SMB Nation Blog

SMB Nation has been serving the Bainbridge Island area since 2001, providing IT Support such as technical helpdesk support, computer support, and consulting to small and medium-sized businesses.

Year-End Strategies For You and Your Clients

By Bob Vogel, B2 Marketing

bob vogel augustThere are some basic things that both you and your clients can do that could have significant advantages for both of you.

For your larger clients that have IT budgets that they must “use or lose” this is a great time to help them use it. You know their environments, and what would be a really good asset for them to acquire now, while you have their attention and they have the money.

For your smaller clients that are doing well, they might be in a position where they will want to accelerate their spending in order to reduce their taxable profits this year. Here are two ways you can help them out:

First, as in the case with the larger clients, having them purchase some assets that you know they are going to need is a good way for the smaller client to bump up their expenses this year. As long as the individual items are under a certain limit they don’t need to be capitalized (have your client’s accountant give them the specific guidance because the rules do vary).

Another way to help your clients accelerate some of their expenses to reduce their profits is by pre-paying some of your service fees. Again, some of this depends on the client’s accounting system and some depends on what you and your clients actually report to the government and how you report it. As long as you are both “on the same page,” nobody will complain. Again, you’ll want to talk to the client’s accountant as to the proper way to characterize the pre-payment on their books to make it legitimately deductible. But just remember though, if your client reports the pre-payment as an expense, you’re probably going to need to record it as income… and maybe in this year. So, if you are already swimming in profits, what’s good for your client might be bad for you.

If you are in that boat, then the solution for you would be to accelerate some of your own expenses. One good way to do that is to go ahead and purchase products that you pay for but don’t need to necessarily capitalize. A good candidate for this is Network Detective, the leading IT assessment tool for IT service providers and MSPs. This is because they sell their products through pre-paid annual subscriptions for unlimited use.

That means if you subscribe to one or more Network Detective modules before the end of 2014, you can book the expense this calendar year, but have unlimited use of the product for all of 2015.

For more information, visit the RapidFire Tools web site at

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Tuesday, 18 February 2020

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