by Daniel Kittell | Business Growth, Industry - Construction, News, Newsletter
For construction companies, growth and profitability often hinge on that company’s ability to overcome progress barriers. Whether it’s delays in project timelines, inefficiencies in communication, or outdated practices, construction firms need innovative solutions to stay ahead. In the article below, we discuss how firms can transform challenges into opportunities for growth and higher profits.
Embrace Innovation to Drive Success
Construction firms that resist change risk falling behind, especially as competitors adopt new technologies to streamline operations and improve outcomes. One key area for innovation is project management. Modern construction project management software is specifically designed to address the industry’s unique challenges, enabling firms to:
- Enhance Coordination: Centralize project details to ensure that all stakeholders have access to up-to-date information.
- Stay on Schedule: Use real-time tracking tools to monitor progress and adjust workflows as needed to meet deadlines.
- Control Costs: Track expenses and allocate resources effectively to avoid budget overruns.
For example, implementing a project management platform will likely result in less miscommunication between office staff and field teams, leading to fewer costly mistakes and rework.
Streamline Operations with Connected Construction Management Solutions
Another move to break through progress barriers is adopting a connected construction management solution. These systems integrate various functions—such as scheduling, payroll, equipment tracking, and documentation—into a single, user-friendly platform. Benefits include:
- Improved Communication: Ensure that field workers and office staff can seamlessly share information in real time.
- Data-Driven Decision-Making: Utilize analytics to make informed decisions about project priorities and resource allocation.
- Increased Productivity: Automate repetitive tasks to allow teams to focus on more critical priorities.
For example, a connected solution could allow a field manager to instantly access the latest blueprints on a tablet while on-site. This would help to ensure alignment with the construction team and reduce downtime caused by outdated plans.
Overcoming Common Challenges
A significant barrier many construction firms face when embracing technology is the challenges in implementing new systems, including upfront costs, a steep learning curve for staff, and resistance to change. To address these issues:
- Invest in Training: Provide comprehensive training to ensure all employees are comfortable using new tools.
- Start Small: Implement one solution at a time, allowing teams to adapt gradually.
- Focus on ROI: Highlight how new technologies will reduce costs and improve efficiency over time.
Achieving Long-Term Growth and Profitability
Breaking through progress barriers requires firms to evaluate their current processes, identify pain points, and prioritize technology investments that deliver the greatest impact. By integrating modern project management software and connected construction management solutions, construction firms can:
- Complete projects on time and within budget.
- Foster better communication between teams.
- Enhance overall efficiency and profitability.
In an industry where delays and inefficiencies can significantly impact the bottom line, these solutions offer a clear path to sustained growth.
by Daniel Kittell | Accounting News, News, Newsletter, Retirement, Retirement Savings
Essential changes to Individual Retirement Accounts (IRAs) and 401(k) plans are set to take effect in 2025, primarily due to the SECURE 2.0 Act. These modifications, set to phase in over the next several years, will impact your retirement savings strategy. Here’s what you need to know about these upcoming changes.
Catch-Up Contributions
One of the most significant changes involves catch-up contributions. The 401(k) contribution limit will increase from $23,000 in 2024 to $23,500 in 2025, while IRA contributions for workers age 50 and older remain at $7,500.
However, starting in 2025, workers aged 60 through 63 will have access to even greater catch-up contributions due to a provision in the Secure 2.0 Act. They’ll be able to make catch-up contributions of up to $11,250. This move helps workers in this age group bolster their financial security as they near retirement.
Automatic 401(k) Enrollment
Another key reform of the Secure 2.0 Act seeks to increase individual retirement savings. New 401(k) plans established on or after December 29, 2022, will be required to implement an automatic enrollment feature in 2025. Eligible employees will be automatically enrolled in their employer’s retirement plan at a minimum contribution rate of 3%, though they can opt out by selecting a 0% contribution rate. Employers can gradually increase the contribution amount by 1 percent, reaching up to 10% over time.
SIMPLE IRA Catch-Up Contributions
Changes are on the way for SIMPLE IRAs (Savings Incentive Match Plan for Employees). The annual limit for contributions to SIMPLE IRAs will increase to $16,500, up from $16,000 in 2024. For those aged 50 or older, the contribution limit remains at $3,500, but it increases to $5,250 for those aged 60-63, allowing for greater flexibility and potential for growth as these workers approach retirement.
The New 10-Year Rule for Inherited IRAs
Under the SECURE 2.0 Act, non-spouse beneficiaries must withdraw the entire balance of an inherited IRA within 10 years of the original account holder’s death. This is a shift from the previous “stretch IRA” rules, which allowed beneficiaries to take distributions over their lifetime. The change aims to ensure that inherited funds are utilized more quickly and will impact the tax strategies used in the future when benefactors are planning for their heirs.
However, the following types of beneficiaries of inherited IRAs can still utilize the “stretch IRA”:
- Surviving spouses
- A child of the decedent under the age of 21
- A beneficiary who is not more than 10 years younger than the decedent
- An individual who is disabled or chronically ill
If you are the benefactor of an inherited IRA and fall into one of the categories above, you must still withdraw funds from the inherited IRA over your lifetime beginning in the year following the decedent’s death.
Inherited IRA RMD Penalties
Lastly, there will be updated penalties related to Required Minimum Distributions (RMDs) for inherited IRAs. Previously, failing to follow the RMD rules resulted in a penalty of 50% on the amount not withdrawn. Starting in 2025, this penalty is significantly reduced to 25%. This adjustment offers some relief for beneficiaries who miss RMD deadlines, making the inherited IRA process less financially burdensome.
by Daniel Kittell | Accounting News, Business Growth, Industry - Professional Services, News, Newsletter, Professional Services
Professional services firms face unique challenges when trying to scale. Effective growth requires a strategic focus on critical areas that impact efficiency, profitability, and client satisfaction. The following article explores the top key areas professional services firms must prioritize to scale successfully.
Adopting Technology
If your firm wants to remain competitive and streamline operations, there’s no getting around up-to-date technology. From cloud computing and automation tools to artificial intelligence (AI), technology can help reduce manual processes and enhance productivity. For example, automation platforms streamline routine tasks, allowing teams to focus on responsibilities that contribute more directly to the firm’s goals, profitability, and client satisfaction. Additionally, utilizing client relationship management (CRM) software helps firms interact with clients more effectively.
Project Accounting
Project accounting assists firms in tracking financials, activities, and transactions on a project-by-project basis. It helps to boost profitability and ensure resources are allocated properly. Investing in specialized project accounting software allows firms to track project performance in real-time and gain a more accurate financial picture. This can lead to better informed decisions and improved project outcomes.
Resource Planning and Utilization
The key to maximizing productivity and preventing burnout? Efficient resource planning and utilization. When you accurately identify the demand for skills and personnel, you can allocate resources where they are most needed. Resource management tools provide insight into team capacity and skill sets, ensuring that the right employees are assigned to the right projects within the correct timeframe.
Effective Time Management
Time is money, particularly in the professional services sector, where billing often depends on hourly rates. Implementing time-tracking tools and fostering a culture of time management can help employees work more efficiently and stay on task. Effective time management boosts productivity and leads to increased profitability. For example, using time-tracking software can help pinpoint areas for improvement, leading to more accurate project timelines and higher client satisfaction.
Digital Collaboration
Digital collaboration tools are essential for keeping teams connected and communicating. Platforms like Slack, Microsoft Teams, and project management tools like Asana or Trello help professionals collaborate, share files, and track project progress. Promoting collaboration leads to more seamless workflows and helps mitigate the likelihood of miscommunication and project delays.
Capacity Planning
Capacity planning involves determining the maximum workload a firm can take on without overextending its resources. By understanding current workload demands and forecasting future needs, you can prepare for growth without sacrificing service quality. Capacity planning tools like Asana, Teamdeck, and Kantata can help professional services firms effectively manage their resources and plan for growth.
Revenue Forecasting
When you can accurately forecast your firm’s revenue based on historical data and current project pipelines, you can set realistic financial goals, allocate resources effectively, and make informed decisions about investments and growth opportunities. By integrating revenue forecasting tools with project accounting and CRM systems, you can gain a holistic view of your firm’s financial health and scale sustainably.
Automation for Efficiency
Automating repetitive tasks such as invoicing, time tracking, and data entry enables firms to save time, reduce errors, and improve overall efficiency. Automating these tasks also allows your firm to focus on more complex and strategic endeavors that promote business growth, which ultimately improves profitability.
Data Consolidation for Project Insight
Data consolidation helps to gain real-time insights into project performance as well as your firm’s overall financial health. When you combine data from different departments like finance, HR, and project management, it’s easier to track important metrics, monitor project progress, and adjust strategies to stay on track. This ultimately leads to better decision-making, improved project results, and higher profits.
by Daniel Kittell | Accounting News, Fraud, IRS, News, Newsletter
In recent years, IRS imposters have become increasingly adept at deceiving taxpayers, resulting in nearly $5 million in losses, according to the Federal Trade Commission (FTC). These scammers are honing their tactics and targeting vulnerable people, making it crucial for everyone to stay vigilant. Here’s what you need to know to protect yourself from becoming a victim.
The Latest Scam: IRS Impostor Calls
One of the latest and most concerning IRS scams involves callers who claim to be from the IRS and insist that the victim owes back taxes. These fraudsters often use advanced tactics to sound convincing. They might have access to personal information, making their threats seem more credible. Here’s how this scam typically works:
- The Call: The scammer will call, claiming to be from the IRS, and assert that the victim owes back taxes. The scammer’s name and credentials will be fake.
- The Threat: They pressure the victim to pay immediately, often using threats of arrest or legal action if payment is not made.
- The Payment Request: Payment is demanded through untraceable methods such as wire transfers or gift cards, which are difficult to recover once sent.
Who Are the Scammers Targeting?
Scam artists often prey on specific groups who may be less aware of IRS procedures or more susceptible to high-pressure tactics. Typical targets include:
- Elderly Individuals: Seniors are frequently targeted due to potential isolation and lack of familiarity with modern technology.
- Hearing or Vision Impaired: Those with sensory impairments may struggle to verify the legitimacy of communications.
- People with Cognitive Issues: Cognitive impairments can make it difficult to discern legitimate communications from fraudulent ones.
- Individuals Not Fluent in English: Individuals who speak English as a second language might find it more difficult to understand IRS protocols and detect scam indicators.
How to Protect Yourself
To safeguard against IRS impostor scams, follow these tips:
- Understand IRS Procedures: The IRS will never demand payment via phone call or require payment through gift cards or wire transfers. When issues arise, their first contact with taxpayers is typically through official correspondence via mail.
- Verify Caller Identity: If you receive a call claiming to be from the IRS, hang up and contact the IRS directly using their official phone number, which you can find on their website. This will help you confirm whether the call was legitimate.
- Do Not Share Personal Information: Be cautious about providing any personal or financial information over the phone. Legitimate IRS representatives will never ask for sensitive details through unsolicited calls.
- Report Suspicious Activity: If you believe you’ve been targeted by a scammer, report it to the Federal Trade Commission (FTC) and the IRS. The FTC’s website offers a place to report such incidents and can help authorities track down fraudsters.
- Educate Vulnerable Individuals: If you know someone who fits the typical profile of scam victims, such as an elderly family member, make sure they are aware of these scams and know how to verify any communication they receive.
The Best Way to Address Back Taxes
If you genuinely owe back taxes, it’s crucial to handle the situation properly:
- Do Not Use Untraceable Methods: Avoid paying with gift cards or wire transfers. The IRS accepts payments through their secure online payment portal or by check.
- Seek Professional Advice: Consult a tax professional if you’re unsure about your tax situation. They can provide guidance on resolving tax debts and navigating the complexities of tax law.
- Set Up Payment Plans: The IRS offers payment plans for those who cannot pay their taxes in full. Contact them directly to discuss your options and set up a manageable payment plan.
Staying informed and cautious is your best defense against IRS impostor scams. Understanding how these scammers operate and knowing the proper channels for addressing tax issues can protect you and others from falling victim to these sophisticated frauds.
by Daniel Kittell | Accounting News, Industry - Veterinary Medicine, News, Newsletter
Developing an exit strategy is essential for veterinary practice owners, and you likely need to begin sooner than you think. A well-crafted exit plan ensures the transition is smooth, maximizes the value of your practice, and aligns with both your financial and personal objectives. Here’s what you need to know about preparing your practice for sale.
Define Your Financial and Personal Retirement Objectives
Before you even begin planning your exit strategy, it’s essential to clearly define what you want to achieve both financially and personally. Do you aim for a full retirement, or are you planning for a phased exit where you gradually reduce your involvement? Understanding your ideal retirement lifestyle, how much income you’ll need, and any legacy goals will shape your exit plan. These objectives also guide decisions on when to sell and whether you need to maximize the value of your practice quickly or have flexibility in timing.
Start Planning Early: Three to Five Years Ahead
One of the biggest mistakes veterinary practice owners make is waiting too long to start planning their exit. Ideally, you should begin preparing at least three to five years before you intend to sell. This timeline allows you to make strategic improvements to your practice, boost profitability, and enhance its appeal to potential buyers.
Early planning also gives you time to address any operational inefficiencies, strengthen your management team, and improve your financial documentation. Buyers look for a practice with consistent revenue, well-maintained facilities, and growth potential, all of which take time to cultivate.
Focus on Key Financial Metrics: Gross, Growth, and Intangibles
When it comes to valuing your veterinary practice, buyers will scrutinize a few key financial metrics, particularly your gross revenue, growth rate, and intangible assets. Here’s why these matter:
- Gross Revenue: Your practice’s gross revenue gives buyers a snapshot of overall business performance. Strong, stable revenue streams are more attractive and signal that the practice has a solid client base.
- Growth Rate: Consistent growth demonstrates that your practice has potential for future profitability. Buyers will review profit-and-loss statements to analyze trends in revenue growth, operating expenses, and net income. Showing a history of growth creates confidence in the ongoing viability of the business.
- Intangible Assets: Beyond the numbers, intangibles like your practice’s reputation, client loyalty, and community presence are significant value drivers. Positive online reviews, strong referral networks, and a recognizable brand can boost your practice’s appeal. Make sure you document these assets and maintain a positive public image.
Demonstrate Cash Flow with Clear Financial Records
To make your practice attractive to potential buyers, you need to have well-organized financial records. Profit-and-loss statements, tax returns, and balance sheets should clearly reflect your practice’s cash flow. Buyers want to see that the practice generates enough profit to cover its operating expenses while providing an owner’s income. Clean, consistent financial records reduce risk for buyers and can lead to a higher valuation.
If needed, consider hiring a financial advisor or accountant specializing in veterinary practices to help organize and present your financials in a way that highlights your practice’s strengths.
Enhance the Practice’s Marketability
In addition to strong financials, take proactive steps to enhance your practice’s marketability. This could involve upgrading equipment, refreshing the facility, or optimizing workflows to reduce costs. An attractive, well-run practice is more likely to fetch a premium price.
Additionally, consider how dependent your business is on your personal involvement. If your presence is crucial to operations, potential buyers might see this as a risk. Transitioning key responsibilities to your team ahead of time can make your practice more appealing to prospective buyers.
Selling a veterinary practice is a significant decision that requires careful planning and forethought. Remember, the time and effort you invest in planning your exit strategy will pay off when you’re ready to step back and enjoy the next chapter of your life.
