Welcome to the first edition of our newsletter! The Analytix team has put together the latest in accounting, bookkeeping and financial news in this issue. Each quarter, you will find an article resource with takeaway tips, as well as industry updates, designed to help you with the accounting and bookkeeping elements of your business.

Our motto is to provide timely and accurate information at a cost-effective price. Over the past few months, we have made tremendous progress and would like to share our success with you.

• Because of the new referral sources many of you have provided to us, we are delighted to tell you that our accounting and bookkeeping portfolio has surpassed the 100-digit mark.

• Since our inception, we have achieved a 96% client retention rate.

• 25% of our clients have also hired us for other value-added services such as custom software development, website design, and search engine optimization.

• Our reach has widened geographically: 40% of our clients are now outside the New England region.

• Our employee base now consists of 60 full-time employees, which enables us to provide you with personalized, qualitative services.

• To thank you, and show how grateful we are for the valuable trust you have placed in us, we have implemented a referral program aimed at rewarding you. When your referral signs up with us, you get paid! Find out more by contacting the Analytix team at sales@analytixsolutions.com.

I appreciate your business, the friendship we have established and your continued support. I also look forward to a meaningful and mutually beneficial relationship.

Best regards
Satish Patel, CPA, CFP
President, Analytix Solutions LLC.

Tips on using payroll services

Require in the contract that your tax deposits be maintained in accounts identified as “Trust Funds” for your business taxes, and frequently request—from the IRS and state tax agencies—transcripts of your tax accounts.

Example: In one case, when the payroll service embezzled a company’s withheld taxes designated for deposit with the IRS, the IRS first sent deficiency notices. When the company reported to the IRS that the payroll service had embezzled its employment-tax funds, the IRS said this was irrelevant and took the company to court. The court ruled that the company was responsible for timely filing and payment of taxes. Relying on an agent, even one that commits criminal acts, does not relieve a taxpayer of its ultimate responsibility for filing returns and paying taxes.
[Pediatric Affiliates, P.A. v. United States; No. 3:05-cv-03108; Feb. 23, 2006, D.C.N.J.]

Each year end, before December 31, consider asking for an adjustment run before you close out and produce your W-2s. Verify and, if needed, correct:

- relocation expense reimbursements;
- manual or voided paychecks that have not been put in the system;
- personal use of company vehicles;
- company-paid educational assistance; and
- other taxable items paid via accounts payable.

Always check your payroll service’s work (just as you check your tax return when it is done by someone else) to make sure not only that it is accurate, but that it is in compliance with the latest IRS changes in employment taxes and reporting requirements.

Real-Time Reporting

CLIENT OVERVIEW

CHALLENGE

THE ANALYTIX SOLUTION

RESULTS

Free Work vs. Internships
From Seth Godin’s Blog

“I think internships are overrated. Most of the time, the employer thinks he’s doing the intern a favor, but he doesn’t trust the interns to do any actual thoughtful, intelligent work worth talking about.”

READ MORE: http://tinyurl.com/ptcrpd

Breaking Up…with Customers
From Inc.com

“Over the course of the eight years we’ve been in business, we’ve had to ‘break up’ with a bunch of customers for various reasons, and you know what I’ve come to terms with? It’s OK. Not every customer is right for every business.”

READ MORE: http://tinyurl.com/lfjwht

The Facts about Amortization and Depreciation

Amortization measures the consumption of the value of an intangible asset, such as a copyright, patent or trademark. In accounting parlance, amortization refers to the deduction of capital expenses over the life of an intangible asset.

Intangible assets are generally expensed according to their life expectancy, but nonphysical assets may have either an identifiable or indefinite useful life. Examples of intangible assets with identifiable useful lives include copyrights and patents, and these are amortized on a straight-line basis over their economic or legal life, whichever is shorter.

Intangible assets with indefinite useful lives are reassessed each year for impairment. If an impairment has occurred, then a loss must be recognized. An impairment loss is determined by subtracting the asset’s fair value from its book value. This impairment loss may be reversed only under certain circumstances. Trademarks and goodwill are examples of intangible assets with indefinite useful lives.

Goodwill must be tested for impairment rather than amortized. If impaired, goodwill is reduced and a loss must be recognized on the income statement.

Depreciation is an expense allocated to a tangible asset’s cost over its useful life. Think of depreciation as the reduction of an asset’s value due to use, passage of time, wear and tear, technological obsolescence, depletion, inadequacy, rot, rust, decay or other similar factors.

Depreciation is the allocation of the historical cost of an asset over the time when the asset is employed to generate revenues. This process of cost allocation has little or no relevance to the market value or current selling price of the asset. It is simply a recognition that a portion of the asset’s cost was used up in the generation of revenues during a given time period.

When used for accounting purposes, amortization and depreciation are noncash expenses that do not affect a company’s cash flow.

Depreciation recognized for tax purposes will, however, affect the cash flow of the company, as tax depreciation will reduce taxable profits. There is generally no requirement that depreciation for tax and accounting purposes be treated the same way. Where depreciation is shown on accounting statements, the figure usually does not match the depreciation for tax purposes.

Straight-line depreciation spreads the cost of depreciation evenly over the life of an asset. On the other hand, there are various methods of accelerated depreciation that allow you to deduct more in the first years after purchase. Bonus depreciation is an additional amount of deductible depreciation that is always taken in the first year of an asset’s service. Bonus depreciation may be offered as an incentive or as a measure of relief for small and medium-sized businesses to buy additional equipment.

The depreciation method used for an asset is fixed when the asset is first placed into service. Whatever rules or tables are in effect for that year must be followed as long as you own the asset.

Since depreciation rules have changed many times over the years, you may have to use a number of different depreciation methods if you’ve owned business assets for a long time.

How Even Small Businesses Can Create a Powerful Brand

• Make a Clear Statement
• Affirm Your Credibility
• Connect with Customers on an Emotional Level
• Motivate Buyers
• Cement Customer Loyalty