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Quantum Computing: Separating Hype from Real-World Business Value

4 min read

Quantum ComputingLately, there has been a lot of talk about quantum computing, drawing interest from many, including business leaders. Quantum computing promises to solve previously unsolvable problems and revolutionize entire industries. As a result, excitement around its potential is rapidly growing. However, it is important to first ask where the hype ends and the real business value begins.

What is Quantum Computing?

Simply put, quantum computing is a new way of processing information. Unlike classical computers that use bits that are either 0 or 1, quantum computers use qubits (quantum bits). Qubits can exist in multiple states simultaneously as enabled by the principles of superposition and entanglement. This allows quantum computers to process vast amounts of information in parallel. Hence, quantum computers can theoretically tackle certain classes of problems that would take classical computers years to solve.

The Hype: Quantum’s Promised Revolution

Quantum computing is said to have the potential to perform tasks such as cracking encryption, revolutionizing drug discovery, optimizing global supply, and transforming artificial intelligence. Forecasts like one from Boston Consulting Group (BCG) project that quantum computing could unlock up to $850 billion in economic value by 2040. As a result, major industries are investing heavily and hoping to be among the first to benefit from a potential industrial revolution.

The Reality: Technical and Practical Challenges

The reality tells a different story. Today’s quantum hardware is still in its infancy, with most of these computers having fewer than 100 reliable qubits. They face issues such as noise and error rates that make large-scale practical applications elusive. Unlike classic chips that can be stacked for scaling needs, quantum systems can’t be easily scaled and need major advances in architecture and interconnects. Specialized expertise is also required to develop software for quantum machines. Besides, the algorithms that fully exploit the quantum advantage are still being researched. McKinsey estimates that while there may be many operational quantum computers by 2030, their ability to solve complex problems will take more time to mature.

This isn’t to say there is no hope as more improvement is made to quantum computing every day. Consider Google’s Willow, a 105-qubit processor introduced in December 2024. Willow addresses the error correction challenge and performs certain computations in under five minutes, which would take a supercomputer 10 septillion years.

Real-World Business Applications

Despite these challenges, quantum computing has demonstrated potential in real-world use cases. One example is Volkswagen who partnered with quantum computing firms to optimize traffic flow in Lisbon. This demonstrated how quantum algorithms can improve urban mobility. In finance, quantum-inspired algorithms are being tested for portfolio optimization and risk analysis by companies like JPMorgan Chase. Pharmaceutical companies are also testing molecular interactions with quantum simulation to potentially accelerate drug discovery. It’s worth noting that these applications are mainly hybrid solutions that use both quantum and classical computing. Even so, it signals there is potential in future breakthroughs.

Cloud-based quantum computing availed by platforms like IBM, Microsoft and Google have greatly contributed to this venture. These resources have made experimentation possible without the need for in-house quantum hardware. Therefore, businesses have a chance to innovate solutions to complex problems more affordably.

An example of a strategic framework that can help business leaders is the “quantum economic advantage” developed by MIT and Accenture. It requires two conditions: a quantum computer capable of handling the problem’s size (feasibility) and a quantum algorithm that outperforms a similarly priced classical solution (algorithmic advantage). Only when both conditions are met does quantum computing become economically beneficial.

How Businesses Should Get Ready for Quantum Computing

Preparing for quantum computing doesn’t require immediate transformation; however, it does call for strategic foresight. Here’s how businesses can begin laying the groundwork today.

  • Create a Quantum Strategy: Identify potential long-term use cases where quantum could offer an edge, and develop a roadmap aligned with industry trends and business goals.
  • Invest in Collaboration and Research: Partner with universities, quantum startups, and industry groups to stay updated and explore early-stage innovations.
  • Start Quantum-Proofing Security: Begin evaluating quantum-resistant encryption methods to safeguard future data as quantum threats to cybersecurity emerge.
  • Experiment Safely: Use cloud-based quantum platforms to run small pilots or simulations, gaining hands-on experience without major commitments.
  • Build Internal Capability: Upskill current staff in foundational quantum concepts to ensure your team can engage with this evolving technology when the time is right.

Final Thoughts

Quantum computing is in its early stages, but its disruptive potential and rapid development give businesses a reason to start planning on its adoption, or risk falling behind. Integrating quantum has the potential to boost efficiency, cut costs, and enable innovative products and services. To stay competitive, businesses should start building a quantum-ready workforce through training, hiring, and academic partnerships.

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New Tax Cut & Spending Bill, Protecting Law Enforcement, VA Benefits and Semiconductor Supply Chains

4 min read

New Tax Cut & Spending BillOne Big Beautiful Bill Act (HR 1) – Introduced by Rep. Jodey Arrington (R-TX) on May 20, this tax bill supports the president’s tax and immigration agenda. The legislation includes:

  • Making permanent the income and estate tax cuts passed in the Tax Cuts and Jobs Act of 2017
  • Waiving income taxes on cash tips, overtime pay and interest on some auto loans (ends 2028). The tip waiver would be a tax deduction of up to $25,000/year on cash-only tips for workers making less than $160,000/year; FICA taxes would still apply to tips.
  • Temporarily increasing the standard deduction (ends 2028)
  • Reducing the amount of income subject to income taxes
  • Temporarily increasing the child tax credit to $2,500 (ends 2028)
  • Increase the estate tax exemption to $15 million and adjust for inflation going forward
  • Increase the SALT cap to $40,000 for incomes up to $500,000, phasing downward for higher incomes, but increasing the cap and income threshold by 1 percent a year over 10 years

To offset the tax cuts, the bill proposes the following spending cuts:

  • Repeal or phase out clean energy tax credits
  • Reduce Supplemental Nutrition and Assistance Program (SNAP) funding by $267 billion over 10 years (and shift a higher percentage of program benefits and administration costs to states)
  • For able-bodied, food-aid beneficiaries without dependents, work requirements would increase from age 54 to 64
  • Increased work requirements for aid to parents based on the child’s age, from 18 down to 7
  • Reduce funding for Medicaid by $700 million
  • Require able-bodied Medicaid beneficiaries without dependents to engage in work, education, or service for at least 80 hours a month beginning in 2026
  • Revamp the student loan program to yield $330 billion in savings
  • Repeal the regulation that allowed students to cancel loans if their college defrauded them or closed suddenly
  • Increase leasing of public lands for drilling, mining, and logging

Additional components of the bill include:

  • Imposing stricter eligibility and income verifications for ACA exchange customers
  • Shortening the ACA enrollment period by one month
  • Prohibiting Medicaid funds from going to Planned Parenthood
  • Canceling a current regulation for minimum staffing in nursing homes
  • $46.5 billion to construct a wall along the U.S.-Mexico border
  • $6.1 billion to fund Border Patrol agents, customs officers, and investigators
  • Impose a $1,000 fee on migrants seeking asylum
  • Remove 1 million immigrants a year and house 100,000 people in detention centers
  • Eliminate the $200 tax on gun silencers
  • $150 billion in new funding for the Defense Department and national security, such as building a missile defense shield (Golden Dome), restocking the nation’s ammunition arsenal and expanding the Navy’s fleet of ships
  • New parents will receive $1,000 from the federal government via a “Trump” account for each baby born during Trump’s second term. Parents may contribute an additional $5,000 a year to the account, earnings would grow tax-deferred in a broad stock index, with qualified withdrawals (higher education, starting a business or purchasing a home after age 18; any purpose after age 30) taxed at the long-term capital-gains rate; nonqualified withdrawals taxed as ordinary income.

The House bill was passed on May 22 and now undergoes scrutiny in the Senate, where there will likely be considerable changes.

Securing Semiconductor Supply Chains Act (S 97) – This bill would enable state-level economic development organizations to increase foreign direct investment in semiconductor-related manufacturing and production. It was introduced by Sen. Gary Peters (D-MI) on Jan. 15 and passed in the Senate on May 20. The legislation is currently under review in the House.

VA Budget Shortfall Accountability Act (HR 1823) – Introduced on March 4 by Rep. Jack Bergman (R-MI), this act would instruct the secretary of the VA and the U.S. comptroller general to report on Veterans Benefits Administration funding shortfalls for fiscal year 2024 and expected funding shortfalls of the Veterans Health Administration in fiscal year 2025. The bill passed in the House on May 19 and is under consideration in the Senate.

Improving Law Enforcement Officer Safety and Wellness Through Data Act (HR 2240) – This bill would require the attorney general to provide regular reports on violent attacks perpetrated against law enforcement officers, as well as for other purposes. Introduced by Rep. Tim Moore (R-NC) on March 21, the bill passed in the House on May 15, and its fate currently lies in the Senate.

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Financial Implications of Marriage

4 min read

Financial Implications of MarriageMarriage isn’t just about two people who fall in love and choose to spend the rest of their lives together. It is also a contract. And while that contract might not be forever binding, marriage does come with certain financial and familial obligations regardless of whether the couple stays married or not.

That is why it is critical for couples to discuss their finances and goals early in the game. In fact, the best time to begin this conversation is actually before they begin making wedding plans. That’s because weddings can be very expensive. If the couple bears this expense, they will remove funds from their future plans and opportunities, which they should consider carefully before designing a wedding budget.

However, many times the parents of a couple will pay for the wedding. In this scenario, the newlyweds should consider how the cost of an expensive wedding would impact the paying party’s long-term financial situation. This is important because bankrupt parents could lead to a potential live-in caregiving situation once they are too old to take care of themselves. That’s quite a trade-off for a $100,000 wedding.

Takeaway: Regardless of who pays for the wedding, moderation is perhaps both prudent and considerate.

Partners also should share information about their earnings, assets, debts, and credit reports before getting married. They should discuss their career goals, preferences for children, type of housing, living location(s), and any big-ticket dreams, such as an expensive vacation or starting their own business. Together, the couple should consider each other’s goals and develop a plan to achieve those goals given their combined financial situation.

Takeaway: Note that while each spouse retains their own credit score and liability for debts prior to the marriage, joint debts acquired during the marriage are recorded on both credit reports.

Once married, couples often assume respective responsibilities, such as household earner and bill payer, while the other is a homemaker and primary child caregiver. From a financial perspective, this is not wise. It’s better for the marriage when each spouse takes turns managing finances, including paying bills, learning about investing and working with a financial advisor if they have one, being on all the joint accounts (home deed, insurance policies, etc.) and even each having their own retirement account (e.g., IRA, employer-sponsored retirement plan).

Takeaway: A collaborative approach to finances enables transparency so each spouse is aware of the other’s spending habits and bill-paying discipline.

The relationship tends to have more balance if each spouse has their own money, even if they do not work outside the home. If both spouses work, they could each have a checking account for their own personal expenses as well as a joint account used to pay for communal expenses like rent/mortgage, utilities, food, and upkeep.

Takeaway: A higher-earning spouse may contribute to a lower/no-earning spouse’s Roth IRA so that person has income to manage as they see fit.

Shared finances among married couples do offer certain benefits, such as lower costs for housing, health, long-term care, and auto insurance premiums. With particular regard to health insurance, consider if one spouse should join the other’s plan and how that might impact premiums, deductibles, and out-of-pocket expenses.

Takeaway: Find out if either spouses’ employer offers an incentive for declining coverage. This bonus income provides a good reason to join the other spouse’s plan.

Couples also have the option to compare the advantages of filing joint or separate tax returns, which may be impacted by one partner’s medical expenses or student loan debt. Also, be aware that no matter what time of year you have your wedding, as long as you are married as of Dec. 31, the IRS considers you married for the whole year for tax-filing purposes.

Takeaway: If one spouse is on an income-based student loan debt repayment plan, be aware that filing jointly with two incomes may result in higher payments than if they file separately.

Right after the wedding, there are several actions most couples should take. For example, report any name changes to the Social Security Administration; update any address changes with the Postal Service, employers, and the IRS; and supply your employers with a new W-4 withholding form.

Takeaway: If you’re taking an extended honeymoon, you might want to complete some of these tasks before your wedding day.

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How to Account for Bad Debt Expense

3 min read

How to Account for Bad Debt ExpenseBad debt expense is an important concept that businesses must account for when it comes to their financial reporting. Regardless of the timeframe a company accounts for, it helps companies determine what portion of their receivables are collectible and what portion are not – and therefore, a bad debt expense. Depending on the receivables’ amount, this bad debt expense can take the form of either the allowance method or the direct write-off method.

Direct Write-Off Method Explained

While a company can see its receivables increase quickly, collections of these receivables might not be possible in the future due to client defaults. The direct write-off method is recommended for accounts with nominal amounts in question. A company’s receivables account sees an immediate write-off with this method. This lowers a company’s revenue, reducing net income. When it comes to accounting for it properly, the journal entry for the direct write-off method is as follows:

 
Description Debit Credit
Bad Debt Expense $500  
Accounts Receivable – ABC Business   $500

Description: Uncollectible ABC Account

Therefore, the journal entry would debit $500 to the Bad Debt Expense and credit $500 to the Accounts Receivable for the ABC Account.

Allowance Method

When it comes to more substantive or material amounts, businesses are inclined to use the Allowance Method because it’s set up to interact well with contra asset accounts that offset accounts receivable. Reported on the balance sheet, a contra asset account has an opposite balance to accounts receivable, and the journal entry is as follows:

Assets

Cash: $500,000

Accounts receivable: $300,000

Less: Allowance for doubtful accounts: $25,000

Equipment: $200,000

Less Accumulated Depreciation: $5,000

Building: $100,000

Less Accumulated Depreciation: $15,000

Since there’s zero impact on income statement accounts, contra accounts are advantageous for companies to use since the revenues aren’t lowered from a direct loss that bad debt expenses can cause with other methods.

When it comes to the Allowance Method in action, the three components are as follows:

First Step: Assess the uncollectible receivables

This is done by either determining the percentage of sales or by the percentage of receivables.

Percentage of Sales Method

This is usually determined by taking a percentage of either net or total credit sales. It’s generally dictated by past trends (both internal and macro economy forecast). For example, 2 percent of $10,000,000 = $200,000.

Percentage of Receivables

This method works by looking at the aging schedule for receivables, including those that are due but not yet late. For example, the receivables that are not late but not yet paid can have a low percentage for the particular bucket. Each successive and later bucket of unpaid receivables would require a higher percentage estimated as uncollectible.

Second Step: Journal entries are notated by entering the bad debt expense as a debit and the allowance for doubtful accounts as a credit.

Third Step: After an account is considered permanently uncollectible, the last two entries are as follows:

Description Debit Credit
Bad Debt Expense $250  
Allowance for Doubtful Accounts   $250
Description Debit Credit
Allowance for Doubtful Accounts $250  
Accounts Receivable – ABC Business   $250

Conclusion: The Importance of Calculating Bad Debt Expense

When it comes to determining a company’s results, it is required in their financial statements. If a company does not include this information, their assets could be inflated, potentially leading to overstating their net income. Calculating bad debt expense also helps companies determine which customers have defaulted on past bills, while at the same time highlighting customers that pay on time.

When it comes to accounting for bad debt expense, businesses that are experts at the two methods can effectively navigate the needs of internal and external audiences.

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How New Grads Can Master Their Finances

4 min read

How New Grads Can Master Their FinancesCollege graduation is a huge milestone. You’ve completed one chapter and are on the precipice of the next. While exciting, it can also be daunting – you have a whole new set of responsibilities in front of you. But take heart, we have some tips to help you navigate.

  1. Look back to look forward. Take some time to examine your money habits. Do you have a tendency to overspend? Reward yourself with dinners out or a little retail therapy after a stressful event? Neither of these things is good or bad. They’re just choices. However, if you intentionally monitor your behavior and make necessary changes, you’ll learn how to budget early in your life. This way, you’ll set yourself up for success in the future. The truth is, a little self-awareness can go a long way.
  2. Create a budget and stick to it. Don’t think of this as limiting. It’s simply a way to get a hold of your money and learn to live within your means. One smart way to begin is using the 50/30/20 rule: You allocate 50 percent of your earnings to your basic needs, 30 percent to your wants, and 20 percent to your savings. You can also set up short-term and long-term goals. Do you want to save for a vacation? New furniture? A new car? No matter what, start by listing ALL your expenses and then breaking them out into categories. See what you’re spending and make adjustments. To get started, here’s a free budgeting calculator.
  3. Start saving. Right now, you might be feeling immortal. You’re young and just beginning your life. But someday, you’ll be older and need resources to live. So instead of thinking of this as taking away from your fun, think of it as paying yourself first, your future self. Whether for a getaway, an emergency, or whatever, regularly set aside some cash. But there’s more. Take advantage of savings accounts that will help you save on taxes, such as an individual retirement account (IRA) or a 401(K). Many employers offer these and even match your contributions, so don’t miss out. You want your money to work hard for you.
  4. Pay back your student loans. It might be very tempting just to kick this to the curb. Warning: Don’t do it! Even if you have a six-month grace period. Find out what kind of loan you have: Federal or private? Subsidized or unsubsidized? If you can’t afford to pay large chunks, contact your lender and work out a plan. Another important thing is to find out whether you can deduct a portion of your student loan interest payments on your taxes. And finally, you can even investigate consolidating, refinancing, or whether you qualify for loan deferment. Just handle it. You’ll be so glad you did.
  5. Know your worth when job hunting. Do research and find out the salary range for your level in your chosen industry. You should also examine companies. What are the benefits? If the perks are exceptional, it might be worth taking a slightly lower-paying job, depending on your situation. If you can’t negotiate your salary, ask to see if they have other perks, like helping with student loans. Another exercise is to create budgets around net salaries to get a sense of what managing your money looks like.
  6. Vet your health insurance. Some of you might be covered on your parents’ policy until age 26. Or you might be covered by your employer. If you have insurance through your job and are in good health, a plan with a higher deductible may be a smart move. You’ll save on monthly payments and have more cash for after work.          

When it comes to handling your money, all it takes is a little practice. And baby steps. Sure, you’re going to make mistakes. But jump in. Learn the ins and outs. In the end, it’s going to determine whether you remain a student or become a responsible adult.

Sources

https://www.investopedia.com/top-7-finance-tips-for-new-grads-5248426