Resolve to get finances in order

  • Sunday, December 30, 2001 9:00pm
  • Business

Associated Press

NEW YORK — The arrival of Jan. 1 can mean a fresh start for small business owners — it’s the beginning of a new tax year and usually a time for some financial housecleaning.

Certified public accountants suggest more than a change in ledgers — they say many small business owners could do with a shift in attitude about handling money, their companies and their personal lives. That means doing more planning, exercising some discipline and perhaps getting some financial help.

Gordon Spoor and Bob Doyle, partners in Spoor, Doyle &Associates in St. Petersburg, Fla., say a common mistake many business owners make is to look at company and personal finances separately. These owners don’t understand that personal goals need to be considered along with company revenue and earnings projections.

"Don’t just look at your taxes. … You’ve got to look at your overall financial plan," said Spoor, who along with Doyle is a certified public accountant and personal financial specialist. "Are you saving for retirement? Are you saving for your children’s education?"

A related problem is procrastination. "We get so many people who say, ‘We’re putting it off a year,’ and then 10 years go by," Spoor said, noting that many entrepreneurs who poured their money into the business suddenly find they have very little time to get college tuition money together.

Doyle said part of the problem is that many business owners try to do all their financial planning and bookkeeping themselves instead of turning to a professional. While admitting he was being self-serving in suggesting business owners use accountants, Doyle questioned whether the do-it-yourself approach makes sense.

Although hiring an accountant is an added expense, it "can give you an additional 10 hours a week to do with as you choose — for more family time, more marketing, more planning," Doyle said, noting again that personal issues need to be considered along with the business.

Of course, delegating work — which is what hiring accountants, lawyers, human resources companies, etc., is all about — is crucial for a business owner trying to build or expand a company. Management experts preach to entrepreneurs that they should focus on their strengths, and let other people do the administrative chores.

Spoor advised business owners that if they’re going to seek financial advice, that they do it soon.

"If you hire an accountant at the beginning of the year, we can help with tax planning throughout the year and business planning," he said. "It’s frustrating for us when you bring in a proverbial shoebox (filled with receipts) in January … think of all the things we could have done for you the previous year."

"Do it now" is a recurring theme with accountants, who note that putting off business decisions can end up costing company and owner dearly.

For example, many business owners put off until later in the year setting up a retirement plan for themselves and employees (procrastinating, again). They reason that it doesn’t matter when the plan is funded; the money the company contributes is deductible whenever it is paid.

But, said, Doyle, "You should fund your retirement plan early instead of late. It may otherwise never happen and this way, you’ll gain a year of tax-free growth."

The accountants noted that under changes in the tax law passed by Congress last spring, taxpayers are able as of Jan. 1 to contribute more money to 401(k) and other retirement plans, making these savings vehicles even more attractive as employee benefits.

Plunking down thousands of dollars to match retirement fund contributions in one swoop might be daunting — and even impossible — for many companies. So the accountants urged business owners to try the installment plan, making a schedule of regular contributions and sticking to it throughout the year.

That might sound hard, and Doyle agreed that it can be for many business owners.

"It means using some financial discipline," he said.

Spoor, however, likened the process to dealing with a porterhouse steak. "I didn’t think I could eat a 32-ounce steak until I ate it one bite at a time," he said.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.