Zero To A Hundred – Episode 28: Proactive Tax Planning For Business Growth And Success With Joe Romano

Accelerators! 🚀

Ready to level up your financial game? This week, we’re featuring Joe Romano, CEO of Romano & Associates, with over two decades of expertise in accounting and tax planning. From creating the ultimate financial team to exploring legal tax avoidance methods, Joe breaks down the strategies every entrepreneur needs to build wealth and keep it. If you’re a business owner looking to save money and grow smarter, this episode is packed with actionable insights. 🎯

What’s on the Menu:

💼 How to build your dream financial team for success.

💰 Legal tax avoidance strategies that maximize savings.

🧾 Avoiding common QuickBooks mistakes and streamlining payroll.

Why Tune In?

Joe’s practical tips and expert insights will help you navigate taxes, build a strong financial foundation, and avoid costly mistakes. Learn how to optimize your financial systems and create a team that supports your growth!

💬 Gem from Joe:

“Your business is only as strong as the team behind it—build it wisely.”

Get in Touch with Joe:

📧 Email Joe at jromano@romano-tax.com or visit Romano-Tax.com to connect.

Don’t miss out—hit that subscribe button and let’s take your business from zero to a hundred! 💥

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Proactive Tax Planning For Business Growth And Success With Joe Romano

We welcome the CEO of Romano and Associates, Joe Romano, twenty years of expertise in accounting as a CPA. He has also built a business where he represents over 1,400 small and mid-sized businesses across the US, and he’s the former education chair of the Entrepreneurs Organization of New York. The topics that we are going to cover will be robust. We’re first going to talk about how to build that dream financial team for your business to take you to the next level, legal tax avoidance because nobody wants to overpay in taxes, how to conquer QuickBooks and the right way to payroll.

For those of you who do not know me, my name is Jarrod Guy Randolph. I am the Founder of BoxFi. We are the nation’s leading payment consultant and we help with business growth solutions through payment processing. I am very excited to share the network that I have build over my 25 year entrepreneurial journey to help you grow your business and become more profitable. Folks, let’s accelerate together.

 Joe, thank you for joining us on the show.

Thank you for having me. I appreciate it.

All of us, the proverbial, we’ve got all of you. That can mean multiple personalities. It can mean a lot of different things. Hopefully, we’re not dealing with that.

I’d like to think I don’t have multiple personalities but I always refer to us as my team. Team at this point of 21, so I’m always very grateful to have them and to represent them.

Joe, before we dive in, when you’re working with a client, have you found that you have a motto or a mantra? Something that you always say or something you always ask your clients when you’re first starting to work with them.

Since we are client-centric and focused on taxes and taxes only, it’s very much, what is it that your goals are? What are you looking to accomplish? How can we fit, as part of your team, in helping you achieve those tax bills? We don’t do anything else. We’re not attorneys and financial planners. We sit at the table and we play nicely with everybody in the sandbox. As part of a client’s team, how can we help you achieve your tax goals and what does that look like to you?

Challenges Faced By Small And Mid-Sized Businesses

Everybody’s goals are going to be individual. That’s going to be specific to each business owner that you work with. However, because I know you work with a lot of small and mid-sized businesses, there’s got to be commonalities around the challenges that they face. Can you walk us through what some are that you see consistently and how your firm helps them get over those challenges?

The big thing that we see with small mid-size businesses is, a lot of times they’re not focused on their business. It happens. It’s the shoemaker shoes. It happens with plenty of businesses that you’re busy running around making sure that your clients are happy and your business is running. You forget about what the tact? What are you looking to accomplish? I’d probably be repeating this a lot, but it’s very client-centric and very focused on what we do with our clients, which is, how can we assist you with it?

The common tax challenges are, clients don’t keep up a lot of them with latest tax savings and what they can do to save on taxes. That’s what we assist them with. From our end, how will we be part of your team? How can we fit as part of your team and how do we overcome them? It’s basically communicating with them. Whether it be monthly, quarterly or semi-annual. There’s no one size fits all. It’s, when do you need the help? How can we help you with that? That’s the most important thing.

That’s the challenge. Every business is different. For the most part, though, as a tax accountant, I will tell you, 99% of the time clients don’t want to pay taxes. We are big in tax legal tax avoidance. What is it that we can strategize with clients in helping them avoid taxes? We 100% will stay away from tax evasion. We don’t like that. Thankfully, we’ve never had anybody go to jail.

We don’t play in that arena or that sandbox at all with anybody. We have 1% of the clients that they need to be bankable. They need to show profit. How do you do that responsibly so that you don’t end up with the tax bill that you’re unaware of and have a big problem? Those are the challenges that we typically see with clients.

The Importance Of Proactive Tax Planning

Let’s talk about being proactive with our taxes and then we’re going to come back to two topics that you just brought up. I knew having this conversation with you, Joe, we were going to go off on a tangent in many different directions. I’ll try to keep us focused, but you just gave me two nuggets that the audience of business owners and entrepreneurs are going to want to know about. Talk to me about being proactive on your taxes. How often should you be sitting with your tax professional to make sure that you’re on track?

We don’t look to spend client’s money or invest client’s money. Everybody’s different. If you have a loss, and/or a prophet, you don’t want to invest in that. That’s up to you. Everybody’s different, but minimally between October 15th and December 31st, at this point, we’re doing a lot of tax planning and a lot of tax projections for clients because its year-end and you have profit. Before this meeting, I was with a client. They had a huge loss and in 2024, they have $1.5 million gain. We got a plan out. What are we doing to avoid taxes?

Strategizing a year-end that we know what the numbers are going to be consistently and we can plan that out. That’s a big part of what we do with a large amount of clients. As clients are growing and as their businesses are growing, we find ourselves meeting with them a lot of times quarterly. What’s going on in your world? What does it look like for the last quarter? Where are the next three quarters going and the next half year going? How do you plan with that accordingly?

For the most part, we are the busiest that we’re going to be with tax planning because a lot of people have profits. “I don’t want to pay taxes.” When the calendar changes to January 1, there’s not much you can do at that point, so it’s tax planning and prepaying things. There’s a whole host of things that we go through with clients to reduce taxes legally and avoid taxes as much as they possibly can.

Let’s stay on the topic of this client who came in and had lost in 2023, but is up $1.5 million in 2024. What are some legal tax avoidance strategies that you would implement with them to help reduce that tax burden?

Prepay. They’re on cash basis. Whatever they’re going to end up owing or paying over the next twelve months, they could legally on a cash basis pay now. Prepaying their insurance or paying their insurance policies in full at this point and paying rent if they owe vendors or paying vendors. I’ve had clients in the past and I was discussing with the client right before, that a lot of times, I owe you X dollars. I owe you $200,000 or $300,000. Will you take payment now? I’ll pay you in full, but maybe with a 5%-10% discount.

Sometimes vendors that are looking for money appreciate that and we’ll do that. Another big savings is a pension plan if it works out potentially doing a defined benefit plan. We’ve had clients where they can put a defined benefit plan and they could put away $200,000-$300,000. It’s like a 401(k), if you will. A 401(k) but with much higher limits. If their spouse is in with the business, maybe another $200,000-$300,000 for the spouse.

You potentially save $400,000 to $500,000 in profit. Now, instead of paying 50% income tax on it, they’ll pay zero and that money will grow tax deferred. Those are the types of things that we’re discussing. We discussed with clients, one beside that. I had a client and I’m constantly doing this all day with clients, what other things, especially on the individual level. I love New York. I’m born and raised in New York, but as we know or don’t know, New York has one of the highest tax rates in the country.

You’re paying 8% to New York State and 4% to New York City. Moving out of the five boroughs. Maybe you moved to Long Island or to Upstate Westchester, New Jersey. You’re saving the 4% New York City tax. If you can make the same amount of money and move to a state with no state income tax as Florida, Texas, so on and so forth, save 12%. I had a client years ago making $2 million and when they realized they were paying New York State $240,000. I explained to them if you can do the same amount and move somewhere else.

Thirty days later, they had moved to Florida saving a quarter million dollars. It was like, it’s no brainer for me. I have other clients that same exact scenario and they’re like, “I got to live somewhere. If the cost of Being in New York is another $250,000. That’s okay.” My role is always, for the most part, what a client wants. Again, with goals ,99% of the time clients want reduced taxes as much as possible and that’s where we come from. If those are your goals, let’s try to help you as much as possible.

I want to make sure that I understand this and the audience understands this correctly because these are tax avoidance strategies but they have to be paid in. If you’re prepaying your insurance, rent, vendors, and creating a pension fund or a defined benefits plan, that’s something that will help you avoid taxes in the preceding year.

Correct, because you’re doing a prior to 1231 and you’re paying it. One thing as well, it doesn’t necessarily mean that you have to pay for it. You can put it on a credit card if your vendor or whoever will accept credit card payment and because you put it on a credit card on, you could pay that credit card in January.

The expense happened in 2024, get yourself your miles and get yourself 30 days to pay it. It’s still considered a 2024 expense even though you’ll end up paying the credit card in 2025 as long as the credit card expenses in 2024. Another thing, too. Buy yourself a few weeks of time in potentially paying it, getting yourself some points or some rebates or whatever you have on your credit card and it’s considered a 2024 expense.

Defined Benefits Plans As A Tax-Saving Strategy

That could be a big savings for our readers. That’s awesome. You talked about the defined benefits plan, and that’s a plan I am not familiar with, so I’d love to learn more about it. I’m sure many of our audience would love to hear about it also. You talked about the limit that, you, as an individual could put in. If your spouse is tied to the business, how they could put in. How do you determine as a business owner or an entrepreneur, when and if a defined benefits plan, 1) would work for you. 2) How that impacts any other plans that you might have like a self-directed IRA or a 401(k)?

That’s beyond the scope of what we do. That’s beyond my pay grade. I’m not that smart of a human. I apologize.

You’re supposed to be a genius and be able to answer every single thing that I ask you. Come on. You’re better than this.

We’re running the tax lane and the tax lane only. I’m good with that end, but in pensions and pension planning, we know enough to be dangerous. There are substantial tax savings potentially out there and we’re happy to recommend people that will focus that will be able to help them. When you talk about a defined benefit plan, that goes into a third-party administrator, a TPA. They are actuaries. As I said, much smarter people than I am.

With US Department of Labor, however, they work their magic, Wizard of Oz type of ways. It may work for certain people. It may not work for certain people. What I mean by that, they’ll ask for census and they go through a whole bunch of questions. Again, this is probably another episode for you with somebody that’s more interesting than me.

You’re going to give me the recommendation to have someone on to talk about this, but even if it’s just a high level, you’re getting us thinking about it so we can ask our professionals about it.

The same thing goes also with, l’m talking about defined benefit plan, where in a lower level, the 401(k), you can have an employee contribution of $23,500. Potentially, if you’re over $50,000, a $750,000 catch up and there’s also the employee or matched that you can do. In addition to that with a 401(k) plan, a profit-sharing component to that. Again, a third-party administrator comes in and based upon your census, based upon your people, and how much they’re earning or how much they make. I’m sure I’m leaving some things out.

They will tell you, “This is how much you need to contribute to rank and file in order for you to be able to max out, if you will.” Where the max out being $69,000. The delta between what you’ve put in as an employee and we’ll call it $23,000 end of match to get to now, the $69,000 maximum. This is what you have to give rank and file. A lot of times what we’ve seen in our experience, if employers get the Lion Share. When I say the Lion Share, 80%-85% of it, they will make that contribution.

It’s safe to say they’re able to contribute $40,000 for themselves in order to get to the max but they have to give rank and file $5,000. They’re getting over 80% and they’re getting almost 90%, so it makes sense for them. For the most part, unless they want to be incredibly generous to their staff, to their rank and file. Sometimes, if you see it, you have to give $40,000 to rank and file in order for you to get $40,000. Clients don’t typically go for something like that.

That’s on an annual basis that needs to go through with their financial planner and this third-party administrator to figure out what it looks like for them. If you think about that, same scenario, if you will, and I’m oversimplifying it. For the sake of example, a defined benefit plan will allow you to do that. Instead of the $69,000 limit for a business owner, those limits tend to be and can be much higher. It’s based upon census and how much you’re earning. There are a bunch of factors that go into it, but we’ve seen first-hand with clients in our experience that an owner and their spouse can put away a couple of hundred thousand each and save $400,000.

The Balance Between Maximizing Tax Savings And Bankability

Let’s talk about something else that you brought up and that’s helping your clients become bankable. How do you toe the line between capitalizing on as much tax saving as you possibly can but being bankable at the same time? Especially when you need to go out and get a loan.

A lot of times, it’s a catch-22 and that’s where strategy is incredibly important in discussing and having those conversations. I can’t tell you how many times we talk about it or surprise comes up from a client and they say, “I’m looking to buy a house that’s all well and good.” You’re looking to get a million-dollar mortgage but last year, your income was $20,000, and this year, it’s the same. If you walked into a bank or think about if somebody came to you and said, “Looking for a million-dollar mortgage and my income is $20,000 dollars.” We’re not laughing at them. It’s laughable.

How are you going to pay the debt service on a million-dollar mortgage if you don’t make any money? Banks don’t do character loans anymore for the most part. They want to see that your bankable. You need to plan that out and sometimes you have to have some foresight on it. You need to say, “I’m looking to buy a house,” especially as a business owner. “I’m looking to buy a house, boat, or plane in a year or two years. I need to show profit.” This is the amount of money and we need to strategize about that. Otherwise, when that time comes and you haven’t been shown any profit, it’s a catch-22 a lot of times. You just can’t qualify for mortgage because you’re not bankable.

How To Choose The Right Business Entity For Your Business

Let’s get into the nitty-gritty and switch topics. I want to talk about business entities because there’s been a lot of development in business entities, how you hold your business and LLC vs C-Corp. How do you as a business owner, choose what business entity is right for you? Maybe there’s different phases that you’re at in your business that will impact the selection. I’d love to hear your Insight on the right business entity, how it impacts you financially, and what we should do as business owners to make sure we are set up for success.

We could do a whole episode on this. How much time to have this question?

I’ve got a couple of minutes. Joe, for you, we got all day.

Put it this way, I probably have these conversations 3 or 4 times a week with either existing clients or potential new clients. We spend the better part of an hour and discussing this one question. It’s important that a client and again, I hate to keep going back to what are your goals but from a client perspective, it is doing their homework in it and being ready and speaking to their account and getting good information. What are your goals?

I always start with, what are you looking to accomplish here with this new entity? From my end, asking a whole bunch of questions because, Jarrod, the reality to it is, during the course of a conversation, we will always discuss the pros and cons of the three different types of entities and the pros and cons and through question and answer of what are you looking to do, where is the business going, and where do you see yourself in five years.

By the end of a half hour or 45 minutes an hour, we will come down to base upon where you are at. This is where you should be, but there are many factors that go into it, such as how many owners are there going to be. There any foreign owners. Do you see yourself potentially selling this business for a huge gain? Where I’m heading at Section 1202 qualified small business stock so that you could potentially avoid $10 million of capital gains.

Are you going to sell it in less than five years? Do you qualify potentially for qualified small business stock? Do you understand the ramifications of a C-Corp and the double taxation of it? Do you already have an S-Corp and having a second S-Corp potentially the taxes on that? Do you want different types and classes of stock? I’m oversimplifying it for the sake of not running into a one-hour conversation just on this but the point being, it’s very important. There’s no Black or White answer.

The easiest thing, for the most part, 99% of the time, when you’re buying a piece of real estate. You’re buying real estate entity. You’re buying piece of real estate. Putting that in an LLC is almost a no-brainer because of basis issues and legality issues. You pretty much always want an LLC. You want a piece of real estate in an LLC. I’ve had conversations with clients that doesn’t make sense a time for them to be in an LLC and will choose a C-Corp for that.

It’s important and I’ve seen this. It’s a great question. A lot of times when we take on new clients, they already have an entity and we go, “Why did you set it up that way?” They go, “My attorney said that, or my prior accountant just said that.” I go, “Did you have a conversation as to the reasons behind? Did you understand why?” They’re like, “No, they just set it up.” We’ll go through the conversation because sometimes, it’s overkill. Sometimes, they have an entity.

In S-Corp, they don’t have any profit and that’s great for me as their accountant. I’m making more money in filing an additional tax return. They’re paying more in administrative fees to process payroll. That’s great for other people, but it’s not the greatest thing for the client. It’s very important from my perspective to have that conversation with clients all the time.

Tax Avoidance For A Growing Business

Let me give you a real time example. Let’s say you’ve got a business that’s an LLC. Their valuation is roughly $4 million and in the next three years, the valuation will grow to $100 million and they would look to exit the business. How would you suggest that they set themselves up for legal tax avoidance?

Along the same lines of the of the prior question. It’s more of who are the owners? What are your goals on that end? I just heard you’re looking to sell the business. Potentially moving that into a tax-free exchange, converting it to a C-Corp and if it makes sense, again because there is limitations on the qualified small business stock. If you’re going to qualify, amount of assets, or what that looks like but there may be a huge tax savings there in converting it to a C-Corp. Again, we could spend hours on what you just proposed, but it’s a great question that I’ve dealt with many times. It’s delving into, what are you looking to accomplish? What are your goals and let’s figure it out from there?

You talked multiple times about qualified small business stock. What does that mean?

Again, dangerous enough to know that I am not the be-all-end-all when it comes to that. When it gets to that level, we recommend speaking with the tax attorney. What is a qualified small business stock? If you qualify and there are parameters that if you Google SQBS code section 1202, there are parameters that you need to fall under, types of businesses and amount of years that you own the C-Corp, which is five years or more, and amount of assets that you have.

If you potentially check all the boxes on that, do check all the boxes on all that. You can potentially, for each shareholder, avoid up to $10 million of capital gains. You have this business that you’re talking about, $4 million. You sell it in five years plus. For $20 million dollars, you would end up paying taxes, let’s say, in theory, on that $20 million, you pay federal capital gains tax of 25%, roughly $5 million. If you can avoid half of that. There’s no election or anything.

Either you fall into it or you don’t fall into it and having your accountant know that you can qualify but there’s also parameters. Let’s say, you sell your business in four and a half years. If you would have waited six more months, you would have qualified. That hurts for $2.5 million. Knowing is half the battle, understanding if you qualify and what you can do to qualify is a portion of it, but that’s important on the qualified small business stock. Again, you could probably have another expert much better than I am in understanding and explaining what the parameters are but we’ve had clients that have utilized it and sold and had no issues with the IRS and have benefited from selling their business as a section 1202 as qualified small business stock.

I’ve got two new episodes coming up at some point in time. One on the section 1202 on the qualified small business stock and defined benefits plan. We’re going to move to some other topics and get into the nitty-gritty. They say don’t sweat the small stuff, but we’re going to sweat the small stuff, Joe. Talk to me about how businesses should be adapting to the new electronic filing structures.

That changes every year by year with IRS and what they’re looking to do and how they want things. It’s important to speak with your professional and understand what new parameters are constantly and what that looks. We are getting a lot of notices. IRS sends out to businesses based upon your prior years, deposits for payroll

“This is what next year’s deposits need to be.” “We get a whole bunch of them every year.” “What is this mean?” “Do I have a problem?” “Do I owe money?” We explain to them. “This is based upon the prior four quarters What you have to do is send this to your payroll company.” It’s important in having a good quality relationship with an accountant and understanding what is it that you need to do and how it is that you need to go about that.

The Key Members Of A Comprehensive Financial Services Team

Talk to me about what your financial services team should look like because as you said, you don’t have all the answers and just like my business attorney is not going to have all the answers. What should your core team look like when you have a business that is fully functioning and profitable? Most of our business owners have had businesses for many years and they might not have that team in place.

Starting from the beginning of bookkeeper. This is not necessarily all-encompassing but Christmas wish list, if you will, from my own business standpoint. Putting your team together of people that you want around a table and bookkeeping. You want to make sure that your books are tight and your numbers make sense. That you’re getting timely books and records. That’s important from that end.

Having a CFO help, assist, and be part of that team, sitting there and discussing where is your financial plan going? Where is your business going and making sure that you have banking relationships in helping you strategize where you want that business to go and working with you on that end. A financial planner to help with the investments. Again, what are your goals on the investment side? Is it short term? Is it long-term? What does that look like?

I was on the phone with my financial planner. Where are you at in that discourse? Also, CFO is huge. A lot of times, a CFO is the quarterback, if you will, of everything and putting everybody together. Looking to save money overall with good P&L and good balance sheet. Are we overpaying for things? Could we reduce fees, banking fees, credit card fees or payroll? What does that all look like? A good CFO was delving into the numbers and working with the client.

Where we come in, the accounting relationship, is taxes. What are you looking to do on taxes? As I mentioned, 99% of our clients want to save on taxes. Our seat at the table, playing in the sandboxes, where we come in here. You’re good financials based upon what your goals are. How can we help you with that? Your tax attorney or your business attorney, or they maybe one in the same or different. Wherever you’re at? Do you have any legal issues or HR issues? Maybe an HR person on top of that. Making sure that you don’t have HR problems but on the business side, the tax side or the legal side, having that part of it., I’m sure I’m leaving somebody off that. Somebody will end up yelling at me.

Shameless plug and you mentioned it already. You’re a payment consultant who can help you reduce or eliminate credit card fees and add to your bottom line. It’s funny, you’re going through this. There’s a couple things that I’ve missed and looking at what the core team should be. We know the bookkeeper and the CFO, whether it’s a full-time or fractional CFO, financial advisor, your tax, your accountant, and your tax strategist. One of the key things that you said there is aside from your business legal, it’s HR. That’s something that a lot of business owners miss, especially as you start to hire more employees to make sure that you have the right protocols in place to protect yourself from potential lawsuits.

We see this a lot more than in the last 30 years. It’s become progressively more litigious. With people working from home and having employees in different States and States now having different laws. It doesn’t need to be a full-time HR to start out with but even a part-time HR person for every State laws are different. It’s real important to not have issues. A good HR person in helping you hire people, fire people, make sure that minimum wage standards are being met, and exempt employees versus non-exempt employees. There are a lot on the HR side that as your hiring and dealing with more and more people, especially different states. It’s real important to have a good HR person.

Common Mistakes Made With QuickBooks

I will attest to the different states because different states laws apply when you pay someone who is working from that state. It could be their state law that prevails over the law in which the business is operated in. That’s very key for remote employment. Thank you for that. Here’s another question because a lot of businesses run into potential issues here and that’s talking about QuickBooks and some of the common mistakes that we make as business owners using QuickBooks. How do we avoid them? What should be aware of?

I see this a lot. I would say that for the most part, 95% of our client base utilizes some intuit product. QuickBooks is great. They dominate the market. We are agnostic. I don’t care what you use, but I will tell you that from my experience, it’s a lot easier to use QuickBooks than most of the other small business packages that are out there.

What people underestimate is, on the QuickBooks side, because you link your bank accounts and your credit card accounts that everything is automatically downloaded. That is false. I have seen and experienced first-hand QuickBooks, where sometimes the link is broken for a day or two and expenses do not happen or duplicates have occurred in my Quickbooks file.

You can anticipate and expect just because there is a banking link that everything is done properly. It’s not going to happen. What I teach at least once a week to a client is there is a function in QuickBooks, a reconcile button. You should be reconciling your bank accounts every month to make sure what the bank statement says and what QuickBooks has been the exact same things. That’s real important to keep track of that because if QuickBooks misses a million-dollar expense and it’s not in there. You don’t pick it up and you don’t reconcile it. Guess what? No one ever picked it up. You missed out on a million-dollar expense potentially. That’s a you problem. IRS has never gone to come back to you and say, “Jarrod, you didn’t did deduct enough n expenses. Can you please deduct some more?”

It doesn’t work that way. Your accountant is never going to know it. That’s a you problem. As a business owner, you need to make sure that is captured. The other thing is, along the same lines and this happens, unfortunately, way too often a few times a year. You need to take a look at your bank statements and your credit card statements for either intentional or unintentional stealing from somebody.

If you don’t take a look at your accounts, if you don’t make sure that your bank accounts and your credit card accounts, everything in there makes sense. You are right for getting taken advantage of, again, advertently by either a bookkeeper or family member. Things that I’ve seen first-hand where a sister was stealing from a brother. “I put my car in there because I could never speak to you.” I’ve been paying for a thousand dollars a month for the last five years because you’ve never asked and you’ve never looked for it or a bank makes a mistake and that same car is coming through your account and you’re not looking at it. It has happened in my experience over the last 30 years way too many times. You can avoid it just by having a little bit of diligence every single month.

The Importance Of Accurate Bookkeeping

Let’s talk about the bookkeeping aspect because it is important. By the way, folks, it’s reconcile. That’s true what it’s all about because I’ve called a ton of mistakes. Let’s say we’re a business owner. We have a successful business, been in the business for years and we’re doing $5 million a year in gross revenue.

What can we do to make sure that our books are in order because, especially at point in time, you’ve got your account, your bookkeeper, your tax strategist, and somebody doing those type of things or those tasks for you. As a business owner, how do we stay on top of it to make sure everything truly is balanced and we’re not running into issues? Where a brother, sister, mother, uncle, or somebody is stealing from us or an employee.

As a business owner, you don’t need to do all of these tasks on your own. It’s not what I’m inferring. You can hire people, bookkeeping companies and maybe that’s another episode for you speaking about the what a good bookkeeper can and will do for you. Getting reports and reviewing those reports to make sure that the bookkeeper is doing an adequate job and doing everything properly is important on that end and getting reports from them. It needs to also be timely.

If Apple or publicly traded companies can close their books with billions of dollars in sales within ten days, there’s no reason that small mid-sized businesses can also close their books in ten days. It’s what you focus on. Its what’s important to you. Once a couple of weeks ago by, a month goes by, stale information. On November 21, if I’m getting a financial statement from June, months have already gone by. I could be broke in my business. You can’t run.

I see this way too many times with businesses. It’s like running in the dark. You’re looking for an accident to happen where you’ll go out of business and that can happen. The bigger you are, the quicker it can happen within 30-60 days. You need to have good financial information that’s timely and quality. If you’re getting it six months ago, you’re out of business by now or by now, you could be doubling your business and you can’t tax plan reasonably.

It’s so important to understand and have a good tight set of books and records. You have to ask good questions. If you’re just going to take what a bookkeeper gives you and go, “That’s great,” and tred it and put in the circular file. That’s pointless. You need to review it. It doesn’t need to be a thorough audit but you need to understand what your numbers are.

Understanding your numbers is so key as a business owner. You don’t have to spend hours. You could spend half an hour a month reviewing it, getting an understanding, and moving forward. Paying people for bookkeeper, CFO, part fractional CFO, and accountant for putting together that information. You, as the business owner, put all that information together, digest it, and you don’t have to be spending hours doing that.

Strategies For Streamlining Payroll To Benefit Business Owners

Audience, two key takeaways regarding bookkeeping. Number one is you have to review your reports regularly. Number two, it’s making sure that you are reconciling your books in a timely fashion. That keeps you on top of your finances and you can catch any mistakes ahead of them becoming real problems. My last question for you before we go into the rapid-fire section. Give us some tricks and tips on how we streamline payroll so it benefits us as business owners.

The one thing now doing tax planning and tax projections at year-end, from a business owner’s perspective, don’t overpay yourself during the year. Pay yourself a comfortable number during the year because you can always catch up on payroll. At the end of the year, give yourself a bonus to catch up. What you can’t do easily is undo payroll. What I mean by that is, sometimes, people like an S-Corp. They will take too much in payroll and it doesn’t make sense.

At the end of the year, you realize and you speak to them about it or you’re doing their taxes. You could have done less. You could have taken $20,000 or $30,000 less in payroll and it’s still reasonable and still, the IRS does not have a problem with you. Now, to undo it is a huge time, effort, energy, and cost to do that with a payroll company. Not overpaying yourself during the year and catching up is fine. It’s totally legal and no issue would do it. Running yourself a bonus payroll at the end of the year.

Making sure that you don’t process payroll on your own, if there’s anybody out there. There are plenty of companies out there that are good quality companies that process payroll. If there are any notices or any problems, they handle it. They’re responsible for the notices. As you mentioned before or one of your questions before, changes with taxes.

If you’re not on top of that and you miss a payroll tax payment or filing something by your day, the penalties could be more than what you would have paid to have a payroll company do it. A good quality partner in a payroll company is extremely important so that you don’t have to worry about paying taxes, filing quarterly taxes, and annual taxes. There’s a huge benefit in having a good payroll company there.

Rapid-Fire Q&A Section

We’re going to add payroll companies to our list of financial team members that we need to have as business owners. Joe Romano, we are ready to go into the rapid-fire section. These are going to be quick questions and quick answers. Are you ready?

Ready.

Coffee or tea?

Coffee.

If it were a zombie apocalypse and you had to leave your home and protect your family. You get to carry one weapon of choice. What would that weapon of choice be?

Not a calculator.

Anything to stop the zombies. I’m going to nerd them out and number them to death.

I don’t know. I’m probably dying. I’m okay with that. I choose death. None of the above.

What is one of your favorite books on business or finance that you would recommend for our audience?

E-Myth Revisited.

Do you know what’s so funny? You did tell me that, and I’m looking at my desk. I did find it. I ordered it and it’s sitting over on my bookcase, so I will get to that. I promise you.

It’s a great book.

Dead or alive, if you had the chance to have dinner with anyone this evening. Who would that individual be?

There’s so many interesting people. I couldn’t even tell you. My mind is going at a million miles an hour. Ronald Reagan. I’ll stay away from politics.

No, that is a solid answer. Don’t worry. What do you disagree with in your industry that you see happening?

More regulation. Instead of making it easier. We’re making it more difficult. There should be less regulation.

Last and maybe the most important question, what is the one thing that you have had to overcome personally to help grow your business to the level of success that you have?

Quality of life. As a business owner, there’s always the struggle between personal life and business life. A lot of business owners that I know have struggled with the same thing. You end up spending a lot more working hours than you do in personal hours, so sacrifices and personal life.

Joe, please tell the audience where they can connect with you.

A couple of places. My email address is JRomano@romano-tax.com. My cell phone’s (917) 596-1362. My website is www.Romano-Tax.com. There’s a link there that you could reach us through that. That’s basically everything.

Joe Romano, thank you for joining us on the show.

Thank you. Pleasure to be here. Thanks.

Important Links

• Romano and Associates
• Entrepreneurs Organization
• BoxFi
• E-Myth Revisited
• Joe Romano’s email address

About Joseph Romano

Joe had a dream of opening a great accounting firm since the early 90’s. That dream has since become a reality. He created an environment where he exceeds expectations with the level of service provided. Joe graduated with a B.S. in Accounting from St. John’s University. He was previously a partner at another firm for 20 years. Presently, Joe assists over 600 small to mid-size businesses and individual clients.

For over 20 years, he has been an Advanced Certified QuickBooks ProAdvisor as well as Certified QuickBooks Point-of-Sale advisor and is extremely knowledgeable with most QuickBooks products. Joe previously served on the board of Entrepreneurs Organization of New York as Education Chair and has also served on the board of advisors of a major credit card processing company. He is an active member of the Knights of Columbus and other various charitable organizations.