If you’ve been reading this newsletter for more than a couple of months, you’ve heard me say this:

Never give up the checkbook.

I will not take signatory control of any company’s financial systems and I look carefully at financial professionals who do. Keeping final say over your payments is a critical part of being a CEO. It doesn’t mean you can’t have help processing the bills, setting up the payments, or doing your bookkeeping. It means that ultimately, you must be aware of all the cash flow going through your business and keep final approval. Especially in a sole proprietorship, LLC, or S-corp, where your business decisions ultimately land on your personal tax return.

If you aren’t convinced, stars like Serena Williams and Halle Berry cite this advice from Oprah as the most valuable business advice they’ve ever received: sign every check. Always know where your money is going.

On the US federal level, Congress owns the checkbook, and a handful of people with a high level of oversight and monitoring organize the payments based on Congress’ authorization. This is how we get payments for Medicare and Medicaid, social security benefits, federal contractor payments, and SBA loan disbursements.

Last weekend, a private citizen with a team of about a dozen other private citizens took over government offices and plugged in unsecured computers, told the vetted people they were on leave, and took over the payment systems. In the case of the US Treasury, the new Treasury Secretary, on the job for one day, put his team on leave and authorized this move. That US Treasury disburses $6 trillion of payments per year. 

If this flew off your radar in the flurry of other executive branch activities, get caught up. This recap is what I would write if this newsletter were my full-time job. You would not allow this to happen in your company. If your bank had a security breach, they’d be obligated to tell you and advise you on how to keep your money and data safe. 

Just because the person is famous, wealthy, and owns several businesses, doesn’t make it okay for him to access government systems, let alone decide not to pay bills owed to federal contractors. Just because our Congressional leaders were on break or started their jobs six days ago, doesn’t exempt them from asserting their Constitutional right to tax and spend the money. If there’s a crisis at your company during your holiday, do you continue your round of golf and drink another mai-tai, or do you grab your laptop and pick up your phone?

For those of us running companies, we can’t set down what we’re doing to track this “flood the zone” effort. There are a lot of unconstitutional things going on. And most of them are in our zone of concern, not our zone of control. In your control is letting your elected leaders know that you want them to do their job and keep the checkbook. Use the 5Calls app to contact your Congressional leaders. You can also schedule an in-person appointment at your rep’s local office, or attend rallies and protests.

Your state attorneys general are also elected. In many states, we have privacy regulation for people and businesses. Let them know you want them to enforce your rights through lawsuits.

A quick roundup of financial news from the past week that may affect your business:

• Tariffs on many consumer goods from China are on at 10%.

• The loophole that allowed Shein, Temu, and Amazon Haul to direct ship goods to consumers and bypass customs duties (the de minimus exception) has been closed. 

• Tariffs with Canada and Mexico at 25%, originally scheduled to take effect on 1 February, have been suspended for 30 days.

• DOGE took over the SBA payments system, among others.

• The Consumer Protection Bureau was put on leave.

• Tax cuts from 2017 expire at the end of this year. Much of the hunt for federal cost savings is driven by a desire to find coverage for an additional $5 trillion in tax cuts, which under current proposals would almost exclusively benefit those making more than $300,000 per year, large estates, and investment income. Incidentally, we owe ourselves $7 trillion on internal loans from reserves like Social Security. 

• The Fed held interest rates steady. If you’re curious how the Fed is approaching fiscal and political uncertainty, check out this cheeky interview with Chicago Fed President Austan Goolsbee on Marketplace. “There’s no bad weather, only bad clothing.” “If you’re a data dog, it’s hard to sniff!” If you ever need to speak about things you can’t speak about, the euphemistic language is delightful. 

I don’t in any way minimize the vast number of other things that are worrisome and having real human impacts, more of which probably popped up while I was writing. The items above are in my area of expertise, and that I’m tracking closely and verifying so I can advise my clients. It’s a lot easier to assess companies and give advice when we have a predictable, stable economy. 

Next week, I’ll be writing about personal and business retirement savings programs that you can participate in before you file your 2024 taxes. That’s the plan, anyway.

February AMA 

February’s AMA will be next Thursday, February 13, at 10 AM Pacific. Send me your questions at [email protected], or join live. 

I’ve decided to wind down my AMAs after March. We are working on some new ways to support you through the newsletter that will roll out in Q2.

It’s time for my annual rant against the City of Los Angeles’ gross receipts tax. The city requires updated registration AND payment of your taxes by February 28, for any freelance income of $600 or more, and even for businesses that are not profitable. My updated 2025 guide is here. 

Filing on time will grant you a tax exemption if you are in your first two years of business, have less than $100,000 in gross receipts for any business, or under $300,000 in the creative arts.

Given the ongoing impact of the Palisades fire, there are some additional exceptions. If your business was in one of three ZIP codes in the Palisades area, you automatically get an extension to April 14. If you were impacted and are elsewhere, you must apply and be approved for an extension. There is no actual new tax relief, just six extra weeks to finish your paperwork.

Mayor Bass has also moved to waive 2025 gross receipts tax for the specified Palisades ZIP codes. This waiver has not been approved; until further notice, you should plan to pay by April 14.

If you’re outside LA and wondering why the Eaton Fire area in Altadena isn’t included, it’s not part of the City of Los Angeles. The mayor cannot dictate tax policy for the rest of LA County.

VML Intelligence has published its annual The Future 100 for 2025. This is a free, downloadable report on top trends impacting global business, and includes global consumer data and trend monitoring. I was particularly interested in their take on how GLP-1s like Ozempic will change our consumption patterns over time. 

INC Magazine has opened applications for the 2025 Inc 5000 of fastest-growing private companies. If you earned at least $100,000 by March 31, 2021 and more than $2 million in 2024, and you are a privately-held company, you are eligible to submit for consideration. Apply by March 21 for the preferred application fee of $395.

Asset management company Vanguard put its industry on notice by dropping its average management fee to 0.07% (seven basis points), versus the national average of 0.44%. Think those little percentages don’t matter? Over your working life, this could add up to hundreds of thousands of dollars in lost compounding in your retirement accounts.  I’m currently moving two clients’ 401ks and the total savings is almost 1% per year from low-fee ETFs like Vanguard and reduced platform and management fees. When you consider the lifetime savings to these business owners, I’m practically working for free.