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GP CPA Client’s Letter – May 2019

GP CPA justin prusiensky accountant cpa 1 » Certified Public Accountant using Xero, Avalara and Gusto to make your payroll and taxes easier, serving in North Carolina and South Carolina

Written by Justin Prusiensky

May 2, 2019

May 2, 2019

Estimated Reading Time: 3 minutes 15 seconds

Dear Client: It was good seeing you both again. Each time we meet the numbers and growth are getting better and better.

The key items we spoke about during the meeting are as follows:

  • The 2018 personal taxes due, totaling about $20K, were a “best case scenario” considering the taxable income generated during 2018. Some deductions carried over from 2017 (equipment write-offs) that took $100K off of the top line of the Company’s income and reduced your 2018 taxes by about $30K.
  • The business loan has an incredibly low-interest rate. Paying the loan off earlier does not benefit you as long as there are other debts with higher interest rates. I understand your desire to be debt free, although I strongly encourage you to prioritize generating cash flow and sales growth over paying down the business loan due to its low-interest rate.
  • Please contact an attorney that you are comfortable and familiar with to get some assistance with negotiating the rent terms. The circumstances surrounding the Company’s ability to rent the space for a set time frame and price are not as formal as the business loan and that could be a potential issue in the future.
  • Based on your prior year W-2’s and this year’s payroll you should have no issues qualifying for a mortgage in 2020. I wish more of our clients understand the relationship between payroll and creditworthiness.
  • If you have unused or unproductive machinery that can be sold, the proceeds would go a long way toward the purchase of a new machine or paying down the newest financed machine’s balance. Depending on the actual amount received from disposing of the older machines, you may want to consider splitting the funds received between a down payment on a new machine and paying down an older machine’s loan.
  • We also noted that your payroll tax payments (paid monthly) are getting fairly significant. Since these payments are paid monthly and quarterly, it has the potential to make for a cash crunch if one of your major customer’s is slower to pay than normal. Consider switching your payroll to make weekly payroll deposits to keep cash flow consistent. This way, you could push off supplier payments and still make payroll if a customer stalls on payments.
  • Let’s schedule another meeting or phone call in late May to catch up and review how things are going.

 

Dear Client, I have good news!

Dear Client, I have good news!

Since we now have less than 90 days left in the year, kindly keep me apprised of when you expect the major revenue collections to be during the next few weeks and we can adjust accordingly.

GP CPA Charlotte Sales Tax News Update

GP CPA Charlotte Sales Tax News Update

As many area businesses know Charlotte Sales Tax rate is either 2%, 7.25%, or 8.25% and what rate belongs to your business is based on what the business is selling.

Technology that GP CPA is currently using

Technology that GP CPA is currently using

We are approaching mid-year (for those of us on a calendar year…) and enough time has passed that we can reflect back on some of the technology that GP CPA has been using and is no longer using in 2019.

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