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Manufacturing Articles

Manufacturing Articles

4 Reasons Your Legacy Systems Are A Financial Risk

4 Reasons Your Legacy Systems Are A Financial Risk

by Krista Magidson, Consilien, LLC. | The manufacturing facility, located in Orange County California, is a hodgepodge of buildings that span three long blocks. The sprawling campus has grown organically overtime. The owners added the buildings,...

QOE Reports Look Beyond the Numbers

QOE Reports Look Beyond the Numbers

In mergers and acquisitions, potential buyers may obtain a quality of earnings (QOE) report to evaluate the accuracy and sustainability of the seller’s reported earnings. It’s also common for sellers to obtain their own QOE reports to spot potential...

Four Signs That Your Budget is Unreliable

Four Signs That Your Budget is Unreliable

Every business should prepare an annual budget, but it’s especially important in the capital-intensive manufacturing sector. Comprehensive, realistic budgets allow you to identify potential shortages of cash, production capacity constraints and other...

Why Wait to Deduct Your Purchases?

Why Wait to Deduct Your Purchases?

Turbocharge Tax Deductions with Bonus Depreciation and Sec. 179 “Don’t put off until tomorrow what you can do today,” Benjamin Franklin once advised. This timeless wisdom applies in many business scenarios, from taking advantage of growth opportunities to...

Keeping a Lid on Unemployment Taxes

Keeping a Lid on Unemployment Taxes

The manufacturing sector tends to spend a lot on salaries and bonuses. So, federal and state unemployment insurance can represent a significant cost of doing business. Fortunately, your management team can take proactive measures to help lower this cost,...

Five Strategies to Improve Your Bottom Line

Five Strategies to Improve Your Bottom Line

To grow, manufacturers often focus on the top line of their income statement (revenue). But boosting profits is the key to long-term sustainable growth. In today’s competitive marketplace, owners must review their operations every year and ask: What can we...

Will Your Program Qualify for a Federal Tax Break?

Will Your Program Qualify for a Federal Tax Break?

Family and medical leaveThe Tax Cuts and Jobs Act (TCJA) introduces a tax credit for certain employers that provide family and medical leave programs. Here are the rules.Plan requirements For wages paid in 2018 and 2019, you may be able to claim a business...

Keys to Effective BYOD Policies

Keys to Effective BYOD Policies

Manufacturers may implement bring-your-own-device (BYOD) policies for salespeople who travel, customer service reps who work from home, and managers who use mobile devices to perform business tasks. But allowing access to the company’s systems on an...

FASB Expands VIE Exception for Private Companies

FASB Expands VIE Exception for Private Companies

Private manufacturers often set up separate legal entities to hold real estate or operate new business ventures. Under current accounting rules, these entities are typically considered variable interest entities (VIEs) that must be consolidated on the...

Manufacturing and Research & Development Tax Exemption

Manufacturing and Research & Development Tax Exemption

For manufacturers and companies with R&D costs in the sciences, this is a great opportunity to save on sales taxes!A new law beginning July 1, 2014 allows companies to obtain a partial exemption of sales and use tax on certain manufacturing and...

Critical Questions to Ask About Internal Controls

Critical Questions to Ask About Internal Controls

When fraud strikes manufacturers, the effects can be devastating. The median fraud loss in the manufacturing sector was $240,000, according to the 2018 Report to the Nations published by the Association of Certified Fraud Examiners (ACFE). That’s almost...

Entity Choice: Is It Time for a Switch?

Entity Choice: Is It Time for a Switch?

The Tax Cuts and Jobs Act (TCJA) lowers the federal income tax rate for C corporations to a flat 21%. This fundamental change has caused some manufacturers that are set up as sole proprietorships, partnerships, S corporations or limited liability companies...

Moving Your Business to the Cloud

Moving Your Business to the Cloud

Many manufacturers and distributors have already jumped aboard the cloud computing bandwagon — but is it right for your business? Some haven’t yet moved to the cloud, possibly because their staff resources and IT expertise are limited. Others have...

Four Ways Tax Reform Could Benefit U.S. Manufacturers

Four Ways Tax Reform Could Benefit U.S. Manufacturers

Tax Cuts and Jobs ActThe Tax Cuts and Jobs Act (TCJA) — which passed late in 2017 — is long and complicated. Its effects will vary from business to business, depending on each one’s structure and the nature of its operations. Here are four major changes...

Employee or Independent Contractor: Worker Classification Matters

Employee or Independent Contractor: Worker Classification Matters

There’s a fine line between employee and independent contractor. The distinction may take on evengreater importance under the new tax law as some employees try to shift ordinary income into businessincome to be eligible for the new qualified business...

Deducting Travel and Entertainment Expenses with Confidence

Deducting Travel and Entertainment Expenses with Confidence

When owners, managers and salespeople attend trade shows, call on customers and evaluate suppliers, they may incur travel and entertainment expenses. Here are the rules for deducting these costs, including how they’ve changed under the Tax Cuts and Jobs...

New Tax Law Limits Business Interest Expense Deductions

New Tax Law Limits Business Interest Expense Deductions

Under the Tax Cuts and Jobs Act (TCJA), starting with tax years beginning in 2018, manufacturers with morethan $25 million in average annual gross receipts will generally be able to deduct less interest expense than theycould have deducted under prior law....

Why Can’t Management Get It Right The First Time?

Why Can’t Management Get It Right The First Time?

Fraud isn’t the only reason behind financial restatements. Sometimes they’re caused by unintentionalerrors or omissions, especially as companies record complex transactions or implement new accountingand tax rules.Error-prone transactionsWhen a company...

Learning the ABCs of the QBI Deduction for Pass-Through Entities

Learning the ABCs of the QBI Deduction for Pass-Through Entities

The Tax Cuts and Jobs Act (TCJA) permanently lowers the federal income tax rate for C corporations to a flat 21%, starting in 2018. But manufacturers that operate as sole proprietorships and “pass-through” entities aren’t eligible for this reduced tax...

Is It Time to Switch Accounting Methods?

Is It Time to Switch Accounting Methods?

The Tax Cuts and Jobs Act (TCJA) liberalizes the eligibility requirements for certain accounting methods that are generally easier to use and more flexible. As a result, more small and midsize manufacturers may be eligible for tax reporting shortcuts that...

Vendor Fraud: Know the Warning Signs

Vendor Fraud: Know the Warning Signs

When fraud strikes, the culprit might be sitting in your purchasing department. This department is particularly vulnerable to fraud because of the volume of transactions it processes and the varying pricing and billing policies that vendors use. Here’s a...

Got Operating Problems?

Got Operating Problems?

Employees may have solutions — if you ask for their input Your management team doesn’t have all the answers — and they may be aware of only a fraction of the problems. Rank-and-file workers can provide simple but effective solutions, but they may need an...

Do You Know How Business Decisions Can Affect Your Tax Liability?

Do You Know How Business Decisions Can Affect Your Tax Liability?

In the day-to-day pressure of meeting your production and sales goals, time constraints can make it difficult to consider the tax implications of business decisions. Three decisions that can directly affect your manufacturing company’s tax liability are...

How to Put Financial Statements to Work for Your Business

How to Put Financial Statements to Work for Your Business

Spring is the time of year that calendar-year-end businesses receive financial statements that conform to U.S. Generally Accepted Accounting Principles (GAAP) and prepare tax returns. This year, take your financial data beyond compliance and use it to...

Here’s What Tax Reform Means for Manufacturing Companies

Here’s What Tax Reform Means for Manufacturing Companies

Congress and the Trump administration gave business and individual taxpayers a holiday gift at the end of 2017 when they passed tax reform legislation.  Known as the Tax Cuts and Jobs Act of 2017, the changes made to the tax code are the most significant in over 30...

Loaning Money Between a Business and Its Shareholders

Loaning Money Between a Business and Its Shareholders

It’s common for owners of privately held manufacturing and distribution firms to loan money to and borrow money from their companies. The IRS looks closely at such transactions to determine whether they are truly loans, or actually compensation, dividends...

Compilation, Review or Audit: Select the Right Level of Assurance

Compilation, Review or Audit: Select the Right Level of Assurance

The term “assurance” refers to how much confidence lenders and other stakeholders have that a company’s financial statements will be reliable, informative and in conformity with U.S. Generally Accepted Accounting Principles (GAAP) or another financial...

How Can You Benefit from Tax Reform?

How Can You Benefit from Tax Reform?

Expanded depreciation deductions - In December 2017, President Trump signed the Tax Cuts and Jobs Act (TCJA) into law. This is the most comprehensive tax reform package in over three decades, and it will have a major impact on how much income taxes...

How to Reduce Waste

How to Reduce Waste

Scrap materials sometimes pile up on the shop floor, especially when a plant ramps up production to meet peaks in demand. Excess scrap can lead to safety issues and cleanup costs — but waste extends beyond trash in a manufacturing context. Here’s an...

Don’t Overlook the Domestic Production Activities Deduction

Don’t Overlook the Domestic Production Activities Deduction

The domestic production activities deduction  (DPAD), also commonly referred to as the manufacturers’ deduction or Section 199deduction, provides a generous tax break for certain “domestic production activities.” Unfortunately, many businesses overlook...

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