One of my favorite clients is an artist who runs a neighborhood cafe — coincidentally, also my favorite cafe in Chicago. She recently came into the role of CFO, and we’ve been crunching some numbers together, looking at trends. After a lengthy evening of meeting, training, analysis and instruction (keep in mind she’d already worked an entire shift at the cafe; I’m frequently amazed at my clients’ commitment to what they’ve built) she then went off to do some investigation and problem-solving of her own. After a couple of astute and insightful questions from her the following day, via email, I happened to see the amazing post above on instagram.
I often laugh about how in my line of work, consulting with small business owners, I’m either friends with the client first, or we become friends through working together. Either way, I’m a pretty lucky CPA to have as many friends as clients as I do. An amusing side effect of this is that I see their posts on social media and they see mine — sometimes I’ll be complaining about my hard day at work, and I have to think twice about who will see the post. Sometimes it happens the other way around… for example, the client who posts about hating QuickBooks or procrastinating on a job I need them to get done.
To go back to the initial post — I call it the Poetry of Numbers. How do you know which ones to trust? How can you identify patterns if your mechanisms are faulty? What to trust and what not to trust is a never-ending problem of bad data. As accountants, we try to put systems in place to make sure the numbers are reliable… to do so helps the client create and then read a story about their own business.
But when you see a story that doesn’t make sense, or your gut tells you it can’t be right, or you can’t find a reason for the storybook characters to do what they’re doing, then you have to ask a different set of questions, starting with, “how did this data get here? where did it come from? how was it generated? did systems or procedures change at some point?” Otherwise you’ll become overwhelmed by interpreting data and connecting it with reality.
I love this work of art and accompanying statement. It describes links that suggest order and yet imagery that defies meaning. The dreamlike surrealism, broken images and weird connections all contribute to the sense of being lost inside your own data, inside your systems, your head. It wrestles with trust.
Feeling very grateful to have clients who are able to illustrate — quite literally — the poetry inherent in the work we do.
Many of the news items I share on my blog come from the National Association of Tax Professionals’ regular e-newsletters or monthly magazine. They’re an amazing group of tax experts and I have found their education — especially at the annual National Conference — to be of excellent quality.
I recently had a client who was doing everything they could to not cross the 50-employee (or rather, full-time-employee-equivalent — FTE) mark, so as not to trigger the requirements of being an Applicable Large Employer (ALE). And it turns out that their benefit policy is such that they already contribute more than necessary to employee health insurance, and their benefits company has already made sure they were complying with the safe harbor rules.
So remember that being classified as an ALE is only an issue if you’re not pulling your weight as an employer, which many of our small business clients already are. If this is the case, don’t short-change your staffing policies out of fear that you might become an Applicable Large Employer… you have nothing to fear.
However — if you’re not sharing the financial burden of health insurance with your employees sufficiently, or are not meeting safe harbors and reporting requirements (which most benefits companies will handle for you), and you do have more than 50 FTEs… you may be getting a notice that needs a quick and thoughtful response.
A common thread I come up against in my work with small businesses and cooperatives is that my clients believe their companies are “too small” to be a victim of employee theft — or that their relationships with staff are “too tight” for anyone to do such a thing. However, and unfortunately, we see fraud committed just as, if not more frequently, at small businesses as we do large ones — often due to a lack of internal controls combined with the need for each employee and owner to wear many hats simultaneously (preventing division of labor and cross-checks that might otherwise exist).
The majority of internal fraud is perpetrated by “truly decent people”, not evil people… and we all have decent people working at our cooperatives. Based on real interviews with “truly decent people” that have committed fraud, this session provides an eye-opening glimpse into the thought processes that can occur in the mind of the potential perpetrator from the identification of the “need”, to the devising of a “scheme”, to the “perpetration” of fraud. Most internal controls deal with dual authorizations and the like. However, armed with the knowledge of what goes on in the mind of the perpetrator, this session provides information regarding the implementation of specific cost-effective controls that actually speak to the mind of the perpetrator.
At the most recent National Association of Tax Professionals annual conference, I noticed that although I was in seminars with seasoned professionals — many of whom know a lot more than I do in certain areas of tax law — there was an overall lack of understanding of the topic of Reasonable Compensation for S-Corp shareholders. Misinformation abounded, with “tips and tricks” rather than legal precedent guiding the way.
Some years ago, I took a series of classes presented by Paul Hamann, President of RCReports Inc., and learned all about the court cases that have defined the issue of Reasonable Compensation over the years. I chose to subscribe to their annual service (no, I do not get any special favors or payment for promoting their product — I’m just a fan)… but even if I hadn’t, the education I received on the topic helped inform my client advisory practice and it made me a better tax preparer and CPA.
Turns out that he’s got another class coming up with CPA Academy in a couple of days, and I wanted to encourage you to take it, and to spread the word (this advice holds whether you’re an S-Corp owner or a CPA/ EA/ Accountant/ Tax Preparer/ Bookkeeper).
Thursday, August 29, 2019
12:00 PM ET – 11:00 AM CT – 10:00 AM MT – 9:00 AM PT
FREE – 2.0 hours CPE / 2 CE
Between 2010 and 2013 a flurry of court cases and IRS enforcement brought the issue of ‘What is Reasonable Compensation for a Shareholder-Employee of an S Corp’ out of the shadows and placed it forefront as a priority issue for CPA’s, Tax and Financial advisors to cover with their clients. There are tools today that take the guesswork out of determining Reasonable Compensation, and help build rapport and trust with your clients.
– Review why Reasonable Compensation has become a priority for the SB/SE division of the IRS
– Demonstrate the basic advantages of Distributions vs. Salary/Wages
– Identify options for determining Reasonable Compensation
Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.
City Inspections – Ask Questions, Get Answers Wed, September 4, 3:00 PM – 4:30 PM City Hall, 121 N. LaSalle St. – 8th Floor, Room 805 Presented by the City of Chicago To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.
Side Hustle Success
Fri, September 6, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Moderated by Kenya Merritt, Chicago Chief Small Business Officer In this workshop you will hear from entrepreneurs who have turned their passion into a profit. This workshop is targeted for entrepreneurs looking to establish a business within the creative or arts sector. Our panelists will share their strategies on how they moved from side hustle to success.
Small Business Center on the Road Expo 2019-09-07 Harry S Truman College, 1145 W Wilson Ave – McKeon Lobby The Small Business Center on the Road Expo is free and open to the public. It provides new and existing entrepreneurs resources to start or grow their business here in Chicago. For more information and to register go to www.chismallbizexpo.com
Social Media Workplace Policies & the Law Wed, September 11, 3:00 PM – 4:30 PM City Hall, 121 N. LaSalle St. – 8th Floor, Room 805 Presented by Charles Krugel, a Management Side Labor, Employment and Human Resource Attorney This is an open discussion with human resources lawyer Charles Krugel concerning: what courts and government regulators are saying about workplace social media policies, employee content & account ownership (who owns what); how a business can protect its social media image; what should a business do if an employee discusses something inappropriate; what businesses should do to control how & who uses its social media & related hardware or equipment; & what are the areas of liability for businesses and how to avoid or minimize liability.
Access to Capital and Avoiding Predatory Financing
Fri, September 13, 9:30 AM – 11:00 AM
City Hall, 121 N. La Salle Street – 11th Floor, Room 1103 Presented by Geri Aglipay, The Small Business Majority Learn about how to navigate safe financing options in Chicago to start and grow your business. Understand how to avoid predatory small business funding and where to go for free assistance. An overview of crowdfunding will also be provided.
Como Lanzar Su Negocio En Chicago
Wed, September 18, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St – 8th Floor, Room 805 Presentado por ESDC – Economic Strategies Development Corporation (Workshop will be presented in Spanish) Exploramos los primeros pasos para empezar su negocio, incluyendo: primeros pasos, investigación de mercado, plan de negocio y recursos estatales gratis, ademas aprenda acerca del tipo de licencia que necesitará y los tipos de estructura legal que existen.
How To Be A “YouTuber” For Your Business, Video Marketing 101
Fri, September 20, 9:30 AM – 11:30 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by JinJa Birkenbeuel, Founder, The Honest Field Guide Podcast and CEO, Birk Creative This YouTube workshop is for small business owners with a working website who want to learn how to create custom content and also create YouTube ads for your business. Learn how to create a business YouTube channel, understand the anatomy of a YouTube channel, learn how to use tags, and best practices for shooting a basic video. You will also learn how to promote your video on YouTube and other channels.
Everything You Need To Know About Business Insurance
Wed, September 25, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805 Presented by Sandra Cavato Insurance Agency In this session, attendees will learn the coverages needed for their business. We’ll discuss the right questions to ask your insurance professional and how to protect yourself and your business against lawsuits.
Buying and Selling a Business: Find, Evaluate and Negotiate
Fri, September 27, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by Lema Khorshid, Fuksa Khorshid, LLC Do you want to buy a business and don’t know where to start? In this step-by-step seminar learn how buying a business can be an alternative to starting up a new business. Also, learn how to effectively analyze new business opportunities and understand a business purchase contract so that you can quickly close the deal.
Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.
The big news of the week for tax professionals is that the IRS is going back to a more traditional version of the 1040 form instead of the mess of six additional schedules created by the TCJA.
Each month the City of Chicago offers twice-weekly (Wed & Fri) FREE business education workshops presented by experts in private practice as well as representatives from various city departments. There are quite a few good ones this month — see the list below — and they’re all offered at City Hall (right downtown and near public transit). To register for any of them, email BACPoutreach@cityofchicago.org or call 312.744.2086.
Are You Startup Ready?
Fri, August 2, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by Cavanaugh L. Gray, Director of Business Development for The Entrepreneur Cafe, LLC A lot of small businesses start off with a great idea, but no clear direction or purpose. Hear from startup specialist Cavanaugh Gray as he walks you through the Startup Questionnaire designed to help better navigate the small business landscape all before considerable time and money have been spent.
City Inspections – Ask Questions, Get Answers Wed, August 7, 3:00 PM – 4:30 PM City Hall, 121 N. LaSalle St. – 8th Floor, Room 805 Presented by the City of Chicago To operate a successful business in Chicago you need to know what it takes to maintain compliance. Officials from several City departments will provide insight on how to operate safely, stay compliant, help prepare for inspections and highlight the do’s and don’ts of operating a business.
Sell A Product or Service Online or in a Facebook Shop Using WordPress WooCommerce
Fri, August 9, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by Dante Hamilton, Chicago WordPress Meetup Group With the Holiday Shopping Season just a few months away, now is the time to setup and deploy an E-Commerce WordPress website solution. In this workshop you will learn how to Install WooCommerce; Enable Stripe and PayPal Payment Gateways; Set Up a Shipping Zone; Add a Simple Product, Variable Product and Downloadable Product; Upload Product Images and Gallery Photos; Make a Test Sale using Stripe.com Payments. Bonus Feature: Discover how to setup a Custom Branded Apparel Store using Printful.com and integrate with a Facebook Shop using WooCommerce and WordPress.
Employee Handbooks Essentials
Wed, August 14, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St. – 8th Floor, Room 805 Presented by Noah A. Frank, Labor & Employment Attorney in SmithAmundsen’s Chicago Office Are you just starting out and need to know what to put in an employee handout? Or are you like most employers, and already have an employee handbook, but you haven’t updated it in a while, and are no longer sure that it complies with current laws? Will your handbook stand up to increased scrutiny by the DOL, EEOC, OSHA, or NLRB? Will your handbook get you into trouble in your next employee lawsuit? Employment laws and regulations are ever-changing which means every few years (or more frequently!), you need to dust off that handbook and give it a proper evaluation. This workshop will discuss the purpose of an employee handbook; wage/hour compliance; safety standards; new EEO reporting and complaint procedure language; surviving DOL, OSHA, NLRB and EEOC scrutiny; what should be included (and excluded) in an employee handbook; privacy, workplace searches and drug testing policies; preserving the at-will employment relationship; ineffective language to avoid; what to do when there is a union workforce; and other common employee handbook mistakes.
Scams & Frauds Targeting Businesses
Fri, August 16, 9:30 AM – 11:00 AM
City Hall, 121 N. La Salle Street – 11th Floor, Room 1103 Presented by the Better Business Bureau (BBB) Businesses continue to be targets of scams and frauds because they make money — for the criminals. Businesses can lose tens of thousands of dollars to a single fraud. Research shows a data breach will cause 60% of small and mid-size businesses to go out of business within six months! The average cost of a typical cyber attack is $200,000. Learn the steps to take to help protect your business against these crimes.
How to Open a Concession at O’Hare or Midway Airport Wed, August 21, 3:00 PM – 4:30 PM City Hall, 121 N. LaSalle St – 8th Floor, Room 805 Presented by the Chicago Department of Aviation – Concessions Department Are you interested in operating a restaurant or shop at O’Hare or Midway International Airport, but don’t know where to begin? Come and learn about the Request for Proposals (RFP) process, how to operate a business at the airport, and a summary of the Airport Concessions Disadvantaged Business Enterprise (ACDBE) program.
How To Get Money For Your Business
Fri, August 23, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by Craig Feldman, Bloom Lending Without positive cash flow, it is difficult to take care of the everyday functions of the business or have the ability to buy things such as equipment or materials. Let’s have a critical conversation about the importance of getting funding and discussing the key indicators of why working capital and Equipment Leasing are crucial in all areas of your business. You will learn about all different types of funding that will be available, programs for all types of businesses regardless of your credit score and the required documents needed to apply for funding.
Write Website Content that Works!
Wed, August 28, 3:00 PM – 4:30 PM
City Hall, 121 N. LaSalle St – 8th Floor, Room 805 Presented by Francisco Ramirez, Chimbly Consultants Business owners know that their websites and marketing materials are only as good as the content they offer. Writing this content often feels like an unpleasant chore. Participants will learn and use a framework to craft content that’s easy to write and your customers will want to read.
Business Licensing 101
Fri, August 30, 9:30 AM – 11:00 AM
City Hall, 121 N. LaSalle St. – 11th Floor, Room 1103 Presented by the City of Chicago Department of Business Affairs and Consumer Protection (BACP) Attendees will learn the 3 steps to obtain a business license and access free business resources to start or expand their business.
Also, in case you weren’t aware, BACP offers a Business Start-Up Certificate Program, designed to give business owners the essential elements in starting and growing a business. Attend nine workshops at BACP and learn the essentials of business planning, financing, marketing, legal issues, technology and more. Complete the program workshops within six months and earn your certificate, as well as get free advice on your business plan. You can register for the Business Start-Up Certificate Program at any BACP workshop. Learn about the full set of BACP offerings here.
On July 1, 2019, the minimum wage will increase in several locations throughout the country. While the federal minimum wage has remained $7.25 per hour since July 2009, many states, cities and counties have adopted their own minimum wage laws which provide for a higher rate. In areas where minimum wage laws overlap, employees are entitled to receive the highest applicable rate.
And here’s the info specific to Chicago — remember that there is an exemption for employees working at a business with three or fewer employees (not counting the employer’s parents, spouse, children or other members of the employer’s immediate family): https://www.chicago.gov/city/en/depts/mayor/supp_info/minimum-wage.html
From the perspective of small businesses, I recognize that this is an unaffordable hike for many. Supposedly the impact on employers has been minimal, but I know that certain clients of mine are struggling to compete in this environment, while they themselves earn far below minimum wage as business-owners. I also know of organizations that are unable to incorporate their LLCs or partnerships because they would not be able to afford compliance with these and other labor laws — and yet as independent contractors they would have even fewer protections.
It also causes problems for small employers that rely on workers for overtime hours — as outlined here, the wage increase is about 9%, and federal law mandates that employees receive overtime in an amount that is 1.5 times the employee’s regular rate. This means that the overtime rate for a minimum wage employee in Chicago will increase from $18.00 to $19.50 an hour.
I’m not sure what the solution might be to reconcile these two issues — but regardless, make sure you’ve got those hourly rates updated in employee contracts and payroll systems by July 1st!
It’s near-impossible for me to choose a favorite client, as well as a pointless exercise — I have so many wonderful folks in my life! Plus, I am lucky enough that the line between clients, friends, business associates and vendors (the people and places where I choose to spend my hard-earned money) are constantly and magically blurred.
But if I had to make a list, there’s no question in my mind that Shirley Kienitz, who runs both the Bruiser clothing line and local retail shop Wolfbait & B-Girls, is in the running for Number One. She’s an inspiration, she’s organized and responsible, she’s community-minded, and she practices what she preaches. And she’s very respectful of the role that accounting and business consulting plays in running a successful small business. Plus, she’s even more energetic and relentlessly awesome than I am!
So of course it was a joy to see her interviewed for Six Degrees of Inspiration by Credstyle Films. Take a watch and be inspired.
