Tax Breaks Your Business Needs to Take Advantage of Before the July 15th Deadline

Tax Benefits for Small & Medium-Sized Businesses
Tax Benefits for Small & Medium-Sized Businesses

Tax Breaks Your Business Needs to Take Advantage of Before the July 15th Deadline

The July 15th tax extension deadline is fast approaching. If you’re scrambling to get everything together for the filing deadline, you might overlook some of the most significant tax breaks possible for 2019. You might have an accountant or bookkeeper doing your small business taxes for you. However, you should still make sure they are following up on these fantastic 2019 tax breaks for small and medium businesses to make sure you get the most optimal tax filing possible.
  1. Rental Income: Do you have investments in properties that you rent? Many landlords don’t realize that in the fall of 2019 the IRS decided that rental properties qualify for the 20% deduction the IRS allows as qualified business income. Rental properties can now be treated like businesses for the Section 199A tax deduction!
  2. First-Year Depreciation on Property: Did you purchase property you are using for business purposes? A new office? A brick and mortar location? These investments can be claimed for a depreciation bonus in the first year of owning the property equal to 100% of the property price. A recent update to the Tax Cuts and Jobs Act, TCJA, has extended this tax credit through 2027 for any properties purchased. This tax cut can also be used on equipment, software, machinery, and more that you use for business. You can learn more about this specific deduction further down.

  3. Research and Development Tax Credits: Did you know that the Wall Street Journal reported that 95% of ELIGIBLE small to mid-sized businesses do not take advantage of the R&D credits they are entitled to?  R&D credits are available to many more companies than you might think.  Any company that designs, develops or improves products, processes, techniques, formulas, inventions or software may be eligible. In fact, if a company has invested time, money and resources toward the advancement and improvement of its products or processes, it may qualify. Identifying and claiming R&D credits is a process that not every CPA does, but there are companies that don’t compete with tax-preparers and specialize in making it simple and risk-free for small to mid-sized businesses to reclaim past credits and take advantage of future credits that are due.  There are billions of dollars available – You just have to have a company that knows how to document the credits…and then apply.

  4. Green Vehicles: Did you invest in a green vehicle, or maybe even an entire fleet for your business? There are tax credits available up to $7,500 for new electric vehicles that your business purchases, although there are qualifications based on size and battery capacity.
  5. Employee Healthcare: If your business has less than 25 employees working full time and you are providing health insurance for them, you may qualify for a small business tax break for healthcare up to 50% of your cost of coverage. To be eligible, business owners need to be paying half of the monthly premium under the Small Business Health Options Program.  There are employee qualifications as well, such as making less than $50,000 per year per employee on average, and each employee must be working 120 days of the year, at least. The smaller your business, the bigger your tax credit, so make sure your accountant looks into the healthcare credit even if you only have a handful of employees. If your employees have HSAs already, the amount eligible for them to put into their Health Savings Accounts has been increased to $7,000 for families and $3,500 for individuals. These tax-exempt savings also lower your FICA contributions.
  6. Pension Plans and 401k: Your employees have an excellent benefit for 2019 & 2020—The IRS raised the limit for employee contributions to retirement plans by $500. If you are over 50, the limit was increased to $6,500! This increase means your company’s FICA contributions should be lowered. There is also a Credit for Small Employer Pension Plan Startup Costs, so if you have never offered a pension plan to your employees, and you have less than 100 employees, now is the time! Up to $500 per year for the next three years can be credited back to you for your pension start-up costs.
  7. Start-Up Costs: The Federal Government offers new businesses a tax credit up to $5,000 for start-up costs. The qualified expenses for start-up costs can include advertising, traveling, purchases of equipment, time to investigate the market and write your business plan, and more!
  8. Self-Improvement: Yes, you can get a small business tax credit all for bettering yourself. The costs associated with continuing education to maintain a license or certificate, professional development, and more are all business expenses that can be deducted.
  9. Travel and Lodging: Another business expense that some business owners don’t realize they can deduct is the cost of their travel and lodging. Mileage deductions, car loan payments, the cost of conference tickets, meals, and cab rides can all be deducted when you are traveling on business. Even your car rental, airline tickets, hotel stays, and even entertainment can be claimed. Make sure to keep your receipts and a travel log detailing what business you were in town for and who you met.
  10. Home Office: Do you run your business from home or have a home-office specifically used for business? The IRS allows sole proprietors to deduce some of the cost of their home office. The simple deduction allows for a maximum deduction of $1,500 for offices that are smaller than 300 square feet, or $5 per square foot, whichever is less.
  11. Employed People Working from Home. One downside of the Tax Cuts and Job Acts was that it eliminated the federal tax deductions for employed people working from home who have home offices.
    There are seven state—Alabama, Arkansas, California, Hawaii, Minnesota, New York, and Pennsylvania, however, that chose to still allow this deduction for their state income taxes. Tax payers in these states who are not self-employed but still work from home are eligible to claim non employer reimbursed expenses such as computers, desks, and chairs for their home offices.

IRS Section 179 Tax Benefits

The one tax break listed above that we see accountants, bookkeepers, business owners, and even tax professionals sometimes miss out on is the tax credit for depreciation of new property. IRS Section 179 allows businesses to deduct up to one million dollars of the purchase price of new property such as equipment, machinery, and software for their business as long as they don’t purchase more than $2.5 million in total. Anything over $2,500,000 can be taken as “Bonus Depreciation.” This deduction applies to purchases that are financed as well. Even if you don’t pay for your equipment, software, or machinery up front, you can still deduct the entire agreed-upon purchase price the first year. The savings go beyond a simple tax credit, however. The amount you save in your small business tax break under Section 179 could equal more than you pay on the property in that first year. Many small and medium-sized business owners find themselves coming out ahead when they take advantage of this specific tax credit.

Tax Tips for Small and Medium Businesses

Whether you have owned your business for decades, or just started up this year, there are a few tax tips that you should review in addition to the deductions listed above. The most important piece of advice is to hire a tax professional to handle your business taxes. These professionals are up-to-date on the latest tax laws, deductions, and credits that could apply to your small business and should make sure you that take advantage of everything the federal government offers. However, since you are the one ultimately responsible for your taxes, you should ensure:
  • It would be best if you kept your taxes in mind all year round by keeping receipts, travel logs, and getting financial statements from your CPA or bookkeepers.
  • Don’t make assumptions about what tax breaks you may or may not qualify for. Hiring a tax professional is the best way to ensure you get the best outcome for your tax situation.
  • Expect to pay taxes. Before you owned a business, you might have been looking forward to your refund check every year. Businesses should always expect to owe and need to pay into taxes. One thing you can do to be prepared is to set aside at least 10% of your monthly profits into a savings account that you can use to pay your taxes when they come due.
  • Depreciation is based on the purchase price, not the amount paid. Even if you have only paid $1,000 towards your loan on software purchased last year, the deduction in appreciation you qualify for is based on the whole amount you have financed.
Don’t miss out on any of the valuable tax credits your small business could be taking advantage of this year. Contact your CPA or review your taxes if you haven’t already and ask them to make sure you are getting the most out of your tax preparation and the best outcome for your business before the July 15th filing dates

Recent Posts

The Types of Financing Your Wireless Business Needs to Grow

Types of Financing for Wireless Providers
Types of Financing for Wireless Providers

The Types of Financing Your Wireless Business Needs to Grow

Small and mid-sized wireless providers face a new challenge. The current coronavirus, COVID-19, a pandemic that is sweeping the world, has shown businesses and educators that there is another way to conduct business and school—online at home! As schools are scrambling to meet the needs of students that lack internet access, employees are desperate to find a reliable wireless provider that meets their needs. Rural communities and communities with a lack of options are finding the transition into a more digital world difficult and frustrating.

Wireless provider companies have an excellent opportunity to rise to the occasion by expanding their networks and subscriber areas into new communities and increasing their Wi-Fi capabilities with faster download and upload speeds, more bandwidth, and better reliability. The problem that these wireless providers face is the ability to pay for all the upgrades and expansion. Without an upfront increase in subscribers, how can a company gain capital for growth?

There are four types of telecommunication companies that are addressing internet needs. Broadband internet is the method of delivery used by these companies and is the industry standard for high-quality, reliable internet. Cable, WISPs, FISPs, and Hybrid companies will each have different financing needs and methods for obtaining that financing. We’ll break it all down for you below so you can decide which methods apply to your internet company.

Cable Telecommunications Companies Financing

Cable operators should be looking to the future and how they can implement new wireless solutions to their traditionally wired models. Many wired providers are focusing their 2020 expansion efforts on becoming a hybrid solution that can offer both wired and wireless internet options for residential and commercial customers.

One of the ways cable operators are entering the hybrid space is by expanding their infrastructure to get more cable fiber laid throughout communities. Expanding your infrastructure is a costly expenditure, and many small to medium-sized cable operators don’t have the capital to expand without the customers already locked in. Luckily, banks are beginning to understand the financing needs of internet providers. However, there is still a long way to go in trying to reconcile asset-backed collateral with the projections of financial growth and the ability to repay when the monthly cash flow may not be reflected yet.

WISPs Challenges in Finding Financing

Wireless internet services also provide broadband internet access and are one of the fastest-growing, albeit newest, forms of internet provider services. The return on investment for WISP company owners is much higher than the other competitor companies. WISP companies are generally aimed at increasing their subscriber base through expanding their infrastructure.

WISPs need financing to expand their infrastructure throughout neighborhoods by adding fiber to connect more broadband pipes to towers. In-home technology also needs to be top-of-the-line and high quality if WISP companies want to be competitive. More towers and antennas are needed and are some of the most expensive technology to build and operate.

WISPs have one of the most challenging times obtaining financing through traditional banks because of the lack of collateral these businesses have. Many bankers do not want to take the risk in lending to WISPs based on growing subscriber bases that could fluctuate at any time.

FISPs Financing

Fiber Internet Services Providers are very similar to WISPs because they use fiber to transfer the internet. Fiber is the most reliable and considered the optimal way to deliver internet access. Most WISPs that use fiber are often considered to be hybrid because they can offer wired connections through fiber as well. FISPs and Cable operators are the most trusted internet service providers currently on the market and generally have much better success in obtaining traditional financing.

Hybrid Internet Service Providers

One of the ways that internet providers are finding is the fastest, easiest, and most profitable way to expand and grow is to become a hybrid internet service provider. As cable operators begin to offer wireless solutions and WISPs begin to expand by laying more fiber and broadband pipes, these companies become hybrids.

Fiber is costly to deploy because of how labor-intensive the process is concerning wireless solutions that rely on tower signals and in-home equipment. Because fiber is the most reliable, internet providers need to begin using fiber in their operations. Many hybrid companies use fiber in their towers, however, and don’t always run fiber straight into consumer homes.

5G and Wireless Expansion

One thing that all internet service providers need to invest in is the 5G technology the world is seeing spearheaded by the United States. This new technology is expected to be the leading mobile network technology by 2025, and home internet companies need to get on board as 5G changes the landscape of wireless access.

Financing Solutions for WISPs, FISPs & Other ISPs

When banks fail to understand the financing needs of WISPs and other service providers, these companies may also face a stall in their expansion and growth efforts. One way to get the financing these providers need is to go through capital investment funding. These sources of funding are great for small and medium businesses, entrepreneurs, and operators that need financing for equipment, software, IT equipment, commercial trucks and trailers, and more.

Working capital loans are also an excellent solution for small and medium telecommunication companies that need extra cash flow for things such as payroll and business expenses. Repayment terms are often flexible, including monthly, weekly, or even daily payment options with low-interest rates and easy to understand terms.

Private funding groups often look at more than just collateral when they are determining the loan you qualify for and focus on annual revenue and bank statements showing the cash flow of the business. Working capital loans through private funding companies will also be different than the loans offered for equipment or software financing specifically.

When companies need specific financing for ventures such as new equipment and material to expand their infrastructure, the terms and conditions can be different than a loan that is for any business expense. Some of the differences can include interest rate and term length.

If you’re more interested in learning about financing for your internet company, contact Dimension Funding to get started on your approval process. 

Recent Posts

Preparing to Go Back to Work After Covid-19

Going Back to Work After COVID-19
Going Back to Work After COVID-19

Preparing to Go Back to Work After Covid-19

States are preparing to open back up, and others already have, which means that before you know it, the world will be getting back to normal, and you’ll be going back to work. After several weeks off, transitioning back into normal life will be challenging; however, there are many things workers and business owners can do to prepare.

How Business Owners Can Prepare for Worker Return

Business owners have a particularly hard task in preparing to open their businesses back up. There are many considerations you need to make before opening the doors and inviting employees back to work. What’s most important is that you follow all state and local guidelines where your business is located.

 

You’ll also need to:

  • Provide Personal Protective Equipment – You’ll want to ensure that you are keeping your employees and clients or customers safe by following all guidelines for personal protective equipment, PPE. Ensure there are adequate masks, hand sanitizer, disinfectant and other PPE available. Make sure to keep the delivery windows in mind to ensure you are ordering PPE with enough time to have it on hand before opening your business.
  • Stock Up and Be Prepared – The shutdown happened quickly, and you may have halted your shipments and stopped stocking your shelves abruptly. You’ll need to make sure your business is ready to open by ensuring your products are in stock, and your customers and clients can get what they need. The last thing you want is your customers being excited to shop and work with you and having nothing to offer.
  • Be Prepared for a Thorough Cleaning – Dust settles rapidly, and if your offices or business has been empty for weeks, you should consider a deep cleaning before letting employees come back to work. There are professional services available for commercial cleaning, but you can also bring staff in provided you have the right PPE for them to wear and commercial grade cleaning products. A carpet cleaning or floor strip and wax may be necessary for some businesses, and these types of services require the use of specialized cleaning equipment.
  • Check the Plumbing – Stagnant plumbing systems could be harboring deadly bacteria such as Legionnaires’ disease. According to a NYTimes article, Facilities staff can also flush out old water and bring in a new and fresh supply. Or they can send a high dose of disinfectant through the building and raise temperatures to kill the microbes.
  • Have Patience and Compassion – Some of your employees might have been or be ill, have family members that are ill, or be having trouble adjusting to the transition back to work themselves. Give your employees a few days or weeks to get back into the swing of things if they seem to be struggling or have dealt with the illness.
  • Be Available – Depending on the type of business you own, clients and customers who have been scarce for weeks might all be clamoring to contact your business now that it’s open. Don’t let yourself be in a position where consumer needs cannot be met, or you are struggling to keep up with the workflow. Ask your employees to be flexible with their schedules and availability, if possible. Some of your employees may have found jobs as essential workers during the pandemic, so you’ll also need to check your staffing levels and adjust as needed.

How Employees Can Prepare to Return to Work

As a worker, you may have been at home for weeks due to stay-at-home orders or job shutdowns. You  have found lots of ways to stay busy from yard work and gardening to home renovation projects you never got around to. You might have written a book, picked your guitar back up, or started cooking classes, so when it’s time to get back to reality and go to work, the transition can be just as tricky on individual employees as it is on business owners.

Here are a few things you as an employee can do to prepare to go back to work:

  • Communicate – If you haven’t talked to your employer in some time, make sure to check-in and communicate any scheduling needs or conflicts you may have in going back to work. Communication is especially if those needs conflict with the usual schedule you previously had. You should also let your employer know if you are available and willing to be flexible as business needs change, including staying over your shift or picking up extra hours as needed.
  • Be Healthy – As states reopen, there will be different mandates in place on wearing personal protective equipment, and employees should take caution to follow all regulations in place. All employees need to continue to wash their hands, use hand sanitizer, and any recommended PPE. If you are feeling ill or showing symptoms of being sick, you should contact your employer right away.
  • Finish Up Existing Home Projects, If At All Possible – Don’t let home projects started during quarantine distract you while being back at work. If your employer gives you a return to work date in advance, ensure you finish up the things you started at home so you can have a clear head when you return to work.
  • Be Patient and Positive – Do your best to keep a positive outlook and keep in mind that the clients and customers might have different attitudes than they did before the COVID-19 crisis. Be patient as the world returns to normalcy, and your clients and customers go back to their usual routines. Some businesses might be slow at first, while others may be swamped the first few weeks of being back open as consumers can go out and shop again. Clients who have had their businesses stalled may be in the market to get started right away with new services and equipment. No matter how reopening affects business, you must ensure you are prepared and ready for anything.

The world is slowly going to return to the new normal, and getting back to your old life might be complicated; however, following our tips can pull you through the transition. Whether you own a business or are an employee going back to work for the first time in weeks, the most important thing you can do is jump back in with confidence, excitement and safely.

Recent Posts

Cares Act Set to Re-Invigorate Tech & Manufacturing Companies

The CARES Act Impact on Tech & Manufacturing Companies
The CARES Act Impact on Tech & Manufacturing Companies

Cares Act Set to Re-Invigorate Tech & Manufacturing Companies

Some sectors thrive amidst a rapidly fluctuating economy

Last Friday, President Trump signed into law an economic stimulus package valued at $2 trillion, a number that is more than twice the size of that which was made available after the financial crisis of 2008. The funds are targeted at measures to alleviate the financial shock that has arisen as a result of the COVID-19 pandemic, and they couldn’t not come a moment too soon. The package is a bright spot in an otherwise clouded sky, and not just for the sick, or the font-line medical professionals who are bearing the brunt of it all.

For American businesses from tech to manufacturing, the package represents a potential foothold atop the frightening slope that our economy has been on.

The Rundown: What’s in the CARES Act Stimulus Package

The unanimously passed bill is the most recent installment in the single largest financial stimulus action ever taken by the American government. The multi-pronged funding measure is not only set to send American adults direct cash payments to help with the basic necessities, but it also includes a slew of other emergency provisions for hospitals, unemployment programs, and small businesses that are unable to cover their basic monthly payments amidst a near nationwide lockdown.

The Important CARES Act Tax Provisions Every Equipment or Technology Company Should Know About

While there has been a lot of discussion about how effectively the CARES Act will be able to help out small business and transportation industries, there has been significantly less talk about what it is going to do for tech companies and medium to large size manufacturers, to not-so-small business sectors that aren’t likely to get the same kind of bailouts as healthcare or transportation.

Fortunately, all three phases of the overall stimulus package include important tax provisions that might be able to help such companies recover. One such provision is a 50% employee retention payroll tax credit that can be applied to any wages paid to workers during the COVID-19 outbreak. This is going to be particularly important for factories, assembly operations, and software firms who were forced to either furlough their staff as a result of plummeting receipts, or operate at reduced employment due to enforced quarantine measures.

Another important provision is that employers be able to hold of on paying their 2020 payroll taxes until 2021 or 2022, opening up an estimated $300 billion of additional operating cash for business nationwide. When paired with the fully refundable tax credit, the overall benefit is looking like something that is going to stimulate a potentially rapid return to normalcy for many operations.

The Connected Commerce Council, a non-profit trade organization, has been keeping a comprehensive list of other emergency funding options. It’s a valuable tool in finding resources available to small businesses that are impacted by COVID-19.

Manufacturers Get Big Help from the Economic Development Administration

Of the $3 trillion being a distributed, just over $3 billion of that has been earmarked to support economic development and help revitalize local and state communities by rebuilding industries that have been affected. Specifically, this money will be given to the Economic Development Administration (EDA), which will be able to provide a significantly higher amount of financial assistance to impacted industries like tourism and manufacturing chains.

The Tech & Software Boom No One Saw Coming

While lawmakers squabbled over the detailed of the recovery act, the free market economy adjusted in its own surprising ways.

Even the initial talk of social distance and potential quarantines has some employers and employees alike thinking about what it would take to adapt. Video conferencing software such as Skype, Zoom, and dozens of others were one of the first sectors to experience the boom. It didn’t take long for investors and VCs to key into what was going on.

When the virtual classroom app Zoom experienced an astounding 2.13 million downloads in the UK on March 23rd (the day that the UK lockdown was announced) shares began to soar. According to a report from The Guardian, Zoom chief executive Eric Yuan saw his net worth jump from $4 billion to $7.9 billion, making him one of the richest people on the planet.

Remote conferencing isn’t the only tech space that has seen rapid, sometimes hard-to-manage spikes in consumer demand. News reports about widespread toilet paper hoarding is no doubt the driver behind skyrocketing bidet sales, and state-sponsored “stay at home” measures and lockdowns have made some online games more popular than they have ever been.

Why Software Companies, Big Tech, & IT Are Likely to Come Out Even Stronger

Without question, it is too early to know how it is going to shake out for a lot of companies, but there are some indications that the stimulus package, when combined with the unprecedented changes we have seen in the global workforce, might emerge from the COVID-19 pandemic with an even stronger financial outlook.

The concept of an economic “snapback” was perhaps less relevant with the 2008 crisis, but it is looking more and more like the forecast for the later half of 2020. The federal stimulus package is making it far more likely that businesses and individuals alike will be able to keep themselves afloat as the virus runs its course.

On the other side of it all is the snapback that manufacturers and light industry companies will be able to benefit from the most. Things like cars, tractors, and construction equipment that was not purchased in Q1 and Q2 are likely going to be purchased just the same in Q3, hopefully providing the defibrillation required to get national supply chains back up and running.

“This is Not the End”: Congress Preps for Phase IV

In an interview with the Wall Street Journal, the Senate Minority Leader Chuck Schumer made it clear that more help is on the way: “This is certainly not the end of our work here in Congress – rather the end of the beginning.”

While it is too early to speculate on what specific industries might be included in the next phase of the stimulus package or how much it would be valued at, we can say this: it certainly isn’t going to hurt.

Recent Posts

Will COVID-19 Leave Small Businesses Behind?

Survival of Small Businesses After Covid-19 background
Survival of Small Businesses After Covid-19 background

Will COVID-19 Leave Small Businesses Behind?

Increasingly, owners & employees seem to think so.

As the world reels from the advance of COVID-19, a sudden and perhaps expected drop in economic confidence has spread through a number of American industries, and the numbers behind it all are finally starting to come in. Businesses are closing, employees are being laid off in droves, and people on both sides of the equation are wondering what the next few months have in store.

With new state-sponsored quarantine measures being introduces every day, small businesses are finally beginning to see the hard hit that many of us had been predicting. According to a new Goldman Sachs poll, the number of American businesses that are feeling impacted by COVID-19 is at a staggering 97%. The same poll suggested that under the current trends, more than 50% of small businesses in the United States believe they will be able to keep their businesses open for another three months.

Some of these businesses have attempted to switched to remote operations, while other service-based businesses who don’t have that option have been forced to either press on, potentially exposing their employees and customers to infection, or shutting their doors in hopes of surviving off of savings.

For many others, statewide lockdowns have made the decision for them.

The Service Industry Is Shuttering

Across the country, one of the most drastic and immediate effects of the COVID-19 economic slowdown can be seen in the restaurant and service industry. This includes breweries.

In places like Washington, California, Michigan, Ohio, Illinois, and Michigan, state-mandated shutdowns have closed the doors on everything from restaurants and bars to casinos and music venues. Other states do not seem far behind, and by the time you read this the likelihood is that the list will have increased.

In cities like New York and Los Angeles, two of the largest cities in the country, these shutdowns represent an immediate halt of one of the largest and most lucrative industries around (around $51 billion in NYC alone, according to the National Restaurant Association).

While many restaurants have managed to stay open with take-out and delivery options (to varying degrees of success) many others have been forced to shut down entirely, leaving their employees without an income.

The Complex Transition to Work-From-Home

While businesses like restaurants, clubs, and sports centers simply do not have the option, some small businesses are attempting the transition to remote positions that can allow their employees to work from home. While bigger businesses have been experimenting with this shift for a few years now, it remains largely uncharted for smaller businesses whose positions are centered around any type of customer interaction.

Either way, the remote working trend is not likely to be thwarted even by the eventual retreat of COVID 19. Already, researchers are predicting a permanent shift in American working patterns as many employees will not think very highly of returning to the office after the shutdowns are over.

Still, the discussion of remote employment, although relevant, does little to improve the position of small business owners, whose financial confidence seems to be dropping by the day.

A Shared Lack of Optimism

The financial market, in the meantime, has been experiencing its own difficulties as a result of this dropping confidence.

According to a manufacturing survey from the New York Federal Reserve showed business conditions had dropped to their lowest levels since 2009. The report also clearly demonstrated that delivery times and inventories have both gone up significantly in a very short period of time.

The basic thrust of the report:

Economic optimism is at its lowest level since 2009, and manufacturing, whether we like it or not, has likely returned to recession. Of course, this report was based on a survey conducted in early March; things have certainly gotten worse since then.

The Options on the Table

While Washington scrambles to come up with a solution with an adequate scope, some federal and state agencies have stepped forward to offer small businesses the help they need to survive the lockdown.

For one, the Small Business Administration has beefed up the value of their funding pool by an additional $30 billion in order to help businesses that have been hit hard by the virus. Low-interest disaster loans are capable of covering debt payments and payroll, which might just be enough to keep some doors open.

On the other hand, SBA loans are restricted to federally-designated disaster areas, meaning that many business owners are not going to be eligible on what feels to many affected business owners like an unfair technicality considering the circumstances.

City Governments Stepping In

With the federal relief yet to arrive and the details yet to be revealed, many city governments and municipalities are stepping forward to protect their local economies from potential collapse. The city of Denver, for instance, has made available a $7,500 grant for small business that are likely going to have to close their doors, if they haven’t already. And while $7,500 is certainly better than the alternative, for many businesses is a small drop in the bucket of what kind of funds would be needed to survive a potential long-term shutdown.

The Senate Approves $350 Billion in Small Business Loans

As this is being written, the Unites States Senate has approved a stimulus package that is designed to alleviate financial woes that have accrued as a result of the shutdown, both for individual citizens and for small businesses. Under the package agreement, the federal government would direct $350 billion to the Small Business Administration, bolstering a loan program that has already seen a sharp increase in applications.

While there is no question that the beefed up loan program would be welcomed by many, there is some uncertainty in whether or not it will be enough to keep the most vulnerable businesses from shuttering for good. Because SBA loans can only be used for payroll and debt operations, there is worry from small operators about how the lack of actual revenue will affect their decision making in the short term.

The legislation, valued at a total of $2 trillion, heads to the House on Friday, March 27, 2020, where it is expected to pass with strong bipartisan support.

Recent Posts

Guide to Coronavirus Pandemic for Small Businesses

Guide for Small Businesses to the Coroniavirus
Guide for Small Businesses to the Coroniavirus

Guide to Coronavirus Pandemic for Small Businesses

With the world in the grips of coronavirus panic and the World Health Organization (WHO) officially labeling it a pandemic on March 11, 2020, how will it affect you and your loved ones personally?  And how will it affect your business?

A pandemic, according to the WHO is “… the worldwide spread of a new disease.” The coronavirus is in over 114 countries including the US.

Since the outbreak of coronavirus, the US stock market has lost more than three trillion dollars and many people have gone into full-on panic mode, buying excessive amounts of supplies in preparation of a more widespread outbreak, as “doomsday preppers” crawl out of the woodwork.   

Both large and small businesses must be proactive in planning on how to address the inevitable disruptions that the virus’s impact will have on the supply chain, as well as labor shortages that will likely result as it continues to spread. 

This guide has been put together to help you take the necessary steps today to ensure that you’re properly prepared.    

Minimizing Risk of Infection at Work

The coronavirus spreads through coughing and sneezing. It can also be transmitted by touching contaminated surfaces, including doorknobs.  Here’s a list of things you can do to reduce the risk of the virus spreading in your workplace.

1. Encourage employees to stay at home

If your company already has employees who are sick – even showing the mildest of symptoms – it’s best that they stay at home for fear of spreading infection at the office.

2. Establish best practices for proper hygiene

Remind your employees of preventative measures, like washing your hands in hot water for at least 20 seconds and/or using hand sanitizer with at least 60 percent alcohol content.

In addition:

  • When sneezing or coughing always use a tissue to cover your face. Worst case scenario, use your upper sleeve. Never cough or sneeze into your hand, even though you were probably told that it was the “polite” thing to do you as you were growing up.
  • Encourage employees to immediately use sanitizer or wash their hands after sneezing or coughing
  • Make sure there is plenty of hand sanitizer equally distributed around the office.

3. Keep your workplace as clean as possible

It might seem glaringly obvious, but it’s of the utmost important that your workplace be kept clean. The Center for Disease Control and Prevention (CDC) has stated surfaces that are touched regularly – workstations, counter tops, door knobs – should also be cleaned often and employees should be provided with adequate cleaning materials to wipe them down.

This is extremely critical for common areas like kitchens, where there’s typically a lot of foot traffic.

4. Consider postponing company events and get-togethers

The highest risk of infection is through human contact; therefore it makes sense to postpone all unnecessary gatherings where possible. Business meetings should also be limited to video conference calls during this period.

5. Monitor travel for yourself and for your employees

If you have employees who need to travel overseas – or will be traveling overseas yourself – consult with the CDC’s online traveler’s health notices regarding the current status of a country. If you or your employee has a cough or is sneezing, it’s best not to travel at all.  If you’re already abroad and start demonstrating symptoms, it’s important to immediately see a health care provider.

Having a Plan to Sustain Business Operations During a Worst Case Scenario

 While it’s important to have prevention practices in place at work, it’s equally important to develop a plan in the event the outbreak worsens, and you have employees who are affected and must self-quarantine themselves at home.

Here are recommended steps to take:

  1. Check with key employees to see if they have home offices set up, or at least stable Internet connectivity and a quiet place to work.
  2. Make sure you have employees who are shadowing essential work personnel in the event they fall ill and are unable to come into work.
  3. Make an assessment on the minimum number of staff for your company to continue operating, and which key areas are essential to maintain operations.
  4. Monitor what’s happening in your local community. This is a fluid situation so be prepared to change your plans, depending on what’s happening.  Knowledge is power.
  5. If your business has more than one location, local managers should be entrusted with more authority in the event they have to take action on a day-to-day basis.
  6. Establish a communication plan that is also flexible and takes your employees suggestions into consideration. An example of this might be to distribute a daily release of the latest updates by health officials and then analyze how it could affect your business operations. This will reduce fear and misinformation among your employees, which is important. Be sure to always keep your entire workforce in the loop with what’s going on.  Also ensure that communication is transparent and doesn’t wildly contradict previous statements. This will help reassure people that everything is under control.

Recent Posts

Does Purchasing a CRM Multi-Year Subscription Make Sense?

CRM Multi-Year Subscription
CRM Multi-Year Subscription

Does Purchasing a CRM Multi-Year Subscription Make Sense?

There are several schools of thought when it comes to CRM multi-year software subscriptions. One is that the company doesn’t want to be locked into a subscription for more than one year unless they are absolutely sure that in a year from now they will still want that software. They want to be able to just stop using it or switch to another subscription software.

Is this a reasonable perspective?

Companies Generally Stick with Their Current CRM

According to the Capterra CRM Industry User Research Report, 60% of companies still have the same CRM as when the company started using a CRM. Of the 40% that switched to a new CRM, over one-third said it was because the CRM provider was no longer supported / went out of business.

What this says is that companies are unlikely to switch CRMs except in very limited circumstances. Why do companies keep their current CRM?

CRM Implementation Time

The time to implement a new CRM is very high. According to the Capterra Industry Report, 60% of respondents said that the actual time to implement their CRM took 6 months to a year. According to the same Capterra Report, 40% of respondents reported that it took over a year to implement a new CRM. 

This is a tremendous investment of time, money & personnel.

Satisfied with Current CRM

According to the Capterra Report, 71% of users said that they were satisfied or very satisfied with their CRM. Another interesting statistic is that users become more satisfied with their CRM the longer they had the CRM. This lines up with users being able to use the CRM more effectively.

Changing Technology is Very Expensive

Changing to a new CRM is a costly and personnel intensive endeavor. Your CRM is usually the center of your company and integrated into your accounting, marketing automation and ERP systems. To decide to change to another CRM is not made lightly but with the knowledge that it is a big commitment for your business of time, money & resources.

Advantages of a Multi-year Subscription

Before you decide whether to get a one-year subscription or a multi-year subscription, let’s investigate some of the ways getting a multi-year subscription can benefit you.

One-Year Subscription Annoyances

While getting a one-year subscription may seem better at first, with it having the illusion of being more flexible, this is not always the case. In fact, going with one-year subscriptions can cause a lot of headaches and end up costing you more money in the long run.

This is because not only do you have to keep track of when the subscription ends and renew it every single year, but you also are subject to paying more if the price increases from year to year. 

By signing up for a multi-year plan, you can set your company up for the long-term and not have to worry about renewing your subscription for however many years you wish. It also allows your company to invest in training, customization & process redesign.

Lock in a Lower Rate

If you purchase a multi-year subscription, you will be locked in at that price for as long as your multi-year plan lasts. This means you don’t have to worry about price increases and can continue paying the same rate. So, if money is a concern, then going with a multi-year subscription will end up saving you the most in the long run since you will be safe from price increases.

Multi-year Software Discount

Additionally, you can usually get the subscription at a reduced cost when you sign up for multiple years. The reduced cost of the subscription can be a substantial amount and is usually more than the amount needed to pay for any financing of the entire subscription purchase including hardware, consulting and training costs.

With the right financing, you can convert the subscription to monthly payments including the implementation & training costs, the maintenance costs and the hardware & IT costs.

This reduces all of your costs to a fixed monthly payment with the additional cost of financing being paid for by the reduction in the cost of the subscription because of the multi-year purchase.

Allows for Customization

While you will need to decide as to which method is better for you and your company, going with a multi-year subscription has been shown to have its advantages. Namely, they are more convenient as well as more cost-effective. Also, most companies keep their CRMs for many years and only change when the CRM no longer offers the features that the company needs or because their current CRM is no longer supported. As stated above, the longer that a company has its CRM, the happier the company is with the CRM.  This is probably at least in part because it allows the company to invest in customization, redesign and training. If you are only keeping a CRM for a year, it doesn’t make sense to invest in customization.

 

But there are still legitimate reasons why a company would prefer to manually renew their plan on a yearly basis, such as the ability to end their subscription sooner if they feel like it’s not working out. So, it’s important to consider all of the benefits and disadvantages of both before making a final decision.

Recent Posts

Can You Bottle That?

Yeti Bottle - Can you bottle this?
Yeti Bottle - Can you bottle that?

Can You Bottle That?

The VP / COO of Dimension Funding surprised every staff member with a Yeti bottle, “just because.” The Yeti bottles are a beautiful steel gray with our corporate branding. It was a spur of the moment impulse on the part of Dimension Funding’s VP. He personally likes the Yeti bottles and he wanted to share them with the people with whom he works. He handed them out at an impromptu meeting at corporate headquarters. The rest were sent to our other offices.

Dimension Funding’s VP is also concerned about the environment. Reducing our environmental footprint also factored into the decision to give the staff Yeti bottles. It should help us reduce our use of paper cups and plastic bottles.

While a Yeti bottle may not seem like much since you can purchase them yourself for less than $50, the spontaneous gift from your place of employment and given out personally by the VP of the company says a lot about the corporate culture. It explains why most of the staff at Dimension Funding have been here for more than 10 years and many for over 20 years.

The VP of Dimension Funding also likes to remain anonymous which is why his name is not mentioned in this post. Please don’t out him.

And “No, we are not hiring at the moment” but I recommend that you follow Dimension Funding on LinkedIn so that you don’t miss out on any job openings. You won’t find many companies like this one.

Recent Posts

Implementing Electronic Medical Records (“EMR”) Software for Small Healthcare Organizations

EMR & EHR Implementation
EMR & EHR Implementation

Implementing Electronic Medical Records (“EMR”) Software for Small Healthcare Organizations

In order to comply with the HIMSS EMRAM, many hospitals are adopting EMRs in order to move their organization closer to achieving a paperless environment and improve the quality of patient care. Many doctor’s offices, clinics, and managed care facilities are going to EMRs or EHRs because of the convenience of going to paperless recordkeeping.

Also, many healthcare facilities are trying to improve the patient satisfaction levels and having an EHR or EMR is a big part of their solution. By allowing hospitalized patients to review their charts, order their dinner, access the internet or watch TV via electronic means, it improves the overall patient experience, particularly for extended hospital stays.

Adopting electronic medical records comes with its own set of problems. It can take months or even years to fully incorporate or update an EMR system depending upon the size of your organization and the level of HIMSS compliance that you wish to attain. It can also come with a large price tag.

Implementation is An Expensive Process

A major issue with EMR software is how expensive it can be. Implementing a full system for an EMR can cost over $150,000 for just one physician. The total cost, of course, grows much more expensive the larger the medical facility and the more advanced the software and hardware.

Because of this, it’s important for any medical facility looking to implement an EMR system to consider the high cost into their budget. Not only is the upfront cost of implementing such a system high, but it needs to be maintained and occasionally updated to keep in line with the latest regulations.

So, it’s imperative that these costs be taken into consideration when managing an EMR system for any medical organization, whether it be a large hospital or a small physician’s office.

Required Training

Another important thing to keep in mind with any EMR system is the training that is required to use them. This training includes medical personnel & doctors as well as staff. It can involve a whole new system of doing things within the healthcare organization when they move from paper to computerized records. It can take many months and sometimes years in order to completely implement an EMR system.

This creates yet another cost that must be factored in when considering the budget for the EMR system as well as a hurdle that needs to be overcome before the system can even be used in the first place.

Cutting Edge Software and Hardware

When moving from paper medical records to electronic records, most healthcare organizations will need new hardware, security and IT personnel. This can be a large investment. The computers will need to have the capacity to run the EMR software and any patient satisfaction software. You’ll want computers that are able to do double-duty: be used by the doctors and staff to enter information and, for patients who have overnight stays, a patient engagement platform so that they have a good experience with the hospital or healthcare facility.

Additionally, for many healthcare organizations, it’s likely that it will need tablet PCs with scanners in order to scan prescriptions, patient wrist bracelets, and implement other patient tracking requirements.

There are also security concerns with electronic records including HIPAA requirements that means investing in security technology and IT personnel.

All this adds up to a substantial investment in new hardware and personnel.

Options for Small to Medium-Sized Facilities

Many smaller healthcare organizations can’t afford the substantial upfront costs of implementing an EMR system. The solution to this is to finance the upfront costs and the subscription itself. This allows the organization to pay for the EMR and its implementation in monthly payments over an extended timeframe which is much more manageable.

However, the decision to finance an EMR needs considerable attention as there are a lot of factors involved, including deciding on a finance company, determining how money needs to be financed, and factoring in the monthly payment along with all the other monthly costs that the organization must budget.

Fortunately there are companies with specific expertise in the financing of EMR/EHR solutions that can work directly with busy practices to help them create a financing program that meets their objectives and enables a simple, easy and efficient solution that enables all of the various costs of engagement to be aggregated together with one monthly payment over a term that meets budgeting requirements.

One of the primary goals of the practice when considering the EMR/EHR acquisition is the ability to conserve their working capital and not disturb existing banking lines of credit. For that reason, many healthcare professionals have relied on financing programs and have found that results in the most economically feasible approach for moving forward.

Further, there might well be Section 179 tax benefits available when selecting to finance this important technology.

Recent Posts

FOUR WAYS THE TCJA CAN SAVE YOU MONEY ON BUSINESS SOFTWARE

Save money on your taxes with the TCJA

FOUR WAYS THE TCJA CAN SAVE YOU MONEY ON BUSINESS SOFTWARE

Save money on your taxes with the TCJA

By now you’ve probably heard about the Tax Cuts and Jobs Act, President Trump’s major corporate tax bill. Known commonly as the TCJA, this law has already had far-reaching effects around the nation. But nowhere has its impact been felt more strongly than in the business sector. In fact, many industries will experience double-digit reductions in their tax liabilities under this new law (source: Ernst & Young).

If you’re wondering how the TCJA can help serve your company’s bottom line, you might find that major savings can come from an unexpected place—software that you buy and use to run your business. The TCJA has expanded companies’ ability to deduct the costs of buying, renting, and financing software more than ever before.

For more details about how much you can claim in deductions for business equipment and software, see the [first article in our series.] For now, here are four steps you can use to take advantage of software deductions for your business:

  1. Find out which software is eligible for deductions. The first thing you’ll want to do is learn exactly which types of software do and do not qualify for deductions under the TCJA. There is a specific list of parameters set forward by the IRS that determine eligibility.
    • The software has to be used by your business for the purpose of producing revenue, either directly or indirectly.
    • The software must have a lifespan of ‘usefulness’ that can be clearly determined (This essentially means that the effectiveness of the software for your business must be clear.)
    • The software must be expected to be functional for at least one year or more.
    • The software can’t be totally custom to your business—it must be available to the general public at large for purchase and not heavily modified for your company’s use.
    • The software can’t be purchased on an exclusive license. That means it’s not only your software, but can be used by others with their own licenses.
      This might seem like a lot of strict parameters, but the good news is that most software qualifies under all of these stipulations. As long as software is available to the public and used by your business for a clear income-generating purpose, you’ll generally qualify for the deduction.
  2. Learn how section 179 works and what it means. We discussed Section 179 in the [first post of this series]. It’s the section of IRS tax code that applies specifically to which equipment and software purchases can be deducted and for how much.
    Under the Tax Cuts and Jobs Act, the deduction limit for 2019 has increased to $1,000,000 with a spending cap on equipment purchases set at $2,500,000. You can also temporarily deduct 100% of depreciation costs for 2019, though this number will decrease in the coming years.
  3. Consider financing your software purchases. The TCJA’s new rules allow businesses to deduct the full cost of equipment and software purchases made by a business in the year those purchases are made. Amazingly, that also applies to financed purchases.
    What does that mean for you and your business? It means that financing software can actually increase your cash for the fiscal year. If you were to finance $100,000 in software in 2019, but only make $5,000 in payments over the course of the year, you’d still be able to claim a deduction of $100,000, resulting in savings of tens of thousands of dollars.
  4. Ensure your software purchases qualify. If you’re planning on taking advantage of the tax benefits of financing software for 2019, it’s important to make sure your purchases qualify. The IRS treats software much in the same way it treats all business equipment purchases. That means that to qualify, the software must be purchased and put into use in the same year that it’s being claimed.
    The software must also be genuinely new to your company, and it can’t have been bought from an entity that has any direct connection to your own.
    Software is an essential aspect of nearly every modern business and industry. And now, thanks to the Tax Cuts and Jobs Act, buying or financing computer software is a smart financial move in its own right. If your business is in need of vital software, there’s never been a better time.

If you’d like to learn more about financing software for your business, contact Dimension Funding today.

Recent Posts