The True Cost of Running a Business… (and How KT Can Help)

Running a business is about more than just bringing in revenue โ€” true success lies in understanding and managing the full cost structure behind every dollar earned. For many business owners, the real expenses involved in day-to-day operations can be surprising, and without proper insight, these hidden costs can eat away at profits.

Fortunately, KTโ€™s Business Accounting services offer the clarity, strategy, and systems needed to stay in control at an affordable price. Specifically, we are looking at a higher level of CFO and outsourced Controller level of offerings.

This article explores the key components of business costs and how we can help business owners make informed, profitable decisions.

Profit Margin: The Bottom-Line Indicator

At the heart of every business is the profit margin โ€” a key performance metric showing how much money you keep after factoring the underlying cost of sales. Gross, operating, and net profit margins each tell a different story about financial health.

However, business owners regularly overestimate their margins because they fail to factor in all costs, especially overhead and less obvious expenses. Underpricing products or services, not tracking job-level profitability, or failing to update pricing for inflation and cost increases can lead to shrinking margins over time.

We can help by providing real-time financial reporting, cost tracking, and profitability analysis. By identifying areas of concern early, businesses can make smarter pricing and expense decisions that protect and even grow profit margins.

Financing: Funding Growth (at a Cost)

Access to capital is vital for growth, but financing brings its own set of costs. Interest in loans, fees, and opportunity costs can all impact your financial picture. Businesses often borrow without fully understanding how loan payments will affect their cash flow or debt.

Our professionals can assist with cash flow projections, budgeting, and bank reporting. They can help you model financing scenarios, ensuring you understand both short- and long-term impacts on profitability and solvency.

Overhead: The Hidden Drain on Profits

Overhead expenses are often the most misunderstood and undermanaged part of running a business. Let us break down key areas:

Accounting

Some businesses treat accounting as a compliance necessity, but when done right, it is a strategic function. Whether it is payroll processing, tax filings, or monthly closes, accounting can become expensive if not streamlined.

Our team can assist by replacing fragmented or outdated accounting systems with efficient, cloud-based processes. This not only saves time and labor but also delivers the financial insights needed to drive smarter decisions.

Marketing / Selling

Marketing is essential for growth, but many businesses do not accurately track their return on marketing expenses. From ad campaigns to sales commissions and sponsorships, these costs can creep up quickly without direct ties to revenue.

We can help tie marketing data to financial results, helping you assess what is working and what is not.

Facility Fees โ€“ Supplies / Repairs / Utilities

Operational costs like rent, utilities, and maintenance may seem fixed, but they can often be optimized. Are you leasing too much space? Are supply contracts being renegotiated regularly? Are repairs reactive instead of preventive?

Our team can help you spot trends, uncover inefficiencies, and benchmark costs across time periods or locations โ€” leading to better vendor decisions and more predictable expenses.

Wages

Labor is typically a businessโ€™s biggest expense. But it is not just about base wages. You must also account for:

  • Payroll Taxes
  • Employee Benefits
  • Overtime
  • Training Costs

When businesses hire too quickly or without fully calculating the loaded cost of employees, profitability suffers. Our solutions can include payroll integration and labor cost analysis, ensuring you are hiring and compensating strategically.

Software / Dues / Transaction Processing Fees

Subscriptions and fees are often overlooked. Whether it is your CRM, project management tools, industry dues, or credit card processing, these minor expenses add up fast.

KT offers expense categorization and recurring expense tracking, helping identify which tools are essential and which may be redundant or overpriced.

Miscellaneous Expenses: Expect the Unexpected

Unexpected costsโ€”from equipment breakdowns to regulatory finesโ€”can catch any business off guard. Building contingency into your planning and monitoring spending categories regularly is key to staying on track.

With KT, you can gain monthly reporting, variance analysis, and budget monitoring, allowing you to prepare and adjust as conditions change.

The KT Advantage

KT is more than just outsourced bookkeeping. We offer a full-service solution with financial reporting, advisory support, software integration, and performance insights โ€” all tailored to your business needs.

Here is how we help business owners better manage costs:

  • Data-driven decisions: Access to real-time dashboards and key performance indicators (KPIs).
  • Process automation: Save on administrative overhead with integrated workflows.
  • Scalable support: From startup to multi-location businesses, KT grows with you.
  • Strategic insight: Turn historical data into forward-looking forecasts and decisions.

The true cost of running a business extends far beyond basic expenses. Without a clear picture of your financials, it is easy to lose control of profitability. We help by uncovering hidden costs, improving visibility, and providing the strategic support needed to build a stronger, more profitable business.

In a world where margins are tight and competition is fierce, understanding your numbers is not optional โ€” it is essential. And with KT on your side, you will not have to face that challenge alone.

If you’re interested in KT’s full-service CFO/Controller solutions, contact Austin Eichacker.

June 23, 2025
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BOI Reporting Update โ€“ March 2025

On March 21, FinCEN issued an interim final rule that removes the requirement for businesses registered in the U.S. and U.S. persons to report their beneficial ownership information (BOI) to FinCEN. This is a major change, as the previous Corporate Transparency Act required most registered businesses to file the BOI report.

The new interim final rule revises the definition of a โ€œreporting companyโ€ to only business formed under law of foreign countries but are registered to do business in the U.S. or tribal jurisdictions. In addition, the new rules rule exempts foreign reporting companies from having to report the BOI of any U.S. persons who are beneficial owners of the foreign reporting company and exempts U.S. persons from having to provide such information to any foreign reporting company for which they are a beneficial owner.

Foreign entities that are registered to do business in the U.S. have 30 days from March 21stย to file an initial BOI report.

If your company needs to file an initial or updated BOI report and you would like KT to assist with this process, contact Austin@ktllp.com.

March 31, 2025
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BOI Reporting Update โ€“ February 19, 2025

There have been major developments concerning Beneficial Owner Information (BOI) reporting in the last two days. The BOI report is once again required. The new deadline for filing the BOI report is March 21, 2025, for those businesses which were originally required to file by January 1, 2025.

On February 18th, a request by the Department of Justice for the stay of the courtโ€™s nationwide injunction over BOI reporting was signed. The stay that was signed removed the courts preliminary block of the filing requirement. FinCEN acknowledged that businesses would need additional time to file the report, so they granted a 30-day reporting period following the courtโ€™s decision.

What Does This Mean?

Reporting companies, meaning most businesses that are registered with a State, will need to file an initial BOI report by March 21, 2025, if they havenโ€™t filed already. Also, if your business has previously submitted a BOI report, you may now need to submit an updated report if there have been any changes to your original filing. These changes could include:

  • A beneficial owner changing their primary residential address.
  • An ID document used on a report has expired.
  • Using a new DBA name for your business.
  • Changing a business office address or your primary work address.
  • Adding or removing an owner with 25% ownership or substantial control.
  • Qualifying for a new exemption.
  • Hiring a new CEO, CFO, COO, LLC Manager, or similar senior management member with substantial control.
  • Adding or removing a director on the board with substantial control.

Updated BOI reports are an ongoing requirement. Updated reports are required to be filed within 30 days of the change occurring.

If your company needs to file an initial or updated BOI report and you would like KT to assist with this process, contact Austin@ktllp.com.

Stay Tuned

At this point, if thereโ€™s anything certain regarding the BOI reporting, itโ€™s that it is uncertain. KT will continue to monitor and send updates on the BOI reporting if new developments arise. One potential update could include a bill that was passed by the House on February 10th. If this bill is passed by the Senate, the bill would extend the filing requirement to January 1, 2026. It is very uncertain whether this will move forward. Especially within the 30-day filing window granted by FinCEN.

Below is a list of potential exemptions that could allow companies to be excluded from the reporting requirement. This is the same list of exemptions previously used by FinCEN. Before assuming you are exempt, it is very important to know the exact language for each exemption. If you are uncertain whether your company is exempt, contact Austin@ktllp.com and we can help determine whether your company should file the BOI report.

Exemption No.Exemption Short Title
1Securities Reporting Issuer
2Governmental Authority
3Bank
4Credit Union
5Depository Institution Holding Company
6Money Services Business
7Broker or Dealer in Securities
8Securities Exchange or Clearing Agency
9Other Exchange Act Registered Entity
10Investment Company or Investment Adviser
11Venture Capital Fund Adviser
12Insurance Company
13State-Licensed Insurance Producer
14Commodity Exchange Act Registered Entity
15Accounting Firm
16Public Utility
17Financial Market Utility
18Pooled Investment Vehicle
19Tax-Exempt Entity
20Entity Assisting a Tax-Exempt Entity
21Large Operating Company
22Subsidiary of Certain Exempt Entities
23Inactive Entity
February 19, 2025
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BOI Reporting Requirement

BOI Injunction Reinstated โ€“ Effective 12/26/24

There has been another update to the Beneficial Owner Information (BOI) reporting saga. Just three days after the nationwide injunction was lifted, on December 26th, the U.S. Court of Appeals for the Fifth Circuit reinstated the nationwide injunction. This means that as of December 26th, there is not a requirement to file the BOI report. Currently, the filing is once again voluntary.

KT will continue follow this progression of the legal system and send blog post updates as we know more.

12/23/24 Update

On December 23, 2024, the federal Court of Appeals put an end to the nationwide injunction for Corporate Transparency Act (CTA) Beneficial Ownership Information (BOI) reporting.  

Meaning that companies are once again required to file the BOI report. Due to the uncertainty of the injunction that began on December 3rd, the Department of the Treasury extended the deadline as follows:

  • Reporting companies that were created or registered prior to January 1, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN. (These companies would otherwise have been required to report by January 1, 2025.)
  • Reporting companies created or registered in the United States on or after September 4, 2024, that had a filing deadline between December 3, 2024, and December 23, 2024, have until January 13, 2025, to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies created or registered in the United States on or after December 3, 2024, and on or before December 23, 2024, have an additional 21 days from their original filing deadline to file their initial beneficial ownership information reports with FinCEN.
  • Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond January 13, 2025. These companies should abide by whichever deadline falls later.

Reporting companies that are created or registered in the United States on or after January 1, 2025, have 30 days to file their initial beneficial ownership information reports with FinCEN after receiving actual or public notice that their creation or registration is effective.


BOI Reporting Requirement explained

December 26, 2024

BOI Reporting Update

On Tuesday, December 3, 2024, a federal district court in Texas issued an order granting a nationwide preliminary injunction that blocks the Corporate Transparency Act (CTA)โ€™s beneficial ownership information (BOI) reporting requirements, and the related deadlines to comply with the CTAโ€™s reporting requirements, including the initial filing deadline for companies established prior to 2025 that have a January 1, 2025 deadline.

The Department of Justice, on behalf of the Department of the Treasury, filed an appeal of the district courtโ€™s decision on December 5, 2024. The potential outcome of BOI reporting, including when reports need to be submitted, remains unknown.

The Financial Crimes Enforcement Network (FinCEN) has responded that as long as the preliminary injunction remains in effect reporting companies are not required to report BOI to FinCEN and reporting companies will not be subject to liability for failing to report their BOI. 

FinCEN also indicated that reporting companies may continue to voluntarily submit BOI reports.

We are actively monitoring this ongoing situation and the related implications as it pertains to the filing deadline and potential penalties.

December 12, 2024

BOI Reporting Requirement

If you have an established company or are planning on starting a new company in 2024 or beyond, please read this article carefully. 

What Is FinCEN BOI Reporting?

BOI (Beneficial Owner Information) reporting is a mandatory NEW business filing requiring most U.S. companies to submit their BOI to the Financial Crimes Enforcement Network (FinCEN) in 2024. This requirement comes from a new law called the Corporate Transparency Act that was passed to enhance the government’s efforts to combat money laundering, terrorist financing, and other financial crimes.

This reporting requirement started in 2024, and it is enforced by potential penalties including fines of $500 per day up to $10,000. 

Who Is Affected?

Entities required to report under this regulation include corporations, limited liability companies, S-corps, LLPs, and other entities created by filing a document with any U.S. state. The majority of for-profit business entities will be required to file this report unless they qualify for an exemption.

๏ปฟTo find out if you have an exemption, visit fincenfetch.com/boi-report-exemptions.

Can We File Your FinCEN report?

Yes, our firm can file your report. Please email BOI@ktllp.com if you would like help with this mandatory filing.

We use a specialized web platform, FincenFetch, to make this process easy for you. This platform will securely and quickly collect your filing information for our firm to let us complete your report. 

What Are the BOI Due Dates?

1) Entities created before Jan. 1, 2024, will have until Jan. 1, 2025, to submit the report.

2) Entities created on or after January 1, 2024, and before Jan 1, 2025, will have 90 days from creation or registration to submit the report.

3) Entities created on or after Jan. 1, 2025, will have 30 days from creation or registration to submit the report. 

What next steps should I take?

For more information or to get started, please email BOI@ktllp.com.

Pricing for this service will be $400 per reporting entity + $25 per beneficial owner. If a beneficial owner has multiple reporting entities, a discount of $100 will be given for each additional reporting entity.

October 1, 2024

BOI Reporting Scam

BOI (Beneficial Owner Information) reporting is a new mandatory business filing requiring most U.S. companies to submit their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) in 2024.

While the actual requirement to report the BOI information is very real, the reporting has led to the latest scam by fraudsters. Businesses are beginning to receive by mail a fraudulent โ€œMandatory Beneficial Ownership Reportingโ€ form. Be leery as these forms appear to be very real.

Example of BOI form from fraudsters:

FinCEN reporting can be done either online through their website at https://www.fincen.gov/boi or you can have us assist with your reporting process.

If you are interested in learning more about the BOI reporting process, please contact BOI@ktllp.com.

August 14, 2024

BOI Reporting Assistance

If you have an established company or are planning on starting a new company in 2024 or beyond, please read this blog carefully.

What Is FinCEN BOI Reporting?

BOI (Beneficial Owner Information) reporting is a new, mandatory, NEW business filing requiring most U.S. companies to submit their BOI to the Financial Crimes Enforcement Network (FinCEN) in 2024. The BOI requirement comes from a new law called the Corporate Transparency Act that was passed to enhance the government’s efforts to combat money laundering, terrorist financing, and other financial crimes. This reporting requirement started in 2024 and is enforced by potential penalties including fines of $500 per day, up to $10,000.

Who Is Affected?

Entities required to report under this regulation include corporations, limited liability companies, S-corps, LLPs, and other entities created by filing a document with any U.S. state. The majority of for-profit business entities will be required to file this report unless they qualify for an exemption.

Find out if you have an exemption HERE.

Can We File Your FinCEN report?

Yes, our firm can file your report. Please email BOI@ktllp.com if you would like help with this mandatory filing.

We use a specialized web platform, FincenFetch, to make this process easy for you. This platform will securely and quickly collect your filing information for our firm to assist us in completing your report.

When are the Filing Dates?

1) Entities created before Jan. 1, 2024, will have until Jan. 1, 2025, to file the report.

2) Entities created on or after January 1, 2024, and before Jan 1, 2025, will have 90 days from creation or registration to file the report.

3) Entities created on or after Jan. 1, 2025, will have 30 days from creation or registration to file the report.

What next steps should I take?

For more information or to get started, please contact BOI@ktllp.com

Pricing for this service will be $400 per reporting entity + $25 per beneficial owner. If a beneficial owner has multiple reporting entities, a discount of $100 will be given for each additional reporting entity.

August 13, 2024

Employee Benefit Plans – Agreed Upon Procedures

What is an AUP?

An Agreed Upon Procedures (AUP) engagement is designed for a practitioner to perform specific procedures over a specified subject matter. For employee benefit plans, this would encompass us testing select transactions, processes, and procedures over the employer sponsored employee benefit plan.

Once the procedures are complete, we report the findings to the plan manager but do not provide an opinion or conclusion on the engagement. While we have a standardized set of procedures for employee benefit plan AUP engagements, the procedures performed can be customized and tailored to the employersโ€™ needs and desires.

Whatโ€™s the difference between an employee benefit plan audit and an AUP?

Under most circumstances, defined contribution plans (401k, 403b, ESOP, etc.) require audits if the plan has 100 participants with balances. Audits are required to follow specific guidelines to cover all facets of the employee benefit plan audit and conclude with financial statements and an independent auditorโ€™s report.

AUP engagements can be finetuned to only focus on areas of concern or areas at higher risk for failures. Under both an audit and AUP, we are required to report the findings to management. An AUP is not required by a regulatory body but would be an election of plan management to help improve the plan and identify potential issues.

Why do I need one?

Employee benefit plans such as 401(k) and 403(b) plans are required to follow numerous rigid plan provisions. Plans are also subject to various Internal Revenue Service (IRS) and Department of Labor (DOL) regulations. These provisions and regulations are established to protect the rights and benefits of the planโ€™s participants.

Plan sponsors and administrators have a fiduciary responsibility to protect the participantโ€™s benefits. If a plan is not being operated appropriately, the planโ€™s participants may be negatively impacted which could cause the plan to be susceptible to unnecessary corrections made by the plan sponsor, fines, and/or penalties for non-compliance.

AUP engagements over employee benefit plans are designed to help uncover common plan failures. An AUP engagement can better ensure plan participantsโ€™ assets are being administered appropriately, participants are treated properly, and potential current plan issues are identified and resolved before becoming an even greater problem.

How can KT help?

Whether the plan has been in place for decades or just getting started; whether the plan has suspected issues or itโ€™s simply time to do an annual checkup; whether you have 5 employees or 100 employees, we can help make sure the plan is operating effectively.

Our team of specialized employee benefit plan professionals have the experience and training to help take care of your employee benefit plan needs. We work hand-in-hand with your employee benefit plan administrators to make sure you receive timely, dependable, and constructive guidance to help improve your plan processes and procedures.

What does an AUP engagement entail?

An AUP engagement requests us to test a selected number of plan participants, their transactions during a given period (such as during a specific plan year) and verify the participants contributions were done in accordance with the plan provisions and IRS/DOL regulations. This would likely focus on the testing of participant eligibility, compensation, and annual employee and employer deferrals. However, the testing can also include the testing of other types of transactions such as distributions, loans, and expenses. The great part of AUP engagements is that the procedures can be tailored to you and your plan needs.

Contact us Today!

If you are interested in learning more about having an AUP engagement performed for your benefit plan, or would like to know more details, please contact me, Austin.

June 17, 2024

Exploring Employee Benefit Plans

Part 1: Eligible Compensation

Part 2: De Minimis Balances of Terminated Employees

Part 3: Maintaining Documentation

Part 4: Timely Remittance

Part 5: Long-Term Part-Time Employees

Part 6: Secure Act 2.0 Changes

Of Note:

The 401(k) 2024 IRS contribution limits for employees is $22,500, with a $7,500 catch-up contribution if over the age of 50.

Secure Act 2.0 Changes

Mark your calendars! Secure Act 2.0 amendments must be made by the last day of the plan year beginning on/after January 1, 2025, or January 1, 2027, for governmental plans.

Required Minimum Distributions

Beginning Jan 1, 2023 โ€“ the age requirement increases to 73.

Beginning Jan 1, 2023 – the age requirement increases to 75.

Additionally, the penalty decreases from 50% to 25% for failing to take the required minimum distributions, effective for taxable years beginning after December 29, 2022.

Catch-up Contributions

For years beginning after December 31, 2023: Catch-up Contributions must be made on a Roth basis for employees with compensation greater than $145,000.

For years beginning after December 31, 2024: for employees ages 60-63 the limit for catch-up contributions increases to $10,000 or 150% of the regular catch-up amounts for 2024.

For more on how KT can help your organization’s Employee Benefit Plan

April 2, 2024