North Carolina is a diverse state, both in terms of people and industries. From manufacturing and healthcare to technology and agriculture, you will find everything here. Each industry has specific accounting challenges and regulations to follow, and unique strategies are required.
As a result, it is important to understand the specific accounting needs of your business based on your industry. It is crucial for ensuring compliance and success in the market. An accountant in Charlotte, NC, understands that not one size fits all. They are aware of the various challenges faced in various industries and can offer tailored advice.
This blog will cover the unique accounting needs of two of the major industries that drive North Carolina’s growth– manufacturing and healthcare.
Healthcare industry accounting considerations
The healthcare industry in North Carolina has various regulatory requirements and requires precise revenue management. Healthcare organizations must ensure they maintain compliance with various state and federal regulations.
Revenue cycle management
Revenue cycle management will be the top priority for healthcare accounting in 2024. Since there have been changes in healthcare payment methods, it becomes important for providers to manage their finances properly. Effective RCM includes everything from patient access to claims processing, payment collection, and denial management.
Compliance with regulatory standards
Healthcare organizations have to deal with the evolving regulatory standards. There have been changes in the state’s Certificate of Need (CON) laws, and new laws about transparent pricing have also been introduced. All of these changes create new challenges in financing and budgeting. Hospitals must work hard to comply with these rules to avoid penalties.
Tax implications
Hospitals in North Carolina can benefit from various tax exemptions. For instance, the government has reduced the corporate franchise tax liability for C corporations. They will have to pay $500 for the first million dollars they earn. After that, $1.50 per $1,000 for any amount over that.
Therefore, starting in 2025, healthcare organizations structured as C corporations will pay a slightly reduced tax amount.
Manufacturing industry accounting needs
There are various unique accounting considerations for the manufacturing industry in North Carolina.
Importance of cost accounting
Cost accounting is crucial for businesses in North Carolina because it helps manufacturers understand the cost of making their products. It allows manufacturers to track expenses, like materials, labor, and overhead. By having detailed insights, you can figure out what is working and what is not. Therefore, you save money, work smarter, and make more profit.
Inventory valuation methods
The inventory valuation methods used in the manufacturing industry are significantly different than those used in other businesses. Manufacturers have to carefully track their expenses for labor and materials. They may use methods like FIFO (first in, first out), LIFO (last in, first out), and weighted average cost.
Compliance with regulatory standards and tax implications
Manufacturing companies must comply with regulatory standards to avoid penalties. There are various rules that only apply to these businesses. For example, in 2024, the income tax rate for manufacturers is 2.5%. The personal income tax rate is a flat 4.5%. It is important to factor these during tax and financial planning.
Other industries
Other major industries in North Carolina include the technology and agriculture sectors. The technology sector has unique accounting needs, especially regarding research and development tax credits. If your business qualifies for this, do not forget to apply.
The agriculture sector has its own challenges. Farmers have to deal with agricultural regulations, including state and federal safety standards, tax laws, and environmental regulations. Knowing about specific tax credits and deductions available to farmers is crucial to save money. A professional CPA can help identify the available options.
Get industry-specific accounting solutions for NC!
Whether you are from the healthcare, technology, manufacturing, or agriculture sector, you are found to face some troubles while handling your accounting and tax preparation. Hire a CPA today to free up your mind and focus on more important tasks.
