Why Entrepreneurs Need Consultants

Consultants Framingham MA

Consultants offer ideas and opportunities to create value in a product or service. For example, if your business sells bagels, how can you show your audience that your bagels are better than the competition? How can you show them that your service is one-of-a-kind? In other words, why buy from you? Every industry is different and faces varying obstacles. For this reason, entrepreneurs need consultants. Learn about their valuable roles below and contact us today.

Management and Strategy

Experienced consultants are knowledgable of particular markets and know the best practices of the industry. For instance, business consultants are great for helping businesses expand. They are likely to help with increasing your product collection and restructuring your middle-market company to produce cost-effectiveness and efficiency. They may even suggest buying out a smaller competitor and seeking the services of experienced managers that can assist with the new locations.

Consultants Framingham MA

Operations

An operations consultant can help you create and implement an innovative way to expand successfully. In addition, other consultants are experts in quality control systems and can help you to make the necessary changes that will reduce the defects.

Information Technology 

Information technology or IT consultant will help you develop a new system and also merge your old system so that they can work together. IT consultants enhance your capabilities and also make your IT more reliable in meeting the expansive needs of internal and external clients.

Human Resource

Human resource companies will specialize in inventing compensation strategies that will align with your overall business goals, training, communication, and leadership. Additionally, human resource consultants help improve employee performance by evaluating your team and offering suggestions. Turn-over rates will decrease while productivity and employee satisfaction increase.

Marketing

Marketing consultants offer a creative spark to attracting new business. They can also help with marketing you to potential new partners and investors.

Benefits of Hiring Consultants

New Ideas

If you do not have the human personnel you need some because you will need some that can make some decisions for you. Hiring a business consultant for a project or temporarily can fill the gap until the right person is found.

Create Evolution

Consultants are skilled at harboring change in an organization. Such changes assist the organization with evolution. Businesses need to evolve in order to stay relevant with their ever-changing market. Without evolution, it is likely that a business will depreciate and suffer losses.

Implementing Best Practices

Consultants are experts within their specified industries. They are consistently seeking new information, trends, and technology of the market. This research is continuous and requires a lot of time. As a business owner, you may be juggling with a lot of responsibilities. For this reason, consultants are a great asset because they provide knowledge and time to perfect your business.

Learn More

Ash CPA offers more than bookkeeping and accounting services. In fact, we have over 25 years of experience in building and growing businesses. Learn how your idea or established business can grow! Book a complimentary consultation today. Call  (617) 462-6651 or book an appointment online.

 

Business Consultant Framingham MA

What is a Business Consultant?

Business Consultant Framingham MA

Business consultants are skilled professionals that provide management and operational consulting to organizations. They are also experts within particular industries and markets. In other words, business consultants conduct hours or research and networking to assure they know the latest trends and solution techniques.  Consultants evaluate businesses and recommend solutions that are cost-effective and productive. Oftentimes, business owners seek a consultant to help restructure the business or expand seamlessly. Learn more about these industry leaders below and contact us today.

Business Consultant Responsibilities

A  consultant has various responsibilities which include the following.

  • Identify liabilities
  • Provide objectivity
  • Restructure the organization
  • Create a new business
  • Influence other people such as lobbyists
  • Implement change to the organization
  • Evaluate the team’s dynamic
  • Train employees

Discovery Phase

The initial step for the business consultant is the discovery phase, where the objective is to learn the clients’ business. A good consultant will take time to know much about the company from the owner to the employees of the business. This will include visiting the facility, meeting with the employees as well as the board of directors, evaluating the finances, and knowing all the company objectives.  During this process, the consultant will learn the details of the company’s mission and what type of operations that are in place.

Business Consultant Framingham MA

Evaluation Phase

Once the consultant has enough knowledge of the business, they have entered the evaluation phase. Here, the goal is to identify where the change is required in the company. This will include identifying the company’s strengths and weaknesses, the current and note able problems. This may consist of the issues that are already outlined by ownership and management. The new problems will be able to be seen by the objectives of the business consultant. A business consultant should also find new ways of growing the business, increase efficiency and also increase the company’s profits.

The business consultant also needs to find solutions to the various issues and plans on how to capitalize on multiple opportunities. During this phase, the consultant and the company’s employees need to maintain open and transparent communications.

Implementation Phase

The owner and consultant combine their ideas and create a plan that improves the business. When the two parties have agreed on a plan, the consultant should enter the third step of consulting, which is the reconstructing stage or the implementation of the program. In this stage, the consultant will build on assets and eliminate liabilities. In addition, they monitor progress and adjust the plan as needed. 

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The consultant should have a passion for their work, a motivation for excellence, and an eye for organization and detail. Additionally, you need a consultant with knowledge of your industry for the best results. 

Fortunately, Ash CPA offers business consulting with over 25 years of experience. Learn more with a complimentary consultation today. Call  (617) 462-6651 or book an appointment online. Moreover, we proudly serve Framingham MA and surrounding towns.

Missed Tax Returns? File Today

Missed Tax Returns Framingham MA

It is not difficult to fall behind on filing your taxes. This may happen due to several reasons, such as; 

  • Inability to afford any tax services.
  • You could forget about the filing tax deadline.
  • You may also have suffered a severe disease that left you incapacitated and hence unable to file your tax return. 

Most people are tempted to stop filing their tax returns and ignore any severe actions. However, this gets completely serious when the IRS starts sending you reminders of your unfilled tax or debt you have not paid. The IRS has a powerful ability to take stern action against you for failure to file. Therefore, it is essential to know the possible repercussions for failure to pay. 

Failure to pay is a crime

When you fail to file your tax returns, there are chances that you will get into serious trouble. The IRS considers this a crime and assumes you are intentionally evading the liability. They usually assess the debt on your behalf. The resulting consequences may mean a jail term for not filing your tax returns or fines or hefty fines amounting to up to $250,000. 

missed tax returns

The IRS can file a substitute return for you

This, however, is not a courtesy return for those who fail to submit their gains. Therefore, it does not include any deductions or exemptions. The IRS files a Substitute return, in place of the missed returns, when they notice the failure to do so. Filled SFRs may reflect a tax liability owed by the taxpayer. After that, the IRS sends out a detailed collection notice showing that an SFR was filed. They will seek to know if there exists a tax balance that is associated with the SFR.

No timeline for IRS action

The IRS has no time limit within which they can enforce their collection action When they asses the balance that is due for collection from you. When IRS analyzes and finds a balance against your account, they can take your wages; charge the bank accounts, where the need arises, they place notices on your physical assets. Do not let time pass by, regardless of time-lapse IRS never loses track of the debt. It gives them more right to ask for the accumulated amount.

Benefits of filing your missing tax return

When the IRS takes collection procedures against you it is not easy; therefore, you should submit your tax return. Although you are not bound by a time limit to file returns for any past tax years, the IRS limits receiving refunds for previous tax returns. The IRS allows you collection on a tax refund for up to three years from your returns the due date.

Filing the tax returns is not one of the exciting things to do. Some people even dread the activity every year. Regardless of your feelings about filing your returns, always remember it is a requirement. You also need to remain compliant and out of the collections list with the IRS. When you have unfiled tax years, consider it beneficial to speak to a tax attorney or any tax resolution organization. These enable you to resolve all outstanding debts, that you may have for all the unfiled years or all the tax debt assessed on you after the IRS filed an SFR. 

Learn More

Contact Ash CPA to learn more about filing missed tax returns. Call (617) 462-6651 or book an appointment online.

tax issues framingham ma

Tax Issues: Avoid Tax Liens Today

Tax Issues Framingham MA

A tax lien is a hold that the IRS places on your assets to ensure that you pay your debt. This, however, should not be confused with a tax levy. The sole purpose, the IRS places a tax lien is to attempt to ensure that it receives the payment due for the unpaid taxes you owe.

There exist five ways by which taxpayers can likely avoid IRS placing a tax lien on them.  

Pay the Taxes You Owe in Full

Stop an IRS lien on its tracks by paying the taxes you owe in full. If you can afford to do this, the tax lien will not apply. When you want to make the payment IRS makes it possible for you to pay directly from your bank account, using your credit card, or through a third-party processing service. You can also use the Electronic Federal Tax Payment System (EFTPS) to make a safe electronic payment. You may also choose to go on a low-tech route and mail a check, money order, or personally deliver your amount to the local IRS office.

Enter into a Guaranteed Installment Agreement

If you owe less than $10,000, and cannot pay the entire tax debt in full, you can still avoid a tax lien, by making a plan for the Guaranteed Installment Plan. In this plan, you can set to remit your entire balance to IRS through monthly installment payments. The size of the monthly payout and the length of repayment will vary according to the size of your debt.

tax issues framingham ma

Streamlined Installment Plan

This method is applicable if you owe a sum ranging from $10,000 to $25,000 in unpaid debt of taxes. You can still avoid a tax lien from the IRS, by entering into a Streamlined Instalment agreement plan. The plan works in the same way as a Guaranteed Instalment Plan. The result is the same, and you eventually pay the entire debt that you owed in federal income taxes.

Reduce Your Balance

This method applies when you owe more than $25,000 in back taxes to the IRS. You, therefore, must reduce your debt balance to less than $25,000 to keep away from a federal tax lien. The payment has to be before the lien gets imposed on you. There is a relief when your unpaid tax balance goes below $25,000, and you are safe to enter into a Streamlined Instalment Agreement.

File for an Offer in Compromise

There are times you can only afford to pay back only a portion of the federal taxes you owe. You could still avoid a tax lien by going to file an Offer in Compromise. When accepted, the Compromise enables you to resolve your tax responsibility with the IRS for an amount less than the sum of federal taxes due. However, the IRS is strict about tolerating Offers in Compromise. The procedure to review Offer in Compromise applications is lengthy. There is also no assurance the IRS will not inflict a tax lien while you are waiting for the decision on your Offer in Compromise plea.

Resolve Your Tax Issues

Ash CPA offers assistance with tax issues for individuals and entities. Learn more by scheduling a consultation. Call (617) 462-6651 or book an appointment online.

framingham bookkeeper

Defining the Role of a Bookkeeper

Framingham Bookkeeper

Whether you sell electronics, pet food., medical services, or investment advice, your business earns and spends money. A bookkeeper helps you keep records of all business transactions. This guide assists you to understand the specific roles of a bookkeeper and why you need to have a good one. 

A bookkeeper is a finance professional who prepares, documents and stores all daily financial transactions. Traditionally, bookkeepers used volumes of files to store receipts, invoices, and bills. Today, the modern ones use software to efficiently track income and expenditure. 

framingham bookkeeper

Bookkeepers vs Accountants 

While bookkeepers are professionals in financial matters, there are some financial tasks that they cannot perform. They may keep daily transactions, but that is pretty much the end of their jobs. Enter accountants. These are advanced analysts who use the data compiled by bookkeepers to generate financial models. 

It is safe to say that bookkeeping is concise and transactional. On the other hand, accounting can be subjective and therefore needs skilled interpretation of data and trends to make logical business conclusions and decisions. 

So what does a bookkeeper’s day look like?

Every day, a bookkeeper will do some data entry and receipt taking. Their jobs revolve around labeling expenses while indicating how much money was paid for goods and services. At a doctor’s office, for example, a bookkeeper tracks incoming payments from patients and issues invoices to demand payments. 

Having said that, bookkeepers do more than just enter numbers in Excel. They make careful entries to ensure that numbers tally. When auditors come knocking at your medical practice, these professionals make sure records are updated and that your business pays taxes properly. 

 

Let us understand the roles further. Any bookkeeper will handle the following 4 main financial statements. 

Income statement – this document indicates the expenses as compared to the revenue of your medical clinic. It is also referred to as a Profit and Loss Statement.

Balance sheet – this is a quick overview of the financial position of your business at a point in time. 

Cash Flow statement – this statement is a record of the cash and equivalents of cash that enters and leaves your accounts.

Changes in Equity Statement – this statement is also known as Statement of overall recognized losses and gains. It indicates how your clinic’s reserves, share capital, and earnings have taken shape over a certain reporting period. 

The following are other financial tasks that your bookkeeper does on a day-to-day basis. 

  • Keep and observe your company’s fixed assets
  • Collect and submit taxes to the government 
  • Pay any contractor or supplier invoices
  • Check levels of debt and make payments that are due
  • Make records of incoming cash while depositing it at the bank
  • Do accounts reconciliation every month
  • Give financial statements 
  • Provide accountants with accurate financial statements during tax seasons
  • Maintain the company’s annual budgets
  • Report on variance issues when they arise
  • Process and make employees payroll

Benefits of a Framingham Bookkeeper

Knowing where your money is coming from and where it is going is very important for your medical practice. Having a highly-skilled bookkeeper will bring this benefit plus many others as follows. 

  • Brings you peace of mind when books are updated
  • Ensures that tax season goes well as planned
  • Keeps detailed documentation to present to audit teams
  • Affords you more time during your day so you can focus on core areas of business
  • Helps you understand the logical flow of your medical clinic
  • Makes you comprehend the costs, revenue, profitability and other key metrics of business

Learn More

Ash CPA offers an array of bookkeeping and accounting services. Learn how a bookkeeper will benefit your business by scheduling a complimentary consultation. Call (617) 462-6651 or book an appointment online.

best bookkeeping framingham ma

Best Bookkeeping Practices for Small Businesses

Best Bookkeeping Practices

Successful business owners need to maintain their bookkeeping. Proper bookkeeping is an integral part of ensuring the business remains successful. Without it, you may not know how much profit you are gaining and how many expenses you incur. Plus, poor bookkeeping makes it difficult to accurately file taxes and can lead to business failure. Many small businesses prefer a professional bookkeeper, such as Ash CPA. Our firm is staffed with knowledgeable professionals and has over 20 years of experience. Nevertheless, if you decide to go at it alone, below are the best bookkeeping practices for small businesses.

Maintain Routine Inventory Audits

With regular inventory audits, you will be able to determine the exact amount of products. This is because some of the products may be missing due to theft by employees or vendors not delivering the correct amount of goods. Regular inventory audits will be able to highlight all the products that you have in your store. It will also enable you to keep the right amount of product in the store, creating more space for you in the process. Regular inventory audits will also allow you to analyze your sales and prevent overstocking of nonperforming products.

best bookkeeping framingham ma

Follow-Up on Your Invoices

Always follow-up on all of your invoices. Some clients are quick to make their payments, but others are not. The invoice could have been sent to an incorrect email or address. Other times, the client may not have read the invoice or marked it for payment. Therefore, keep track. Always follow-up on all the invoices sent, especially those that are over 30 days due.

Separate Business and Personal Expenses

You should not only keep track of your business expenses, but you should also have a separate account for the expenses incurred by the business. In addition to that, have a separate credit card for your business as this will significantly make it easier to file your taxes and be eligible for all business deductions.

Avoid Tax Penalties

By not paying the quarterly taxes on time, the government charges a penalty for all late remittances. You will pay more with the option of waiting till fall to remit your taxes as it will accrue penalties. All these can be avoided by saving a certain amount every month and paying the taxes quarterly. This will help you avoid evading or accumulating taxes while at the same time stabilizing your finances all year long.

Save Money

You may be faced with a situation where a piece of equipment that is vital to your business breaks down or requires repair or maintenance, yet you may not have the necessary funds to fix it. This may slow down business for you and lead to losses that could have been avoided if you saved some money for such situations. 

You may take a loan for such; however, setting some money aside will be more viable as it will come in handy without extra charges. Another workable solution is opening credit lines that can be used for operating expenses and act as an emergency fund source.

Create End-Of-Year Accounting Checklist

Having an end-of-year accounting checklist helps not only to prepare for taxes, but it is also critical to the long-term growth and success of the business. It will also give an insight into the business performance at the end of the year and will help you make more informed decisions to be more profitable in the coming year.

Contact Us

Ash CPA offers a wide range of solutions to help businesses of all sizes and dynamics succeed. Speak to us today to learn about the best bookkeeping practices. Call  (617) 462-6651 or book an appointment online. We proudly serve Framingham MA and surrounding towns.

tax audit framingham ma

How to Handle a Tax Audit

Tax Audit Framingham MA

Individuals and private business entities are required by law to complete their tax returns. Some people and business owners are not aware of their tax obligations, resulting in tax issues and audits. Therefore, it is important to know how to handle a tax audit and why a tax audit representative is essential. Learn more below and contact us today.

What is a tax audit representation?

Tax audit representation, also known as audit defense, refers to any service where tax or legal professionals defend the taxpayer for state or IRS tax audits. The law allows the taxpayer to have legal representation during an income tax verification. The legal representative should be registered and licensed by the IRS to practice within the specified region or state. The representatives are usually CPAs, attorneys, and enrolled agents. The audit representative serves on the interests of the taxpayer during the process. They ensure that all the required paperwork is updated and available, attends meetings, and serves as a link between the taxpayer and the tax authorities.

tax audit framingham ma

What is the tax audit process?

Audits occur at random or when suspicious items appear in tax returns, such as unusual deductions or stated income amounts. The state or IRS will notify the individual or entity via letter. The letter usually states that an audit will be conducted on a specific date. Usually, the letter will also require that certain documents be made available for the audit.  Depending on the audit, the taxpayer may need to simply submit the documents or formally meet with the auditor. Both of these instances should include a tax audit representative to assure the audit is properly handled.

It is prudent to reply to the letter from the tax authorities promptly. Ignoring the letter is not advisable. If you need extra time, you can ask to extend the date. When called upon to present yourself to the tax authorities, assess whether you need legal representation. Sometimes all is needed is clarity on the information provided in the tax forms. When not sure about what they require from you, it is essential to seek professional advice and guidance for a tax audit representative.

On the completion of the audit, the agent will assess the documents you provided. Next, the results of the case will be discussed. In other words, you may or may not be charged a penalty. If so, you can appeal. Having a competent, qualified, and experienced attorney, agent, or CPAs representative will help during this process. 

Learn More

Learn more about proper tax audit representation with Ash Wasilidas, CPA. He has over 20 years of experience assisting individual and business tax audits. Schedule a complimentary consultation today. Call  (617) 462-6651 or book an appointment online. New clients are always welcome!

best cpa framingham ma

Find the Best CPA

Best CPA Framingham MA

Finding a CPA is easy, anyone can do it. However, very few know how to find the best CPA and having the best can make all the difference for you and your business. Here is a three-part process of how to find the best CPA.

  • Referrals

Getting referrals is a very important way of getting a good CPA as long as your referral sources are good. By good sources, it means you are asking the right people. Family and friends are great referral sources as long as they have some tax or financial expertise. If they don’t, probably the only thing they can assure you of is whether or not the CPA returns calls or if they are nice people. 

best cpa framingham ma

The best referrals you can get are from professionals such as your financial advisor or your attorney. The point is the best referrals you can get are from people who are familiar with how CPAs work from the technical side. It means you want references from someone who can identify any professional problem or even a lack of qualifications. Also, while looking for referrals for a CPA, keep in mind the specific reason why you need one in the first place. You could be looking for someone to only handle your taxes or someone to offer business consulting. 

  • Ask questions

Most business owners end up hiring the wrong person since they are in a hurry to get someone and settle for nice rather than qualified. Prepare a list of questions for when you have settled for a handful of candidates to choose from an interview. Your questions can focus on getting answers to the following aspects:

  • The type of client they focus on and why
  • What differentiates them from other professionals
  • How long they have been in business
  • Their charges
  • Whether they offer audit protection
  • How they handle IRS audits
  • What licenses they have and how they acquired them
  • The number of clients they have
  • Whether they have ever been sanctioned by any professional board before
  • Whether they have had complaints before
  • How many of their returns they had audited in the last year
  • How many clients left them in the last year and why
  • What to expect from them in their first year of service

You can get answers to these and add more when you feel you want to find out more. This is important since you are about to give this person your entire financial future, therefore, ensure that you get as much information as you can in advance.

Also, you can settle for a candidate who is keen on asking you questions as well rather than just being modest and trying to impress you with credentials. If someone doesn’t ask about you too, it could mean they probably don’t care or think of you as an individual which can be a fatal flaw when it comes to handling your finances. 

  • Get a second opinion

Once you have settled for the candidate you are more confident with, you can let her review your last tax return and provide a price quote. In the process, you can also get a critique to review what he should have done differently and why, or whether he noticed any flaws or errors or missed opportunities or whether there are audit red flags that need to be addressed. This way, you would be looking for thoroughness, creativity and value-added. If what you are getting from this person is nothing better than what you already have, then keep looking. It’s better to find this sooner rather than later after you have wasted time and money. 

Finding the best CPA requires time and adequate preparation. Start today by meeting Ash Wasilidas, CPA. He has over 20 years of growing businesses of all sizes. Call (617) 462-6651 or book an appointment online.

Hire a CPA Framingham MA

How to Hire a CPA

Hire a CPA Framingham MA

Businesses quickly get complex once they start growing and at some point, you might want to let go and learn to trust other people to handle some parts of your business. When you feel like you are losing track of your finances, an accountant; and not just any accountant but a Certified Public Accountant can help you get things back on track. CPAs are basically accountants who got through a notoriously difficult licensing examination that may vary from state to state. 

While an accountant may fulfill all the accounting needs in your business, CPA services can come in handy in some specific circumstances. CPAs are licensed by a state and are current with not only all the states but also the federal tax laws. And also, in order to maintain their licenses, they must comply with continuing education requirements. But, perhaps the biggest reason why you should hire a CPA is that they are eligible to represent you in an audit before the IRS, while an accountant is not. So how do you know how to hire a good one for your business? Read on to find out how.

Hire a CPA Framingham MA

 

Identify your needs before hiring

 

Your business may have specific accounting needs such as processing your sales invoices and account payables, do taxes or payroll or even create your financial statements and budgets. Before you begin the hiring process, come up with a list that both you and your business needs including what you might need in the future. This will help you to find the right CPA who can handle it all. 

 

Hire an accountant who understands your business needs

 

Open communication with your CPA is very important. If you are hiring an external CPA firm or even one who usually outsource work to a third party, they have to understand your needs and that of your business before you decide to work with them. This applies even if you just need them to do your taxes. 

Your business may need their availability since it may be one of those businesses that need an accountant’s services all year-round instead of waiting for the next tax season. Also, if you have several entities under your name, you may need an accountant with the ability to coordinate as well as track money moving between those entities. If your CPA doesn’t understand needs as well as others, there are too many things that could go wrong. 

 

Consider their qualifications

 

There is a lot more to accounting than just dealing with numbers, and this applies mostly to CPA’s. CPA’s have a deep understanding of complex financial concepts as well as tax code which can be hard to break down into simpler terms. Therefore, it’s good to sometimes look beyond the resume and consider other qualifications such as communication. 

Another qualification to consider is a CPA’s experience in working with different clients. You would definitely want an accountant who understands your type of business. Therefore, hire a CPA who has worked with other businesses similar to yours and knows the ins and outs of your industry.

 

Experience with the IRS

 

IRS audits can be expensive, time-consuming and stressful, therefore, ensure you hire a CPA who has experience with dealing with the IRS. They can give you advice and take you through the hiring process and also help keep you off the watchful eye of the government by ensuring you do not violate any tax laws afterward. 

Also, if you can, hire a CPA that offers audit insurance. Audit insurance covers fees needed if your business has to respond to an official audit, review, inquiry or investigation by a tax department. If you find an accountant with this cover, it means you won’t incur any extra charges for the amount of work they will cover during the entire auditing process.

Learn More

Contact Ash CPA to learn more about how a CPA will help your business grow. Call (617) 462-6651 or book an appointment online. New clients are always welcome.

 

dba framingham ma

The Advantages and Disadvantages of DBAs (Doing Business As)

DBA is an abbreviation for “doing business as.” A firm or individual uses this name when it is operating under a different name than that which it was legally registered. Depending on where you decide to do business, you are required to register your DBA with either your state government or county clerk’s office. DBAs are also known as “trade names,” “assumed names,” or “fictitious names.”

Choosing a fictitious business name

A business owner might want to use a DBA or a fictitious business name if they find themselves in two main situations:

  • Corporation or LLC: you are allowed to register a fictitious business name or DBA if you’ve already established a business structure and incorporated, but still want to adopt a different name other than the one you’ve used. 
  • Sole Proprietor or partnership: this second case is a situation where you are a co-founder of a partnership or sole proprietor, and you wish to do business with a name different from your legal government name. This will give your business a unique marketing identity that’s different from your personal name, but in the eyes of laws, it won’t be the same as a corporate structure. 

dba framingham ma

Do I need a DBA if I have an LLC?

Most people will tell you “No” unless you are looking to operate a business with a different name from that of the LLC. You’ll notice right away that a lot of those people who use DBAs are people who operate as sole proprietors. For example, Jack Daniels has been operational as a sole proprietor graphic designer, but then, on a whim, he decides to operate as: “Jack Daniels Designs.” This is a perfect example of a DBA that’s an extension of the natural person who’s the sole proprietor. But, if they have decided to operate as a corporation or an LLC, the firm will be handled as a separate legal entity, different from the individual or people who own it. 

Advantages of using a DBA

Using a DBA name for a business is the best decision an owner can make. It actually allows the proprietor to use a more ‘official’ name, appropriate for a business website or business card. Your identity doesn’t have to be entangled with your business. You can give it a separate and unique identity. This is not the only advantage that you get to enjoy as you’ll learn that there are a few more, such as:

  • Increased flexibility 

With the help of a DBA, you can expand into new markets because the business’s legal name is already in use there. For your information, a legal business name’s proprietary use is often state-specific. Therefore, if you go ahead and register a business in a state different from that which you created your business, you might not be able to use the existing business. State laws require a business to operate within its boundaries with different names to avoid public confusion. So the solution is always to register your business with a fictitious business name before starting operations. 

  • Enhanced value 

A DBA can also help your entity develop brand awareness, and this is yet another advantage of using it. So instead of operating the traditional way where business owners develop products under business names such as “Jean Park’s Ice Cream joint,” you can use a catchy DBA such as “Cold Cones.”

Disadvantages of using a DBA

Te one primary disadvantage experienced by all the business entities using DBAs has to be the hassle of maintaining the registration. Typically, these registrations are supposed to be renewed every couple of years and in some states, you are compelled by law to make the registration in every county that you plan to do business in. In addition, DBAs are nothing more than aliases that can’t be used by business owners to execute legal documents. Other cons include:

Lack of legal protections is yet another con of using a DBA. You, of course, get to enjoy legal protections and limited liability as a corporate structure or LLC but a DBA doesn’t offer these things. You’ll only have a name on a business card and that’s just about it. No ‘corporate shield’ to protect you from your business liabilities, or tax benefits available from setting up a legal entity.  

The bottom line

If you are operating as a sole proprietor, you are better off working with an LLC instead of a DBA name. A DBA will not offer you the benefits other corporate structures offer business owners. However, if you already have an LLC, you can use a DBA to expand your services, or change the name of your business without losing its existing identity. 

Learn More

Contact Ash CPA to learn about properly incorporating your business. Call (617) 462-6651 or book an appointment online.