Bench shuts down, leaving thousands of businesses without access to accounting and tax docs

However, companies that may undergo a transaction must still complete a section 280G analysis to support the required actions and disclosures. From What is bookkeeping an M&A perspective, it is important for buyers to review the R&D expenses of potential targets and understand the tax implications of the new section 174 rules, which will require ultimately capitalizing these expenses going forward. Technology companies considering a sale should understand the current tax structure of the business and model the specific tax consequences in the event of a transaction. This will help identify optimal structures that could maximize the seller’s post-tax cash proceeds. Not only does getting all of this right avoid such issues and help with the audit process, but it can also defer the point at which corporation tax is paid on the cash received. Sales are typically taxed when they are recognised in the P&L, so in some scenarios, getting this right can provide a positive cash flow benefit.

• From an M&A perspective, it is important for buyers to review the R&D expenses of potential targets and understand the tax implications of the new section 174 rules, which will require ultimately capitalizing these expenses going forward.
• As complexities increase, innovation alone won’t be enough to capitalize on growth.
• Picture a spaceship navigating through the vast universe of technology, where every dial and control must work perfectly to keep it flying smoothly.
• View our guide for a list of relevant due dates that startup and emerging growth companies should be aware of.
• Besides its AP automation software, Tipalti offers employee expense automation software (Expenses) that works in combination with its AP automation software.

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Precise financial records ensure compliance and help build investor trust and allow companies to make informed decisions about growth, hiring, and future investments. In the fast-paced tech industry, accurate accounting provides a strategic foundation for scalability and agility, enabling firms to adjust to changing market demands without compromising financial stability. Tracking expenses for research and development helps a company manage its money better and can lead to better rates from venture capital firms. These costs show up differently in accounts payable and are essential for gaap standards. Accountants must stay updated on new regulations, technologies, and financial models to maintain accuracy and reliability in financial reporting. Exploring resources such as webinars, accounting certifications, and industry reports will help you stay informed about the latest developments in tech finance.

• For companies operating globally, understanding international tax laws is essential to avoid double taxation and ensure compliance.
• That’s why our CFO Advisory service is designed to be more than just financial guidance – it’s a partnership to propel your business toward its unique goals.
• With over a dozen locations across America, we support hundreds of businesses and startup founders with outsourced accounting operations.
• Plus, with honest and transparent communication, we ensure you stay actively involved in each step of the process.
• This article explores the essential aspects of accounting for technology companies, including common accounting practices, financial reporting requirements, and tax considerations.
• The clearest targets for productivity gains are the elements of tax preparation workflows that take more time than they should.

Experienced Professionals

Few firms have implemented technology that automates work paper organization and data entry into tax software, compiling workpapers into a Legal E-Billing standardized index for rapid review. That’s all time they could better spend on higher-value work such as tax planning. Using technology like TaxCaddy to streamline the gather phase and integrate it fully with the preparation phase can help reduce resource requirements, improve accuracy, and produce a better client experience. Your company withholds FICA taxes (along with their federal income taxes) from your employees’ paychecks.

Navigating Tech Company Mergers: Essential Valuation Techniques and Considerations

• If your technology company is considering a transaction or an initial public offering, the tax implications of the sale should not be overlooked.
• In June and July 2024, Arizent — the parent company of Accounting Today — conducted a survey on behalf of Thomson Reuters among accounting firm employees directly involved with tax service strategy or work.
• On the other hand, Jaz Philippines is the local business unit of Singapore-based accounting software company Jaz.
• Technology companies can capitalize costs related to software development and enhancements that significantly improve the software’s functionality or extend its useful life.
• The acquisition supports Thomson Reuters vision for tax and accounting professionals, advancing efficiency in workflows for tax preparers and taxpayers across the U.S.
• Significant growth along with the continuous innovation by technology entities introduces complex issues for accounting and financial reporting professionals.

The startup was backed by investors, including IT firm Sage, Contour Venture Partners, and Altos Ventures. “As you saw on the website, we’re moving fast and are available to support many of Bench’s customers with their bookkeeping needs,” he told TechCrunch. Wadowski did not respond directly to a question from TechCrunch about details of any possible agreement or other business relationship it had with Bench prior to the shutdown.

• The platform also allows Deloitte to embed functional leading practices and conduct real-time checks, reducing data discovery time from weeks to minutes, the firm said.
• Navigating the inventory accounting guidance is key for many technology entities, particularly those that sell hardware and components.
• Spend more time running the daily operations of your software development business while we handle your accounting.
• With Fusion CPA’s expertise, you can look forward to not just growing your business, but doing so in a financially smart and tax-efficient manner.
• Haynie & Company has been working closely with technology companies at almost every stage of growth — from startups to mergers and acquisitions and beyond.
• According to the Financial Accounting Standards Board (FASB) ASC 606, revenue must be recognized when control of goods or services is transferred to customers.

Technology Services Helpdesk

These are sometimes assessed in large urban areas (think New York City, San Francisco, etc.). This is because your company’s industry, years in business and unemployment history can all determine the percentage used to calculate the amount due. Alternatively, with asset transactions, these costs are capitalized and generally amortized over 15 years on a straight-line basis. In contrast, costs that do not facilitate a transaction can generally be deducted as incurred or be amortized over 15 years. To that end, we’ve compiled some important tax-related factors that all technology organizations need to consider ahead of a potential transaction. Get connected with small business consultants and specialized CPAs for tech startups.

BDO Technology CFO Outlook Survey

The evolution of the technology industry has introduced a variety of complex challenges for accounting and financial reporting professionals. Deloitte’s Technology Industry Accounting Guide can help accounting and reporting teams navigate the most accounting for tech companies pressing issues they face. Tech companies, especially those offering software-as-a-service (SaaS) or subscription-based services, face tricky situations when figuring out when to count money as earned. They deal with deferred revenue, where a company may receive payment for a long-term contract but can’t count it all as income right away.