Navigating uncertainty and boosting resiliency: Four practical strategies to enhance your small business’s back office

As you begin to navigate year-end planning, below are key considerations in four areas that your small business or organization should take into consideration, including evaluating entity structure and proactive planning, navigating regulatory complexity, optimizing technology and AI tools, as well as mitigating operational costs and outsourcing.

Evaluating entity structure and proactive planning

The formal structure of your business is foundational for its long-term success. The structure influences tax outcomes, HR and payroll policies, and the overall rights and responsibilities of the owner and the organization. Small business owners and small organization leaders can be unaware that as your business grows and changes, the formal structure can be changed and should be adjusted to best fit the needs of the organization. There is no one-size-fits-all solution — the structure should depend on the business’s goals, industry, ownership and future.

“Is it worth exploring alternatives?” Baker Tilly tax principal Chase Murphy asked during the discussion. There could be benefits your business is missing by keeping the structure you currently have if it no longer quite fits or potential downfalls that could be mitigated or avoided through adjusting your structure. Todd Bernhardt, Baker Tilly managing principal, adds, “Just because you set something up at one point in your process doesn’t mean that’s the best avenue for the future.” It could be beneficial to regularly discuss with a qualified professional if any adjustment should be made to your overall business structure for the benefit of the business or organization and its future strategy.

Additionally, small businesses and organizations should evaluate and plan for their strategic, long-term goals. Planning is often focused on the relatively short term, but there are benefits to longer term planning, including succession and exit planning. According to Baker Tilly Wealth Management executive managing director Kelly Baumbach, most businesses experience key changes due to one of the “Five Ds” — death, divorce, disability, disagreement or distress. “The same way you have a business plan, having a potential exit plan is just as important. Even if it sits on the shelf, it’s important to think about that in advance,” Baumbach added.

Navigating regulatory complexity, including the One Big Beautiful Bill Act

It is interesting to note that the last few years have had more regulatory tax changes than there have been in the past few decades. These changes can be difficult to navigate, but they also can present opportunities for improvement and adjustment for your business.

The recent One Big Beautiful Bill Act (OBBBA) brings with it key provisions for small businesses and organizations, such as favorable changes for research and development expense deductions and expanded benefits for qualified small business stock. Another key provision from the OBBBA is the changes related to payroll, overtime and employee tips tax deductions. These provisions bring an added level of required tracking and reporting which needs to be done in an accurate and reliable way to mitigate risk and stay compliant with both federal and state employment laws.

This can be an added challenge if you have a workforce that spans across more than one state. Baker Tilly senior manager Deanna Kempinski adds that remote and hybrid work has “always been around, but it has definitely increased in complexity and visibility in the last few years.” Employers must manage varying state requirements for payroll, leave, pay frequency and more. Businesses should consider implementing a tool like Baker Tilly’s Employer State Compliance Roadmap to get all the state HR and payroll requirements they need in one convenient location.

Optimizing technology and artificial intelligence (AI) tools

Choosing the right technology stack for your business can depend on a variety of factors. Volume, process complexity and growth trajectory are some of the top factors that should be considered when determining which enterprise resource planning (ERP), accounting and HR systems your business or organization needs. Your business needs a system that can help not only with year-end planning but will also equip you with the data you need for your day-to-day success.

As with entity structure, there is no one-size-fits-all solution for a technology stack in a small business or organization. Baker Tilly principal Mike Sullivan remarked that if you have a more moderate level of volume, complexity or growth trajectory, a standard ERP system will be sufficient to meet your needs. If your business is more complex, however, you should consider migrating to a more robust technology. The appropriate system can withstand your overall business operations and reduce the risk of compliance issues and inconsistencies, as well as minimize the repetitive administrative tasks that your employees need to complete.

In many cases, businesses are turning to AI systems to automate their business operations. Our panelists advise to be cautious of these types of third-party tools. Some of these tools can be a welcome addition to stronger ERP systems, while others market having better return on investment and overall capabilities than they are able to deliver. One place where these AI tools have been proven to be effective is within the financial planning and analysis (FP&A) space. These tools can be put into place and assist in real-time financial data and analytics as well as real-time feedback at month end.

Mitigating operational costs and outsourcing

Finding a financial planner is crucial in determining which systems your small business or organization should consider and what tools you can employ for insights into your business and its operations. For a small business or organization, the needs of day-to-day operations are often more pressing than the long-term planning required to grow. A cost-effective option is outsourcing these functions to experienced professionals. Utilizing an experienced team to manage your tax, accounting, HR and payroll functions means that you as a business owner or organization leader can stay focused on your long-term strategy for enhancing and growing your business or organization.

Source: BakeTilly