All Posts tagged CPA

What Is Positive and Negative Cash Flow and How Does It Affect a Business?

What Is Positive and Negative Cash Flow and How Does It Affect a Business?

As a business owner, it is crucial to understand cash flow and how it can affect your business and your profit. 

We implore you to work with a qualified virtual Chief Financial Officer (vCFO) who can help you determine what practical steps should be taken to reach your business goal. In the world of business finances, a cash flow report can make or break a business, and is one of the reasons your vCFO will be an indispensable part of your team.

Determining the Quality of Your Cash Flow

Cash flow can be either positive or negative. 

When your business account is receiving more cash than it is paying out, you will have a positive cash flow result. This usually means that your company is receiving more money in sales of products or services than it is spending on business expenses or anything else, which results in a good, positive cash flow. The remaining money after business expenses is your profit. 

However, if expenses for payroll, maintenance, rent, and other services are exceeding the flow of money being made, you will start losing money, resulting in negative cash flow.

How Does Your Cash Flow Affect Your Decision Making?

Positive cash flow is the foundation of a solid business. Positive cash flow can pay for expansions in operational capability and help you to recognize when targeted profit goals are within reach. 

However, negative cash flows can also be a necessary part of life for every business, especially during start-up and periods of rapid expansion. Cash flow reporting during these times will help you determine if your business finances will remain strong enough to last until the expected revenue increases finally appear and bring your cash flow back into the positive.

Your cash flow ultimately determines if you have the means to expand, maintain, or upgrade your business.

Planning for Future Growth

Cash Flow Report is an important tool for your vCFO’s; it can be used to determine which investments have the best chance of resulting in future revenue gains without putting the business at risk of bankruptcy.

Your virtual CFO will be an architect designing the profitable business you have always envisioned.

Hiring a vCFO Can Assist in Succeeding in Your Business Plan

The Virtual Chief Financial Officers at Gonzalez and Arrambide, Inc. in Weslaco can help you maintain a profitable cash flow for your business. We strongly suggest learning about cash flow and how it affects your business. 

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What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

What is Cash Flow and How Can a Virtual Chief Financial Officer Help Improve it?

To run a successful business, you must have a solid cash flow. 

Understanding cash flow is key to prospering as a business owner. A virtual Chief Financial Officer (vCFO) can help you develop your business and triumph. Your vCFO will use several tools and strategies at their disposal, including cash flow reports, amongst other data sources, to create a strategic plan that helps grow your business.

The vCFOs at Gonzalez and Arrambide, Inc., can inform you about the financial information you need to make critical business decisions.

What Is a Cash Flow Report?

In short, cash flow is how much money is coming into your business and how much is going out. A cash flow report will summarize how your business is doing in this regard.

For example, more money coming in than going out will give a positive monthly cash flow result. If this monthly trend continues, you can expect to profit. It is possible to have a good cash flow result at the end of the year even if you were negative some months. 

It’s worth noting, however, that a cash flow report isn’t the same as an income report.

Who Creates a Cash Flow Report?

This report falls under the responsibility of a vCFO since it is per finances. While your accountant creates the income report to help you determine how much tax to pay, your vCFO will create a cash flow report to assist in determining when you are ready to grow your business and increase your future profits.

How Is a Cash Flow Report Used?

A cash flow report is useful for predicting future account balances. These forecasts are what allow strategic plans to be made. Your cash flow report will tell you when your business can operate with the extra costs that come with expanding without breaking the bank. 

By timing your growth correctly, your business will experience increased revenue with minimal risk.

Outsourcing to a Virtual CFO Can Improve Your Business’ Cash Flow

Owning a business can be extremely overwhelming and stressful, but by hiring a virtual Chief Financial Officer in Weslaco, you will be assisted with the financial services your business may need. By reaching out to Gonzalez and Arrambide, Inc., you’ll get the guidance you need to start or grow your business.

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What Does a Virtual Chief Financial Officer Do?

What Does a Virtual Chief Financial Officer Do?

Now that you’ve started down the path of entrepreneurship, there are a series of essential roles to fill, like CEO and marketing team positions. However, many people make the mistake of leaving the financial department last in the staffing queue.

Within the financial department, the most ignored position is that of Chief Financial Officer, also known as the CFO. The lack of a CFO is the reason many enterprises don’t make it.

At Gonzalez & Arrambide, we want to showcase the importance of hiring one of our vCFOs to help your business boom.

What are the Duties of a vCFO?

The CFO is responsible for managing the financial aspects of your business. Yet, a full-time, in-person CFO can be costly. This is where hiring a virtual CFO (vCFO) could make a lot of sense for small businesses and startups.

A vCFO is a consultant or business that offers the services of a CFO but does their job remotely and usually on a part-time basis. The vCFO will focus on creating high-level financial strategies and putting them into action, such as:

  • Managing and monitoring the bookkeeping
  • Creating short and long-term financial goals and providing valuable feedback
  • Providing competitor analysis
  • Cutting out any financial waste, with growing your business efficiently in mind
  • Managing your business spending
  • Generating key financial metric reports

Our vCFOs at Gonzalez & Arrambide can provide financial services on a weekly, monthly, or quarterly basis. Our vCFOs are also ready to provide advice for any specific project you have in mind. However, if you already retain the services of a full-time CFO, investing in a vCFO may not be an optimal decision for your business. Keep in mind, however, that it is more fiscally advantageous to hire a vCFO over a CFO.

At the same time, if you have a new startup, hiring a vCFO is always the better decision to save on overhead costs.

Find the Weslaco Financial Services You Need at Gonzalez & Arrambide

As your business grows, a vCFO can grow with you. Get all of the skill set you need with a traditional CFO working with you at a more affordable rate. Whether you only need the Gonzalez & Arrambide vCFO services one day a week, or part-time as you become more successful, we are here to support your business at every step.

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Hiring an Accountant Can Make Your Life Easier for this Tax Season’s Extension: Here’s How

Hiring an Accountant Can Make Your Life Easier for this Tax Season’s Extension: Here’s How

As we live through another year with the COVID-19 pandemic, the deadline to pay your taxes was extended last month by the IRS to May 17th in an effort to take some economic pressure off Americans.

To make your life easier for this tax season’s extension, your local Weslaco CPAs at Gonzalez & Arrambide can ease the process of filing your taxes by the deadline. Today, we will break down what’s expected for this payment extension, and how we can help.

What to Expect from the Tax Extension

This extension goes for all filers, including individuals, businesses, trusts, estates and more. It applies regardless of how much you may owe, and payments will not include extra penalties or interest up until the extended date. This extension is automatic, so taxpayers don’t have to file any more forms to take advantage of it.

The extension could offer great benefits for taxpayers seeking to save for retirement through an IRA. That’s due to the typical April 15 income tax deadline that also happens to be the IRA contribution deadline. With this, the updated May 17 due date would set back the 2019 IRA contribution deadline.

The 2020 standard IRA contribution limit exceeds $6,000, or $7,000 if you are 50 or older. If you’ve already used your contribution for the 2020 tax year, you can put it towards the 2021 tax year, where the limit is also $6,000.

Note that this extension does not apply to 401(k) retirement savings accounts.

The federal government recommends that taxpayers file their taxes as soon as possible, especially those who are awaiting a tax refund. Earlier this year, U.S. Treasury Secretary Steve Mnuchin mentioned that he wanted people to be able to access their refunds as soon as possible. This flow of cash would lift some of the financial weight of the pandemic.

Gonzalez & Arrambide Can Help You This Tax Season

While you might be able to file your taxes by yourself without any assistance, you’ll never be aware of how much money you’re leaving on the table. An accountant will have the knowledge and expertise to make sure you’re not overpaying, and that you’re making accurate claims to all the deductions you deserve.

Handling taxes on top of the stress of the ongoing pandemic can feel overwhelming and difficult to navigate through. The most minor mistake in this financial circumstance can leave an impact on both you and your business. If doing taxes alone feels like too much pressure, our skilled CPAs can show you the process, step by step.

We can sort out the process of filing taxes and simplify the intricate process for a reasonable rate. You don’t have to file your taxes by yourself. Be proactive and consult with Gonzalez & Arrambide!

To learn more about how this tax extension affects you or your business, or for help filing your taxes, speak with our certified public accountants by scheduling a consultation with us today.

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Do You Need a CPA or VCFO for Your Business?

Do You Need a CPA or VCFO for Your Business?

Making sound financial decisions are crucial to the success of any size company. A financial professional will help you understand and chart strategies to help you manage a profitable company, but for many, there may be confusion regarding the respective services of a Certified Public Accountant (CPA) or a virtual Chief Financial Officer (VCFO). 

What your business needs will determine what level of financial professional you need. To clear the air, the virtual CFOs at Gonzalez & Arrambide want to discuss the differences between all of these roles so that you can get the most benefit for your business.

The Differences Between a CPA and a VCFO

A moderate sized company with revenue ranging from $2 million to $20 million may have senior executives rely on the advice of their CPA for matters involving certain business finances. In these instances, the CPA will offer a financial opinion based on experience with taxes and tax law, rather than offering insight related to long-term financial advice for the business.

The responsibilities of a VCFO go beyond tax advice and basic accounting. In a nutshell, a VCFO helps with business planning, forecasting, negotiating, and business budgeting, all of the same kind of responsibilities a company Chief Financial Officer (CFO) would do. A VCFO, on the other hand, saves a company money because they aren’t paying for a full-time employee with benefits.

It’s important to note that you don’t need to be a CPA to be a VCFO, and CPA’s aren’t always well-versed on managing complex corporate finances that a VCFO can.

Let’s elaborate a little bit on these roles now.

More Into the Role of the CPA

In the simplest of terms, the CPA is in the business of tax return preparation; that is their primary responsibility. A CPA may collaborate with a VCFO to provide tax advice that will ultimately help guide the company’s financial decisions based on short term and long-term objectives. 

The CPA’s knowledge revolves around taxes and tax laws that lend to the strategies that may be developed by an outsourced CFO. Often, a company may mistakenly look to a CPA for business advice that may be best handled by an individual with a background as a VCFO. A CPA will help a company thrive by performing a range of duties including: 

  • Organizing and updating accounting records
  • Staying abreast of tax laws 
  • Tax preparation and analyzing reports on transactions
  • Conducting regular, detailed audits 
  • Manage financial documents, expenditures, and investments

Consider a VCFO to Help You Strategize While Saving Money

When evaluating the financial goals and objectives of a company, an outsourced CFO will bring strategies and insight that a CPA may not be equipped to handle. A qualified and experienced VCFO will focus on future cash flow and offer expert advice on operational planning to ensure a company is sustainable. In addition, a company may choose to hire a VCFO in order to:

  • Chart a financial strategy
  • Forecast growth
  • Outline sustainability by addressing expenses and highlighting assets
  • Improve profitability 
  • Control expenses and cash flow
  • Establish strong financial relationships
  • Assess financial risk
  • Finance project management 
  • Liaison shareholder relationships

Ultimately, a business may decide to hire a CPA, a VCFO, or both based on a range of factors exclusive to your company’s needs. Whether you’re a growing business or an established company, hiring the right team can make all the difference in your financial outlook.

The Virtual CFOs at Gonzalez & Arrambide Offer Trusted and Sound Service

Founded in 1996, Gonzalez & Arrambide, Inc. has become a respected and recognized accounting firm dedicated to helping individuals and businesses of all sizes with their business needs and strategy. Our commitment to services ensures we give you what you need to succeed and grow your revenue streams. 

At Gonzalez & Arrambide, we offer our clients Virtual Chief Financial Officer (VCFO) services and have helped them improve financial management without spending the substantial resources needed to hire someone in a full-time role. 

Serving the entire Rio Grande Valley Greater Metro and located in Weslaco, our VCFOs are more than qualified to meet your business needs.

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