Month: August 2019

Preface: The Traction EOS Process™ provides a proven way to successful manage your business. The entrepreneurial operating systems (EOS) incorporates EOS Tools in the right order to best strengthen each key component of your business. One of those key tools is the Clarity Break. Try it. Scheduling your “vacation hour” monthly will likely be more challenging than you think. Read about it here….

EOS-Clarity-Break

Preface: Bitcoin is as much a speculative asset as a medium of exchange in today’s economy. While the Federal Reserve has no governance over the BitCoin exchange as such, as a digital cryptocurrency, its exchange value rises and falls on marketplace whims and traders.

Bitcoins in Business

Credit: Donald J. Sauder, CPA | CVA

You’re Invited to an Exclusive Building Your “Dream Team” Workshop

October 3, 2019

Develop Your People, Build a Positive Corporate Culture And Take Your Business To The Next Level

As leaders, we want our organizations to be high-performing, and in order for that to be a reality, our people need to perform at a high-level. When our people perform at a high-level, and they do it together, your organization will have your own “Dream Team”.

This workshop is for business leaders that aspire for their organizations to perform better, and in the process, produce better results. This workshop will address important questions:

 Join us on October 3, when Steve Erb, of True Edge Performance Solutions, will walk us through the following:

•  How can we make the positive changes to Build Our Dream Team and take our organizations to the next level?

• Company Culture -> Why does it matter? How can I impact?

• We’ll work toward evaluating your organization and identifying positive culture development strategies

• Your Greatest Asset -> How can I develop my team? What tools can I use to assist?

• We’ll work on processes and tools to help you build your “Dream Team” • Recognition -> Why is this so hard?

• We’ll work on recognition strategies that will enable sustainable change

Develop Your People, Build a Positive Corporate Culture And Take Your Business To The Next Level

As a workshop, you will develop and clarify your “Next Steps” for your business after each session; and you will have the opportunity to learn from others in a collaborative environment in the process.

Register Here: Building Your Dream Team Workshop

(A buffet breakfast is included.)

For more information, please contact:

Presenter: Steve Erb, MBA

True Edge Performance Solutions

SErb@TrueEdgeLLC.com

717-509-9177, ext. 106

“Grow With Traction” – An EOS (Work)shop to help you achieve your vision!

If you are the owner, leader or manager of an entrepreneurial organization who wants to see your business consistently run better and grow faster, Brian White and EOS can help you and your team simplify, clarify and achieve your vision.

Even the most successful entrepreneurs occasionally find running a business more challenging than they expected. Many work longer hours and get less return on their investment of time and money than they would like. Most entrepreneurs regularly grapple with one or more of the following challenges:

• Lack of control – over time, the market, or the company
• People – don’t listen, understand or follow-through
• Profit – there’s not enough of it
• Growth – is okay, but they just can’t seem to break through to the next level
• Magic Pills – Lots of remedies and quick fixes have come and gone, but the wheels are still spinning

If these problems seem all too familiar, you’re not alone. It doesn’t have to be that way. For over 15 years, Brian has been helping entrepreneurs and their leadership teams succeed. In this interactive workshop, Brian will introduce you to the Six Key Components™ of successful businesses. He’ll arm you with a set of simple, practical tools you and your leadership team can begin using right away to get more done and realize better results.

Read More Details on Eventbrite:

Clarify | Simplify | Achieve your Vision

Companies who should attend:

• A company that has 10+ people
• A company that is more afraid of the status quo than making change
• A company who is self-implementing EOS (read Traction, Get A Grip, have been implementing with no facilitator and/or downloaded some EOS tools)
• Companies who want to get to the next level (would like to see what EOS is and get some tools)

Brian is excited to share his expertise to help you run a better business.

Preface: Researching and developing can be hard work, and proper documentation can be hard work too. When applicable, hopefully, the research and development projects yield improvements to your products or processes, and the documentation yields a tax credit.

Tax Credit for Research or Development (Segment II of II)

Credit: Jacob M. Dietz, CPA

Sufficiently document in the records what the original problem was to solve, the steps in the process, and what was finally created. The IRS wants documentation, although it does not specify in exactly how to document. This article gives some ideas. Consider grouping records by project for recordkeeping. Examples of this documentation could be: notes from meetings, drawings, blue prints, notes of tests, etc.

There are some exclusions for activities. Below is a partial list of the excluded activities that do not qualify for the credit:

1. Research after the product is being produced commercially
2. Adapting a product for a specific customer
3. Duplicating (reverse engineering)
4. Studies and surveys
5. Funded by others.

If the project is not a qualifying project, then do not include expenses for that project for a research credit.

If, however, the project does qualify, then make sure you have substantiated by documentation how it qualified, and then track the expenses and indicate how they are qualifying expenses.

For each period, track how many hours of each employee was for each activity. Keep records that show the employee name, the employee hours, the day, and the activity

Track and Document Expenditures

Labor

Labor is likely a significant amount of the research expense. Carefully substantiate labor costs. For each period, track how many hours of each employee was for each activity. Keep records that show the employee name, the employee hours, the day, and the activity. Also, indicate what the employee did for the project. For example, was the employee creating drawings, or sawing, or testing, etc. Include labor for the actual research, and first-line management supervision of those employees.

At the end of the project, be prepared to substantiate how many hours each employee put into the project. At the end of the year, be prepared to substantiate the ratio of qualified research hours to nonqualified hours for each employee.

 If you are buying supplies, and you know they will all be used for research and development, code them immediately to that research and development supplies account.

Supplies

Track the supplies that are used in research and development. Consider creating a separate general ledger account, and record your supplies expense in that account. If you are buying supplies, and you know they will all be used for research and development, code them immediately to that research and development supplies account.

Alternatively, some supplies that you buy may be used for both qualified research expenses, as well as other expenses. In this situation, consider keeping a usage log that tracks how many of each supply is used in a specific project. Every month, this log can be entered in your books and records, and the expense can be taken from the account that the supply was originally purchased in and moved to the research and development supplies expense account.

If you have multiple projects, then try to document which project consumed the supplies.

If using the usage log to move expenses from their original expense account to a research and development supplies account, document how the price per each is computed. For example, perhaps it is pulled periodically from a catalog or an invoice.

Save documentation that shows how the supplies are being used. For example, suppose that you are using metal to create a piece, and subjecting it to tests to see if it will break. Try to have some documentation that would indicate why all this metal is being used, such as notes from the tests or some other substantiation. If you have multiple projects, then try to document which project consumed the supplies.

Subcontract Labor

If subcontractors are paid to do any research, consider creating a separate general ledger account for subcontractor research expense. Keep copies of the contract on file. It should be clearly documented how they fit into the overall project. There are various qualifications for the subcontract expense to qualify. Here are some of them:

1. The work is of a nature that would qualify if it were performed in-house by an employee.
2. There should be an agreement with the subcontractor before the subcontracted work was accomplished.
3. The agreement should explain that the work is being done for your company
4. The agreement should indicate that you must pay for the research even if the project fails
5. The agreement should indicate that your company should own the rights, although not necessarily exclusively, to the research being subcontracted.

Before taking the tax credit, however, consider if you have qualifying activities and qualifying expenses. Also, make sure you have documentation to prove them.

If your business is spending significant money to research and develop, smile and consider the tax credit. Before taking the tax credit, however, consider if you have qualifying activities and qualifying expenses. Also, make sure you have documentation to prove them. Researching and developing can be hard work, and proper documentation can be hard work. Hopefully, the research and development yields improvements to your products or processes, and the documentation yields a tax credit. Taking the credit can be complex, so consult with your tax advisor if you are interested in applying to your business research or development activities.

 

Preface: If your business is spending significant money to research or develop, smile and consider the research or development tax credit. Before taking the tax credit, however,  consult with appropriate tax counsel.

Tax Credit for Research or Development

By Jacob M. Dietz, CPA

The IRS allows a tax credit for increasing research or development activities. If you are a business owner spending on research and development, then you may have felt pain watching money flow out the door to develop a product before you can even sell the product.

If you find yourself grimacing as you pay to research or develop, consider if the research credit will put a smile on your face with a tax credit.

Furthermore, you may even doubt if the product you are researching and developing will ever succeed. If you find yourself grimacing as you pay to research or develop, consider if the research credit will put a smile on your face with a tax credit.

Different industries can qualify for the research credit, and manufacturing is a prime industry for this credit. For example, suppose you are a small equipment manufacturer. You want to create a much larger version of your current equipment, but when you do that the axle tends to break. You therefore try a larger diameter for the axle, but then another part of the machine hits the axle. Then you try a second material for the axle, but one of your shop machines has trouble with it. Too much of the second material gets destroyed in the manufacturing process. Next you try a third material, which works well. Does that scenario sound familiar? If so, keep reading.

Another industry that can qualify is construction. Suppose a construction company wants to move into the energy efficient market. They may incur some qualifying research and development costs along the way.

If you are interested in this credit:

1. Determine if you have qualifying activities
2. If yes, then track your qualifying expenses and
3. Document both your qualifying activities and your qualifying expenses.

What type of activities qualify?

Not all expenses qualify. For an expense to qualify, it must be a qualifying expense of a qualifying activity. Also, you should document how the activity qualifies.

Make sure the tax documentation for a project indicates what uncertainty is trying to be researched and overcome.

In determining which activities qualify for the credit, check for these qualifications:

1. There should be uncertainty to overcome. For example, perhaps the project is to make a larger piece of equipment, but it is uncertain how to make an axle to withstand the additional stress. Make sure the documentation for a project indicates what uncertainty is trying to be researched and overcome.
2. The research should be technological in nature. If it relies on engineering or some type of physical science, that helps. The documentation that shows what the problem is may make it clear that it is technological, and that physical science or engineering should help. For example, maybe the research is to make something stronger, more powerful, larger, etc. Maybe the research is to make a new kind of equipment. This type of research would rely on physical science, and possibly engineering.
3. There should be a process of experimentation, in which the company strives to solve a problem. The problem should somehow relate to quality, reliability or similar features and not merely be cosmetic. Ideally, there should be records indicating what the problem is, and what steps are being taken to improve it. If one attempt at improving ends up failing, that can be documented. Documenting a failure in the process helps to demonstrate that experimentation occurred.
4. The research and development should be to either create an improve a new product, invention, technique etc.

To be continued….

Preface: Now you have a financial target, and now you know when you “don’t have enough (working capital or equity).” We omit the “when you have too much” because that’s usually not the problem.

Surviving a Debt Euroclydon (Segment VI)

Credit: Donald J. Sauder, CPA | CVA

Typically, as an entrepreneur builds equity with profitable earnings, liabilities decrease as they are paid-off, and investment increases. Therefore, the measurements and grades improve with time. Startup business ventures should appreciate that their most substantial risk is liquidity, i.e., measured as working capital.

Diligent financial managers will measure this monthly, and possible graph the trends on comparable actual working capital to the 100% level

The above working capital tool is advisedly applicable to businesses in almost every industry. Diligent financial managers will measure this monthly, and possible graph the trends on comparable actual working capital to the 100% level.

Preparing for a Debt Euroclydon can begin with two easy tools. Tool one is working on optimizing the analytical ratio of equity to total assets or total liabilities and equity.  Tool two is tracking trends with working capital levels and grades. These are quantitative financials to bring a mathematical approach to what some advisors say is too much…debt, payables, etc. Now you have a target, and now you know when you “don’t have enough (working capital or equity).” We omit the “when you have too much” because that’s usually not the problem.

…..while financial tools and weather forecasts may be helpful, always keep the following (Questions) top of mind, because that’s what your financials reflect.

If your business has all the necessary financial reporting to begin these steps towards diligent financial preparedness, then your also advised starting to be your own business “financial weatherman.” You can achieve this following these two easy tools. If you don’t know where to start, then all you need to do is ask for help.

Above all, when preparing for any business risks or pressures, i.e., a Debt Euroclydon, while financial tools and weather forecasts may be helpful, always keep the following questions top of mind, because that’s what your financials reflect.

1)    What is our enterprises’ purpose?
a.     Are we achieving that purpose effectively?
2)    What is our enterprises’ vision?
a.    Are we working successfully towards the vision?
3)    What are our enterprises’ core values?
a.    Do we commendably exemplify those values?
4)    What is our enterprise core focus?
a.    What do our customers appreciate most about our core focus?
5)    What does our business contribute to the community?
a.    Are our products or services, adding the most exceptional         value possible?

Finally, many business successes and opportunity are a matter of “time and chance.” They are not necessarily indications of superior strength, wisdom, understanding, or skill, so as an entrepreneur give thanks daily, and live with gratitude.