Although we believe tax planning should be a year-round process, below are a five strategies to consider while winding down 2010:

Taxable Fringe Benefits: These are items such as the personal use of company-owned or leased vehicles, medical insurance premiums paid for S-corporations’ shareholder employees, group term life insurance premiums over 50K and/or corporate apartment leases.

Inventory Reduction: The general rule of thumb is the more inventory you have on hand, the more taxable income you have. Reducing the amount of inventory could reduce the amount of taxes you will have to pay.

Expense Increases: Consider increasing your expenses the last two months of the year by purchasing new equipment, paying all outstanding invoices or issuing bonuses.

Maximize Retirement Contributions: Making the maximum contribution allowed to your 401k, Sep or Roth IRA, or other retirement vehicles could significantly reduce the amount of taxes you will have to pay.

Use Current Mileage Rate: Be sure that you are using the correct current mileage rates. Currently, this is 55 cents per mile driven for business, 24 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations.

If you are unsure of how to get your financials in order for the New Year, please contact us. We can definitely help!

Depending upon your type of business, you could potentially be able to save yourself hundreds… even thousands… of dollars by making some December purchases.  But you’ll never know until you contact a CPA who can help you determine how best to spend the last month of the year! 

Who knows?  You could find yourself waking up on January 1, 2011 with a huge smile on your face knowing that you made the best choices for your business!

My answer is always “no”.

There are companies of all shapes and sizes around the globe that have managed to reach a pinnacle of financial success (and remember that their definition of “financial success” may be different than another organization’s.)  What has set them apart are a few characteristics:

1. A positive attitude – They don’t believe they can fail.
2. A great team – They have hired the right people for the right positions.
3. A good financial manager – They have had the foresight to ask someone to help them plan.

Obviously, I’d like to discuss #3, especially given my occupation as a virtual CFO.

Having the right financial manager or advisor is critical to financial success for any business.  And by “right”, I mean someone who innately understands your business and cares about it as much as you do.

If you’re not currently experiencing financial success, I’d enjoy talking with you about how I can help you move toward your monetary goals.  You might be surprised at the step you can take to make financial success a reality for 2011 and beyond.

·  FinancialFutureCFO:  Protecting your company for the future.

·  Join FinancialFutureCFO on Twitter

What are affiliates?  In terms of your business, they are sources of quality referrals and if you seek out the best ones and treat them well, you might just wind up getting a whole lot of moolah in return!

So how can your business use affiliates for financial success in the coming year?  Try these steps:

1.  Set up an Online Affiliate System

Get in touch with a marketer who can help you set up an online affiliate system.  Through the system, other websites will market your products and/or services.  They’ll get a “chit” for every source they send you.  And you’ll get a new customer! 

2.  Set up a Person-to-Person Affiliate System

Do you have a good friend who is in a business where he or she could be a great source of referrals for you?  You might want to set up a formal affiliate system that can help you both.  Whenever he or she passes a potential customer your way, you can track that customer and give your friend a financial reward.

3.  Trade Affiliate Systems

Between the right entities, an affiliate system “trade” (“you scratch my back, I’ll scratch yours”) is not only appropriate – it’s the making of a financial success.  Just be wary and trade affiliations only after doing some major investigations.  It isn’t an undertaking to take lightly.

One final note:  Check with your financial advisor, CFO and/or accountant to determine the best way to budget your online and brick-and-mortar affiliate networks.  You may also want to run any ideas past your legal advisor as well, just in case.

·  FinancialFutureCFO:  Protecting your company for the future.

·  Join FinancialFutureCFO on Twitter.

As a virtual CFO, I’d like to help you map out your future goals from January 1, 2011 to December 31, 2011… and beyond.  Believe me — having a plan in place isn’t negotiable; it’s necessary.  Not only will it help you stay on track and focused, but it will help your employees (even freelance or temp ones with whom you share your ideas), too.

Don’t throw your hands into the air and pray for luck!  Instead, take a strong stance and plan for 2011 to be a year to really remember for all the right reasons!

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• Around 39% of invoices are paid “late”

What does that mean to you?  Any number of things:

1. If you’re sending out invoices and you’re not charging late fees, you’re unnecessarily allowing your customers to take advantage of you… at your expense.
2. If you know more than a third of your customers are likely to pay their invoices late, you will need to either a) work with them to pay on time; or b) adjust your cash flow to accommodate the reality.
3. If you are paying your bills late, you’re one of the 39%… and you’re wasting money by not being prompt.

The moral of the story?  The closer you can get to getting paid on time AND paying your own bills on time, the better your profit margin is going to be.

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Though it might sound intimidating, a cash flow system doesn’t have to be complicated.  It just means that you have processes that are set in stone (for now — they should be regularly reviewed) to help you make sure you can meet payroll, pay your bills, pay down debt, etc.

Of course, this isn’t a one-size-fits-all proposition.  Consequently, you should consider getting help.  A virtual CFO can assist you in developing a cash flow system model that will be perfect for your industry and company.  He or she will take into consideration all aspects of your business in order to create a systematic way for you to have the liquid assets you need when you need them.

Don’t be intimidated by the thought of a cash flow system.  Instead, start on the path to putting one in place.  You’ll appreciate the rewards you reap.

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Many business people would unequivocably say “YES!”… but I’m not asking if more CASH is better… I’m talking about cash flow.

When thinking along those lines, the answer can be a definite ”NO”.

So why can a lot of cash flow be a problem?  Namely, it’s because it means that you might not be investing your cash in the wisest way.

This is where working with a virtual CFO can really come in handy.  Otherwise, you might just be allowing your cash flow to gush when it would better be conserved.  And that would be a waste.

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While there’s nothing innately wrong with doing so, might I suggest that you hire a CPA before going forward with the idea?

A trained CPA will be able to assist you in making certain that you’re starting on the right foot (or the left foot, if that’s the foot you should start on depending upon your goals and industry!)  He or she will also be able to help you maximize cash flow from the get go.

There’s not any reason NOT to start a business now… it’s as good a time as any.  Just be certain to hire a CPA to increase your chances of success.

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Though many people fall into this kind of trap, it’s a bad idea and not a long-term solution at all.  If you’re making any kind of a profit (and if you aren’t, it’s time to rethink your sales and marketing plans), you need to start paying the top dog — YOU!

How much should you give yourself as a salary?  It all depends upon a number of factors… which is where the help of a virtual CFO can come in handy.  A virtual CFO will assist you in making sure that the paycheck you receive is fair without hurting your company. 

Remember — taking a paycheck isn’t selfish.  It’s a smart business move.

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