Building New Relationships at CICPAC Chicago!

CICPAC Chicago BoothCPAs across the nation who specialize in the construction industry have turned out for the annual CICPAC conference in Chicago this week, and ComputerEase is there with them.

CICPAC, the Construction Industry CPAs/Consultants Association, has been serving construction-focused CPAs for 25 years with educational webinars, industry news and other resources to help CPAs share information and strategies that benefit their clients.

The relationship between ComputerEase and CICPAC is born of a shared interest in helping construction-focused CPAs to help their contractor clients. With the ComputerEase CPA Partnership Program, CPAs can get all the resources they need to support their clients.

If you’re in Chicago for CICPAC, find out more by visiting our booth at the conference! If not, you can learn more about our CPA Partner Program from our website.

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CE Payroll Service Unveils New Website

CE Payroll Service, the sister company of ComputerEase Software, has announced a brand new website that will make it easier than ever to learn the difference between payroll experts and construction payroll experts. CE Payroll Service is rapidly expanding, and with that expansion has come the need for a streamlined, simplified and elegantly designed platform to share information with clients both current and prospective.

CE Payroll Service was launched in 2012 and has since become a premier source of payroll processing for the construction industry. Staffed by experts familiar with the intricacies of payroll for a contractors office, they provide a reliable, accurate and cost-effective way for construction businesses to handle their payroll.

Along with the new website, CE Payroll service has released a brief demo video to help spell out exactly how their payroll processing solution works. The new videos is embedded below.

To see the new website, visit www.cepayroll.com

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Press Release: ComputerEase Software Announces Wellness Program for Employees

Farrell Fit

CINCINNATI, Ohio, January 19, 2016: ComputerEase Software, Inc., The national leading provider of construction accounting, project management and field-to-office software for the construction industry, today announces it is expanding its focus on employee well-being and preventative health care. ComputerEase Software, headquartered in Cincinnati, was recently voted one of the top places to work in that city for its employee-focused structure and benefits.

Now ComputerEase employees can look forward to a great new perk – a new wellness program through the Cincinnati-based fitness company Farrell Fit. “We feel it’s important to enable our employees to manage their health and fitness so that we can promote a healthier overall life.” Says John Meibers, President of ComputerEase. “It’s great for our employees, it’s great for our health care plan – it’s a win-win overall.”

As in the software industry, ComputerEase strives to be ahead of the curve where healthcare benefits are concerned. This new partnership is a bold step toward that direction.

About Farrell Fit
Farrell Fit is a Cincinnati-based fitness company that focuses on meeting each client wherever they are in life. They offer years of experience in the industry and believe in educating, motivating and connecting with each client to impact their lives and help them establish or maintain a healthy, happy lifestyle. For more information, visit www.FarrellFit.com

About ComputerEase Software
Founded in 1983, ComputerEase develops integrated construction accounting and project management software that helps contractors solve problems and increase profits. The scalable, modular structure of ComputerEase makes it the ideal fit for companies of all sizes and specialties. In addition to accounting and job costing, ComputerEase offers robust equipment, purchasing, service and document management solutions. ComputerEase takes great pride in providing a matchless level of customer support by employing a team of experts with experience in the construction industry. For more information, visit: www.ComputerEase.com

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Year-End Tax Planning for Business

While the fate of several business-related tax extenders such as Research & Development tax credits, bonus depreciation, and Section 179 expensing that expired at the end of 2014 is uncertain, there are still a number of end of year tax planning strategies businesses can use to reduce their tax burden for 2015.

Deferring Income
Businesses using the cash method of accounting can defer income into 2016 by delaying end-of-year invoices so payment is not received until 2016. Businesses using the accrual method can defer income by postponing delivery of goods or services until January 2016.

Section 179 Expensing.
Business should still take advantage of Section 179 expensing this year for a couple of reasons.  In 2015 businesses can elect to expense (deduct immediately) the entire cost of most new equipment up to a maximum of $25,000 for the first $200,000 of property placed in service by December 31, 2015. Keep in mind that the Section 179 deduction cannot exceed net taxable business income. In addition, unless Congress reauthorizes it, the bonus depreciation expired at the end of 2014 and is not available for 2015.

While most businesses follow a calendar year, for those that don’t there is an exception to the $25,000 cap that allows those businesses to take advantage of the $500,000 Section 179 benefit. However, only businesses whose calendar year begins in 2014 and ends in 2015 can take advantage of this.

Qualified property is defined as property that you placed in service during the tax year and used predominantly (more than 50 percent) in your trade or business. Property that is placed in service and then disposed of in that same tax year does not qualify, nor does property converted to personal use in the same tax year it is acquired.

Note-blue-stickyNote: Many states have not matched these amounts and, therefore, state tax may not allow for the maximum federal deduction. In this case, two sets of depreciation records will be needed to track the federal and state tax impact.

 

Small Business Health Care Tax Credit.
Small business employers with 25 or fewer full-time-equivalent employees (average annual wages of $51,600 in 2015) may qualify for a tax credit to help pay for employees’ health insurance. The credit is 50 percent (35 percent for non-profits).

Business Energy Investment Tax Credit.
Business energy investment tax credits are still available for eligible systems placed in service on or before December 31, 2016, and businesses that want to take advantage of these tax credits can still do so.

Business energy credits include solar energy systems (passive solar and solar pool-heating systems excluded), fuel cells and microturbines, and an increased credit amount for fuel cells. The extended tax provision also established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems. Utilities are allowed to use the credits as well.

Repair Regulations.
Where possible, end of year repairs and expenses should be deducted immediately, rather than capitalized and depreciated. Small businesses lacking applicable financial statements (AFS) are able to take advantage of de minimis safe harbor by electing to deduct smaller purchases ($500 or less per purchase or per invoice). Businesses with applicable financial statements are able to deduct $5,000. Small business with gross receipts of $10 million or less can also take advantage of safe harbor for repairs, maintenance, and improvements to eligible buildings. Please call if you would like more information on this topic.

Section 199 Deduction.
Businesses with manufacturing activities could qualify for a Section 199 domestic production activities deduction. By accelerating salaries or bonuses attributable to domestic production gross receipts in the last quarter of 2015, businesses can increase the amount of this deduction.

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Small Business Investment Company Program

There are a variety of alternatives to bank financing for small businesses, especially business start-ups. The Small Business Investment Company Program fills the gap between the availability of venture capital and the needs of small businesses that are either starting or growing. Licensed and regulated by the SBA, SBICs are privately owned and managed investment firms that make capital available to small businesses through investments or loans. They use their own funds plus funds obtained at favorable rates with SBA guaranties and/or by selling their preferred stock to the SBA.

SBICs are for-profit firms whose incentive is to share in the success of a small business. Laptop on Desk office and Graph analysis spreadsheet, Business financeIn addition to equity capital and long-term loans, SBICs provide debt-equity investments and management assistance.

The SBIC Program provides funding to all types of manufacturing and service industries. Some investment companies specialize in certain fields, while others seek out small businesses with new products or services because of the strong growth potential. Most, however, consider a wide variety of investment opportunities.

Surety Bond Programs
By law, prime contractors to the federal government must post surety bonds on federal construction projects valued at $100,000 or more. Many state, county, city and private-sector projects require bonding as well. The SBA can guarantee bid, performance and payment bonds for contracts up to $1.25 million for small businesses that cannot obtain bonds through regular commercial channels.

Bonds may be obtained in two ways:
Prior Approval. Contractors apply through a surety bonding agent. The guaranty goes to the surety.

Preferred Sureties. Preferred sureties are authorized by the SBA to issue, monitor and service bonds without prior SBA approval.

The SBA has offices located throughout the United States. For the one nearest you, look under “U.S. Government” in your telephone directory, or call the SBA Answer Desk at (800) 827-5722. To send a fax to the SBA, dial (202) 205-7064. For the hearing impaired, the TDD number is (704) 344-6640.

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Business Record Keeping Essentials

What kind of Records Do I Need to Keep in My Business?200811-img3
Complete and accurate financial record keeping is crucial to your business success. Good records provide the financial data that help you operate more efficiently. Accurate and complete records enable you to identify all your business assets, liabilities, income and expenses. That information helps you pinpoint both the strong and weak phases of your business operations.

Moreover, good records are essential for the preparation of current financial statements, such as the income statement (profit and loss) and cash-flow projection. These statements, in turn, are critical for maintaining good relations with your banker. Finally, good records help you avoid underpaying or overpaying your taxes. In addition, good records are essential during an Internal Revenue Service audit, if you hope to answer questions accurately and to the satisfaction of the IRS.

To assure your success, your financial records should show how much income you are generating now and project how much income you can expect to generate in the future. They should inform you of the amount of cash tied up in accounts receivable. Records also need to indicate what you owe for merchandise, rent, utilities, and equipment, as well as such expenses as payroll, payroll taxes, advertising, equipment and facilities maintenance, and benefit plans for yourself and employees. Records will tell you how much cash is on hand and how much is tied-up in inventory. They should reveal which of your departments or services are making a profit, as well as your gross and net profit.

The Basic Recordkeeping System
A basic record-keeping system needs a basic journal to record transactions, accounts receivable records, accounts payable records, payroll records, petty cash records, and inventory records. These records will form the basis of your financial statements and tax returns.

Business Applications Performed by Computers
A computer’s multiple capabilities can solve many business problems from keeping transaction records and preparing statements and reports to maintaining customer and lead lists, and paying your staff. A complete computer system can organize and store many similarly structured pieces of information, perform complicated mathematical computations quickly and accurately, print information quickly and accurately, facilitate communications among individuals, departments and branches, and link the office to many sources of data available through larger networks. A computer can also streamline such manual business operations as accounts receivable, inventory, payroll, and planning. With all of these operations, the computer increases efficiency, reduces errors, and cuts costs.

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The 7(m) and the (504) Loan Programs for Business

The 7(m) MicroLoan Program
The 7(m) MicroLoan Program provides small loans ranging from under $100 to $25,000. Under this program, the SBA makes funds available to nonprofit intermediaries; these, in turn, make the loans. The average loan size is $10,000. Completed applications usually are processed by the intermediary in less than one week. This is a pilot program available at a limited number of locations.

Use of Proceeds.
Microloans may be used to finance machinery, equipment, fixtures and leasehold improvements. They may also be used to finance receivables and for working capital. They may not be used to pay existing debts.

Terms Interest Rates and Fees.
Depending on the earnings of your business, you may take up to six years to repay a microloan. Rates are pegged at no more than 4% over the prime rate. There is no guaranty fee.

Collateral.
Each nonprofit lending organization will have its own requirements, but must take as collateral any assets purchased with the microloan. In most cases, the personal guaranties of the business owners are also required.

Eligibility.
Virtually all types of for-profit businesses that meet SBA eligibility requirements qualify.

The Certified Development Company (504) Loan Program
The Certified Development Company (504) Loan Program enables growing businesses to secure long-term, fixed-rate financing for major fixed assets, such as land and buildings. A certified development company is a nonprofit corporation set up to contribute to the economic development of its community or region. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. There are about 290 CDCs nationwide.

The program is designed to enable small businesses to create and retain jobs; the CDC’s portfolio must create or retain one job for every $35,000 of debenture proceeds provided by the SBA. Typically, a 504 project includes:
A loan secured with a senior lien from a private-sector lender covering up to 50% of the project cost, A second loan secured with a junior lien from the CDC (a 100% SBA-guaranteed debenture) covering up to 40% of the project cost
A contribution of at least 10% equity by the borrower.
The maximum SBA debenture generally is $750,000 (up to $1 million in some cases).

Use of Proceeds.
Proceeds from 504 loans must be used for fixed-asset projects such as:
Purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping, Construction, modernizing, renovating or converting existing facilities, Purchasing machinery and equipment.
The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or most refinancing.

Terms, Interest Rates and Fees.
Interest rates on 504 loans are based on the current market rate for five-year and 10-year U.S. Treasury issues plus an increment above the Treasury rate, based on market conditions. Only maturates of 10 and 20 years are available. Fees total approximately 3% of the debenture and may be financed with the loan.

Collateral.
Generally the project assets being financed are used as collateral. Personal guaranties of the principal owners are also required.

Eligibility.
To be eligible, the business generally must be operated for profit and fall within the size standards set by the SBA. Under the 504 Program, a business qualifies as small if it does not have a tangible net worth in excess of $6 million and does not have an average net income in excess of $2 million after taxes for the preceding two years, or if it meets standard 7(a) criteria. Loans cannot be made to businesses engaged in speculation or investment.

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Minority and Women’s Pre-qualification Programs for SBA Loans

If you are a woman or minority who owns or wants to start a business, The Minority and Women’s Pre-qualification Programs can help. Intermediaries assist you in developing a viable loan application package and securing a loan. On approval the SBA provides a letter of pre-qualification you can take to a lender. The women’s program uses only nonprofit organizations as intermediaries; the minority program uses for-profit intermediaries as well.

200602image2Once your loan package is assembled, the intermediary submits it to the SBA for
expedited consideration; a decision usually is made within three days. If your application is
approved, the SBA issues a letter of pre-qualification stating the agency’s intent to guarantee the loan. The intermediary will then help you locate a lender offering the most competitive rates.

Maximum Loan Amount
The maximum amount for loans under the women’s program is $250,000; under the minority program, it is generally the same, although some district offices set other limits. With both programs, the SBA will guarantee up to 75% (80% on loans of $100,000 or less).

Here are the eligibility rules for these programs.
Businesses at least 51% owned, operated and managed by people of ethnic or racial minorities, or by women.
Businesses with average annual sales for the preceding three years that do not exceed $5 million.
Businesses that employ fewer than 100, including affiliates.
Businesses that are not engaged in speculation or investment.

Intermediaries may charge a reasonable fee for loan packaging. These programs are available through a number of SBA district offices nationwide. To find out if these programs are available in your area, contact your nearest SBA district office.

 

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Additional Need to Know Items Regarding SBA Loans

Interest Rates
Interest rates are negotiated with your lender, up to 2.25% over the prime rate. The guaranty fee is the same as for any standard 7(a) loan. The SBA places no servicing-fee restrictions on the lender for the Standard Asset-Based Line but requires full disclosure to ensure that fees are reasonable. On all other CAPLines, the servicing fee is restricted to 2% based on the average outstanding balance.

Collateral. The primary collateral will be the short-term assets financed by the loan.

The International Trade Program
The International Trade Program helps small businesses that are engaged in international trade, preparing to engage in international trade, or adversely affected by competition from imports.

The SBA Guarantee
The SBA can guarantee as much as $1.25 million in combined working-capital and fixed-asset loans. The working-capital portion of the loan may be made according to the provisions of the Export Working Capital Program (see below) or other SBA working-capital programs.

Use of Proceeds. Proceeds may be used for:
Working capital; and/or purchasing land and buildings, building new facilities; renovating, improving or expanding existing facilities; purchasing or reconditioning machinery, equipment and fixtures; and making other improvements that will be used within the United States to produce goods or services for export. Proceeds may not be used to repay existing debt.

Terms, Interest Rates and Fees
Loans for facilities or equipment can have maturates of up to 25 years. The working capital portion of a loan under Export Working Capital Program provisions has a maximum maturity of three years. Rates and fees are the same as for the general 7(a) loan.

Collateral
The lender must take a first-lien position (or first mortgage) on items financed under an international trade loan. Only collateral located in the United States, its territories and possessions is acceptable as collateral under this program. Additional collateral may be required, including personal guaranties, subordinate liens or items that are not financed by the loan proceeds.

The Export Working Capital Program
The Export Working Capital Program was developed in response to the needs of exporters seeking short-term working capital. The SBA guarantees 90% of the principal and interest, up to $750,000.The EWCP uses a one-page application form and streamlined documentation, and turnaround is usually within 10 days. You may also apply for a letter of pre-qualification from the SBA.

You may have other current SBA guaranties, as long as the SBA’s exposure does not exceed $750,000 for all of your loans. When an EWCP loan is combined with an international trade loan, the SBA’s exposure can go up to $1.25 million.

Terms
Typically, EWCP loan maturates either match a single transaction cycle or support a line of credit, generally with a term of 12 months. Unlike other 7(a) programs, interest rates and fees are negotiated between you and your lender. The SBA charges the lender a nominal guaranty fee, which may be passed on to you.

SBA EXPRESS (FA$TRAK) Loan Program
The SBA Express (FA$TRAK) Loan Program makes capital available to businesses seeking loans of up to $350,000 without requiring the lender to use the SBA process. Lenders use their existing documentation and procedures to make and service loans. The SBA guarantees up to 50% of a FA$TRAK loan. Your local SBA office can provide you with a list of FA$TRAK lenders.

Like most 7(a) loans, maturates are usually five to seven years for working capital and up to 25 years for real estate or equipment. For revolving credits, you may take up to five years after the first disbursement to repay the loan.

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CAPLines Loan Program

The CAPLines Loan Program is the program under which the SBA helps small businesses meet their short-term and cyclical working-capital needs. A CAPLines loan can be for any dollar amount (except for the Small Asset-Based Line), and the SBA will guarantee 75% up to $750,000 (80% on loans of $100,000 or less).

There are five short-term working-capital loan programs for small businesses under CAPLines:
Seasonal Line. This line advances funds against anticipated inventory and accounts receivables for peak seasons and seasonal sales fluctuations. It can be revolving or non-revolving.

Contract Line. This line finances the direct labor and material costs associated with performing assignable contract(s). It can be revolving or non-revolving.

Builders Line. If you are a small general contractor or builder constructing or renovating commercial or residential buildings, this line can finance your direct labor and material costs. The building project serves as the collateral, and loans can be revolving or non-revolving.

Standard Asset-Based Line. This is an asset-based revolving line of credit that provides financing for cyclical, growth, recurring, and/or short-term needs. Repayment comes from converting short-term assets into cash, which is remitted to the lender. Businesses continually draw, based on existing assets, and repay as their cash cycle dictates. This line generally is used by businesses that provide credit to other businesses. Because these loans require continual servicing and monitoring of collateral, additional fees may be charged by the lender.

Small Asset-Based Line. This is an asset-based revolving line of credit of up to $200,000. It operates like a standard asset-based line except that some of the stricter servicing requirements are waived, providing the business can consistently show repayment ability from cash flow for the full amount.

Use of Proceeds. CAPLines may be used to:
Finance seasonal working-capital needs.
Finance direct costs needed to perform construction, service and supply contracts.
Finance direct costs associated with commercial and residential building construction without a firm commitment for purchase.
Finance operating capital by obtaining advances against existing inventory and accounts receivable.
Consolidate short-term debt.

Terms:
Each of the five lines of credit has a maturity of up to five years, but, because each is tailored to your individual needs, a shorter initial maturity may be established. You may use CAPLines funds as needed throughout the term of the loan to purchase assets, as long as sufficient time is allowed to convert the assets into cash by maturity.

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