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5 Ways to Overcome Economic Uncertainty

5 Ways to Overcome Economic Uncertainty

Economic uncertainty is an ongoing worry for any business owner.

You can control your own financial management, but you don’t have any direct control over the wider macro-economy. And in the first few years of the 2020s, there have certainly been plenty of tricky ups and downs for your business to navigate.

Current economic uncertainty stems from a number of factors, including:

    • Fluctuating markets
    • Geopolitical tensions
    • Pandemic recovery
    • The impact of climate change.

This unpredictability poses significant challenges for sustained growth and stability – but there are simple steps you can take to react to these challenges.

Simple strategies for overcoming the challenges of economic uncertainty

Simple strategies for overcoming the challenges of economic uncertainty

Good financial management is the key to riding any period of economic uncertainty. When sales, revenues, supplier prices and operational costs are all highly dynamic, it’s good to know that your business has cash in the bank and a solid financial strategy to stick to.

But how do you get tighter control over your business finances? And what are the main areas to focus on, track and manage as a business owner or financial director (FD)?

Here are five straightforward ways to tackle economic uncertainty:

    • Manage your cashflow effectively – cashflow management is the process of tracking your cash inflows and outflows, identifying potential problems and being proactive about taking action. It’s helped by running regular cashflow forecasts and sticking to budgets.
    • Carry out spend management – spend management involves tracking your expenses and identifying areas where you can cut costs. You do this by switching to more cost effective suppliers, cutting back unnecessary expenses and having tighter approval processes.
    • Negotiate better terms and prices with suppliers – negotiation can help you save money on your raw materials, labour and other important costs. You can also negotiate better payment and credit terms by building trusted relationships with your suppliers.
    • Embrace AI automation to cut costs – artificial intelligence (AI) tools are a great way to automate tasks, such as customer service, billing and inventory management. This frees up time for strategic activities and saves you money on labour costs.
    • Diversify into new products or markets – diversification helps you reduce your dependence on a single product or market, making your business more resilient to economic downturns. It’s important to choose products or markets that are complementary to your existing business, and that have good growth potential.

Talk to us about strengthening your financial management

With the world in such an unstable state, it’s always difficult to know exactly what lies around the corner for your business. But it’s safe to say that with a robust and agile financial strategy, you’re in a better position to flex your revenue streams and overcome any cashflow pitfalls.

As your adviser, we’ll help you get tighter control over your cashflow, budgeting and financial forecasting – giving you the numbers you need to navigate uncertain times.

The following content was originally published by BOMA, and is updated for freshness, accuracy and comprehensiveness. 

IRS Requiring Many Tax-Exempt Organizations to File Information Returns by May 16, 2022

IRS Requiring Many Tax-Exempt Organizations to File Information Returns by May 16, 2022

Even though organizations like charities and foundations may be tax-exempt, the IRS still requires them to file certain information every year, and this year the deadline is May 16.

Here are the forms they may need to file, depending on the size and type of organization:

    • Form 990, Return of Organization Exempt from Income Tax
    • Form 990-EZ, Short Form Return of Organization Exempt from Income Tax
    • Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation
    • Form 990-N, Electronic Notice, e-Postcard, for Tax-Exempt Organizations Not Required to File Form 990 or Form 990-EZ
    • Form 990-T, Exempt Organization Business Income Tax Return
    • Form 4720, Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code

Tax-exempt organizations must file their forms electronically. E-filing reduces the processing itme and will make compliance with reporting requirements easier for you.

Here are a few things organizations should know about filing:

    • Organizations can e-file most returns through an IRS Authorized e-File Provider.
    • However, organizations filing Form 990-N must e-file through the Form 990-N, e-Postcard, page on IRS.gov.
    • The IRS will reject incomplete or incorrect returns. Organizations should check that they’re using the right return, have fully completed it and don’t have missing schedules.
    • The IRS has a series of pre-recorded online workshops for exempt organizations. For organizations filling out one of the Form 990 series, the Form 990 Overview Course may be helpful.

Extension of time to file
If an organization can’t make the May deadline, they can request a 6-month automatic extension by filing Form 8868, Application for Extension of Time to File an Exempt Organization Return. This extension to file isn’t an extension to pay any tax owed. Organizations can e-file Form 8868 for faster processing.

 

 

CARES Act Allows Employee Retention Credit for Businesses Financially Impacted by Covid-19

CARES Act Allows Employee Retention Credit for Businesses Financially Impacted by Covid-19

Under the CARES Act, enacted March 27, 2020, the Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees.

The CARES Act allowed these credits for wages paid after March 12, 2020, and before January 1, 2021. See Notice 2021-20 PDF.

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 (Relief Act), enacted December 27, 2020, amended and extended the employee retention credit (and the availability of certain advance payments of the tax credits) under the CARES Act for the first and second calendar quarters of 2021.

Was your business financially impacted by COVID-19? You could be elgibile for a employee retention credit against certain employement taxes.

Like the credit for 2020 under the CARES Act, you can get immediate access to the credit by reducing the employment tax deposits you are otherwise required to make. If your employment tax deposits are not sufficient to cover the credit, you may be able to request an advance payment from the IRS. See Notice 2021-23 PDF.

The ARP modified and extended the employee retention credit (and the availability of certain advance payments of the tax credits) for the third and fourth quarters of 2021. See Notice 2021-24 PDF for guidance on the ability to reduce deposits and, in some cases, request advances for the employee retention credit through December 31, 2021.