Summer is time to take care of business

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If the summer is a slow time for your business, it's probably a good time to take care of some of the chores you've been putting off for a while.

With customers away or having some down time themselves, you'll have more freedom to evaluate your company's finances, think about formulating some employment policies and have some maintenance work done around the office.

Perhaps the top item on your agenda should be a financial checkup for your business.

"It's a good time to, halfway through the year, do a tax projection," said Gordon Spoor, a certified public accountant with Spoor, Doyle & Associates in St. Petersburg, Fla. He said business owners should ask, "Are their estimated payments sufficient -- not just to avoid tax penalties, but more important, are they overestimating?"

Tax planning isn't only about how much you'll owe the government; it's part of your overall business planning. So this is also the time when owners should be thinking about the capital spending that they might want to do between now and the end of the year -- and maybe in early 2005.

"They want to do cash-flow budgeting and try to time their purchases," Mr. Spoor said.

The timing has to do with taking advantage of the Section 179 deduction, which allows businesses to deduct upfront the cost of equipment bought and put into service during the calendar year. The maximum deduction for 2004 is $100,000, the same as last year.

Mr. Spoor said owners need to estimate how much they're likely to spend on equipment this year. If they're likely to go over the maximum, they might want to consider putting off some purchases until next year. Or, they might want to think about depreciating the amount that is above the $100,000 limit.

Either way, it calls for some financial projections now.

Mr. Spoor also noted that many companies are doing better now that the economy is stronger. Those owners with improved cash flows might want to consider setting up a retirement plan for themselves and their employees.