Tag Archives: Accounting

Is your business ready for a disaster?

The historic storm on the east coast brought this question back to me. Think about it. If everything in your office were lost to fire or flood, how would you continue your business? By everything, I mean all computer, files, and papers.

How would you pay your employees or vendors?

How would you know which customers you owed orders to? Or how would you communicate to your customers that you are still in business at all? How would you get replacement inventory?

How would your employees know whether they still had a job?

If your business is leveraging cloud technology, these questions are easy to answer if you take the time to do some preparation. Paperless timesheets and online payroll processing make paying employees on time a breeze.

Whether using your online banking on the “pay now” button on vendor invoices, paying vendors on time is a breeze. If you have a higher volume of transactions, there are a number of other options to pay vendors electronically.

Using cloud-based accounting, project management, and CRM solutions will ensure you and your team can work from anywhere. Cloud-based email such as Office 365 or Gmail means you stay in touch with employees and customers.

They key to seamlessly keeping your business operating during a disaster is planning. Now is the time to get the right tools in place and prepare a disaster recovery plan that is communicated with your employees. Don’t let a disaster be the end of your business.

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Goodbye 2015, Hello 2016

Where did the year go? 2015 is over and all that’s left is to close out the financial year and get your taxes done. Opportunity for 2015 tax planning is gone (except for a last minute retirement account contribution, or estimated tax payments). So if you haven’t already done so, it’s time to tally up how you did last year.
First things first. If you hired any independent contractors (web/graphic design, attorney, accountant, virtual assistant, etc.) or paid rent to a landlord and you paid them $600 or more, there’s an excellent chance you need to issue them a 1099. The 1099 forms must be postmarked to recipients no later than January 31. So stop procrastinating and get your 2015 bookkeeping done. Need help getting those 1099s done? Click here.
Need some help pulling together those 2015 numbers? I can help you set up an Excel spreadsheet or an online accounting system in Quickbooks or Xero. Or perhaps your Quickbooks or Xero needs some cleaning up. Ready? Click here.
Have you resolved to really learn how to use Quickbooks or Xero better for your bookkeeping this year? Perhaps learn to do things more efficiently? I’ll teach you. Ready?Click here.
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It’s Too Expensive

I don’t usually write about books I read. However, reading This Book is About Travel by Andrew Hyde got me thinking.

In spite of the title, the book is about much more than travel. It’s about getting out of your comfort zone. The author gave away everything he owned and traveled the world for 16 months. He traveled with one backpack and purposely didn’t plan every detail to take advantage of random adventures whether those adventures were conversations with locals, tours, or just experiencing a new community. While I’m not sure I could live out of a backpack and either couch surf or stay in hostels for an undetermined about of time, I appreciated reading his insights. Hyde traveled for the experiences, not just to check locations off his bucket list. He found creative ways to get to know the locals and refused to buy guidebooks.

Rather than a historical accounting of his trip, Hyde shares his experience about a different place he visited in each chapter of the book. The chapter about New York City struck a cord with me. He was visiting a friend, and they had the opportunity to see a Broadway play at over 60% off the regular price that would have cost them $40 each. The response of his friend? It’s too expensive. (The issue wasn’t a lack of money.) Notice the response of his friend wasn’t that he didn’t want to see the play. That got me to thinking about how many experiences I missed out on because I thought something was too expensive. Yes, the value is in the eye of the beholder, and there is the economic reality of simply not having $40. After reading this chapter of the book, missing out on something I wanted to do because I wasn’t willing to spend $40 seems foolish. And I’m determined to stop and think before declaring something is too expensive.

34HBeing a business owner, I also related Hyde’s New York City experience to running my business. We business owners work too many hours, think we can accomplish more than is realistic, and miss out on too many other experiences. Is it too expensive to invest $30 per month in software to streamline and automate a business process that will also give back two hours of your time each month? What could you do with that two hours? Go for a walk? Spend time with family or friends? Accept a new client?

What about the cost of outsourcing areas of our business where we have little experience, dread doing, get stressed out over, and mostly avoid? Is it too expensive to outsource those things that keep us awake at night and freak us out? What’s that worth to you? Think about the result of that investment. Who among us doesn’t complain about not having enough time to accomplish all we want? We all get 24 hours in a day and the only way to get more done in a day is to eliminate things from our to-do list or outsource. Outsourcing could mean automating with software or hiring someone to help us get more done. In the future, before I say something is too expensive, I’m going to stop and ask myself what it’s worth in the way of enjoying a new experience or giving me more time to accomplish more on my to-do list. How are you going to open yourself to new experiences?

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Don’t Delay Your EMV Credit Card Compliance

The United States is the world leader in credit card fraud. EMV or Europay, Mastercard, and Visa is the new credit card standard going into effect October 2015. The new credit cards will have an embedded microchip that will make payments more secure than the traditional magnetic stripe. You’ve probably already received your replacement card from your credit card company.

ChipCard_Blog-newI’ve written a prior blog post about this and hopefully your merchant service company has been in touch with you about the changes you need to make. In spite of all the attention, I see many small businesses still using the old card readers.

Using the new cards means inserting the credit card into a new type of card reader instead of swiping the magnetic stripe. That means if you accept credit card payments in person, you need a new card reader by October 2015. What happens if you don’t get a new card reader by then? If you continue swiping cards via the magnetic stripe or do not purchase a new card reader, you could be liable for fraudulent charges on any cards compromised after being swiped on your machine. Considering the United States lost over $5 billion to credit card fraud in 2013, spending up to a few hundred dollars on a new credit card machine is a small investment.

Oddly enough, PayPal has yet to announce the availability of an EMV compliant card reader. Square has had a new mobile reader available for months, but their register hardware hasn’t been updated. You can learn more here as well as purchase your new reader.

If you use a traditional merchant service company such as Authorize.net or Paymentech contact them to learn about your options to upgrade your equipment. Another option you may want to consider is Apple Pay and other contactless payment systems. Either way, please don’t delay. Waiting until the last minute to upgrade your equipment could mean the readers go on back order due to the last minute demand, not having as many equipment choices, and paying more for a new card reader.

Square has a website dedicated to the new EMV standard. Learn more here.
Authorize.net has an EMV FAQ here.

The option you choose depends on how you accept payments from customers and how your customers prefer to pay you. If you need some help navigating this process, please get in touch.

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Another Way to Protect your Data

There’s no end of articles out there telling you how to protect your data. Having strong passwords is obvious. But think about employees and independent contractors that have access to your online data.

When is the last time you reviewed who has access to your online accounts? People move on, and task assignments change. People who work for you should only have access to the data they need in order to do their job. No more, no less.

Invest the time to review and update who has access to your online accounts on a regular basis. While you’re at it, change those passwords too. Doing so could reduce your risk of damage to your finances and reputation.

Here’s a list of places to start:

*Accounting Software
*Online Banking
*Employee Benefits
*Credit cards (online access and physical cards)
*Sites you purchase from online
*Twitter
*Facebook
*LinkedIn
*HootSuite
*SproutSocial
*WordPress
*Newsletter software (MailChimp, Constant Contact)
*Online document sharing (Dropbox, GoogleDocs)

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Save Money By Filing Your Tax Return on Time

Tax day approaches. For individuals and businesses who follow the calendar year, your tax return is due by April 15, 2015. It is true you can request an extension to delay filing your taxes. Here’s why you should file your tax return by April 15:

File Your Taxes Now and Know What Changes to Make This Year

The sooner you file your tax return, the sooner you will know whether you owe taxes or will receive a refund. Filing your tax return sooner than later gives you the opportunity to start planning for the 2015 tax year by learning from what you did right or wrong for 2014. Did you pay the correct amount of estimated tax payments? What about contributing to a retirement account? Did you keep receipts for all the expenses you should have? When you request an extension, most of the next year is gone, and you lose the opportunity for tax planning and correcting things you did wrong last year.

Get Prepared, Then Meet with a Tax Professional

I recommend you have a tax professional prepare your personal and business tax returns. Partnering with the right tax professional will ensure you take advantage of tax deductions and credits to your advantage. To help you answer some of your questions and build a list to ask your tax professional, I recommend two resources:

J.K. Lasser’s Small Business Taxes 2015 by Barbara Weltman – This book discusses everything from choosing your business entity, handling income and losses, expenses, home office deduction, tax planning tips, and much more. Use this book as a reference year round to answer your quick tax questions.

Small Business Taxes Made Easy by Eva Rosenberg – You should read this book cover to cover. The author starts with the basics of starting a business, choosing an entity, business plans, income and deductions, pitfalls to avoid, and much more. She is an IRS Enrolled Agent and shares her years of tax experience throughout the book, including downloadable book updates, checklists, and resource lists.

To make the most of your meeting with your tax professional, you need to have up to date accounting records, namely a balance sheet and income statements. Financial statements help you make timely business decisions. They also help your tax professional quickly get an overview of your company in order to provide the right tax advice for your situation.

So stop procrastinating and start gathering what you need to get those tax returns done. If your accounting records are in a bit of a mess, I can fix your accounting. Just get in touch.

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Are you a victim of fraud?

I have had the misfortune on several occasions to speak with business owners who were victims of fraud. Fraud can destroy your business by the way of ruined relationships and cash flow problems that force you into bankruptcy.

Regardless of the size of your business, you don’t have to spend a lot of time and money to reduce your exposure to fraud. Simply put, set boundaries and hold the people who work for you (or otherwise represent you) accountable. Some see these accountability measures as an accusation. (You don’t trust me! or But we’re all friends!) I call them protection. In the words of Ronald Reagan, “trust but verify.” Accounting is about financial responsibility and transparency.

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Stress and the value of time

As I write this, the holiday season is in full swing. Anyone with a product or service to sell is marketing like crazy. Just take a look at your postal mailbox and your email for proof. It takes extra effort just to sort through all that for what you need. Along with the day-to-day activity of running your business there are the year-end things to think about; estimated tax payments, retirement account contributions, health insurance, getting your books up to date, etc. Add to that holiday preparations; travel, decorating, shopping, baking, etc. Overwhelmed? The more overwhelmed we are, the less productive we are because we lose focus. The less productive we are, the more stressed we become.

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What is Europay, MasterCard and Visa (EMV)?

EMV stands for Europay, MasterCard and Visa. What is it and how will it affect you and your business?

U.S. banks will be switching to this new type of credit card by October of 2015. All cards will be equipped with a super-small computer chip that is extremely hard to counterfeit. Europe already has this technology in use in an effort to combat fraud. According to current statistics, the U.S. is currently the capital of credit-card fraud. Here is a link explaining the vulnerability of the U.S. to credit fraud that may help you understand the advantage of the new computer chip technology vs. the old magnetic strip technology:  – http://www.businessweek.com/articles/2013-12-23/why-the-u-dot-s-dot-leaves-its-credit-card-system-vulnerable-to-fraud

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Improving your Collections Chances!

I recently had an unfortunate experience with collecting payment from a client.  I would like to share some information with you so that you will, hopefully, not have to go through this as well…

I had an unresolved invoice from a client and after many attempts on my part to collect the debt, I had to turn to a collection agency.  This is not an avenue that any business owner relishes, however, I was able to receive some sound advice through the generosity of the collections agency. It was suggested to me that I add a “Personal Guaranty” to my standard business agreement. They even provided me with the proper verbiage!  I would love to share this with you so that you may also take advantage of the great advice that I received.

PERSONAL GUARANTY

In consideration of [COMPANY NAME] its subsidiaries or affiliates, extending credit, I/we jointly and severally do personally guarantee unconditionally, at all times, to [COMPANY NAME], its subsidiaries or affiliates, the payment of indebtedness or balance of indebtedness of the within named firm. I understand that this could include remedies up to and including reporting on my personal credit and responsibility for any and all collection or attorney fees associated with the recovery of any past due balances.

 

By adding the “Personal Guaranty” to your service contract, you may increase your chances of being able to collect if you should find yourself in the unfortunate situation of having an “noncollectable” account!!

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