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Monthly Archives: May 2019

Buy vs. lease: Business equipment edition

Erin Mirante0 Comment

Life presents us with many choices: paper or plastic, chocolate or vanilla, regular or decaf. For businesses, a common conundrum is buy or lease. You’ve probably faced this decision when considering office space or a location for your company’s production facilities. But the buy vs. lease quandary also comes into play with equipment.

Pride of ownership

Some business owners approach buying equipment like purchasing a car: “It’s mine; I’m committed to it and I’m going to do everything I can to familiarize myself with this asset and keep it in tip-top shape.” Yes, pride of ownership is still a thing.

If this is your philosophy, work to pass along that pride to employees. When you get staff members to buy in to the idea that this is your equipment and the success of the company depends on using and maintaining each asset properly, the business can obtain a great deal of long-term value from assets that are bought and paid for.

Of course, no “buy vs. lease” discussion is complete without mentioning taxes. The Tax Cuts and Jobs Act dramatically enhanced Section 179 expensing and first-year bonus depreciation for asset purchases. In fact, many businesses may be able to write off the full cost of most equipment in the year it’s purchased. On the downside, you’ll take a cash flow hit when buying an asset, and the tax benefits may be mitigated somewhat if you finance.

Fine things about flexibility

Many businesses lease their equipment for one simple reason: flexibility. From a cash flow perspective, you’re not laying down a major purchase amount or even a substantial down payment in most cases. And you’re not committed to an asset for an indefinite period — if you don’t like it, at least there’s an end date in sight.

Leasing also may be the better option if your company uses technologically advanced equipment that will get outdated relatively quickly. Think about the future of your business, too. If you’re planning to explore an expansion, merger or business transformation, you may be better off leasing equipment so you’ll have the flexibility to adapt it to your changing circumstances.

Last, leasing does have some tax breaks. Lease payments generally are tax deductible as “ordinary and necessary” business expenses, though annual deduction limits may apply.

Pros and cons

On a parting note, if you do lease assets this year and your company follows Generally Accepted Accounting Principles (GAAP), new accounting rules for leases take effect in 2020 for calendar-year private companies. Contact us for further information, as well as for any assistance you might need in weighing the pros and cons of buying vs. leasing business equipment.

© 2019

Writing a winning grant proposal

Erin Mirante0 Comment

Competition is as fierce as it has ever been for private and public grants to not-for-profits. If your funding model depends on receiving adequate grant money, you can’t afford to submit sloppy, unprofessional grant proposals. Here are some tips on writing a winner.

Do your research

Just as you’d research potential employers before applying for a job, you should get to know grant-making organizations before asking for their support. Familiarize yourself with the grant-maker’s primary goals and objectives, the types of projects it has funded in the past, and its grant-making processes and procedures.

Performing research enables you to determine whether your programs are a good fit with the grant-maker’s mission. If they aren’t, you’ll save yourself time and effort in preparing a proposal. If they are, you’ll be better able to tailor your proposal to your audience.

Support your request

Every grant proposal has several essential elements, starting with a single-page executive summary. Your summary should be succinct, using only the number of words necessary to define your organization and its needs. You also should include a short statement of need that provides an overview of the program you’re seeking to fund and explains why you need the money for your program. Other pieces include a detailed project description and budget, an explanation of your organization’s unique ability to run this program, and a conclusion that briefly restates your case.

Support your proposal with facts and figures but don’t forget to include a human touch by telling the story behind the numbers. Augment statistics with a glimpse of the population you serve, including descriptions of typical clients or community testimonials.

Follow the rules

Review the grant-maker’s guidelines as soon as you receive them so that if you have any questions you can contact the organization in advance of the submission deadline. Then, be sure to follow application instructions to the letter. This includes submitting all required documentation on time and error-free. Double-check your proposal for common mistakes such as:

  • Excessive length,
  • Math errors,
  • Overuse of industry jargon, and
  • Missing signatures.

Take the time

To produce a winning proposal, you need to give yourself a generous time budget. Researching the grant-maker, collecting current facts and statistics about your organization, composing a compelling story about your work and proofreading your proposal all take more time than you probably think they do. Above all, don’t leave grant proposal writing to the last minute. Contact Langdon & Company LLP if you have any questions!

© 2019

NC Medicaid Compliance Update

Rachel Owens0 Comment

by Rachel Owens

North Carolina requires program-specific reporting of facilities/homes based on their license. For many facilities this is not a new requirement, however, for adult care, mental health and dual-licensed facilities this is only required every other year.  This year is an on year.  Compliance with these state requirements fulfill the mandate enforced by the North Carolina General Assembly under General Statute 131 D-4.1-4.3 through the Office of the Controller.  Facilities that do not receive funds through State/County Special Assistance are exempt, but all others must complete a cost report.  The deadline for which, is just a few short months away – September 30, 2019!

What report is my facility required to file?

Requirements of the statute vary depending on the license and the number of beds in the facility.  Facilities with 6 beds or less are required to prepare a cost report only.  Facilities with 7 or more beds must complete a cost report and have agreed-upon-procedures performed by an independent CPA.  The larger facilities with 31 beds or more have additional requirements for their cost report this year.

There are many factors to consider to determine exactly what is expected of each facility and what period is to be reported.  The repercussions of non-compliance of these requirements are suspended admissions or worse!  The OOC office anticipates releasing updated cost report information and agreed-upon-procedures in the next few weeks.  The healthcare industry continues to be an ever-changing environment and we continue to be on the look out for additional information as the deadline approaches.  We would be happy to answer any questions you have and would appreciate the opportunity to serve your organization.