Free Webinar: “Cracking The Code To M&A Growth”

Join us on July 12th at 1pm for a free webinar. John Bly, Principal and CEO of LBA Haynes Strand, will deliver his signature presentation: “Cracking The Code To M&A Growth.” John has delivered this speech across the globe to rave reviews and even wrote a book on the topic. He is excited to bring it to a webinar platform.

“Cracking The Code To M&A Growth” serves as a guide to effectively find good deals for entrepreneurial businesses in the $1 to $30 million range.  John provides a blueprint for how to tackle such issues as: determining whether the deal is a good fit, due diligence, structuring the deal, tax issues, and how to land the perfect catch.

John will show you ways to find potential spots for rapid growth and accomplish, on a smaller level, what the larger companies do. By breaking down the M&A process into approachable elements, you will find that your entire outlook on the topic will be transformed!

If you would like to meet with John, contact us to schedule a no-cost consultation.

Fraud Alert: Rise in Imposter Fraud

Imposter fraud is the most recent attempt of fraudsters to trick businesses out of money. Imposter fraud is when a fraudster poses as a person or an entity that you know. They could pose as an executive of your company, a vendor, or even the IRS! 

In these instances the fraudster will most likely contact you by email. The only problem is, the email looks exactly like the one you receive from the person you know, even down to the email signature. When the fraudster is posing as an executive at your company, they will attach an invoice and instruct you to make payments, usually by wire transfer. Most employees would take an email from their CFO or Controller as a direct order and would pay the invoice without any hesitation. This is exactly what these fraudsters want. We have heard from numerous companies in North Carolina that have seen this attempt at fraud. Some have caught on to this fraud before sending money, others unfortunately have not.

When the fraudster is acting as a vendor they will most likely send you a similar email as your vendor would. However, they will request that you change the original vendor’s payment instructions and that you pay the account of their choice. In addition, they may also hack into your email account and find trends of who you do business with. This allows the fraudsters to create fraudulent invoices or payment requests with very subtle differences than the original invoices.

So, how can you reduce this risk?

First of all, you need to alert your employees and tell them to be aware of scams such as these. No payments should leave your office without being approved by multiple people in your office. If something seems odd or off about a request for payment, be sure to discuss the matter first hand with the executive or the vendor in question. This could alleviate any concerns you had and could protect your company against this fraud.

Education is truly the best way to prevent fraud. We must learn from what others have seen in the marketplace in order to create best practices in these kinds of situations. We challenge you to discuss openly any external attempts at fraud that you have seen. Discuss these cases with your friends, at networking events, at chamber meetings, on social media, etc.

To learn more best practices and speak to a team of CPAs that understand how to safeguard your business against fraud. Contact us for your no-cost consultation.

Finding The Right CPA For Your Construction Firm

Often times the relationship between accountants and their clients can be misunderstood as one that just produces a tax return or one time advice.  If this describes your current relationship with your CPA, you might want to re-think your CPA Firm.  An accountant is supposed to act as a trusted advisor, one that you can count on to answer all your accounting questions on a year-round basis and someone you will never hesitate to call with a question.

So, how do you maximize your relationship with your accountant?

It starts with hiring the right accountant.  You need to find the professional CPA firm that has experience handling similarly sized construction companies, someone who understands the nuances of construction accounting.  They should also show a general interest in your company.  Your accountant should be able to ask relevant questions about your company/industry and should be able to provide advice that is specific to the construction industry.  For example if your CPA firm is REALLY knowledgeable about the construction industry, the CPA firm will be able to provide you with strategic planning, smart growth and expansion consulting, sound internal controls, tax and cash flow planning, and finally budgeting and forecasting.

You must understand that your CPA is a resource to your company. If you are only sending over your financial information and waiting for your accountant to send over a completed tax return – then you are missing an opportunity to better your company. Your accountant should be utilized as a financial resource.  Accountants can develop corporate strategies, financial plans, can make recommendations to how to lower taxes and increase profits, and can open up doors to new relationships with lawyers and bankers for example.

In today’s economy many general contractors have attempted to do more work with less resources.  This often times puts more of a burden on employees and on the contractor or owner of the company.  This has led to some aspects of the overall financial plan being ignored or not maintained.  If you are a contractor, wouldn’t it be nice to receive monthly reports and analysis of your spending, cash flow, and other financial data?  Utilizing your accountant to do this, can help you stick to a financial plan that increases your financial health and can help identify problems before they turn into significant issues.  When hiring the right accountant, ask them if they are able to provide monthly analysis and reporting, if they say, “no”, then move on and find an accountant who can.

What else should you be looking for in an accounting firm for construction companies?
  • Accountants with industry knowledge.  Look for the “CCIFP” designation!
  • Look for accountants who won’t charge for phone calls and will never put you on the “clock.”
  • Look for CPAs who are in Construction related groups.  CFMA for example.
  • Find your trusted advisor – someone you can envision developing a relationship with and contacting on a weekly or monthly basis.
  • Someone who can provide insight into the construction industry.
  • During your first meeting, ask the accountant a specific tax question about the construction industry.  If they truly are a “specialist” in construction accounting, this will help you learn that.

Construction accounting is a specialty. That’s why you need an accounting firm that has keen insight into the challenges faced by general contractors and specialty contractors. LBA Haynes Strand’s in depth understanding of construction accounting is the result of providing services to more than 150 clients in the construction industry. For more information on construction accounting, download our free guide, “Profitable Construction: A Guide To Outsourcing Tax Preparation And Accounting.”

Fake Accounting Invoices Used to Steal Credentials

A recently resurfaced banking Trojan is now being used in a malware/phishing campaign targeting users of accounting services provider Xero. Similar attacks have also been used against users of Intuit and QuickBooks. The goal of these attacks is to gather login details for banking and financial accounts. Here’s how it works, what it looks like, and what do if you get this message:

How it works:

The attack sends a spoofed email message that appears to come from Xero/Intuit/QuickBooks regarding an invoice and attempts to get the recipient to click a link to download the invoice. This link will download a ZIP file which contains another file that appears to be the invoice itself but is actually a malicious JavaScript (.js) file which installs the malware.

What to do:

  • Before clicking any link in an email, hover your mouse over that link and observe where it will take you. Either a pop-up will appear next to the link, or look at the bottom of your email program to see the actual link address. If you don’t recognize the link or it’s slightly altered (for example, intuito.biz instead of intuit.com) from the official site: Don’t click on it!
  • Be cautious around ZIP files, often they are used by malware to disguise contents.
  • If you have already clicked on or opened something suspicious that doesn’t show or do what you expect: run extra malware scans – in addition to your regular anti-virus software, contact your trusted IT advisors to see if further checks are necessary, and take precautions to change your account passwords especially for financial institutions – from another computer!

Exciting News: Chad Stafford Has Been Promoted To Principal

LBA Haynes Strand is pleased to announce that effective January 1st, Chad Stafford has been promoted to Principal. Chad joins the principal team, where he will remain focused on providing tax planning, tax preparation, and tax research for clients of LBA Haynes Strand.

John Bly, Principal and CEO of the firm, had this to say, “Chad is a long term member of our team in Mt. Airy.  As a firm we are excited to have him become a principal with the firm.  It’s an exciting step for both Chad in his career path and for the firm’s continued focus on developing our people.”

Having been with the Firm for over 20 years this promotion is a result of Chad’s hard work, loyalty to the Firm, commitment to our team, and dedication to providing top-notch tax services to his clients.

Please join us in congratulating Chad Stafford on this exciting promotion! To arrange a meeting with Chad, contact us!

Estate Planning For The Wealthy and Not-So-Wealthy

Estate planning is important for both the wealthy and not-so-wealthy.  Even if your estate is not large enough to require payment of estate taxes at your death (for 2017, the estate tax lifetime exemption amount is $5,490,000), having the proper documents in place at your death can minimize the burden placed on your loved ones.  Consider the following items when devising an estate plan:

Create A Will

This is an important first step in the estate planning process.  Wills help you make sure your wishes are carried out with respect to distribution of property, and if you have minor children, a will can be used to designate a guardian or guardians.

Avoid Probate

Documents can be put into place that will eliminate the need for the costly and time-consuming probate process.  In preparing an estate plan, all assets should be examined to determine the best way to title the property so the assets will be distributed according to your wishes and to minimize the expense of the final distribution of your assets.

Where To Start

Your attorney and wealth management advisors (brokers, bankers, CPA, etc) can assist you in the estate planning process to ensure you have a plan in place that is optimal for you.

Whether you need to devise a new estate plan or update an existing plan, having the proper documents in place is the key to providing peace of mind for you and your family. Contact us today to learn more!

Entrepreneur’s Spotlight With Yuno

LBA Haynes Strand is putting the spotlight on the entrepreneur community. Entrepreneurship plays a huge role in not just our local economy, but our global economy.  In this blog, we caught up with Andre Walters, who is the founder and owner of Yuno, Inc. Andre breaks down his thought process for creating Yuno and why he decided to take a simple idea and move it to market.

Yuno, Inc.

Have you ever recommended a product to a friend or family member? If you have, and the person bought what you recommended, what did you get for it? If you are like most people, the answer is more than likely nothing. This scenario is why I created Yuno in 2010.

Word-of-mouth marketing is now, and always has been, the most valuable form of marketing. A global study by Nielsen in 2013 revealed that 84% of people surveyed trusted word of mouth marketing above all other methods of marketing—no television ad, radio jingle or any other form of marketing is as effective, and companies have known this for quite some time. Case in point, a 2014 study by the American Marketing Association uncovered that 64% of marketing executives believe that word of mouth marketing is the most effective form of marketing. The issue, however, is that ordinary people like you and I drive the profits of the companies we support through our own purchases and the purchases we influence others to make, yet it seems our contributions to their profits go largely ignored other than the occasional discount or “special offer.” Yuno was created to do something about this very issue. Yuno acknowledges the fact that you are valuable to your friends and family and provides a benefit to you every time your word-of-mouth marketing encourages someone else to buy a product you bought in Yuno (or an item related to something you bought in Yuno).

Our approach at Yuno is really simple. We’ve established relationships with several hundred well-known brands like Macy’s, Saks Fifth Avenue, Best Buy, Footlocker and many others and added over 70 million products to our database as a result. Our team of content curators monitors the latest trends and looks for the best products from our partners to present to our users on Yuno. Yuno gives its users cashback on every product they buy. Additionally, Yuno provides that user with cashback every time someone following them in Yuno sees what they bought and decides to buy the same or a related item. Ultimately, if enough people decide to buy, a user can potentially get their entire purchase price repaid to them through cashback. As our name suggests, “Yuno” is all about helping you benefit not from what you know, but rather, who you know.

For many, 2010 was a difficult time period financially as our nation continued to try and recover from a devastating recession. I personally observed many people that needed a little boost financially, and I created Yuno in large part to give them that boost. The fact of the matter is we are all valuable in the world of commerce because of our impact through word of mouth marketing. If that value is recognized in our everyday transactions by the companies we support, then we believe Yuno will provide a way to spread the wealth in our economy, help people save naturally on everything they buy, and maybe even help our country avoid a similar recession.

Visit Yuno, by clicking here!

Download Your Free LBA Haynes Strand Smartphone App

LBA Haynes Strand has developed an app to deliver real world accounting solutions to businesses and individuals alike.  Included in the app are:

  • Office Information – addresses, directions, phone numbers, office hours
  • M&A Due Diligence Checklist – Be prepared and make sure your due diligence is done!
  • Tax Questionnaire – Stay organized with this helpful tool!
  • Free Industry Guides
  • A Printable Tax Organizer
  • Subscribe To Our Newsletter
  • Read the most recent LBA Haynes Strand Blog posts
  • Keep up with Firm News
  • Document Submission – Take a photo of your document and send it to our team of CPAs!

In an effort to become the best CPA Firm for our clients and provide them with up to the minute updates, news, and service, we have developed this App with their needs in mind.

To download our app, click the links below:

Apple App Store URL:

https://itunes.apple.com/us/app/lba-haynes-strand/id1016215236?mt=8

Google Play URL:

https://play.google.com/store/apps/details?id=com.app_haynestrand.layout

Does My HOA Have To File Tax Returns?

Does my association need to file the 1120-H or the 1120 federal income tax forms? What is the difference? Isn’t my association exempt from taxes? Is my association subject to franchise and income tax in North Carolina? These are questions that come up for community association board of directors.

Under North Carolina law, a homeowners or property owners association is exempt from state franchise and income tax as long as the association is comprised solely of residential property Associations organized for commercial property (such as office condominiums). However, they are not exempt under the law. This is a common misconception for board members. We sometimes see commercial property associations having to amend prior years’ tax returns and pay the franchise and income taxes for past years, plus penalties and interest.

If your association is comprised solely of residential property, income from member assessments is exempt from income taxes for both federal and state filings. What is defined as membership income? Essentially, it is income derived from members for the preservation, maintenance and management of the association. Some examples are the dues or assessments paid by members, late fees, interest charges on delinquent dues, and special assessments. Income generated from the clubhouse rentals, amenity rentals, as well as interest income generated from CDs and interest-bearing bank accounts is considered to be outside the purpose of the association.

Which tax form needs to be filed?

The standard form for a homeowners association is the federal form 1120-H. The “H” stands for homeowners association. This is a straightforward one-page form on which both exempt and non-exempt income is listed. The tax rate associated with this form is a flat 30 percent applied to the taxable net income only. Remember, this form is for homeowners associations specifically.

An association has the option to use form 1120, but this will subject the association to being treated as a for-profit corporation for tax purposes. This could expose the association to closer scrutiny by the IRS. The tax rate on the federal form 1120 is only 15 percent on the first $50,000 in taxable income. Many board members view this as a big savings on the association’s tax liability, but the board must weigh the increased risk for an IRS audit before choosing to use form 1120.

The fact that your association’s income may all be tax exempt does not eliminate the requirement to file tax returns. Failing to file can subject the association to additional or higher preparation fees for these unfiled returns, plus penalties and interest. In addition, the North Carolina Secretary of State will often suspend the corporation’s charter until all returns have been filed.

Let us know if you have questions about your association’s tax or audit needs. Reach out to the LBA Haynes Strand team for your no-cost consultation.

practice sales and use tax

Sales and Use Tax for Practice Owners

Over the past few years we have seen an increased focus by the North Carolina Department of Revenue (NCDOR) on dentists for the audit of sales and use tax compliance. With this in mind, we want to work with our Practice owners to educate and proactively prevent the massive impact these audits can cause.

Sales tax is what we all expect to pay when we purchase items in our day-to-day lives. As a Practice owner, it is necessary to charge sales tax on certain items like electric toothbrushes. As a general rule of thumb, we tell our dental clients: If it leaves in the patient’s mouth, the items and services are NOT subject to sales tax. With this being said, everything else that does not leave in the patient’s mouth may be subject to the tax. If you are unclear which items this applies to, our team will work with you to review your product offerings and determine which items sales tax should be added to.

When looking at use tax, this is what applies when you purchase items from a vendor and they do not charge you tax. If you receive invoices for supplies and equipment or office supplies, your Practice is responsible for reporting this information. In addition, you must pay the sales tax the vendor did not charge. For example, this could be when Practice owners purchase items from out of state suppliers, online vendors, or small retailers.

While it can be time consuming and difficult, compliance with both parts of the tax is necessary. For this reason, one of our main goals is to implement procedures to ease the compliance process for our clients.

Best Practices

Each month you should total the number of items sold by your Practice that were subject to sales tax and forward to your accountant. Remember, review your Practice Management software reports as this information may already be shown.

For use tax, we recommend you include your office manager or a trusted member of staff in this process. This staff member must review all invoices from your vendors to verify if sales tax was charged. If not, those invoices should be set aside for payment of Use Tax. This information needs to be shared with your accountant on a regular basis.

To learn more about how we can support your Practice in this process, contact us!

Dental Practice Lifecycle: Start Up & Acquisition

Every dental Practice follows its own unique lifecycle, however, there are a few main phases it will pass through as it continues to grow and evolve that we’d like to focus on:

  • Start Up & Acquisition
  • Growth & Maintenance
  • Sale of Practice & Retirement

Before you enter any phase, we highly encourage any future Practice owner to seek out professionals who specialize in the dental industry.  There are many pain points that can be avoided by working with a CPA, attorney, banker, etc. who specialize in the dental industry and can guide you in the right direction from step one.  Once you have your Practice advisory team in place, it’s time to look at the next big questions: Do I want to start from scratch or purchase an existing Practice? And where will my funding come from?

Our dental team works with doctors on both sides of the start-up. With future Practice owners looking to start from scratch we develop a business plan to help obtain bank financing for the next steps in the ownership process. This document gathers and presents information related to many aspects of your future Practice: demographics of your proposed location, expected revenues and expenses, and a breakdown of desired loan funding just to name a few. Your business plan is what provides information to banks to show your Practice is a worthy investment. More importantly, it gives you a guideline and stepping stone to launch your Practice with confidence.

If you’d prefer to purchase an established Practice, our dental team works with you to find purchase options and review these options through our Practice Scorecard Analysis and due diligence process. Much like the Due Diligence period of buying a house, this is where you have a chance to review various aspects of the Practice and determine if it’s right for you. Many items are looked at during this but we help our clients to focus on what the historical financial data of the Practice shows and how it will apply to you, your future ownership of the Practice and if this coincides with your ownership goals.

Do you have your specialized team in place? From start-up services to exiting your practice, our team serves as strategic business advisors that are there with you every step of the way.

Next week, we will be discussing Phase 2: Growth and Maintenance.

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Dental Practice Lifecycle: Sale of Practice & Retirement

After the start-up and acquisition phase and years of hard work growing your own dental Practice, you may be ready to hang up the gloves and retire but are not sure where to start.

The answer is to build a plan that starts years before you actually plan to retire or sell.  Having this conversation with your Practice advisory team in advance allows us the opportunity to guide you to that point and help achieve the maximum results for you and your Practice.

During this pre-retirement/sale time we find and develop answers for the hard questions like “What’s my Practice really worth?” and “How much cash will I receive from the sale?”  Using the answers to these questions we review options and prepare a plan to guide you to your best outcome.

Our Capital Advisors team has the ability to provide sell side representation to Practice owners in order to focus on finding qualified buyers. Over the years we have developed a process that allows us to find our clients the “right buyer” that may otherwise not have been found. This “right buyer” is the one who sees the most value in your Practice and is able to provide you, the seller, with the right offer.

Remember – the end of your dental Practice lifecycle is the beginning of the next generation’s lifecycle!

Continue checking back for our continuing dental blog series. Over the next few months, we will address subjects such as buying a dental practice, profit & loss statement explanation, and how sales tax impacts dentists, along with many other informative topics.

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