Managing Your Time Wisely
Yes, I know I have written about time management before. But so many people struggle with this subject and are not sure how to solve it. There are endless answers and everyone has their own way to fight through it. Time will get away from you every day unless you can structure your day or admit that you need help.
I always tell my clients and potential clients that the best way to destroy your company is to spend all of your time in the back office or to ignore it all together. That’s the office that invoices, pays bills, and keeps an eye on your cash flow. While this office is very important, the owner’s expertize is the product and that is why they started this business in the first place. The owner needs to work with current clients and obtain new clients in order to grow and this should be where the majority of their time is spent.
I always encourage entrepreneurs to hire an expert to work in and monitor their accounting functions. A good back office should be handling so much more than your data entry. An experienced bookkeeper can help to reduce and manage costs, control cash flow, follow correct guidelines for hiring employees, manage your payroll tax payments, and so much more. There are so many ways to get yourself in trouble between hiring practices, payroll taxes, sales tax, and monitoring cash flow. An expert can help to reduce your risk and avoid penalties, interest, and a lack of cash when you need it.
Since cash flow is so vital to my company, I make sure that invoices are created and sent by the first business day of the following month. Since I spend most of my time monitoringand being responsible for my clients back offices and marketing for new clients, I follow my own advice. Bottom Line has its own back office expert who is responsible for the timely invoicing of clients, payroll tax compliance, and many other compliance items. Taking this responsibility off of myself and delegating to the expert has helped me to focus on my clients. After all, marketing is so much easier when happy clients send you referrals.
Call me to discuss your back office and how I can help your company to run at maximum efficiency.
Integrity in the Workplace
One of the things that I hated about having a "normal" job was that I did not have any control over how the company was run. Integrity — along with everything else — starts at the top. I worked in many industries over my 30+ years of “working for the man” (as my daughter says). I have worked in construction, graphic design, retail, and government contracting, but the common denominator about any office is the owner.
In starting my own company, I had to set some goals. I based my goals on good examples from the past, as well as bad examples. For instance, I worked for an owner who had a “transparency” policy when it came to the books. He believed that sharing everything except payroll information was important to the morale of the company. So payroll was grouped into one large number and all of the other expenses were individual line items as they would appear normally for management review. Each month, I would project the Profit & Loss statement on the wall and I would go through the individual lines. The first month was terrible, nobody said a word, but as we went along people started to ask questions and more importantly, started to make suggestions. Turns out that if you want to run the trenches efficiently, you talk to the trench people. They saw unnecessary expenses and even over spending because we were buying from the wrong vendors. They made suggestions to enhance our service and make our service more economical. Profits improved and at year-end bonuses were handed out. Turns out the owner knew what he was doing. Giving people a voice and a stake in that company lead to great ideas and high morale.
I decided that my priority when it came to goals would be how I treated my clients. I think I have always treated them with respect and have been honest with them, which is very important in accounting. I also think that I have always listened to their concerns. But when you are a one-person operation, sometimes you need another opinion and a place where others can speak out. I decided to apply for accreditation in the Better Business Bureau. What I like about BBB is that it’s not a “write-a-check and you are a member” type of organization. You are vetted and only approved after a vigorous background check of your company. They are also a place where any consumer can go to check out your company or even file a complaint against your company. BBB will take the complaint very seriously and will work with both parties to resolve that complaint. I have since worked my way up to an A+ rating, which I am very proud of.
New Version of Form I-9
The U.S. Citizenship and Immigration Services (USCIS) has released a new version of
Form I-9, Employment Eligibility Verification. Several things were changed on the form, including the ability to enter multiple preparers and translators, a dedicated area for additional information and a supplemental page for the preparer/translator. According to the USCIS, the revised form is easier to complete on a computer and streamlines the certification process for certain foreign nationals. Employers are required to use the new form by January 22, 2017.
Have A Proactive Tax Year!
“As a reformed procrastinator, I'm now getting things done in the first 10 seconds of the last minute.”
― Stewart Lee Beck
So, you’ve worked hard all year and have diligently paid your quarterly estimated taxes. But now, you’re starting to wonder … have I paid enough? Have I paid too much? A visit with your CPA can help you answer this question and keep you on track for a stress-free tax season.
After your 2015 Tax Return was finalized, your CPA should have laid out a quarterly schedule for you to follow. Hopefully, you have followed this schedule, and if your business has not deviated drastically from last year’s results, you should be on the right course.
However, I always recommend you schedule at least one visit per year with your CPA, right after your third quarter results are in. These results are a good indicator of your yearly projections and will help your Tax Accountant determine your tax liability for the year. At this point, your CPA can analyze your quarterly payments and make adjustments as necessary.
The third quarter results are probably your last chance to predict your quarterly payment for January 15 (the 4th quarter for calendar year Corporations).
Of course, you cannot do this if your Corporation books are not up to date. Remember — it is very important to your financial forecasting, as well as your personal tax forecasting, to have the books in order!
So, let Bottom Line Consulting, LLC give you an estimate for getting your books in order and keeping them that way. It will pay big dividends come January.
Always keep the communication open during the tax year and let your CPA know about changes both personally and within your business which may affect your tax situation. Being proactive during the tax year will result in less stress during tax season. And, as always, let me know if there’s anything I can do to help.
How Outsourcing Can Make Your Life Easier
So, your company is growing…how could that be a bad thing?
It can be, if you don’t have a plan.
During rapid growth periods, the back-office operations of a company will also expand. This expansion could have an adverse effect on your growth at the expense of the core activities that have made your company successful. Outsourcing those activities will allow refocusing on those business activities that are important without sacrificing quality or service in the back-office. Finding an experienced and an available accounting/HR professional can have an immediate impact and facilitate a smoother transition.
1. Cost And Efficiency Savings
Some back-office functions are complicated in nature, and if the size of your company is preventing you from performing them at a consistent and reasonable cost, outsourcing is a great solution.
Example: A company outgrows its present bookkeeper or hasn’t hired a bookkeeper at all because of its size. Bringing in an experienced bookkeeper who can hit the ground running will help with the transition.
2. Reduced Overhead
Overhead costs of performing the accounting function are extremely high. Consider outsourcing those functions which can be moved easily.
Example: Growth has resulted in an increased need for office space. The current location is very expensive and there is no room to expand. Outsource your accounting needs to a professional who is set up to work remotely.
3. Operational Control
Operations whose costs are running out of control must be considered for outsourcing. Departments that may have evolved over time into uncontrolled and poorly managed areas are prime motivators for outsourcing. In addition, an outsourcing company can bring better management skills to your company than what would otherwise be available.
Example: An information technology department that has too many projects, not enough people, and a budget that far exceeds their contribution to the organization. A contracted outsourcing agreement will force management to prioritize their requests and bring control back to that area.
4. Staffing Flexibility
Outsourcing will allow operations that have seasonal or cyclical demands to bring in additional resources when you need them and release them when you're done.
Example: An accounting department that is short-handed during tax season and auditing periods. Outsourcing these functions can provide the additional resources for a fixed period of time at a consistent cost.
5. Continuity & Risk Management
Periods of high employee turnover will add uncertainty and inconsistency to the operations. Outsourcing will provided a level of continuity to the company while reducing the risk that a substandard level of operation would bring to the company.
Example: The human resource manager is on an extended medical leave and the two administrative assistants leave for new jobs in a very short period of time. Outsourcing the human resource function would reduce the risk and allow the company to keep operating.
6. Develop Internal Staff
A large project needs to be undertaken that requires skills that your staff does not possess. On-site outsourcing of the project will bring people with the skills you need into your company. Your people can work alongside of them to acquire the new skill set.
Example: A company needs to embark on a replacement/upgrade project on a variety of custom built equipment. Your engineers do not have the skills required to design new and upgraded equipment. Outsourcing this project and requiring the outsourced engineers to work on-site will allow your engineers to acquire a new skill set.
For many years, I resisted the rest of the world and the changing times and continued to print out all of my back-up documentation. After all, anyone over the age of 20 was trained to set up those folders with the back-up paperwork and every year we would clean out that file, create a current-year file, and store the old files in a dark, dingy storage room somewhere. And depending on the competence of your predecessor, whether or not you ever found what you needed again depended on their ability to mark boxes in a clear and concise manner.
When I decided to go paperless in my own practice, I wrestled with the pros and cons:
Pros: All of my old files are here in my office, I have marked the boxes, I generally can read my own handwriting, and I can access them anytime.
Cons: As my company grows and gets older, the files take up a lot of space, they are always exposed to the risk of fire, flood, etc., files could get mis-marked or put back into the wrong box.
As I reviewed the pros and cons, I decided to start with each new company as they came on board.