April 29, 2020

10 Tips for Managing Cash Flow in a Crisis

During the boom times of recent years, businesses concentrated on growing the top line and managing costs, and not as much time focused on working capital components, such as accounts receivable, accounts payable and inventory. Now with financial strain on businesses as a result of COVID-19, business owners and leadership teams need to not only focus on revenues and reducing costs, but they need to concentrate on the balance sheet to optimize cash and maintain liquidity. It is imperative to keep an eye on your cash flow, regularly monitor your cash position and develop some survival strategies to get you through the crisis. 

Instituting an effective cash flow management strategy may be the most important action you can take to navigate through challenging times.

Here are some tips to control cash:

  1. Actively manage accounts receivables.  The typical 30- or 45-day  account review probably won’t cut it anymore. Now is the time to shorten collection times and improve your collection process. You may also want to closely review your customers, identifying those that absorb cash from the organization.
  2. Review customer payment terms. Consider early payment discounts, or advance payment options for those slow paying customers.
  3. Review accounts payable more closely.  While you don’t want to hurt your credit or supplier relationships, speak to your suppliers about ways to assist in managing your payments and shipments.
  4. Adjust inventory levels. First, make sure your inventory on the books is accurate. Analyze customer demands and adjust future purchasing as necessary.
  5. Adjust staffing levels. Look at customer needs and utilize resources to right-size your staff. There are currently opportunities for loans and additional monies for unemployment that could help and still provide for your staff.
  6. Review all costs. Determine which costs might be eliminated, reduced or renegotiated.
  7. Review all agreements.  Look at current and upcoming commitments, and determine if some could be restructured, delayed or cancelled.
  8. Review plans for capital investments. Determine which capital projects can be delayed, eliminated or modified.
  9. Establish a deeper relationship with your banker.  Make sure to discuss your cash flow and liquidity positions with your banker. Pay attention to any debt covenants.
  10. Prepare a cash flow forecast. If don’t already have a cash flow forecast, now is the time to start.  Begin with a simple 13-week projection containing your major cash inflows and outflows each week. This will allow you to understand periods of cash difficulty and provide you with time to maneuver.

The tips outlined above are very important in the current environment.  Liquidity and cash flow are always critical to business continuity. While it is an old clique, Cash is King today.  Every business should evaluate short-term cash flow and financing needs. This will provide you with the information needed to make the difficult decisions ahead with  greater confidence. Cash flow planning done today will allow businesses to see the bigger picture of the COVID-19 impact on the business and the length of time it will take to recover. 

Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

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April 28, 2020

RECORDED WEBINAR: PPP Loan Forgiveness and Stimulus Updates

Download our recorded webinar to hear from the Anders CARES Act Research and Response Team on the details of PPP loan forgiveness and the newest stimulus package update, including:

  • Loan forgiveness calculations based on current guidelines
  • How to maximize your loan forgiveness
  • Loan forgiveness for self employed individuals
  • Updates on the various stimulus programs based on the new bill

The recording also includes plenty of Q&A as the team answers important questions from the audience.

Complete the form below to download the presentation.

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April 24, 2020

New $484 Billion Stimulus Package Replenishes PPP and Offer Relief for Hospitals and Businesses

President Trump recently signed a new coronavirus relief bill into law that will help replenish the depleted Paycheck Protection Program (PPP), among other initiatives. Below are the details of the relief package.

Details of the New Bill

The new relief package adds an additional $310 into the PPP. $60 billion of that is allocated to small institutions. Half of the $60 billion is set aside for lenders with assets of less than $10 billion, and half for those with assets between $10 billion and $50 billion. Here is how the relief is broken down:

  • $310 billion total for PPP, with $250 billion unrestricted and $60 billion set aside for smaller institutions
  • $50 billion for EIDL loans and $10 billion for EIDL grants
  • $75 billion for hospitals
  • $25 billion for COVID-19 testing, $11 billion of which will be distributed to states
  • $2.1 billion for Small Business Administration administrative expenses

How to Benefit from the Potential New Relief

Since the PPP has been replenished, businesses who have yet to apply should submit their application to receive funds from the $310 billion offered in this relief package.

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Learn more about the Paycheck Protection Program or visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

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April 23, 2020

Sales and Use Tax Reviews Provide Opportunity for Businesses to Recover Overpaid Taxes

With the COVID-19 pandemic impacting businesses across industries, this is an ideal time to look for other ways to find funds to be able to recover quickly and get business back to normal. One way to do that is through a sales and use tax review to find where the business may be overpaying tax and take the necessary steps to avoid overpaying in the future and to recover past overpayments.

What is a sales and use tax review?

A sales and use tax review can assure your business operations are in compliance, and that you are taking advantage of tax savings opportunities. The review provides companies with a benchmark of their current sales and use tax underpayment and overpayment status, as well as associated planning opportunities. State statutes and interpretations change on a continuous basis causing unexpected liability issues to arise and overpayment opportunities to be overlooked. These reviews help ensure businesses aren’t leaving money on the table when it comes to sales and use tax.

At a state level, Missouri made a recent law change extending the refund statute to 10 years instead of 3 years, making it a fantastic time to recover overpaid taxes from the past decade.

What documentation is needed for a sales and use tax review?

To fully understand a business’s tax payment and liability landscape, a sales and use tax review analyzes the following documentation:

  • Sales and use tax returns and support documentation
  • Capital and fixed asset purchase invoices
  • General expense purchase invoices
  • Chart of accounts
  • Prior state sales and use tax audits
  • Prior refund claim documentation

A sales and use tax review can help find overpayments to keep more money in your business’s pocket during this tough time. Contact an Anders advisor for more information on reverse audits or learn more about Anders State and Local Tax.

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April 21, 2020

Tips for Acing Your Next Virtual Job Interview

As recruitment processes for many companies continue to change due to COVID-19, virtual interviews are becoming a normal part of the process. There are many similarities between interviewing in-person and virtually, and ultimately, the end goal is the same. Whether your next virtual interview is done via Microsoft Teams, Skype, Zoom, or Google Hangouts, below are some tips to consider to help ace your next virtual interview.

Prepare Your Setup

There are many things you can do ahead of time to help get prepared for your virtual interview. First, get yourself comfortable with the technology you will be using for the interview. There are many videoconferencing tools out there today, so be sure you know what system you will be using and that it works properly on your computer. Test out your camera and microphone capabilities and ensure that your internet speed allows for good video quality. It is also important to put yourself in a professional setting. Finding an area where there is a blank wall or a professional scene in the background is best. Most video software allows you to set your own virtual background during your session – if needed, you can always pick a professional virtual background. It is also important to pick a spot where there will be minimal distractions (background noise, lighting issues, etc.). If you are in a shared living space (roommates or family members) it might be a good idea to let them know what time your interview is so they will not interrupt.

Do a Test Run

If possible, ask a friend or family member to do a virtual interview test run with you. Not only will you be able to test the video/audio capabilities, you will also be able to ease some interview nerves by doing a mock interview.

Dress Appropriately

Although it might be hard to get dressed up with nowhere to go, it is important you still dress professionally for your virtual interview. Dress the same as you would if you were going in for a face to face interview. Business professional attire would likely be expected unless otherwise stated in interview instructions.

Prepare Yourself

Same as you would do when going into a face to face interview, be sure you are prepared for the interview. Think about what questions might be asked and how you would respond. Know your resume and be able to speak to your qualifications and skills. Do your research on the company and interview team and be sure to have questions prepared to ask the interview team and what the next steps in the process might be.

Think About Your Body Language

Interviewers can still get a sense for body language in a virtual interview just the same as they can in an in-person interview. Be sure to sit up straight, talk clearly, and maintain eye contact throughout the interview. It can be easy to look at yourself in the computer screen, so try your best to not let that distract you.

Be Yourself

In the end, an interview is designed to get to know the candidate and if they would be a good fit for the team and culture. Be yourself and don’t be afraid to initiate some small talk to get to know one another. This will help you relax and feel more comfortable throughout the interview.

As an interviewer, we understand things happen – kids may rush in at any moment, dogs might be barking at something outside – know that we understand there may be things out of your control, especially during times where you may be playing the role of parent, teacher, and employee. Do your best to eliminate the things that could go wrong, but if they do, apologize and continue on!

Following these tips will hopefully help you ace your next virtual interview and get you into the next round of the recruitment process, or even an offer! By being prepared and being yourself you are sure to make a lasting impression.

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April 21, 2020

Anthony Szczepaniak Named Chief Executive Officer of LEA Global

As a member firm of the Leading Edge Alliance (LEA), one of the largest international associations of independent accounting firms, Anders is excited to announce that Anthonoy Szczepaniak has been named CEO of LEA.


LEA Global welcomes Anthony (Tony) Szczepaniak as Chief Executive Officer (CEO). Szczepaniak will lead the strategic direction and day-to-day operations of the international accounting association, focusing on membership best practices, cohesiveness, collaboration and growth.

Szczepaniak most recently led the Moore North America accounting and consulting firm association. His career also includes 15 years of working and leading Fortune 500 corporate tax teams and 15 years in public accounting, including as a tax partner serving primarily middle market clients.

“Tony brings perspective from outside the industry with his corporate roles, inside the industry with his public accounting experience, and the very specific expertise gained in leading an international association,” said LEA Global Board Chair Michael D. Newton. Newton is also the managing partner of member firm Fuller Landeau in Montreal, Canada. “Under his leadership and growth mindset, we will further strengthen the LEA Global community and move forward into the future.”

As CEO, Szczepaniak will leverage his experiences as a strategic thinker, business leader and change agent to work with LEA Global members to strengthen relationships, accelerate best practice sharing, and expand technical expertise and industry knowledge in accounting, audit, tax and business advisory.

“I look forward to working with the members of this well-respected community to help build a vision of a future that sees the uncertainty and volatility of today’s environment as opportunity,” commented Szczepaniak. “Creating belief and enthusiasm around this vision and purpose in a way that engages members while increasing the value for members and ultimately their clients, is the main goal.”

Szczepaniak, who has held several executive committee and resource panel roles for the American Institute of Certified Public Accountants (AICPA), holds a Bachelor of Science degree in Accounting from Elmhurst College, a Master of Science degree in Taxation from DePaul University, both in the Chicago-area, and certifications from University of Chicago, Harvard University and Stanford University.

LEA Global board members and selection committee include managing partners Jeffrey S. Drummonds, LBMC, Nashville, TN; Wayne R. Pinnell, Haskell & White, Irvine, CA; Robert J. Minkler, Jr., Anders CPAs + Advisors, St. Louis, MO, Chairman and CEO Jeff Weiner, Marcum, Allan Koltin, one of the leading consultants to the public accounting profession, along with COO Michele Alcorn, interim CEO Frans Tijssen, former managing partner of BOL International in the Netherlands.

About LEA Global
LEA Global is a leading association of independent accounting firms that provides clients with professional accounting, audit, tax and advisory services. It’s 200 member firms maintain over 600 offices in 110 countries throughout the world. For more information on LEA Global visit www.leaglobal.com.

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April 20, 2020

Qualified Improvement Property Now Eligible for Bonus Depreciation Under CARES Act

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided a long anticipated technical correction for Qualified Improvement Property stemming from the 2017 Tax Cuts and Jobs Act (TCJA).

Pre-CARES Act

The TCJA eliminated pre-existing definitions for qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property and replaced those definitions with one category called qualified improvement property (QIP). Under the TCJA, QIP fell into the 39-year recovery period for nonresidential rental property, making QIP investments ineligible for 100% Bonus Depreciation.

QIP Technical Correction

The CARES Act provides a technical correction to the TCJA, designating QIP as 15-year property and eligible for 100% Bonus Depreciation. For alternative depreciative system (ADS) purposes, QIP is recovered over 20 years.

What You Should Do

Because of this technical correction (retroactive to January 1, 2018), taxpayers can file amended returns to claim bonus depreciation for 2018 and 2019 or file for a change of accounting method with Form 3115 to fix this error on their 2018, 2019, or 2020 tax return.

In addition to the QIP technical correction, the CARES Act also temporarily repeals the 80% income limitation for net operating loss deductions for years beginning before 2021. For losses arising in 2018, 2019, and 2020, a five-year carry-back is allowed (taxpayers can elect to forgo the carry-back).  This could result in tax savings for taxpayers claiming additional depreciation deductions and potential refunds of taxes paid.  Contact an Anders advisor to see if these situations make sense for you.

Visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

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April 17, 2020

COVID-19 Resource Center Offers Insights and Guidance for Individuals and Businesses

As a source of information and guidance for businesses and individuals since 1965, Anders is here for you during this time of uncertainty. We’re researching and dissecting the latest legislation, local news and relevant updates around COVID-19 and sharing them in our COVID-19 Resource Center.

As always, we are here for you, your family and your business. Contact your Anders advisor to discuss your specific situation and how to move forward during this challenging time.

View the COVID-19 Resource Center.

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April 16, 2020

Using PPP Loan Proceeds to Maximize Loan Forgiveness

Updated 6/8/20

One of the biggest areas of CARES Act that benefits businesses is the Paycheck Protection Program (PPP). With big benefits, comes many questions around one detail specifically: loan forgiveness.

Which loan expenses are forgivable?

According to the CARES Act, if you spend the loan proceeds on four specific categories while maintaining the same level of employees your loan should be forgiven:  

  1. Payroll – The SBA declared that payroll costs include gross salaries and wages of employees up to a cap of $100,000 per year (on an annualized basis), employer-paid health insurance, employer-paid 401k matching contributions, and employer-paid state and local taxes on payroll (e.g., unemployment insurance), among other things. Payroll costs do not include the employers portion of payroll tax expenses such as Social Security and Medicare. Recent updates added a requirement that at least 60% of the loan forgiveness amount must be attributable to payroll costs.
  2. Rent – Eligible rent expenses include payments under a lease agreement in force before February 15, 2020.
  3. Utilities – The CARES Act defines utilities narrowly to include electricity, gas, water, transportation, telephone, or internet service for which service began before February 15, 2020. 
  4. Interest – Interest payments can be for debt obligations that are a liability of the borrower incurred in the ordinary course of business and before February 15, 2020. The underlying debt must be a “mortgage on real or personal property.” This would include debt on real property that is secured by a traditional mortgage lien as well as working capital lines of credit and other indebtedness where a UCC-1 is filed on the borrower’s personal property. This definition does not appear to include unsecured debt.

What are the stipulations for forgiveness?

Beyond the four categories, there are a few other stipulations businesses must follow for their loan to be forgiven:

  • Businesses must maintain the headcount and salaries of employees as the same pre-COVID-19 level.
  • The expenses need to be paid for during the covered period. Recent updates allow the covered period to be up to 24 weeks. Existing loans (as of June 5, 2020) may choose to keep their 8-week covered period.

If these requirements are not met, the loan must be repaid. New loans will have a loan term of 5 years, and existing loans may be modified from 2 years to 5 years at the discretion of your lender.

How can I maximize loan forgiveness?

If your payments follow the above criteria, there are two payroll calculations to use to determine the actual forgivable amount. The first calculation is a measurement of the number of Full Time Equivalents (“FTEs”) and the second is a measurement of actual salary expense. These calculations verify that the expenses are directly related to the purpose of the CARES Act: keeping employees working at wages comparable to pre-COVID-19. 

Headcount Calculation

If a business reduces its full-time employees during the covered period, the forgiveness amount is reduced by a ratio defined as: 

  • The average number of FTEs during the covered period divided by the average number of FTEs during the base period.
  • There are three different options to determine the base period, and borrowers can select the one most favorable:
    • Using 2019 Information –the average number of FTEs per month from February 15, 2019, through June 30, 2019
    • Using 2020 Information –the average number of FTEs per month from January 1, 2020, to February 29, 2020
    • Seasonal Businesses –the average number of FTEs per month from February 15, 2019, through June 30, 2019
  • There are provisions within the act that will help restore some or all of the forgiveness if displaced employees are rehired prior to December 31, 2020.  Please consult your advisor for further clarification. 

Wage Calculation

The CARES Act introduced a forgiveness penalty for companies who reduced wages per employee by more than 25% compared to the most recent quarter before the PPP loan was made. For purposes of this calculation, businesses only need to consider employees who makes $100,000 or less per year. The statute compares an eight-week period to a three-month period, so we expect further guidance will clarify the method of calculation.

How can I start planning?

The loan forgiveness process will be administered by your bank and we expect they will request supporting documentation to validate. Once a loan is received from the PPP program, businesses will need to be strategic about how to bring employees back, how to spend the funds, and how to ensure you receive the maximum amount of loan forgiveness. Here are a few planning points we suggest: 

  • Make sure proceeds are used on covered expenses only to maximize forgiveness
  • Use at least 60% on payroll expenses
  • Keep thorough documentation of how the proceeds are used so you can apply for forgiveness

Our advisors are closely following COVID-19 relief efforts and will continue to publish insights to keep you informed about potential business impacts and benefits. Learn more about the Paycheck Protection Program or visit our COVID-19 Resource Center for more news, tools and insights you need to know in these uncertain times.

It’s important to work closely with your banker and to expect changes as the program is still evolving.

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April 15, 2020

GAAP Financial Reporting Considerations Related to the COVID-19 Crisis

There’s no doubt that businesses have been thrown into a “new normal”. For the past few weeks, business owners have worked to understand the aspects of the CARES Act, and the FFCRA, while trying to rework budgets, cash flow projections, and other important business forecasts to help weather this crisis. There are several important accounting and reporting rules under Generally Accepted Accounting Principles (GAAP) that should be considered:

Subsequent Events

GAAP often requires disclosure of events or circumstances occurring after the balance sheet date, but before the financial statements are issued. Events that provide evidence about conditions that did not exist at the balance sheet date but arose subsequent to that date are called “Type 2” events. For many closely held businesses in the US, the COVID-19 crisis is considered a Type 2 event. Generally, Type 2 events are not recognized in the financial statements but are disclosed in the footnotes to keep the financial statements from being misleading.

Risks and Uncertainties

GAAP financial statements normally include disclosures related to the nature of an entity’s operations or activities, significant estimates, and current vulnerability due to certain concentrations to provide users with information on risks and uncertainties impacting financial performance. The COVID-19 crisis has created new risks and uncertainties for many businesses. Businesses experiencing operational shutdowns, work stoppages, supply chain constraints, etc. should considered the relevant disclosures required under GAAP.

Decline in Market Values of Investments

The COVID-19 crisis has had a tremendous impact on the capital markets, and entities holding investment assets (including businesses, nonprofits, and employee benefit plans) should consider disclosure in the financial statements regarding declines in fair values of these assets. Again, as a “Type 2” event, it is not necessary to record an adjustment to fair value, but the disclosure would typically be required.

Goodwill Impairment

Under current GAAP, goodwill should be tested for impairment at least annually, and more frequently if there are indications of impairment. Among other factors, industry and market conditions caused by the COVID-19 crisis may prompt such an indication. Companies that have elected the Private Company Accounting Alternative for goodwill should also test for impairment if a triggering event occurs. The COVID-19 crisis and the related economic impact may be considered a triggering events. In addition, companies must consider whether the potential decline in it’s fair value is driven by other assets, rather than goodwill alone (e.g. accounts receivable, fixed assets, inventory, etc.). The potential write-down of those assets could reduce or eliminate any goodwill impairment.

Going Concern

GAAP requires that management evaluate whether conditions and events, in the aggregate, exist that raise substantial doubt about an entity’s ability to continue as a going concern for a period of one year from the date the financial statements are available to be issued. Existing literature cites external factors, such as catastrophic events, as issues that may raise substantial doubt. For some businesses, the COVID-19 crisis may have raised new threats and doubts that severely impact operations. Going concern evaluations must consider both quantitative and qualitative factors, and the analysis can be very complicated. Nevertheless, if substantial doubt is raised, the entity must consider the need to for additional disclosures in the financial statements.

There are many other areas of financial reporting that could be impacted by the COVID-19 crisis. Management should consider the effect, if any, on the collectability of receivables, inventory valuation, and when deferred revenue may be earned – just to name a few. Each situation is different, and significant judgment will be needed in determining the appropriateness of the above considerations on specific businesses.

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