Monthly Archives: July 2017

Timeliness Counts in Financial Reporting

laterDon’t delay in closing books

Do you procrastinate when it comes to closing your books and delivering year-end financial statements? Lenders and investors may think the worst if an organization’s financial statements aren’t submitted in a timely manner. Here are three assumptions your stakeholders could make when your financial statements are late.

You are hiding negative results
No one wants to be the bearer of bad news. Deferred financial reporting can lead investors and lenders to presume that your organization’s performance has fallen below historical levels or what was forecast at the beginning of the year.

Your management team is not up to the task at hand
A delay in statements may lead to questions regarding your controller’s experience, the depth of your accounting department, or your overall ability to deal with a changing accounting landscape.  Fair or not, your stakeholders may assume any or all of the above concerns and that you and your team cannot pull together the requisite data to finish the financials.

Delayed statements may also signal that management doesn’t consider financial reporting a priority. This lackadaisical mindset implies that no one is monitoring financial performance throughout the year.

You are more likely to be a victim of occupational fraud
If financial statements aren’t timely or prioritized by the organization’s owners, unscrupulous employees may see it as an opportunity to steal from the organization. Fraud is more difficult to hide if you insist on timely financial statements and take the time to review them.  Assume your stakeholders are savvy and understand the control provided by strong reporting – and the potential for fraud when that reporting is absent or delayed.

Get back on track
Late financial statements cost more than time; they can impair relations with lenders and investors.  And specifically for not-for-profit organizations, they can negatively impact the opinions of donors and board members. Regardless of your reasons for holding out, timely financial statements are a must for fostering goodwill with outside stakeholders.

We can help you stay focused, work through complex reporting issues and communicate weaker-than-expected financial results in a positive, professional manner. Contact Herzl Ginsburg, Ciuni & Panichi, Inc. Audit and Accounting Services Department Manager, at hginsburg@cp-advisors.com or 216-831-7171 to learn more.

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Digital Marketing for Your Business

Business Operations and Income Statements

 

Digital Marketing for Your Business

Four digital marketing tips for every business

Photo woman working with new startup project in modern loft.You’d be hard pressed to find a company not looking to generate more leads, boost sales and improve its profit margins. The first step is creating awareness of your services and more importantly your expertise. Fortunately, today’s digital technologies make it easier to accomplish both tasks.

Here are four digital marketing tips for every business to consider:

  1. Add quality and current content to your website. Helpful blog posts, articles and even whitepapers can establish your business as a knowledge leader in your Few things disappoint and disinterest customers like an outdated or unchanging website. Give your visitors a reason to return.

    Review your website and add fresh content regularly to ensure it doesn’t look too old. Photos and videos are especially interesting to visitors. Beware, however, that posting amateurish-looking videos could do more harm than good. If you don’t have professional video production capabilities, you may need to hire a professional.  Finally if you haven’t updated your overall website design in a few years, it’s time.

  2. Leverage social media. If you’re not using social media tools already, focus on a couple of popular social media outlets, most definitely LinkedIn and perhaps Facebook and Twitter. Actively post content on them, including photos. Check the analytics regularly. LinkedIn, Facebook, and Twitter offer pretty detailed tracking so the you can see what content generated likes, clicks and re-tweets giving you insight to what appeals to your audience.
  3. Interact frequently. This applies to all of your online channels, including your website, social media platforms, email and online review sites. For example, be sure to respond promptly to any queries you receive on your site or via email, and be quick to reply to questions and comments posted on your social media pages.
  4. Keep your message concise and consistent with your brand. Remind your audience of what your business can do for them at every opportunity. The point is to help your customers and potential customers become aware of your services and/or products so they will think of you when they need them.

When it comes to marketing, you don’t want to swing and miss. Ciuni & Panichi, Inc. offers a full range of marketing advisory services to help you promote your business. To learn more, contact Jenna Snyder, at jsnyder@cp-advisors.com or 216-831-7171.

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2017 Q3 Tax Calendar

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Taxes and Cost Segregation

Could a cost segregation study save your company taxes?

cost segregationIf your business has acquired, constructed or substantially improved a building recently, consider a cost segregation study. One of these studies can enable you to identify building costs that are properly allocable to tangible personal property rather than real property. And this may allow you to accelerate depreciation deductions, reducing taxes and boosting cash flow.

Overlooked opportunities
IRS rules generally allow you to depreciate commercial buildings over 39 years (27½ years for residential properties). Often, businesses will depreciate structural components (such as walls, windows, HVAC systems, elevators, plumbing and wiring) along with the building.

Personal property — such as equipment, machinery, furniture and fixtures — is eligible for accelerated depreciation, usually over five or seven years. And land improvements — fences, outdoor lighting and parking lots, for example — are depreciable over 15 years.

Too often, companies allocate all or most of a building’s acquisition or construction costs to real property, overlooking opportunities to allocate costs to shorter-lived personal property or land improvements. Items that appear to be part of a building may in fact be personal property.

Examples include:

  • Removable wall and floor coverings,
  • Detachable partitions,
  • Awnings and canopies,
  • Window treatments,
  • Signage, and
  • Decorative lighting.

In addition, certain items that otherwise would be treated as real property may qualify as personal property if they serve more of a business function than a structural purpose. Examples include reinforced flooring to support heavy manufacturing equipment, electrical or plumbing installations, and dedicated cooling systems for server rooms.

A study in action
Let’s say you acquired a nonresidential commercial building for $5 million on January 1. If the entire purchase price is allocated to 39-year real property, you’re entitled to claim $123,050 (2.461 percent of $5 million) in depreciation deductions the first year.

A cost segregation study may reveal that you can allocate $1 million in costs to five-year property eligible for accelerated depreciation. Reallocating the purchase price increases your first-year depreciation deductions to $298,440 ($4 million × 2.461 percent, plus $1 million × 20 percent).

Impact of tax law changes
Bear in mind that tax law changes may occur this year that could significantly affect current depreciation and expensing rules. This in turn could alter the outcome and importance of a cost segregation study. Contact our firm for the latest details before you begin.

On the other hand, any forthcoming tax law changes likely won’t affect your ability to claim deductions you may have missed in previous tax years.

Worthy effort
As you might suspect, a cost segregation study will entail some effort in analyzing your building’s structural components and making your case to the IRS. But you’ll likely find it a worthy effort.

A look-back study may also deliver benefits
If your business invested in depreciable buildings or improvements in previous years, it may not be too late to take advantage of a cost segregation study. A “look-back” cost segregation study allows you to claim missed deductions in qualifying previous tax years.

To claim these tax benefits, we can help you file Form 3115, “Application for Change in Accounting Method,” with the IRS and claim a one-time “catch-up” deduction on your current year’s return. There will be no need to amend previous years’ returns.

The best advice we can offer is, “don’t go it alone.” Contact Tony Constantine, CPA, Ciuni & Panichi, Inc. Tax Partner, at tconstantine@cp-advisors.com or 216-831-7171. He can help you make sure you are not missing any of the tax benefits available to you.

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2017 Q3 Calendar

Make Collections a Priority