Author: Zabel & Co.

When running your business, you cover a lot of ground, from meeting with clients and managing employees to marketing your products and services. Making money keeps the doors open, but managing the financial side of your business might take a back seat to other responsibilities.

That’s where your certified public accountant (CPA) can become your trusted partner. While you remain focused on daily operations, your CPA can help you get the most out of your business while helping limit your tax liability.

But how can you feel confident that you’re getting the most from your CPA and business? Get the ball rolling by asking your CPA these seven key questions.

What Can a CPA Do for a Business?

If you only think about your CPA during tax season, you’re not taking full advantage of what a good CPA brings to the table and how your business could benefit. A CPA is far more than the person who completes and files your taxes. 

A CPA can offer crucial guidance in several important areas. They can help you with things like tax law, financial planning, and regulatory compliance, aiding your business in meeting its legal requirements as it grows.

7 Questions for Your CPA

Whether you already have or want to hire a CPA, asking questions and maintaining clear communication are essential. Here are seven of the top questions to ask:

1. Do I Have the Right Business Structure?

The structure you select for your business can have a significant impact. Setting up as a sole proprietorship, limited liability company, or S or C corporation can affect tax liabilities, legal requirements, and operational efficiencies. Your CPA can analyze your situation and give advice on how to use your business structure to meet your goals.

2. Can You Help Manage My Cash Flow?

Businesses, both small and large, can struggle with cash flow. Your CPA has the knowledge to sift through financial information and recommend strategies for budgeting, investing, and financing to stabilize your business and set it on track for growth.

3. What Records Do I Need to Keep?

Your record-keeping is at the heart of keeping good books, preparing for tax season, and meeting other legal obligations. Your CPA can assist you in this key area by telling you the receipts, tax documents, bank statements, invoices, and other business documents that must be maintained. 

A CPA helps you establish a process. They can even recommend accounting software for keeping your records and books.

4. What Tax Laws and Other Regulations Should I Be Aware Of?

The tax laws and regulations that apply to your business can vary by industry and location. Laws and regulations are also ever-changing. Your CPA can guide you through the labyrinth of business regulations and tax laws to keep you aware of deadlines, tax obligations, and potential compliance issues.

5. How Can I Grow My Business?

You’re not giving up any control if you ask your accountant about growing your business — you’re helping yourself. Your accountant doesn’t engineer your products and services or market them.

Instead, through financial reporting, they can provide insights to help you gain and maintain profitability. Your CPA can identify key performance indicators, monitor your progress, and break down your financial data to support growth strategies.

6. Can You Help Me Find Other Professionals?

An accountant who’s successfully remained in business typically works with many companies and has built a vast network of other professionals. Your CPA often can refer you to: 

• Trusted attorneys
• Business brokers
• Financial advisors
• Lenders 

With an accountant who knows your industry, you may get the bonus of connecting with other knowledgeable professionals.

7. What Will It Take to Exit My Business?

Retirement or just moving on may be far in the distance. However, planning your exit at the start of your business can set the strategic roadmap for growth. An accountant can help you value your company, revealing opportunities for improvement. 

You also can get a clear view of the tax implications. This helps you know that someone will be monitoring your tax situation as you move closer to leaving your business behind.

Find an Accountant With Zabel & Co.

An accountant on your team is more than a number cruncher; your CPA is a strategic partner. You can navigate financial matters, tax requirements, and regulatory compliance by openly communicating with your CPA, seeking regular updates, and understanding the impact an accountant can have on the success of your business.

At Zabel & Co., we are passionate about helping clients thrive now while working toward future goals. Call us today.

As a business owner, you are likely starting to prepare for your annual tax filings as the end of the year draws near. Your business filings may include federal income tax returns, state returns, and local returns, among other requirements that must be met to avoid interest payments and penalties.

The deadline for filing your business’s federal income tax for the 2024 tax year depends on the type of business you run, and you have other federal due dates to meet as a business as well, such as for estimated tax payments, payroll taxes, and W-2 forms.

It can be a lot to keep track of, even if you have dedicated team members to handle tax matters. Here’s what you need to know to stay on top of your business tax deadlines in 2025.

When Is Your Business Tax Return Deadline?

When you file your business tax return with the Internal Revenue Service (IRS) depends on your business’s structure and whether you report on a calendar or fiscal year. The IRS has different dates for C corporations, S corporations, partnerships, limited liability companies (LLCs), and sole proprietorships to file federal income tax returns.

Mark these dates on your business tax calendar:

• Partnerships and S Corporations on a Calendar Year: March 17, 2025
• C Corporation on a Calendar Year: April 15, 2025
• C Corporation on a Fiscal Year Ending October 31: February 18, 2025
• C Corporation on a Fiscal year Ending June 30: September 15, 2025
• Sole Proprietorship (Filed on Personal Income Tax Return): April 15, 2025
• LLCs (Elected to Be Taxed as One of the Above): Due date for selected taxation

These are only the filing dates for your business’s federal income tax return. If you operate in a state that collects income taxes, some state deadlines align with the federal filing dates. However, you may have other local and state business tax deadlines for sales, property, and excise taxes.

Federal income filing requirements often fall on the 15th of a month. However, if the 15th of the month is a federal holiday or a weekend, your business tax return may be due the following Monday.

Business Tax Filing in Disaster Situations

If your business operates in an area hit by a disaster, it’s important to know that the IRS typically grants a 60-day extension to disaster victims. The IRS can provide more information about the extended filing dates for businesses in disaster areas.

Filing Extensions for Your Business Taxes

If you can’t file the tax return for your business by the deadline, you may be able to get a six-month extension to file your return. It’s generally automatic, but you must file for it by your original filing date. 

For C corporations, S corporations, and partnerships, you must file Form 7004 by your original date to gain the extension. A sole proprietorship must file Form 4868. You can extend the date to file your return, but you will need to pay the taxes your business owes by the original due date.

Deadlines for Estimated Tax Payments From Businesses

Beyond when the federal income tax returns for your businesses are due, you also have deadlines for making estimated tax payments, depending on the structure of your business.

For example, if you’re a C corporation and expect to owe $500 or more in taxes, you generally are required to make estimated tax payments throughout the year. No estimated tax payments are required of S corporations or partnerships because income passes through to owners, who are taxed. However, if you expect to owe $1,000 or more in taxes, as an owner — including sole proprietorships — you must make estimated tax payments.

Here are the deadlines for your estimated tax payments for tax year 2025:

• C Corporations and Individual Business Owners: April 15, June 16, and September 15, 2025
• C Corporations: December 15, 2025
• Individual Business Owners: January 15, 2026

If you’re a business owner of an S corporation, partnership, or sole proprietorship, your final estimated tax payment for 2024 is January 15, 2025.

Find a Qualified Tax Accountant for Your Business

As a business owner, you fill many roles to stay on top of operating your business every day. Consider leaving your taxes to accountants who give you the confidence to focus on running your business. 

At Zabel & Co., we have more than 25 years of helping small businesses and nonprofits meet their obligations for filings through tax accounting. Our comprehensive business advisors are committed to the future of your business and your life. Call us today.

Strong working capital is necessary for businesses with an eye toward growth and expansion. Defined as the difference between a company’s current assets and liabilities, working capital plays a major part in providing resources for growth and cash flow. 

Although the calculation may seem relatively simple, the impact of working capital is a bit complex.

What Is Working Capital?

The calculation of working capital is straightforward:

Current Assets − Current Liabilities = Working Capital

“Current” is a keyword in this calculation. The assets used in figuring working capital are generally limited to those that can be successfully converted to cash within 12 months. This limits the components to the most immediate debts and liquid assets.

Working capital provides a snapshot of a company’s short-term cash flow. If a company has positive working capital, it probably has the opportunity to propel growth, expansion, and investments. If working capital is negative, the company may have problems funding projects and paying off credit bills.

Calculating working capital may seem easy, but it reflects differently on different industries. Businesses that have long production cycles — auto manufacturers, machinery producers, aerospace companies, electronics makers, and others — typically need more working capital to source materials, maintain assembly lines, and set up distribution.

Businesses with short production cycles, such as retailers and service-based companies, do not require as much working capital. Their core activity is marketing a pre-made product or service and selling it to others — sometimes dozens of customers over a single day. This means they can get short-term funds fairly quickly, so they can navigate around the lower capital.

What Is Included in a Company’s Current Assets and Liabilities?

Current assets in a working capital calculation may include:

• Cash on hand
• Cash equivalents
• Accounts and notes receivable
• Prepaid expenses
• Inventory (if applicable)

Current liabilities might cover:

• Accounts payable (supplies, rent, property taxes, operating expenses)
• Wages payable
• Portions of long-term debts that must be paid within 12 months
• Accrued tax payable
• Dividends paid to shareholders
• Advance capital funding a current or future project (unearned revenue)

Working capital gives a more immediate picture of a company’s current financial health, daily operations, short-term liability, and overall efficiency.

Working Capital and Cash Flow

Working capital is directly related to liquidity and cash flow. However, the difference between positive and negative working capital is a bit more nuanced.

When a company has positive working capital, it can pay off short-term obligations and invest in growth more easily. While it’s better to have positive working capital than negative, too much working capital in reserve might signal trouble. The company may be using cash inefficiently, stocking excess inventory, or just holding on to too much idle cash. It’s not a “good problem to have” — it’s a cash flow management issue.

Similarly, negative working capital isn’t always a sign of impending doom. Some companies — retailers especially — frequently operate under negative working capital. That’s because they handle multiple transactions a day and cash is always coming in. 

If the company’s suppliers or creditors have agreed to extended payment terms, it has more money coming in than it has to pay off suppliers. This implies positive cash flow even if the working capital remains negative.

Generally speaking, most companies want to eventually get to a point of positive working capital. But if carefully managed, negative working capital can be endurable, at least in the short term.

Raising Working Capital

Businesses have a few options if they’re looking to maintain positive working capital and improve liquidity. In basic terms, they need to increase assets and decrease liabilities.

To increase assets, a company can put cash in savings, increase its inventory, prepay discount expenses, or (carefully) extend credit to lessen the effect of bad debts.

To reduce liabilities, a company can negotiate for better credit terms with its suppliers or service providers, manage spending, and steer clear of incurring nonessential debt.

Guidance on Managing Working Capital

A fractional CFO can offer plenty of resources for improving working capital. They can refine cash flow to speed up the conversion cycle. They can manage inventory levels and credit policies to streamline liquidity. They can provide keen insights into budgeting, projections, and risk management — all the components that intersect to analyze working capital.

The fractional CFOs at Zabel & Co. can optimize your company’s working capital and cash flow to put your business in the most advantageous position. Get in touch with us to find out more.

The end of the year is in sight. Businesses are about to take on the annual ritual of reviewing their finances and preparing their yearly tax returns. While some companies are ready to handle their tax statements in-house, others are considering outsourcing their tax filing to professionals.

Businesses have a few options for tax season. Some rely on professional tax preparers, especially if their finances are simple and relatively straightforward. Tax specialists, however, focus almost entirely on taxes. If an organization’s financials are especially complex, a more qualified professional might be needed to act in an advisory role.

Certified public accountants (CPAs) are well-rounded financial consultants who cover a broad range of services. Budget planning, regulatory compliance, income stream strategy, and auditing support are just a few of the areas CPAs can manage.

What level of support does your business need during tax time? This blog takes a close look at situations that might require more comprehensive financial services.

Tax Preparers’ Role and Responsibilities

Some small businesses have finances that are simple and uncomplicated, especially if they’ve not been in operation all that long. A sole proprietor or single-person limited liability company (LLC) may only need help getting its annual tax reports over the finish line. In those cases, a tax preparer might be sufficient and cost-effective.

Tax preparers help small businesses organize their income and expense reports for tax purposes. They perform functions like: 

• Spotting opportunities for deductions or tax credits
• Managing payroll taxes for Social Security and Medicare
• Estimating quarterly tax payments
• Preparing state and local tax filings on top of federal returns

A business with a steady income, a small but effective team, and modest assets may only need a tax preparer at filing time. 

However, it’s important to note that tax preparers are not required to be licensed and therefore aren’t tightly regulated. Although rare, some tax preparers also take an aggressive approach to estimating deductions, knowing they aren’t likely to face disciplinary actions. The company, in contrast, may face closer scrutiny.

A small-to-medium-sized company focused on growth may need more thorough financial advice and support than a tax preparer can provide.

What a CPA Can Do

An established business generating income and looking to expand needs a sure hand at tax time — one that can handle the more complex needs of a growing company. That’s exactly what a qualified CPA provides. Some of the specific areas a CPA can address include the following.

Intricate Tax Structures

Some small businesses operate in multiple states or even internationally. They may be owned by several partners with diverse interests and priorities or have run into legal issues with their finances. 

All these conditions can make the company’s tax profile particularly complex. A CPA can manage all these tax structures while keeping the business in compliance. They can also help prevent financial mishaps down the road.

Optimizing Rental and Investment Properties

CPAs assist businesses that have commercial, rental, or investment properties in settling their tax affairs. A rental property is subject to complex taxes due to depreciation, revenue, and management expenses. A CPA’s job is to limit their client’s tax liability by helping property owners find all the deductions they can take at tax time.

Business Growth and Change

Perhaps the most important job a CPA can do is prepare a business for sustained growth. When a company changes its legal structure, acquires new assets, or merges with another company, a CPA’s role is essential. 

Times of transformation change businesses from top to bottom, especially where taxes are concerned. Experienced CPAs have guided companies through expansion and success.

Support During Tax Audits

As a business grows, its tax exposure increases. A slip-up or misfiling can trigger an IRS audit, which can threaten the company’s fortunes. CPAs are fully licensed to represent businesses during audits. They have deep knowledge of current tax codes and legislation and can help you avoid expensive mistakes that lead to legal fines.

When your business is poised for growth or already on the road to success, a CPA can manage all the financial aspects that arise, including taxes. They can be essential partners in scaling your business for profitability.

Get Tax Time Help From Zabel & Co.

Zabel & Co. supports small businesses through all their financial needs. Whether you need a tax advisor, accountant, growth coach, or fractional CFO, we can help. Contact us for a free profit acceleration analysis.

Minnesota recently enacted a new rule governing contractors and employees. This rule took effect on July 1, 2024. 

These new regulations will primarily impact employees in the construction industry and contractors that operate in this sector. If you misclassify employees as independent contractors, you could incur severe penalties and reputational damage.

Repeat offenders could incur personal liability. Therefore, you must familiarize yourself with what’s changing and what’s remaining the same so you can make sure workers are classified appropriately. Here’s what you need to know. 

Fine Amounts Got Steeper

Minnesota increased the fines for contractor misclassification violations. These increases apply to both construction and general workers. If your business misclassifies workers, it can incur a fine of up to $10,000 per violation.

That’s not all. You could also incur personal liability for repeat violations. This means that the state could fine you directly, and misclassified workers may have grounds to file a lawsuit. Even a single lawsuit could cost your business tens of thousands in legal fees and tarnish your reputation. 

What About the Five-Factor Test?

Minnesota will continue to use the five-factor test to determine whether a non-construction worker is an employee or an independent contractor. You should consider the following variables to determine how to classify a worker: 

• Control over the means and manner of performance
• Mode of payment
• Furnishing of tools and materials 
• Control over the location where the work was done
• Right of discharge

The Minnesota Department of Labor and Industry (DOLI) has established 34 different industry-specific tests for workers’ comp purposes. These tests are used to determine whether a person is eligible for workers’ comp benefits in the event of an injury.

It’s a good idea to consult with a legal professional to ensure that you are in compliance with state laws. Failing to classify workers correctly can lead to significant financial penalties and reputational damage. 

The New 14-Factor Test

The construction industry will face the most significant changes as a result of the new rule. DOLI replaced the existing 9-factor test with a 14-factor variant that draws attention to the timing of the services provided. This new test introduces more specific rules regarding business registration and tax reporting. 

To quality as an independent contractor, the person must:

1. Establish and maintain a separate business from the person who received the services
2. Own, rent, or lease tools and equipment to perform construction services
3. Provide construction services to multiple persons 
4. Hold federal and Minnesota tax identification numbers, file business or self-employment income tax returns, and receive 1099 forms
5. Be in good standing with DOLI
6. Have a Minnesota unemployment insurance account (if required by law)
7. Obtain workers’ comp insurance
8. Hold current business licenses and certifications 
9. Operate under a written contract
10. Submit invoices and receive payments
11. Retain control over the means of providing specified services
12. Incur the main expenses and costs
13. Assume responsibility for the completion of services
14. Be able to realize additional profit or suffer a loss 

These additional provisions also specify that the worker must meet all of these conditions at the time they provide services. This change to the law’s verbiage is especially important because it makes misclassification an ongoing concern throughout the project.

Suppose that you hire a subcontractor to remodel a kitchen. If they fail to renew any state-mandated licenses during the project, the worker will no longer meet all 14 criteria of an independent contractor. Therefore, you must do your part to ensure that all subcontractors remain compliant with the new law. 

How You Can Stay Compliant

You must be proactive about maintaining compliance with the new rules. Regularly review worker classifications and all relevant paperwork to verify that they meet the criteria of the 14-factor test. Make sure your contracts and tax reporting practices meet the new requirements as well.

If you’re unsure about how these changes will impact your business, Zabel & Co. can help. Our team of consulting professionals can identify key areas of concern and implement strategies to mitigate risks of non-compliance. Contact our team today, and let’s chat about your workforce management needs.

Small to medium companies have been near the core of American business for decades and remain there today. It’s more important than ever for these businesses to develop financial management skills and habits for the prospect of success. Here are a few actionable, powerful steps your business can take for financial well-being.

Keep Detailed Records

Accurate and thorough record-keeping is crucial in developing a business. Set up a wide-ranging base of financial records, including income, expenses, cash flow, budget management, tax information, and other categories pertinent to your business.

A detailed record system helps business owners make informed decisions and maintain compliance. It also helps to cut down calculation errors and inefficiency.

Reconcile Bank Statements Every Month

Reconciling your financial records with your bank statements every month bolsters accuracy and finds discrepancies that need to be fixed. Look over both to find errors, unapproved or duplicated transactions, missing payments, and other fiscal details.

This step can help you maintain a steady cash flow, prevent fraud, and develop a clear picture of your financial growth over time.

Prepare a Monthly Profit and Loss Statement

A monthly profit and loss (P&L) statement gives you a clear overview of business operations and financial performance. A solid P&L report tracks revenue, cost, and expenses that help you find profit opportunities, discover market trends, and improve your decision-making. It can also help you build a budget and make better projections.

Manage Cash Flow With a Fractional CFO

A fractional CFO — something Zabel & Co. can help you with — is a part-time financial specialist who builds business strategies from an objective standpoint. They analyze business data to improve cash flow and liquidity. This gives a small business the opportunity for advanced financial knowledge without having to commit to a full-time employee.

Plan for Unexpected Expenses and Slow Customer Payments

Unforeseen events happen in every business but may have outsized effects on smaller companies. Delayed customer payments can also affect your bottom line.

Create strategies and contingencies for dealing with surprise expenses and shortfalls. These can include building an emergency fund, offering incentives for prompt customer payments, and laying out clear payment terms.

Re-Invest in Your Business

Small and medium businesses rely on reinvestment. It allows them to fund upgraded equipment, business expansion, employee training, and other important business practices. Reinvesting can also strengthen your market presence and competitive edge by fostering innovation, better performance, and sustained growth. Adjust your reinvestment allocations from time to time.

Evaluate Cost Savings Measures

Review your expenses to find opportunities for savings. Find budgeted items that can be reduced, cut, or optimized. This can include upgrading or renegotiating vendor agreements, reducing overhead, and slimming down or streamlining operations. Cost savings evaluation is another area where a fractional CFO can be of great assistance.

Keep Separate Accounts for Business and Personal Finances

Maintaining separate bank accounts for company and personal finances is crucial. Tracking each separately can eliminate budget mix-ups and back you up should any legal problems arise. It can also make tax preparation much easier.

Put Yourself on the Payroll

Some business owners leave themselves off the company payroll to accelerate business growth and mitigate taxes. However, in most cases, owners should put themselves on the payroll to earn dependable, documentary income. It can help you build transparency and streamline planning efforts.

Let a Professional CPA Handle Your Taxes

Business owners should be focused on finding ways to earn revenue and expand. Tax planning can get in the way of that process, however. Enlisting a professional CPA lets you refocus on business operations. CPAs also have experience and knowledge that can help you avoid audits, find deductions and tax credits, and meet compliance regulations.

Zabel & Co.: Steering Companies Toward Success Zabel & Co. helps small to medium companies build a successful framework for profitability and growth. We support business owners by coaching business growth, advising on technology and taxes, and serving as fractional CFOs. Our goal is to drive you toward success in both business and life. Contact us to find out more.

Running a successful business requires planning. Even though a business owner might have excellent instincts and a hearty work ethic, these traits are far more functional in the context of well-designed blueprints. One of the most important topics that planning can address is how your business will turn a profit, both now and in the future.

Profit planning establishes how your business will earn revenue over a designated time. It entails objectively assessing your current status, outlining your business goals, and designing sustainable cash flow. A solid profit plan will also include a strategy for monitoring progress and allocating resources. It’s a virtual roadmap for success.

What Is Profit Planning? Profit planning is setting up a financial outline of how a business owner aims to become profitable over a given time. The plan takes several financial elements under consideration to project future earnings. It helps business owners and managers set goals and milestones to reach, and it serves as a reference point for business decisions.

A good profit plan identifies core metrics and data collection methods. It also specifies how managers and employees use the results to point the way forward.

The plan doesn’t need to be unnecessarily complex or overthought. At the outset, you just need a few measurable goals that you can aim for over a year or so. What’s most important is that these goals are defined and written down, along with details about how progress will be monitored and measured.

Depending on your business structure, there are many ways you can plan how your business will handle profit. For example, you may broaden your offerings or services, expand to other regions, ramp up your marketing and sales strategies, or enhance customer retention.

Your profit plan should also address how you can control expenses to protect profits. This can include streamlining operations, negotiating with suppliers and vendors, and implementing cost-effective technology. It’s important to know how much money and capacity you need to improve production. This can make it easier to plan for expansion and growth.

Why Is Profit Planning Important?

Profit planning builds a strategic foundation for attaining your business goals. It accounts for strategic resource allocation to support your business objectives, setting

realistic forecasts for revenue and expenses. This information guides your decision-making so you can anticipate obstacles and take advantage of opportunities.

A complete profit plan includes methods for monitoring and recording performance metrics. This data sets a standard for production rate and can show deviations from normal operations. Businesses use this information to enact corrective actions to maintain consistency.

Profit planning sets up a framework for financial stability and success. It can include strategies for increasing liquidity and contingency planning for unexpected events. A solid profit plan also establishes a sense of accountability in the organization for maintaining long-term sustainability and continued success.

Steps for Creating a Profit Plan

To get you started, here are the basic steps for building a comprehensive profit plan.

· Set Profit Goals: Define realistic, achievable, and detailed financial targets you want to reach

· Project Revenue: Use market analysis and past performance data to estimate future sales

· Budget for Expenses: Outline all anticipated operational and material costs, both fixed and variable

· Analyze Break-Even Points: Figure how much sales volume you need just to cover expenses

· Project Cash Flow: Estimate cash inflow and outflow to maximize liquidity

· Set Performance Metrics: Implement key performance indicators (KPIs) to monitor progress and make modifications as needed

· Make Contingency Plans: Set backup plans for dealing with risks and business changes

· Review the Finished Plan: Evaluate your profit plan from time to time and update it as needed.

By following these steps and shaping them to your specific needs, you can create a solid profit plan with achievable goals and growth plans.

Turn to Zabel & Co. for Help Whether your business is just about to launch or has been around for years, Zabel & Co. can help you plan for its success. We offer a no-cost profit acceleration analysis, which takes about 45 minutes of your time. Email Todd Zabel to set up your call with our team!