If the pandemic taught business owners anything, it is the importance of having their financial house in order. More than ever, businesses needed financial assistance. The SBA was dolling out funds through the PPP and the EIDL platforms and Charlotte was offering local city grants, as many municipalities did.
I found over and over that so many owners were scrambling and were not able to fill out applications and I cringed. Why? Because most of these applications required them to have financial statements or information from their financial statements. Our entire business model is built on getting your financial house in order as a business owner. We pride ourselves on getting your financial statements as close to perfect as we can. We get your Chart of Accounts set up to your industry, and we make sure your transactions are up-to-date and in real time, amongst making sure you are tax agency compliant.
We are proud to say that ALL of our clients got some sort of funding and in some cases, both the PPP and EIDL. In this time, we had picked up two clients that exemplify why financials are so important (but so overlooked).
Client A came to us as a ‘shoebox receipt’ client. She ended up applying for the PPP loan and ended up getting way less than she deserved or should have. She realized that she didn’t have any financials prepared, and only a tax return from the previous year, which was not accurate of her current situation since her business had grown. Since she was a S Corp, she should have been taking a W2 salary but did not in the first year and that also hurt her situation in applying for the PPP.
In addition to her S-Corp issue, we helped her find $10,000 in expenses that she overlooked in 2019 and thereby help her reduce her personal tax liability. Since she had been filing as a Single Member LLC rather than a S Corp (though she elected to be one) we saved her the hassle of the IRS sending her notices looking for those S Corp returns by having her amend 2019 immediately. She now has real time financials and knows where she stands at any given moment.
Client B came to us as a ‘shoebox receipt” client. He had no accounting system and he was one of the lucky ones that had a lucrative business and cash in the bank at all times. He based his business and personal finance decisions on that basis. That is very dangerous but fortunately he had never found himself strapped….until the pandemic hit. We got him set up on an accounting software and saved him the hassle of taking his shoebox to his tax CPA each year. This process was very stressful to him and he hated tax time.
We also got him caught up so that he knows exactly where he stands net income-wise at any point in time. This will help him make better decisions as well as help him tax plan more strategically. We assisted him in applying for a local city grant with his new up-to-date organized financial statements and he was awarded a grant of $10,000.
These are just two examples of the massive importance of financial statements and why you need to have them caught up and right at any given point in time. The pandemic exposed not only the vulnerability of human health, but of businesses and their health.
How can we help?
Contact Nesha at Nesha@paicpapllc.com