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AI And The Future Of Accounting

Posted on by Michelle Antico

Artificial intelligence has transitioned from an intriguing possibility to a transformative reality in accounting.

Recently, our CEO shared insights on how AI is already reshaping our profession, moving from intriguing possibility to everyday reality.

Here’s a look at how these advancements are changing our profession and client services. We will also explore how we navigate this journey. Read the full blog from CEO Paul Peterson here.

  • AI is Happening Now: It’s not just the future; AI is actively enhancing accuracy and efficiency in accounting processes today.
  • Better Accuracy and Efficiency: AI algorithms quickly analyze large financial datasets, greatly reducing errors and automating routine tasks. This means our accountants have more time to focus on strategic, advisory roles.
  • Advanced Financial Insights: Tools like Basis AI enable predictive analytics by spotting trends and patterns, helping our team offer proactive, strategic recommendations to clients.
  • Changing Roles in Accounting: Our accountants are shifting away from purely detail-oriented tasks to become strategic advisors, leveraging powerful AI-driven insights to better serve our clients.
  • People-First Integration: We understand adopting AI successfully is not just about technology. It’s also about people. At Wiss, we focus on clear communication, engaging our employees, and providing thorough training so everyone feels confident and ready for the change.
  • Enhanced Client Experiences: AI helps us deliver more personalized solutions, automated, accurate reporting, and advanced forecasting to help our clients proactively manage their financial future.
  • Looking Ahead: Exciting developments like real-time auditing and sophisticated data analytics will further elevate how we support our clients. We’re also inspired by emerging tech startups, setting new standards in efficiency and value.
  • Industry Evolution: Our profession is steadily moving toward more automation of routine tasks, real-time data-driven decisions, and strategic technology applications to deliver deeper insights.

At Wiss, we’re committed to blending cutting-edge technology with our team’s invaluable human expertise. This powerful combination is key to the future success and growth of the accounting industry.

Generative AI in Finance: How Wiss Supports CFOs

Posted on by Kristine Sinisi

In today’s rapidly evolving financial landscape, Chief Financial Officers (CFOs) are redefining their roles, transitioning from financial stewards to strategic visionaries. The need for CFOs to adopt long-term planning and embrace transformative technologies like generative AI has never been more critical.

At Wiss, we’re at the forefront of helping CFOs harness the power of generative AI in finance, equipping them with cutting-edge tools to drive innovation and success.

A Shift Toward Long-Term Strategic Planning

Gone are the days when CFOs could focus solely on short-term profitability. The modern CFO must now prioritize resource allocation, anticipate global market complexities, and foster sustainable growth.

Wiss supports this transition by empowering our clients with advanced technology solutions and expert guidance to create strategic, forward-thinking financial roadmaps.

How Generative AI Is Transforming Finance

Generative AI in finance has moved from a futuristic concept to an indispensable tool, reshaping how finance functions operate. This technology is about more than automating routine tasks—it unlocks actionable insights and enables CFOs to make data-driven, strategic decisions.

At Wiss, we’ve embraced Basis AI, a leading generative AI platform, to revolutionize our clients’ financial reporting and month-end processes. Here’s how it works:

  • Seamless Integration: The Wiss team provides Basis access to clients’ statements and files. Basis then executes workflows end-to-end, allowing our team to review and approve every step.
  • Full Transparency: Basis AI communicates areas of low confidence, enabling the Wiss team to step in and guide the platform effectively.
  • Efficiency Gains: Basis automatically generates files tailored to the client’s ledger, accounting for activity and adjustments, while ensuring accuracy and compliance.

This partnership has yielded impressive results. Our clients experience a 30% reduction in time spent on core monthly workflows, enabling quicker book closures.

For instance, with Basis AI in place, our tax team can now begin returns three months earlier, delivering a significant advantage to our clients. More importantly, this streamlined process allows Wiss to support clients’ growth with agility and precision.

Benefits of Digital Transformation for CFOs

Digital transformation offers benefits that extend far beyond operational efficiency. For CFOs, adopting digital tools like generative AI in finance means:

  • Greater Transparency: Real-time data sharing fosters collaboration and informed decision-making across departments.
  • Improved Accuracy: Automation reduces errors in financial reporting and compliance tasks.
  • Strategic Insight: Enhanced analytics drive better scenario planning and risk mitigation.

At Wiss, we guide clients through their digital transformation journey, helping them achieve these outcomes while staying focused on long-term growth.

What’s Next: Trends in Finance and Technology

Looking to the future, several trends will shape how CFOs operate:

  • AI and Machine Learning: These technologies will continue to evolve, offering even more sophisticated data analysis capabilities.
  • Cybersecurity: As digital finance becomes more prevalent, robust security measures will be critical to safeguarding sensitive data.
  • Real-Time Insights: Integrated platforms will drive faster and more accurate strategic decision-making.

Generative AI in finance is set to remain a key driver of these advancements. Wiss is committed to staying ahead of these trends, ensuring our clients remain competitive and secure in an increasingly digital world.

Balancing Today’s Needs with Tomorrow’s Opportunities

The road to financial success requires balancing immediate priorities with long-term goals. By leveraging generative AI and fostering a culture of innovation, CFOs can turn challenges into opportunities, driving sustainable growth for their organizations.

At Wiss, we’re proud to partner with CFOs on this journey. Through tailored solutions like Basis AI and our deep expertise, we enable finance leaders to navigate uncertainty with confidence and build a foundation for enduring success.

Contact us today to learn more about how generative AI in finance and our specialized solutions can empower your organization to achieve its strategic goals.

The Future of Accounting: AI and Emerging Technologies

Posted on by Michelle Antico

As the CEO of Wiss, a top 100 accounting firm, people often ask me about the future of accounting. They want to know how AI and new technologies will affect our industry. Artificial Intelligence has transitioned from an intriguing possibility to a transformative reality in accounting.

Here’s a look at how these advancements are changing our profession and client services. We will also explore how we navigate this journey.

Advantages of AI in Accounting

AI offers significant benefits, including enhanced accuracy, greater efficiency, and deeper insights through predictive analytics. Tools such as Basis AI empower accountants by:

  • Automating repetitive tasks to streamline workflows
  • Minimizing human error, ensuring greater accuracy
  • Freeing up professionals to focus on strategic consulting
  • Enhancing the ability to strengthen client relationships

Change Management and Employee Training

Integrating AI or any new software isn’t just a technological shift—it’s primarily about people. Effective change management is crucial, and it requires transparent communication, employee involvement, and a clearly articulated vision for the future of accounting.

Building a culture of collaboration and trust helps team members feel supported and valued throughout the transition. When employees understand the vision and feel empowered to contribute, the organization is far more likely to experience a seamless and successful technology integration.

At Wiss, we support employees throughout this transformation by providing comprehensive training and reskilling opportunities, which enable smooth adaptation to new systems and client expectations.

Translating Technology into Enhanced Client Services

Leveraging advanced technology allows us to deliver more timely, insightful, and proactive services to our clients. We help our clients adopt and benefit from these technological advancements by:

  • Offering customized solutions leveraging AI-powered tools for real-time insights
  • Implementing automated financial reporting to improve decision-making speed and accuracy
  • Streamlining financial planning and forecasting processes to provide actionable insights and strategic advice

Areas for Future Improvement and Innovation

There remain key areas ripe for improvement and disruption, such as real-time auditing, advanced data analytics for forecasting, and comprehensive financial solutions. Emerging tech startups are innovating faster than traditional companies. They are changing the accounting field and setting new standards for efficiency and client value.

The Future of Accounting: Industry Trends

The accounting industry is clearly moving toward increased automation, real-time analytics, and technology-driven strategic insights. The firms best positioned to thrive will proactively embrace these changes and empower their teams and clients with the necessary skills and mindsets to fully leverage these powerful technologies.

I’m interested in hearing your perspective and understanding your thoughts on this matter. What technological developments do you believe will have the most significant impact on the accounting profession and our clients in the next five years?

Connect with our experts for further information.

ERC Update: IRS Releases New Guidance

Posted on by Michelle Antico

The IRS has recently updated its Employee Retention Credit (ERC) guidance, specifically addressing how the ERC update impacts your tax return. Many businesses have faced challenges adjusting their wage expenses, and this ERC update clarifies how to handle ERC refunds, disallowed claims, and tax return amendments.

How the ERC Update Impacts Your Income Tax Return

Under the original ERC guidance, businesses that claimed the credit were required to adjust their wage expense on their Income Tax Return for the year the wages were paid. This adjustment reduced the wage expense by the amount of the ERC claimed, effectively increasing taxable income.

Under the ERC update, the IRS offers various options for claiming the ERC on your Income Tax Return if any of the situations below apply to you.

  1. You did not reduce your wage expense on your original Income Tax Return (related to that ERC period) and your claim was allowed.
  2. You reduced your wage expense on your Income Tax Return, but your claim was disallowed.

You Received an ERC Refund but Didn’t Amend Your Tax Return

If you received an ERC refund but did not reduce your wage expense on your Income Tax Return, you can report the ERC as gross income in the year you received the payment. This allows you to correct the issue without amending your return.

Example

Your business claimed ERC for the tax year 2021, but you did not amend the 2021 tax return. You received your 2021 Refund in 2024. You then report gross income on your 2024 Tax Return for the ERC claim.

Please reference Section Income Tax & ERC, Q2 on the FAQ website.

Adjust Your Tax Return if Your ERC Claim Was Denied

You can take the following steps to adjust for your denied ERC Claim. See the options listed below:

  1. You can increase your wage expense on your tax return by the same amount that it was reduced when you made your original claim. You will need to report the increase in the wage expense in the year the disallowance was finalized.
  2. You may be able to file an amended return, AAR, or protective claim for the refund to increase the wage expense for the year in which ERC was claimed.  Please be aware that there is a limited amount of time to file amended returns

Example

Your business claimed ERC for the tax year 2021 and reduced the wage expense on the 2021 Income Tax Return. In 2024, the IRS sent a denial letter you do not challenge. You do not need to go back and amend the 2021 Income Tax Return. Instead, you can increase the wage expense on the 2024 Income Tax Return.

Please reference Section Income Tax & ERC, Q3 on the FAQ website.

Takeaways on the ERC Update

Did you claim ERC during 2020 & 2021? The IRS expects you to adjust your wage expense on your Income Tax Return when claiming ERC.

If you didn’t adjust your tax return, reporting the ERC as income in the year received may be an alternative solution.

If your ERC claim was denied, you may be able to restore your wage expense deduction on a future return.

Staying compliant with these rules helps avoid penalties and ensures accurate tax filings. If you have any questions about the ERC update, please contact our expert, Taylor Van Slyck, for further assistance.

Understanding Inventory Costs

Posted on by Michelle Antico

For companies in the manufacturing and distribution industries, inventory plays a pivotal role in working capital, directly impacting cash flow and profitability. Understanding and effectively managing inventory costs is key to evaluating past performance, forecasting future results, and supporting strategic decision-making. 

What Are Inventory Costs?   

Inventory costs refer to the total costs incurred to acquire, produce, and prepare goods for sale. These include the purchase of raw materials, direct labor, and allocated overhead necessary to bring inventory to its current condition and location.

In accounting, inventory is categorized into raw materials, work in progress, and finished goods available for sale. When a product is sold, inventory is reduced, and the expense is recorded as cost of goods sold (COGS).

What is Included in Inventory Costs?

Materials   

  • Includes the purchase price of raw materials from vendors and freight costs incurred to bring these materials to the warehouse or manufacturing plant.   
  • Freight costs to ship products to customers are excluded from inventory and classified as selling expenses, though they remain crucial when analyzing product profitability.

Production Costs   

  • Covers direct labor associated with manufacturing or packaging goods and overhead expenses.   
  • Overhead can include rent, utilities, and depreciation related to the production facility. 

Abnormal Costs   

  • Certain expenditures are included in COGS but not considered inventory costs to keep abnormal amounts off the balance sheet, as these lack future value.   
  • Examples often include abnormal freight, handling costs, and spoilage not part of regular production or management processes.   

To maximize profitability, businesses should conduct a thorough analysis of product and customer profitability. Here are actionable ways to reduce inventory spend and enhance margins:

How to Analyze Inventory Costs   

Understanding the components is the first step toward making informed decisions to influence these costs. Surprisingly, pricing decisions are often made without fully understanding production costs, which can result in selling at a loss or targeting the wrong products or customers.  

How to Analyze Inventory Levels   

Two essential metrics for evaluating inventory levels are inventory turnover and days of inventory on hand (DOH): 

  • Inventory Turnover Rate = Cost of Goods Sold (COGS) / Average Inventory Value   
  • Days of Inventory on Hand (DOH) = Inventory / Average Daily COGS 

These metrics provide insight into whether you are overstocked or risking stockouts. Optimal levels depend on factors like industry norms, customer behavior, expiration risks, warehousing costs, and competitive pressures. Striking the right balance is crucial, as excessive inventory increases carrying costs, while insufficient inventory can lead to lost sales and diminished customer satisfaction. 

Driving Success Through Strategic Inventory Costs Management  

A comprehensive understanding of inventory costs is essential for manufacturing and distribution businesses. It goes beyond bookkeeping, impacting your ability to make informed decisions that strengthen profitability and operational efficiency.  

Mastering inventory costs is a strategic advantage for businesses looking to stay competitive. Regularly reviewing and optimizing inventory management practices can improve your bottom line and ensure sustainable, long-term success.  

By factoring this into strategic planning and day-to-day operations, companies can pave the way for stronger financial performance and a more resilient future. If you need help analyzing, our experts at Wiss are here to help. 

SECURE Act Final Regulations and Planning Considerations

Posted on by Michelle Antico

Estate planning is often considered daunting, but the SECURE Act Final Regulations for 2025 provide much-needed guidance for individuals and families. These changes bring clarity while presenting new opportunities and challenges for managing retirement accounts. By understanding these regulations and leveraging strategic planning, you can better secure your financial future and maximize the benefits available to you.

This blog explores the SECURE Act Final Regulations in detail, focusing on the Required Beginning Date (RBD), changes to beneficiary designations, and key planning opportunities to help individuals and families better manage their legacies. Here’s what you need to know.

SECURE Act Final Regulations Offer Guidance

With the SECURE Act Final Regulations officially effective as of January 1, 2025, the landscape of retirement and estate planning has shifted significantly. These changes provide much-needed rules for required minimum distributions (RMDs) while establishing deadlines and new beneficiary categories for inherited retirement plans.

Regulations Went Into Effect on January 1, 2025

  • The final rules outline specific timelines and processes for managing retirement accounts after the account holder’s death. These updates aim to make compliance clearer for all involved while also placing a renewed focus on the timing of distributions.

Death Before or After the Required Beginning Date (RBD) Matters More Than Ever.

  • The Required Beginning Date the date at which retirement account owners must start taking RMDs—has become a critical factor in determining how and when beneficiaries can take distributions. The distinction between dying before and after the RBD now has major implications for tax and estate planning. For Example:
    1. If an account owner dies before reaching the RBD, their adult children have more distribution flexibility and can choose to take distributions over a 10-year period without being subject to annual required minimum distributions.
    2. If an account owner dies after the RBD, their adult children must continue taking the RMDs based on the owner’s schedule on a yearly basis, and the remaining balance in the account must be fully depleted by the end of the 10 year.

Post-12/31/19 Deaths Face New SECURE Act Rules

  • For those who passed away after December 31, 2019, the SECURE Act requires most beneficiaries to withdraw inherited retirement accounts within 10 years. Exceptions apply for certain categories of beneficiaries, but the days of extended tax deferral through stretch IRAs are largely over.

Grandfathered Stretch Rules for Pre-12/31/19 Deaths

  • If a participant passed away before December 31, 2019, their beneficiaries were grandfathered into the old stretch-IRA rules. This means they can continue taking distributions over their life expectancy, spreading out the tax burden.

RBD Becomes a Moving Target

Determining the RBD—and, by extension, the distribution timeline—is more complex than it seems.

Changes to RMDs

  • The age for RMDs has increased to 73 in 2025 and will rise further to 75 by 2033.

Age Isn’t the Only Factor

  • While age plays a significant role, it’s not the sole determinant for the RBD. The type of retirement account—whether an individual retirement account (IRA), 401(k), or Roth IRA—can have its own applicable RBD.

Different RBDs for Different Accounts

  • For traditional IRAs, the RBD is generally tied to the account holder’s age. However, employer-provided plans (like 401(k)s) may have their own RBDs depending on whether the account owner is still working.
  • Roth IRAs, on the other hand, are exempt from lifetime RMDs, which further differentiates them from other accounts. Inherited Roth IRAs follow the same RMD rules as traditional IRAs. However, withdrawals from an Inherited Roth IRA are typically tax free if the Roth IRA account has been open for at least five years.

These varying timelines mean that individuals and families must carefully assess each account to avoid penalties and maximize tax efficiency.

Beneficiary Type Matters

The SECURE Act introduced new categories of beneficiaries, each with different requirements for how and when distributions must occur. Understanding these distinctions is essential for proper planning.

Eligible Designated Beneficiaries (EDBs)

  • These beneficiaries receive the greatest flexibility. EDBs include the account holder’s surviving spouse, minor children (up to age 21), disabled or chronically ill individuals, and beneficiaries who are less than 10 years younger than the account holder. For EDBs, annual RMDs are still allowed over their life expectancy.

Individuals Who Don’t Qualify as EDBs

  • Regular designated beneficiaries, such as adult children, are subject to the 10-year rule. They must fully withdraw the account by the end of the 10th year following the account holder’s death, without the option for extended annual distributions.

Non-Designated Beneficiaries

  • If the account lacks a designated beneficiary (for example, if the account is left to an estate), the rules are even stricter. These beneficiaries must withdraw the entire account within 5 years if the account holder died before their RBD or over a ghost life expectancy (the deceased IRA owner’s remaining single life expectancy) if the account holder died after their RBD.

Trusts and Retirement Accounts

  • Special considerations arise when trusts are named as beneficiaries. Trusts may now qualify as Eligible Beneficiaries under more specific circumstances but are often subject to the same 10-year distribution rule.
    1. See-Through trusts can be either conduit trusts or accumulation trusts. These trusts can still be used to stretch distributions over the life expectancy of the oldest beneficiary if they qualify as Eligible Designated Beneficiaries.
    2. Conduit trusts ensure all distributions pass directly to beneficiaries, keeping the 10-year rule in mind. This can be beneficial for ensuring the trust complies with the RMD rules while providing the beneficiaries with immediate access to the funds, avoids the risk of beneficiaries taking a lump-sum distribution, and provides a level of control over how the assets are managed and distributed which is especially beneficial if the beneficiaries are minors or have special needs.
    3. Accumulation trusts allow the trustee to retain distributions within the trust. This can provide more control over the timing and amount of distributions to beneficiaries which can be useful for tax planning, preserving wealth, protecting assets from creditors, and addresses concerns about the ability of a beneficiary to manage a significant sum of money.

Potential Penalties under the SECURE Act 2.0

Under the SECURE Act 2.0, there have been significant changes to the penalties related to Required Minimum Distribution.

Reduced Penalty for Missing RMDs

  • The penalty for failing to take an RMD has been reduced from 50% to 25% of the RMD amount not taken.

Further Reduction for Timely Correction

  • If the missed RMD is corrected in a timely manner the penalty can be further reduced to 10%. To qualify for this reduction, the account owner must withdrawal the missed RMD amount and submit a corrected tax return within two years.

Planning Opportunities with the SECURE Act Final Regulations

Despite its challenges, the Final SECURE Act Regulations open the door to several key planning opportunities that can help maximize tax savings and enhance your legacy.

Qualified Charitable Distributions (QCD)

  • Taxpayers age 70½ or older can make up to $108,000 in charitable distributions directly from their IRAs in 2025. These distributions count toward RMDs and can help reduce taxable income while supporting charitable causes.

Expanded Definition of “Child” for Minor Protections

  • The updated definition of “child” now includes minor stepchildren and certain foster children. This expanded coverage ensures broader protections for young beneficiaries, allowing distributions to be stretched until the youngest child reaches age 21, followed by the 10-year rule.

Charity as Remainder Beneficiary of Special Needs Trusts

  • The regulations allow taxpayers to name a charity as the remainder beneficiary of a special needs trust. This strategy combines supporting loved ones with giving back, while also maximizing tax benefits.

Delayed Deadlines for Trusts with Multiple Minor Children

  • If a retirement account is left in trust for multiple minor children, the distribution timeline can be delayed until 10 years after the youngest child reaches age 21. This provides additional flexibility for managing the inheritance while addressing the unique needs of each beneficiary.

Trusts can be used to manage the tax impact of distributions

  • Trustees can carefully plan the timing and amount of distributions to potentially minimize the overall tax burden on the trust and its beneficiaries.

FAQs on SECURE Act

1. What is the SECURE Act in simple terms?

The SECURE Act (Setting Every Community Up for Retirement Enhancement) is a U.S. law designed to help more people save for retirement and make retirement plans easier to manage. It changed when people must start taking money from retirement accounts (RMDs), how inherited accounts are handled, and expanded access to retirement plans for workers and small businesses.

2. What are the new rules for the SECURE Act?

Key updates from the SECURE Act and SECURE Act 2.0 include:

  • Increasing the Required Minimum Distribution (RMD) age to 73 in 2025 and 75 by 2033
  • Requiring most non-spouse beneficiaries to withdraw inherited retirement accounts within 10 years
  • Reducing the penalty for missing an RMD from 50% to 25% (or 10% if corrected quickly)
  • Allowing Qualified Charitable Distributions (QCDs) of up to $108,000 from IRAs starting in 2025
  • Offering small businesses new incentives to start retirement plans

3. What are the requirements for SECURE Act 2.0 in 2025?

In 2025, SECURE Act 2.0 requires:

  • Catch-up contributions for older workers to be made as Roth contributions if they earn $145,000+
  • New 401(k) and 403(b) plans to automatically enroll employees (unless they opt out)
  • RMD age increases to 73 for those turning 73 that year
  • Roth-style 401(k)s to no longer require RMDs
  • More flexibility and delay options for RMDs from inherited accounts

4. What is the 10-year rule under the SECURE Act?

The 10-year rule means most beneficiaries who inherit an IRA or 401(k) after 2019 must withdraw all the money within 10 years of the original owner’s death.

  • If the original account holder died before their RMD age, there are no annual minimums, just full withdrawal by Year 10.
  • If they died after their RMD began, annual withdrawals are required during the 10 years.Certain beneficiaries—like surviving spouses or minor children—may qualify for exceptions and use life expectancy instead.

Next Steps with the SECURE Act Final Regulations

The SECURE Act Final Regulations may seem complex, but with the right planning, they offer significant opportunities to optimize retirement and estate planning strategies. Whether you’re considering QCDs, redefining beneficiary designations, or navigating the nuances of RBDs, understanding the updated regulations is the key to making informed decisions.

By aligning your financial goals with these new rules, you can ensure a more secure future for both you and your loved ones. Our experienced professionals at Wiss are here to help. Reach out today for personalized advice and to explore the strategies that work best for your specific needs. A well-thought-out estate plan is one of the greatest gifts you can offer to the next generation.

REIT Investment Strategies: What You Should Know

Posted on by Michelle Antico

Real estate is one of the most reliable forms of investment, offering unique opportunities for wealth creation, diversification, and long-term stability.

Traditionally, real estate ownership was accessible primarily through joint ventures in partnerships or LLCs, often leveraged by family-owned businesses or limited partnerships with a sponsor. However, Real Estate Investment Trusts (REITs) have revolutionized the industry, paving the way for individual investors to access institutional-grade real estate opportunities. 

This blog explores advantages of investing in REITs, drawbacks, and operations. Whether you’re a seasoned investor, a small-business owner, or an ultra-wealthy individual, understanding REIT investment strategies is pivotal to navigating the evolving real estate landscape.  

What is a REIT?  

A Real Estate Investment Trust (REIT) is a company that gathers money from many investors. The company then uses this money to buy, manage, and run properties that earn a profit. These properties can include office buildings, shopping centers, apartment complexes, and industrial sites.

These companies operate as trusts. The law says they must return at least 90% of their taxable income to shareholders.  

Investors can own a small part of different real estate portfolios through REITs. They do this without having to manage the properties themselves. They democratize real estate ownership, making it accessible to a broader range of people and offering multiple investment pathways.  

For investors, REIT investment strategies provide the dual appeal of predictable income and potential appreciation, tax advantages, and flexibility.  

Five Types of REITs  

Investors should understand different REIT structures to better align with their financial goals.  

1. Equity REITs  

Equity REITs focus on the ownership and management of income-producing properties. Revenue is predominantly generated through rental payments. These are the most common REITs and typically include properties like office spaces, malls, hotels, and apartments.  

2. Mortgage REITs (mREITs)  

Mortgage REITs invest in real estate loans and earn income through interest payments. They play a critical role in financing real estate and providing capital to property owners and developers. However, they are more sensitive to interest rate fluctuations.  

3. Hybrid REITs  

Hybrid REITs are a mix of equity and mortgage REITs, allowing investors to diversify across both direct real estate ownership and real estate loans.  

4. Publicly Traded REITs  

Publicly traded REITs can be bought and sold on major stock exchanges, much like stocks. They offer high liquidity for investors who may want the flexibility to exit their positions quickly.  

5. Non-Traded REITs  

Non-traded REITs are not publicly traded but often appeal to investors seeking long-term holding periods and diversification. These REITs are less liquid but may offer higher potential returns.  

The Benefits of Owning Real Estate Through a REIT  

REITs provide specific advantages that other forms of real estate ownership cannot match. A clear, well-researched REIT strategy can maximize returns while minimizing risk. Without one, investors may overlook key considerations like tax implications, income stability, or sector performance. Here are some key benefits every investor should consider when exploring REIT investment opportunities.  

1. Predictable Cash Flow  

One of the most attractive aspects of REITs is their ability to provide a steady stream of income. By law, REITs are required to distribute at least 90% of their taxable income as dividends. Many REITs take it a step further, distributing 100% of their taxable income to shareholders.  

This means a reliable source of passive income for investors, making REITs appealing to retirees, business owners looking to diversify their income, and any investor seeking consistent returns.  

2. Liquidity  

Unlike direct real estate investment through partnership agreements or LLCs, which can be highly illiquid, publicly traded REITs offer liquidity. Investors have the flexibility to buy and sell shares on the stock market, making it easier to adapt their portfolios to changing financial needs.  

This liquidity factor makes REITs particularly attractive for small-business owners or real estate investors who want exposure to property markets without tying up significant capital for extended periods.  

3. Affordability  

Traditional real estate ownership often requires significant capital investment, which can be a barrier for many aspiring investors. However, REITs allow individuals and businesses to partake in real estate ownership with relatively lower initial costs. A single share in a publicly traded REIT may cost less than a single month’s rent, enabling small-scale investors to grow their wealth alongside institutional giants.  

4. Diversification  

REITs allow investors to access a broad portfolio of properties, effectively diversifying their holdings across different real estate market sectors. For example, a single REIT investment may include office buildings in major cities, suburban apartment complexes, and industrial warehouses. This built-in diversity minimizes risk and balances market fluctuations.  

5. Tax-Advantaged Structure  

REITs offer tax benefits. REIT dividends are usually taxed as ordinary income. However, the trusts do not pay corporate taxes if they follow strict rules.

The Tax Cuts and Jobs Act of 2017 added a Qualified Business Income (QBI) deduction. This allows investors to lower their taxable income by up to 20% of REIT dividends.  

Considerations of Operating as a REIT  

While owning a REIT offers numerous benefits, it’s not without challenges. Investors should carefully weigh these considerations before committing capital.  

1. Market Volatility  

Publicly traded REITs are subject to market fluctuations, just like other equities. While real estate is generally considered a stable and appreciating asset class, REIT values can be influenced by broader economic trends, interest rates, and investor sentiment.  

2. Higher Tax Rates on Dividends  

Unlike qualified corporate dividends that enjoy lower tax rates, REIT dividends are often taxed at higher rates. This tax structure can erode some gains if investors aren’t prepared to manage their tax liabilities effectively.  

3. Regulatory Complexity  

To maintain their tax-advantaged REIT status, trusts must adhere to stringent IRS regulations, including annual income and organizational tests. Failure to comply can result in significant penalties, additional taxes, or the loss of REIT status altogether.  

Navigating these complexities demands robust financial reporting, timely compliance monitoring, and tax strategy support.  

How to Maximize REIT Investments  

Investing in REITs requires strategy and discipline to align with your long-term financial goals. Here are three critical strategies for REIT success:

Leverage Professional Guidance  

The regulatory landscape for REITs can be daunting. Work with financial advisors or tax consultants experienced in the nuances of REIT structures to ensure compliance and maximize returns.  

Focus on Long-Term Growth  

While REITs are known for their dividends, consider the underlying properties’ growth potential. REIT investment strategies with portfolios in high-demand, geographically advantageous areas often yields better long-term appreciation.  

Diversify Across Sectors  

The real estate market is dynamic, and different sectors perform well under different economic conditions. Diversify by investing in multiple REITs with exposure to various property types, such as residential, commercial, and industrial.  

How Wiss Can Help With REIT Investments  

Understanding, structuring, and operating a REIT requires specialized expertise. Wiss is here to guide real estate investors, family-owned businesses, and financial advisors through every aspect of REIT ownership.  

Here’s how we can support you:

  • Compliance Monitoring: Quarterly and annual monitoring to ensure compliance with all REIT regulations.
  • Tax Advisory Services: Minimize tax liabilities while leveraging the full tax-advantaged benefits of REIT ownership.
  • Financial Reporting: Accurate financial reports to meet regulatory standards and attract investor confidence.  

Whether you’re an experienced real estate investor or someone exploring REITs for the first time, Wiss offers tailored solutions to meet your needs.

Talk to a Wiss advisor today to make sure your REIT strategy is compliant, efficient, and designed for long-term success.

Why Explore REITs Now?  

The real estate market is always evolving. Rapid urbanization, the boom in e-commerce driving industrial warehouse demand, and the changing preferences of millennial renters and buyers have never been greater, creating greater opportunities for REIT investments.  

REITs provide a powerful way to access this dynamic market while enjoying the benefits of diversification, liquidity, affordability, and predictable income.  

Unlock Success with Expert REIT Investment Strategies

For business owners, financial advisors, and real estate investors, REITs present an opportunity to grow wealth with less risk and fewer barriers compared to direct property ownership. However, successful investment requires expertise, strategy, and compliance.  

Partner with Wiss for expert guidance in navigating REIT investments. From maximizing tax advantages to ensuring compliance, we’re here to make your real estate investment as seamless and profitable as possible.  

An Overview of the Various Method of Accounting

Posted on by Michelle Antico

One of the most important aspects of accounting is to ensure that a business is using an ideal method of accounting for the business’ current needs. In order to achieve this objective, there are several methods of accounting that businesses can choose from. The method chosen by a business largely depends on its size, nature, complexity, and legal requirements. Choosing the right accounting method can impact tax liability, financial reporting and analysis, and overall management of cash flow.

In this article, we’ll explore four major accounting methods and how each can support your business’s success. Whether you’re a startup managing simple transactions or a company scaling toward complex financial systems, there’s a method built to work with you.

What is a Method of Accounting?

A method of accounting is the set of principles and rules a business uses to record its financial transactions and generate financial statements. It defines when income and expenses are recognized, and directly impacts everything from cash flow visibility to tax liability and strategic forecasting.

Broadly speaking, methods of accounting fall into two categories: cash basis and accrual basis, each with their own variations. The method a company adopts is often influenced by its size, growth stage, regulatory requirements, or even funding structure.

Broadly speaking, methods of accounting fall into two categories: cash basis and accrual basis, each with their own variations. The method a company adopts is often influenced by its size, growth stage, regulatory requirements, or even funding structure.

So now that we’ve covered what a method of accounting is and why it matters, let’s look at the four most widely used options and which one might be the right fit for your business.

4 Major Accounting Methods and Their Applications

Before choosing the right method, it’s important to understand the four main accounting methods and what each is best suited for. Here are the different accounting methods a business typically chooses from (or, at times, is required to apply):

 1. Cash Basis Accounting

Cash basis accounting is a method of accounting where transactions are recorded when cash changes hands. It is a simple and straightforward method commonly used by small businesses. Under this method, revenues and expenses are recognized when the cash is received or paid, respectively.

The benefit of cash accounting is that it provides a simple and straightforward view of the cash flow of a business. It is easy to understand and does not require sophisticated accounting practices to be used.

Who it works best for: Businesses with limited transactions, no inventory, or those that primarily operate on a cash-in-hand basis.

However, cash accounting may not offer a full picture of your business’s financial health, particularly when invoices or large expenses cross reporting periods.

If you’re unsure whether this method suits your goals, Wiss’ Outsourced Accounting service can help you choose and implement a system that aligns with your operations.

 2. US GAAP Basis Accounting

US GAAP basis accounting refers to accounting practices that apply accounting principles generally accepted in the United States of America (US GAAP). US GAAP is a set of principles, standards, and guidelines developed by the Financial Accounting Standards Board (FASB) that are widely accepted as authoritative and reliable by stakeholders. Under US GAAP basis accounting, financial statements are prepared using accrual accounting rules

Accrual basis accounting is a method of accounting that records transactions when they occur, regardless of whether cash is involved or not. Under this method, revenues are recognized when they are earned, even if payment is not received yet. Similarly, expenses are recorded when they are incurred, even if the payment has not been made yet. One of the significant benefits of accrual accounting is that it provides a more accurate picture of the financial position of the business by more closely matching expenses incurred within a given period to the revenue earned in that period.

If you’re wondering about cash vs accrual accounting differences, here’s the key: cash accounting tracks money movements, while accrual accounting tracks commitments. The latter gives a more complete view of business health.

US GAAP basis accounting requires adherence to specific standards for recording and reporting financial transactions, including revenue recognition standards, expense recognition rules, accounting for inventory and fixed assets, and disclosure requirements for financial statements. At times, additional cost is required in order to meet these standards.

 3. Modified Cash Basis Accounting

This hybrid method of accounting combines elements of both cash basis and accrual basis accounting, but does not necessarily follow all of the standards prescribed under US GAAP. Under this method, certain transactions are recorded on a cash basis, while others are recorded on an accrual basis. This method is useful for businesses that want to record certain financial transactions on a cash basis, but also utilize accounts such as accounts receivable, prepaid expenses, accounts payable, and accrued expenses to more closely align certain revenue and expense items for a given period.

However, modified cash basis accounting may not be accepted by certain stakeholders such as bankers, investors, or regulatory agencies who typically prefer traditional US GAAP or cash accounting methods. Businesses should consider their specific needs and consult with their accounting professional before choosing this method of accounting to ensure it aligns with their reporting requirements.

 4. Tax Basis Accounting

Tax basis accounting is a method of accounting that focuses on reporting financial transactions based on tax laws and regulations, regardless of when cash is received or paid. Tax basis accounting, is often used to provide simplicity to reporting as the accounting is less complex that US GAAP basis accounting, to eliminate differences between the book method and tax method of reporting, and to provide a picture of potential taxable income throughout the year.

The tax basis of an asset or liability is typically different from its US GAAP or cash basis value because tax laws have different rules for calculating depreciation, amortization, and certain expenses.

Which Accounting Methods Suit Your Business?

There’s no one-size-fits-all answer. Choosing between cash basis, accrual, modified cash, and tax basis depends on:

  • Business size
  • Complexity of operations
  • Stakeholder expectations
  • Tax strategy

Here’s a quick recap:

Accounting Method Best For Key Benefit
Cash Basis Startups & small business Simple, real-time cash visibility
Accrual (US GAAP Basis) Growing/complex firms Accurate long-term planning
Modified Cash Basis Flexibility-seeking organizations Customizable for internal use
Tax Basis Compliance-focused companies Simplified tax reporting

 

Select the Optimal Method of Accounting for Success

In conclusion, choosing the right method of accounting is critical for appropriate financial reporting. Each method has its own advantages and disadvantages, and businesses should consult with their accounting advisor to choose the method that best suits their reporting needs and preferences. Whether it’s cash basis, US GAAP basis, or a hybrid method, accurate financial data is crucial for the success of any business.

For more information, contact our experts today.

FP&A Skills Redefined: Why Soft Skills Matter as Much as Technical Expertise

Posted on by Michelle Antico

When you think of Financial Planning and Analysis (FP&A), spreadsheets, forecasts, and financial models will likely come to mind. However, over the years, the FP&A role has evolved far beyond just crunching numbers. Today, success in this position requires mastering soft FP&A skills just as much as technical expertise.

Strong communication, emotional intelligence, and active listening are now essential for effectively navigating the different stakeholders and priorities that FP&A professionals encounter daily.   

This blog dives into the growing importance of soft FP&A skills, exploring how they complement technical expertise and benefit both the professional and the organization. We’ll also provide actionable tips to help FP&A professionals develop these crucial skills and maximize their impact.

The Evolving Role of FP&A

The modern FP&A function has shifted from being reactive and report-driven to being forward-looking and partnership-driven. Finance professionals are now expected to work closely with departments like operations, marketing, HR, and even product teams. They’re not just explaining what happened, they’re advising on what should happen next. They bridge financial and strategic goals, engage stakeholders, and focus on data-driven decisions.

This expanded role demands strong interpersonal skills to influence, align, and connect diverse priorities. To succeed, they must evolve from technical experts to strategic advisors who unite numbers with people.

4 Crucial Soft FP&A Skills to Develop

To stand out in today’s dynamic FP&A landscape, developing these four soft FP&A and integrating them into your everyday interactions is critical for both career growth and business impact:

1. Active Listening

Listening isn’t just about hearing what someone says. Active listening requires fully understanding and processing stakeholders’ needs, concerns, and goals. FP&A professionals often work with people from various functions, including marketing teams, HR leaders, and department heads, all with unique priorities.

By listening actively, FP&A professionals can: 

  • Ensure that stakeholders feel valued and understood.   
  • Address concerns before they escalate.   
  • Build trust and collaboration across teams.

For example, during a budget negotiation meeting, truly listening to a department head’s concerns might help uncover critical priorities that could reshape financial recommendations.

2. Emotional Intelligence

Stakeholder interactions often involve conflicting priorities. Emotional intelligence (EI)—recognizing and managing your emotions while empathizing with others—is critical to handling these situations.

Strong EI allows FP&A professionals to: 

  • Manage difficult conversations effectively.   
  • De-escalate tension when there’s misalignment.   
  • Foster a collaborative, inclusive environment where all voices are respected.

Imagine that a marketing manager and a product manager want more budget allocation for their teams. An FP&A professional with high emotional intelligence might balance these competing needs by addressing the rationale behind each request and arriving at a solution that aligns with overall business goals.

3. Insightful Questioning

FP&A isn’t just about solving problems; it’s about asking the right questions to uncover insights. Thoughtful, insightful questioning helps FP&A professionals see the big picture and make more accurate financial recommendations.

Some techniques for asking better questions include: 

  • Focusing on open-ended questions to encourage detailed responses.   
  • Exploring “why” and “what if” scenarios to better understand stakeholders’ priorities and goals.   
  • Asking questions from the lens of the organization as a whole.

For instance, a question like, “How will this budget help us achieve our long-term growth strategy?” can shift a conversation from focusing on short-term demands to prioritizing strategic outcomes.

4. Persuasion and Influence

FP&A professionals must often present findings to stakeholders, recommend actions, or guide decisions. Strong persuasion and influence are essential to ensuring your insights result in meaningful outcomes for the business. 

Key factors for effective persuasion include: 

  • Tailoring your message to resonate with each audience.   
  • Demonstrating how your recommendations align with the organization’s goals.   
  • Addressing objections with both data and empathy. 

For example, a CFO hesitant to invest in new technology might be swayed by a data-backed argument illustrating cost savings and ROI, paired with reassurance that the investment aligns with the company’s broader financial goals.  

Advantages of Developing Soft Skills in FP&A

Combining soft skills with technical expertise doesn’t just elevate individual performance—it drives lasting organizational success.   

Make Improved Decisions   

When FP&A professionals successfully collaborate with stakeholders and gather input across departments, they provide more holistic insights. This leads to decisions that better align with the company’s financial and strategic goals.   

Develop Stronger Relationships Across Teams   

Building trust through attentive listening and clear communication fosters stronger relationships between FP&A and other departments. This trust encourages collaboration and stronger stakeholder buy-in.    

Build Credibility and Influence   

FP&A professionals who master the art of persuasion and manage dynamics with emotional intelligence establish themselves as credible advisors to leadership and colleagues. This, in turn, reinforces their role as a vital part of the strategic decision-making process.   

Creating Impact with Soft FP&A Skills

Success in FP&A is no longer about just “running the numbers.” Technical expertise may help uncover insights, but soft skills ensure those insights lead to action. To truly stand out, FP&A professionals must lean into communication, empathy, and influence—skills that drive collaboration and decision-making in today’s fast-paced business environment.   

When an FP&A team excels in both hard and soft skills, the organization ultimately reaps the greatest benefit. Decisions become more informed, departments work cohesively, and financial goals are sustainably achieved.    

If developing these skills feels overwhelming, remember that growth happens one step at a time. Whether through training, mentorship, or practicing authentic communication, there’s always room to improve.

Unlock the Full Potential of Your FP&A Team

If you’re ready to elevate your business and gain deeper insights into the drivers of profitability and growth, the Wiss FP&A Team is here to help. Our experts combine technical excellence with the soft FP&A skills essential for fostering collaboration and driving results.

Talk to our FP&A Experts to unlock a clearer financial picture and confidently steer your business toward a thriving future. Let’s achieve success together—starting today!