks. And when it comes to processing payments, PCI Compliance is a way to certify that your business meets current cybersecurity milestones.  As a small business owner, understanding payment processing and data security can be overwhelming. That’s why we’ve put together this beginner’s guide to PCI Compliance, to help small business owners understand the basics and protect their customers’ payment information. We hate that we have to think about this at all!

If you accept payments through Intuit/Quickbooks, make sure you read the last section of this blog!

What is PCI Compliance?

PCI Compliance stands for Payment Card Industry Compliance. It was developed by a council of payment card issuers, including Visa, Mastercard, American Express, and Discover, to establish security standards for businesses that process payment transactions. These standards were established to protect customers from payment card fraud and data breaches. Did we mention that this is boring and we don’t want to have to learn about this?

If you accept payments through Intuit/Quickbooks, make sure you read the last section of this blog!

Who needs to be PCI Compliant?

If your business accepts ACH, credit card, or debit card payments, you should be PCI Compliant. Even if you only accept a few payments a year, you are still at risk of a security breach. If your business is not PCI Compliant, you could be at risk of liability, fines, and a damaged reputation. They hit you where it hurts!

How can you become PCI Compliant?

Becoming PCI Compliant involves a series of steps that ensure your business is complying with the Payment Card Industry Data Security Standards (PCI DSS). These standards require businesses to implement certain security measures to protect their customers’ payment card information. The steps to becoming PCI Compliant typically involve completing a self-assessment questionnaire and undergoing a vulnerability scan to identify any potential security issues. Snooze, snooze.

What are the consequences of non-compliance?

If your business is not PCI Compliant, you could be at risk of fines, legal action, and a damaged reputation. In addition, if your customers’ payment card information is breached, you could be liable for the cost of the damages. Ensuring that your business is PCI Compliant is not only a legal requirement but also a crucial step in protecting your customers’ payment card information and your business’s reputation. Hit where it hurts….again.

PCI Compliance is essential for any business that processes payment transactions. As a small business owner, it is crucial to understand the basics of PCI Compliance and take the necessary steps to protect your customers’ payment card information. By implementing PCI DSS security measures and regularly monitoring your systems, you can reduce the risk of data breaches and cyber-attacks, and ensure that your customers’ trust in your business is maintained. Remember, being PCI Compliant is not only a legal requirement, but it’s also good business practice and a sign of your commitment to keeping your customers’ payment information safe.

If you accept payments through Intuit/Quickbooks:

Intuit recently released an announcement requiring businesses to use Intuit merchant services to become PCI compliant. To continue receiving electronic payments through Intuit merchant services, you will need to become compliant. You have likely already received an email from Intuit (yes, it’s in your junk) explaining the process.

Compliance requires that you pay an annual fee of $85-$300 to SecurityMetrics.  SecurityMetrics will provide you with your final price.  

As a small business owner, you have choices.  You can become compliant.  You can change to a different payment processing system.  You can decide not to accept electronic payments.  All of these options have implications for your business and for your bookkeeping system.  Please take a moment to talk with your lead bookkeeper about your options.  For more information, contact your lead bookkeeper to schedule a talk.  

If you decide to become compliant, Quickbooks has partnered with SecurityMetrics to provide a more seamless experience.  For more information about how the process works and to become compliant, here is the update from Intuit. 

Or for a more personalized experience, contact SecurityMetrics directly at 801-995-6400

How to Get Paid Faster: A Guide to Accounts Receivable

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As a small business owner, you know that cash flow is key. Without cash, you can’t pay your vendors, staff, or yourself. But sometimes it feels like getting customers to actually pay what they owe is an uphill battle. That’s where accounts receivable come in! Don’t worry if you don’t know what it is – we’re about to break it down for you.

What is Accounts Receivable?

Accounts receivable (AR) is the money that customers owe a business for goods and services provided but not yet paid for. It can also refer to the process of tracking how much each customer owes and how much has been paid off. AR falls under the umbrella of financial management and plays a major role in your company’s overall financial health.

How Can You Generate Faster Cash Flow?

Generating faster cash flow involves making sure that customers are paying their invoices quickly and accurately. Here are some tips on how to do just that:

1. Offer discounts for early payment

This provides an incentive for customers to pay their bills on time or even early!

2. Make sure your invoices are clear and easy to understand.

Include due dates, itemized lists of products/services, payment methods accepted, etc. This will help avoid confusion or miscommunication down the line and ensure that payments get made in a timely manner.

 3. Automate reminders.

Automated text messages or emails can remind customers when payments are due or remind them of any discounts they may receive if they pay early. Automation saves time and ensures more reliable communication with customers so that payments get made promptly!

4. Use online payment portals.

Online payment portals make it easier for customers to pay their bills quickly and securely without having to mail in checks or other forms of payments manually.

5. Offer multiple ways for customers to pay.

Accept credit cards, e-checks, direct debit, check by phone, PayPal, Venmo, etc. Allowing multiple forms of payment makes it easier for customers to pay their bills on time !

6. Streamline Collection Process

Streamlining your collection process includes tracking invoices sent out as well as payments received so that nothing slips through the cracks. This helps ensure that all outstanding accounts are being tracked accurately and consistently.

7. Implement Automated Credit Control Systems

Automated credit control systems allow businesses to automate tasks like sending out reminder emails/texts or automated follow-ups when invoices remain unpaid after a certain period of time has passed. This helps keep track of all accounts receivable efficiently without having someone manually monitor them every day which saves time and resources!

8. Follow Up On Late Payments Immediately.

Following up on late payments immediately shows your clients that you take their commitments seriously by providing prompt responses when necessary. Prompt responses help ensure quicker resolution times which can result in faster cash flow!

Accounts receivables play an important role in managing a business’s overall financial health as well as its ability to generate faster cash flow – but it doesn’t have to be tedious or overwhelming! By following these tips you’ll be able to manage your AR more efficiently while still providing excellent customer service throughout the process! So put them into action today – let’s get those invoices paid faster! Contact us if you’d like help managing your accounts receivables.

What is the Difference Between a CPA and a Bookkeeper?

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Are you a small business owner, CEO or CFO trying to determine which financial professional you need for your organization? Both Certified Public Accountants (CPAs) and Bookkeepers are important roles in any finance department, but they have different responsibilities. Here’s what you need to know about the difference between CPAs and bookkeepers.

What Does a CPA Do?

A CPA is responsible for providing financial advice, managing taxes, and auditing financial records. They typically focus on long-term planning for businesses as well as individuals. CPAs also analyze complex financial data and create solutions that can help businesses reduce their taxes or increase profits. A CPA may also work with other professionals such as lawyers or consultants to provide the best advice possible.

What Does a Bookkeeper Do?

A bookkeeper is responsible for maintaining accurate financial records of a business’s daily transactions. Common tasks include tracking accounts receivable, accounts payable, payroll, budgeting, and invoicing. The goal of a bookkeeper is to ensure that all transactions are properly recorded so that accurate financial statements can be generated each month.  While bookkeepers don’t usually provide long-term strategies or tax advice like CPAs do, they can assist with analyzing data and making sure everything is up-to-date and accurate. This helps the business make informed decisions by having reliable data on hand at all times.

It’s important to understand the differences between CPAs and bookkeepers when hiring for your organization’s finance team – both play an essential role in helping you reach your goals! While CPAs provide strategic guidance on long-term planning and reducing taxes, bookkeepers keep track of day-to-day operations by tracking expenses and generating accurate reports from this data. Together, both roles are critical components of running an effective finance department!

Balance Sheet Basics – What Assets Can You Expect to See?

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A balance sheet is an essential financial document that provides a snapshot of your business’s assets, liabilities, and equity. It serves as a way to track the health of your company by revealing how much money you have coming in and how much money you are spending. But what exactly do all of those assets mean? Let’s take a look!

What are Assets?

Assets are items that have value and can be owned or controlled to produce value. On a balance sheet, they can represent anything from cash to accounts receivable. They can also include tangible items such as machinery and equipment, real estate, vehicles, furniture, inventory, and buildings.

Examples of Assets

Cash

This includes both physical cash on hand as well as funds held in bank accounts or other liquid investments. Cash is important for day-to-day operations because it allows businesses to pay bills, purchase supplies, and make payroll.

Account Receivables

These are payments owed by customers who have purchased goods or services from your business but have yet to pay for them. Accounts receivable is an important asset because it reflects future revenue that has not yet been recognized in the current period.

Investments – Investments include stocks, bonds, mutual funds, etc., which may be held for investment purposes or income generation. Holding investments helps diversify risk within a portfolio and potentially generate returns over time.

Equipment

Equipment refers to any machinery or tools used in order to run the business such as computers, desks, printers, vehicles, and more. Equipment is important because it enables the business to carry out its operations efficiently.

Inventory

This includes any products or materials that are held for sale by the company. Inventory must be tracked closely in order for a business to maintain healthy cash flow levels since selling inventory generates immediate revenue for the business.

As we can see from this quick overview of assets on a balance sheet, understanding what each asset means can help small business owners better manage their finances and stay on top of their financial goals! By familiarizing yourself with these common assets—cash accounts receivable investments equipment inventory—you will get one step closer to achieving financial success!