Use Visual Aids to Enhance Financial Reporting

Graphs, charts, tables and other data visualizations can be inserted in your financial statement disclosures to improve transparency and draw attention to key accomplishments. As your organization prepares its year-end or quarterly financials, consider presenting some information in a more user-friendly, visual format.

Reimagine data presentation

In business, the use of so-called “infographics” started with product marketing. By combining images with written text, these data visualizations can draw readers in and evoke emotion. They can breathe life into content that could otherwise be considered boring or dry.

Annual reports are traditionally lengthy and heavy with numbers and text. Some organizations are now using visual aids to disclose critical financial information to investors and other stakeholders. In this context, infographics help stakeholders digest complex information and retain key points.

Show, don’t just tell

Examples of formats that might be appropriate in financial reporting include:

Line graphs. These graphics can be used to show financial metrics, such as revenue and expenses over time. They can help identify trends, like seasonality and rates of growth (or decline), which can be used to interpret historical performance and project it into the future.

Bar graphs. Here, data is grouped into rectangular bars in lengths proportionate to the values they represent so data can be compared and contrasted. A company might use this type of graph to show revenue by product line or geographic region to determine what (or who) is selling the most.

Pie charts. These circular models show parts of a whole, dividing data into slices like a pizza. They might be used in financial reporting to show the composition of a company’s operating expenses to use in budgeting or cost-cutting projects.

Tables. This simple format presents key figures in a table with rows and columns. A table can be an effective way to summarize complex time-series data, for example. It can provide a quick reference for information that investors may want to refer to in the future, such as gross margin or EBITDA over the last five years.

Effective visualizations avoid “chart junk.” That is, unnecessary elements — such as excessive use of color, icons or text — that detract from the value of the data presentation. Ideally, each graphic should present one or two ideas, simply and concisely. The information also should be timely and relevant. Too many pictures can become just as overwhelming to a reader as too much text.

Other uses of visual aids

In addition to using infographics in financial statements, management may decide to create data visualizations for other financial purposes. For example, they could be given to lenders when applying for loans or to prospective buyers in M&A discussions. An infographic could also be used in-house to help the management team make strategic decisions.

Additionally, nonprofits often use infographics to create an emotional connection with donors. If effective, this outreach may encourage additional contributions for the nonprofit’s cause.

Bringing the numbers to life

By supplementing text and numeric presentations with visual elements, your organization can communicate more effectively with investors, lenders, donors and other stakeholders. Contact us to decide how visual aids can help you drive home key points and clarify complex matters.

With unemployment hitting record lows, many employers are struggling to fill key positions in their organizations. If you’re dealing with just such a problem, remember that hiring isn’t the only way to find skilled workers — there’s also outsourcing. And if it’s jobs in human resources (HR) that you’re having trouble filling, engaging a professional employer organization (PEO) could be a feasible solution.

Not a provider, a co-employer

Most PEOs market themselves as “co-employers.” That is, they partner with an employer to provide a broad slate of HR services rather than simply offering help with staffing or payroll.

By signing a contract with one, you won’t need to hire HR staff. The PEO will handle tasks such as recruiting and training, payroll management, benefits administration, and regulatory compliance. You may even be able to reduce the size of your HR department or redeploy those employees to more strategically focused duties.

PEOs offer other advantages as well. Overworked HR staffers might struggle to keep up with the ever-changing trends and regulations related to employment. The built-in expertise of a PEO can help ensure compliance and help prevent costly penalties.

Further, because PEOs typically work with multiple clients, the cost to engage one can be lower than hiring more HR employees. Partnering with a PEO enables an organization to focus on its core mission while it gains access to HR know-how, technology and administrative services.

For example, many PEOs can recommend best practices for functions such as onboarding new employees. And some provide an HR information system that allows your organization to use the latest technology to track recruiting, payroll and benefits data.

Finally, long-standing PEOs often have established relationships with multiple health insurers. This enables you to shop for a greater number of policies at more competitive rates than you might be able to obtain on your own. A good PEO can also educate employees about the benefits available to them, which tends to boost participation, morale and retention.

Not always the right move

To be clear, a PEO isn’t right for every employer. You’ll incur a substantial cost in engaging one and you’ll need to be prepared to manage the relationship. From a benefits perspective, some PEOs work with a limited number of health insurers whose policies might be no better than coverage you can find on your own.

It’s also possible that your in-house expertise isn’t that far off from a PEO’s. A little more training or continuing education could get your HR staff up to speed and negate the need for investing in outside help.

The contract is key

When you partner with a PEO, your organization and the PEO enter into a legal co-employment agreement. Typically, the employer remains responsible for strategic planning and business operations, while the PEO takes on specific HR-related services outlined in the contract.

It’s important to thoroughly understand the co-employment agreement. Often, the employer engaging the PEO continues to pay employment taxes and file tax returns. Under some agreements, however, these responsibilities shift to the PEO. Assess the contract carefully with your leadership team and ask an attorney to review it.

Far from easy

Partnering with a PEO may be a way to sidestep today’s tight job market. But deciding whether to do so is far from easy. Our firm can help you assess the feasibility of such an arrangement, including forecasting the costs involved.

If you made gifts last year you may be wondering if you need to file a gift tax return. The short answer: There are many situations when it’s necessary (or desirable) to file Form 709 — “United States Gift (and Generation-Skipping Transfer) Tax Return” — even if you’re not liable for any gift tax. Let’s take a closer look at the reasons why.

What gifts are considered nontaxable?

The federal gift tax regime begins with the assumption that all transfers of property by gifts (including below-market sales or loans) are taxable. It then sets forth several exceptions. Nontaxable transfers that need not be reported on Form 709 include:

Gifts of present interests within the annual exclusion amount ($17,000 per donee in 2023, up from $16,000 in 2022),
Direct payments of qualifying medical or educational expenses on behalf of an individual,
Gifts to political organizations and certain tax-exempt organizations,
Deductible charitable gifts,
Gifts to one’s U.S.-citizen spouse, either outright or to a trust that meets certain requirements, and
Gifts to one’s noncitizen spouse within a special annual exclusion amount ($175,000 in 2023, up from $164,000 in 2022).

If all your gifts for the year fall into these categories, no gift tax return is required. But gifts that don’t meet these requirements are generally considered taxable — and must be reported on Form 709 — even if they’re shielded from tax by the federal gift and estate tax exemption ($12.92 million in 2023, up from $12.06 million in 2022).

Are there tax traps to be aware of?

If you make gifts during the year, consider whether you’re required to file Form 709. And watch out for these common traps:

Future interests. The $17,000 annual exclusion applies only to present interests, such as outright gifts. Gifts of future interests, such as transfers to a trust for a donee’s benefit, aren’t covered, so you’re required to report them on Form 709 even if they’re less than $17,000 in 2023 ($16,000 in 2022).

Spousal gifts. As previously noted, gifts to a U.S.-citizen spouse need not be reported on Form 709. However, if you make a gift to a trust for your spouse’s benefit, the trust must 1) provide that your spouse is entitled to all the trust’s income for life, payable at least annually, 2) give your spouse a general power of appointment over its assets and 3) not be subject to any other person’s power of appointment. Otherwise, the gift must be reported.

Gift splitting. Spouses may elect to split a gift to a child or other donee, so that each spouse is deemed to have made one-half of the gift, even if one spouse wrote the check. This allows married couples to combine their annual exclusions and give up to $34,000 for 2023 (up from $32,000 for 2022) to each donee. To make the election, the donor spouse must file Form 709, and the other spouse must sign a consent or, in some cases, file a separate gift tax return. Keep in mind that, once you make this election, you and your spouse must split all gifts to third parties during the year.

The deadline to file Form 709 for 2022 is April 18. Please contact us if you’re unsure of whether you need to file a gift tax return this year.

Many people began working from home during the COVID-19 pandemic — and many still work from their home offices either all the time or on a hybrid basis. If you’re self-employed and run your business from home or perform certain functions there, you might be able to claim deductions for home office expenses against your business income. There are two methods for claiming this tax break: the actual expense method and the simplified method.

How to qualify

In general, you qualify for home office deductions if part of your home is used “regularly and exclusively” as your principal place of business.

If your home isn’t your principal place of business, you may still be able to deduct home office expenses if:

You physically meet with patients, clients or customers on your premises, or
You use a storage area in your home (or a separate free-standing structure, such as a garage) exclusively and regularly for business.

Expenses you can deduct

Many eligible taxpayers deduct actual expenses when they claim home office deductions. Deductible home office expenses may include:

Direct expenses, such as the cost of painting and carpeting a room used exclusively for business,
A proportionate share of indirect expenses, including mortgage interest, rent, property taxes, utilities, repairs and insurance, and
Depreciation.

But keeping track of actual expenses can take time and it requires organized recordkeeping.

The simpler method

Fortunately, there’s a simplified method: You can deduct $5 for each square foot of home office space, up to a maximum of $1,500.

The cap can make the simplified method less valuable for larger home office spaces. Even for small spaces, taxpayers may qualify for bigger deductions using the actual expense method. So, tracking your actual expenses can be worth it.

Changing methods

When claiming home office deductions, you’re not stuck with a particular method. For instance, you might choose the actual expense method on your 2022 return, use the simplified method when you file your 2023 return next year and then switch back to the actual expense method for 2024. The choice is yours.

What if I sell the home?

If you sell — at a profit — a home on which you claimed home office deductions, there may be tax implications. We can explain them to you.

Also be aware that the amount of your home office deductions is subject to limitations based on the income attributable to your use of the office. Other rules and limitations may apply. But any home office expenses that can’t be deducted because of these limitations can be carried over and deducted in later years.

Different rules for employees

Unfortunately, the Tax Cuts and Jobs Act suspended the business use of home office deductions from 2018 through 2025 for employees. Those who receive paychecks or Form W-2s aren’t eligible for deductions, even if they’re currently working from home because their employers closed their offices due to COVID-19.

We can help you determine if you’re eligible for home office deductions and how to proceed in your situation.

Yeo & Yeo CPAs & Advisors is pleased to announce that Christopher M. Sheridan, CPA, CVA, will lead the firm’s Business Valuation and Litigation Support Services Group.

Yeo & Yeo’s Business Valuation and Litigation Support Group offers business valuation and forensic accounting, including complex litigation assignments, to businesses, law firms, receivers, trustees, financial institutions, and individuals.

“Chris is a trusted leader in the business valuation and litigation support industry. He has big-picture thinking and years of advisory experience,” said John W. Haag Sr., CPA/ABV, CVA, CFF, Managing Principal of the firm’s Midland office. “He has made a big impact by continually improving our processes and providing our clients with excellent valuation services.”

Sheridan is a senior manager and a member of the Consulting Service Line and Manufacturing Services Group. His areas of expertise include business valuation and litigation support, expert witness testimony, business consulting, and fraud investigation and prevention. As a Certified Valuation Analyst (CVA), Sheridan provides defensible, objective business valuation services for attorneys and business owners. He is a National Association of Certified Valuators and Analysts / Consultants Training Institute “40 Under Forty” honoree.

Sheridan is a member of the National Association of Certified Valuators and Analysts, the American Institute of Certified Public Accountants, the Michigan Association of Certified Public Accountants’ Manufacturing Task Force, and the Michigan Manufacturers Association. In the community, he serves as a board member for the Great Lakes Bay Economic Club and Bay Future.

“My goal is to continue to expand and build upon the services the group offers and continue to build the trust and confidence of our expertise in the industry,” Sheridan said. “John Haag has provided great mentorship and remains a crucial part of our continued growth. He will continue to serve our clients and communities with his specialized expertise.”

After your manufacturing company’s 2022 tax return has been filed, you can focus your efforts on reducing its 2023 tax liability. What are the top tax-saving opportunities available to manufacturers this year? Here are seven prime candidates available for many companies:

1. Section 179 deduction. The Sec. 179 “expensing” deduction continues to be a mainstay for manufacturers. Under the deduction, a manufacturer can expense, or currently deduct, the cost of qualified new or used business property placed in service during the year, up to an annual inflation-adjusted limit.

Qualified property includes business property with a cost recovery period of 20 years or less. For 2023, the limit is $1.16 million (up from $1.08 million for 2022).

However, the deduction can’t exceed the amount of business income for the year. Furthermore, the deduction is phased out dollar-for-dollar for amounts above an annual threshold. The threshold for 2023 is $2.89 million (up from $2.7 million for 2022).

2. First-year bonus depreciation. If the Sec. 179 deduction doesn’t cover all business property acquired in 2023, first-year bonus depreciation can be a valuable supplement. For 2023, the Tax Cuts and Jobs Act (TCJA) authorizes an 80% first-year bonus depreciation (down from 100% for 2022) for qualified property placed in service during the year. The property can be new or used. The percentage will drop to 60% for 2024 and another 20 percentage points per year through 2026. After 2026, no bonus depreciation will be allowed unless Congress revisits this issue. Accordingly, a manufacturer may want to accelerate property acquisitions into 2023 to take maximum advantage of the bonus depreciation deduction. Keep in mind that, for you to claim the deduction, the property also must be placed in service during the tax year.

Bonus depreciation generally is applied after the Sec. 179 deduction is claimed. If any amount remains, it’s subject to the regular cost recovery rules.

3. Research credit. Often referred to as the research and development or research and experimentation credit, your manufacturing company may be eligible to claim it for qualified expenses. Generally, the credit equals 20% of qualified research expenses for the year over a base amount.

For these purposes, the base amount is a fixed-base percentage (not to exceed 16%) of average annual receipts for the prior four years. It can’t be less than 50% of the annual qualified research expenses. Alternatively, a company can use a simplified 14% credit.

4. Retirement plans. The SECURE 2.0 Act, enacted at the tail end of 2022, makes sweeping changes for retirement accounts, with varying effective dates. For instance, the law:

Increases the age to begin taking required minimum distributions (RMDs) to 73 beginning January 1, 2023, and boosts it to 75 on January 1, 2033,
Eases the penalties for failing to take full RMDs, reducing the 50% excise (or penalty) tax to 25%,
Increases the annual limit for catch-up contributions,
Requires 401(k) plan catch-up contributions to be made to Roth accounts,
Provides for automatic enrollment in new plans, except for certain small companies,
Expands the eligibility for part-time workers,
Creates emergency savings accounts linked to retirement plans,
Allows penalty-free withdrawals for certain emergencies,
Enhances the tax credit for starting up a retirement plan, and
Replaces the retirement saver’s credit with a matching government contribution.

Again, the effective dates for these provisions vary. Contact us for more details.

5. Qualified business income deduction. A manufacturer operating as a pass-through entity — such as a partnership, S corporation or limited liability company — or as a sole proprietorship can benefit from the qualified business income (QBI) deduction.

The maximum deduction is equal to 20% of QBI (essentially, your net profit from the business). Notably, the QBI deduction is subject to a phase-out, based on your income. For 2023, the threshold is $182,100 for single filers and $364,200 for joint filers, up from $170,050 and $341,000, respectively, for 2022.

6. Form of business ownership. Depending on several variables, a switch in your company’s form of business entity may be warranted. For instance:

A C corporation can change to S corporation status to avoid double taxation and benefit from the QBI deduction (see above).
A sole proprietor can use a pass-through entity to save on self-employment tax.
An S corporation may revoke its status so that it can pay tax at the lower C corporation rate of 21%.

Note that changing your business’s entity may be treated as a taxable event.

7. Accounting methods. Manufacturers can save tax through astute choices relating to accounting methods. For example, it may make sense for your company to switch to the last in, first out (LIFO) method of accounting for inventory. Switching to LIFO can be beneficial when costs are rising due to inflation. LIFO may result in bigger deductions for the company as inventory prices increase.

Similarly, under the TCJA, your company may use the simplified cash method of accounting if receipts don’t exceed $25 million, indexed for inflation, for the past three tax years. The threshold is $29 million for the three years ending prior to 2023. This method may provide greater flexibility at the end of the year.

These are just seven tax-saving opportunities available to manufacturers in 2023. Contact us to discuss which strategies are right for your company.

Even though it may not be top of mind when you’re developing or revising your estate plan, it’s important to consider how bequeathing assets to your family might affect them. Why? Because when your heirs receive their inheritance, it becomes part of their own taxable estates. Giving a loved one permission to create an inheritor’s trust can help avoid this outcome.

The trust in action

In a nutshell, an inheritor’s trust allows your loved one to receive the inheritance in trust, rather than as an outright gift or bequest. Thus, the assets are kept out of his or her own taxable estate. Having assets pass directly to a trust benefiting an heir not only protects the assets from being included in the heir’s taxable estate, but also shields them from other creditor claims, such as those arising from a lawsuit or a divorce.

Because the trust, rather than your family member, legally owns the inheritance, and because the trust isn’t funded by the heir, the inheritance is protected. The reason is because everything you gift or bequeath to the trust (including growth and income from the trust) is owned by the trust, and therefore can’t be treated as community property. An inheritor’s trust can’t replace a prenuptial or postnuptial agreement, but it can provide a significant level of asset protection in the event of divorce.

With an inheritor’s trust, your heir can also realize wealth building opportunities. If you fund an inheritor’s trust before you die, your loved one can use a portion of the money to, for example, start a new business. A prefunded inheritor’s trust can also own the general partnership interest in a limited partnership or the voting interest in a limited liability company or corporation. If you decide to fund the trust now, your initial gift to the trust can be as little or as much as you like.

Talk to your heirs first

As you draft or revise your estate plan and consider who to pass your assets to, it’s a good idea to talk to family members first. Determine if they would accept the bequests and then inform them of their option of creating an inheritor’s trust. Turn to us to help determine whether an inheritor’s trust is right for your situation.

The 2022 mid-term election has shifted the scales in Washington, D.C., with the Democrats no longer controlling both houses of Congress. While it remains to be seen if — and when — any tax-related legislation can muster the requisite bipartisan support, a review of certain provisions in existing laws may provide an indication of the many areas ripe for action in the next two years.

Retirement catch-ups at risk

The SECURE 2.0 Act, enacted at the tail end of 2022, reportedly includes a technical drafting error that jeopardizes the abilities of taxpayers to make catch-up contributions to their pre-tax or Roth retirement accounts. According to the American Association of Pension Professionals and Actuaries, under the existing statutory language, no participants will be able to make such contributions beginning in 2024.

The American Retirement Association has brought the issue to the attention of the U.S. Department of Treasury and the Joint Committee on Taxation (JCT), a nonpartisan congressional committee that assists with federal tax legislation. While the JCT has apparently acknowledged that the language does appear to be a drafting error, a timely correction is far from guaranteed.

Indeed, such “technical corrections” legislation once passed Congress routinely. However, it has proven more challenging in the political climate of the last decade or so. For example, it took three years for Congress to pass minor corrections to the first SECURE Act. And a glitch in the Tax Cuts and Jobs Act of 2017 (TCJA) affecting eligibility for bonus depreciation wasn’t corrected until the CARES Act became law in 2020.

Expiring tax provisions

Tax-related legislation often includes so-called “sunset” dates — the dates tax provisions will expire, absent congressional action. For example, the Consolidated Appropriations Act, enacted in 2021, boosted the allowable deduction for business meals from 50% to 100% for 2021 and 2022. In 2023, the deduction limit returned to 50%.

A JCT report released in January 2023 highlights numerous significant provisions that are scheduled to expire in coming years without congressional action to extend them. For example, several tax credits related to renewable and alternative energy will expire at the end of 2024.

But 2026 is the year when some of the most wide-reaching and particularly valuable provisions — many of them created or modified by the TCJA — are set to disappear. They include:

Lower individual tax rates,
Enhancements to the Child Tax Credit (CTC),
Health insurance premium tax credit enhancements,
The New Markets Tax Credit,
The employer credit for paid family and medical leave,
The Work Opportunity Tax Credit,
The increase in the exemption amount and phaseout threshold for the alternative minimum tax,
The increase in the standard deduction,
The suspension of the miscellaneous itemized deduction,
The suspension of the limit on itemized deductions,
The income exclusion for employer payments of student loans,
The suspension of the deduction for personal exemptions,
The limit on the deduction for qualified residence interest,
The suspension of the deduction for home equity interest,
The limit on the deduction for state and local taxes,
The qualified business income deduction,
The deduction percentages for foreign-derived intangible income and global intangible low-taxed income,
Empowerment zone tax incentives, and
The increase in the federal gift and estate tax exemption.

At the end of 2026, bonus depreciation also is slated for elimination. In fact, the allowable deduction already has dropped from 100% to 80% of the cost of qualified assets in 2023. The limit will drop by 20% each year until vanishing in 2027.

Expired tax provisions

Several notable provisions expired or changed at the end of 2021, despite chatter in Washington about the possibility of extensions. For example, as of 2022, taxpayers can no longer deduct Section 174 research and experimentation expenses, including software development costs, in the year incurred. Rather, they must amortize these expenses over five years (or 15 years if incurred outside of the United States). In addition, the calculation of adjusted taxable income for purposes of the limit on the business interest deduction has changed, potentially reducing the allowable deduction for some taxpayers.

Individuals also saw the end of several tax provisions at the end of 2021, including the:

CTC expansions created by the American Rescue Plan for some taxpayers,
Expanded child and dependent care credit,
Increased income exclusion for employer-provided dependent care assistance,
Treatment of mortgage insurance premiums as deductible mortgage interest,
Charitable contribution deduction for non-itemizers, and
Increased percentage limits for charitable contributions of cash.

It’s possible that some of these could be included in any “extender” legislation Congress might consider this year or next.

The FairTax Act

Unlikely to see much progress, however, is the proposed FairTax Act. Although it has the support of a group of U.S. House Republicans, GOP House Speaker Kevin McCarthy has stated that he doesn’t support the legislation.

The bill would eliminate most federal taxes — including individual and corporate income, capital gains, payroll and estate taxes — as well as the IRS. It would replace the taxes with a 23% federal sales tax on goods and services, which couldn’t be offset by deductions or tax credits. The plan has been around for two decades and has yet to garner a floor vote, an indicator of its odds this time around — especially with Democrats in control of the U.S. Senate.

Ear to the ground

Congress may not feel a sense of urgency to address tax provisions that aren’t set to expire for three years, but the catch-up contribution error would have substantial repercussions for many taxpayers in less than a year. We’ll let you know if lawmakers take action on this or any other important tax matters that could affect you.

It can be challenging to keep track of which accounting rules are changing, when the changes kick in and for which types of entities. Plus, implementing the necessary revisions to your organization’s procedures and systems often takes time and resources. Here are five updates that go live for certain entities this year.

1. Targeted improvements for long-term insurance contracts

Accounting Standards Update (ASU) No. 2018-12, Financial Services — Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, was issued in 2018, but its effective date was deferred twice. It requires insurers to 1) review annually the assumptions they make about their policyholders, and 2) update the liabilities on their balance sheets if the assumptions change. Updated liabilities will be measured using a standardized, market-observable discount interest rate based on the yield from an upper-medium-grade, fixed-income instrument. This is a more conservative approach than the method used for insurance policies under previous guidance.

Large public insurance companies must implement these changes in 2023. This may initially require significant, expensive software changes. Private insurers have until 2025 to make the changes.

2. Expanded disclosures for supplier finance programs

With a supplier finance program, the buyer arranges for a third-party finance provider or intermediary to pay approved invoices before the due date at a discount from the stated amount. Meanwhile the buyer receives an extended payment date, say, 90 to 120 days, in exchange for a fee. This enables the buyer to keep more cash on hand. ASU No. 2022-04, Liabilities — Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, will require buyers to disclose the key terms of supplier finance programs and where any obligations owed to finance companies have been presented in the financial statements.

3. Changes to M&A accounting

ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, requires companies to measure contract assets and liabilities acquired in a business combination as if they originated the contract. Under previous rules, buyers were required to report acquired customer contracts at fair value.

The updated guidance generally requires buyers to report acquired contracts consistent with how they were reported on the sellers’ financial statements, if the amounts were accurately reported in accordance with the revenue recognition rules under U.S. Generally Accepted Accounting Principles. This update goes into effect in 2023 for public companies and 2024 for private ones.

4. New model for reporting credit losses

ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, requires banks and other entities that extend credit to forecast into the foreseeable future to predict losses over the life of a loan and then immediately book those losses. The updated guidance is designed to provide more-timely reporting of credit losses, but measuring losses is challenging in today’s uncertain, inflationary marketplace. It primarily affects banks and other financial institutions. However, any company that has trade receivables, notes receivable, investments in held-to-maturity debt securities or contract assets will be affected.

Large public companies have already transitioned from the incurred loss model to the current expected credit losses (CECL) model. This year, small public companies, private companies and not-for-profits must adopt the new CECL model.

5. Hedge accounting changes

ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging — Portfolio Layer Method, clarifies the updated guidance from 2017 on hedging transactions. It expands the current last-of-layer method (now called the “portfolio layer” method) that permits only one hedged layer to allow multiple hedged layers of a single closed portfolio.

The updated guidance bridges the gap between hedge accounting and the CECL standard to clarify that an entity is prohibited from including hedge accounting impact in the credit loss calculations. It also specifies how to consider hedge basis adjustments when determining credit losses for the assets included in a closed portfolio. The changes go into effect in 2023 for public entities and 2024 for private ones.

Are you ready?

In addition to educating your staff about accounting rule changes in the pipeline, you also should consider letting investors and lenders know about any changes that could have a major effect on your financial statements in 2023. Contact us for more information or help adopting these new rules.

Yeo & Yeo CPAs & Advisors is pleased to announce that Michael Evrard, CPA, will lead the firm’s Audit Services Group. The Audit Services Group helps drive change, innovation and growth for the audit practice under the supervision of Assurance Service Line Leader Jamie Rivette, CPA, CGFM.

“Mike has been a great mentor to our auditors,” Rivette said. “He has helped many of our staff grow into high-performing professionals, and he takes pride in helping clients succeed. I am excited that he will lead the Audit Services Group and continue to find ways for our staff to innovate and deliver high-quality audit services.”

Evrard is a Principal based in Yeo & Yeo’s Kalamazoo office. He is a member of the firm’s Nonprofit Services Group and the Education Services Group. He joined Yeo & Yeo in 2010. He assisted in developing the firm’s award-winning YeoLEAN audit process and provides audit services for school districts, construction companies and nonprofit organizations. Evrard is a frequent contributor to Yeo & Yeo’s blog and the firm’s Nonprofit Insight eNewsletter. He holds the AICPA Advanced Single Audit Certification and is a Leadership Genesee graduate.

“I am excited to take on this new role as the Audit Services Group leader,” Evrard said. “I am fortunate to work with a fantastic group of clients and team members at Yeo & Yeo, both in my local office and across the firm. As the future of audit evolves, I look forward to helping elevate our team with more efficient auditing techniques and technologies that will allow us to better serve our clients.”

Merger and acquisition activity dropped dramatically last year due to rising interest rates and a slowing economy. The total value of M&A transactions in North America in 2022 was down 41.4% from 2021, according to S&P Global Market Intelligence.

But some analysts expect 2023 to see increased M&A activity in certain industries. If you’re considering buying or selling a business, it’s important to understand the tax implications.

Two approaches

Under current tax law, a transaction can basically be structured in two ways:

1. Stock (or ownership interest). A buyer can directly purchase a seller’s ownership interest if the target business is operated as a C or S corporation, a partnership, or a limited liability company (LLC) that’s treated as a partnership for tax purposes.

The current 21% corporate federal income tax rate makes buying the stock of a C corporation somewhat more attractive. That’s because the corporation will pay less tax and generate more after-tax income. Plus, any built-in gains from appreciated corporate assets will be taxed at a lower rate when they’re eventually sold.

The current individual federal tax rates have also made ownership interests in S corporations, partnerships and LLCs more attractive. Reason: The passed-through income from these entities also is taxed at lower rates on a buyer’s personal tax return. However, individual rate cuts are scheduled to expire at the end of 2025.

2. Assets. A buyer can also purchase the assets of a business. This may happen if a buyer only wants specific assets or product lines. And it’s the only option if the target business is a sole proprietorship or a single-member LLC that’s treated as a sole proprietorship for tax purposes.

What buyers want

For several reasons, buyers usually prefer to buy assets rather than ownership interests. In general, a buyer’s primary goal is to generate enough cash flow from an acquired business to pay any acquisition debt and provide an acceptable return on the investment. Therefore, buyers are concerned about limiting exposure to undisclosed and unknown liabilities and minimizing taxes after a transaction closes.

A buyer can step up (or increase) the tax basis of purchased assets to reflect the purchase price. Stepped-up basis lowers taxable gains when certain assets, such as receivables and inventory, are sold or converted into cash. It also increases depreciation and amortization deductions for qualifying assets.

What sellers want

In general, sellers prefer stock sales for tax and nontax reasons. One of their objectives is to minimize the tax bill from a sale. That can usually be achieved by selling their ownership interests in a business (corporate stock, or partnership or LLC interests) as opposed to selling assets.

With a sale of stock or other ownership interest, liabilities generally transfer to the buyer and any gain on sale is generally treated as lower-taxed long-term capital gain (assuming the ownership interest has been held for more than one year).

Seek advice before a transaction

Be aware that other issues, such as employee benefits, can also cause tax issues in M&A transactions. Buying or selling a business may be the largest transaction you’ll ever make, so it’s important to seek professional assistance before finalizing a deal. After a transaction is complete, it may be too late to get the best tax results. Contact us about how to proceed.

Ask any business owner whose company has been defrauded by an employee, and you’ll probably hear a common refrain: “I never would have suspected that person!” In many cases, spotting fraud perpetrators before they commit a crime is difficult, especially if you don’t work closely with them on a daily basis. But many fraudsters exhibit performance and interpersonal behaviors that can tip off owners, managers and HR professionals to more serious issues.

Overt and subtle signs

According to the 2022 Association of Certified Fraud Examiners’ (ACFE’s) occupational fraud study, A Report to the Nations, the vast majority of occupational fraud perpetrators have no previous criminal record. However, in 8% of cases, perpetrators have been terminated from a previous position and 9% have been disciplined by an employer.

The ACFE has also found that most fraud perpetrators exhibit at least one behavioral red flag before they’re discovered. Living beyond their means is the most prevalent (39% of cases) and unusually close relationships with vendors or customers are also common. Other behavioral red flags can be more subtle. A crooked employee may be the friendliest and most cooperative person in the office, but fraudsters often come into conflict with other staff members or fail to follow rules. They may also be socially isolated, unusually defensive or exhibit “control” issues.

Perpetrators in half of all occupational fraud cases engage in some non-fraud-related misconduct before or during the fraud incident. For example, they might be disciplined for bullying subordinates or frequently showing up for work late. According to the ACFE, a small number of fraud perpetrators are investigated for sexual harassment or inappropriate Internet use. Some dishonest workers also exhibit work performance problems. In the ACFE study, 15% received poor performance evaluations and 12% were denied a raise or promotion.

Nipping it in the bud

When misconduct or poor performance leads to disciplinary action, supervisors and HR professionals have a golden opportunity to potentially stop fraud in progress. After all, the longer a scheme goes undetected, the more costly it is for the organization. Fraud schemes with a duration of less than six months have a median loss of $47,000, but those with a duration of 13 to 18 months soar to a median $125,000 loss. So if you detect smoke, look for fire.

Although it’s usually a good idea to closely observe any worker who routinely flouts the rules, antagonizes coworkers or lets job responsibilities slip, be cautious. Most underperforming or difficult employees aren’t actually thieves. Talk to legal counsel before you make accusations about possible criminal activity.

Maintain controls

It’s also a good idea to establish and strictly enforce internal controls. Such controls can help protect your organization from financial losses even if you fail to notice a potential fraud perpetrator in your midst. Contact us for help.

Giving back to the communities in which
we live, work & play

At Yeo & Yeo, we’re dedicated to helping our communities thrive. The Yeo & Yeo Foundation was created to fully embrace our dynamic culture of community service and volunteerism. Through the Foundation, we give back to our communities using our time, our talents, and our financial resources.

In 2022, the Yeo & Yeo Foundation proudly donated over $130,000 to 56 organizations throughout Michigan, including $24,000 to the American Cancer Society Making Strides program through the Yeo Young Professionals firm-wide service project. Foundation dollars were donated to a broad range of causes, including child advocacy groups, food banks, homeless shelters, humane societies, veterans’ organizations and more.

“The Yeo & Yeo Foundation is a way for our donation dollars to be combined to make a larger impact in our communities,” said Alex Wilson, Yeo & Yeo Foundation Board President. “From the contributions of our people and the firm, each year, we have been able to grow our giving and help nonprofit organizations throughout our communities. I am proud of our people’s compassion and love to see our employees volunteering, serving on committees or boards and providing financial support.”

The Principals of Yeo & Yeo established the Foundation in 2018 to continue the Yeo family’s legacy of giving back. Since its inception, the Yeo & Yeo Foundation has donated more than $340,000 to over 170 nonprofit organizations across our Michigan communities and beyond, made possible by our people’s contributions and firm support. The Foundation is employee-sponsored, serving organizations the firm’s associates across all Yeo & Yeo companies are personally involved in or passionate about.

Learn more about our firm’s impact on its communities in our 2022 Yeo & Yeo Foundation Annual Report and visit our Giving Back page.

The current job market is great — for applicants. The federal jobs report released in early February revealed that the U.S. economy added a whopping 517,000 jobs in January, bringing the unemployment rate down to a historic low of 3.4%.

Employers, on the other hand, face an uphill battle. Competition is fierce to not only draw optimal job candidates, but also retain employees who may be looking to jump ship to competitors or change careers to booming industries.

When it comes to employee retention, one often-overlooked difference maker is internal communications. When organizational leaders appear aloof or communicate unclearly, employees can fall prey to rumors, distrust and misinformation. It’s important to stay engaged with your workforce.

Less talk, more listening

Organizations that get caught off guard by workforce issues such as high turnover often find the problem is that leadership is doing all the talking and little of the listening. Sometimes, the easiest way to find out what it’ll take to keep your workers happy and productive is to ask.

Although it may sound old fashioned, putting a suggestion box in the break room can pay off. Also consider using an online tool that allows employees to provide feedback anonymously. Executives can reply to queries with the broadest implications, while managers can handle questions specific to a given department or position. Share answers through organizational emails or make them a feature of an internal newsletter or blog.

At least once a year, hold a town hall with staff members to answer questions and discuss issues face to face. Even if the meeting must be held virtually, let employees see and hear the straight truth from leadership.

Ways to raise your profile

Larger employers often engage PR consultants to help executives manage both their public images and the personas they convey to employees. If yours is a small to midsize organization, this expense may be unnecessary. But each of your leaders should think about their internal communications profiles and manage them like the critical assets that they are.

For example, be sure photographs and personal information used in internal communications and on your organization’s website are up to date. A profile pic of you from a decade or two ago may say, “I don’t care enough to share who I am today.”

Although you should avoid getting up in employees’ business too often, leadership needs to keep a high profile. Have upper management regularly visit each unit, department or facility, and give supervisors and employees a chance to speak candidly. Ask execs to periodically sit in on meetings, asking and answering questions as appropriate. Employees will likely get a morale boost from seeing leaders take an active interest in their corner of the organization.

In fact, for a potentially fun and insightful change of pace, execs might set aside a day to learn about a specific company position. They could shadow selected employees and let them explain what really goes on in their jobs. Again, the leaders may pose questions but should otherwise stay out of the way. If you do implement such a program, clarify upfront that you’re not playing “gotcha” but trying to better understand how things get done and what improvements could be made.

Good faith effort

Every employer wants to be fully staffed with a highly engaged workforce. To get one, you’ve got to hold up your end of the bargain by communicating clearly, regularly and as part of a good faith effort to support employees.

The SECURE Act 2.0 became law on December 29, 2022. Like its predecessor legislation, SECURE 2.0 made several changes to retirement plans that will affect individuals and employers. However, one of the lesser-known impacts of this legislation is its effect on trusts listed as the beneficiary of qualified retirement plans, such as IRAs and 401Ks.

Before the original SECURE Act, conduit trusts were utilized in estate planning to protect retirement plan assets from creditors while also allowing required minimum distributions to be calculated on the eldest, or sole, beneficiary’s life expectancy (referred to as a stretch IRA). This strategy was very popular in many estate plans involving significant retirement plan assets. With the passing of the SECURE Act and SECURE Act 2.0, naming a trust as the beneficiary of a qualified retirement plan can have some negative and unintended consequences, as the stretch IRA is no longer available to non-eligible designated beneficiaries and can create significant income tax burdens as a result.

Under current rules, trusts with qualified retirement plan assets and have at least one non-eligible designated beneficiary, such as most adult children and grandchildren, must withdraw the entirety of the assets in the plan within 10 years. The 10-year period starts with the year after the account owner’s death. Naming your spouse, an eligible designated beneficiary, and your adult children as current beneficiaries of the same trust could cause the unintended consequence of the trust needing to distribute the qualified retirement plan assets within 10 years. Instead, suppose the trust was to have only the spouse as beneficiary. In that case, the retirement plan assets could be distributed over the spouse’s remaining lifetime and spread the income tax burden over a longer period at lower tax rates.

It is very important that estate planning documents, including wills and trusts, be reviewed to ensure that they still meet your wishes and that there will be no unintended income tax consequences due to the rules of SECURE Act 2.0. Additionally, some planning opportunities could lessen the income tax burden of your heirs if you have significant qualified retirement plan assets.

Please reach out to your Yeo & Yeo professional for additional information and planning guidance.

Generally speaking, owning property jointly benefits an estate plan. Indeed, joint ownership offers several advantages for surviving family members. However, there are exceptions and it’s not the solution for all estate planning problems.

2 types of joint ownership for spouses

As the name implies, joint ownership requires interests in property by more than one party. The type of joint ownership depends on the wording of the title to the property.

From a legal standpoint, there may be two main options for married couples:

Joint tenants with rights of survivorship (JTWROS). This is the most common form and often is used for a personal residence or other real estate. With JTWROS, one spouse’s share of the property can be sold without the other spouse’s consent. The property is subject to the reach of creditors of all owners.
Tenancy by the entirety (TBE). In this case, one spouse’s share of the property in some states can’t be sold without the other spouse joining in. But TBE offers more protection from creditors in noncommunity property states if only one spouse is liable for the debt. Currently, a TBE is available in slightly more than half the states.

Property may also be owned as a “tenancy in common.” With this form of ownership, each party has a separate transferable right to the property. Generally, this would apply to co-owners who aren’t married to each other, though in certain situations married couples may opt to be tenants in common.

Joint ownership plusses and minuses

The main estate planning attraction of joint ownership is that the property avoids probate. Probate is the process, based on prevailing state law, whereby a deceased person’s assets are legally transferred to the beneficiaries. Depending on the state, it may be time-consuming or costly — or both — as well as being intrusive. Jointly owned property, however, simply passes to the surviving owner.

Joint ownership is a convenient and inexpensive way to establish ownership rights. But the long-standing legal concept has its drawbacks, too. Some disadvantages of joint ownership relate to potential liability for federal gift and estate tax. Comparable rules may also apply on the state level.

For starters, if parties other than a married couple create joint ownership, it generally triggers a taxable gift, unless each one contributed property to obtain a share of the title. However, for a property interest in securities or a financial account, there’s no taxable gift until the other person actually makes a withdrawal.

Lessons to be learned

Joint ownership can be a valuable estate planning tool, especially because it avoids probate. However, this technique shouldn’t be considered a replacement for a will. We can help you coordinate joint ownership with other aspects of your estate plan.

Business owners: If you’re having trouble reading the U.S. economy, you’re not alone. On the one hand, the January 2023 jobs report revealed that the unemployment rate had fallen to 3.4%, its lowest level in 54 years. And inflation, while still a concern, has moderated in most sectors — staving off fears of a recession in the immediate future.

And yet concern remains about whether the economy will grow or suddenly stall. And the Fed is expected to continue raising interest rates, meaning the battle against inflation is far from won. What can you do, strategically, to neither under- nor overreact to this “interesting” situation? Sail a steady ship.

Save a little, spend a little

In a faltering economy, business owners tend to want to curb spending. Conversely, during boom times, companies are more apt to spend money to seize opportunities. Right now, the best approach may be a little of both.

Enlist employees to help cut expenses that don’t foster your business’s long-term success. Communicate regularly with staff about the need to curb spending and celebrate those who come up with effective cost-control measures.

That said, now isn’t the time to stop investing in new assets, people or technologies if they’re essential to your operations or could sharpen your company’s competitive edge.

Prioritize expenditures

A good exercise to undertake at least annually, if not quarterly, is to make a list of all expenses over the course of a year and separate them into three categories: “must have,” “nice to have” and “don’t need.” Ask your leadership team for input on which expenses should fall under each category.

Another idea for small to midsize businesses: Have a “check-signing social” in which you gather department managers to discuss major cash outlays while you sign checks or otherwise remit payments. An event like this lets managers know that you’re aware of their spending while giving them a chance to explain their rationale for the spending.

Know your suppliers

In tough economic times, businesses must keep a close eye on the stability of suppliers. If a major vendor goes under, you could be left in the lurch.

You might not have to worry quite as much about insolvencies in today’s environment, but don’t let your guard down. Nurturing good relationships with suppliers is particularly vital with supply chain issues continuing to trouble many industries. Maintain strong communication. Every so often, you may want to conduct a supplier audit to collect key data points regarding each one’s performance.

Watch out for fraud

No matter what the state of the economy, dishonest employees and outside criminals may seize the opportunity to commit fraud. Cash and asset misappropriation, as well as outright theft, are among the most prevalent types of “traditional” fraud. Cybercrimes are also increasingly common today. Hackers can steal from you or shut down your operations from hundreds or thousands of miles away.

Reduce typical fraud risks by implementing a solid system of internal accounting controls, such as segregating duties and requiring a second signature on checks over a certain amount. Also, if you’re hiring, conduct thorough background checks within legal parameters. Finally, invest time and money in cybersecurity measures to protect your systems and data.

Good news, bad news

The good news is the U.S. economy has generally rebounded well from the many changes and challenges of the pandemic. The bad news is, no one is completely sure where we’re headed. Our firm can help you gather and analyze the right financial data to make strong strategic decisions.

Accounting is a critical element when launching a successful business venture. Unfortunately, it’s also an area where startups tend to make mistakes. Here are some common (and avoidable) errors that entrepreneurs should watch out for.

Failing to track expenses

Starting a new business is exciting — and it’s natural to focus on generating revenue and building business relationships. But it’s essential to keep detailed records of expenses, including receipts and invoices. This will help you properly allocate costs, price products and services, assess and improve financial performance, and claim tax deductions.

Forgetting to reconcile accounts

Reconciling accounts involves comparing your records to your bank and credit card statements to identify and correct any discrepancies. Account reconciliation ensures that your business pays close attention to its expenses and available cash. It can also help to prevent and detect fraud by third parties and employees.

Commingling personal and business expenses

When you own a business, you need to keep personal and business matters separate for financial reporting, tax and legal purposes. In addition to maintaining a distinct workspace for your business, you should have different bank and credit card accounts. This will avoid confusion and make it easier to track business expenses. It also will facilitate budgeting and forecasting.

Incorrectly classifying workers

How much control do you exercise over the people who work for your business? Are your workers an integral part of your operations? Misclassifying employees as independent contractors can have serious legal and financial consequences. Make sure you understand the differences between employees vs. contractors and categorize them appropriately. If you don’t follow the rules, the IRS, the U.S. Department of Labor and a state tax agency might challenge the status of your workers.

Not budgeting for taxes

Since many startups run at a loss, at least initially, some owners forget to set aside money for taxes. This can lead to cash shortages and other financial difficulties when tax time rolls around. Failure to make timely federal and state tax payments can result in penalty and interest charges. And don’t forget about payroll, sales and property tax obligations, too.

Failing to set up a formal accounting system

Entrepreneurs must select and consistently follow an accounting method based on their business needs. Many fledgling businesses start off using cash- or tax-basis accounting, then graduate to accrual-basis reporting as they mature. But lenders, franchisors and investors sometimes require accrual-basis financial reporting from the get-go.

It also pays to invest upfront in simple internal controls — such as locks on file cabinets, regular software updates, network backups and antivirus programs — to help prevent theft and fraud. Startups with valuable intellectual property, such as patents, secret recipes and proprietary software, should consider protecting these assets by requiring employees and contractors to sign noncompete agreements, implementing network security policies and filing appropriate legal protections. Additional internal control measures can be implemented as your business matures.

Need help?

Taking steps early on to ensure accurate financial records will save you time, money and stress over the long run. Contact us for help getting your accounting and finance department up and running. In addition to helping set up your systems and procedures, we can provide interim CFO and bookkeeping services while you find qualified candidates to fill these positions.

Employers are generally responsible — and liable — for applying employment taxes to wage payments. To fulfill this obligation, you must determine when and where Federal Insurance Contributions Act (FICA) taxes and federal income tax withholding (FITW) are applicable.

FICA and FITW are separate employment tax regimes. Thus, when analyzing how to treat a payment, you’re best off separately determining their respective applicability, even though the end result is often the same.

What to look for

Three essential elements must be present in wage payments for services to be subject to FICA taxation and/or FITW:

1. The payment must be remuneration for services and the payment must not be specifically excepted from the definition of “wages.”

2. The type of services performed by the worker must fit within the statutory definition of employment. This determination is more specific for FICA tax purposes, because “employment” is specifically defined by statute.

3. The relationship between the service recipient and the service provider must be one of employer and employee.

If one or more of these elements is missing, the payment isn’t subject to FICA taxation or FITW. However, the payment may still constitute income and, therefore, you’ll need to report it.

FICA, the funding mechanism

Both the FICA tax regime and the FITW regime require withholding of the employee’s taxes at the source, for which the employer remains secondarily liable. When analyzing whether either FICA taxation or FITW is applicable to a particular payment, you’ll need to confirm the appropriate treatment under each regime.

In many instances, the requirement to impose FICA taxes and the requirement to withhold income taxes on a payment will coincide, even though the statutory reasons for taxation under the two regimes may not be parallel. Because FICA (the law) is the funding mechanism for the two most important social welfare programs in the United States, the correct FICA tax treatment of a payment can often be more challenging than determining whether FITW applies.

With the undercurrent of protectionism that comes with its purpose, FICA (the law) is replete with definitions, statutory requirements, convoluted cross-references, exemptions and exceptions to exemptions. What’s more, Section 3121 of the Internal Revenue Code separately defines each of the three elements necessary for the imposition of FICA taxes. This is because of the need to carefully determine whether particular types of services, and payments for the same, are intended to be covered by the Social Security Act.

In contrast, the mission of FITW — to collect taxes on payments at the source — isn’t tied to a taxpayer’s future benefits. As a result, the statutory definition of wages under Sec. 3401(a) essentially consolidates the discussion of payments for services with the types of services that constitute employment for FITW purposes.

Not so simple

Long story short, payroll taxes aren’t as simple as they may first appear. It’s in an employer’s best interest to understand precisely when FICA and FITW apply and to double-check that this is being handled properly by your staff or a third-party provider. Our firm can answer any questions you might have about your payroll tax obligations.

Many business owners spend most of their time developing strategic plans, overseeing day-to-day operations and, of course, putting out fires. Yet an underlying source of both opportunity and trouble can be human resources (HR).

Think about it: The performance of your HR department determines who works for you, how well employees are supported, and to what extent the business complies with laws and regulations pertaining to employment and benefits.

One way to ensure that your strategic HR decisions are likely to yield positive, cost-effective results is to apply a strengths, weaknesses, opportunities and threats (SWOT) analysis.

Strengths and weaknesses

When used for general strategic planning, a SWOT analysis typically begins by identifying strengths — usually competitive advantages or core competencies that generate value, such as a strong sales force or exceptional quality of products or services.

Next, you pinpoint weaknesses. These are factors that limit business performance, which are often revealed in comparison with competitors. General examples include a negative brand image because of a recent controversy or an inferior reputation for customer service.

When applying a SWOT analysis to HR, think about that department’s core competencies. These include filling open positions, administering benefits, and supporting employees who need help or are in crisis. What are its strengths? What are its weaknesses?

You can use various HR metrics to put a finer point on these relatively broad questions. For example, calculate “time to hire” to determine how long it’s taking to fill open positions and “early turnover” to see how many new hires you’re losing in the first year of employment.

External conditions

The next step in a typical SWOT analysis is identifying opportunities and threats. Opportunities are favorable external conditions that could generate a worthwhile return if the business acts on them. Threats are external factors that could inhibit performance or undermine strategic objectives.

When differentiating strengths from opportunities, or weaknesses from threats, ask yourself whether an issue would exist if your company didn’t. If the answer is yes, the issue is external and, therefore, an opportunity or threat. Examples include changes in hiring demographics or government regulations regarding benefits.

How to apply it

Let’s say you determine, by benchmarking yourself against similar businesses, that “time to hire” is a strength. This means that your HR staff is skilled at placing targeted, effectively worded ads; working well with recruiters; and interacting in a timely, efficient and positive manner with applicants.

In today’s environment, a strong hiring mechanism is undoubtedly a competitive advantage. If hiring and retention are weaknesses, however, you could be headed toward a crisis if you lose too many employees — particularly in today’s tight job market.

Opportunities and threats are important as well. For example, if your company seeks to strengthen employee retention through expanded benefits, you’ll need to anticipate the opportunities and challenges for your HR staff. You may need to invest in training and upskilling to make sure that they can effectively communicate with employees about the broader package and administer the specific benefits therein.

And there are likely external threats to consider. For example, an aggressive competitor may begin poaching your employees. Evolving tax regulations and compliance requirements for health and retirement benefits could catch your HR staff off-guard if they’re unaware of the changes.

Advisable and feasible

Sometimes business owners assume that HR will run itself while they dedicate themselves to growing the company. But the truth is that HR departments need to set strategic goals, just like the business does. A SWOT analysis can help ensure that these goals are advisable and feasible.

Use Visual Aids to Enhance Financial Reporting

Giving back to the communities in which we live, work & play

Giving back to the communities in which
we live, work & play