Accounting, Bookkeeping, and QuickBooks Tips for Small Businesses

Posts in category Small Business Tips

How Much Does Your Employee Actually Cost?

Cubical Espionage

Are you are considering adding another member to your team? If so, do you think your employee will only cost you the $15/hour you plan to pay? Think again. Most business owners are surprised to learn that on average an employee will actually cost 25%-40% above their wages/salary amount. As you think about hiring your next employee, here are some additional employment costs to keep in mind.


Payroll Taxes


In addition to paying your employee their wages/salary, business owners are also responsible for paying employment taxes. On average, these employment taxes cost employers about 15% of an employee’s wages. Business owners are responsible for paying Social Security, Medicare, Federal & State Unemployment Insurance Tax, Workman’s Compensation Insurance, local payroll taxes, etc. These employment taxes happen to cost the employer about an additional 15% of the employees wages. Therefore, an employee making $15/hour will cost the employer about $17-$18/hour.
**Payroll tax figures subject to change**


Paid Time Off


To be a competitive employer, business owners also have to look at offering their employees paid time off benefits. These benefits can include vacation, sick leave, personal time off, paid holidays, and paid breaks (as required by local & federal employment laws). The cost of these benefits typically depends on the employees’ wages/salary, the size of the business, the company’s geographical location, and the industry standard.


Health Insurance


Most employees expect to receive health insurance benefits from their employers. It’s a wonderful benefit to offer employees, but can add a hefty price tag to the employer. Business owners need to consider the monthly premiums paid for their employees’ health insurance benefits. Some employers pay 100% of the monthly premium, while other employers pass along a portion of the cost to the employees. With the new Obamacare laws starting to take effect, these numbers could be even higher for businesses in the future.


Retirement Savings Benefit


Another consideration is whether or not you offer employees retirement savings plans or pensions, such as Simple IRA or 401(k). These retirement benefits are funded by both the employee and the employer. Typically, the employer offers to match the employee’s contribution, up to a certain percentage. On average, the employer contribution costs businesses 3-6% of the employee’s salary/wages. This does not keep in mind the cost of managing the retirement plan.


Overhead Costs


If that’s not enough, there are also additional overhead costs employers must consider when hiring an employee…

  • Work Space – computer, desk, chair, phone line, phone equipment, office space, etc.
  • Office Supplies – pens, paper, printer toner, whiteout, post it notes, etc.
  • New Hire Training – teach them how to do the job and work expectations.
  • Human Resources Department – hire additional employees to handle the hiring & firing, creating employment forms, drafting employment handbooks, and to keep up with the changing employment laws.
  • Payroll Processing – hire payroll processor to generate checks, calculate tax deductions, submit payroll tax deposits to government agencies, filing payroll tax forms, W-2’s, direct deposit fees, etc.
  • Insurance – Workman’s Comp Insurance, licensing & bonding, and other general business insurance.
  • Miscellaneous – uniforms, tools, protective gear, cell phone, computer servers, health club memberships, etc.

With all this in mind, an employee hired at an annual salary of $35,000, will cost the employer at least $45,500, if not more in the additional costs discussed above. Or based on the example above, an employee paid an hourly wage of $15/hour, will cost the employer at least $20/hour, if not more. When you decide to hire an employee, it’s important to keep in mind and budget for these additional hidden costs.

Helpful Resource:
IRS – Publication 15, Employer’s Tax Guide

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.


Top 7 Tips to be a Successful Entrepreneur

The Key to Entrepreneurial Success

Let’s face it, being an entrepreneur is tough. It’s a risky endeavor, but comes with the dream of big rewards. Below are seven tips to be a successful entrepreneur. I can’t guarantee your success, but I can help steer you in the right direction. The rest is up to you!


1. Get the Cash Flowing


We all know that cash is king. Without cash flow, your business will not be successful. The first step to generating income is to sell a product or service that people want to purchase. Entrepreneurs are known for being dreamers and trying to sell their new big ideas. However, if there’s no market for your product or service, you will not be able to generate the cash flow your business needs to survive.


2. You Need a Profitable Business Model


Great, you have a product or service that people want to buy. Now it’s time to figure out a business model that works. Can you make a profit? Will the income you generate selling your product or service be more than the costs of running a business? If not, your business won’t survive for long. When running these projections, a good rule of thumb is to always overestimate your costs and underestimate your income.


3. Marketing is More Important than Mastering


You have a product or service that people want to buy and a successful business model. Now get out there and market yourself! I’m guilty of this one, spending too much time planning. Fear settles in and I spend lots of time trying to feel more qualified. Be confident, get out there, and sell your product. Funny thing, you actually learn more while you work on a customer’s engagement and interact with your clients. Not to mention, this helps get the cash flowing sooner than later.


4. Spend Time on Revenue Generating Tasks


If you’re coming from Corporate America, you’re used to being paid for sitting at a desk from 9-5. Let’s face it, your paycheck was deposited into your bank account regardless of how much you created or the results of your work. Entrepreneurs need to change this mindset. Now, your paycheck is directly related to the value you add to your customers lives. Wasting Time = No Paycheck. You need to be focused and spend your time doing revenue generating tasks.


5. Continually Look For Ways to Keep Costs Low


You have your marketing strategy down, are closing more deals, and spending your time wisely doing revenue generating tasks. Congrats, you have cash is coming in the door. Don’t forget to keep track of where your money is going. Keep track of what you spend, where you spend it, and see if there are ways you can cut these costs. The more entrepreneurs make, the less frugal they tend to become. Keep in mind, the more money that goes out the door means less money in your pocket. So keep a close eye on those pennies!


6. Measure Your Results


Unless you measure and track the results, there is no way to tell if what you are doing is actually working. As business grows, you might add a new department, change your product line, try a new advertising campaign, etc. Did this new department increase your profit margin? Did the new product line help convert more leads to buyers? Did the new advertising campaign bring in new customers? Without tracking and measuring the results of these changes, you have no idea if these programs or strategies actually worked. Meaning you could be wasting money and not even know it. Or on the flip side, you could have stepped into a gold mine and not even know it!


7. Learn From Other Successful Entrepreneurs


Surround yourself with people who are where you want to be. No need to spend your time reinventing the wheel. You can learn from their mistakes and from their successes. Take that knowledge and move forward with your own business! Consider hiring a business coach or find a mentor. Find someone who has done what you want to do. They can give you tips and hold you accountable for your own goals.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.


Video Blog – How to Collect Past Due Invoices

Yesterday I wrote a blog listing out 4 easy steps to collecting your accounts receivable. I decided I wanted to try to a video blog as well. If you would rather listen than read, here’s the link to my video blog giving you some tips on how to collect those past due invoices.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.


4 Easy Steps to Collecting your Accounts Receivables

All small business owners and entrepreneurs know cash is king. You need cash to run your business. Whether it’s ordering inventory, purchasing supplies, paying payroll, covering your utilities, investing back in your business, and paying yourself. I was shocked to read an article from the AICPA’s blog about a survey conducted by SageWorks. The survey found that the typical small business has at least 40% of their assets tied up in Accounts Receivable. Wow, that’s a lot of financing to their customers! Here are 4 easy steps to collect your accounts receivable quickly.

  1. Be In Touch With Your Customers
    Don’t be afraid to pick up the phone and contact your customers. A simple and friendly call to remind them about their outstanding invoices can go a long way. Another great way to remind customers of their past due balances is to send monthly statements. I recommend sending monthly past due statements at the beginning of every month. Add it as a task to your calendar and stick to it. Then the customers who are still outstanding by the middle of the month, give them a call. It’s a lot easier to collect newer receivables than the older ones. So being in touch with your customers sooner than later will almost always pay off.
  2. Take a Look at Your Accounts Receivable Policy
    • Not all of your customers are the same. Yes, if you are working with large corporations, it typically takes the standard 30-45 days for them to issue payment. If you work with smaller companies, try adjusting the payment terms. Is it possible to have your invoices due within 10 days, 20 days, upon receipt, etc?
    • What about charging a retainer payment – your customer pays half up front and the other half when you deliver the product or service.
    • Another great option is offering prepayment discounts. Many times you will see invoices with 5% discount if paid before 30 days. There are a lot of small businesses out there that love reaping the benefits of paying early to get discounts. Why not entice them to pay your bill early too!
    • Contact your bank and get set up to accept automatic draft payments or credit card payments. You can sign your customers up to have their monthly fees be directly debited from their bank account on the 1st of each month or you can automatically charge their credit card the 1st of each month (or whatever day you choose).
    • Don’t be afraid to charge late fees. Keep in mind some states have credit laws, so you need to make sure your financing fees are in line with the state and federal laws. Typically you need to have the late fees spelled out in your contract and listed on your invoices. That way there are no surprises to your delinquent customers.
  3. Not Everyone Has To Be Your Customer
    Don’t be afraid to turn away customers that you get a bad gut feeling about. Maybe you know the potential customer doesn’t have the funds to pay or maybe you’ve done this type of work in the past and have been stiffed more times than you would like to admit. If it doesn’t feel right, it probably is not. Why waste your time and resources doing work when you do not think you will get paid. Instead, kindly turn down the work. If you really want to do the work, make sure you collect the payment up front.
  4. Double Check Your Invoices
    Don’t forget to double check the invoices you send to your customers. Set up a procedure to have them looked over before sending or a few weeks after they have been sent, if payment has not been received. I know I’m guilty of this too, taking longer to pay on incorrect invoices. We are all busy, but don’t make your customer have to make time to correct your billing mistakes. This will almost always result in a delay in you getting paid.

These 4 easy steps should make collecting your past due invoices easier and quicker. Bottom line, being active and managing your accounts receivable will help turn those late payments into cash in your bank account. Eventually word will get out that your business does not mess around with accounts receivable and your customers will start a habit of paying you on time, if not early!

Want to watch the video blog version? Check it out here!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle Edwards, CPA is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and Virtual CFO solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, home brewing, quilting, and hanging out with her family.


Top 3 Benefits to Correctly Recording Credit Card Charges into QuickBooks

How to Posting Credit Card Charges into QuickBooks

The other day I wrote a guest blog about “Entering Credit Card Charges into QuickBooks, the Right Way!”. One of my main goals working with clients is to teach them the correct way to use QuickBooks. QuickBooks is a great tool for small business owners, but you must know how to use it. In my guest blog post, I taught you the best way to record your credit card payments in QuickBooks. Today I’d like to talk about the top 3 benefits to using this method to record your credit card receipts into QuickBooks.

  1. Always Know How Much You Owe!
    If you are good about keeping up with your bookkeeping tasks and recording your credit card charges as they occur, you will always know the balance on your credit card. This avoids surprises when your monthly credit card statement arrives and helps you plan for your upcoming cash outflows.
  2. Accurate Financial Statements!
    Let’s face it, quite a few small businesses do not have the luxury of paying their credit card bill in full every month. This method for posting credit card charges into QuickBooks, allows the small business owner to choose the credit card transactions to pay this month and which ones will have to wait until next month to pay. QuickBooks will keep track of the amount still owed and the transactions still owed to your credit card company. Thus providing you an accurate accounts payable figure on your balance sheet.
  3. Save Time!
    The third benefit for posting credit card charges correctly to QuickBooks allows the small business owner the opportunity to quickly look up transactions. Let’s say you’re trying to figure out how much you typically spend at the big box retailer for office supplies. By recording the credit card charge to the correct vendor, you can quickly pull up that big box retailer and figure out how much you spent. This saves a ton of time over scrolling through every single credit card payment looking for those office supply charges. Some bills have them, some do not, and now you’ve just wasted a ton of time searching for these charges. Let’s face it, which small business owner does not love to save time!

There you have it. The top 3 benefits to using the correct way to post credit card charges to QuickBooks. Not only does it allow you to plan for your upcoming cash outflows, it provides business owners with accurate financial statements, and best of all it saves time! Give it a try and let me know how you like using this QuickBooks tip!



Check out my QuickBooks Tutorial about “Entering Credit Card Charges into QuickBooks, the Right Way!”..



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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Top 8 Things You Need to Do When Starting A Business

Starting A Business

Entrepreneurship is reaching record highs these days. A combination of people wanting to create their own destiny, people desiring a flexible schedule, and the unemployed that need to start working again fuels this entrepreneurship growth. If you are thinking about becoming an entrepreneur, here are the top 10 things you need to do when starting a business.

  1. Create a Business Plan
    Business plans are a great way to organize your ideas and put your dreams on paper. Business plans force you to evaluate every angle of your business, helping you decide whether or not your business ideas might work. Business plans help you research your competition, price your product, create a marketing strategy, generate a budget, and think about an exit strategy. They are also required if your business is going to need outside funding. Don’t get me wrong, a business plan will not guarantee success, but it will lead you in the right direction and will alert you to potential troubles once your business is up and running.

    Tip: a good business plan grows and changes with your business. Once your business is up and running, make a habit of reviewing your business plan on a monthly, quarterly, or annual basis. See if you are on track to reach your initial goals and update areas where you business took a different direction.

  2. Decide on a Business Structure
    You will need to decide the type of business entity you would like to create. Your business structure choices are: Sole Proprietorship, Limited Liability Company (LLC), Partnership, Corporation, or an S Corporation. Choosing a business structure is not a task to be taken lightly. It is important that you understand the pros and cons to each structure. Some structures offer better tax benefits, while others are much more simpler to operate. Some structures are better for individuals while other structures offer better benefits for business partners. The IRS has lots of information on their website about the various business structures. Individual states also have their own requirements and conditions for business structures. I advise you to contact your CPA to assist in helping you decide on a business structure that best fits your specific and unique needs.
  3. Employer Identification Number (EIN)
    Contact the IRS to obtain your EIN (Employer Identification Number). You will need to fill out Form SS-4, Application for Employer Identification Number, which can easily be done at IRS.gov. Even if you plan to operate as a sole proprietor, I recommend obtaining an EIN so you don’t have to use your Social Security Number on your business transactions.

    If you plan to hire employees, you will need to register with your state(s) to obtain an Employer Unemployment Insurance Tax ID and a state wage withholding ID. Check with your state’s Department of Labor and Department of Revenue for information about your state’s employer identification number requirements.

  4. Register Your Business with the State
    Corporations, s corps, limited liability companies (LLC), partnerships, sole proprietors, and non-profits need to be registered with the state(s) you plan to operate in. You can register your Trade Name and Doing Business As (DBA) with your State’s Secretary of State’s office as well.
  5. Sales and Use Tax License
    Businesses that sell products, goods, food, etc. need to apply for a sales tax license from the state(s) in which you plan to operate. Some states even tax services. You can check with the state’s Department of Revenue for specific information pertaining your individual business. Contrary to popular belief, internet businesses are required to collect and submit sales tax as well. With the state governments strapped for cash, many states are starting to enforce collection of sales tax on internet transactions. Sales tax can be a tricky subject and gets complicated quickly when nexus comes into place. I recommend you contact your CPA to help figuring out what state(s) your business is required to collect and submit sales tax.

    Use Tax – Depending on the state(s) and county(s) in which you live and/or operate a business, consumer use tax can be required to be paid by businesses and residents on purchases that were not taxed when purchased. Some examples include Internet, mail, and/or phone orders. Check with your CPA or your state to determine whether you owe use tax.

  6. Local Business License and Permits
    Many cities, towns, and counties require businesses to register and obtain general business licenses. In addition, building permits, liquor licenses, contractor licenses, professional licenses, home occupational licenses, special event permits, etc. may be required by your state, city, town, and/or county as well. Don’t forget to look into these additional licenses and permits to ensure your business is operating legally.
  7. Insurance
    Business insurance is a necessity to help protect you and your assets. In general, you will want to carry a general business liability insurance policy. If you have employees or hire subcontractors, you will also be required to carry a Workman’s Compensation Insurance policy. An insurance broker is a great resource and can help you get your business insurance set up.
  8. Set Up a Bookkeeping System
    As your business starts making and spending money, you will want to have a system in place to track your income, expenses, bills to be paid, receivables, loan payments, cash, etc. With today’s technology, there are several great and inexpensive bookkeeping software options available. Check out QuickBooks, Sage Peachtree, Outright, FreshBooks, and Wave Accounting.

Keep in mind this list of the top 8 things you need to do when starting a business is a general list. Every business is unique and has individual needs. Please consult with professional advisors regarding your individual business. Most importantly, have fun and enjoy your entrepreneurial adventure!

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Colorado Sales Tax Updates, Effective July 1, 2011

Small Business Owner at Cash Register

Ca-Ching! Great news for Colorado businesses – the State of Colorado is restoring their State Sales Tax Service Fee (aka Vendor’s Fee), effective July 1st, 2011. The State Sales Tax Service Fee will be 2.22%. According to Colorado’s Department of Revenue’s website, “the service fee may be claimed on timely filings and paid sales tax returns submitted on or after July 1st, 2011. Beginning with sales tax returns for June 2011 and 2nd quarter 2011 returns due July 20th, 2011.” In a nutshell, if you if you file and pay your sales tax returns on time, you may take this 2.22% state sales tax vendor’s fee credit.

Here’s the link to Colorado’s Department of Revenue for additional information. Colorado Department of Revenue – July 1, 2011 Sales Tax Rate Changes

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Small Business Health Care Tax Credits

Small Business Health Care Tax Credit

Did you know that your small business could be eligible to receive tax credits for offering health insurance benefits to your employees? The Small Business Health Care Affordability Tax Credits are made possible by the Affordable Care Act passed in 2010. Hopefully your tax preparer checked to see if your small business qualified for the tax credit in 2010. If you missed out in 2010, there are more opportunities to earn the tax credit through 2013. It was estimated that about 4 million small businesses would qualify for the health care tax credit in 2010.

History
The Small Business Health Care Tax Credits were created to help small businesses and small tax-exempt organizations offer health insurance benefits to their employees. The credit is designed to encourage small businesses to offer health benefits for the first time or to help them maintain the current benefit plans they already have in place. The credit specifically targets small employers that employ low-income and moderate-income workers.

Amount of the Tax Credit

  • 2010 – 2013:
    • Small Businesses: Eligible employers can receive a tax credit of up to 35% of the business’ annual health insurance premium costs.
    • Tax-Exempt Organizations: Eligible tax-exempt organizations can receive a tax credit of up to 25% of the organization’s annual health insurance premium costs.
  • 2014 – Beyond:
    • Small Businesses: Eligible employers who purchase insurance through the new Health Insurance Exchanges can receive a tax credit for 2 years of up to 50% of the business’ annual health insurance premium costs.
    • Tax-Exempt Organizations: Eligible tax-exempt organizations that purchase insurance through the new Health Insurance Exchanges can can receive a tax credit for 2 years of up to 35% of the organization’s annual health insurance premium costs.
  • Phase Out: The tax credits phase out when your small business employs between 10-25 full time employees and when you pay your employees average annual wages between $25,000-$50,000.

Employer Eligibility Rules

  • Employ fewer than 25 full time employees
  • Pay average annual wages below $50,000
  • Employer must cover at least 50% of the cost of the health insurance premiums
  • Both for profit businesses (taxable) and non-taxable organizations can be eligible
  • Household Employers may also qualify for the tax credit in 2010-2013.

Receive the Tax Credit
To calculate your small business or tax-exempt organization’s health insurance tax credit, fill out Form 8941, Credit for Small Employer Health Insurance Premiums. Then you will include the tax credit on your annual business tax return.

Resources
The White House Health Reform Information Center
IRS – Health Insurance Tax Credit FAQ’s
IRS Form 8941

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Colorado Businesses Beware

The Colorado Secretary of State issued a warning to businesses about a misleading advertisement business are receiving in the mail. Several of my clients have received the official-looking notification from “Corporate Controllers Unit” requesting you to file your annual report for $225. If you receive one of these notices, please be aware they are NOT from the Colorado Secretary of State. Instead, it is a scam – it is a misleading sales flyer trying to have you sign up to use their business to file your Colorado annual business registration.

Businesses in Colorado are required to file annually with the Colorado Secretary of State. Typically your business will receive a post card from the Colorado Secretary of State reminding you to file. Once your business is set up, the annual filing fee is only $10. You can easily register your business online and it only takes a couple of minutes.

Click Here to See a Copy of Misleading Letter

The letter does not appear to contain any false information. It was designed to be an advertisement, but is generating publicity for being misleading to Colorado business owners.

To see if your business is in compliance with your annual reporting requirements or to file your annual report visit the Colorado Secretary of State’s website.

As always, if you have any questions or concerns about your annual filings please feel free to contact your Colorado CPA.

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


Health Care Reform and Your Small Business

Health Care Reform and Small Business
Small businesses are trying to figure out what the health care reform (the Patient Protection and Affordable Care Act) means for their business. Watching the news and reading articles online, I get confused to! Is it better to start implementing some of these health care reform changes to our small business benefits plan or should we wait until the dust settles and things become more clear? A handful of States are taking the health care reform to court. Some district courts have ruled the individual mandate is not legal while other district courts have ruled the reform laws are constitutional. What does this mean for small businesses? What should entrepreneurs and small businesses owners do?

I recommend implementing the newest changes that are already in affect. These are minor changes in coverage and will ensure your small business benefit plan is up-to-date and in compliance with current laws. Make sure your small business benefit plan has been updated to:

  • Extend coverage for employee’s children, up to the age of 26.
  • Eliminate certain lifetime dollar limits on essential benefits.
  • Eliminate certain annual limits.
  • Eliminate coverage for nonprescription over-the-counter drugs through flexible spending accounts (FSA’s).
  • Check with your accountant and/or CPA to see if your small business qualifies for the Small Business Health Care Tax Credits.

A majority of the other health reform laws go into affect in 2014. Therefore, your small business has plenty of time to implement the future benefit changes. Not to mention, a lot can change between now and 2014.

Resources:
whitehouse.gov

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Michelle Edwards, CPA - QuickBooks Consultant Written by Michelle Edwards, CPA
Certified QuickBooks ProAdvisor

Michelle is the owner of Trailhead Accounting Solutions CPA, LLC, an Erie, CO based CPA firm focused on providing small and mid-sized businesses with day-to-day accounting, bookkeeping, and business solutions. Michelle is a CFO turned consultant who loves working with small businesses and entrepreneurs. When she’s not crunching numbers, she can be found hiking, remote camping, gardening, quilting, and hanging out with her family.


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