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 Profit ≠ Cash Flow: Know the Difference

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Many businesses celebrate a “profitable” month—only to realize they’re short on cash at month-end.
Here’s why:
📊 Profit shows what you earned on paper.
💵 Cash flow shows what’s actually in your account.
You can be profitable and still run into cash problems if:
✅ Customer payments are delayed
✅ Inventory ties up funds
✅ Expenses aren’t aligned

🔑 Tip: Always review your cash flow statement alongside your profit & loss report.

📌 At CMCPA Services, we help businesses stay on top of both profits and cash flow so you can make smarter financial decisions.

U.S. Tax-Ready Checklist for Small Business Owners

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Be prepared. Stay compliant. Maximize your deductions.
By CMCPA Services – Helping U.S.-Based Entrepreneurs Stay Tax-Ready Year-Round

🗂️ 1. Organize Your Business Documents

✔️ Business Registration (EIN, LLC, S-Corp docs)
✔️ Prior Year’s Tax Return (Federal & State)
✔️ Articles of Incorporation or Partnership Agreement
✔️ IRS Correspondence (if any)

📊 2. Update Your Bookkeeping

✔️ All income and expenses recorded
✔️ Bank & credit card statements reconciled
✔️ Categorized transactions (with receipts if possible)
✔️ Accurate chart of accounts
✔️ Up-to-date financial reports (P&L, Balance Sheet, Cash Flow)

🧾 3. Collect Your Tax Documents

✔️ 1099-K / 1099-NEC / 1099-MISC forms
✔️ W-2s (if you have employees)
✔️ Business loan statements & interest paid
✔️ Asset purchases or disposals (equipment, vehicles)
✔️ Estimated tax payments made (IRS & State)

💼 4. Track Deductions & Credits

✔️ Home office expenses (sq. ft. + bills)
✔️ Mileage or vehicle expenses (with logs)
✔️ Internet, phone, and software tools
✔️ Professional services (legal, accounting, etc.)
✔️ Business meals, travel, and marketing costs
✔️ Depreciation on business assets
✔️ Employer credits (if applicable)

📆 5. Key Deadlines to Remember

📌 January 31 – 1099s & W-2s due to contractors/employees
📌 March 15 – S-Corp / Partnership tax return deadline
📌 April 15 – Individual & single-member LLC tax return
📌 Quarterly – Estimated taxes due: Apr 15, Jun 15, Sep 15, Jan 15

👩‍💼 BONUS: Work With a Professional

Don’t wait until the last minute. Avoid costly mistakes and missed deductions.

🎯 Book a FREE Consultation with CMCPA Services
📅 Schedule here: Book a Call
📧 Email: mcmworkz@gmail.com
🌐 Website: cmcpaservices.com

Reports You Need Before Quitting Quickbooks Online Subscription

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Before canceling your QuickBooks Online subscription, export or print key reports like the Balance Sheet, Trial Balance, Profit & Loss, and General Ledger to ensure you have access to your financial data for future reference, tax filings, or audits. 

Here’s a breakdown of the reports you should consider exporting or printing:

Essential Reports:

  • Balance Sheet: Provides a snapshot of your assets, liabilities, and equity at a specific point in time.
  • Profit & Loss (Income Statement): Shows your revenue, expenses, and net income or loss over a specific period.
  • General Ledger: A comprehensive record of all financial transactions, essential for audits and detailed analysis. 

Other Useful Reports:

  • Sales Tax Liability: If applicable, ensures you have records of your sales tax obligations.
  • Statement of Cash Flows: Tracks the movement of cash in and out of your business.
  • Inventory Valuation Summary: If you have inventory, this report helps track its value.
  • Customer Balance/Vendor Balance: Provides a summary of outstanding balances for customers and vendors.
  • A/R Aging Summary and A/P Aging Summary: Helps track outstanding accounts receivable and payable. 

How to Export Data:

  1. Go to the Gear icon .
  2. Select “Export Data” under Tools .
  3. Set the date range: in the Reports tab.
  4. Add or remove items from the Reports and Lists tabs .
  5. Click “Export to Excel” . 

You may download any report that is important to you. If you need some assistance, we can help!

Maximizing ROI in Real Estate

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What is ROI in Real Estate?

RETURN ON INVESTMENT (ROI) in real estate measures the profitability of a property investment. It’s calculated using the formula:

A higher ROI means your real estate investments are generating strong returns, while a lower ROI may indicate inefficiencies or areas for improvement.

How a Bookkeeper & Accountant Can Help Real Estate Businesses Increase ROI

As a bookkeeper and accountant specializing in real estate, we help investors, landlords, and agents maximize their ROI through:

  1. Accurate Expense Tracking
    • Categorizing operating costs (maintenance, property management fees, utilities, etc.)
    • Identifying tax-deductible expenses to minimize liabilities
  2. Cash Flow Optimization
    • Monitoring rental income vs. expenses to ensure profitability
    • Implementing strategies to reduce vacancies and late payments
  3. Smart Tax Planning & Deductions
    • Maximizing deductions like depreciation, mortgage interest, and property taxes
    • Structuring investments to optimize tax benefits
  4. Financial Analysis & Investment Decisions
    • Evaluating properties based on ROI and cash flow projections
    • Advising on whether to hold, sell, or refinance properties
  5. Budgeting & Forecasting for Growth
    • Creating financial plans to scale a real estate portfolio
    • Forecasting potential market trends to make informed investment decisions
  6. Ensuring Compliance & Reducing Risks
    • Keeping records up to date for audits and legal compliance
    • Helping navigate financial regulations in real estate

By partnering with an experienced bookkeeper and accountant, real estate business owners can gain financial clarity, improve cash flow, and make smarter investment decisions—all leading to a higher return on investment.

File Form 1099 series information returns for free online

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Business taxpayers can file electronically any Form 1099 series information returns for free with the IRS Information Returns Intake System. The IRIS Taxpayer Portal is available to any business of any size. It’s secure, reduces the need for paper forms and requires no special software.

With IRIS, business taxpayers can:

  • Enter information into the portal or upload a file with a downloadable template in IRIS.
  • Download completed copies of Form 1099 series information returns.
  • Submit extensions.
  • Make corrections to information returns filed with IRIS.
  • Get alerts for input errors and missing information.
  • Get a confirmation in a little as 48 hours that the IRS received the return.
  • Reduce expenses on paper, postage, storage space and trips to the post office.

Get started

Taxpayers will need a IRIS Transmitter Control Code to access the IRIS Taxpayer Portal. This 5-digit code provides an extra layer of security for filing and can only be use on this portal.

First time users can use Publication 5717, IRIS Taxpayer Portal User Guide, for detailed instructions about access and features.

E-filing required for 10 or more returns

If you have 10 or more information returns, you must file them electronically. This includes Forms W-2, e-filed with the Social Security Administration.

Find details on the final e-file regulations.

Source: IRS

Be Our Partner Firm

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Attention Tax Preparers, Advisors and EA’s:

Are you tired of doing the books for your tax clients? Then we could be the solution, we can help! Outsource accounting and bookkeeping to us. We will handle the books for you so that you can do the things that matters to you most. Having us as your partner will free your firm of the time doing the hard work and many more. Our partner firms are enjoying the benefits, be one of them!

Talk to you soon,
CMCPA Services

Back Taxes Implications and What To Do

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Back taxes is a term for taxes that were not completely paid when due. Typically, these are taxes that are owed from a previous year. Causes for back taxes include failure to pay taxes by the deadline, failure to correctly report one’s income, or neglecting to file a tax return altogether.

Most of this happen because of lack or incomplete recording in the books that it is hard for the tax accountant to get the information it needs to complete the filing of return.

What are the implications of this?

If back taxes are owed, the taxpayer’s debt will continue to increase with the inclusion of interest and tax penalties. Late payment penalties include 1/2 of 1% for each month the taxes remain due past the due date. If the taxpayer never filed taxes, there is also a significant late filing penalty.

You will also risk losing your refund and other benefits if you don’t file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date. The same rule applies to a right to claim tax credits such as the Earned Income Credit.

What do you need to do?

First, consult with your tax accountant what needs to be done.

Second, look for someone to complete your books.
(Hint: We are an expert when it comes to accounting and bookkeeping.)

Lastly, act now. The longer you delay filing, the larger your interest and penalties will be!

The Idea Behind Profit First by Mike Michalowicz

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Profit First Book by Mike Michalowicz

What is Profit First Method by Mike Michalowicz?
Profit First Method is based on the idea to pay yourself first before paying your expenses. The goal is to grow a more profitable business, not a cash-eating monster. To run your business based on what you can afford now, not what you hope you can afford someday. 

Profit First Principles
By taking your profit first, the money available for expenses is artificially reduced. It flips the old adage accounting formula;
Sales – Expenses = Profit into Sales – Profit = Expenses. Hence, you are forced to be innovative, strategic and be mindful of your spending.

How Profit First Method Works
It was inspired by a fitness advertising on tv where in order to reach the goal, one must:
1. Use small plate
2. Serve sequentially
3. Remove temptation
4. Enforce a rhythm

Actionable steps:
1. Set up five different accounts for these purposes.
-Main income
-Profits
-Owner’s salary
-Taxes
-Operating expenses

2. Use those accounts for that purpose only.

Profit First method could be a tool to a more profitable business but the downside;
Maintaining the books of the business can sometimes be a daunting task. Having too many accounts to maintain can be burdensome. Not to mention that if the purpose of some of these accounts is served, you need to revert it to the business main depository account. And it is also important to note that Profit First method is not an accounting method but rather a more cash management system.

How to implement it in the books, particularly, Quickbooks Online and how often? It really depends on what type is your business and how often you want it to be.

How much percentage will you take from your business? This requires assessment of the health of your business. Remember that, money taken out of your business is money you cannot use for the business. You may adjust your percentages along the way should you find yourself unable to cover your expenses.

The biggest question is how will you use the profit you have saved? You decide.

Recommendation (Steps We Can Do)
Profit First can be very useful but let’s make it simple for books purposes, to save you time and money. We can talk about it, contact us now!

P.S. For now, Quickbooks Online is not integrated with Profit First method. Maybe because it is not an accounting method and used for internal purpose only.

Best,
Melchie