Red Earth CPA

09/22/2026

We are heading to ScaleCon this week!

If you are an MSP owner attending, come find us at our booth. We would love to connect, talk through what is happening in your business, and share what we do at Red Earth CPA.

We work primarily with MSPs, so if you have ever felt like your CPA just does not get the way your business works, that is exactly the conversation we want to have.

See you in San Diego!

09/18/2026

Every hour spent serving a client outside your ideal profile is an hour not spent growing a relationship with an A client.

Keeping wrong-fit clients absorbs capacity that could go toward your best clients. That mismatch drives turnover.

At the end of the day, protecting your gross margin sometimes means letting go of a client so both sides can thrive.

Full post here: Wrong Client Gross Margin: https://redearthcpa.com/2026/09/18/wrong-client-gross-margin/

Keeping the wrong client is a leading cause of gross margin compression. Learn how to reprice, right-size, or exit clients.

09/10/2026

Two clients. Same monthly revenue. Same number of seats. Same tech stack.

And yet one of them is drastically more profitable than the other.

Your PSA won't show you that difference. It just shows you time and tickets.

The true cost of delivering service is more than seats, hardware, and software. It includes the motivation and dedication your team brings to serving a difficult client.

Grading your clients gives you a way to see that cost clearly and price for it accordingly.

Full post here: https://redearthcpa.com/2026/09/09/client-grading-service-gross-margin-2/

Client grading reveals the true cost of your service gross margin. Learn how to grade your MSP clients and price.

09/08/2026

Renewal season is here, and your software vendors are counting on you not paying close attention.

For most MSPs, managed service revenue grows 3-5% a year. Software costs? Closer to 15-20%.

Small increases, auto-renewed, spread across ten or twenty tools. None of them look alarming on their own. Together, they are quietly compressing your gross margin every single quarter.

Now is the time to catch it before another round of renewals locks you in for another year.

Red Earth CPA works exclusively with MSPs to find exactly these kinds of gaps before they become a real problem.

Want to read more on this first? We cover it in depth here: Software Costs and Service Gross Margin

09/02/2026

Most MSP owners think tax planning happens in April.

It doesn't.

The decisions that actually reduce your tax bill have to be made before December 31.

Owner comp. Entity structure. Equipment purchases. Retirement contributions. Estimated payments.

None of those levers work after the year is over.

We've been writing about exactly this kind of planning lately:

- Is your business structured to take advantage of the Pass-Through Entity Tax election? redearthcpa.com/2026/06/12/pass-through-entity-tax-election/

- If hardware purchases are part of your Q4 plan, make sure your books are ready for it. redearthcpa.com/2026/06/03/msp-hardware-sales-cogs-mismatch/

- And if you're not sure whether your accounting method is giving you an accurate picture heading into year-end, start here. redearthcpa.com/2025/08/18/accrual-vs-cash-for-msps/

Red Earth CPA specializes in helping MSPs get ahead of year-end so tax season feels like a confirmation, not a surprise.

Still a few months out? Good. That's exactly when this conversation is most useful.

08/19/2026

Software costs keep rising. Your per seat revenue stays flat.

And the reason nobody catches it in time is simple: the costs are charged monthly to the credit card and are individually small.

Stack five, ten, or twenty software subscriptions together, all creeping up independently, and those small increases compound faster than the rate you are increasing your clients' pricing.

We broke it down here: https://redearthcpa.com/2026/08/14/software-costs-service-gross-margin/

Rising software costs are quietly compressing your service gross margin. Learn how to audit your tool stack and adjust your MSP pricing.

07/22/2026

The industry's best operators run a service gross margin over 50%.

Most owners looking at this number for the first time are nowhere close.

Want to learn why? We broke it down in our latest post.

Full post here: https://redearthcpa.com/2026/07/22/service-gross-margin-pricing-for-msps/

Your service gross margin reveals the truth about your pricing. Learn why MSPs underprice deals, how cost-plus pricing fixes it, and where to start.

07/10/2026

The coffee station, the breakroom drinks, the team lunch you DoorDashed on deadline day.

Starting January 1, 2026, none of that is deductible anymore.

This is not a reduction. It is an elimination.

The One Big Beautiful Bill did not restore it. It did not extend it. For most employers, the deduction is simply gone after December 31, 2025.

The fix is straightforward: create a dedicated account in your chart of accounts for non-deductible office expenses and route all de minimis meal and snack costs there beginning January 1, 2026.

The account name does not need to match exactly. What matters is that non-deductible meal and snack costs have their own account, clearly labeled, so the treatment is transparent from the moment the expense is entered.

This is the kind of detail that shows up quietly in the code and creates surprises at year-end if no one flags it early.

We broke it all down in our latest post.

Link to the post in the comments.

06/24/2026

MSP owners: Q3 hardware deals can quietly wreck your margins if you're not paying attention.

Here's why.

When you sell hardware to a client, the timing of when you recognize that revenue and match it to your costs can shift your gross margin significantly from one month to the next.

Get it wrong and you might think a great month was average, or worse, make hiring or pricing decisions based on numbers that don't tell the full story.

Mid-year is the right time to review how your hardware revenue is being handled before Q4 gets busy.

We do this every day for MSPs across the country.

Want us to take a look at yours?

Visit the link in the comments.

06/17/2026

Every year, business owners hand the IRS more money than they need to.

Not because the law requires it.

Because they never made one simple election.

The Pass-Through Entity Tax election lets S-corp and partnership owners move their state tax payment from their personal return to the business return. That shift turns a deduction that was capped at $40,000 into one that is fully available at the federal level. No cap. No limit.

On $150,000 in net profit at a 5% state PTE rate, that is $1,800 in federal savings. On higher income, or in states with higher rates, it grows proportionally.

The math is straightforward.

We published a post that explains what the PTE election is, how it works, and why the payment coming from your business account is not an added expense, it’s the whole point.

Full post here: https://redearthcpa.com/2026/06/12/pass-through-entity-tax-election/

The pass-through entity tax election lets S-corp and partnership owners recover lost deductions. Learn how it works and why it matters