Tax Time, Ready or Not

It’s always a huge relief to many people who get their taxes done early. That gray cloud of stress that nags at you to get it over with can be gone in a matter of weeks instead of months. April is right around the corner, and here are a few tips to cross that task off your to-do list way before spring.

1. Catch up on your books.

If your books are behind, the first step is to get everything recorded so that your tax return will be accurate. With automated bank feeds and data entry automation, this is easier than it’s ever been before. If you have cash transactions or receipts lying around that your accountant doesn’t know about, be sure and get those pulled together so nothing is left out.

2. Make year-end changes.

Some companies may need additional year-end adjustments, and now is the time to make them. These include items such as loan balances if the interest adjustment has not been booked every month, depreciation and amortization, accounts receivable write-offs, accrual vs. cash basis adjustments, and possibly clean-up work. Have you accountant help you with these items.

3. Double-check vendor documents.

If you hire contractors and sent them 1099s, make sure you have the proper onboarding documents for these individuals which includes a W-9. You may also want to have a workers compensation certificate from them in order to avoid paying it yourself.

4. Note deadlines.

Get clear on the deadlines for your corporate, franchise tax, individual and any other tax returns that are required. Even though you might hire someone to complete and file your return, you’ll want to make sure the deadline has been met.

5. Stay organized.

As you receive your 2016 tax documents, keep them all together in a special place. Download them or scan them in and keep them all in one folder. If your tax accountant has a client portal, upload them as soon as you get them.

Your tax accountant appreciates getting your information as early as possible. The sooner you get the documents to them, the sooner the whole process can be complete. Even if you owe money and want to file at the last minute, you can still be complete with the process except for the filing which can be deferred.

Try these tips to reduce tax stress this winter and spring. And, as always, if we can help you with any of this, please reach out.

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The New I-9 Form

The I-9 form is used for employment eligibility when hiring new employees.  It is one of many forms that need to be completed when you onboard a new employee.

Effective Tuesday, January 17, 2017, the new I-9 form, which is dated 11/14/2016, must be used.  Here is a summary of the changes.

  • Section 1 asks for “other last names used” rather than “other names used,” and streamlines certification for certain foreign nationals.
  • The addition of prompts to ensure information is entered correctly.
  • The ability to enter multiple preparers and translators.
  • A dedicated area for including additional information rather than having to add it in the margins.
  • A supplemental page for the preparer/translator.

The instructions have been separated from the form and include specific instructions for completing each field.

The revised Form I-9 is also easier to complete on a computer. To check to see if you are using the correct I-9, check the form’s date, which should be 11/14/2016.  If you are using the one dated 03/08/2013, you are using the old one and must switch to the new one.

You can get the new I-9 form here:
https://www.uscis.gov/i-9

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Start the New Year with a 2017 Profit Plan

Are you ready for 2017 to be even better than 2016?  If so, take a few minutes to reflect on the questions below and take action to set your 2017 profit plan.

Question 1:  What were the three best business things about 2016?

No need to re-invent the wheel.  If you knocked it out of the park in 2016, can you wash, rinse and repeat these tasks in 2017?

If you’re having trouble thinking of three things, here are some hints:

  • What apps saved you time and money?
  • Did you make some good hires?
  • Did you let go of a bad hire or two?
  • Was there a marketing campaign that really worked?
  • Were there any events you went to that generated great ideas?
  • Did you add or remove products and/or services?
  • Did you buy new equipment or open a new location?

Summarize the three best things that happened in your business for 2016 and think about how you can repeat them to enhance your 2017.

Question 2:  What were the three worst business things about 2016?

While we don’t want to dwell too much on our failures, we do want to learn from them.  Think about the three things that are causing you to lose time, money or gain stress, and decide if you can make changes for 2017.

Question 3:  What vision do you have for your business in 2017?

At the end of 2017, what has to have happened in order for you to have a successful year?   Think in terms of metrics as well as intangibles, such as peace of mind and happiness.

Once you know your destination, the fun is in creating a roadmap to get you there.

Your 2017 Profit Plan

If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout 2017.  Start by deciding how much profit you want to make in 2017.  From there, you can compute your revenue goal and make a plan.  Then you can add expenses to complete the budget.  Here’s an example:

Let’s say you want to make $50,000 in profit for 2017.  You can do that in a number of ways:

  1. Generate $500,000 in revenue and $450,000 in expenses.
  2. Generate $2 million in revenue and $1,950,000 in expenses.
  3. Generate $150,000 in revenue and $100,000 in expenses.
  4. And so forth.

From your profit number, you can create a revenue plan.  A revenue should include how many items you need to sell.  Like this:

  No. of units Price Revenue
Widget A 3,000 $200 $600,000
Part B 100 $2,000 $200,000
Service C 700 $1,000 $700,000
Total     $1,500,000

Once you have your revenue plan, you can fill in your estimated expenses.

You might be thinking that this sure sounds a lot like making a budget.  And it is.  But it’s far more fun to work on something called a profit plan than it is a budget.  And if you need us to do the number-crunching part, please feel free to reach out any time.

Here’s to a very happy and prosperous 2017.

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Five Money-Saving Things to Do Before Ringing Out 2016

Hopefully you’re having a wonderful December with all of the holidays and parties this month. And if you’ve spent too much on gifts and decorations, never fear. Here are six ways to save on your accounting and taxes. But hurry, you only have until year-end to cash in a few of these tips.

1. Check your profits

After adjustments, are your books going to show a profit this year? If so, you may want to try to increase business spending before year-end so you won’t have to pay as much in taxes. Consider accelerating larger expenditures to reduce your profits and therefore, your 2016 taxes.

If your business is cash-basis and you pay with a credit card, pay the card off before year-end so that it will fall into this year’s deductions.

There are many tips on business deductions, so check with us to get the full benefit.

2. Eliminate payroll headaches

If your payroll system is causing you pain and suffering, consider switching. Year-end is the best time because switching costs are lower and year-to-date amounts don’t have to be entered. You’ll still want your old system to generate January’s W-2s, but if you start writing 2017 paychecks out of a new system, it will give you a clean break.

And if you’re not sure what system to move to, we have answers.

3. Make January smoother

January is typically a bookkeeper’s busiest month of the year. Many tasks can be done early, such as checking to make sure your W-9s are current and ordering W-2 forms if they are needed. To avoid last-minute headaches, check with us to see what can be done early. It may help keep your accounting costs lower.

You may also want to consider automating more of your accounting system. Adding an app to your existing system may save you time and money in 2017.

4. Give to your favorite charity

Giving to your favorite charity may reduce your personal taxes if you plan to itemize your deductions on Schedule A of Form 1040.

There are many personal deductions that can help reduce your taxes, so check with us for options to minimize your tax payment.

5. Get ready for tax time

Start collecting the documents you need for tax time so they’ll be handy when you need them. You may be able to upload them to your accountant’s portal, or simply set them aside in a special drawer or folder.

Go through your receipts to be sure you communicate all your possible deductions. If you’ve had a major event, such as a move, new child, new marriage, or new job, be sure to mention it to us.

When all of the parties are over and the relatives have left, try these tips to save time and money on your taxes and your accounting in 2017.

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Cool Apps: Google Forms

Do you ever need to collect information from your customers? There are many ways to do it: a form in Microsoft Word®, a fillable PDF, and a Web form are all very common. Less common but slicker than the rest is the option of using Google Forms.

You’ll need a Google ID, and most people use their gmail account for this. Go to Google Drive from your menu, or you can access it from this URL: https://drive.google.com.

In Google Forms, you can have customers complete a line or paragraph of text, select from multiple choice, check a box, select from a dropdown, rate an item on a linear scale, or enter a date or time. To design the form, decide what questions you want to ask your customers.

Start creating your new form by clicking the button labeled New in the top left corner of the screen and select More, then Google Forms.

Title the form by typing over Untitled Form. Your first question is already formatted for you. Multiple choice is selected, and you can change the question type by clicking the arrow on the right side of the Multiple Choice option. Over on the left, you can type your first question or label. Let’s say you need to know their name, so you would enter “Name” in the field and change the question type to Short Answer.

To add a field, click the plus sign on the vertical menu to the right of the form. Repeat this until you have all your form fields entered. If you need to add instructions, choose the TT option on the vertical menu just below the plus sign. You can also add images, video, and sections to your form using this menu.

Clicking the Send button allows you to email the form, get a link (click the chain icon), or add it to a web page (click the <>).

There are dozens of options and settings for your form. You can change colors (palette icon at top right), preview your form (eye at top right), or modify your settings (gear icon). The three vertical dots at the top right provide more functions. If you need a team member to access the responses or edit the form, you can Add Collaborator from this menu. You can even turn the form into a quiz.

Once people start submitting their answers, you can review them by clicking the Responses tab at the top of the form.

Google Forms are versatile, professional-looking, and best of all, free. Give them a try next time you need to collect information from your clients.

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Is There Really a 4-Hour Workweek?

Tim Ferriss made the 4-hour workweek a popular concept in his 2007 book.  But is there such a thing, and more importantly, can business owners like you and me cash in on it?  As the last of the Baby Boomers approach retirement, the topic of working less while making the same or more income is popular.

Here are five ideas to help you work fewer hours while making the same or more income.

Active vs. Automatic Revenue

Some business models allow you to generate automatic revenue.  Automatic revenue is revenue you can earn and leverage over time by doing something only once and not over and over again.  Active revenue is earned while doing something over and over again.  Showing up for a teaching job with a live audience is active revenue while producing and selling video recordings of the same teaching is automatic revenue.

A goal of a 4-hour workweek concept is to increase automatic revenue while reducing active revenue.  You may have to think out of the box to do this in your industry, but the payoff can be huge.

Delegation and Outsourcing

One traditional way to move to a 4-hour workweek is to have others do the work.  Hiring staff frees up your time and allows your business to become scalable.  When it runs without you, it’s more salable too.

Time Batching

If you have a lot of distractions in your day, you can easily double your productivity by learning time batching, which is grouping like tasks together in a block or batch of time and getting them done.  For example, if an employee interrupts you with questions multiple times a day, train them to come to you only once a day to get all their questions handled at one time.  Take your calls one after the other in a group, and then stay off the phone the rest of the day.  Do the same with email, social media, running errands, and all of your other tasks.

Automation and Procedures

New apps save an amazing amount of time. List all of your time-consuming chores and then find an app that helps you get them done faster.  For example, a scheduling app can reduce countless emails back and forth when setting meetings and appointments.  To-do list or project management software can cut down on emails among you and your staff.  And apps like Zapier can connect two apps that need to share data, reducing data entry.

Leverage

The key to working less is to embrace the concept of leverage.  How can you leverage the business resources around you to save time, increase staff productivity, and improve profits?  It takes discipline and change, two difficult goals to accomplish.  But when you do, you will be rewarded.

Posted in Bookkeeping Tips, Business Development, Time Management Tips | Leave a comment

Signs You Might Be Outgrowing Your Accounting System

If you’re struggling with your accounting system, it might be a sign that you’re ready for something new.  Perhaps your company has grown so much that it’s outgrown its older accounting solution.  Here are several indications to look for that justify moving to an accounting system with more features and scalability.

User Permissions

Some companies have a need to limit certain functions to certain users.  Most systems come with basic functional limitations, such as restricting Accounts Payable and Accounts Receivable functions.  But what if you need more granular user permissions such as access to only purchase orders or a certain bank account?  Mid-market systems like QuickBooks Enterprise provide those features.

Multiple Companies and Consolidated Financial Statements

Do you have multiple companies that are the “children” of a parent company?  You might need consolidated financial statements and the ability to open multiple companies at the same time.

Number of Customers and Vendors    

If your business is growing and the number of customers and vendors you do business with exceeds 14,500, you will have reached a list limit in QuickBooks Premier.  Each system has their own list limits, and these limits can get complex quickly, so check with us if you feel you are getting close.

File Size and Performance 

There may also be file size limits that you need to watch, especially if you have a high volume of transactions or multiple years of history in one file.

You could also have performance issues.  If you have a new PC and your accounting system is still running slowly, we can help you improve your performance by condensing your file or setting preferences differently before you have to switch.

Inventory Features

A mid-market system like QuickBooks Enterprise provides advanced features, such as tracking inventory in multiple locations, using the FIFO method, and managing lots or serial numbers.  If you need these features, it may be worth it to switch.

Enhanced Customization   

Most mid-market accounting systems provide better customization such as additional custom fields, better reporting, and improved form design.

Number of Simultaneous Users

The final reason to switch to a larger accounting system is if you need more simultaneous users.  QuickBooks Pro allows for up to three simultaneous users, QuickBooks Premier handles up to five, and QuickBooks Enterprise makes room for up to 30 simultaneous users.  QuickBooks Online allows up to 25 simultaneous users.   Check with us if you are curious about your system’s license limits.

Did any of these reasons resonate with you?  If so, let us know so we can discuss your needs.

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A Quick Primer on Crowdfunding

An interesting way to fund your dream project, whether you are a startup or a more established business, is to consider crowdfunding.  Crowdfunding is when many people provide the money in small amounts for a project.

Although crowdfunding is not new, it became much more popular when organizations like Kickstarter, Indiegogo, RocketHub, and GoFundMe created web platforms to enable this method of raising funds.  The 2015 crowdfunding market is estimated at $34 billion and is growing exponentially.

In crowdfunding, the person who initiates the project receives the money that the people contribute.  The web platform that supports the project usually gets a percentage of what’s raised.  It varies as to what the people who contribute to the project receive in return.  It can be the payback of a loan with interest, shares of stock, rewards, or a possible tax write-off in the case of a donation.

You probably hear about companies that get funded overnight, making it look easy to create a successful crowdfunding campaign.  There is a lot that goes into the launch of a successful campaign.  Here are some steps:

  1. Design your project and research how much money you need
  2. Choose your platform (Kickstarter, Indiegogo, etc.).  This requires careful research about which platform is best for your type of project as well as a complete understanding of the rules and limitations of that platform.  For example, on Kickstarter, if you don’t reach your goal, you don’t get any money, including what you have partially raised.
  3. Create a video that tells your story and makes the pitch.  You must not only grab attention but appeal to both the rational and emotional sides of your followers.  You must also provide an enticing reward for your followers.
  4. Count your followers.  Do you have enough to raise the capital you need?  If not, create the marketing you need to build your followers and make your numbers.
  5. Gain some big name backers if you possibly can.
  6. Develop a carefully orchestrated launch using multiple marketing channels, including social media and press.

With the explosive growth in crowdfunding, it’s here to stay.  Consider how it may help your business grow.

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5 Steps to Move Your Marketing into the 21st Century

If it’s been a while since you’ve adopted new marketing methods, it might be time, especially if you want to attract younger customers. Here are five ideas to do just that.

1. Video

With YouTube as the second largest search engine, using video in your marketing is a slam-dunk return on investment. If there is an educational aspect to your sales cycle, a video is perfect to get the message across.

Even better news is that many companies still haven’t caught on to how powerful video can be in marketing, so you will have an advantage. There is no longer a financial barrier to entry as most videos are no longer professionally made.

There are so many ways to create video: using a webcam, capturing your screen with webinar software or TechSmith’s Camtasia®, or even using your cell phone. If you have a gmail address, you already have a YouTube account, and you can easily crate and customize your own YouTube channel.

The hardest part of adding video to your marketing is to simply take the leap.

2. Social Media

Social media is now one of the best places for a business to expand brand awareness. LinkedIn provides customers with a way to discover your background. It’s also a good source of new employees. Facebook and Google+ enable you to build community and learn more about the interests of your customers.

Twitter is perfect for announcing sales and boosting event excitement. YouTube enhances education and motivation. Pinterest for Business and Instagram are perfect for retail to showcase new products. Tumblr is a must if you market to teens.

If you’re new to social media, choose one or two sites and set up your profile. If you already have some social media profiles, consider expanding or increasing your activity.

3. Content Marketing

Content marketing is another way to educate your customers before and during the sales cycle. With content marketing, you creates a report, white paper, or educational video that describes a topic congruent with your services. The content is typically “gated,” meaning the prospect needs to provide email address or phone number or both, so that you can follow up on the lead. The content should be enticing and educational and should also introduce the prospect to your brands and services without being heavy handed about it.

Content marketing is a great lead generator, especially if you have a sales staff that can deliver scripted follow-up calls.

4. Mobile and Wearables

Over a year ago, Google proclaimed there are now more mobile searches than desktop searches. For the last few years, it’s been increasingly important to make sure your website delivers a great experience via mobile technology.

Wearables are growing as fast as mobile did. Innovative companies are providing a rich customer experience through wearables. It’s now common to see wearables in health, sports, household automation, and virtual reality entertainment. But others are having fun with creative solutions, such as British Airways blankets that turn a color based on a passenger’s mood and Nivea’s children’s sunblock that comes with a GPS bracelet tracker so the kid doesn’t stray too far away.

5. Marketing Automation and Integration

Today, the entire marketing funnel can pretty much be automated, from SEO-enhanced social media posts to landing pages using content marketing to follow up emails, videos, and shopping cart links. Almost every business needs a website, list management system, shopping cart, social media automation app, and a CRM, Customer Relationship Manager. With this automation, you may be able to reduce sales labor as well as customer support expenses.

Integration of multiple marketing channels and methods is essential as the buying decision has become more complex and trust is built slowly over time. Successful marketers are integrating SEO (search engine optimization) with social media, video with content marketing, and email marketing with landing pages, to name a few.

Try any of these five trends to give your marketing a future-focused boost.

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Beyond Saving Trees: New Trends in Receipt Management

Accounting automation has come a long way in the last few years, and the process of handling invoices and receipts is included in those changes. No longer is there a mountain of paperwork to deal with. In this article, we’ll explain some of the changes in this area.

Vendor Invoices

Most invoices are now sent electronically, often through email or from accounting system to accounting system. Some accounting systems allow the invoice document, usually in PDF format, to be attached to the transaction in the accounting system. This feature makes it easy for vendor support questions as well as any audit that may come up.

Some systems are smart enough to “read” the invoice and prepare a check with little or no data entry. Others are able to automate three-way matching – this is when you match a purchase order, packing slip, and invoice together – so that time is saved in the accounts payable function.

Receipts

Today’s systems allow you or your bookkeeper to scan in or take cell phone photos of receipts – whether cash or credit card – and then “read” them and record the transaction. This type of system cuts way down on data entry and allows the accountants to focus on more consultative work rather than administrative work.

Some vendors will email you receipts so all you have to do is use a special email address where your accountant is copied or forward the receipt as you receive it.

The biggest challenge for business owners is getting into the habit of photographing the receipt and sending it to the accountant. The days of shoebox receipts are not completely over, but cloud-savvy business owners are definitely enjoying the alternative options of today’s paperless world.

Approvals

Some systems automate bill approval. This is especially handy for nonprofits or companies with a multi-person approval process. It cuts down on approval time and the time it takes to pay the bill.

New Systems

Here is a short list of new systems that automate a part of the vendor payment or receipt management system. There are a lot more, in addition to your core accounting system, and all of them have different features, platforms, software requirements, integration options, and pricing.

  1. Bill.com
  2. Hubdoc
  3. Receipt Bank
  4. Expensify
  5. SmartVault
  6. Doc.it
  7. Tallie
  8. Concur
  9. LedgerSync
  10. ShoeBoxed
  11. ShareFile
  12. DropBox

If you are interested in finding out more about automating your accounts payable invoices or receipts, please reach out anytime.

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