Author: Complete Controller

Before starting a business, an entrepreneur must know which legalities and formalities to take care of to be trouble-free in the future. Unlike popular belief, the requirements are easier to find, and with some research, the entrepreneur will know what is required to start the business of his choice. For example, running an eatery may require approval from the local food authorities. Entrepreneurs, however, worry about the legalities and wonder if they need to retain an attorney. But they also want to save costs and think of hiring one later, if required. This article helps entrepreneurs identify whether they need a lawyer to start a business or manage without one!

Things that Do Not Require a Lawyer

An entrepreneur must avoid spending money on things they can do without an attorney. Therefore, knowing tasks that might arise before starting a business without a lawyer. Listed below are activities that an entrepreneur can do himself!

• Finding an Available Business Name

As a rule, two businesses cannot have the same name! And why would an entrepreneur want to confuse his customers by keeping a business name already occupied? Therefore, a startup needs to check whether the desired name is available for use or not. However, it does not require a lawyer to do the research. Most states have an easy-to-use database on their websites, including all the registered business names. It also includes instructions for different businesses and industries to help register one’s business name. Once decided, the name needs to be verified with Trademark Electronic Business Centre to ensure that the name is not reserved. It would be wise to check if a relevant domain is available for the company’s website.

• Getting an Employer Identification Number

Entrepreneurs are often worried about getting an Employment Identification Number. However, it is one of the simplest tasks. The Internal Revenue Service issues the number all businesses use, including a sole proprietorship, non-profit organizations, partnerships, corporations, and others. The website for IRS provides all the details of getting an Employee Identification Number. The process is simple and requires the online submission of documents that the entrepreneur is likely to have if the business is ready to operate. Therefore, a lawyer is not required. However, it is necessary to know that an Employee Identification Number does not require sole proprietorships with no excise taxes and pension plans.

When You Must Hire a Lawyer

Some issues can be taken care of without a lawyer, but a lawyer must tack some. As an entrepreneur, one must know when and when not to hire a lawyer. Here are some of the things that need professional help!

• Registering a Partnership or a Corporation

Businesses differ from one another; therefore, their requirements too. A partnership is required to register with the state with formal documentation. One of the necessary documents for a partnership is the LLC Operating Agreement. Corporations must register with the state and develop proper bylaws. Therefore, an attorney is a must! An S-Corporation must register with the Internal Revenue, and starting one requires help from an attorney. Although the state facilitates entrepreneurs through online registration, an attorney will make life easier for you. Hiring an attorney will ensure that all documents are complete and submitted to the state.

• Preparing Contracts

Preparing business contracts is tricky and requires a lawyer’s assistance to allow a profitable arrangement for both parties. A business undergoes additional agreements between partners, suppliers, stakeholders, customers, and more. Other companies can exploit your business with a tricky contract that you may not understand clearly. For example, a supplier can trick a business into paying for supplies damaged during the delivery, although the supplier was responsible for the freight. Let the attorney do the job before the company gets a grip on legal matters. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

 

Disadvantages of Partnerships: Key Risks Every Business Owner Must Consider

Disadvantages of partnerships include unlimited personal liability for business debts, profit-sharing conflicts, decision-making disagreements, tax complications, and difficult exit strategies that can threaten both business success and personal assets. These fundamental challenges affect partnerships across all industries, regardless of size or structure.

I’ve spent two decades guiding business owners through financial decisions, and one truth remains constant: partnerships fail at alarming rates, with over 50% ending due to preventable conflicts. Through my work at Complete Controller, I’ve witnessed the aftermath of hastily formed partnerships that crumbled under the weight of ambiguous agreements and misaligned expectations. In this comprehensive guide, I’ll walk you through the critical partnership pitfalls I’ve observed firsthand, providing actionable strategies to protect your interests if you choose this business structure.

What are the disadvantages of partnerships and why should business owners care?

• Partnerships expose owners to shared liability, profit disputes, decision deadlocks, tax complexities, and challenging exit scenarios that can threaten both business viability and personal assets.
• Unlimited liability means your personal savings, home, and investments could be seized to cover business debts incurred by any partner.
• Without proper documentation, profit distribution becomes contentious when partners contribute unequally or value contributions differently.
• Decision gridlock occurs when partners have equal authority but different visions, slowing growth and creating operational inefficiencies.
• Exit strategies become particularly problematic without pre-established buyout terms, often leading to costly litigation and business dissolution.

Shared Liability: The Financial Risk Most Entrepreneurs Overlook

The most significant disadvantage of partnerships is the unlimited personal liability that general partners face. Unlike corporations or LLCs, general partnerships offer no legal separation between your business and personal finances.

This liability extends beyond your own actions to encompass decisions made by your partners. If your business partner makes a costly mistake, signs an unfavorable contract, or incurs substantial debt, your personal assets—including your home, vehicles, and savings—can be seized to satisfy those obligations. This “joint and several liability” means creditors can pursue any partner for the full amount owed, regardless of who created the liability.

Limited partnerships and Limited Liability Partnerships (LLPs) offer some protection, but they come with their own restrictions. Limited partners sacrifice management control for liability protection, while LLPs (available primarily for professional service firms) still expose partners to personal liability for their own negligence or malpractice.

• General partnerships expose all partners to unlimited liability for all business debts
• Limited partnerships protect limited partners but require them to remain passive investors
• LLPs shield partners from other partners’ negligence but not from their own actions or contractual debts

The legal implications of partnerships vary by state, making it crucial to understand local laws before formalizing any business relationship.

Profit-Sharing Conflicts: When “Fair” Becomes a Battlefield

Even partnerships that begin with the best intentions frequently deteriorate when money enters the equation. While a 50-50 split might seem equitable on paper, it rarely accounts for the reality of business operations.

Partners often contribute unequally—whether through capital investment, time commitment, expertise, client relationships, or operational responsibilities. Without clear documentation addressing these differences, resentment builds quickly.

The classic “sweat equity” debate emerges when one partner works 80-hour weeks while another maintains regular hours but contributed more startup capital. Who deserves more of the profits? Without predetermined formulas accounting for both capital and labor contributions, these discussions become heated.

Silent partners vs. active operators

Conflicts frequently arise between investing partners (who provide capital but limited involvement) and operating partners (who run daily operations). When the business succeeds, silent partners may feel entitled to equal profits despite minimal effort, while active partners resent sharing rewards with those who didn’t “earn” them through daily work.

A real-world example I encountered involved a professional services firm where the founding partner provided all client relationships and 80% of billable hours, while the junior partner handled administrative duties. Their 60-40 profit split seemed reasonable until growth required hiring support staff, effectively replacing the junior partner‘s contributions. The resulting compensation dispute eventually dissolved the partnership.

• Establish profit-sharing formulas tied to measurable contributions
• Create separate compensation structures for labor (salary) versus capital investment (distributions)
• Review and adjust agreements annually as roles and contributions evolve

The most successful partnerships I’ve observed implement tiered profit distribution systems that account for both capital investment returns and compensation for actual work performed.

Decision-Making Deadlocks: The Paralysis of Equal Authority

Perhaps the most operationally damaging aspect of partnerships is the potential for decision deadlock. Without clear governance structures, equal partners must reach consensus on every significant decision—from hiring choices to marketing strategies to expansion opportunities.

This requirement for unanimity creates paralysis when partners have different risk tolerances, growth visions, or management philosophies. I’ve seen promising businesses stagnate for years because partners couldn’t agree on fundamental strategic directions.

The consequences extend beyond missed opportunities to operational inefficiencies. Staff receive conflicting directives, vendors deal with inconsistent expectations, and clients experience service discrepancies—all symptoms of partnership discord.

The emotional cost of partnership conflicts

The interpersonal tension from ongoing disagreements creates an additional burden that affects not just business operations but personal well-being. Many partnerships involve family members or close friends, making conflicts particularly painful and difficult to resolve objectively.

• Create detailed operating agreements that specify decision authority for different aspects of the business
• Establish dispute resolution mechanisms like mediation before conflicts arise
• Consider bringing in third-party advisors for major decisions
• Implement tiered approval thresholds based on financial impact

Remember that challenges in partnership dynamics often stem from leadership style mismatches rather than business disagreements. Partners with complementary skills but incompatible decision-making approaches will struggle regardless of their expertise.

Exit Strategy Nightmares: The “How Do We Break Up?” Crisis

The most painful partnership disadvantage often emerges at the end—when partners need to part ways. Without predetermined exit provisions, dissolution becomes messy, expensive, and potentially destructive to the business itself.

Common scenarios I’ve witnessed include:

• Partner buyouts without valuation formulas: When one partner wants to leave but there’s no agreed-upon method for determining business value, negotiations stall and often become adversarial.

• Death or disability without succession plans: If a partner passes away or becomes unable to participate, their ownership interest often transfers to family members with different priorities or expertise.

• Forced liquidations: When partners can’t agree on continuation terms, the business must be sold or liquidated, often at distressed prices that benefit neither party.

• Business sale disputes: When an acquisition opportunity arises, partners may disagree on acceptable terms or whether to sell at all.

The Hendershot Cowart case provides a sobering example. When one partner attempted a lowball buyout offer at far below market value, courts ruled the offer breached fiduciary duties—resulting in significant damages awarded to the wronged partner. This illustrates how exit disagreements frequently escalate to litigation.

Creating comprehensive buy-sell agreements that address triggering events (retirement, death, disability, voluntary departure), valuation methods, payment terms, and non-compete provisions is essential before partnership formation—not during dissolution when emotions run high.

These issues with partnership businesses require proactive planning rather than reactive problem-solving.

Tax Complexities: The IRS Complications Partners Face

Partnerships create unique tax challenges that many entrepreneurs don’t anticipate until they’re filing returns. Unlike corporations, partnerships are “pass-through” entities where business income flows directly to partners’ personal tax returns—regardless of whether profits are distributed or retained in the business.

This creates several disadvantages:

Self-employment tax burden

Partners pay 15.3% in self-employment taxes on their share of partnership income—significantly higher than what corporate shareholders pay on dividends. This tax applies even if profits remain in the business for growth or cash reserves.

Phantom income challenges

Partners must pay taxes on their share of profits even if cash isn’t distributed—creating “phantom income” situations where tax bills arrive without corresponding cash to pay them. This commonly occurs when partnerships reinvest profits for growth.

Complex reporting requirements

Partnerships must file Form 1065 and provide K-1s to each partner, creating additional compliance requirements. Each partner’s share of various income types (ordinary income, capital gains, etc.) must be separately stated and reported.

Increasing audit risks

While historical partnership audit rates were low (0.05%), recent IRS initiatives have increased partnership audits by 76% using new AI tools and additional funding. The tax implications of partnerships now include greater scrutiny of profit allocations and distributions.

• Partners need larger tax reserves than corporate owners
• Special allocations of profits/losses require substantial economic effect documentation
• Tax planning must account for both entity and individual considerations
• Partnership tax elections affect all partners, creating potential conflicts

Converting to S-corporation status after establishing profitability can mitigate some of these tax disadvantages, but such conversions require unanimous partner approval—highlighting again how consensus requirements constrain flexibility.

Cultural and Operational Misalignment: When Business Cultures Clash

Beyond legal and financial disadvantages, partnerships often suffer from fundamental misalignment in operating philosophies, risk tolerance, work ethics, and communication styles. These “soft” factors frequently cause partnership dissolution even when the business itself remains viable.

Common operational conflicts include:

• Workload distribution: Partners often disagree about who’s contributing fairly, especially when responsibilities differ in visibility or measurability.

• Risk tolerance differences: Conservative partners resist growth initiatives that more aggressive partners consider essential.

• Work-life balance disparities: Partners with different personal situations often clash over time commitment expectations.

• Quality vs. efficiency priorities: Partners may have fundamentally different views on service delivery or product standards.

• Client relationship ownership: Disputes over who “owns” client relationships create tension, especially regarding compensation tied to business development.

I worked with a marketing agency partnership that dissolved despite strong financials because one partner prioritized creative excellence while the other focused on operational efficiency. Neither approach was wrong, but their incompatibility created constant friction that eventually became unbearable.

• Conduct thorough “cultural due diligence” before partnership formation
• Create explicit agreements about performance expectations and operational values
• Implement regular partnership reviews focusing on relationship health, not just financial metrics
• Consider personality and working style assessments during partnership formation

The strongest partnerships combine complementary skills with aligned values—particularly regarding quality standards, client service philosophy, and growth priorities.

Mitigation Strategies: Protecting Yourself While Preserving Partnership Benefits

Despite these significant disadvantages, partnerships offer valuable benefits—including shared risk, complementary expertise, and expanded capacity—that make them worth considering with proper protections.

The “bulletproof” partnership agreement

The foundation of partnership risk mitigation is a comprehensive agreement addressing:

• Capital contributions and valuation of non-cash contributions
• Profit distribution formulas based on multiple factors
• Management authority and decision thresholds for different categories
• Dispute resolution procedures including mediation
• Buy-sell provisions with valuation methods and payment terms
• Restrictive covenants (non-compete, confidentiality, etc.)
• Admission of new partners and requirements for consent

Entity structure optimization

Consider alternatives to general partnerships:

• LLP status for professional service firms provides liability protection while maintaining partnership taxation
• LLC taxed as partnership offers liability protection with partnership tax benefits
• Corporate structures with shareholder agreements can provide similar collaborative benefits with greater liability protection

Insurance protection

Comprehensive insurance coverage helps mitigate partnership risks:

• Professional liability (E&O) insurance for service businesses
• General liability coverage for third-party claims
• Employment practices liability insurance for HR claims
• Key person insurance funding buy-sell agreements
• Business overhead insurance for partner disability scenarios

Final Thoughts: Making Partnerships Work Despite the Disadvantages

After two decades helping businesses navigate partnership challenges, I’ve found that successful partnerships share common elements: thorough planning, explicit agreements, regular communication, and aligned values.

The disadvantages of partnerships are significant but manageable with proper structure and documentation. The key is addressing potential problems before they emerge rather than trying to resolve them during conflict.

For partners considering formalization, invest in professional guidance from attorneys and accountants with partnership expertise. For existing partnerships facing challenges, consider partnership counseling or mediation before issues threaten business viability.

Remember that your choice of business structure affects everything from daily operations to long-term wealth creation. Take time to evaluate whether a partnership truly serves your goals or if alternative structures might better protect your interests while providing similar benefits.

Need expert guidance on partnership structures, agreements, or tax planning? Contact our team at Complete Controller for specialized assistance navigating the complex intersection of business structure, taxation, and financial management.

FAQ

What’s the biggest financial risk in forming a business partnership?

Unlimited personal liability is the greatest financial risk. In general partnerships, your personal assets can be seized to satisfy business debts created by any partner, even without your knowledge or approval. Unlike corporations or LLCs, there’s no legal separation between business and personal finances.

How can I protect myself in a partnership without changing to a corporation?

While maintaining partnership status, you can: 1) Form a Limited Liability Partnership (LLP) where available, 2) Create a detailed partnership agreement with liability allocation provisions, 3) Obtain comprehensive business insurance coverage, 4) Implement strong internal controls requiring multiple approvals for major financial decisions, and 5) Consider a Limited Partnership structure where some partners have liability protection.

What should a good partnership agreement include to prevent conflicts?

A comprehensive partnership agreement should address: profit distribution formulas, capital contribution requirements, decision-making authority for different business aspects, dispute resolution procedures, buy-sell provisions with valuation methods, non-compete and confidentiality clauses, partner roles and responsibilities, admission of new partners, and circumstances permitting involuntary removal of partners.

How are partnerships taxed compared to corporations?

Partnerships are “pass-through” entities where profits flow directly to partners’ personal tax returns, regardless of whether cash is distributed. Partners pay self-employment tax (15.3%) on their share of income, unlike corporate shareholders who pay only income tax on dividends. Partners also face “phantom income” scenarios—paying taxes on profits retained in the business—and must report their share of business income even when cash isn’t distributed.

What’s the best way to handle a partnership dissolution?

The best approach is following pre-established buy-sell agreement terms that specify valuation methods, payment schedules, and transition procedures. Without such agreements, partners should: 1) Agree on a neutral business appraiser, 2) Consider a structured buyout with payments over time, 3) Use mediation before litigation, 4) Implement client transition plans to preserve business value, and 5) Consult with tax advisors to minimize dissolution tax impacts.

Sources

• American Express. (2023). “The Advantages and Disadvantages of a Business Partnership.” www.americanexpress.com/business
• FindLaw. (2024). “What Are the Disadvantages of Partnerships?” www.findlaw.com
• Hendershot Cowart P.C. (2021). “Case Study: Partnership Dispute Ends in Buyout.” www.hchlawyers.com/blog/2021/july/buy-sell-agreement-case-study-partnership-disputes/
• Internal Revenue Service. (2024). “Partnerships.” www.irs.gov/businesses/small-businesses-self-employed/partnerships
• Labaton Sucharow. (2003). “In re Real Estate Associates Limited Partnership Litigation.” www.labaton.com/cases/in-re-real-estate-associates-limited-partnership-litigation/
• Latham & Watkins. (2024). “IRS Launches New Large Partnership Audits.” www.lw.com/admin/upload/SiteAttachments/IRS-Launches-New-Large-Partnership-Audits
• Miller Hawkins, PLLC. (2023). “Why most business partnerships fail.” www.idahojustice.com/blog/2023/04/why-most-business-partnerships-fail/
• Sensiba. (2024). “When Are LLC Members Subject to Self-Employment Tax.” www.sensiba.com/resources/insights/when-are-llc-members-subject-to-self-employment-tax/
• Small Business Administration. (2024). “Choose your business structure.” www.sba.gov/business-guide/launch-your-business/choose-your-business-structure
• SoLegal. (2023). “Business Partnerships: Understanding the Risks and Rewards.” www.solegal.com
• Stone Sallus. (2024). “The Pros and Cons of Business Partnerships.” www.stonesallus.com
• Wikipedia. (2025). “Partnership.” www.wikipedia.org/wiki/Partnership

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The term millennial is heard everywhere, particularly in marketing and entrepreneurs; know some tips that will help you make use of this segment of the population for your company.
The millennials are the generation of those born between 1980 and 2000. Because it is a large segment of the population today, they are a fundamental part of the workforce in any country. Most importantly, by ascending the employment ladder, they take on more responsible roles. Simply put, millennials are the generation that is already or will be working for you very soon, is your company prepared for them? We share five things that these young people look for in a job.
Millennials are making their way in the workforce by the thousands consistently. This age is more inventive and creative than ages before, which can provide your organization with numerous advantages if you can profit from their qualities. Twenty to thirty-year-olds are development arranged, more enterprising, and the most different age at any point comprised of 44% minorities.

An employee / employer relationship

Some people think that Millennials demand more than they give. They are not afraid to question authority, but the reality is that the millennials talented do not tolerate unilateral working relationships. Companies that have an attitude of “you should be honored to work here” will gradually be forgotten. The modern employee seeks to feel valued, respected, and appreciated in his company, regardless of his position in the labor hierarchy.

An efficient and productive work environment

To create a millennial-friendly work environment, companies must invest time and resources in creating a hiring system that allows new employees to enter their responsibilities fully. At millennials, they like to move fast. It is a good idea to ensure that your workspaces are ready, that the technology they will work with is up to date, and that the design of the space allows the relationship between employees and productivity.

Competitive compensation

The millennials know their search tools and comparison of jobs. They pay attention to a company’s reputation in networks such as LinkedIn and Glassdoor and know well how to measure the compensation and benefits they will receive in one job compared to another. Yes, the Millennials care about more than just money. To attract the best people, it is a good idea to publicize the great experience your employees have when working with you and the monetary compensation they will receive.

Business culture

Many human resources departments talk about business culture. Unfortunately, these conversations never have a more significant impact. Modern companies that look for a niche among millennials have a corporate culture backed by a series of values ​​that impact how they hire staff and make promotion decisions. This corporate culture helps create a special environment that fosters productivity, innovation, and well-being.

Horizontal hierarchies

Many companies are looking for new horizontal schemes. Even when traditional hierarchies have real value, millennials have a hard time developing in an environment in which decisions are made “very high,” where they have no way of influencing them.
The working environment should be a positive situation where representatives feel a kinship. That is the thing that keeps Millennials cheerful and proceeding to work at your organization. A decent workplace demolishes free stuff quickly and is a dependable answer for improving the worker experience.
Accomplice Millennials with a preparation friend on their first day can be one instance. It can be a companion or a manager who can assist them in exploring their new position and answer questions. Give them away from their everyday duties, which they’ll be responding to, and anything they have to know identifying with work strategies. After they’ve finished the formal onboarding, stay aware of occasional registration to screen advance, and authorize responsibility.
Millennials are ravenous to learn new abilities and rank access to learning open doors as a top boss advantage. The absence of preparation is the prominent explanation Millennials begin scanning for new openings. Preparing can be offered from various perspectives, including shared getting the hang of, tutoring, and formal preparation. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

At the time of performing an audit, the auditor must rely on international auditing standards (ISA). In this case, he must apply Nia 240, which is titled fraud and error. The purpose of this Standard is to establish standards and provide guidance on the auditor’s responsibility to consider fraud and error in an audit of financial statements.

The Standard emphasizes that the auditor should consider the risk of the existence of significant errors and fraud in the financial statements when planning the audit, execute the necessary procedures for that purpose and submit the respective report.

The Standard distinguishes fraud from errors and includes its characteristics. It also highlights the primary responsibility of the entity’s management to prevent and detect frauds and errors that may exist.

On the other hand, it is the responsibility of the auditor, as indicated in ISA 200, to conduct an audit in compliance with the ISA so that the selected procedures are aimed at expressing an opinion as to whether the financial statements examined, in their significant, are free of errors and essential frauds. It should be noted that, clearly, the Standard emphasizes that the auditor is not responsible for preventing fraud and error.

It is also vital what it indicates about the inherent limitations of an audit to obtain absolute security to detect frauds and errors even when the audit has been efficiently planned and efficiently executed per the ISA. Therefore, the auditor’s opinion is issued within a framework of reasonable security and not of certainty.

Once the foregoing has been clarified, the Standard requires the auditor to comply with specific requirements and procedures to mitigate the risk that frauds and important errors may not be discovered. This requires him to carry out the work with an attitude of professional skepticism and hold planning discussions with the direction of the entity inquiring about the organization’s susceptibility to the risk of fraud or error and the evaluation that the management makes about such possibility. The Standard makes an analysis detailed audit risk (give a wrong opinion on the financial statements subject to examination) and its components: the inherent risk, the risk of control, and the risk of detection, explaining each of them and indicating what attitude should assume the auditor in front of them. The Standard also analyzes the procedures to be performed by the auditor when there are circumstances that indicate a possible distortion of the financial statements and when the distortion is due to potential fraud. In addition to the required procedures, the Standard establishes the effects of these distortions on the auditor’s report. Finally, other issues addressed in ISA 240 relate to the documentation in the auditor’s work papers of the fraud or error risk factors detected; the procedures executed in connection with them; the representations of the direction you must obtain; the communications of the findings of fraud or error to the address; communications of important internal control weaknesses; the issues that arise if the auditor is not able to complete the work; communication to the proposed successor auditor and other related topics.

Representations of the administration

The auditor must obtain representations in writing from the administration that:

• It recognizes its responsibility for the start-up and operation of accounting and internal control systems designed to prevent and detect fraud and error.
• Believes that the effects of uncorrected misstatements of states.

Financial statements accumulated by the auditor during the audit do not significantly affect, either individually or in the total accumulated, the financial statements taken as a whole. A summary of such items should be included in or accompanying the written representation.

• It has disclosed to the auditor all crucial facts regarding any fraud or presumptive fraud known to the management that may have affected the entity.
• It has disclosed to the auditor the results of its assessment of the risk that the financial statements may be presented in material misstatement because of fraud.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Most people only watch the cars, the trips, the mansions, and all those symbols that characterize a millionaire. However, few people wonder what these people have done to achieve financial success.

Tony Maiorino is one of them. With more than 20 years of experience advising clients with enormous fortunes, the vice president of RBC Wealth Management has identified five things that your clients usually do when investing and that you should imitate.

How wealthy individuals put away their cash is a mystery that many of you need to become familiar with. As a matter of first importance, how fundamentally would you be able to build your total assets by placing your cash into the correct ventures? Also, by what means would it be advisable for you to choose what to put resources into? Rich individuals are acceptable individuals to suggest contributing conversation starters too. The rich are continually searching for something to put resources into, so they know a great deal about contributing.

About how rich individuals contribute, there is a great deal of blended data out there. Numerous individuals recommend that you put cash in the securities exchange, land, items, digital money, or shared assets. The rundown continues endlessly. It would help if you accepted that it would pay off if you tuned in to the counsel of specialists on how wealthy individuals contribute.

They do not get carried away by their emotions

Equanimity is a characteristic of successful investors. Accustomed to facing scenarios where uncertainty reigns, they avoid being prey to their own emotions and know how to make decisions based on their experience and knowledge.

Whatever your objective may be, at some point, you may feel optimistic or pessimistic, says the manager of RBC Wealth Management. Still, it would be best if you did not lose sight of the fact that it is important to plan and make decisions with a cool head.

Act as if they were a company

If you have ever been in front of a company, you will surely know that your success depends to a large extent on the control you have over the flow of money. If you want your investments to grow your capital, you must do the same.

You know where every penny goes if you own a business and run it. The same must happen when you invest. That is why it is advisable to select investment instruments that allow you to know precisely the destination, term, return, and risk of each dollar invested.

They have a strategy

Another characteristic of rich people is that they have taken the time necessary to develop and implement an investment strategy. According to many reliable financial online platforms, this allows you to take advantage of opportunities both in adverse contexts and in more favorable circumstances.

“More people need to do this with their wealth and investments: to be involved and committed to their money, and to have a plan and a goal,” says the manager of RBC Wealth Management.

They do not seek only performance

Do not look for opportunities based exclusively on performance. The most important thing, he emphasizes, is to have clear what your goals are from the beginning and identify the alternatives that best suit them. That makes millionaire people.

The recommendation is to avoid being compulsive. While it is true that a reasonable investor must take advantage of opportunities and precise moments, it is also true that he must not lose sight of what his goals are and what alternatives are the most appropriate to achieve them.

Come long term

According to many finance-related platforms, many people decide to invest conservatively for fear of losing, without noticing that this fear can translate into greater risk, such as not accumulating enough capital to enjoy a quiet retirement.

“What is happening in the short term is not the biggest risk to your investments. The biggest risk is not meeting your goals at the end, “he says. In short, the dangerous thing is not to lose money, but to lose the opportunities and the right moment to generate it.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Some studies conclude that we spend more when we use credit cards than when paying in cash. You seem fascinating to me, since as many of my readers know and illustrated in this post, credit cards are my preferred means of payment.

That is why in my most recent posts, I have explored a little the subject of psychology applied to our finances since I believe that many of our money problems have to do with satisfying other types of deficiencies. The shopaholics are a typical example of this.

Why do we spend more when paying with credit cards?

Psychologists and behavioral economists have identified two fundamental reasons why we overspend when we use credit cards instead of cash:

We spend more because we do not have the same feeling when paying

The simple act of handing out cash – taking it out of our pocket to give it to someone else – is a sense of detachment that money is getting out of hand. That is, we felt that expense in a very vivid way.

On the other hand, when we pay by credit card, we sign a promissory note. The money, in that case, is abstract: we will deliver it sometime later. Emotionally it is a big difference: we are not feeling that money is getting out of hand. That is why we spend more.

Psychologists call this feeling a “bond” – or coupling in English. In this case, he describes how the experience of consuming something links to the understanding of paying for it.

When we buy an item in cash, our shopping experience to the feeling of paying, when we invite the family to eat at a restaurant, and the bill is several thousand pesos when paying in cash, we feel a sense of pain for the amount we must pay, which is intense and immediate. In addition, this pain is intricately linked to the pleasure of eating with the family. That is, it is significantly related to that consumption because it is experienced almost simultaneously.

On the other hand, if we take out the credit card, although we may feel an inevitable “pain” when seeing the amount at that moment, it is much less intense. The feeling of paying is actually “throwing” into the future. And when we finally pay for it, that experience will not be linked to the consumption that we made; we are unlinking the pain of paying with the pleasure of consuming. That is why we spend more: the experience of drinking and the pain of spending are not linked as they are when paying in cash.

We spend more because we focus on the benefits of what we buy, not on its cost

One of the natural consequences of decoupling the feeling of payment from the pleasure of buying is that consumers tend to overestimate the benefits of that purchase. That is another reason why we spend more when we pay with a credit card.

That is, the decoupling causes consumers to evaluate the benefits without considering the costs.

To give a simple example, suppose we have $500 to go to dinner at a luxury restaurant with our partner to celebrate our anniversary. We cannot take the risk that when the account arrives, it will not reach us. But sometimes, we do not want to limit our partner too much.

In that case, we try to limit our consumption and search among the cheapest dishes on the menu.

When we have a credit card that we know we can use, our behavior changes, it is evident that in this case, we do not have any concerns. We concentrate on enjoying the evening, without the total cost of the account we care too much. Come on, and we are celebrating, so we can even order a bottle of wine to accompany our food.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

In the era where the Internet dominates a good part of the economy and the business ecosystem, the boundaries between professional and personal are increasingly diffuse. Where the generation, access, and data traffic of any kind grows exponentially, our personal and professional, and business history is much more exposed. However, this does not always have to become an obstacle and can give us opportunities that would be unthinkable in another context.

When we talk about new technologies applied to the company, the first things that come to mind are marketing (usually online marketing), document management (cloud computing), or even the commercial area.

And if we talk about technologies and techniques such as big data, that is, the collection and massive accumulation of data for later analysis and search for trends, opportunities, etc. Between technology and business management, we leave a vital element for the start-up and the growth of any company or business: financing.

But if I finance my business, if obtaining credit or capital is a fundamental element for my project, why not also apply the virtues of the digital revolution and big data for it?

The new technologies have allowed the creation of alternative sources of financing intricately linked to the Network and offering a new window to entrepreneurs. Perhaps, crowdfunding platforms are the most representative (and best known) agent of this new way of conceiving financing, so far from traditional banking intermediation, but it is not the only one.

Technological progress allows us to go much further when it comes to finding financing for our project. Proof of this is creating new platforms that use all these enormous amounts of information and data to offer financing lines appropriate to the accurate profile and the needs of a project or entrepreneur.

What data do they use? Can my social networks influence my ability to finance my business?

Well, pay attention, because that seems to be the trend. Consciously or unconsciously, we have data about our companies and us on the Network, data that other companies can analyze and use to form a reasonably clear picture of how our business works and decide on our credit capacity.

And, although that point has not yet been reached, there is little left for it. Some recent landing platforms in Spain, such as Spot cap, already use the data provided by Amazon, eBay, or Presentation accounts, for those companies that sell online.

A priority may be that over-exposure to the Network can create suspicion. Still, the truth is that, in many cases, it can be advantageous when it comes to obtaining financing without the need to rely solely on the credit history of our company.

For example, they offer an alternative financing model for freelancers and SMEs based on data obtained from the aforementioned platforms to provide credit lines adapted to a reality closer to that of entrepreneurs and SMEs. Many influences more factors than merely financial ones.

A recent study by the Chamber of Commerce asserts that only 1 in 4 small businesses get the desired financing, while the injection of credit to large companies is increasingly significant.

When it comes to obtaining financing, especially among small businesses, time and flexibility are essential. Still, the long waits, the high demands of the banks, and the high conditions they demand mean that meaningful growth opportunities are often lost.

For this reason, it seems that the traditional ways of bank financing have begun to become an obsolete model unable to respond effectively to the real needs of SMEs and self-employed, which make up more than 95% of the Spanish business fabric. Today, the new possibilities that offer new technologies, the increasing connectivity, and the proliferation of intelligent terminals such as smartphones or tablets are the not-too-distant future for obtaining credit in small businesses.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

If you are determined to start, setting up a franchise can be a great idea. It is an exciting option both for those looking to make a living opening a business and those who have some savings and want to make a profitable investment.

First, you should know that the operation of a franchise consists of business collaboration between two parties. One is the franchisor, the company that created the brand, and the other is the franchisee, which would be you. An autonomous society that wants to open an establishment with the support of a brand already consolidated.

The agreement between the two parties is generated by a contract that establishes specific image standards, sales targets or business strategies, and the franchisee’s payment of a fixed or variable amount.

Why do you want to open a franchise?

Setting up a business of this type has many advantages, which we could summarize in three main aspects:

Comfort

If you have wanted to start for a long time, one of the obstacles you have encountered is likely finding a good business idea. Luckily, when opening a franchise, this work is already given. This and many other initial steps you must take to create a company, such as developing the business plan, managing suppliers and sales, the design of the image, etc.  

Lower risks

When you open a franchise, you support a consolidated brand and the security of a business idea that has already proven its operation. In addition, you have the know-how (knowledge), training, and assistance of an experienced company. This means that the adventure’s chances do not go as you expected are much lower than when you start from scratch.

Greater competitiveness

Being backed by a brand allows you to specialize in a sector and compete on equal terms with large stores. You facilitate growth concerning more local businesses.

Tips for setting up a franchise

Despite all these benefits, launching a franchise also has risks and disadvantages. You cannot forget that it requires an essential economic investment and limits the business’s independence. Therefore, you must reflect and make a good decision. For this, we recommend the following:

Choose the franchise that best suits you

You will be one of the most complex points. And in 2015, 1232 franchise brands operated in our country, as the report the franchise in Spain points out. First, think about the sector: fashion, food, hospitality. From there, research the brands of the field you have chosen. You must evaluate the canon they offer, your obligations as a franchisee, the proven experience of the brand, profitability, and future options.

Negotiate the contract

When the time comes, he asks specialized lawyers to help him review the contract and negotiate it with the other party. The goal is for both of you to win.

Find the perfect location

The situation can determine the success or failure of the business. Hence, you should study very well in which place you should put the franchise. Although much of the research work has already been given to you, you cannot neglect this point.

Find a way to finance yourself

Suppose you have the money, perfect. If not, beyond the traditional financing in the bank, you should ask for loans to friends and family, in addition to public subsidies. Try to save everything you can.

And, above all, do not rush

We know that it is challenging to stop the entrepreneurial impulse but setting up a franchise requires time. You must think carefully about each decision and each movement, so keep looking for options if you are not entirely sure.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Every business requires an investment to either initiate, grow, or expand it regardless of its level (small or large). Especially in the case of small businesses, loans can play a significant role in supporting the commercial growth of a business idea, funding new research and development, providing aid in expansion into new territories, enhancing sales and marketing efforts, help in the recruitment process, and much more.

However, the process of loan-taking for small businesses can get a bit complicated for first-timers. It requires some extra effort and may induce anxiety for some people. Several questions can pop up while taking a loan. Therefore, some prior knowledge regarding the loan-taking process will increase the chances of acquiring a loan. Mentioned below are five key steps to assist in getting a small business loan.

Determine whether you qualify for a business loan or not

Before applying for a loan, it is necessary to evaluate if the business qualifies for a loan or not. A credit score of the company plays a vital role in the industry for the loan. Different lenders require different credit scores. Therefore, it is essential to calculate them beforehand. If the credit score falls below the threshold, the loan is likely to be declined.

Importantly, lenders need assurance for being paid back in time, therefore, the demand for information regarding early revenue of the business. So, it is necessary to evaluate the business revenue to calculate if a loan can be paid back or not. In addition to this, having collateral is also important for a secured loan. In some cases, lenders make it necessary to have collateral. Even though it is a risky step, it may reduce the interest rates, allowing to lend more significant sums.

Furthermore, the period a particular business has been in the market also contributes to qualifying. Online lenders and banks require one and two years of business, respectively.

Research potential lenders

Numerous lenders are willing to lend to small businesses, and you can discover many of these through online platforms. One can choose any lender after research that may seem suitable and appropriate for their business. Some of the main lenders are listed below:

• Direct online lenders: Various lenders have made the lending process relatively smooth through easy online methods. It includes many reputable companies such as PayPal that provide fast, small cash advances, working capital loans, and a certain amount of short-term loans. Moreover, many sites act as a lead generation service, where multiple lenders can access on a single platform.
• Commercial banks: For the small business market, large commercial banks act as the traditional lenders. However, the loan-taking process tends to be relatively slower due to the time-consuming and challenging underwriting criteria.
• Local community bank: Several community banks tend and aim to make a business loan to local businesses in the region.
• Peer-to-peer lending sites: Many sites act as an agent between the lender and individual. These lenders are known to make relatively quick decisions.

Figure out the purpose and amount of the loan

An essential step before acquiring a loan is to figure out precisely the purpose of the loan application. For a small business, a loan can be either for initiating the business, managing daily expenses, or growing the pre-existing business. It is essential to mention the purpose of the loan to the lender for transparency as it increases the trust level with the lender.

 Furthermore, it is vital to calculate the exact amount of loan required since money ranges do not work when taking a loan. Listing the works and their costs appears to be helpful for such purposes.

Compile the required documents

For an accessible, smooth, and hassle-free experience, it would be helpful to gather all the required documents before starting the actual process of a loan application. Standard documents required include a resume, business plan, Business Credit Report, Income tax returns, financial statements, license, registrations, contact details, and commercial lease. Any further additional document may also be required depending on the lender.

Apply for the Loan

Once the business is qualified for the loan, the purpose and amount of the loan are determined, all the relevant documents are together, and an appropriate lender is selected. Finally, the business owner is all set to apply for a small business loan.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

There are numerous reasons why QuickBooks should be your first pick if you need a business accounting solution. QuickBooks Pro, Premier, Enterprise, and Accountant are all distinct versions of the software.
QuickBooks has a solution for your specific accounting needs. However, which version is ideal for your company? Knowing this is critical before making the crucial decision.
The top five favorite productivity features in the QuickBooks for every accountant are as follows:

Easy management of finances and reporting

You’ll need an end-to-end perspective of all your financial transactions for your business to obtain a good understanding of your income and expenses. It is available if you use QuickBooks Enterprise, which includes an “income tracker.” You may quickly input your expense transactions with this tool, including transactions from numerous bank accounts in one place and in less time.
With this powerful program, you can even merge reports from multiple corporate files. It is more convenient to export QuickBooks data in Excel format for later use.
Other significant advantages of QuickBooks Enterprise include tracking costs conveniently, fixed assets, and tax deductions.

Easy management of inventory

QuickBooks Enterprise offers an advanced inventory tool that allows you to build sub-assemblies without manually entering them quickly. You also don’t have to be concerned about stock levels below or above a certain threshold. You may quickly establish advanced price rules based on parameters such as customers, items, vendors, and so on.
Another advantage of QB Enterprise is that it allows you to enter data accurately by scanning inventory, serial numbers, or bar codes. You can even use it to generate barcodes.
Every company needs to keep an eye on its supply chain. To receive complete, accurate visibility of your supply chain, you can start utilizing QuickBooks Enterprise. You can obtain industry-standard reports that include precise information such as the number of items on hand, sales orders, and purchase orders.
You can also use QuickBooks’ Inventory center to locate inventory tasks by browsing inventory items and reports. With this program’s built-in inventory stock status report, even reordering your goods as needed becomes easier.

Management of user roles and permissions

Not every firm employee requires access to all types of business data and information. Additionally, having all data available to all employees raises the danger of data loss. With the help of QuickBooks Enterprise, it can reduce this danger.
You can provide your employees role-based access to the data depending on their departments and work responsibilities. As the owner of your company, you will have central access to this program, from which you will be able to set user roles and issue permissions to your staff.

Track your sales and customers

Tracking sales and orders is difficult for any organization, whether small, medium-sized, or large. QuickBooks Enterprise is a program that can help you keep track of your sales more efficiently. You can track your sales agents and view expenses with this intelligent program, saving time and effort. You can also use the QuickBooks Lead Center to track leads.
You want to add as many clients, vendors, and workers as possible to expand your firm. When you use QuickBooks Enterprise, which has comprehensive user tracking tools, you can do this. With this software, you can send estimates or invoices, define, and use foreign currencies for sales transactions, create custom pricing, and much more.

Employee payroll management

Just like handling orders and customers, managing employees is essential for all businesses. You can cater to this aspect related to your business using QuickBooks Enterprise. Using this software, it is easier to calculate all your employees’ earnings, deductions, and payroll taxes.
You can get and check customizable reports to track your employees and contractor time. If you want to save time running payroll, this software is all that you need.

QuickBooks Enterprise software is equipped with tools to assist you in managing your company’s accounting demands. It supports a variety of facets of your organization, including payroll, payments, inventory, and much more. About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.