CPA Blog

Opening a new location calls for careful planning

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Published: Monday, 10 January 2022 09:15

Written by Phillip Strickler, CPA.CITP

The U.S. economy has been nothing short of a roller-coaster ride for the past year and a half. Some industries have had to overcome seemingly insurmountable challenges, while others have seen remarkable growth opportunities arise.

If your business is doing well enough for you to consider adding a location, both congratulations and caution are in order. “Fortune favors the bold,” goes the old saying. However, strained cash flow and staffing issues can severely disfavor the underprepared.

Ask the right questions

Among the most fundamental questions to ask is: Will we be able to duplicate the success of our current location? If your first location is doing well, it’s likely because you’ve put in place the people and processes that keep the business running smoothly. It’s also because you’ve developed a culture that resonates with your customers. You need to feel confident you can do the same at subsequent locations.

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Business owners, do you need to step up your internal communications game?

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Published: Monday, 10 January 2022 09:11

Written by Phillip Strickler, CPA.CITP

They say we live in an on-demand world. Right now, many business owners are demanding one thing: more workers. Unfortunately, the labor market is somewhat less than forthcoming.

In the so-called “Great Resignation” of 2021, droves of people voluntarily left their jobs, and many aren’t rushing back to work. Neither are many of those who lost their jobs because of the pandemic. This is putting pressure on companies to do everything in their power to retain current employees and look as appealing as possible to the relatively few job seekers out there.

One element of a business that can make or break its employer brand is communications. When workers feel disconnected from ownership, it’s easy for them to listen to rumors and misinformation — and that can motivate them to walk out the door. Here are some ways you can step up your communications game in 2022.

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Defer tax with a like-kind exchange

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Published: Tuesday, 04 January 2022 09:00

Written by Phillip Strickler, CPA.CITP

Do you want to sell commercial or investment real estate that has appreciated significantly? One way to defer a tax bill on the gain is with a Section 1031 “like-kind” exchange where you exchange the property rather than sell it. With real estate prices up in some markets (and higher resulting tax bills), the like-kind exchange strategy may be attractive.

A like-kind exchange is any exchange of real property held for investment or for productive use in your trade or business (relinquished property) for like-kind investment, trade or business real property (replacement property).

For these purposes, like-kind is broadly defined, and most real property is considered to be like-kind with other real property. However, neither the relinquished property nor the replacement property can be real property held primarily for sale.

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Commission fraud: When salespeople get paid more than they’ve earned

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Published: Tuesday, 04 January 2022 08:52

Written by Phillip Strickler, CPA.CITP

Many employees — from retail workers to sales staffers involved in complex business-to-business transactions — receive part of their compensation from sales-related commissions. To attract and retain top talent, some companies even allow employees to earn unlimited commissions.

Unfortunately, some commission-compensated employees may be tempted to abuse this system by falsifying sales or rates. Fraud methods vary depending on an unethical salesperson’s employer and role. But companies need to be aware of the possibility of commission fraud and take steps to prevent it.

3 forms

Generally, commission fraud takes one of three forms:

1. Invention of sales. A retail employee enters a fake purchase at the point of sale (POS) to generate a commission. Or an employee involved in selling business services creates a fraudulent sales contract.
2. Overstatement of sales. Here, a worker alters internal sales reports or invoices or inflates sales captured via the company’s POS.
3. Inflation of commission rates. An employee changes a company’s commission records to reflect a higher pay rate. Employees who don’t have access to such records might collude with someone who does (such as an accounting staffer) to alter compensation rates.

More sophisticated schemes can involve collusion with customers and other outside parties.

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