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The 30 Day Bill Cycle is Dead

21 Sep

The way that medical and dental practices have approached people that owe money in the past no longer works nearly as effectively as it once did. 

The “one size fits all” approach is dead, and the 30 day bill cycle is dead both in follow-up and collections of slow-pay and delinquents accounts. 

The reasons for a patient not paying the bill when due can be varied.  Some don’t pay on time because of financial reasons. Others have the funds but are too disorganized to remember where the bill is.  Some will try to hold off paying, hoping that you will forget or give up.  Still others have no intention to pay you

It can be very expensive to have your staff continue to send statements, make phone calls, and “chase the money”

So what should a business do?

We have determined that there are actually four distinct types of patient payers.  Each is motivated in a different way to pay the bill, and it is a mistake to treat them all the same.  They are:

THE DUTIFUL PAYER

The dutiful payer feels a keen responsibility to pay their debts in a timely manner.  They are motivated to pay the bill by the initial statement you send following patient responsibility.  Fortunately, they are (or should be) the largest category in your practice.

THE DISTRACTED PAYER

The distracted payer has the very best intentions to pay your bill, but they seem to be so busy and distracted that they misplace your statement or just forget to pay it.  Timely reminders are sufficient to motivate them to get that bill paid.

THE DISRESPECTFUL PAYER

The disrespectful payer tries to see what they can get away with, and hope that you will give up trying to collect the bill if they dodge you long enough.  They do not respond to your statements, letters, or phone calls.  Rather it will take a contact by a third party collection agency for them to be convinced that the practice is serious about collecting the debt.  That alone will motivate them to pay, and they will generally pay the bill after they receive the first contact by that third party.

PROFESSIONAL DEBTOR

The professional debtor never intended to pay the bill when they received service.  They are likely in collections with other creditors already.  These, and these alone, need to be in the hands of professional collectors, familiar with medical debt, before too much time has elapsed and too much money has already been spent chasing them.

HOW TO GET PAID FASTER

I’d like to have the opportunity to show you how to motivate each type of payer to pay their bill, and to do it inexpensively and easily.  Call me or email me today and I’ll be happy to show you.

Don’t forget to subscribe to this blog for more Tips and Tricks to make your business or practice more profitable.

Contact Me Directly

Please subscribe to this blog , or contact me with any questions.

Call me directly at 770-224-8504 or 888-780-1333
Schedule a phone call with me by clicking here
Visit my website by clicking here
Visit my YouTube channel by clicking here
Email me at David.wiener@cashflowstrategies.us

Appreciating Depreciation for Real Estate Brokers

7 Sep

You can be a tax hero to your clients and prospects. Here’s how.

Become a “Tax Hero”

You can become a Tax Hero to your current and potential real estate clients. We’re talking about a hero status so big that your clients think you should start wearing a cape.

And, you don’t need to become a tax professional to be a Tax Hero. Just make your clients aware of one simple tax code that most are missing—100% Bonus Depreciation.

In the first year of ownership, this one change potentially saves a commercial building owner $40,000 – $100,000 per $1 Million of building owned or purchased. It’s like buying a building and getting up to a 10% off gift card.

To become a Tax Hero, just say this to your client or prospect:

  • “100% Bonus Depreciation.
  • • When you buy a building, about 20% of the building qualifies for 100% Depreciation.
  • • It’s worth about $60K per Million in the first year you own the building.
  • • I have a specialist that you can talk to. I’ll send you their number.”

That’s it. Congratulations on achieving Tax Hero Status! YOU EARNED IT!

How Does it All Work?

Now, overachievers want to know how and why this new tax code works. I’ll try and keep it simple.

  • In the new tax code, Congress wanted to encourage business owners to buy more stuff to stimulate the economy.
  • So on purchased items that have to be capitalized and depreciated over a period of 20 years or less, Congress said you can have all of your depreciation deductions in the first year.
  • It is like everything went on sale.

Every tax professional knows how to take these deductions on items like equipment, computers, furniture and fixtures but not all know how to get 20% of the building to qualify for this same bonus depreciation in the first year. This is where you might want to recommend a cost segregation specialist.

What is cost segregation?

Instead of selecting the old straight-line depreciation method that views the building as one whole piece and depreciates the building over 39 years, the owner can select a depreciation method that groups or “segregates” the values of the parts and pieces of the building into categories that depreciate on a 5-, 7-, 15- and 39-year basis. About 20% of the building fits into the 5-, 7-, and 15-year categories. And remember Congress said that anything purchased that has a depreciable life of 20 years or less can be 100% Depreciated in the first year. That averages $40,000-100,000 of cash flow in the first year for every $1M of building.

Cost Segregation Services, Inc. —CSSI can perform an engineering-based study of the building by identifying and valuing all the parts and pieces that qualify, photo document the building, and to supply the numbers that allows the tax professional to file for these deductions, AND we can provide a free, no-obligation estimate on any building in 48 hours.

For buildings that you might have for sale, or buildings that a prospect might be considering, you can contact me and I will get you that estimate on the building to present to your potential client.

I think that long shiny cape would look good on you. Contact me today to learn more about how I can help make you a HERO.

Contact Me Directly

Call me directly at 770-224-8504 or 888-780-1333
Schedule a phone call with me by clicking here
Visit my website by clicking here
Visit my YouTube channel by clicking here
Email me at David.wiener@cashflowstrategies.us

Free CARES Act Webinar for Commercial Real Estate Owners

9 Apr

Tuesday, April 14, 2020 1:00 PM CST

If you own or lease commercial or residential income property, this will likely be the most critical information you have heard since the Covid-19 outbreak.

During this uncertain time, most business owners are faced with difficult decisions regarding cash flow. We can help you increase cash flow NOW, through new and existing tax legislation, because you own commercial property.

Please don’t miss this critical tax information.

Join us for a live 30-minute webinar on Tuesday, April 14th at 1:00pm CST. We will be discussing how, as a business owner, you are able to make cash available immediately by utilizing existing tax laws and the new CARES Act. We will be explaining two specific items, NOLs and Qualified Improvement Property, within the act that have been designed to allow you to get money back from the US Treasury when you need it most. These topics are not related to the SBA loan process; this is an additional viable source of cash flow.

Please click the link below to register for this live webinar with Q&A so that you can have all your questions answered in one place. Seating is limited, so please register soon. 

Whether you are a tax professional joining the session on your client’s behalf, a building owner, or lessee looking for a solution to a very real problem, we are here to answer any questions you have.

CLICK NOW TO REGISTER

CSSI has been called on during economic downturns in the past, saving businesses in the path of financial destruction. 

“Thank you so much CSSI! Without the influx of cash I received from my reduced tax payment, I would have had to close my new location. You literally saved my business. I will forever be grateful.“

                                                                                                      – Barbara S.

About CSSI: For years, CSSI has been providing quality and affordable engineering-based cost segregation studies. Our national coverage and expertise allow us to work with customers and properties across the United States.

With over 20,000 studies performed, we are the premier company proving cost segregation studies and Tangible Property Regulation studies for U.S. Properties.

This webinar will be presented by Warren Dazzio, Executive Vice President, and Robert Taylor, VP of Operations at CSSI.

The Impact of Bad Debt on Sales

28 Oct
business vision concept and man standing on money

Companies may sometimes become accustomed to thinking of bad debt as a cost of doing business. After all, every accounting department has to write off bad debt every once in a while, right?

That’s not necessarily the healthiest way to view any bad debt you may have out there. Instead of worrying about your write offs, you want to be able to focus on new sales, revenue growth, profitability, and brand awareness. And as we all know, reducing bad debt can, and will, have a direct impact on your bottom line.

By the Numbers

When you have to write off large portions of bad debt, you simultaneously must increase the pressure on your sales team and marketing staff to recoup the revenue you lost in those write-offs. Ultimately, you want your sales to drive growth, improve cash flow, and create new opportunities for your business.

A cash-positive business can hire more employees, expand into new locations, and upgrade equipment. When you’re drowning in bad debt, however, you’re too busy making up for losses.

If you’re using your sales to cover write-offs you’re reducing your business’s accounts receivable management efficiency and leaving money on the table. Worse, your sales, advertising, and marketing employees are faced with enormous stress as they scramble to improve customer acquisition and retention rates.

To understand how bad debt impacts sales, you need to know two metrics:

  1. Your net profit, and
  2. The amount of money you’ve written off.

Let’s say that you’ve written off $100,000 in bad debt and your profit margin is 5 percent. In this scenario, you’ll need to generate $2 million in profit to offset that loss.

Check your DSO numbers to determine whether you’re operating efficiently. Companies with a DSO of fewer than 45 days (and ideally 30 days) typically enjoy better cash flow and fewer write-offs. If your DSO has extended to 60 or 75 days, however, your bad debt could have an increasingly negative impact on your sales.

The solution is two-fold.

First, create a solid debt-collection strategy. Don’t wait until the 90-day mark to start calling customers and asking about unpaid invoices. Take a more active approach.

Consider working with a professional, third-party debt collection company. Some businesses don’t have the resources to mount a full-scale debt collection strategy cost up-front. Working with experienced experts should increase the amount of unpaid debt you collect, which automatically reduces potential write-offs – and offsets the relatively modest cost compared to in-house efforts.

Second, stop thinking about bad-debt write-offs as a cost of doing business. Profitable companies focus on revenue growth and stability. They don’t like to feel hampered by bad debt. “Fire” clients who don’t pay their bills, vet potential customers carefully and urge your sales team to take a full-funnel approach to acquiring and retaining clients.

Yes, bad debt can impact sales. Fortunately, there are available solutions to help avoid this trap. We encourage you to learn more about how to optimize your revenue so you don’t get stuck in the bad-debt trap.

Contact Me Directly

Call me at 770-224-8504 or 888-780-1333
Email me by clicking here
Visit my website by clicking here
Visit my Youtube channel by clicking here

The Tangible Property Regulations for Commercial and Investment Property Owners

3 Sep
Tangible Property Regulations
Magnifying Glass and Tax

AN ADVANTAGEOUS TAX CHANGE

One of the largest changes to tax code since 1986 was passed in 2015, and these changes directly affect real estate owners and investors. These regulations are extremely taxpayer friendly, but most owners and investors are not aware of them. They are called the Tangible Property Regulations (TPRs), under code section 263a (1-3). The regulations put all the past court cases and past regulations into one single code that also contains a few interesting twists.

WHAT ARE THE TPRs?

The TPRs clarify which expenditures and repairs on buildings can be written down and which must be depreciated over 39 or 27.5 years. It is very advantageous for the building owner or investor to write down as many repairs as possible. This is because they not only receive a one-time expense of the entire expenditure but will also have reduced capital gains upon the sale of the building.

Generally, they are as follows:

The expenditure (or renovation) can be expensed if it meets these criteria:

  • done more than two years after purchase
  • did not make the component being repaired or replaced materially better
  • affected less than 33% of all the like components.

IRS SAFE HARBORS

There are also three Safe Harbors which allow certain expenditures to be expensed without IRS scrutiny.

  1. The De Minimis Safe Harbor is for expenditures under $2500.
  2. The Small Taxpayer Safe Harbor covers many expenditures on buildings with a purchase price of under $1 million.
  3. Routine Maintenance Safe Harbor is for expenditures to keep the building in its normal operating condition which will also have to be repeated at least once in the subsequent 10 years.

POTENTIAL REVERSALS

The amazing opportunity is under code section 481A, if past expenditures (not De Minimis or Small Taxpayer) which are currently being depreciated would not be depreciated today, (based on the regulations), they can be expensed in the current year.

So, the regulations will positively affect the building owner or investor moving forward but in addition can create a permanent tax deduction right now.

CONTACT ME DIRECTLY

For more information on the Tangible Property Regulations and other cash-flow producing and tax-saving strategies for property owners, contact me directly.

Call me at 770-224-8504 or 888-780-1333
Email me by clicking here
Visit my website by clicking here
Visit my Youtube channel by clicking here

Are You A Landlord? Don’t overpay your taxes.

14 Jul

Many landlords, especially those who own smaller properties, are unaware of the tax benefits available to them.  Here is something that your CPA may never tell you about.

Real estate investors have a simple alternative.  Most will take the option of depreciating the initial value of their residential rental building in equal amounts over the allowable 27.5 years or their office building over 39 years.  In a $200,000 rented house, you would write off $7.272 per year in depreciation.  Many CPAs will recommend that you do your depreciation this way, the easiest way.


Straight line depreciation may be the easiest way for your CPA to apply your depreciation, but is it the most advantageous way for you and your cash flow?  Depending on your circumstance? Perhaps not.


Cost segregation is an IRS-defined method of accelerating your depreciation and, while it may be more complicated, it need not be difficult for you or your tax professional.  By using engineering-based cost segregation, your property depreciation is applied by depreciating all of its component parts, many of which may be depreciated fully in 5, 7 or 15 year increments.  By depreciating this “short life” property more quickly, you would receive an increased tax deduction now rather than waiting for 27.5 or 30 years to take its value off of your tax bill.  With the 2017 Tax Cuts and Jobs Act, that 5, 7 and 15 year property can all be depreciated the very first year.  That is called “Bonus Depreciation”

In essence, you are getting an interest free loan on your taxes from the US Government.  Think of it this way:  If I was going to give you $100,000, would you rather have it all now, or in 27.5 annual installments.  Getting it right away is a “no-brainer” because that money, if invested back into the business or smart investments, will yield far more money long-term than having me babysit your money for you for many years.

If you:

  • have property worth over $200,000,
  • intend to keep the property over 3 years, and
  • pay taxes

then I believe it would be in your best financial interest to, at least, investigate whether this is a good option for you.   I will complete a no-cost, no-obligation analysis of your property and I will let you know if this strategy would be profitable for you.  Your tax professional cannot, in most cases, provide you with the study necessary to maximize your depreciation.  We will work with your CPA to make sure you get all the cash flow you are entitled to.

I can also advise you of some other tax strategies that may be beneficial to your cash flow and profitability.  The 2014 IRS Repair Regulations, IRS Safe Harbors, and Building Systems Valuations may all be beneficial strategies to consider.  I’ll help you navigate these strategies.

And don’t worry about the IRS.  They have called this method of cost segregation the “certain method” of depreciation.  We have completed over 20,000 studies in all 50 states, and have never triggered an audit.  Should the IRS question your cost segregation during an audit, we will defend the study at no cost to you.  We have never had a study rejected or changed.

Go to my web site at https://davidwiener.cssistudy.com for more information, or schedule a time to talk with me at https://calendly.com/david-wiener/talk.

6 Little-Known Facts about Debt Collection Compliance

13 May

Debt collection is one of the most heavily regulated activities you will ever undertake.

The debt collection industry is one of the most heavily regulated in the United States. That is precisely why it’s risky to undertake debt collections on your own; there are rules for when and how past due clients can be contacted, what mediums you can use to reach out, what you can say, and how often you can say it.

There are federal rules and industry-specific rules, rules for how data is collected and stored, and even rules for what you should do if a consumer or past due client asks you to stop contacting them. These rules can shift quickly, but failing to stay compliant can promptly get a business into hot water.

We’ve compiled half a dozen rules currently governing the debt collection industry. These rules also apply and those businesses seeking a more DIY approach.

Following the Rules for Debt Collection

First, let’s start with the rules under the Fair Debt Collection Practices Act (FDCPA), the federal law that protects consumers from overzealous debt collection agents.

  1. The FDCPA usually does not cover a business debt. If your business is trying to collect a past due mortgage, credit card, medical bill, or personal or household-type debts, your debt collection practices are covered by FDCPA.
  2. The FDCPA regulates time and place of debt collection. For example, your debt collection efforts cannot occur before 8:00 a.m. or after 9:00 p.m. If you attempt debt collection in the workplace and the consumer or client asks you to stop, you may not continue your efforts.
  3. If you’ve been informed that an attorney is representing the client, debt collection must go through them and not the customer.
  4. If the past due client writes to tell you to stop contacting them, you cannot contact them. The exception is that you may tell them there will be no further contact or inform them that other legal action will be taken. It doesn’t mean you can’t pursue other avenues of debt collection, just that you cannot contact them to collect the debt.
  5. A debt collection agent is required to tell you certain things about the debt, specifically who the money is owed to, how much, and how the client can dispute the debt. If this information isn’t provided on initial contact, you have five days to send these details in writing.
  6. If the past due account holder disputes the past due debt within 30-days of receipt of the initial communication, you must stop all collection activityuntil you have verified the past due debt.

There are also rules under the Fair Credit Reporting Act governing how debt collection and past due balances can be documented in credit reports. There are even state laws governing fair practices by anyone conducting debt collection. Keeping compliant with all of these rules is a full-time job. That’s exactly why businesses turn to TSI. Our track record of compliance with all debt collection laws, along with decades of experience in most industries make us the top company in the nation to partner with companies seeking a better bottom line.

The TSI data-driven approach is designed to boost debt recovery while enhancing the relationship with your valuable customers. Contact me directly at 770-224-8504 for more information.

Hotels and Cost Segregation

6 May

U.S. tax codes require expensing assets such as vehicles, office equipment, and buildings over their designated recovery period. Depreciation accounts for the wear and tear on an asset and reduces the value of the asset over time. Depreciation is a non-cash expense which means money was not spent to create the deduction. To someone who owns commercial property including hotels, depreciation is a huge benefit because it reduces their taxable income.

Generally, on a depreciation schedule, hotels are set up to depreciate over a 39-year period. However, separating the structural and non-structural components of a building and accelerating the depreciation lives of the non-structural components can result in significant tax savings. Structural components include the building’s roof, walls, and foundation which depreciate over 39 years. Non-structural components can be depreciated over five years and include carpeting, molding, window coverings, security systems, and more. Property improvements like curbing, paving, and striping can also be segregated and depreciated over 15 years.

Hotels have many non-structural components that can be reclassified into shorter depreciable lives. Failing to properly separate these components can result in missed tax savings. Having a cost segregation study done on a hotel can help property owners realize these tax savings.

Since 1999, cost segregation studies have been recognized as an accepted method of accelerating the depreciation of property. Through reclassifying a portion of the building’s assets as business use, the cost segregation study lowers the property owner’s income tax liability, thereby increasing cash flow. Average savings to the hotel owner is between $50,000 and $70,000 per $1,000,000 of building cost. This savings can be used to invest in the business, pay off debt, or however they see fit; it is their money.

Cost Segregation studies have the potential to provide significant financial benefits to hotel owners— benefits that are most likely overlooked. With proper guidance from a reputable cost segregation provider, hotel owners can even take advantage of greater expensing of repairs and improvements under the 2014 Tangible Property Regulations.

If you have questions, I can provide answers. Contact me directly at 770-224-8504 for more information, or visit http://davidwiener.cssistudy.com

Best Practices for Collecting Debt from Millennials in 2019

29 Apr

Millennials, those youthful consumers born after 1980, are about to overtake Baby Boomers as the largest living adult population in the U.S., with more than 74 million of them working and accruing debt. Speaking of debt, there is a lot of it; CNBC says the average student loan debt is around $33,000  – and yet that isn’t even the main source of debt for the older millennial.

That’s why the chances are good that your business will often be conducting debt collection from the millennial population. What are some special considerations related to this age group? Are there any communication best practices to follow?

Facts About Millennials and The Debt They Accrue

According to CNBC, Millennials between the ages of 25 and 34 have around $42,000 in debt. The highest level of debt is from credit cards. But CNBC says these young professionals also have other stressors that prior generations didn’t have, such as higher education expenses and student loans as well as the high cost of housing. Almost one-half of Millennials are 90-days past due on at least one bill. In fact, Americans owe more than $1 trillion in debt from student loans. It’s possible that other debts will suffer as these people spend more money on college debt.

While debt is increasing across all age brackets in the United States, these trends are particularly troubling for an age group that is just getting started on a career path. CNBC says that Generation Z, the age bracket that comes behind the Millennials is following in their footsteps with an average debt of $4,343.

Given the high debt ratio for these young people, are there any considerations for handling collecting debt that might be different from older populations?

Best Practices for Collecting Debt from Millennials

Collecting debt from Millennials is actually different from GenX or the Baby Boomers. First, it might be more difficult to reach these young consumers, because most of them have given up a landline for a personal smartphone.

Pursuing debt collection from this youthful population requires a few tricks in order to accommodate their personal preferences and styles:

  • Use technology to reach Millennials. They are one of the first generations to grow up with the immediacy of the internet and a host of software tools. Debt collection must mine this tech-familiarity to reach these consumers.
    Tip: Try setting up a web portal so these customers can explore easy online payment.
  • Make connections with Millennials and use the power of relationships to pursue debt collections.
    Tip: A compassionate and diplomatic approach to debt collection can go a long way when it comes to collecting what’s owed.

Debt collection for the Millennial population requires some flexibility to handle the special needs of this population. Contact me today at 770-224-8504 for more information.

Businesses and Cash Flow

22 Apr

Business and Cash Flow

The first rule of business is to stay in business, and businesses need cash to operate. Every successful business keeps a close eye on cash flow for this reason. There are many tax-saving advantages for those who own or have improved commercial properties through tax law. If you own or lease commercial or income producing property and you are not taking advantage of all that US Tax Code has to offer, you are actually diminishing cash flow.

Let’s look at how your business can easily increase its cash flow by using the cost segregation method of depreciating your building.

Cost segregation is a way for commercial property owners to accelerate their building’s depreciation, saving significantly on income taxes. Within the first five years of building ownership, an owner can save up to $100,000 for every $1 million in building costs. To maximize cash flow, an owner or lessee who has paid for improvements can have a cost segregation study performed.

At CSSI, we perform an engineering-based study to ensure you comply with US Tax Code rules and regulations. Our team of specialists will segregate parts of your building that are deemed non-structural. Non-structural items include carpeting, flooring, cabinets, specialty lighting and electrical, etc. These and other non-structural items are placed in accelerated tax lives. After the analysis, your CPA will adjust your depreciation schedule from the conventional 27.5-/39-year schedule to a 5-, 7-, 15-, and 27.5-/39-year schedule.
A cost segregation study reduces your taxable income and results in lower taxes paid. Using this cash surplus to reinvest in your business or pay down debt is a great way of maximizing the time value of money.

At CSSI, our tax experts will help your business generate more cash flow through an engineering-based study. In some cases, the calculations from our study can be necessary to realize benefits from the 2014 Repair Regulations and the 2017 TCJA. Contact us today, and we can provide you with a no-cost preliminary analysis, and we can facilitate a discussion with you and your CPA or tax professional.

Contact me directly at 770-224-8504, or schedule a conversation with me by clicking here, to see how much you can add to your cash flow this year. There is, as always, no cost or obligation.

It’s Your Money . . . Keep More of It!

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