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Client Accounting
Services

Reliable financial information. Proactive guidance. Accounting solutions that help your business grow.

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Monthly Bookkeeping

Accurate, timely transaction recording and categorization.

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Financial Reporting

Clear, meaningful reports to track performance.

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Cash Flow Management

Monitor cash flow and improve financial stability.

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KPI Dashboards

Real-time insights to help you make better decisions.

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Controller-Level Oversight

Experienced professionals providing strategic support.

Why Clients Choose AFairchild

We combine big-firm expertise with personalized service to deliver accurate reporting, proactive recommendations, and peace of mind.

Let’s talk about your business. (214) 731-7664 SCHEDULE A CONSULTATION

Meet Your Advisor

Cost Segregation

Accelerating tax savings through strategic asset classification.

Your Cost Segregation Advisor

Jasmine Inge

Tax Manager

Cost segregation can help real estate owners accelerate depreciation by identifying building components that may qualify for shorter recovery periods instead of depreciating the entire property over the traditional building life.

Accelerate depreciation deductions.

Improve current cash flow.

Support stronger real estate tax planning.

How Cost Segregation Creates Value

A cost segregation study separates qualifying building components into shorter tax-life categories, such as 5-year, 7-year, and 15-year property.

Increase current-year depreciation deductions
Improve cash flow through accelerated depreciation
Maximize available bonus depreciation opportunities
Defer federal and state income taxes
Enhance after-tax investment returns
Identify missed depreciation opportunities on existing properties

When a Cost Segregation Study May Make Sense

Cost segregation may be appropriate for a variety of real estate acquisitions, construction projects, and property improvements.

Newly acquired commercial properties
New construction projects
Renovated or expanded properties
Multifamily housing developments
Manufacturing and industrial facilities
Medical, retail, and office buildings

Analysis, Documentation & Implementation

A well-supported cost segregation study requires detailed review of construction costs, building information, and property records.

Evaluate the potential tax benefit before proceeding
Coordinate the engineering-based cost segregation study
Review asset classifications and depreciation treatment
Calculate resulting depreciation adjustments
Coordinate the strategy with the client's broader tax and investment objectives
Maintain supporting documentation for the accelerated depreciation classifications

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Reasonable Compensation

Practical guidance for S Corporation shareholder-employees.

Ricardo Gonzalez

Accounting Technology Manager

At AFairchild CPA, we help S Corporation business owners evaluate reasonable compensation as part of a broader tax and payroll planning strategy. Our approach considers the owner's role, responsibilities, business economics, and relevant compensation data.

Fact-based analysis.
Clear documentation.

Practical guidance.
Year-round planning.

Supportable decisions.
Built around your business.

When Compensation Should Be Reviewed

Starting a new S Corporation election
Taking shareholder distributions
Paying little or no W-2 wages to an owner working in the business
Evaluating payroll before year-end tax planning
Preparing for growth or changes in owner involvement
Reviewing wages in light of profits, cash flow, and industry benchmarks

Reasonable Compensation Analysis

Services and responsibilities performed by the owner
Time and effort devoted to the business
Training, experience, credentials, and professional background
Comparable market compensation
Business size, profitability, and complexity
Contributions of employees, capital, and equipment
Relationship between wages and shareholder distributions

Documentation & Planning

Written description of the owner's role and duties
Comparable salary and compensation data
Payroll records and financial information
Documentation of the methodology used
Periodic review as business circumstances change
Coordination with payroll and year-end tax planning

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Subject Matter Expert

Business Taxation

Compliance, planning, and strategic tax guidance for growing businesses.

Rebecca Haynie, CPA

Tax Senior Manager

At AFairchild CPA, we help businesses navigate complex tax requirements while identifying opportunities to improve tax outcomes, manage risk, and support long-term growth. Our team combines accurate compliance with proactive planning tailored to each company's structure, ownership, and goals.

Deep expertise.
A higher standard.

Practical solutions
for real-world challenges.

A long-term partner
in your success.

Business Tax Compliance

Form 1065 partnership return preparation
Form 1120 corporate return preparation
Form 1120S corporate return preparation
Schedule K and Schedule K-1 reporting
Book-to-tax adjustments and reconciliations
Partner and shareholder tax reporting
Multi-state tax compliance
Estimated tax payments and filing extensions
IRS notice and correspondence assistance

Strategic Business Tax Planning

Entity formation and tax structuring
Tax-efficient allocations and distributions
Partner and shareholder compensation planning
Basis, capital account, and at-risk calculations
Deduction and credit optimization
Depreciation and fixed asset planning
Section 754 election analysis
Quarterly estimated tax and safe harbor planning
Nexus and multi-state tax considerations

Growth, Transactions & Ownership

Admission and withdrawal of partners
Ownership and succession transitions
Financing and capital structure considerations
Mergers, acquisitions, and restructurings
Expansion and equipment investment planning
Shareholder and partner transactions
Tax exposure and risk review

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Tax Strategy & Restructuring

Structure your business today for greater tax efficiency tomorrow.

Your Restructuring Advisors

Annie Fairchild, CPA

Managing Partner

Troy Womack, CPA

Chief Experience Officer

As a business grows and evolves, its entity structure should be reviewed to ensure it continues to support financial, operational, and tax objectives. AFairchild CPA helps business owners evaluate restructuring opportunities and understand the potential tax effects before changes are made.

Identify tax-saving
opportunities.

Align structure with
changing goals.

Position the business
for future growth.

When to Consider Restructuring

Increased business profitability
Changes in ownership
Succession planning and exit strategies
Business expansion
Changes in tax law
Changes in long-term business objectives

Restructuring & Tax Strategy

Review current entity structure and tax treatment
Evaluate opportunities to reduce federal income tax
Consider C corporation to S corporation elections
Analyze ownership and succession alternatives
Evaluate restructuring before expansion or transactions
Assess potential tax consequences before implementation

Complex Restructuring Support

Entity conversion planning
F reorganization considerations
Ownership transition planning
Mergers and acquisition restructuring support
Coordination with legal counsel
Tax planning aligned with broader business objectives

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Deferred Tax Provisions

ASC 740 guidance for accurate, compliant financial reporting.

Rebecca Haynie, CPA

Tax Senior Manager

AFairchild CPA helps companies navigate ASC 740 and income tax accounting by connecting financial reporting with the tax consequences of current and future transactions.

Accurate provision
calculations.

Clear book-tax
analysis.

Compliant and
defensible reporting.

Why Deferred Tax Provisions Matter

Support compliance with GAAP and ASC 740
Match tax expense with the related accounting period
Reflect future tax consequences of current transactions
Forecast future cash flows and tax obligations
Identify and manage book-tax differences
Analyze effective tax rates, NOLs, and tax credits

Deferred Tax Assets, Liabilities & Differences

Deferred tax liabilities for future tax obligations
Deferred tax assets for future tax benefits
Temporary differences that reverse over time
Permanent differences affecting the effective tax rate
Depreciation and other book-versus-tax timing differences
Loss carryforwards, accrued liabilities, and other tax attributes

ASC 740 Reporting & Provision Support

Year-end income tax provision calculations
Measurement using applicable enacted tax rates
Re-measurement following enacted tax law changes
Valuation allowance analysis and documentation
Effective tax rate reconciliation
Financial statement disclosure support
Coordination with finance teams and external auditors

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International Tax

Cross-border tax guidance and reporting for growing businesses.

Caleb Mullins

Tax Senior Consultant

Multination tax requirements can become relevant quickly as businesses expand across borders, work with foreign owners or vendors, earn income abroad, or provide multination tax information to their owners. AFairchild CPA helps businesses understand and manage their US reporting obligations as part of a broader tax strategy.

Navigate cross-border
tax requirements.

Coordinate complex
reporting obligations.

Support multi-nation
business growth.

US Tax & Cross-Border Activity

Foreign earned income and taxes paid outside the United States
Foreign ownership of US companies
Transactions with foreign vendors or related parties
International activity within US partnerships and passthrough entities
Coordination of U.S. tax obligations with international activity

Key International Reporting

Foreign Tax Credit considerations to help address double taxation
Schedule K-2 international reporting at the entity level
Schedule K-3 reporting for each owner's share of international items
Form 5472 reporting for certain foreign ownership and related-party transactions
International information needed by owners for their individual filings
Coordination of specialized disclosures with U.S. tax returns

Compliance, Documentation & Growth

Identify applicable international filing obligations
Track and document cross-border transactions
Coordinate information across entities and owners
Maintain reliable US tax records
Address reporting requirements before filing deadlines
Integrate multination compliance with broader tax planning
Support business growth while remaining aligned with U.S. tax rules

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Accounting Technology

Modern systems for accurate, secure, and efficient accounting operations.

Ricardo Gonzalez

Accounting Technology Manager

AFairchild CPA helps businesses evaluate and improve the technology supporting their accounting operations. The right systems can reduce manual work, improve financial visibility, strengthen controls, and create a more scalable foundation for growth.

Improve efficiency
and visibility.

Strengthen security
and controls.

Build systems that
scale with growth.

Modern Accounting Technology

Automate repetitive accounting and administrative tasks
Reduce duplicate data entry and manual errors
Improve integration between accounting systems
Provide leadership with more timely financial information
Strengthen secure access, audit trails, backups, and approvals
Support more scalable accounting operations as the business grows

Choosing & Maintaining the Right Systems

Evaluate software based on business size and operating needs
Review reporting requirements and workflow demands
Assess integrations with other business systems
Review user access, security, and internal controls
Confirm systems continue to support tax and compliance requirements
Pair system updates with training and clear documentation

Conversion, Controls & Process Improvement

Review and improve accounting procedures
Plan and support accounting software conversions
Streamline accounting and reporting workflows
Strengthen internal controls and approval processes
Clean up outdated data during system transitions
Improve financial visibility and reporting consistency
Build a stronger technology foundation for future growth

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Work-in-Progress (WIP) Schedules

Better project visibility. Better forecasting. Better decisions.

Your WIP Advisors

Suyee Chen

Audit Manager

Denise Villarreal

CAS Manager

A well-prepared WIP schedule gives construction companies a clearer picture of project progress, earned revenue, billing status, profitability, and expected results at completion.

Understand true
project profitability.

Identify problems
earlier.

Improve reporting
and forecasting.

Why WIP Schedules Matter

Measure project progress and work completed
Determine revenue earned by project
Monitor expected project profitability
Identify cost overruns and billing concerns
Improve visibility into project cash-flow risks
Support GAAP financial reporting
Provide meaningful information to management, lenders, bonding companies, and auditors

Billing & Profitability Indicators

Identify underbillings where earned revenue exceeds customer billings
Monitor overbillings where billings exceed revenue earned to date
Evaluate the impact of billing status on cash flow
Monitor profit fade when projected profit declines
Review profit gain when projected profit increases
Investigate significant changes in job forecasts
Improve estimating and project-management decisions

WIP Preparation & Analysis

Develop and maintain accurate WIP schedules
Review project cost coding and accounting consistency
Reconcile WIP schedules to the general ledger
Reconcile WIP reporting to prior and current financial statements
Review projected job costs and profitability
Analyze billing and profitability trends
Provide management with meaningful information for timely decision-making

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Forensic Accounting

Clear financial answers when the records do not tell the whole story.

DeAnn Huegele, CPA

CAS Manager

What Is Forensic Accounting?

Forensic accounting helps clients understand financial concerns involving suspected fraud, disputes, insurance claims, litigation support, missing documentation, or unusual activity. We review the records objectively, identify what happened, quantify the impact, and present clear, supportable findings.

Follow the financial
facts.

Quantify financial
impact.

Present clear and
supportable findings.

How We Help

Review accounting records, bank activity, invoices, payroll, contracts, and supporting documentation
Trace funds across accounts, vendors, employees, entities, or related parties
Identify unusual activity, missing support, duplicate payments, or inconsistencies
Quantify losses, overpayments, damages, unsupported activity, or misstated balances
Prepare clear summaries and reports for owners, management, attorneys, insurers, or advisors

When Forensic Accounting May Be Needed

Suspected fraud, theft, unauthorized payments, payroll issues, or vendor concerns
Business, ownership, contractor, vendor, or customer disputes
Insurance claims, business interruption losses, or property-related damages
Litigation support, damage calculations, or attorney-requested analysis
Internal control concerns, unsupported activity, or unexplained discrepancies

What Clients Can Expect

1

Initial discussion: Clarify the concern, period, parties, and intended use.

2

Document request: Identify the focused records needed for review.

3

Financial review: Trace activity, compare records, and identify unsupported items.

4

Findings: Summarize results, financial impact, limitations, and next steps.

Information We May Request

Bank, credit card, and loan statements
General ledger detail, financial statements, and accounting reports
Invoices, receipts, contracts, bills, and vendor records
Payroll, reimbursement, approval, and timekeeping support
Relevant emails, policies, ownership records, or related-party documentation

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Financial Ratio Analysis

Understand the story behind the numbers.

Annie Fairchild, CPA

What Is Financial Ratio Analysis?

Financial ratio analysis compares information from a company's financial statements to evaluate financial condition and operating performance. When viewed in context, ratios can help identify trends, strengths, weaknesses, opportunities, and potential financial risks.

Measure financial
performance.

Identify trends
over time.

Support informed
decisions.

What Financial Ratios Can Reveal

Evaluate profitability and overall business performance
Assess liquidity, cash flow, and the ability to meet short-term obligations
Measure operational efficiency and use of company resources
Analyze debt levels, leverage, and financial risk
Benchmark performance against competitors, industry measures, budgets, and internal targets
Identify trends and support lending, investment, and strategic decisions

Types of Financial Ratios

Liquidity Ratios – measure a company's ability to meet short-term obligations, including the Current Ratio and Quick Ratio
Profitability Ratios – evaluate how effectively a business generates earnings, including Gross Profit Margin, Net Profit Margin, Return on Assets, and Return on Equity
Efficiency Ratios – assess how effectively assets and other business resources are being utilized
Leverage Ratios – evaluate debt financing, capital structure, and the financial risk associated with leverage

Using Ratios Effectively

Compare results across multiple reporting periods to identify trends
Compare performance with industry benchmarks and similar businesses
Review results against internal targets, forecasts, and budgets
Evaluate several ratios together rather than relying on a single measure
Consider unusual transactions, one-time events, and changes in accounting methods when interpreting results
Use accurate, complete, and consistently prepared financial statements as the foundation for analysis

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IOLTA Accounting Services

Accurate trust accounting. Clear records. Greater confidence.

Caprice Hewitt

CAS Staff

What Is IOLTA Accounting?

Managing client trust funds requires accurate records, consistent reconciliations, and strong oversight. AFairchild CPA helps law firms maintain organized trust records, identify discrepancies, and strengthen the accounting processes that support responsible trust-account management.

Protect client funds.
Maintain clear records.

Identify discrepancies
early.

Strengthen trust-account
controls.

Trust Account Reconciliation

Monthly reconciliation of IOLTA bank accounts and accounting records
Three-way reconciliation of bank balances, trust records, and individual client ledgers
Review of outstanding checks, deposits, and reconciling items
Identification and investigation of unexplained differences or unusual activity

Client Ledger & Transaction Management

Maintain individual client or matter trust ledgers
Track deposits and disbursements by client or matter
Review transfers between trust and operating accounts
Monitor and research negative or unusual client balances

Internal Controls & Trust Accounting Processes

Review existing trust-account procedures
Establish consistent accounting and reconciliation workflows
Strengthen approval, authorization, and documentation procedures
Improve management review and trust-account oversight

When IOLTA Accounting Support May Be Needed

Trust accounts have not been reconciled consistently
Client ledger balances do not agree with bank or trust-account records
Unidentified deposits, outstanding checks, or negative balances exist
Trust and operating transactions have been incorrectly recorded or mixed
Historical trust records require cleanup or reconstruction
Growth, staffing changes, or software conversions require stronger trust-account processes

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Research & Development Tax Credit

Turning qualifying innovation into potential tax savings.

Debra Norris

Tax Manager

What Is the R&D Tax Credit?

The Research and Development Tax Credit rewards businesses that invest in developing or improving products, processes, software, techniques, formulas, or inventions through a qualifying process of experimentation.

Identify qualifying
innovation activities.

Capture eligible
research expenses.

Build supportable
documentation.

Qualification Test & Common Activities

Permitted Purpose – the activity relates to developing or improving a product, process, software, technique, formula, or invention
Technological in Nature – the activity relies on principles of physical or biological science, engineering, or computer science
Elimination of Uncertainty – the work addresses uncertainty regarding capability, method, or design
Process of Experimentation – alternatives are evaluated through modeling, testing, trial and error, simulation, or similar methods

Activities may include:

Developing or improving products, prototypes, software, or technology
Designing or testing manufacturing and production processes
Evaluating alternative materials, designs, methods, or technical approaches
Engineering, modeling, testing, validation, and performance improvements

Qualified Research Expenses & Potential Benefits

Employee wages related to qualifying research activities
Supplies consumed during the research process
Certain contractor research expenses
Certain cloud computing and software development costs where applicable
Federal research credits may reduce federal income tax liability
Certain qualified small businesses may elect to apply up to $500,000 of research credit against payroll tax liability, subject to eligibility requirements
Texas provides a Subchapter T franchise tax credit for qualifying research expenses attributable to research conducted in Texas

Credit availability and treatment depend on the taxpayer's facts, eligibility, expenses, and applicable federal and state requirements.

Documentation Required

Project records describing the research or development activities
Employee time allocation analyses
Engineering, design, technical, or development records
Testing and validation documentation
Payroll records supporting qualified wages
General ledger detail supporting research expenses
Contractor invoices and related supporting documentation

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Charitable Strategies

Give with greater purpose, confidence, and tax efficiency.

Your Charitable Strategy Advisors

Annie Fairchild, CPA

Managing Partner

Troy Womack, CPA

Chief Experience Officer

At AFairchild CPA, we help individuals, families, and business owners make charitable giving part of a thoughtful tax strategy. With proper planning, charitable gifts can support the causes you care about while also creating tax-saving opportunities.

Give intentionally.
Plan thoughtfully.

Coordinate giving
with tax planning.

Build a meaningful
charitable legacy.

Charitable Giving Strategy

Charitable giving planning to coordinate donations with your overall tax picture
Evaluate the timing and amount of charitable contributions
Gifts of appreciated assets, such as stock, which may provide added tax benefits
Coordinate personal, family, and business charitable goals with broader financial planning

Tax-Efficient Giving Opportunities

Qualified Charitable Distributions (QCDs) for eligible IRA owners
Donor-advised funds for flexible, long-term giving
Multi-year or concentrated charitable giving strategies when appropriate
Coordination of charitable giving with retirement and other tax-planning opportunities

Legacy & Business Giving Planning

Charitable trust and legacy planning support in coordination with legal and financial advisors
Business charitable planning for owners and closely held companies
Coordinate charitable goals with estate, retirement, and broader financial planning
Align personal, family, and business giving objectives with long-term goals

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Industry Benchmarks

Understand how your business compares — and where opportunity may exist.

Your Industry Benchmarking Advisor

Annie Fairchild, CPA

Managing Partner

Industry benchmarks compare a company's financial and operational results to similar businesses, industry averages, and internal performance goals. These comparisons provide valuable context for understanding where a business is performing well and where opportunities may exist.

Compare performance
to industry peers.

Identify trends,
risks, and gaps.

Support stronger
business decisions.

What Industry Benchmarks Can Reveal

Benchmarking helps provide context for evaluating financial and operational performance relative to similar businesses and industry expectations.

Evaluate financial performance and profitability
Identify operational inefficiencies
Assess liquidity, solvency, and financial risk
Monitor business growth and performance trends
Strengthen lending discussions and performance goals

Types of Industry Benchmarks

Financial Benchmarks — revenue, margins, liquidity, leverage, and profitability
Operational Benchmarks — productivity and efficiency measures
Growth Benchmarks — revenue growth, expansion, and market development
Performance Benchmarks — overall competitiveness and business performance

Internal benchmarking compares current results to prior periods within the organization, while external benchmarking compares performance to industry peers. Using both approaches can provide a more complete view.

Using Benchmarks to Make Better Decisions

Raw financial data rarely tells the complete story. Industry benchmarks help business owners understand whether results are strong, weak, or simply typical for their industry.

Compare profit margins to industry averages
Use liquidity ratios to evaluate cash flow strength
Review debt metrics for potential financial risk
Identify operational improvement opportunities
Establish realistic performance goals and targets

AFairchild CPA helps clients evaluate profitability, financial ratios, key performance indicators, and peer comparisons to better understand competitive position and identify opportunities for improvement.

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Chief Operations Officer (COO)

Turning strategy into results.

Your Operations Advisor

Wendy Knutson, CPA

Chief Operations Officer

As businesses grow, operational complexity grows with them. A COO helps create structure, improve efficiency, strengthen accountability, and turn strategic goals into practical action.

Improve efficiency
and execution.

Strengthen accountability
across the team.

Build scalable systems
for growth.

How a COO Creates Value

A COO helps leadership translate strategy into consistent execution by aligning people, processes, technology, and financial performance.

Improve operational efficiency and workflow
Identify and remove operational bottlenecks
Develop scalable processes and procedures
Strengthen accountability across teams
Implement and optimize technology solutions
Improve operational and financial visibility

Why Operational Leadership Matters

Many businesses have a strong vision but struggle with execution. As organizations grow, unclear processes and responsibilities can create inefficiencies, missed opportunities, and inconsistent results.

Keep strategic priorities moving forward
Create clearer roles and accountability
Support better coordination between teams
Maintain service quality during periods of growth
Help leadership make more informed decisions

How AFairchild CPA Can Help

AFairchild CPA works alongside owners and leadership teams to evaluate operations, improve processes, implement practical solutions, and build systems that support long-term growth.

Evaluate operational processes and workflows
Identify opportunities for greater efficiency
Support strategic planning and execution
Improve reporting and performance visibility
Strengthen systems, technology, and accountability
Help owners spend less time managing daily challenges and more time focused on growth

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CFO Advisory Services

Strategic financial leadership for growing businesses.

Your CFO Advisor

DeAnn Huegele, CPA

CAS Manager

CFO advisory gives growing businesses the financial insight needed to improve cash flow, profitability, forecasting, risk management, and strategic decisions.

Improve profitability and cash flow.

Strengthen financial decision-making.

Build a clearer path for sustainable growth.

How a CFO Creates Value

CFO advisory turns financial information into practical insight for owners and leadership teams.

Improve cash flow and working capital
Develop budgets, forecasts, and financial models
Monitor KPIs and financial performance
Identify profitability opportunities
Evaluate financial risk and financing needs
Strengthen financial processes and controls

Risk Insight & Industry Benchmarking

Benchmarks help leadership understand how financial performance compares to expectations and where opportunities or risks may exist.

Profitability Gross Profit Margin and EBITDA Margin

Cash Flow Cash Conversion Cycle and DSO

Working Capital Inventory Turnover and AR/AP trends

Capital Structure Debt-to-Equity and Interest Coverage

How AFairchild CPA Can Help

We provide strategic financial leadership without requiring a full-time in-house CFO.

Improve financial visibility and forecasting
Analyze profitability and performance
Identify financial and operational risks
Compare results to relevant industry benchmarks
Support financing, capital, and growth decisions

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Revenue Recognition

Clear, supportable revenue accounting under ASC 606.

Your Revenue Recognition Advisor

Alyson Brands, CPA

Audit Director

Revenue recognition is one of the most judgmental and highly scrutinized areas of financial reporting. AFairchild CPA helps organizations evaluate contracts, document accounting conclusions, and support revenue recognition practices under ASC 606.

Evaluate contracts
and revenue terms.

Strengthen documentation
and internal controls.

Support audits,
deals, and transactions.

ASC 606 Assessment & Accounting

We work with management to evaluate revenue streams, contract terms, performance obligations, transaction price considerations, and the appropriate timing of revenue recognition.

Identify performance obligations within customer contracts
Evaluate transaction price and variable consideration
Assess multiple-deliverable arrangements
Review contract modifications and change orders
Evaluate retainage and milestone-based billing
Analyze long-term customer agreements

Audit Readiness, Controls & Documentation

Revenue accounting conclusions should be supported by clear policies, consistent processes, and documentation that can withstand external review.

Evaluate revenue recognition policies and practices
Identify accounting positions requiring additional support
Strengthen internal controls over the revenue cycle
Improve contract review and approval processes
Develop supportable accounting position documentation
Prepare for auditor, lender, investor, or regulatory scrutiny

Due Diligence & Transaction Support

Revenue is often a significant driver of business valuation. Understanding the quality, sustainability, and timing of revenue can be critical during mergers, acquisitions, ownership transitions, and capital transactions.

Review historical revenue recognition practices
Analyze customer contracts and revenue portfolios
Identify potential accounting risks or earnings adjustments
Evaluate post-transaction accounting exposure
Support buyers, sellers, and stakeholders during due diligence
Address revenue accounting issues before they become deal obstacles

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Texas Franchise Tax

Understanding margin tax, deductions, exclusions, and available credits.

Your Texas Franchise Tax Advisor

Debra Norris

Tax Manager

Texas Franchise Tax is a margin tax calculated separately from federal income tax. The calculation begins with federal revenue and applies Texas-specific rules for deductions, exclusions, rates, and credits.

Apply the appropriate Texas margin calculation.

Identify available exclusions and deductions.

Evaluate reduced rates and available credits.

How Texas Franchise Tax Works

Texas Franchise Tax uses a margin calculation that is separate from the federal income tax calculation. The process begins with revenue from the federal return and then applies Texas-specific calculation methods.

Margin may be based on 70% of revenue
Cost of Goods Sold may be used when applicable
Compensation or wages may be used when applicable
A statutory deduction may also apply
Available deductions vary based on the business and industry

Exclusions & Cost of Goods Sold

Texas rules determine which amounts may be excluded from revenue and which businesses qualify for the Texas Cost of Goods Sold deduction.

Certain contractor payments
Certain pass-through entity payments
Certain intercompany payments
Medicare and Medicaid payments
Other qualifying revenue exclusions
Texas COGS may apply to businesses that sell, produce, construct, manufacture, develop, or improve real or tangible personal property

Texas Cost of Goods Sold is calculated under Texas Franchise Tax rules and should not be assumed to match the federal Cost of Goods Sold calculation.

Reduced Rates & Texas Credits

Certain businesses may qualify for reduced franchise tax rates or credits that can reduce Texas tax liability.

Certain retail and wholesale businesses may qualify for a reduced franchise tax rate
Research and Development Credit — AFairchild CPA can perform an R&D calculation to help identify and capture the credit
Texas Strong Families Credit — a charitable contribution program for Texas families that requires application before making a qualified contribution
Additional Texas credits may be available depending on the business and its activities

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Client Accounting Services

Tax Return Preparation

Services may include:

Tax Return Preparation

How We Can Help

Year End Tax Planning

How We Can Help

Year-End Tax Projections

Income & Deduction Planning

Charitable Giving Strategies

Retirement Contribution Planning

Tax-Saving Opportunity Analysis

Reduce Your Tax Burden

Make Informed Decisions

Plan with Confidence

Estimated Tax Support

How We Can Help

Quarterly estimated tax calculations

Federal and state payment planning

Income and deduction reviews

Safe-harbor payment guidance

Year-end tax projections

Proactive Tax Planning

Better Cash Flow Visibility

Year-Round Support

Tax Return Preparation

How We Can Help

Individual Income Tax Returns

Business Income Tax Returns

Multi-State Tax Filings

Tax Extensions and Estimated Payments

Year Round Tax Planning Support

Experienced CPA Guidance

Maximize Deductions

Year-Round Support

Estate & Trust Tax

How We Can Help

Estate income tax returns

Trust Tax Return Preparation

Fiduciary Tax Planning & Compliance

Trustee & Executor Guidance

Estate Administration Support

Trusted Fiduciary Guidance

Preserve Family Wealth

Ongoing Support

IRS Notices & Support

How We Can Help

IRS Notice Review & Explanation

Response Preparation & Support

Tax Account Research

Penalty & Interest Assistance

Ongoing Resolution Guidance

Experienced Representation

Clear, Timely Response

Peace of Mind

Business Tax Returns

How We Can Help

S Corporation tax returns

C Corporation tax returns

Partnership and LLC tax returns

Extension and estimated tax filings

Experienced Business Tax Guidance

Experienced CPA Guidance

Identify Tax-Saving Opportunities

Year-Round Support

Tax Exempt Organizations

How We Can Help

Form 990 Preparation & Filing

Tax-Exempt Status Compliance

Unrelated Business Income Tax Review

Governance & Reporting Support

State Local Compliance

Protect Your Tax-Exempt Status

Navigate Complex Reporting

Stay Focused on Your Mission

Cost Segregation

Your Cost Segregation Advisor

Client Accounting
Services