The Herald Bulletin

Morning Update

Local Business

April 15, 2013

Emmett Dulaney: Business terms can be confusing

ANDERSON, Ind. — There are a number of business-related terms that I struggle with. Every discipline has its own quirks, and business is no exception, but the following three are particularly troublesome:

I have never understood the term “not for profit.” If you’re not for profit, what are you for? No one seems to ever come right out and say they are “for losses,” yet that is what the wording would seem to imply. My first job out of college was for an organization that was legally identified as a not for profit, but if we had run losses we would have had to shut down. The same is true for every organization, and we — like they — held fundraisers, sought grants, and did everything we could think of to be able to meet expenses and keep the doors open. We charged more for the services than they actually cost to deliver because we needed the excess for more mailing campaigns. Everything that came in above the break-even amount went into the bank account to help future years. At no point in time would we have ever told a potential donor that we now have all we need for the year and they need to keep their money rather than give it to us because we can’t spend anymore and we certainly don’t want to make a profit. While there are some restrictions on how the excess (what would agree can be defined as a profit) can be used — it can’t be given out as dividends, for example — in reality, “not for profit” could pretty easily be changed to “able to accept donations and have you declare them on your tax return” and be a far more accurate description in most cases.  

This brings up the second term I struggle with, and it is one closely related to the first: “tax exempt.” My confusion is not only about what tax they are exempt from (quite often it is from paying sales and/or property tax), but also why. This status is often bestowed upon not for profits, and if we really don’t want them making a profit, one way to help assure that is to have them pay the tax everyone else has to. Organizations with this status are supposed to file a Form 990 with the IRS and that department’s website currently lists 162 such entities within Anderson, or one for every 345 residents.

Lastly, the words “pro forma” are Latin meaning “for form,” but no one is ever “contra forma.” Usually, the phrase is used with financial statements accompanying business plans or models of projected results. It can also be used in other situations as well, but I am willing to bet that most people who ask to see pro forma statements don’t really know that they are just asking to see them in standard form — this is particularly true when they next want to know if this or that can’t be moved around to make the data easier to read. I guess pro forma should really mean “more of a guideline than anything.”

There are many more terms that are confusing as well (just add “integration” to anything), but these three tend to be more troublesome than others.

Emmett Dulaney is the author of several books on technology and an Anderson resident. His column appears Tuesday.

 

1
Text Only
Local Business
  • boynton, brandon photo Teen receives funding for business venture Brandon Boynton is moving forward with his business dreams, thanks in part to a local working capital loan and a fundraising campaign.

    July 30, 2014 1 Photo

  • Senior housing project advances If all the pieces fall into place within the next two weeks, construction on a new senior housing development could begin this fall.

    July 30, 2014

  • Roundabout bids higher than expected Bids for a planned facelift of the gateway into Anderson from Interstate 69 at Scatterfield Road came in considerably higher than the engineer’s estimate for the project.

    July 29, 2014

  • FEA - HB0729 - Senior Falls Aging safely in the comfort of her home Marilyn Moneyhun said being totally reliant on others is difficult. "Losing your independence is a shock to your system," Moneyhun, 84, said. "You are not in control anymore."

    July 29, 2014 1 Photo

  • NWS - HB0728 - business expansion CB Fabricating makes $2 million investment

    A local business founded in 2006 has invested $2 million in new equipment and a building expansion.

    July 29, 2014 1 Photo

  • Charo Boyd: 'My Social Security' simplifies your life So many people buzz through extremely busy and complicated schedules these days. A smartphone in one hand, a computer in front of you, and a digital task list that never seems to end. In addition, to complicate things just a little more, there’s another event you need to add to your list — National Simplify Your Life week.

    July 28, 2014

  • nws - hb0725 - colts - jc - 4.jpg Colts camp's impact: pricey or priceless?

    Football fever is here and the city is flooded with fans eager to catch a glimpse of a favorite player. But officials say they are unclear what kind of economic impact the Indianapolis Colts training camp has on the area.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Skill gap 2 Seeking a solution today, not tomorrow Tina Warner-Morton says she wants to open her own healthcare business because it is too difficult to work for an employer with unclear employee expectations.

    July 26, 2014 1 Photo

  • BIZ - HB0727 - Cathy Cupboard Biz Profile Business Profile: Cathy's Cupboard focuses on customer satisfaction Cathy McPhearson opened her first storefront in June, but this is not her first venture into business. “I have always wanted to have my own business,” she said. “The problem was finding what people like, but everyone seems to like candles.”

    July 26, 2014 1 Photo

  • IU Health Ball Memorial Hospital named Level III trauma center The Trauma Center at Indiana University Health Ball Memorial Hospital has been verified as a Level III Trauma Center by an ad hoc committee of the Committee on Trauma (COT) of the American College of Surgeons.

    July 26, 2014

Stocks
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide