Chortek’s Sage Inventory Advisor Webcast

Are you experiencing inventory stock-outs?
Do you struggle with excess inventory?

Don’t miss out! If your business is experiencing inventory and capital challenges, contact Chortek on how Sage Inventory Advisor can:

 Improve Your Inventory Status and Free Up Cash

Learn how Sage Inventory Advisor helps you:

  • Reduce excess inventory by 10%-15%
  • Reduce working capital and free up 15%-20% of cash tied into inventory
  • Improve fill rates by up to 10%
  • Reduce stock-outs
  • Produce quality forecasts and reduce time spent on forecasting

Sage Inventory Advisor is a cloud-based and mobile solution that connects to Sage ERP systems to deliver inventory solutions critical to the success of your business.

 

 

Are Your Profits On Target?

How to prepare WIP reports for long-term contracts

ARE YOUR PROFITS ON TARGET?

Work-in-progress (WIP) is a major inventory account for manufacturers, media and film companies, construction contractors, and other entities that enter into long-term contracts. WIP reports help management gauge the profit on each long-term project. To maximize profitability, it’s essential to regularly monitor these reports.

What should be included?
There are many ways to create WIP reports, including spreadsheet programs and accounting software add-ons. Whichever method you use, the report should track key information for each project in progress, such as:

  • Contract price (including approved change orders),
  •  Estimated job costs,
  • Estimated gross profits,
  •  Costs incurred to date,
  • Revenues recognized,
  • Percentage of completion,
  • Billings to date, and
  • Billings in excess of earnings or earnings in excess of billings.

Most companies with long-term contracts run monthly WIP reports. But proactive managers run them weekly. Warning: The process requires a current and accurate assessment of estimated costs to complete each project. Otherwise, the information will be incorrect and could be misleading.

How can you spot trouble?  

WIP reports can help you identify problems and take corrective action before the problems spiral out of control. For example, say a job is 25% complete but your costs incurred to date are 40% of budget. That’s not good, but thanks to your WIP report, you’ll have time to investigate, make adjustments and, one hopes, get the project back on track.

WIP reports also indicate whether a job is underbilled or overbilled. Either situation is a potential red flag of financial trouble. But, in many cases, there’s a benign explanation. For example, underbilling (that is, billing that fails to keep pace with a job’s progress) may be attributable to cost overruns, inefficient project management or sluggish billing.

WIP reports can also help you spot “profit fade.” This is the gradual decline in projected gross profits over the course of a job. There are several potential causes of profit fade, including inaccurate estimates, lax project management and sloppy change order practices. Again, a WIP report can tip you off to project discrepancies before the job gets too far along.

For more on WIP reports

WIP reports may initially seem overwhelming. But once you understand the terminology used and conditions that raise a red flag, the WIP report can be a powerful management tool. We can help you create these reports and teach you how to monitor WIP on a regular basis.69c593bd c97e 4958 99a8 f0d7daeb200e?service=Wordpress(com)&f=3698145&view=true

real_estate_taxes

IRS Disallows Prepayment of 2018 Real Estate Taxes

There has been substantial information in the news lately regarding prepaying next year’s real estate taxes in order to accelerate a tax deduction into 2017.  The IRS issued an advisory on December 27, 2017 basically stating that making a “deposit” for taxes to be assessed in the future does not constitute a current deductible expense for income taxes.  Here are our observations for paying real estate taxes:

  1. For Wisconsin residents, generally consider paying the real estate tax bill you received in early December by the end of the year.  However, if you are subject to alternative minimum tax in 2017, there may be no advantage to doing so.
  2. For residents of other states, it depends on the assessment period, and when you actually have a legal obligation to pay the real estate taxes.
  3. Just because your municipality has a method for making a deposit of future real estate taxes does not make such payment deductible in 2017.

Everyone’s tax situation is unique.  Please consult with our tax professionals to understand what options provide the best tax benefits to reduce your income tax burden in both 2017 and 2018.

https://www.irs.gov/newsroom/irs-advisory-prepaid-real-property-taxes-may-be-deductible-in-2017-if-assessed-and-paid-in-2017

Pat Wirth, CPA, Partner
262-522-8255

fed govt

The 2017 Tax Cuts and Jobs Act (H.R. 1)

The 2017 Tax Cuts and Jobs Act was signed into law on December 22, 2017.  The linked publication highlights the key changes and planning opportunities of individuals and businesses: CCH House-GOP-Tax-Cuts-Job-Act.

Chortek’s tax department is analyzing the impact of the tax law changes for our individual and business clients. We will expeditiously be developing strategies as additional clarification is published on the intricacies of the tax bill.

In the meantime, do not hesitate to reach out to our tax team with your questions.

See also “Why you may want to accelerate your property tax payment into 2017

 

 

Property Tax sign

Why you may want to accelerate your property tax payment into 2017

Accelerating deductible expenses, such as property tax on your home, into the current year typically is a good idea. Why? It will defer tax, which usually is beneficial. Prepaying property tax may be especially beneficial this year, because proposed tax legislation might reduce or eliminate the benefit of the property tax deduction beginning in 2018.

Proposed changes

The initial version of the House tax bill would cap the property tax deduction for individuals at $10,000. The initial version of the Senate tax bill would eliminate the property tax deduction for individuals altogether. Read More >

Woman looking at 100-dollar bills

Is it time to rethink your holiday bonuses?

Many employers feel obligated to hand out holiday bonuses. If you’ve been distributing such checks for years, without regard to merit or longevity, maybe it’s time to rethink this practice.

Merit-based rewards

Citing economic uncertainties or philosophical changes, some employers have done away with holiday bonuses altogether. This is an option, of course, but a better one may be to replace your across-the-board holiday bonuses with a merit-based program that rewards those who deserve extra recognition. Read More >

writing with a pencil

The Write Stuff: A Letter of Instructions

When you draft an estate plan, the centerpiece is your will or living trust. Such a document determines who gets what, where, when and how, as well as tying up the loose ends of your estate. A valid will or living trust can be supplemented by other legally binding documents, such as trusts (or additional trusts), powers of attorney and health care directives.

But there’s still a place at the table for a document that has absolutely no legal authority: a “letter of instructions” to your heirs. This informal letter can provide valuable guidance and act as a road map to the rest of your estate. Read More >

retirement plan 7

Are your retirement plan documents in complete agreement?

Pop quiz! What are the two legal documents that govern your company’s qualified retirement plan? It may not be a question that keeps you up at night, but it’s one that can trip up employers that sponsor such a plan.

The answer, of course, is: 1) an underlying plan document (UPD) and a summary plan description (SPD). But here’s an even scarier question — what if these two documents don’t completely agree with each other? Read More >

Tax Break for Hiring Veterans

2017 might be your last chance to hire veterans and claim a tax credit

With Veterans Day on November 11, it’s an especially good time to think about the sacrifices veterans have made for us and how we can support them. One way businesses can support veterans is to hire them. The Work Opportunity tax credit (WOTC) can help businesses do just that, but it may not be available for hires made after this year.

As released by the Ways and Means Committee of the U.S. House of Representatives on November 2, the Tax Cuts and Jobs Act would eliminate the WOTC for hires after December 31, 2017. So you may want to consider hiring qualifying veterans before year end. Read More >

Glass office buildings with fall colors

How to maximize deductions for business real estate

Currently, a valuable income tax deduction related to real estate is for depreciation, but the depreciation period for such property is long and land itself isn’t depreciable. Whether real estate is occupied by your business or rented out, here’s how you can maximize your deductions: Read More >