no. 1the $20,000 horror!
HOW A $500 EXPENSE BECAME A
THE TALE OF A START-UP CEO WHO MADEA TERRIBLE MISTAKE!
To conserve funds, he had his office manager prepare his customer billing. He could have paid Engine Room an EXTRA 500 BUCKS to do it -- BUT HE DIDN'T.
Then his office manager MISCLASSIFIED taxable items as non-taxable. And didn't keep data to support the non-taxable claim...
The phone rings in the DEAD OF NIGHT...it's the Department of Tax and Fee Administration...they're being AUDITED!
Now the CEO has to pay sales tax experts and Engine Room to CLEAN UP THE MESS. Engine Room recalculates the correct sales tax. ASSEMBLES supporting documentation. And works with the tax experts to present the company's position to the auditors.
The start-up gets hit with GRUESOME PENALTIES. They pay fees to the tax experts and Engine Room. And they owe the original unpaid tax!
TOTAL DAMAGE -- $20,000!
Don't let this happen to you -- HIRE ENGINE ROOM TODAY! >
no. 2the $7,000 nightmare!
i thought managing a peo and a 401k myself would be a snap. my mistake plunged me into...
the shocking tale of a start-up that did its own payroll!
A life science start-up has a brainstorm -- “Let’s manage our own payroll and 401k, instead of having Engine Room do it!”
Madness ensues! The start-up offers employees a 401k through a firm not affiliated with their PEO! They neglect to perform timely transfers of 401k withholdings! They improperly record the amounts withheld in the 401k portal!
Issues are found when reviewing the Form 5500 info. Engine Room is called in to do damage control. They correct the 401k withholding payments and Form 5500 supporting information. Then they compute penalties. Total added cost -- $7,000!
This stuff really happens. Don’t let it happen to you!
no. 3the incredible shrinking ownership stake!
He economized like a madman to get his start-up off the ground. But his frugality created the...
read about the entrepreneur who saved too much!
To develop my brilliant idea, I got friends and family to stake me. To squeeze every buck, I got engineers and attorneys on board with deferred pay and stock. I even hired my brother-in-law to do my accounting -- a move that haunts me still.
A VC decides to invest. Turns out my in-law kept our books on a cash basis, not accrual -- we’re sitting on 500K in unrecorded liabilities! We’ve got unrecorded stock options, too!
The VC invests an extra 500K -- and we give away a chunk of equity! Then they say, ”Hire Engine Room. They’ll create accrual-based statements, maintain your cap table, and help with cash planning.“
Turns out their fees are scalable! I could’ve afforded them all along -- to help run my start-up better and hang on to more equity. Don’t be a penny-pinching cheapskate like I was...