Subcontract vs. Hire:
The Best Choice for Your Accounting Needs

Accounting subcontract or hire decisions depend on your business size, budget constraints, and specific financial needs—subcontracting offers flexibility and specialized expertise for project-based work while hiring provides consistent daily oversight and deeper integration with company culture. The right choice directly impacts your bottom line, with outsourcing typically saving 20-50% compared to full-time employees when you factor in salaries, benefits, training costs, and overhead expenses.

As the founder of Complete Controller, I’ve guided over 500 businesses through this critical decision over the past 20 years. One tech startup client slashed their accounting costs by 40% through strategic subcontracting while maintaining an in-house CFO for high-level strategy—a hybrid approach that transformed their cash flow. This article breaks down the real costs, compliance considerations, and strategic frameworks that will help you make the smartest choice for your unique situation, whether you’re a bootstrapped startup or an established company ready to scale.

What’s the best choice for your accounting needs: Subcontract or hire?

• Subcontract for specialized expertise, variable workloads, and cost savings of 20-50%; hire for daily oversight and consistent financial operations
• Subcontracting eliminates employee benefits, payroll taxes, and training costs while providing access to niche skills
• Hiring builds institutional knowledge and ensures tighter data control for sensitive financial information
• Hybrid models combine the best of both worlds—outsource routine tasks while keeping strategic roles in-house
• Your decision should align with business size, growth trajectory, and compliance requirements

Understanding the Core Differences: Subcontracting vs. Hiring

The fundamental distinction between subcontracting and hiring lies in the employment relationship and cost structure. Subcontractors operate as independent businesses, managing their own taxes, benefits, and professional development while charging you only for completed work. Employees become part of your organizational structure, receiving regular paychecks, benefits packages, and direct supervision while building long-term loyalty to your company.

Control levels vary dramatically between these options. With subcontractors, you define the deliverables and deadlines but cannot dictate how, when, or where they complete the work—they maintain complete autonomy over their methods and schedules. Employees work under your direct supervision, following company procedures, using your systems, and adhering to set schedules that align with your business operations.

The financial implications extend beyond simple hourly rates. A $50,000 salary actually costs employers approximately $78,000 when you include payroll taxes, workers’ compensation, health insurance, retirement contributions, and paid time off. Subcontractors handle all these expenses independently, charging higher hourly rates that still result in lower total costs for businesses needing specialized or intermittent services.

The Financial Reality: Breaking Down True Costs

Smart financial analysis reveals that outsourcing accounting saves businesses 20-50% compared to maintaining in-house teams. These savings stem from eliminated recruitment costs, reduced training expenses, no benefits packages, and avoided overhead for office space and equipment. A retail startup might invest $3,000 monthly for comprehensive outsourced bookkeeping instead of $6,000 for a full-time accountant’s total compensation package.

Hidden costs of hiring extend beyond the obvious salary and benefits. Companies spend an average of $4,000 to recruit each new employee, invest 40 hours in initial training, and lose productivity during the 3-6 month ramp-up period. Additional expenses include software licenses, continuing education, management time for supervision, and potential severance costs if the hire doesn’t work out.

Subcontracting delivers predictable costs with built-in flexibility. You pay only for actual work completed, scale services up or down based on seasonal needs, and avoid long-term financial commitments. During tax season, you might triple your accounting support without permanent payroll increases, then reduce to maintenance levels during slower periods.

Case study: Manufacturing success through strategic outsourcing

A growing manufacturing startup partnered with Farche Solutions to outsource payroll and tax compliance while maintaining one in-house controller for strategic planning. This hybrid approach reduced their accounting costs by 30%, eliminated compliance errors that previously triggered audits, and freed up $50,000 annually for product development. The key to their success: keeping daily financial oversight internal while leveraging external expertise for specialized, rules-based tasks.

Navigating Compliance and Legal Requirements

Misclassifying employees as independent contractors can trigger IRS penalties of $1,000 per worker, with 40% of unpaid employment taxes stemming from classification errors. The IRS examines behavioral control, financial arrangements, and relationship factors to determine proper classification. If you control when, where, and how work gets done, you likely have an employee regardless of your preferred label.

Protecting your business requires clear contractor agreements specifying project scope, deliverables, payment terms, and intellectual property rights. Include confidentiality clauses, data security requirements, and termination procedures. Require proof of business insurance and verify their business entity status through state databases.

Employee compliance involves different obligations: workers’ compensation coverage, unemployment insurance contributions, overtime pay requirements, and adherence to labor laws. While more complex, these requirements provide legal clarity and reduce audit risks. Document all employment policies, maintain accurate time records, and conduct regular compliance reviews.

Strategic Decision Framework for Your Business

Statistics show 37% of small and medium businesses now outsource accounting functions, with cost savings cited as the primary driver by 65% of companies. Your optimal choice depends on several critical factors that require honest assessment.

• Business Size and Complexity Analysis: Companies under $5 million in revenue typically benefit most from subcontracting due to variable workloads and budget constraints. Growing firms between $5-20 million often adopt hybrid models, combining outsourced bookkeeping with in-house financial leadership. Larger organizations usually bring core accounting in-house while subcontracting specialized projects.
• Workload Consistency Evaluation: Map your accounting tasks by frequency and complexity. Daily transaction processing, weekly reporting, and monthly closings suggest hiring needs. Quarterly tax filings, annual audits, and periodic system implementations align with subcontracting advantages. Calculate hours needed monthly—if under 80 hours, subcontracting likely offers better value.
• Total Cost of Ownership Calculation: Compare all-in costs including salaries, benefits (add 25-40%), recruiting expenses, training time, software licenses, and management overhead against subcontractor quotes. Factor in flexibility value—the ability to scale quickly without severance costs or unemployment claims has real monetary worth during economic uncertainty.

When Subcontracting Delivers Maximum Value

Project-based initiatives create ideal subcontracting opportunities. System conversions, acquisition due diligence, or IPO preparation require specialized expertise for defined timeframes. Paying premium rates for 3-month engagements beats hiring specialists you won’t need long-term.

Seasonal peaks demand flexible staffing solutions. Retail businesses processing 40% of annual revenue during the holidays can add subcontracted support for October through January. Tax firms scale up during filing season. Construction companies need extra help during summer building booms.

Specialized expertise requirements favor subcontracting when you need niche knowledge occasionally. International tax compliance, forensic accounting investigations, or industry-specific regulations might require monthly consultation rather than full-time staff. Access top talent without competing for permanent hires in tight labor markets.

Building Your In-House Advantage

Data sensitivity in healthcare, financial services, or government contracting often mandates internal accounting teams. When client information requires strict access controls and audit trails, employees provide better security through background checks, ongoing supervision, and legal accountability.

Companies experiencing rapid growth need dedicated financial professionals who understand evolving business models, can adapt systems in real-time, and provide strategic input during leadership meetings. An invested employee who grows with your company brings institutional knowledge that contractors cannot replicate.

Cultural alignment and team integration matter when accounting interfaces with multiple departments daily. Employees attend company meetings, understand internal politics, and build relationships that facilitate smooth operations. They become trusted advisors who anticipate needs rather than simply responding to requests.

Future-Proofing Your Financial Operations

Automation will handle 40% of traditional accounting tasks by 2025, fundamentally shifting the subcontract versus hire equation. Routine data entry, bank reconciliations, and basic reporting increasingly require less human involvement. This technological evolution makes specialized subcontractors more valuable for analytical work while reducing the need for entry-level employees.

Progressive companies adopt hybrid models that leverage both employment types strategically. They maintain lean in-house teams focused on strategy, analysis, and stakeholder relationships while outsourcing transactional processing, compliance filings, and technical projects. This structure provides stability, expertise, and scalability.

AI integration changes required skillsets dramatically. Modern accounting professionals must interpret AI-generated insights, identify anomalies in automated processes, and provide strategic context that machines cannot. Subcontractors often lead adoption curves, bringing cutting-edge tools and techniques without requiring your investment in training or technology.

Final Thoughts

The choice between subcontracting and hiring accounting support shapes your company’s financial efficiency, compliance posture, and growth potential. Through two decades of building Complete Controller, I’ve learned that dogmatic approaches fail—successful businesses thoughtfully blend both options based on specific needs, growth stages, and industry requirements.

Start by auditing your current accounting workload, calculating true costs, and identifying which tasks require daily oversight versus periodic expertise. Most thriving companies discover that hybrid models deliver optimal results: maintaining core financial leadership internally while leveraging specialized subcontractors for variable workloads and technical projects.

Your next step is clear: assess your unique situation using the frameworks provided, then design a financial team structure that balances cost efficiency with operational excellence. For personalized guidance on optimizing your accounting operations through strategic staffing decisions, connect with our experts at Complete Controller. We’ll help you build a financial backbone that scales with your ambitions while protecting your bottom line.

Frequently Asked Questions About Accounting: Subcontract or Hire

How do I protect sensitive financial data when working with subcontractors?

Require subcontractors to sign comprehensive non-disclosure agreements, use encrypted file-sharing platforms, limit access to only necessary systems, and verify their data security protocols through third-party certifications like SOC 2 compliance audits.

Can I transition a subcontractor to an employee if my needs change?

Yes, many businesses start with subcontractors to validate workload demands and cultural fit before offering full-time positions. Document the relationship change clearly, adjust tax withholdings immediately, and provide appropriate benefits to avoid compliance issues.

What’s the biggest legal mistake businesses make with contractor classification?

Exercising too much control over subcontractors’ work methods, schedules, or requiring exclusive relationships triggers employee classification. The IRS focuses on who controls how work gets performed, not just payment structure.

Do subcontractors handle year-end tax preparation and filing?

Subcontractors prepare and provide Form 1099-NEC documentation, but businesses remain responsible for filing these forms with the IRS by January 31st and maintaining accurate records of all payments exceeding $600 annually.

How does AI adoption impact the decision to subcontract versus hire?

AI automates routine bookkeeping tasks, making entry-level positions less necessary while increasing demand for specialized subcontractors who can implement, optimize, and interpret AI-driven financial systems for strategic decision-making.

Sources

• Better Accounting. (2025). “Hiring vs. Outsourcing Accountant.” URL: https://betteraccounting.com/hiring-vs-outsourcing
• Brady CFO. (2025). “Outsourcing Accounting Services vs. Hiring Internally.” URL: https://bradycfo.com/outsourcing-vs-hiring
• CFO Hub. (2024). “Hiring an Accounting Manager? Why You Should Outsource Instead.” URL: https://cfohub.com/outsource-vs-hire
• Complete Controller. (2024). “Accounting Subcontract or Hire?” URL: https://www.completecontroller.com/accounting-subcontract-or-hire
• Cook CPA Group. (2025). “How to Account for Independent Contractors.” URL: https://cookcpagroup.com/independent-contractors
• Deloitte. (2024). “AI in Finance.” URL: https://www2.deloitte.com/us/en/pages/finance/articles/ai-in-finance.html
• DPE AFL-CIO. (2025). “Misclassification of Employees as Independent Contractors.” URL: https://www.dpeaflcio.org/factsheets/misclassification-of-employees-as-independent-contractors
• DVF CPA. (2025). “Hiring an Accounting Firm.” URL: https://dvfcpa.com/hiring-accounting-firm
• Farche Solutions. (2024). “Cost Savings and Business Growth Through Outsourcing Accounting.” URL: https://farchesolutions.com/franchising/cost-savings-and-business-growth
• Gentle Frog. (2025). “Bookkeeping Subcontracting: Expectations vs. Reality.” URL: https://gentlefrog.com/bookkeeping-subcontracting
• Housecall Pro. (2024). “Subcontractor vs. Employee.” URL: https://housecallpro.com/subcontractor-vs-employee
• Invedus. (2024). “Top Accounting Outsourcing Trends You Need to Know for 2025.” URL: https://invedus.com/blog/top-accounting-outsourcing-trends
• Investopedia. (2024). “Total Cost of Ownership.” URL: https://www.investopedia.com/terms/t/totalcostofownership.asp
• IRS. (2024). “Independent Contractor Self-Employed or Employee.” URL: https://www.irs.gov/newsroom/independent-contractor-self-employed-or-employee
• Lucey Accounting. (2022). “To Hire or Not to Hire.” URL: https://luceyaccounting.com/to-hire-or-not
• NOW CFO. (2025). “Outsourcing Accounting For Business Growth.” URL: https://nowcfo.com/outsourcing-accounting-growth
• Personiv. (2025). “Learn How to Maximize Accounting Outsourcing Cost Savings.” URL: https://insights.personiv.com/blog-personiv/accounting-outsourcing-cost-savings
• Reconciled Solutions. (2025). “Subcontractors vs. Employees.” URL: https://reconciledsolutions.com/subcontractors-vs-employees
• Tesseon. (2023). “Subcontractor vs. Employee.” URL: https://tesseon.com/subcontractor-vs-employee
• TGG Accounting. (2024). “Outsourced Accounting vs. Hiring In-House.” URL: https://tggaccounting.com/outsourced-vs-in-house
• TMD Accounting. (2022). “Bookkeeping for Independent Contractors.” URL: https://tmdaccounting.com/bookkeeping-contractors
• Voolt. (2024). “Subcontractor vs. Employee.” URL: https://voolt.com/subcontractor-vs-employee

Reviewed By: Brittany McMillen

Brittany McMillen

Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.

See Full Bio

Effective communication is the cornerstone of successful relationships, and this holds, especially in the realm of customer interactions. Shifting the focus from viewing customers as mere conduits for profits to acknowledging them as individuals is a fundamental step in enhancing communication skills. The language you choose and how you convey messages are pivotal in shaping these interactions.

Whether it’s face-to-face communication or digital correspondence, the methods employed and the content of your messages significantly impact the customer’s perception. Avoid the temptation of sending generic email blasts and expecting swift responses. As you observe how a shopkeeper addresses you, recognize that your customers are equally observant of your approach.

How do you build relationships with people? These techniques are the same ones you would use to build a relationship with your customer. First, the foundation for building any relationship is trust. When you put your trust in someone, and they trust you in return, you both work on building something that can last for a long time. If that relationship is the foundation of your business, then trust is the cement used to fortify that relationship.

Improve Your Communication Skills

Communication is the bedrock of any good relationship. Work on how you communicate with your customers and treat them as humans instead of a means for profits. If you notice how a shopkeeper talks to you, it stands to reason that your customers would notice the same in you.

Language choice is critical, and communication methods and messages matter significantly. Do not send email blasts and expect quick responses. If a customer walks in, be prepared, and do not give them the impression that they are an imposition.

Consumer’s Point of View

Some states require a form of agency disclosure at the beginning of a relationship. Forget about legal requirements from the agency from the perspective of the licensee and regulatory agencies. The main reason agencies exist is to impose the licensee’s fiduciary duties that need them to protect the customer. Customers trust you because you are representing them under agency employment. You are bound to keep their information confidential, disclose facts, obey the lawful instructions, safeguard all monies entrusted, and be loyal to them.

Consumers do not care about the intricate nature of the regulatory agency rules. They genuinely care whether we will protect their interests and if they can count on us.

Use Realtor Pledge of Performance

The National Association of Realtors (NAR) has summarized the Code of Ethics in a single-page document. The document sets a promise that each realator is bound to uphold in working with consumers and ensuring that their interests are placed above all others.

Ensuring customers that they can trust you because you adhere to a code of ethics and will promote their interests increases customer confidence and loyalty.

Gather and Use Testimonials 

Trust is essential, but you cannot convey that clients must trust solely you. Take a lesson from those businesses and companies that have spent millions of dollars learning and using the power of customer testimonials. When we go to Amazon to purchase a book, what is the first thing we see? Testimonials from others. What determines when you look up a new restaurant or hotel? Testimonials. People tend to trust others’ experiences more than what the hotel or restaurant has to say.

Gather testimonials from your previous and current clients and post them on a visible platform like LinkedIn, Facebook, YouTube, and your website.

Ask for Feedback and Use it

When you ask for feedback, the customers feel heard and valued. It also helps improve your brand, products, services, and processes.

Ask your customers to review your products online and check your reviews at least every week. Timely replies to feedback show how attentive you are to your customers. However, feedback is only valuable when you act on it, so be attentive to customer needs and demands for maximum profit. Be aware of customer feedback because it is critical to building any relationship.

Conclusion

You must do your best to build a long-lasting relationship with your customers. Customers want to buy something from a company they can trust and support. Similarly, create a necessity and use all your selling skills, but remember that customers are people just like you who want a positive buying experience.

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.

Essential Insights for Your Business Structure Guide

A business structure guide provides entrepreneurs with the critical framework needed to select the optimal legal entity for their company, directly impacting personal liability exposure, tax obligations, and growth potential. The choice between sole proprietorship, partnership, LLC, or corporation shapes everything from how much you pay in taxes to whether your personal assets stay protected during lawsuits.

Over my 20 years as CEO of Complete Controller, I’ve witnessed firsthand how the right business structure can make or break a company’s future. One client avoided personal bankruptcy by switching from sole proprietorship to LLC just months before a major lawsuit hit—that single decision saved their family home. This guide walks you through the exact process I use with clients to match their business goals with the perfect legal structure, covering tax strategies that save thousands annually and growth frameworks that attract investors.

What is a business structure guide and why does it matter?

• A business structure guide helps you choose the legal framework defining ownership, liability protection, tax treatment, and operational flexibility for your company
• Legal structures create barriers between personal assets and business debts—sole proprietorships offer zero protection while LLCs and corporations shield your home and savings
• Tax implications vary dramatically: pass-through entities avoid double taxation while C-corps face both corporate and dividend taxes
• Growth potential depends on structure: corporations attract venture capital through stock options while LLCs limit investor appeal
• • State regulations add complexity: California charges $800 annual LLC fees while Texas requires biennial reports

Core Business Structures Demystified

Each business structure serves different entrepreneurial needs, balancing simplicity against protection and tax efficiency against growth flexibility. The four primary structures dominate the American business landscape, with 21.6 million active LLCs representing the fastest-growing category.

Sole proprietorship: Simplicity and risk

Sole proprietorships offer the easiest entry point for new entrepreneurs—no formal paperwork, no separate tax returns, just you and your business idea. You report income on Schedule C of your personal tax return, maintaining complete control over every decision. The dark side emerges when liability strikes: your personal assets become fair game for business debts and lawsuits.

Partnerships: Sharing the load

Partnerships split ownership between two or more people, allowing flexible profit-sharing arrangements through operating agreements. General partnerships expose all partners to unlimited liability, while limited partnerships (LP) and limited liability partnerships (LLP) provide varying protection levels. Law firms and medical practices often choose LLPs to shield partners from each other’s malpractice claims.

LLC: Flexibility and protection

The Limited Liability Company revolutionized small business when Wyoming introduced it in 1977 for Hamilton Brothers Oil Company. LLCs combine corporate liability protection with partnership tax flexibility—your personal assets stay safe while profits flow directly to your tax return. This hybrid structure explains why LLCs grew from zero to 21.6 million entities in under 50 years.

Corporations: Growth and complexity

Corporations create the strongest legal separation between business and owner, ideal for companies planning major expansion. S-corporations limit shareholders to 100 and require all to be U.S. citizens, but avoid double taxation through pass-through treatment. C-corporations face corporate tax rates (currently 21%) plus shareholder dividend taxes, yet remain the gold standard for venture capital investment due to unlimited stock classes and global investor access.

Tax Implications: Your Make-or-Break Factor

Tax treatment often determines which structure saves or costs you thousands annually. Pass-through entities (sole proprietorships, partnerships, LLCs, S-corps) report business income on personal returns, paying individual tax rates ranging from 10% to 37% in 2025.

Self-employment taxes hit sole proprietors and single-member LLC owners hardest—15.3% on all net income. S-corporation election changes this equation dramatically: you pay employment taxes only on reasonable salary, not distributions. A consulting firm owner reduced taxes from $24,000 to $9,000 by electing S-corp status, splitting $200,000 income into $70,000 salary and $130,000 distributions.

C-corporations face double taxation—first at the corporate level (21% federal rate), then shareholders pay taxes on dividends (0%, 15%, or 20% depending on income). This structure makes sense primarily for businesses reinvesting all profits or planning public offerings.

Liability Protection: Safeguarding Your Assets

Business structure determines whether a lawsuit can touch your personal wealth. A café owner operating as sole proprietorship lost their home and savings when a customer sued after slipping on a wet floor—the business had no legal separation from personal assets.

LLCs and corporations create legal firewalls between business obligations and personal wealth. This protection requires proper maintenance: separate bank accounts, formal record-keeping, and avoiding personal guarantees on business loans. Even with an LLC, signing a personal guarantee on a lease makes you personally liable for that specific debt.

Industry risk levels guide protection needs. Professional services face malpractice claims, restaurants encounter slip-and-fall lawsuits, and manufacturers risk product liability. Statistics show 21.5% of businesses fail within their first year—proper structure prevents business failure from destroying personal finances.

Growth Trajectory: Aligning Structure with Ambition

Your business structure either accelerates or limits expansion opportunities. Venture capitalists typically take 20-40% ownership during Series A funding, preferring C-corporations for their stock flexibility and established investor frameworks.

Attracting investors: Why structure matters

C-corporations dominate the startup ecosystem because they offer multiple stock classes, employee stock options, and unlimited shareholders. LLCs struggle with venture funding due to pass-through taxation complications for institutional investors and restrictions on foreign ownership.

S-corporations fall between extremes—attractive for profitable small businesses avoiding double taxation but limited by the 100-shareholder cap and single stock class restriction.

Scaling and changing structures: A roadmap

Business evolution often demands structure changes. A sole proprietor hiring employees should consider LLC conversion for liability protection. An LLC hitting $250,000 in revenue might elect S-corp status for tax savings. A startup securing venture capital typically converts from LLC to C-corp.

Structure changes involve state filing fees, potential tax consequences, and operational adjustments. Planning ahead minimizes disruption—many entrepreneurs start with simple structures knowing they’ll evolve with growth.

Your Step-by-Step Selection Process

Choosing your business structure requires systematic evaluation of current needs and future goals. This framework guides optimal selection while avoiding common pitfalls.

Assessing your business risk and goals

Start by mapping your risk profile:

• Industry liability exposure (high for construction, low for consulting)
• Personal asset protection needs (homeowners need more than renters)
• Growth ambitions (lifestyle business vs. venture-backed startup)
• Tax situation (high earners benefit more from S-corp elections)

Calculate projected revenue, planned hiring timeline, and funding requirements. A freelance writer might thrive as sole proprietor while a tech startup needs immediate C-corp structure for employee equity plans.

Consulting the experts: When to seek help

Complex situations demand professional guidance. Multi-state operations, foreign investors, or industry-specific regulations warrant attorney consultation. CPAs model tax implications across structures—sometimes paying $2,000 for proper setup saves $20,000 in first-year taxes.

State-specific rules add complexity. Delaware attracts corporations with business-friendly laws while Nevada offers strong LLC privacy protections. Your home state’s fees, taxes, and regulations often override these benefits for small operations.

Conclusion

Selecting your business structure ranks among your most consequential entrepreneurial decisions—one I’ve guided thousands through during two decades building Complete Controller. The right structure protects your family’s future, optimizes tax obligations, and positions your company for sustainable growth.

Your business deserves a foundation as solid as your vision. Whether you’re launching tomorrow or restructuring for growth, making informed structure decisions today prevents costly corrections later. For personalized guidance on structuring your business for maximum protection and growth potential, connect with our expert team at Complete Controller.

Frequently Asked Questions About Business Structure Guide

What is the simplest business structure to set up?

Sole proprietorship requires no formal filing or fees—you start doing business under your own name immediately. However, this simplicity comes with unlimited personal liability for all business debts and lawsuits.

Which business structure provides the best personal asset protection?

LLCs and corporations legally separate business liabilities from personal assets, preventing lawsuits or debts from touching your home, car, or savings. Maintaining this protection requires following corporate formalities and keeping finances separate.

How do taxes differ between LLCs and S-Corps?

Both use pass-through taxation, but S-corps split income between salary (subject to employment taxes) and distributions (not subject to employment taxes). LLCs pay self-employment tax on all profits unless they elect S-corp tax treatment.

Can I change my business structure after starting?

Yes, businesses commonly evolve structures as they grow. Moving from sole proprietorship to LLC involves state registration and new tax ID numbers. Converting LLC to corporation requires additional steps but remains feasible with proper planning.

What structure works best for businesses seeking venture capital?

C-corporations dominate venture capital due to preferred stock options, unlimited shareholders, and familiar legal frameworks. VCs rarely invest in LLCs due to pass-through tax complications for institutional investors.

Sources

• Checketts Law. “The History of LLCs as a Business Entity.” 2025. https://checkettslaw.com/the-history-of-llcs-as-a-business-entity/
• DHJJ. “Choosing the Right Business Structure: Tax Implications.” 2024. https://www.dhjj.com/tax-implications-business-structures/
• Eqvista. “Business Structure Guide.” 2025. https://eqvista.com/business-structure-guide/
• HubSpot. “Business Structures: How to Choose.” 2025. https://www.hubspot.com/business-structures
• Indeed. “5 Common Business Structures.” 2025. https://www.indeed.com/career-advice/business-structures
• Internal Revenue Service. “Small Businesses and Self-Employed.” 2025. https://www.irs.gov/businesses/small-businesses-self-employed
• Legal Dictionary. “Sole Proprietorship – Definition, Examples.” 2016. https://legaldictionary.net/sole-proprietorship/
• LendingTree. “Percentage of Businesses That Fail.” 2025. https://www.lendingtree.com/business/small/failure-rate/
• NerdWallet. “Business Structure: How to Choose.” 2022. https://www.nerdwallet.com/article/small-business/business-structure
• RSM. “Business Structure and Entity Choice.” 2025. https://rsmus.com/business-structure-guide
• Small Business Administration. “Choose Your Business Structure.” 2025. https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
• Texas Secretary of State. “Selecting a Business Structure.” 2023. https://www.sos.texas.gov/corp/businessstructure.shtml
• TurboTax. “How an S-Corp Reduces Self-Employment Taxes.” 2025. https://turbotax.intuit.com/tax-tips/small-business-taxes/how-an-s-corp-can-reduce-your-self-employment-taxes/
• UpCounsel. “Venture Capitalist Percentage Ownership in Startups.” 2025. https://www.upcounsel.com/seed-funding-percentage-ownership
• Westfield Insurance. “Pros and Cons of Different Business Structures.” 2019. https://www.westfieldinsurance.com/resources/business-structures
• Wikipedia. “Corporation.” 2025. https://en.wikipedia.org/wiki/Corporation

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. Reviewed By: Brittany McMillen

Brittany McMillen

Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.

See Full Bio

Moving for most people is like a nightmare that never stops haunting their dreams. Uprooting your life and packing everything up into different boxes is traumatizing. Changing your residence to an entirely new location can be stressful, and that can easily overwhelm you. To ensure your move is as smooth as possible, avoid these common problems during an activity.

Unnecessary Items

Retaining unnecessary items is a common mistake when beginning life in a new home. It’s impractical to pack belongings that have been collecting dust on shelves for years, especially when you know you won’t use them. To streamline your move, consider parting with items unused for over a year. Donate them to charity or include them in a yard sale—avoid investing time and money in things destined to remain unused.

Lack of Planning

The lack of planning is akin to setting oneself up for failure; as the saying goes, “If you fail to plan, you plan to fail.” This phrase aptly captures the essence of moving without careful consideration. Would you embark on a skydiving adventure without a parachute, adopting a “Let’s see how it goes” approach? Moving shares similarities, albeit a bit scarier. Without thorough planning up to the last detail, things can quickly spiral out of control.

Here are the things you need to prepare

• Plan your finances (enough money in the bank for payments)
• Getting all the paperwork in order
• Make a timetable or calendar of the involved tasks
• Discussing your moving details with the moving company (how you want things done)

Before engaging a professional moving company, it’s essential to consider a few key factors. Movers won’t automatically identify sensitive or fragile items within your boxes and won’t be aware of your budget unless you communicate your needs. Establishing a two-way relationship with clear communication is crucial. Here are some effective strategies to optimize your moving experience and save money.

Hiring Professional Movers

Contrary to common perception, hiring professional movers is often more cost-effective than attempting a DIY move. When you enlist a moving company’s services, you ensure precision in handling every box and item according to your preferences. In a DIY scenario, the responsibility for any breakages rests solely on you, and you bear the expenses of replacing the damaged items. Opting for professional movers provides a service guarantee and minimizes the financial burden associated with potential damages.

Proper Labeling

It is crucial to label and categorize each box during packing meticulously. Proper labeling serves several purposes, including facilitating quick retrieval of items and ensuring that everything has been successfully moved to the new location. Additionally, clear labeling aids both you and your movers in identifying the designated area for each box in your new home. This simple yet effective practice enhances organization and streamlines the unpacking process.

Planning Ahead

Prioritize planning by ensuring you have all the necessary supplies well before the moving day. Avoid a last-minute rush for packing boxes when your belongings are already outside. If you’re opting for moving services, it’s advisable to make your booking in advance, especially before the peak season hits. Additionally, consider early bookings for other essential services such as painters, rental supplies, and cleaners to secure a smooth and well-coordinated moving experience.

Looking for any Leakages and Cracks

Upon moving into a new house, conducting a thorough check for any leakages and cracks is essential. Ensuring everything is in proper working order is crucial to avoid surprises. You wouldn’t want your first bathing experience in your new home to become a disaster due to overlooked issues. Taking the time to inspect for potential problems early on can save you from inconvenient and costly repairs later.

Bottom Line

In conclusion, we understand that moving is a challenging endeavor. To assist you in navigating this process more smoothly, here are crucial money-saving tips that can contribute to a comfortable and hassle-free experience in your new place. By following these recommendations, your next move, whether to a new home or office, can be executed quickly, comfortably, and, most importantly, cost-effectively.

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.

When we go to a store or search for a service, we usually ask what the value of what we are about to buy is. But do you know that there is a difference between price and value? And as much as we do not always make that distinction when we go shopping, we’d better think about whether we are getting something for value or value when it comes to investments.

Are you confused? What do you think of going deeper into this idea to understand it better? Follow the post we prepared and ask your questions!

How Much Does it Cost to Produce and Distribute Products and Services?

When a company produces a commodity or a service, it calculates the resources needed to deliver the solution to its customers. This calculation includes fixed costs (water, electricity, telephone, internet, rent) and variable costs (inputs, payroll, and distribution). Once you calculate the cost of production, then you will add the taxes due and the profit margin together. At the end of the process, we have the price of the product or service!

What Relevance Does the Consumer Usually Give to Products and Services?

Whoever values ​​an investment is the buyer. So, what is a priority for you may be relevant for another person. For example, it is a case of taking a trip or buying a car. Both options populate the dreams of various consumers. While some want to cruise, others want to buy a new vehicle to make their family more comfortable. And neither of the two profiles is wrong! They are only different points of view, adapted to the reality of each one.

In the End, is it Better to Prioritize Price or Value?

We tend to prioritize lower prices when discussing everyday items such as pens. We can satisfy our needs in the same way as its more expensive counterpart. However, when making investments, you must consider other factors. Here comes the value of a good, which can have an influence overall.

You want to buy a new car because your family is growing. This may seem like an unnecessary luxury. However, this acquisition has excellent value for you, so much so that the price to pay does not equal the benefits you will get once you have your new car in the garage.

For those who dream of traveling the world, the money spent on travel, lodging, food, and other necessities does not compare with the experience of meeting new cultures, experiencing exotic foods, and people of different profiles.

However, you do not have to pay more than the fair price for what you are getting, do you? And this is worth it even if experiences, comfort, and safety have the most incredible value in the world for you! It is the case of buying a property, for example. You have the good at your disposal in less time by opting for financing, but for a higher price than it is worth it. Already choosing a real estate consortium, you can plan yourself more peacefully, paying less, but not for that, letting you see your dream come true!

The same logic holds for other investments. Do you need to travel today, or can you wait? Is the new car urgent, or does it still have time until the children arrive? Think about it: what you save with planning can be used in other investments!

And why are we talking about it? Simple: only end up spending what is necessary. You need to find the balance between price and value, investing wisely!

Conclusion

Distinguishing price from value is crucial for your brand’s success. Value, a magnet for lasting customer loyalty, is exemplified by American brands like Mac and Coke, which are desired by over 90% monthly. Satisfy customers with top-notch quality, and they’ll willingly pay higher prices, ensuring sustained brand reputation and customer satisfaction.

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.

Value investing involves strategically purchasing assets or investments at prices below their intrinsic value. Instead of relying on complex definitions or abstract financial theories, value investing boils down to a straightforward principle: buying something for less than its true worth.

To illustrate this concept, consider the scenario of a store, such as a clothing outlet, undergoing liquidation. During this process, merchandise is often sold at significantly reduced prices. Value investors recognize the opportunity in such situations, as they can acquire items at a favorable cost compared to their regular market value. This principle extends beyond retail scenarios to encompass investments in companies.

Similar to a store in liquidation, there are instances when a company is facing financial distress or undergoing a phase that can be likened to “liquidation” mode. This might be due to factors such as economic downturns, poor management decisions, or industry challenges. In these situations, value investing is a strategic approach to evaluate and capitalize on undervalued opportunities.

Value investors analyze companies experiencing temporary difficulties or market mispricing, allowing them to identify potential bargains that other investors may overlook. By delving into a company’s fundamentals and examining its assets, earnings, and growth potential, value investors aim to uncover discrepancies between the market price and the investment’s intrinsic value.

Value investors gain a distinct advantage through this careful study and understanding of a company’s true worth. While the broader market may be influenced by short-term fluctuations or sentiment, value investing remains rooted in the long-term perspective of identifying and acquiring assets at prices below their intrinsic value, ultimately seeking to benefit from their potential appreciation over time.

Is Value Investing a Fad?

Here is a humble opinion on value investing, and I will also point out what is and what is not. For those who do not know this investment flow, I will start from the beginning:

Value investing was developed as such by Benjamin Graham in the 1928 environment. Its investment philosophy is to buy assets for less than they are worth (intrinsic value) to generate a profit in the subsequent sale.

As you can see, nothing from the other world, buy cheap and sell at its price or more expensive. Sure, before Graham thought about it and carried it out, but Graham was the one who created the school.

Then came other mythical investors such as Warren Buffet, Peter Lynch, Carl Icahn, Seth Klarman, and Jeremy Grantham. It is fashionable because, in an increasingly efficient market, the way to excel is by finding inefficiencies such as those exploited by value investing.

Today, managers are doing things very well by following this philosophy. Therefore, the term and its followers have become popular, but we will study it to avoid mistakes.

Are There Different Types of Value?

Value investing is evolving. People like to make distinctions, although we discuss the same thing.

These subtypes are:

• GARP (growth at a reasonable price). We could not consider these companies cheaply concerning the market average, but this is because their development is much higher than the average of companies. For this reason, they do not list multiples such as PER and EV / EBIT, which are as low as those of other value companies.
• Deep value investing. It is value investing using elements of the “old school” balance. It is about finding companies looking at the balance. They usually hide jewels that are typically true treasures. For example, the NCAV, Graham & Dodd liquidation value, P / Net cash, and modifications of both.

What is Not Value Investing?

Value investing is NOT buying “apparently” good companies and keeping them forever. As much as they are called Coca-Cola, Santander, or Iberdrola, they are large and good companies because they have worked for years. Buying and maintaining them is not value investing. It will be a buy-and-hold or buy-and-hold strategy, but not value investing. See this continuously.

Investors who invest in Telephone or BBVA for dividends deceive themselves by telling themselves and others that they have made a “Valiu” investment when, in the best case, they will long-term aspire to approach inflation.

How Do You Learn About Value Investing?

There are valuation methods. Suppose you want to learn to detect sound and priced companies to enter the world of value investing. In that case, I leave you the link to the most recommended article in my blog on performing a “Fundamental Analysis for Rookies.” A common mistake is to use the same valuation method for all companies.

Each company is different and is in a different cycle (growing, already mature, expanding). Therefore, the considerations we need to know about each company are additional, and we will weigh variables more than others.

The differences are the most complicated part. Although there is a more rational and logical part, I explain myself. Once we understand the analytical role better or worse, we must see if our assumption is crazy.

Conclusion

As we explore value investing, this article aims to demystify its principles, dispel common misconceptions, and equip readers with the tools to discern true value. In a world where financial landscapes evolve, value investing remains a stalwart philosophy that transcends market trends, offering astute investors a timeless advantage.

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.

Mastering Insurance Contracts:
A Guide to Decoding Them

Decoding insurance contracts means breaking down the dense legal language to understand what protection you truly have, which clauses matter most, and precisely what you’re agreeing to when you sign—so you can avoid costly misunderstandings and confirm your coverage fits your real needs.

Over the past 20 years as CEO of Complete Controller, I’ve worked with thousands of business owners across every industry imaginable, and I’ve seen firsthand how a single misunderstood insurance clause can devastate a company’s finances. Consider this: insurance policies are written at a college or graduate school reading level (grades 13-24), while the average American reads at an 8th-grade level—and only 27% of people actually read their complete policy documents. This guide will equip you with practical tools to analyze coverage sections, spot hidden exclusions, compare competing policies, and negotiate better terms, transforming you from a passive policyholder into an informed decision-maker who protects their business and personal assets with confidence.

What soes “Decoding Insurance Contracts” mean, and how do you really do it?

• To decode an insurance contract, read beyond the surface to understand coverage, exclusions, conditions, definitions, endorsements, and your obligations as a policyholder
• The declaration page summarizes the essentials: who and what is covered, your limits, and policy period
• The insuring agreement spells out what the insurer promises to pay for and when
• Exclusions and conditions reveal what isn’t covered and what rules must be followed
• Reviewing endorsements, policy definitions, and legal implications helps you grasp every commitment—and every gap

The Anatomy of an Insurance Contract:
Your Step-by-Step Policy Breakdown

Understanding your insurance contract’s structure gives you the roadmap for systematic policy analysis and interpretation, preventing expensive surprises and creating transparency in your coverage.

Your insurance contract contains five essential sections that work together to define your coverage. The declaration page provides your quick-reference snapshot—listing names, policy period, coverage types, limits, and premium amounts. The insuring agreement forms the heart of your contract, detailing what the insurer promises to pay, which perils are covered, and how claims get processed. Exclusions spell out what your policy won’t cover—often the source of denied claims that catch policyholders off guard. Conditions establish the rules you must follow to keep coverage valid and claims payable, including notification timeframes and documentation requirements. Finally, endorsements or riders modify your standard coverage, and these often contain critical changes that expand or limit your protection.

Insurance policy analysis: Comparing key sections across different policies

Strategic insurance document breakdown involves lining up multiple policies for side-by-side analysis to spot subtle exclusions and create true apples-to-apples coverage comparisons. Start by creating a comparison chart with columns for each policy option and rows for declaration details, coverage types, exclusions, conditions, and endorsements. Pay special attention to differences in definitions—one policy’s “flood” might include sewer backup while another’s doesn’t. Note variations in notification requirements, as missing a 72-hour reporting deadline could void your coverage entirely.

Decoding Insurance Terms and Clauses:
The Language That Matters Most

Insurance contracts deliberately use precise legal terminology that creates binding obligations, and understanding these terms empowers you to recognize your rights and responsibilities.

The insurance industry operates with its own vocabulary, and mastering key terms transforms confusing documents into clear agreements. Common insurance contract legal terms include “perils” (the specific risks covered), “occurrence” versus “claims-made” (when coverage triggers), “aggregate limit” (maximum payout for all claims combined), “deductible” (your out-of-pocket before coverage kicks in), “named insured” (who’s specifically covered), “additional insured” (others added to your policy), and “waiver of subrogation” (preventing your insurer from suing third parties).

Insurance terms and conditions: Plain-english definitions

Critical clauses can dramatically shift your coverage without obvious warnings. “Other insurance” clauses determine which policy pays first when you have multiple coverers. “Choice of law” provisions dictate which state’s regulations apply to disputes. “Indemnification” clauses spell out who pays for legal defense costs. Insurance coverage explanations reveal how tiny word choices create major differences—”shall” creates mandatory obligations while “may” grants discretion to the insurer.

Real-World Example:
How Decoding Your Policy Can Mean the Difference Between Getting Paid and Denied

A small manufacturing business in Ohio faced potential bankruptcy when their warehouse fire claim was initially denied in 2023. The insurer cited failure to comply with a “condition precedent” requiring loss notification within 72 hours. However, the owner and their Complete Controller bookkeeper had meticulously reviewed the contract together, creating calendar alerts for every compliance requirement. Their documentation proved they’d notified the insurer within 48 hours, including timestamped emails and certified mail receipts. The insurer reversed their denial on appeal, paying the full $1.2 million claim. This case demonstrates why understanding every contract provision matters—hospitals alone spend $19.7 billion annually fighting insurance claim denials, with 54.3% ultimately overturned after expensive appeals processes.

Smart business owners learn from others’ mistakes. Common oversights include assuming generic policy templates fit your specific business, missing exclusions buried in endorsement pages, and neglecting to verify coverage matches current operations. Insurance contract interpretation requires reading between the lines—if your business model changed since your last renewal, your coverage might have gaps you haven’t noticed.

Insurance contract interpretation: Reading beyond the obvious

Professional insurance policy transparency starts with demanding plain-English explanations from your broker for any unclear provisions. Document these clarifications in writing, as verbal assurances won’t help during claim disputes. Create a coverage summary sheet listing what is covered, what isn’t, and what conditions apply. Review this summary with your team quarterly, especially after any business changes.

The Bottom Line:
Actionable Steps for How to Decode Insurance Contracts Before You Sign

Master these five steps to decode insurance contracts like a seasoned professional, protecting your assets and avoiding claim denials.

How to decode insurance contracts: A proven checklist

Request the complete policy document in writing, not just quotes or summary pages that omit critical details. Highlight and tab five key sections: declarations, insuring agreement, exclusions, endorsements, and definitions. Create a specific questions list including “What scenarios aren’t covered?”, “What must happen for claims to be paid?”, and “What triggers cancellation or denial?” When comparing policies, build a spreadsheet tracking differences in coverage, exclusions, limits, and conditions. Finally, involve your attorney or trusted advisor for complex policies, documenting every clarification they provide—this paper trail proves invaluable during disputes.

Building Trust:
Why Transparency in Insurance Policies Matters

Despite regulatory progress requiring clearer policy language in 47 states, consumer confusion remains widespread—51% of insured adults report difficulty understanding their coverage, including what’s covered (36%) and out-of-pocket costs (30%).

Insurance policy transparency: Your rights as a policyholder

You have the right to demand clarity from brokers and insurers, including plain-language summaries of complex provisions. Recent regulatory protections mandate better accessibility and clearer disclosures, though enforcement varies by state. Shockingly, 60% of insured adults don’t know they have legal appeal rights when claims are denied, and 76% don’t know which government agency handles insurance complaints. Your state insurance department serves as your advocate—file complaints when insurers provide evasive answers or deny legitimate claims. Most states also have insurance ombudsmen who mediate disputes between policyholders and companies.

Final Thoughts:
Why I Never Sign Without Reading the Fine Print

As a founder who’s navigated countless insurance renewals and claims, I treat every insurance agreement with the same scrutiny I give financial statements. My process involves three careful reads: first for understanding coverage scope, second for identifying exclusions, and third for imagining worst-case scenarios to test whether they’re covered. This discipline saved Complete Controller multiple times—once catching an exclusion that would have left us exposed during a data breach, another time discovering our business interruption coverage had silently expired through an endorsement change.

The statistics prove why this matters: between 39% and 59% of insurance claim denials get overturned on appeal, yet only 1% of denied claims are ever challenged. Don’t become another statistic. Take control of your insurance contracts today, and if you need expert guidance navigating complex coverage decisions, visit Complete Controller where our team helps businesses decode financial and insurance complexities daily.

Frequently Asked Questions About Decoding Insurance Contracts

What is the main purpose of an insurance contract?

To legally define the obligations, coverage, and limitations between the insurer and insured, creating binding agreements about who pays for what losses under which circumstances.

Which section of an insurance policy lists what is NOT covered?

The Exclusions section details all events and circumstances excluded from coverage, often spanning multiple pages with specific scenarios your policy won’t pay for.

What is an endorsement in insurance policy terms?

An endorsement modifies the original contract terms—either adding, removing, or changing coverage—and these modifications override standard policy language.

Why do insurance policies contain complex terminology?

Insurance contracts are legal documents requiring precise language to define coverage, responsibility, and limits—though this precision often creates confusing jargon that advantages insurers over policyholders.

What should I do if I don’t understand part of my contract?

Ask your broker or agent for a plain-language explanation in writing, and if still unclear, consult an insurance attorney or contact your state insurance regulator for guidance.

Sources

• Anderson Kill. (2024). “Understanding ‘Other Insurance’ Clauses in Insurance Policies.” www.andersonkill.com
• Carlson Bier. (2024). “Decoding Insurance Policies: A Layman’s Guide.” www.carlsonbier.com
• Foundershield. (2023). “The Ultimate Guide to Insurance Requirements in Contracts.” www.foundershield.com
• Gilman & Bedigian. (2024). “Half Of Insurance Claim Denials Are Overturned On Appeal.” www.gilmanbedigian.com
• Insurance Information Institute. (2024). “What is Insurance?” www.iii.org
• Insurance Professionals of Arizona. (2024). “How to Read an Insurance Policy.” www.insuranceproaz.com
• International Medical Group. (2023). “How to Read an Insurance Policy.” www.imglobal.com
• Kaiser Family Foundation. (2024). “KFF Survey of Consumer Experiences with Health Insurance.” www.kff.org
• Lexagle. (2024). “Insurance and Indemnification in Contracts.” www.lexagle.com
• Lockton. (2023). “Key Terms and Clauses in Insurance Contracts.” www.lockton.com
• OLHI. (2024). “Decoding Life and Health Insurance Policies: A Simple Guide.” www.olhi.ca
• Readable.com. (2023). “Have you read the terms and conditions? The Readability of Insurance Policies.” www.readable.com
• Restorical. (2024). “Understanding Choice of Law in Insurance Claims.” www.restorical.com
• South Carolina Department of Insurance. (2023). “Understanding Your Insurance Policy.” www.doi.sc.gov
• The American Hospital Association. (2024). “Payer Denial Tactics — How to Confront a $20 Billion Problem.” www.aha.org
• USALearning.gov. (2024). “How to Read — and Understand! — Your Insurance Contracts.” www.usalearning.gov
• Zuva. (2024). “What is an Insurance Clause?” www.zuva.ai

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. Reviewed By: Brittany McMillen

Brittany McMillen

Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.

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Since purchasing a property mobilizes an incredible number of resources, it is necessary to negotiate the right way. We have mentioned this step before, but it is never too much to point out. For this purchase, you must first evaluate your financial situation to study the possible impact on your budget. With that in mind, you will have three forms of payment: financing, consortium, or cash. Check out the major features of each alternative.

In Cash

To make the cash payment, you must have many resources in one go. So, it is recommended to think twice before making a final decision. Thus, if the property costs two hundred thousand dollars and you have 250 thousand dollars available, this may not be an innovative idea since you will immobilize a tremendous amount of your money.

On the other hand, if 200,000 dollars correspond to 10% or even 20% of what you have, this is a beneficial alternative.

Financing

With the financing, you pay the property’s value (plus an interest rate) in a diluted way over the years. It is usually the preferred option of familiar buyers, but it can also be possible if your budget involves a commitment of about 30% of the monthly income. In this case, you will need to get the property back as quickly as possible so that the rent is responsible for paying the most massive portion of the financing.

Consortium

The consortium, in turn, is the option that unites the best of cash and financing. In this form of payment, you pay monthly installments to an administrator, which can be contemplated with a letter of credit in the property’s value at any time.

The detail is that you can make monthly bids to ensure early contemplation. With the letter of credit, you can negotiate the property’s value insight and acquire it to make the subsequent resale or monetize it through the rent. So, suppose you want a real estate of two hundred thousand dollars and have 250 thousand available. In that case, you can bid in the consortium of fifty thousand and increase the chances of being contemplated. With this, you can buy the property by trading sight – and therefore, more cheaply.

What Should You Evaluate When Investing in Real Estate?

When it comes time to choose the property to buy effectively, you must consider factors that can make a massive difference to the success of your investment. To increase your chances of profit, you should evaluate:

Location

Remember that location is one of the few items that cannot be changed on a property, regardless of what you do. Therefore, choosing a property situated in a valued place is essential since this increases the exposure to sound investments. A residential property usually works best in a safer neighborhood with access to different city services. In turn, commercial property should be as close as possible to the city’s financial heart. It is not that complicated.

Appreciation

It is also necessary to keep an eye on the possibilities of valuing both the property and the region. Sometimes, the area is still not highly valued but is in development. Thus, it is possible that soon, it will become a stronghold of highly prestigious real estate. If you realize this trend of acquiring property there while still cheap, you can benefit greatly when the region is more valued.

To do this, check the data on the investments made in the region, look at the development and the local economy, and look for news about future installations and improvements. The more attractive the future looks to the area, the greater the potential for property appreciation.

Age

Another factor to consider is the age of the property. Although this is not a rule, the ideal is to look for newer properties or, if possible, still in the plant. But take your time, too. No discarding older real estate! That is because they tend to be more spacious and are great options, especially if you plan to renovate and improve to achieve more profitability later.

Future

As the property is a durable good, when choosing, you should also consider the future and the projections. Remember: a property that shows trend today may not always be the most sought after, and one that does not seem incredibly attractive at present can become rare and much sought after in the future.

This analysis requires good market knowledge to understand, for example, that a smaller property may make more sense in each area because of the natural reduction of households. At the same time, more significant commercial real estate can be beautiful.

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 economics, there are fundamental differences between depression and recession. For example, in the US, the last natural depression was the Great Depression of the 1930s. The US economy has experienced frequent episodes of recession, however.

Depression VS. Recession

Generally, a recession in the economy is much less severe than a depression. A recession decreases a country’s gross domestic product (GDP) for over a quarter of a year. The GDP decrease is smaller than a 10% decrease.

Also, the economic recession tends to be measured in quarters of a year rather than whole years. Depression is a decrease in GDP of 10% or more each year. The fourth drop rate was more than 10%, which you could not describe accurately as a depression unless the same conditions existed for one year.

If economic conditions improve in the fourth quarter of the year, and the decline in GDP becomes an increase, then the year is considered to have been the subject of a recession. However, GDP has declined steadily, and year totals show a reduction of 10% or more in GDP.

Recessions tend to occur more frequently than depressions because a country’s economy is fragile, and slight changes or shocks, such as the dot.com outbreak, produce a decrease in spending that reduces GDP by less than 10%. A diversified economy quickly recovers from this kind of shock because of other ways to spend money.

The dot.com recession lasted for years. People mistakenly call this a depression. It did not reduce GDP by more than 10%, hence the economy in recession, and it was not depressing.

Economic Dynamics

People tend to produce a term that reflects more than its real meaning. A depressed economy is reminiscent of the type of depression people find when they must do less, spend less, or invest less. A recession seems more neutral or more favorable in comparison.

Sometimes, people deliberately use the terms to give a negative or positive turn to declining economic conditions. A politician who supports a particular monetary policy may refer to depression as a recession to lessen the responsibility of the wrong approach. A politician on the opposite side of economic policy could call a recession a depression to exaggerate how politics affects people.

However, depression and recession can use specific terms, and economists often visibly correct those who misuse words.

• Getting a job during both a recession and a depression can be difficult.
• In general, depressions cause difficulties for everyone, not just a particular part of the population.
• Recessions tend to occur more frequently than excavations do.

Great Depression’s Situation in the United States of America 

• Depression stayed in the country for 43 months
• The crust and trough rate of GDP decline was 26.5 percent
• The reduced rate of industrial Production is around 46 percent
• There was an 80% decrease in stock share.
• A significant drop in the labor force increased unemployment; that percentage was 24.6%

Ways to Overcome Depression and Recession

Governments should take the initiative to arrange different programs to strengthen the clients’ pocketbooks to level up small businesses. It should include enhanced unemployment benefits. There are other ways to overcome the issue of recession or depression.

Throttle Your Expenses

Lockdown mode has made our financial condition worse. On the one hand, people cannot earn, and on the other hand, there is a complete restriction on extracurricular activities. But there is the best opportunity for saving maximum money. This period also lets us know our rate of prodigality. Track your budget, whatever the situation is. Do not compromise in this regard.

Keep Your Emergency Funds Active

A financial emergency is an exposure that brings you into a state of desperation. In such cases, your only focus is to keep yourself stable financially. At that time, you need extreme demand for an emergency fund to cool down your financial catastrophe. The best way to keep it safe for these is to throttle the amount from your annual or monthly income.

Conclusion

In economics, the distinction between depression and recession holds crucial significance. While recessions are less severe, characterized by a GDP decrease lasting more than a quarter of a year but below 10%, depressions are marked by a 10% or more annual GDP decrease. The dot.com recession is an illustrative example, lasting for years but not meeting the criteria for depression. People’s tendency to use these terms interchangeably, often influenced by political motives, highlights the importance of precision in economic terminology.

Examining the Great Depression’s impact on the United States provides a historical context, emphasizing the challenges faced during that period. Overcoming economic downturns requires proactive government initiatives, such as programs to bolster small businesses and enhanced unemployment benefits. Additionally, individuals can navigate challenging times by managing expenses, tracking budgets, and maintaining active emergency funds to weather financial crises.

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 insurance contract contains two different natures. One refers to the insurance of damages, and the other to the insurance of people, concepts that, although they can resemble in principle, in this article, we will see that they are opposite.

What is Damage Insurance?

Damage insurance will be responsible exclusively for repairing the damages suffered by the insured, there being a direct relationship between the covered warranty and the injuries suffered.

Its nature is compensatory so that the insured can never obtain any benefit. At most, you will restore your situation. You will return to the exact point just before the incident occurred.

It would be best if you did not profit from damage insurance.

The Insurance Contract Law exposes articles that make obtaining any insured benefit with insurance difficult. Let us mention the most prominent:

Insured Interest

The owner of the covered asset receives the compensation. You cannot repair damage to someone who has not suffered it.

Sum Assured

It will be the maximum amount that the insurer will pay to the affected. Two values will determine the amount to be repaid: the damages produced and the sum insured. The total that the insurer will receive will be the smallest amount between those two values.

Underinsurance

Underinsurance is the case that occurs when the sum insured is less than the value of the insured good. If an accident occurs, in this case, the compensation will be the maximum of the sum insured. But if the incident is partial, the thing is complicated since the affected party will only receive an amount in proportion to the capital. How is this figure calculated?

With an established formula, we call the proportional rule:

Insured Sum and Damage Value

Over-insurance

Over-insurance would be the opposite of the previous when the sum insured is greater than the guaranteed substantial value. The insured will only receive the amount of the value of the damage that has occurred, the insured amount. But you will be thinking, would the difference that paid more lose it? No, of course not. The insurer would return that part that was overpaid.

Coinsurance

When we ensure an object by insurers, this procedure is legal and, in principle, does not have to be a problem as long as the total amount insured does not exceed the absolute value of the asset. If this were the case, the procedure followed would be the same as in the previous point.

Subrogation

In this case, we are facing a transfer of rights of the insured to the insurer. This process occurs when there is a third person responsible for the incident. With this, the company manages to claim from the person causing the accident the amount he had previously paid to his insured.

What is personal insurance?

Here, the situation changes completely. There is no longer a relationship between the covered warranty and the damage suffered. As with damage insurance, reversing to the point before the accident is impossible.

In the case of death or amputation of a member, it is impossible to repair the damage caused. In these cases, people insurance gives the affected party or beneficiary an amount previously agreed upon and reflected in the policy.

As it is impossible to calculate the value of human life, here we are not talking about compensation but the nature of savings or capitalization. Capitalization means that the insured will pay fees for what may happen in the future through salvation.

Summary

In summary, damage insurance focuses on compensatory measures to restore the insured’s situation after an incident, ensuring no profit is gained. The intricate nature of insured interest, sum assured, underinsurance, over-insurance, coinsurance, and subrogation form a legal framework that restricts unwarranted benefits. On the contrary, personal insurance diverges by offering predetermined amounts in the face of irreparable damages like death or amputation, emphasizing a form of savings or capitalization rather than mere compensation.

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