Orlando, FL (PRWEB) January 25, 2013
For companies that have received 8(a) status in 2013, congratulations on successfully completing the application process and for taking advantage of the opportunity to develop new business. However, with any government program, there are rules and guidelines in place that you should be aware of so that a business can get the most out of the program. There are a number of compliance standards associated with the 8(a) status and one inadvertent trip-up with the withdrawal rules or audit requirements and the cost could be your 8(a) status.
To be compliant for the 2013 SBA 8(a) Business Development Program you should be aware of the following:
If your business sales are less than $1M:
Withdrawals exceeding $250,000 are considered excessive and compiled financial statements are required. Withdrawals include but are not limited to: cash dividend, distributions in the amounts needed to pay corporation or partnership taxes, cash and property withdrawals, payments to immediate family members not employed by the company, bonuses to officers and investments on behalf of an owner.
If sales are between $1M and $2M:
Withdrawals exceeding $300,000 are considered excessive and financial statements are required
If your sales are greater than $2M, withdrawals exceeding $400,000 are considered excessive:
Sales between $2M and $10M require reviewed financial statements
Sales greater than $10M requires audited financial statements
Primary NAICS Code –
· If the Business Development Program participant can prove the majority of its total revenues during a three-year period have transitioned from one NAICS code to another, a change in the primary industry classification may be granted.
Personal financial information for each 8(a) business owner –
· The three year average of your adjusted gross income must be less than $250,000 for initial eligibility and less than $350,000 for continued eligibility. Gross income is defined as the gross income shown on the federal tax return.
· Adjusted net worth must be less than $250,000 for initial eligibility and less than $750,000 for continued eligibility
· Total assets must be less than $4M for initial eligibility and less than $6M for continued eligibility
In summary, the guidelines above are available here so that a business can be informed and current on government requirements, which can make or break a business's 8(a) status. The process of working with the government can become complex and confusing. It’s best if a business has a trusted advisor to turn to that’s familiar with the government contracting language. Carr, Riggs & Ingram (CRI) is a unique firm in that it has individuals who specialize in government contract consulting. Their team includes past DCAA auditors and others who have worked in the government contracting arena.
Before a business can certify for the 8(a) Business Development Program in 2013, they must first be registered in System for Award Management (SAM) to receive federal contracts. That is why most businesses choose to use a third party registration firm to help them with the registration process. US Federal Contractor Registration is the world’s largest third party registration firm that registers small businesses in SAM and certifies their business in the 8(a) Business Development Plan. Eric Knellinger, President of US Federal Contractor Registration quoted, “CRI’s advice on financially complying for 8a is right on the money. CRI’s talented consultants will keep a business on task and financially sound. Any business applying for 8a must be aware of the eligibility requirements that are a part of the program. CRI’s knowledgeable consultants have the background and the experience to aid any business with their financial dilemmas. I would advise every business currently receiving federal contracts to take advantage of CRI’s services and request a consultation of your federally registered business.”
Carr, Riggs & Ingram provides CPAs and business consultants that offer a broad array of accounting, auditing, tax, forensic accounting and business consulting services. CRI’s tools and expertise tailored to each client's needs are what makes them such a valuable resource to businesses. As one of the largest accounting firms in the South, they believe in delivering technical accounting and auditing, tax, and consulting expertise services that are derived from National Strength and grown from Southern Roots of client service and hospitality. CRI's business advisors specialize in serving mid-sized, growing domestic and international companies, as well as publicly traded companies, governmental entities, construction companies, healthcare entities, and not-for-profit organizations. Mr. Knellinger of US Federal Contractor Registration, “Encourages all government contractors to speak with one of CRI’s account professionals to make sure their business is complying with federal regulations.”
Speak directly with one of CRI's accounting professionals by visiting the CRI Locations section of the website for contact information for the accounting office location nearest you in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, Tennessee, or Texas. Otherwise, their online form is available to which CRI will promptly respond to all inquiries.