B&M Financial Management Services, LLC

Why You May Just Be Bad With Money

noreply@blogger.com (Business_Finances) — Tue, 26 Feb 2019 15:52:00 +0000

Here’s a question for you. If a stranger with a mic and camera came up to you at your favorite coffee shop while you were enjoying your steamed almond milk latte and asked you your favorite sexual position, would you tell them?

If, in that same scenario, rather than asking about your favorite sexual position they asked what your bank account balance was. Would you tell them?

That’s exactly what Gaby Dunn, of the newly published Bad with Money: The Imperfect Are of Getting Your Financial Sh*t Together, did in the premiere of her Bad with Money podcast. To satiate your curiosity, everyone answered the sex question and refused to answer the account balance question.

Dunn made her name as a personality for Buzzfeed and YouTube and her wildly popular first book, I Hate Everyone but You. Her Bad with Money podcast is a money show ‘for the rest of us,’ and was a project she undertook because, as Dunn claims she’s honestly bad with money.

Dunn appeared on the Queer Money® podcast to talk about why her generation is turned off by traditional financial advice and the systemic challenges marginalized communities, including the queer community, face today. In a culture that celebrates the fabulous no matter how fake, Dunn’s take on money is a breath of fresh air.

Being bad with money

“Even though my whole thing is radical transparency, there was one thing I [was keeping] secret, and that was my money situation,” says Dunn. This is what prompted Dunn to start her podcast, Bad with Money, and provide a unique take not seen in traditional money media.

“As I learned more and more about my own money situation and other people’s money situations, it became clearer to me that [money] was more of a social justice issue than I had previously realized,” Dunn says. She continues, “All the advice is for middle- to upper-class, able-bodied, largely straight, cis white people.”

Being about the rest of us

“It’s better to look at something through a specific lens rather than a generic one,” Dunn continues. Especially with money, the traditional advice alienates large segments of the population. When you’re concerned about your job security or physical security, the financial security promoted through traditional advice seems unreachable. Now, today, there are alternatives now.

Dunn’s show started with her talking about her talking with people about their experiences with money. By the second season, Bad with Money became as much about the social issues about money as money itself.

This is about when Dunn assumed the show description of ‘money for the rest of us.’ Today her show looks at money through a female, person of color, queer, disable, neuro-atypical lens. Dunn wants to reach people with her message who traditional resources aren’t reaching.

Being turned off by traditional money media

Dunn says that traditional finance media is condescending, it doesn’t consider most people’s ‘real lives,’ and, she argues, the shame is palpable because “everyone can’t start their retirement savings in kindergarten.” Dunn explains that traditional financial advice isn’t connecting with broader demographics and younger populations because it often leaves out the disenfranchised and minority communities, both economically and demographically.

Dunn says one of the best things she learned during her first season was from a disability expert who shared that disabled people are discouraged from earning more than $2,000 monthly (and sometimes less) or they risk losing Social Security Disability (SSDI) benefits. Thus, when traditional money media suggest having a certain amount of money by a certain age, they’re losing whole segments of the population. After a while, Dunn says, “it feels classist.”

Dunn says, “the best people to talk about money with are people from your same demographic because they likely have similar lifestyles, risks and concerns.” This is one of the benefits of the gig economy.

Once upon a time, there were three television channels for everyone, and those three channels had to speak to the largest demographics in order to sell the value of advertising on television. Today, with podcasts, YouTube, blogs and social media, nearly every demographic can find money experts from their community.

Being inundated with financial education and not being educated

To be true, contrary to popular belief, there’s a lot of financial education out there. From the internet to cheap books on Amazon to podcasts to YouTube videos, there’s a lot of financial education and much of it is good.

Why is it not connecting with so many Americans? Dunn attributes this lack of connection to systemic issues. “For so many, there’s almost no economic mobility, and no matter how much individual advice you follow, there are so many historical factors to consider that the traditional advice almost doesn’t apply.”

For marginalized people, Dunn continues, “There are a million ways to punish you.” Most people, when presented with enough challenges, give up or find the path of least resistance. The latter is often the most criticized.

Being in a world ruled by Gaby Dunn

If Gaby Dunn ruled the world, she’d “eliminate shame about money because it presents so many problems that people don’t even approach it.” Dunn would encourage “people to stop taking their financial circumstances as a personal failure.” She’d make clear that “People who are born on second base didn’t earn a double.”

Being willing to talk about sex more than money

So, what’s Dunn’s take on why her coffee shop experiment exposing people’s willingness to talk about their sex lives and not their account balances? “You seem ‘cool’ talking about sex, and people want to be ‘cool.’ Money isn’t cool. Money’s boring,” she says.

Dunn continues that, especially because of social media, everyone wants to be “living the dream.” No one wants to claim to have a poor sex life. Money’s an embarrassment for many. So, they dismiss talk about money, especially something as quantifiable as account balances, as too personal. One wonders how people would’ve responded to questions about their income, as incomes are a point of pride for many people.

Too often, and to an extent it’s true, that social justice warriors are dismissed as trying to tear people and systems down. But many are trying to help everyone get a fair shot, create true opportunity equilibrium. That’s Dunn’s mission and why she’ll continue being bad with money.

Source: https://www.forbes.com/

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Tax Tips and Traps for Your Startup Business

noreply@blogger.com (Business_Finances) — Mon, 25 Feb 2019 15:43:00 +0000

For a startup business, avoiding tax hassles begins the minute you make your first business decision. Everything from leasing office equipment to choosing your business structure has some bearing on your tax obligations. To avoid common tax traps, here are three areas where you need to pay special attention.

1—Official Start Date

Your business start date is not necessarily the date you make your first sale or the date you’re issued a Federal Tax ID number. Whether you’re a brick and mortar operation and/or an e-commerce website, your business officially starts when the business begins operating, has expenses and has the potential to make a profit.

The year in which you start is the first year for which your business should file taxes (and the first year when you can deduct qualified startup costs on your tax return). Deductible startup costs include anything related to investigating starting a business or related to the actual opening. For example, expenses such as advertising, marketing, travel and wages to consultants or contractors are deductible, as are research costs such as surveys, site selection and employee background checks.

2—Business Formation

Your business’s legal structure has huge implications for your taxes throughout your business’s life. In your first year of operation, expenses related to setting up your corporation, LLC or partnership are deductible. These expenses include state incorporation fees, legal fees, organizational meetings, and salaries for temporary directors.

Your legal structure also determines how you file taxes and what tax liabilities you incur.

Sole proprietorships are the most common business structure because they are the easiest to form and have the least amount of paperwork. The business is owned and managed by an individual proprietor; all business income or losses is reported on the proprietor’s personal income tax return. This is called pass-through taxation.

There are two types of partnerships. General partnerships have two or more partners; all the partners manage and are responsible for the business’s debts and operations. Limited partnerships have both general partners and limited partners; the limited partners are investors and not involved in day-to-day business operations. Business income and losses are reported on the partners’ personal income tax returns.

A C corporation is considered a separate legal entity from its owners and shareholders. It’s costlier and more complex to form than sole proprietorships and partnerships but protects owners and shareholders from liability for the corporation’s debts or lawsuits. Under the 2018 Tax Reform law, C Corps are taxed at a flat rate of 21 percent.

Limited Liability Companies (LLCs) combine some elements of a corporation and some elements of a partnership or sole proprietorship. It protects owners and shareholders from personal liability but has a more flexible management structure than a corporation. LLCs are treated as pass-through entities unless the members elect to have the business taxed like a corporation.

The S Corp is not a legal business entity type in and of itself, but rather a special election made by either an LLC or C Corp with the IRS. Companies that elect to be S Corps receive the same liability protection as LLCs and C Corps; however, S Corps can choose to pass corporate income, losses, deductions and credits through to their shareholders for federal tax purposes. March 15 is the deadline to elect S Corp status.

3—To Buy or to Lease

Before you buy or lease office equipment such as computers, copiers, scanners and machinery, understand how the IRS views lease payments. In theory, lease payments are deductible, but if the leasing company offers a buy-out at the end of the contract, the IRS may reclassify your lease as a sale. In general, the business purchase of long-term assets (items lasting a year or more) must be depreciated over several years, unless you choose to deduct the entire amount at once under Section 179 of the tax code.

With April’s tax deadline quickly approaching, ask your accountant for suggestions on steps you can take at startup to save on taxes in the future.

Source: https://www.business2community.com

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How Often Should Your Business Run Payroll?

noreply@blogger.com (Business_Finances) — Fri, 22 Feb 2019 15:37:00 +0000

Businesses have a lot of options when it comes to how often they pay their employees. Whether it is every week, every two weeks or once a month, there are a lot of factors business owners must consider when deciding how often to run payroll. Company size, legal requirements, payroll budget, whether employees are salaried or hourly are just some of the key considerations.

Payroll schedules

There are four different payroll schedules you can choose from.

Weekly: Payroll is paid every week. This is typically the most expensive schedule for employers.

Biweekly: Employees are paid every two weeks, typically on a Friday. It is the second most expensive payroll schedule.

Semimonthly/Bimonthly: This payroll schedule is often confused with biweekly; however, employees are paid twice monthly, typically on the 1st and 15th or the 15th and 31st. It is the second least expensive payroll schedule.

Monthly: Employees are paid at the end of each month. While this is the least preferred payment schedule for workers, for employers, it's the least expensive option.

Salaried vs. hourly employees

According to Steffi Wu, a spokesperson for online payroll provider Gusto, the type of worker your business employs – salaried vs. hourly – also significantly impacts your payroll schedule. "Companies that mostly employ hourly employees typically run payroll more frequently, for example," Wu told Business News Daily.

Laurent Sellier, vice president and business leader of QuickBooks Payroll, said salaried employees who receive a set amount each period are best off being paid semimonthly.

Payroll schedules for small vs. large businesses

Sellier added that a business's payroll schedule also depends on the overall size of the company. Smaller businesses that employ fewer workers may be able to get away with a more frequent payroll schedule. However, as your business grows, your needs may change.

"As companies grow larger and take on more headcount, a biweekly payroll schedule is typically the preferred schedule for a number of reasons, including cost savings, and it simplifies reconciliation," said Sellier.

Legal requirements

There are both federal and state requirements small business owners must follow when deciding how often to pay employees. These laws establish other important payroll requirements, such as minimum wage rates and overtime. The Fair Labor Standards Act, said Sellier, does not dictate how often a business can pay employees, as long as employers pay employees for the hours they have worked. However, he noted that individual state laws may vary.

"Most states set either a weekly, biweekly, or semimonthly payday schedule," said Sellier. "For example, states like Nebraska and Pennsylvania allow the employer to designate paydays. Arizona, [however], requires employers to pay employees twice a month but 16 days apart."

The cost of running payroll

According to Wu, cost-associated factors, like business cash flow and available debit schedules, typically guide payroll schedules. Since there is no one-size-fits-all approach for processing payroll, your costs will vary based on a number of factors, such as tax requirements, the number of employees, service bundles and, sometimes, your current payroll frequency.

The costs of running payroll exceed the fee the payroll company will charge you. Keep in mind there are additional administrative costs you'll be responsible for. Add-on fees you'll incur each time you run payroll may include, among others, printing paper checks, data entry and direct deposit charges.

Complications

As a small business owner, there are some risks you face processing payroll yourself or having an employee process payroll for your business. The three biggest pitfalls include:

Misclassification: According to Sellier, employers sometimes misclassify the type of worker they are running payroll for. For example, you might pay someone as a contractor when the law says they should be paid as an employee. As the employer, it is your responsibility to review employee classifications and ensure you are accurate and compliant in classifying and paying employees.

Miscalculating overtime: Managing overtime can be a challenge for many employers, said Sellier. This includes either not paying overtime or paying it incorrectly. To avoid miscalculating overtime payments, properly monitor employee hours and the overtime pay rate.

Late payment: Completing payroll on time is a common complication and can be especially difficult for small businesses. This can be avoided by outsourcing your payroll.

According to Wu, many complications can be mitigated by using a payroll system that does the tricky work for you. This includes choosing a payroll system that can automate your payroll and file and pay taxes for you.

Finally, when determining how often your business should run payroll, keep in mind that you can pay salary and hourly employees at a different rate, and this might be necessary, depending on your business.

Most payroll companies give you the option to update or change your payroll schedule, so if you decide your current schedule isn't the best option for your business, you are free to make the switch.

Source: https://www.businessnewsdaily.com

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6 Tax Hacks For Small Business Owners

noreply@blogger.com (Business_Finances) — Thu, 21 Feb 2019 15:30:00 +0000

Around the world, businesses are the ever-present lifeline of small and big economies. However, even success comes with long hours and significant investment in money and energy.

Every small business owner wants to save some funds on software, for example, or at the bare minimum utilize their finances efficiently for better profit margins. One of the best ways to save money and meet your obligations is by paying more attention to your taxes. With a few simple, and most importantly legal, tax hacks you can enhance your small business in more ways than one. Here are a few.

1. Make the most of tax filing tools

It’s never easy to file taxes being a small business owner who already has so many things to worry about. However, using tax filing software should considerably lessen your experience with the not so friendly proverbial of ‘death and taxes’. It certainly helps with avoiding errors and severe headaches. The best entrepreneurs, accountants, and mathematicians are often frequent tax software users, so it should be a consideration you take seriously.

Tax filing tools accord small business owners plenty of safeguards they probably cannot afford otherwise. Use these platforms to file tax returns on the web accurately and enjoy full refunds whenever they apply.

2. Mind the morrow

Small business owner can’t take long-term goals lightly. But preparing for tomorrow does help. For instance, you should already have set your retirement goals by now, and if you haven’t – now is the time. In fact, by investing more funds into your retirement today you could end up with handsome tax benefits. Check out IRA tax hacks and harness your taxes with retirement savings.

Don’t stop there. Understanding accounting, taxes and other related financial obligations for your business pays off in the long-run. Think about a CPA course for yourself or a staff member that will allow you to organize your finances and plan your future financial trajectory while meeting relevant tax obligations. CPA exam costs vary between $1,000 and $3,000 with diverse features such as video lectures, pass guarantees, personalized support and audio courses, among others.

3. Don’t throw away financial footprint

Obvious financial footprints some ignore are receipts. Don’t throw them away yet. Lots of receipts for all manner of services and goods are deductible from taxes and can balance your taxable income effortlessly. Depending on your small business structure, you’ll find lots of deductibles you can take advantage of. If keeping paper receipts for months or a whole year is cumbersome, start digital storage for them. Use any of the different apps out there to keep your paper trail digitized by capturing the receipts, storing and organizing them in one unique place.

4. Home office deductions

Do you operate your small business from home? Do you know it’s possible to deduct expenses from it? Yes, you can deduct certain things such as repairs, mortgage interest, internet services and other utilities. To hack this, ascertain the part of your home you’ve dedicated to running your small business operations. Tax software can help calculate the amount while the deduction is open for renters and property owners alike.

5. Keep an eye on tax calendar

You should never miss a tax deadline or wait until it’s too late to comply with tax laws. However, you could be really busy and hardly remember to keep up with everything. With deadlines always on the horizon, you can rely on free tools provided by the IRS to avoid missing critical tax deadlines. Check out the IRS calendar for businesses and self-employed individuals and you won’t miss any tax payment.

6. Mind your business equipment

If your small business continuously purchases equipment all the time you can make something out of it. Familiarize yourself with Section 179 and Form 4562 to ensure your equipment bought in 12 months is an expense for your budding business. In the long-term, this will be invaluable and will bring much-needed cash savings.

Old equipment? Don’t sell it yet. Incurring an ordinary loss (by abandoning it) might be a better option because it’s fully deductible. Study Section 1231 and ascertain how your old equipment will be classified to make some tax saving from it.

Source: https://www.theselfemployed.com

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Improve Your Accounting by Using SKU Numbers

noreply@blogger.com (Business_Finances) — Wed, 20 Feb 2019 15:10:00 +0000

Your accounting and financial tracking are vital to the overall health of your business. Yet, it’s intimidating to calculate the sheer number of variables that play a role in determining your finances. Everything from the bankers you work with to the employees you hire affects profitability. And, the tiniest accounting error can significantly impact your numbers.

Developing and regularly using SKU numbers is one of the greatest tools your small business or side hustle can leverage to improve accounting (and profitability).

SKUs vs. UPCs vs. Serial Numbers

SKU numbers may not seem very interesting or very critical to your bottom-line accounting. However, once you see how deeply integrated they are in your business operations, you’ll come to recognize their value.

First, you need to know what defines a SKU number. SKU stands for “stock keeping unit.” It is a code made of letters and numbers and is usually six to eight characters long. These numbers are designed to keep track of inventory. They are used heavily in both inventory management and point-of-sale (PoS) software as well as accounting software.

At this point, you may be confused about how SKU numbers differ from UPCs (universal product codes) or serial numbers. UPCs are 12-digit numbers that run along the bottom of barcodes on various products. UPCs are, as the name implies, universal, and can’t be unique to any one store. In other words, two companies selling the same products will share the same UPC for a given product but will likely have two different SKUs.

Serial numbers are unique to each individual product. They are usually used for electronics and other big-ticket items. If your store is selling 20 laptop computers of the same make and model, they’ll all have the same UPCs and SKUs. But, each of those 20 laptops will have a distinct serial number.

Advantages for the Accounting Process

So, why are SKU numbers good for your business’s accounting?

Loss Tracking

For starters, SKUs are one of your best resources for loss tracking. Because each SKU number allows you to track your inbound products, and track them quickly and easily throughout their journey to customers, it’s easy to determine where and how your products are disappearing.

Inventory-based Decisions

Inventory management errors are one of the three biggest causes of profit losses in retail businesses. Yet, SKUs make it much easier to keep track of inventory at each of your locations. This becomes critical the more products you have to track and the more locations you have. With accurate inventory numbers through a largely automated process, your team will be able to make smarter stocking decisions. You’ll lose fewer products, have a more reliable stock in each of your locations, and be less likely to make a bad development call.

Individual Item Locations

Accounting can also determine advanced statistics based on the locations of various items. For example, they can see which stores are ordering the highest quantities of each product and determine where most products are being lost. As an added bonus, warehouse managers and store stockers will find it much easier to track down individual items. This can greatly increase your speed and profitability.

Reporting Accuracy

You know the importance of reporting accuracy, and SKUs can make those reports much more accurate. Because you’ll be scanning your items regularly throughout your operation with unique numbers for each item, you won’t have to worry as much about misleading or erroneous information. That helps create more consistent, reliable revenue projections. Plus, it enables smarter accounting decisions.

Customer Service and Marketing

Though not related to accounting directly, it’s also important to note the benefits of SKUs for marketing and sales and customer service. SKUs can help you learn which products are being bought most frequently (and how). This information can be used to create targeted advertising. They can also improve our in-store experience since you’ll be able to locate in-store items faster or order them from the correct locations.

Creating SKU Numbers

You can generate SKUs any way you want; there are no fundamental limits on what formatting you use or how many characters are to be included. When deciding on a format, make sure you consider the application for which you’re using SKU numbers. For example, if you believe your cashiers will need to commit SKUs to memory, it’s a good idea to keep them short, easy to read, and memorable. But, if you’re working mostly in warehouses, and you have many different products, longer SKU numbers may be advantageous.
Once you decide on the length, select a format that allows you to embed some level of meaning into each section of your SKU code. You could split your code into three sections—a beginning, middle, and end—and associate each of those sections with a different element of meaning. For example, you could have the first two digits represent the broad category of the item, the second three digits represent a specific category of the item, and the final group of digits represents some kind of sequential order.

There are many different assignments and designations you could consider, including:

Store assignment and location. Track which products belong to which store or the location or department where they’re being held.

Sub-category identifier. You can also create groups of numbers that identify a sub-category. These might include “fruits” or “vegetables” within the “groceries” category.

Variation identifier. The last set of numbers or letters should take advantage of subtle variations between different products, such as color, size, or the type of item.

Miscellaneous SKU Tips

To get the most out of your SKU numbers, try these tips:

You Can Use SKUs Again.

Common sense might tell you that once you use a specific SKU number, you can never use it again. After all, these are meant to be unique identifiers. As long as you wait a few years between circulating items, you should be able to use old SKU numbers for new products. The only problem you might run into is customers returning several-years-old items that are no longer in your database.

Begin SKUs with Letters, and Definitely Not Zero.

When assigning SKU numbers, it’s a good idea to begin them with letters. This will help your accounting team pick them out easier in a spreadsheet that’s likely full of other numbers. While you’re at it, make sure your SKU numbers don’t begin with zero. This is because some apps and software will misinterpret your zero to mean “nothing,” resulting in errors.

Work from Broad to Specific.

The beginning of your SKU number should be the broadest, highest-level category. Subsequent sections of numbers should gradually work to become more specific. Ultimately, this results in the most specific, narrowest category you can qualify.

Avoid Letters that Look like Numbers.

You can automatically scan some SKUs. Accountants must enter others manually or review them in spreadsheets. Accordingly, you can cut down on errors by specifically avoiding letters that look like numbers. For example, the letter “I” looks like the number “1,” and the letter “O” looks like the number “0.”

Avoid Using Manufacturer Numbers.

To keep it simple, you might use manufacturer numbers — or an element of them — as your own. However, there aren’t many benefits from this strategy. Remember, SKU numbers should be unique for every business. Therefore, it can be confusing to duplicate SKUs from another business.

Don’t Pack Meaning into your SKUs.

While it’s a good idea to imbue some sections of your SKU numbers with meaning—like using “GRC” for “groceries”—it’s a bad idea to overload your SKUs with meaning. This often results in SKUs that are far too many digits This creates more confusion for your accounting staff.

Shorten SKUs for Manual Entry.

If you’re going to be manually entering your SKUs, try to minimize the number of characters used. The shorter the string of characters in a SKU, the easier it will be for people to remember and the less time it will take to enter. That’s going to save your team a ton of time and hassle.

Using SKU numbers to keep your business finances under control is one of the best decisions you can make for your brand, especially if you have a wide variety of products to track across locations. It takes time to set up a system capable of scanning, tracking and analyzing them. However, it’s worth the effort.

Source: https://smallbiztrends.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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Need Accounting Help? Learn How to Use QuickBooks for Less Than $20.

noreply@blogger.com (Business_Finances) — Tue, 19 Feb 2019 19:00:00 +0000

Boasting a market share of more than 80 percent among small businesses, Intuit QuickBooks reigns supreme in the world of financial management software. That popularity can be credited to its vast lineup of features for invoicing, bill payments, income tracking, inventory management, and more — basically, everything a business could ever need accounting-wise. And with all of these "smarter business tools" accessible on one clean, flexible interface, it should come as no surprise that QuickBooks was recently named the PC Mag Editors' Choice for online accounting software.

Maybe you're already one of the 5.6 million QuickBooks customers around the world. Or maybe your knowledge of the software is limited to its quirky video ads starring Danny DeVito. Regardless, it's worth mentioning that the latest version of QuickBooks can be tricky to use if you're not familiar with its functionality.

QuickBooks helps you make sense of your finances, from demonstrations on how to instantly create accurate bookkeeping documents (i.e, estimates, invoices, statements, and deposits) to tips on how to track customers, vendors, and employees.

Dreading tax season? Not to worry: QuickBooks even includes tools for tackling your tax return. Such as creating income/expense reports and track loans, credit cards, and sales tax, and more.

Who knew accounting could be so, well, tolerable?

Source: https://www.entrepreneur.com
Image Credit: Alpha Stock Images

Receipt and Expense Tracking Still an Obstacle for Small Business Owners & Self-Employed

noreply@blogger.com (Business_Finances) — Fri, 15 Feb 2019 14:30:00 +0000

With tax season looming, many self-employed people and small business owners are starting to sweat their tax deductions. One of the greatest areas of concern year after year is business expenses and receipt capture. In a recent study conducted by the Receipts team at QuickBooks Online, 500 self-employed individuals and small business owners were surveyed regarding their current expense tracking and receipt capture habits.

Questions ranged in topic from what types of deductions self-employed individuals take to how expense receipts are stored and organized to what types of challenges these workers face while trying to keep track of it all.

Of the 500 respondents, 60 percent identified as self-employed, while the other 40 percent indicated they were small business owners. Sixty-five percent of these individuals indicated they have between 1 and 5 employees, while almost 20 percent (19.2) have no employees. A majority of all respondents were single (36.6%) or married (38%) with no children (50.4%) and intend to make a real estate purchase in the next 12 months (50%).

Leaving Money on the Table

Two things became apparent as soon as the data was initially analyzed: self-employed individuals are uncertain what exactly they can deduct and this uncertainty leads to not deducting everything they can. This directly translates to leaving money on the table.

According to the study, more than 50 percent (55.4) of respondents do not deduct all of the expenses they can from their taxes every year. In fact, only 15 percent (15.2) of those that responded stated they deduct 100 percent of what they can annually.

When examining why self-employed individuals don’t take all of their deductions, in addition to being uncertain of what can be deducted, people can’t remember all their expenses (21.8%) and don’t deduct everything because they lose their receipts (17.4%).

While it’s unfortunate that these obstacles keep self-employed individuals from taking all the deductions they could, it’s encouraging that these challenges are easily addressed.

QuickBooks Receipt Scanner is designed to keep receipts all in one place and works fast, so it doesn’t disrupt a busy business owner’s day

Organization is Key

Of course, one of the key elements of any tax deduction is keeping and organizing the necessary receipts. Nearly 8 out of 10 respondents (79.6) stated that they could be better or a lot better at organizing their receipt. Only 20 percent (20.4) felt that they had no room for improvement where organization was concerned.

This margin for improvement leads to a high margin of error as well. Seven out of 10 self-employed individuals (69.8) stated that they lose a receipt at least once per month; while the other 30 percent (30.2) said they never lose receipts.

Plus, many self-employed individuals don’t keep their receipts for the express purpose of using them as a tax deduction. When asked to rank the most important reasons that they hold on to receipts, respondents stated it was in case they wanted to make a return. Tied for the second most important reason were the following: to keep product warranties; to keep track of how much is spent on business and expenses; and finally, to deduct expenses at tax time.

Physical vs. Digital Tracking

When asked to describe how they organize their receipts, only 16.8 percent of respondents stated that they keep track of their receipts digitally. That means that more than 80 percent of self-employed individuals are still relying on shoeboxes, coffee cans, file folders and their wallets as a filing system.

However, 20 percent (20.5) of respondents expressed a wish for a better way to keep track of their receipts, while another 8 percent (8.2) said that they spend too much time keeping track of and organizing their receipts.

Similar to understanding what receipts are necessary to keep for tax deductions, it would appear that a lack of knowledge regarding other expense tracking and receipt organization methods is what is preventing self-employed individuals from using a more secure tool.

Uncertainty Breeds Stress

Perhaps the most upsetting statistic revolved around the amount of stress that self-employed individuals feel when it comes to expense tracking and receipt management. Two out of 10 respondents stated that they feel stress related to expense tracking at least once every two to three months, while 13 percent of respondents feel stress on a monthly basis. That means that three out of every ten of the survey respondents are feeling some type of stress related to expense tracking on a fairly regular basis. When combined with the over 50 percent (53.8) of respondents who also feel stress organizing these business expenses, tracking these expenses and receipts are obviously providing self-employed individuals with another layer of stress they don’t need.

The Biggest Struggle

When asked what their biggest struggle was relating to tracking their business expenses, self-employed individuals were able to easily articulate these obstacles in their own words. Of all the responses, an overwhelming number was some version of the following: “keeping track of every expense.”

Other themes that were repeated included:

Misplacing or forgetting to separate personal and business expenses

Knowing what can and cannot be deducted

Keeping everything organized

Work Smarter, Not Harder

Fortunately, digital tools have evolved to help self-employed individuals to keep track of their expenses and receipts. With QuickBooks Receipt Scanner, a smartphone camera becomes a scanner. By taking a photo of the receipt, a digital file is uploaded to QuickBooks. Now, losing a receipt isn’t the end of the world; the digital image will remain and can be used when it’s time to review expenses at tax time.

This functionality directly addresses a set of challenges that self-employed individuals repeated throughout the study: keeping track of the receipts, finding the receipts, and putting the receipts all in one place.

Weird But Necessary

Despite confusion regarding what can be deducted, survey respondents were able to recall some of the more … odd items they have deducted for business-related purposes. Some of our favorite responses:

Trip to the Zoo

Banana

Cow

Shrunken Head

Mustard

Dog Walking

Inflatable Snowman

Feather Duster

There were a few other more “colorful” items, but we’ll keep this PG for business purposes.

Methodology
QuickBooks surveyed 500 self-employed people about their business expenses and receipts throughout the US in May 2018. The sample was selected by Pollfish. QuickBooks welcomes the re-use of this data under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution, and reproduction in any medium.

Source: https://quickbooks.intuit.com

Can and Should Your Business Go Paperless

noreply@blogger.com (Business_Finances) — Wed, 13 Feb 2019 18:49:00 +0000

Is your printer constantly warm? Do your regular customers get receipts a mile long? If so, then you may have considered going paperless more than once in recent years.

The paperless movement is on the rise, now that so much of our information can be stored digitally. With a recent but ongoing push toward green initiatives and sustainability in the corporate world, you may be wondering if your business is using too much paper. The truth is, it probably is. Matt Peterson reports on Forbes that for every 30 copies printed, 39% are trashed. That’s a lot of preventable waste heading to the landfill or recycling center.

However, just because everyone else seems to be talking about going paperless doesn’t mean you necessarily should. Some businesses can benefit from ditching the printer, while others suffer.

Can (and should) your business go paperless?

Apps and Cloud-Based Services

One of the reasons going paperless is becoming “trendy” in the business world is because the way we do business is changing. There are many companies operating in the Software as a Service (SaaS) space, and many others participating in the “sharing economy”, which includes services like ride-sharing.

Currently, around 9829 companies participate in the sharing economy and more enter space each year. These services use apps and cloud-based platforms, which makes it simple for a company in these industries to go paperless from the very beginning. With other companies catering more to the demands of customers who are becoming increasingly mobile, the need for print materials has been drastically reduced.

Before you can decide if your company can cut the printer cord, ask yourself a few questions.

What Type of Business Do You Run?

The first thing to consider when deciding whether or not to go paperless is the type of business you run. There are some industries (such as accounting or insurance) that could benefit immensely by reducing or eliminating paper records.

For example, if you’re an upcoming entrepreneur in the healthcare industry, then you probably help develop or maintain some of the 165,000 mHealth applications that allow patients to view health records from the convenience of a smartphone. However, if you run an e-commerce business and need to include invoices in your shipments, going paperless might not be as convenient or realistic.

Going Paperless Helps the Environment

Of course, one of the main reasons so many businesses are moving toward paperless operations is sustainability. It’s a much more environmentally-friendly option than using paper, since paper adds up to about 25% of the waste found in landfills, and causes the emissions of millions of tons of greenhouse gases. As we move toward sustainable changes like a circular economy, these changes can be a huge boon for the environment.

Paper isn’t the only environmental hazard caused by printing. The ink itself contains chemicals and heavy metals that can pose a risk to the environment if allowed to break down in a landfill and enter the soil.

Production of ink also requires the use of fossil fuels, which put a strain on the environment. Even recycling isn’t 100% clean since it takes energy and fuel to process the paper for recycling. Not all paper can be recycled, so some will end up in a landfill regardless.

Cheap and Convenient

In addition to being environmentally friendly, going paperless is cheap and convenient in the long run. Initially, making substitutions and ensuring that all necessary information is available digitally can be a slow and frustrating process, but it’s more convenient over time.

This is especially true if you’re like 80% of business executives that are planning to outsource or expand business internationally. Just imagine managing and organizing all of that paperwork! Or even consider how much money you save by not having to mail documents back and forth.

Any business looking to cut costs and increase efficiency in 2018 should consider making the switch. Going paperless can mean that more tasks can be automated, information can be backed up, and updates can be made quickly.

Security Risks, Fire Risks

Of course, cutting out paper isn’t without its downsides. Cyber attacks and data breaches are on the rise, and it can be difficult to stay one step ahead of hackers.

Many experts agree that it’s impossible to prevent all breaches and that the best businesses can do is apply security measures and have a damage control plan in case of a data breach. If customers’ data is compromised, they can lose faith in business quickly, or worse, the data could be deleted altogether, interrupting normal operations.

Most Americans have been victims of cyber attacks on major organizations, putting credit card information and even social security numbers at risk. Though the likelihood for the loss of physical data is much lower than for digital data, physical documents can also be at risk from theft, fire, or other damages.

Little Inconveniences and Viable Substitutes

While it’s easy to shift most operations over to paperless options, there are some small inconveniences and substitutions that need to be made. Document signing, faxing, and other traditionally paper-based tasks must be switched over to digital programs. Many of these are cloud-based, but most charge a fee for businesses for a certain amount of usage each month.

Depending on these costs, sticking with paper might make more sense for some businesses. However, some customers don’t have easy access to printers, fax machines, and other equipment they might need to share, and would prefer online forms and e-signature options.

Going Paper Light?

So should you go paperless? That just depends on the kind of business you run and your current dependency on paper. More and more customers these days want to support sustainable businesses, but it’s not always possible to completely cut out physical documents. If you can’t go fully paperless, you may want to consider going paper light.

Not all businesses can afford to get rid of paper altogether, but most could stand to cut down on how much they use. Think before you print. What really needs to exist in physical form? Probably less than you think.

Source: https://tweakyourbiz.com
Image Credit: Depositphotos

QuickBooks Apps to Improve Your Small Business

noreply@blogger.com (Business_Finances) — Mon, 11 Feb 2019 18:28:00 +0000

As any small business owner will tell you, running a business is a constant battle to find more time.

More time to sell the product, more time to supervise employees, more time to manage inventory and stock, and more time to handle any of the endless tasks and activities that come with running a business.

The good news is that there are other, far more accessible tools out there that can help the small business owner get their time back. Check out the following list of Quickbooks applications to help you better manage, and improve, your business more effectively.

Stripe and PayPal Sync

As two of the most popular digital platforms in the world to send and receive money through, Stripe and PayPal are used by merchants and customers alike.

With so many payments being processed through either Stripe or PayPal small business owners often find themselves giving themselves more work importing each individual transaction into their Quickbooks account.

With the Stripe and PayPal Sync app, small business owners can eliminate all the manual work involved and automate the entire process.

Through a simple 5-step setup process, small business owners can immediately sync their Stripe or PayPal accounts to Quickbooks. From there every single transaction or payment made will automatically be imported to Quickbooks, allowing small business owners to track all their transactions, everything from incomes, fees, to expenses, without ever having to leave Quickbooks.

Add Stripe and PayPal Sync to QuickBooks

TSheets Time Tracking

Whether you’re managing a team of employees or hiring our sub-contractors you need to be able to accurately track when they’re working.

Traditionally that process either involved having to keep a manual timesheet and entering the data into your accounting software when you had time. Not only this process slow and time-consuming, but it can also lead to mistakes being made like team members not getting paid correctly or on time.

By using the TSheets Time Tracking app, you’ll be able to monitor your team’s work hours directly from Quickbooks Online. With their mobile app all employees can easily clock in through their phone or computer and their time data will automatically sync to your Quickbooks account in real-time.

As the small business owner all you have to do is open up your Quickbooks account and you’ll be able to edit, review, and approve timesheets and invoices without ever having to switch to a different program. With any changes you make syncing up immediately with TSheets as well so all your information is accurate and up-to-date.

Add TSheets to QuickBooks

Inventory by erplain

For small business owners who manage physical products, managing inventory is a huge task in and of itself. In-between dealing with suppliers and ensuring that your product actually gets to the customer, you need a robust tool that can help you manage your inventory without the endless administration and potential for mistakes.

This is where Inventory by erplain comes in handy.

For one thing, with Inventory by erplain small business owners will be able to sync up their products and inventory with their Quickbooks account in real-time. Allowing owners to keep track of their stock and inventory before it actually gets invoiced.

Another perk of this particular app is that it also provides drop shipping support, allows tracking for products that contain multiple components, as well as allowing owners to easily track inventory across multiple locations through their easy-to-use interface.

Add Inventory by erplain to QuickBooks

Expensify

A large headache for many small business owners is keeping track of company expenses, whether that’s the company credit card, tracking mileage, or getting a handle on suppliers and sub-contractors.

Using the Expensify app you can go entirely paperless by having all your expenses sync up directly with Quickbooks. Even if you’re a business that handles multiple paper receipts, all you have to do is use the Expensify mobile app and take a picture of it and it’ll immediately transcribe all the necessary information into an expense report for you.

Add Expensify to QuickBooks

LivePlan

Being able to make data-driven strategic decisions is key for any growing business. The problem with that is that unless you happen to have the money for a full-time accountant, it’s difficult for small business owners to find the time to create the spreadsheets and reports necessary to make those decisions.

LivePlan solves that with their easy-to-understand dashboard which breaks down the key metrics and sets of data for small businesses. By syncing up directly with your Quickbooks, LivePlan pulls through all relevant data to quick build financial forecasts and budgets for you without having to plug through numbers in a spreadsheet. The app goes even further by showing you how you compare with competitors using Industry Benchmark data.

This means that you can save so much more time when handling your finances, as well as be able to quickly gather the data you need to make the right decisions for your business.

Add LivePlan to QuickBooks

Source: https://quickbooks.intuit.com

2019 Tax Scams Targeting Your Small Business

noreply@blogger.com (Business_Finances) — Fri, 08 Feb 2019 18:16:00 +0000

Guard Your Business’ Tax Information

With the continued adoption of going “digital,” small and mid-sized businesses (SMBs) they have become increasingly vulnerable to cybercrime. This transformation, combined with fewer checks and balances inherent with a smaller team, is one of the primary reasons why SMBs are ideal targets for data thieves every tax season.

By making minor tweaks to their tried and tested fraud techniques, criminals can dupe small business owners and employees into falling for comparable cons each year. Here are some data scams targeting small businesses to be aware of as we approach the 2019 tax season.

Business-Related W-2 Scams

The IRS recently warned SMBs of the rising threat of W-2 scams, where hackers lure payroll and human resources professionals to share sensitive tax information via a bogus email. By the end of the email exchange, your employees’ W-2 Forms could be in the hands of cybercriminals.

In another scam, companies applying for Employer Identification Numbers (EINs) are being tricked into signing up through fraudulent websites. Like your Social Security Number, your EIN is required for business bank, loan, and credit accounts as well as state and federal tax filing. Only apply for your EIN by filing a SS-4 Form through the IRS.

Red flags indicating your business identity has been stolen:

You’re rejected from requesting a tax extension or sending an e-filed return because a return with your company’s EIN is already on file.

Your business receives an unexpected tax transcript receipt or IRS notice that doesn’t correspond to your return.

You fail to receive expected communication from the IRS because fraudsters have changed the address on your application.

Scams Targeting Tax Preparers

Tax preparers are often small businesses, helping consumers and SMBs in their community to prepare on time and accurately. Their database is a treasure trove of tax information, making them a target for scammers, cybercriminals, and identity thieves this tax season.

In 2018, the IRS received five to seven reports per week from tax professionals that experienced data theft.

The IRS requires tax preparers to create and endorse a security plan to protect client data and their computer networks from the threat of a hack. If using a tax professional to prepare your business return, be sure to confirm their credibility by asking for their Preparer Tax Identification Number. And, don’t trust your business’ information to anyone without first verifying their CPA status.

IRS Services Limited Due to Government Shutdown

As the government shutdown continues with no end date in sight, small businesses are all wondering if tax returns will be postponed. The IRS claims it is “business as usual” and tax refunds will be issued, albeit likely delayed.

Due to very limited IRS availability, do not expect your tax-related questions to be answered while the shutdown continues. You may also experience a delay in receiving your Employer Identification Number (EIN), which interrupts your ability to process your business tax return and other financial obligations. As previously mentioned, don’t be tempted to trust third-party websites to create your EIN.

It’s always important to be alert and aware of how you are protecting your organizational, employee, and customer data, but it’s especially during tax season. Avoid damaging the trust of your clients and your business’ reputation by letting hackers penetrate your small business.

Tips to Protect Your Small Business from Tax Scams

Create a system of checks and balances. Have a trusted member of your executive team or an independent tax agent double check your processes.
Train employees to recognize W-2 phishing scams. The IRS will never call or email you for tax-related information. They will first contact your organization via carrier mail.
Keep up to date with the latest tax scams: The IRS keeps a running list of scams for consumers and businesses to be aware of, called “The Dirty Dozen”.

Source: https://www.business2community.com

Prevent Cash Flow Problems in Your Small Business – Read These 3 Tips

noreply@blogger.com (Business_Finances) — Wed, 06 Feb 2019 18:08:00 +0000

One of the biggest problems faced by small businesses is consistent cash flow. A US Bank study found that cash flow problems account for why 82% of small businesses fail!

It’s understandable; many people who start businesses do so because they have a passion, not business experience. They want to fix a problem they see, or they want to share their creativity with the world. They may not have the business know how or understand what systems they need to put into place to keep theirbusiness afloat.

How to Prevent Cash Flow Problems

Here’s how you can avoid that cash flow crunch for yourself and keep your business (and personal life) running.
Have an Invoicing System

Handling all your invoices yourself is a sure fire way to get behind, miss details, or forget to follow up on late payments. You can’t keep your invoice to do list in your head, and updating a spreadsheet is a task that many dread.

Having an invoicing system like Due means you can create a template for your invoices, set up recurring payments, automatically set reminders to go out a certain amount of days beyond the due date. All those things that currently take up your brain space and work time? Due can do them for you.

Having automated invoices for recurring clients can mean regular payments. Reminders to late clients means there won’t be month long gaps between payments. These help insure there’s always cash coming in.

Invoice More Than Once a Month

A common trend in freelancing or small business work is to invoice only once a month- at the end, when you’ve completed all the work for each client.

There’s no law that says that’s what you have to do. And a great way to avoid a cash flow crunch in your business is to invoice as soon as you’re done with a client’s work. Sending out invoices throughout the month means that payments should come in throughout the month.

Set Up Systems ASAP

The more systems and structure you have in your business, the better off you’ll be. Having an invoicing software is one system. What else can you systematize?

Have templates for common emails you send; requests for your bio and head shot, pitches, etc.

Set up automated emails and marketing funnels; automating emails is a huge time saver and can generate sales.

Client management software; track warm and cold leads, send out contracts, and save data with a client management software.

Having systems in place will make it easier for cash to flow freely through your business. Often payments will get held up because there is a breakdown in a system or because there is no system. Avoid a cash flow crunch by keeping channels open and running smoothly.

Source: https://due.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

Hiring An Outside Expert For Your Family Business

noreply@blogger.com (Business_Finances) — Tue, 05 Feb 2019 18:03:00 +0000

One of the of the trickiest thing for a family business to do is to ask for help from an outsider, whether it’s bringing on an expert as a full-time employee, a consultant or a board member. But to take a family business to the next level, tackle thorny challenges and receive no-holds-barred feedback, sometimes you need to do just that.

It’s tricky, though. Pulling back the curtains to non-family members requires trust and a willingness to listen and to learn.

For insight on when and how to find an outside expert for a family business, I reached out to Ted Clark, Northeastern University Center for Family Business executive professor of entrepreneurship and innovation and director of the Center for Family Business. Clark is also on the board of FamilyBusiness.org, from the University of St. Thomas’ Entrepreneur and Innovation Exchange — eix.org — a social media platform for new business ventures. (Full disclosure: The Schulze Foundation, which funds EIX, is also a funder of Next Avenue.)

Next Avenue: When should a family business look for an outside expert?

Ted Clark: I would say as soon as you need one at any particular point in time. Bringing in a non-family employee can happen immediately, if you need someone to support the business.

The same with the board. You can’t do it soon enough.

Isn't there a psychological or ego issue — the insider versus the outsider issue?

From the perspective of a functioning family business, I would turn it around. If you’re thinking that you don't need these people — ‘We are smarter than the rest of the world. We don’t need outsider perspectives.’ — it’s really a question of how long can that last? Seriously!

To think for one second that you can be disconnected and unconnected from the outside world, that is not reasonable. If you are in the situation where your family is saying ‘We don’t need outside people,’ that is a sign that you need some outside people.

Does it depend on the way the family business is set up?

There are three types of family businesses.

There’s the monarchy or aristocracy, where there is the king or the queen, and one person is in charge. That is the family business that gets the bad rap of not needing outside people.

You see the king or the queen, who either started the business or have been running it for a long time, and they are very confident in their abilities and may have had success by not listening to the experts and charting a different course and being an innovator. It is difficult for them to hear somebody new, or an outside perspective. But if the business is faltering or not working well, that is the time that person hopefully acknowledges that yeah, maybe the world has changed. and they do need a new vision and perspective from the outside.

The next kind of family business is when siblings own the business. You move away from a monarchy to an oligarchy. That group is typically a little more prone to bringing in outsiders, because they have lived with the monarchy, and they may have seen sometimes the monarch gets a little long in the tooth and needs a new view of the world.

The third type of family business is the diffused type where there are multiple owners and more of a democratic structure. Those almost always have a board of advisers. And quite often a board of directors. They are the aspirational model of a family business: outside advisers, board of directors, meetings, openness, transparency. It takes a while to get there.

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Is there a business case for bringing in an outsider as a consultant rather than as a full-time employee?

Yes. You bring in the expert employee — great voice, great vision, great everything — but all their eggs are in one basket of being an employee. And they may not necessarily give you the best advice for fear that they will upset you or that if they say something the monarch is not pleased with it, it could jeopardize their career or future employment. Sometimes, although these people are experts, they may be reluctant to provide advice and the owner may be reluctant to accept it. So, there is great risk there.

The upside with consultants is that it is temporary. It should be a transactional relationship. By that I mean, they provide a service and then move on. You can reengage them and hire them again.

But the idea here is you want someone to be able to look you in the eye and tell you that with all honesty, in a diplomatic way, that is the dumbest thing they have ever heard, without any fear of losing their employment with you because they know it is transactional.

So, you will hopefully listen to them. They are telling you the truth because they have nothing to lose.

If you’re hiring an outside expert, are you looking for a trusted adviser?

One of the things in family businesses that drives me nuts is the term “trusted adviser.” I don’t want to trust an adviser. I want a truthful adviser. Trusted adviser also sort of implies forever, too. I don't want them to think this is forever. As the business changes, my needs change; as I change, my needs change.

You shouldn’t feel you should keep them forever and they shouldn’t feel they are stuck here for life.

What’s the best way to look for experts?

There are two general ways to go.

First, you can openly broadcast that you are looking for people or go to your attorney, say, to push out information. ‘Kerry’s company is looking for a marketing expert to be on their board.’ People connect in and send a resumé and then you can have a conversation with them.

That is not my preferred method.

My preferred method is to do it blindly. So, you would go to the same group of people — like your accountant or your attorney — but you as the business owner should never approach these [potential experts] directly.

Say, for example, you are looking for an expert with my expertise and your accountant called me and said ‘Hey, there is a company looking for someone with expertise in your realm. Would you be interested?’ I might say ‘yes’ and send my resumé, and they would forward to you, and I would not know who the company is.

The thought here is if they reject me, I don’t have bad feelings about the company since I have never met them.

What are the rewards of having outside voices at a family business?
If there is conflict in the family, it is partially reduced, because bringing in outside people puts the family on their best behavior.

You don’t want to act like a 12-year-old in front of a bunch of adults. When you bring in the outsiders, you need to act more appropriately, so it elevates the conversation.

If you have been honest and set goals, it helps achieve the goals. Everyone wins.

Source: https://www.forbes.com

Image Credit: Getty

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

4 Ways to Teach Your Children Financial Responsibility

noreply@blogger.com (Business_Finances) — Mon, 04 Feb 2019 15:00:00 +0000

Set your children on the path to a lifetime of financial stability and fiscal responsibility by helping them learn these four fundamental money lessons.

Americans are facing a personal finance crisis. Almost 60% of all working age Americans have no retirement savings. And dealing with unexpected expenses can be a hardship for many families without savings. In fact, 4 in 10 adults could not cover a $400 emergency expense.

We need to make sure the next generation is better prepared, and that means helping children form healthy financial habits and relationships with money at a very young age.

The good thing is, most parents understand this need. Edelman Financial Engines recently surveyed 1,000 parents and found that over half (56%) believe children should start learning good financial habits when they are between 4 and 8 years old. Nearly half (49%) of parents also said their greatest difficulty talking to their kids about money is doing it in a way the kids would understand.

In my new children’s book, The Squirrel Manifesto, my wife, Jean, and I tackle this problem head-on and give parents an easy way to talk with their kids about how to form good financial habits. We equate it to the way squirrels gather nuts to prepare for winter, eating some nuts now and storing some for later.

These are the four important lessons we believe children need to learn to be set up for financial success throughout their lives:

Tax a Little

The first time most of us learned that we don’t get to keep everything we earn was when we saw our first paycheck and wondered why the government was taking so much of our money.

Children need to learn from an early age that they don’t get to keep everything they earn. Consider withholding one-third of a child’s earnings and call it a tax, so they get used to the concept. Parents can put these “taxes” into a savings or investment account and hand over the funds when the child is ready to pay for a big purchase, such as college tuition or a car.

Spend a Little

It’s important to let children experience the joy of buying something they want with the money they earn or receive as a gift. Being able to purchase a comic book, toy or piece of candy will help them develop a positive relationship with money and teach them valuable lessons about how much things cost and how much they’re worth.

Save a Little

Most of the time when parents talk with their kids about money, it’s in the context of saving. In fact, our survey found that 86% of parents have this conversation with their children.

One practical way to teach children the importance of saving is by helping them set aside money for a big-ticket item, like a bicycle or electronic device. When children are trained at an early age to save toward larger purchases, they will develop the right mindset and self-discipline to save for future life milestones, such as buying a house or retiring.

Give a Little

Children need to be taught at a young age that they have a responsibility to give back by supporting worthy causes or helping others who are less fortunate. For every dollar a child receives, parents should have a conversation with them about what portion should go to philanthropy. The percentage should be material, to reflect true sacrifice, and applied consistently to all money the child earns or is given. Children should be empowered to decide who receives the money, whether it is a charity, a church or a friend in need. By developing a sense of philanthropy early in life, children will come to appreciate that the greatest joy in spending comes from supporting and caring for others, not spending on themselves.

Teaching children these fundamental money principles at an early age will set them up for a lifetime of financial security. As we say in our book, “If we save just a little, a couple nuts at a time, it leads to what matters: Squirrel Peace of Mind.”

Source: https://www.kiplinger.com
Image Credit: Getty Images

5 Reasons You Should Not Spend Money On Valentine's Day

noreply@blogger.com (Business_Finances) — Fri, 01 Feb 2019 20:44:00 +0000

There are a lot of contradictory feelings about Valentine's Day: some people love it, others loathe it. The one thing most everyone can agree on is that Valentine's Day is expensive, and it is easy to spend a lot of money on something as simple as cards—which is madness. With so many people in debt with student loans or medical bills, spending money on Valentine's Day is ridiculous when there are smarter ways to spend money. Here are a five reasons why you should not spend your hard-earned money on

Valentine's Day:

It Is An Insignificant Holiday

People often feel obligated to celebrate Valentine's Day, even if they are single. So they go on a date or go out with friends, when really they do not need to go out at all. No one needs to eat one heart shaped thing if they do not want to. This is an unimportant holiday. In an ideal world, it would be completely unnecessary because all couples be grateful for the love they share, and tell the ones they love they appreciate them on a regular basis. But there are 364 other days in the year you can appreciate them, Valentine's Day is just another day, and you have no obligation to celebrate it whatsoever.

It's Expensive
The thing about Valentine's Day is it's expensive. If you even get some cute small things for your group of girlfriends, let's say you have five close girlfriends, a card and some cute heart shaped things quickly add up to $50 or $60. Which is nothing compared to flowers, teddy bears holding hearts, dinner reservations or heart-shaped jewelry. I'm not even mentioning all the other heart shaped gifts you can receive. It's smarter to save the money, the heart shaped candy will be much cheaper on the 15th.

You Have Better Things To Spend Your Money On

In the grand scheme of life, Valentine's Day is not important. There are things you'd rather have than a stuffed animal or an overly priced bouquet of flowers, and things you need like rent, clothes, car payments, student loans, toiletries, a waffle maker and other random items that bring you joy that are more practical and more important. In so many ways, it is a holiday meant to boost the economy in February, but you do not have to participate. You can save your money, or spend it on something smarter than Valentine's Day.

It Is A Terrible Day/Weekend To Go Out

It is a universal truth in the restaurant business that Valentine's Day is one of the worst days of the year. It is completely slammed from open to close, there are almost exclusively parties of two which requires breaking down and reorganizing the whole dining room, couples are rude, demanding and linger forever. It is generally speaking a hilariously unromantic atmosphere. From a customer's perspective everywhere is jam packed while it is freezing outside, everything is expensive, and if you happen to not be in a relationship it is a weekend that can make you feel self-conscious about it, when your relationship status is not something you should feel self-conscious about.

Source: https://www.forbes.com
Image Credit: Getty

Federal Workers: How to Protect Your Finances During the Government Shutdown

noreply@blogger.com (Business_Finances) — Fri, 01 Feb 2019 15:30:00 +0000

If you’re a furloughed government employee, you are likely feeling a good deal of stress and uncertainty about how to manage your finances during the government shutdown. While missing a paycheck is a financial moment no one wants to experience, there are many ways you can keep your financial health intact. There’s no need to panic just yet: use this time to take stock of the situation with these five steps.

Determine your priority payments – and pick up the phone

To start, take stock of your current financial responsibilities. Figure out what bills need to be paid now and what can wait. Because it’s still unclear how long the shutdown may last, it could prevent several of your next paychecks getting to you on time. Determine if you have any payments you can defer or pay the minimum on, and most importantly, contact your lenders and utility providers.

Housing costs are likely your top of mind payment. In times like these, know that it’s okay to dip into your emergency funds to cover this monthly expense. If you don’t have enough to cover your current housing bills, contact your lender or landlord and explain the situation. Ask if they can grant you an adjustment of the payment due date, or if there are other services they can offer you to help during the furlough time.

Many companies and financial institutions are offering assistance programs for furloughed employees. For example, Chase has set up a special assistance line for impacted federal employees. Start by calling the number on your debit or credit card, and they will route you to the right person. Additionally, all four major U.S. mobile phone service providers have said they will work with individuals to set up a payment schedule that won’t negatively affect service. When negotiating with each company, be sure to write down all of the instructions you are given over the phone, and take note of the date, time and person who shared the information with you just in case there are any questions in the future.

Supplement your savings

If you don’t have substantial savings to draw from, a number of credit unions are making offers for workers, including short-term low-or no-interest loans, and payment deferrals. A zero-interest loan will allow you to borrow money without having to pay any interest on the amount borrowed.

Currently, Launch Federal Credit Union is offering a 0 percent interest rate for loans up to $3,000 to federal employees, and Navy Federal Credit Union is offering them up to $6,000. You can also find options available from the U.S. Employees Credit Union and Justice Federal Credit Union. Chase is also waiving fees for government employees who have direct-deposit set up.

You can also dip into your 401(k) accounts, but it will have a few tax implications. IRS regulations impose strict restrictions and penalties on early withdrawals, which is defined as making distributions while still under the age of 59 and a half. However, there are a few ways you can withdraw funds without having to incur a 10% excise tax penalty on the amount withdrawn.

For starters, you can likely qualify for a 401(k) loan which allows you to withdraw funds from your account with the promise of paying it back later to the same account. A word of caution on these types of loans — interest will be charged on the amount taken and repayment starts almost as soon as the loan is taken out.

Given the current situation, you also can qualify for a hardship withdrawal. You can use this money to cover living expenses to prevent eviction or foreclosure, medical expenses, and higher education costs. But it is worth noting that 10% penalty is not waived for hardship withdrawals.

File for unemployment

Furloughed government employees and contractors are typically eligible for unemployment benefits under the Unemployment Compensation for Federal Employees Program. Eligibility and waiting periods vary by state, so look up your state’s unemployment website for more information. Most states will pay up to 26 weeks of regular benefits. If you receive back pay after returning to work, you will need to repay your unemployment funds to the state. Your state unemployment agency will provide you instructions.

File your taxes early

Despite the current shutdown, tax refunds are expected to be available on time, meaning your refund can provide a solid supplement to your emergency fund spending. Despite the Government Shutdown, the IRS will begin processing tax returns on Monday, January 28, 2019 and provide tax refunds as scheduled. You can get started now and be first in line for your tax refund!

TurboTax is already accepting tax returns and will securely hold them for transmission to the IRS and States once they begin accepting e-file.

Look to your community

Several businesses are offering “furlough freebies”, including free meals, discounts, other assistance programs to help government employees. Additionally, see if your local social services or religious organization is providing temporary relief efforts. Look to friends and relatives for ways to save: host a potluck and have everyone bring a dish (who says you can’t enjoy friends and family with a good meal?)

Although there is a lot of turmoil right now hopefully these tips can give you peace of mind as you navigate all of these challenges. This moment of change is the perfect opportunity for you to make adjustments to your finances you may have wanted to make previously. The Senate recently approved a bill that will require that all government employees be paid as soon as the government reopens. The bill will have to next be approved by the House of Representatives before it can go into effect. So, be sure to stay up to date on the latest so you can plan for when to expect your back pay.

Source: https://blog.mint.com

Valentine’s Day Spending Statistics

noreply@blogger.com (Business_Finances) — Thu, 31 Jan 2019 20:39:00 +0000

Some 135 million Americans expected to drop $30 billion on V-Day 2019.

Roses are red. Violets are blue. If you don’t spend big on Valentine’s Day, your partner might end things with you.

It’s expected that more than half (53%) of all Americans will pull out all the stops this February 14th, spending a collective $30 billion on all manner of heart-shaped treats and experiences.

However, signs point to Lotharios tightening the old purse strings in 2019, with spending on Valentine’s Day down 10%, falling from $30.3 billion in 2018 to $30 billion in 2019.

So who’s spending what on whom?

If you’re one of the 53% of Americans planning to spend on someone for Valentine’s Day, I hope you’ve got deep pockets: The average person is expected to spend $221.34.

As far as the spending battle between the sexes, 62% of men expect to spend for a loved one, versus only 45% of women who say the same. That said, it’s little surprise that those spending on their wives will pay the most in 2019 at an average of $357.96 — 73.5% higher than the $206.23 those spending on their husbands. There’s a similar divide between boyfriends and girlfriends, who say they’ll spend $231.55 and $105.02, respectively.

Who are we buying for?	Average amount spent
Wife	$357.90
Kids	$280.07
Myself	$235.56
Girlfriend	$231.55
Friends	$208.10
Husband	$206.23
Secret	$160.13
Other family members	$146.24
Boyfriend	$105.02
Pet cat	$95.90
Pet dog	$81.56

Who else is expected to be showered in love on Valentine’s Day? Rounding out the top three recipients are kids at $280.07, followed by those spending gifts for themselves at $235.56.

Gen Y is crazy in love … with buying Valentine’s Day gifts

For the second straight year, Gen Y leads the way with V-Day gifts, with 63% of these little cupids planning to buy a gift. Gen X closely follows at 57%, with baby boomers a distant third at only 39% who plan to buy a gift.

Saying “I do” to Valentine’s Day

Those who’ve taken the plunge or in a domestic partnership are most likely to spend on their partner for Valentine’s Day, with 66% planning to participate. Interestingly, those who were separated are the next group most likely to spend on February 14th at 52%. Singles ready to mingle round out the top three at 39%.

Valentine’s Day grinches

Roughly 43 million Americans — about 17% of the population — will get an unwanted Valentine’s Day gift in 2019. This calculates to about $9.5 billion spent on gifts nobody wants.

Source: https://www.finder.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

Options for Managing Payroll

noreply@blogger.com (Business_Finances) — Thu, 31 Jan 2019 15:30:00 +0000

QuickBooks provides all of the tools you need to gather employee information, calculate payroll, and process payments. Once you set up the payroll functionality, you’ll find that QuickBooks saves you hours of time.

Now that you’ve started using the software, it’s a great time to take advantage of the QuickBooks payroll features. You need to decide how much of the process you’ll perform yourself, and the amount of work you might delegate to an outside payroll expert. Consider hiring an accountant, to help you make an informed decision.

Here are some options for managing small business payroll.

Payroll Processing Steps
To determine how you will manage payroll, consider the steps a small business must take to complete the process. Assume, for example, that you’re just hired Sally as a new employee.

Collect information: You need to collect data from Sally, including her Social Security number, tax withholding preferences and other information. You must document her gross pay and the benefits she is eligible to receive. All of the data must be filed securely.
Calculating net pay: Each payroll period, you need a system that takes Sally’s gross pay and subtracts her tax withholdings (federal and state), and deducts amounts related to company benefits, such as Sally’s contribution into a retirement plan. Gross pay, less all of the deductions, equals the net pay for an employee.
Payments: You need a process to pay each worker, and those payments may be electronic or by check, depending on the employee’s preference.
Reporting and other payments: Finally, you must file reports and send payments to each entity that required a withholding amount. In addition to the IRS and the state department of revenue, you must send a report and payments to your retirement plan administrator.

This process repeats each payroll period, and it’s important to set up an efficient process now, as you’re starting to use QuickBooks. Your firm may add or remove employees over time, and a particular worker’s gross pay, tax withholdings, and benefit preferences may change.

QuickBooks can keep your payroll process on track as your business grows, but you need to decide on a system that works for your company. Ask an accountant for help with that decision.

Payroll Choices
Many companies start using QuickBooks when they are solo practitioners or manage a company with just a few employees. A number of businesses account for payroll using Excel, then input data into QuickBooks when they purchase the software.

Manual input: If your business is small, you may decide to calculate net pay, and the other calculations yourself, and enter that data into QuickBooks. If you’re organized and willing to invest the time, this strategy can work in the short term.
Sending data, outsourcing calculations: As your business grows, manual input may no longer be practical. You can set up a system to outsource the employee data storage and net pay calculations. QuickBooks can provide this service, and send you the net pay amounts so that you can pay your staff.
Bank interface, tax reporting: Finally, QuickBooks can help you manage the entire payroll process. In addition to data processing and calculations, the software can provide an interface to bank accounts, so that you can pay workers electronically. You can also outsource the process of tax and benefit reporting, and the task of submitting payments to third parties, like the IRS.

Speak with an accountant, who can help you determine which system is right for you.

Getting Payroll Right
The accuracy of your payroll records and payments is vitally important. Payroll errors impact your employees, and you may incur fees and penalties to make the necessary corrections. Keep your business on track by speaking with an accountant, and get help with this important process.

If you have an accountant, invite them to log in to your QuickBooks account to advise you. If you don’t already have one, start your search with the QuickBooks Find-a-ProAdvisor site, which can help you find a qualified professional that’s right for your business.

Source: https://wordpress.intuit.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

Choosing the Right Small Business Accounting Software

noreply@blogger.com (Business_Finances) — Wed, 30 Jan 2019 22:04:00 +0000

One of your top priorities as a small business owner is keeping a close eye on the money you bring in and pay out, which is why it's critical to have the right accounting software. You need a program that helps you accomplish your daily accounting tasks – recording payments, tracking expenses, invoicing customers and reconciling transactions – and gives you insight into your business's financial health, allowing you to generate reports that help you analyze your business's performance from multiple angles.

But choosing the best accounting software for your business is challenging. Each program includes a different set of features, and most offer multiple pricing plans to choose from, which also vary by feature, number of users or other factors. Here are three items to keep in mind when selecting accounting software for your business:

Costs. Would you prefer inexpensive, basic accounting software or an application that costs more but includes extra features?

Usability. How many users need to access the software? Do you prefer a cloud-based system that you can access anywhere or desktop software? Do you need it to have a mobile app? What capabilities do you need the app to have?

Features. What do you need the accounting software to do? Do you need both accounts receivable and accounts payable tools? Which reports do you need it to generate? Do you need it to track inventory? Do you need it to include ancillary services, like time tracking, project management and payroll?

How Much Does Accounting Software Cost?

Accounting software varies in cost, depending on the features included, the number of users supported and other such factors. Many of the best accounting software companies offer cloud-based software as a service rather than software licenses, so they charge a monthly subscription fee.

You can usually choose from multiple plans, with paid packages typically ranging from $10 to $60 per month, though high-end programs can cost much more. If you're willing to pay for the software annually rather than monthly, discounted rates are often available.

More expensive plans often include advanced features such as expense and sales tracking, recurring invoices, project tracking and billing, automatic past-due reminders, team functions, advanced reporting capabilities, inventory tracking, and purchase ordering. Many accounting software companies offer integrations to augment the software's capabilities or to connect it to other business programs, sometimes at an additional cost.

Several companies offer a free version of their accounting software, though these usually have either basic features or limit the number of users, clients, or transactions. Some free accounting software providers make their money from the paid add-on services they offer. These programs are useful if your business is very small or you want to take the software for a longer test run than the trial period allows.

What Usability Factors Should You Look for in Accounting Software?

To find the best accounting software for your business, you need to decide how and where you want to use it and if anyone else will be using the system. Here are some factors to consider:

Multiuser Access

Most accounting programs allow you to invite other users to the system and control the data they can see and the tasks they can access. For instance, you may wish to give your business partner and accountant full access, while only allowing your employees to use the system to track their time and invoice customers. Some systems allow you to invite multiple users at no additional cost; others provide free accountant access but require you to subscribe to a higher pricing plan or pay extra if you want to add other users to the system.

Multi-Business Support

If you own more than one business, you may want accounting software that supports multiple small businesses under one account at no additional cost. Otherwise, you'll pay extra to set up separate accounts for each entity.

Cloud-Based Software and Mobile Access

Most of the top accounting systems are cloud-based, so you can access your account anytime, anywhere from any computer with internet access, helping you run your business remotely, whether you're home or on vacation.

Many also offer mobile apps to help you monitor key information and accomplish core tasks on the go. Some offer separate apps for employees that have limited features such as tracking time and submitting expense receipts.

Mobile app capabilities vary, so if this is an important feature for you, you'll want to ensure it has the functionality you need. You'll also want to ensure it works on your preferred platform, as some are compatible only with iOS and others can be used with smartwatches in addition to phones and tablets.

Which Accounting Features Do You Need?

Accounting software offers many features and tools to help you manage your finances. It should cater to your business's needs, making it easy to accomplish routine accounting tasks. It should also help you see the big picture of how your business is performing.

Many business owners we spoke with said that ease of use and timesaving features are the top two things they look for in a program. Here are some of the features accounting software should have to help you save time and better manage your finances:

Basic Accounting Features

Most small businesses can make do with accounting software that offers basic functions like invoicing (both by email and snail mail), income and expense tracking, financial report generation, and customer management. However, if your business sells more than just a few products, you'll also want the software to track your inventory, manage vendors and assist you with purchase ordering. If your business provides services, you want a program that makes it easy to track time and invoice billable hours.

Timesaving Automations

Some accounting software can be set up to automatically send recurring invoices and past-due notifications, saving you time on your invoicing and accounts receivable tasks. Others can save you time reconciling your accounts by suggesting transaction matches. If your business provides customers with quotes or estimates, look for a program that converts these documents to invoices in just a few clicks. If you carry inventory, look for a system that reorders products by automatically creating purchase orders when items drop below a set threshold.

Tax Preparation

Make your life (and your accountant's life) easier with accounting software that helps you with your taxes with features like automatic tax calculations, multiple tax rates and tax reporting. You should also be able to give your accountant access to relevant data within the system or easily email all necessary data and files to them.

Add-on Services

Accounting software add-ons, such as payment processing and payroll services, make it easy to accept invoice payments online and pay employees. Although these services usually cost extra, they're convenient to use, and the costs may be comparable to what you'd pay elsewhere.

Third-Party Integrations
Accounting software can make it easier to run your business by integrating with the programs and services you already use, automatically sharing data between systems in real time. Popular integrations include POS systems, payment processing, advanced inventory management, e-commerce, ERP, CRM, email marketing and Google apps.

Question to Ask When Evaluating Accounting Software

When you've narrowed your choices to your top two or three options, sign up for the free trials so you can see for yourself whether the accounting software has the features you need, is easy to use and saves you time. Call the software companies to get a feel for their customer service so you can feel confident that you'll receive the support you need should you experience an issue with the program.

Here's a list of questions you can ask when you call to help you select the right accounting software for your business:

Is your software a good fit for my industry?

Do you offer customized solutions to fit my business's needs?

How many employees and clients can your software accommodate?

How can your software help me comply with GAAP, tax laws and financial regulations?

How is my data backed up? Can access be restored immediately after an outage?

What security measures do you have in place to keep both my business's and my customers' data secure?

What is the total cost? Are there any setup or cloud storage fees?

What types of tech support and customer service do you provide? (For instance, does the provider offer your preferred form of contact, such as phone or live chat?)

Source: https://www.businessnewsdaily.com
Image Credit: Rawpixel/Shutterstock

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

Everything You Need To Know About Small Business Payroll Taxes

noreply@blogger.com (Business_Finances) — Wed, 30 Jan 2019 15:30:00 +0000

Ensuring your employees are paid on-time and accurately is one important key to keeping them motivated. To make this happen, you need to ensure that all your i's are dotted and t's are crossed when running payroll each pay period.

A key component to figuring out exactly how much your employees should receive in their paychecks each pay period is correctly determining how much money should be withheld for such things as state and federal income tax, benefits and payroll taxes.

As a business owner, it is critical to have a complete understanding of each component of your employee's withholdings. While you know what benefit withholdings are for, you might not be as clear on the purpose of payroll taxes. Understanding what payroll taxes are, how they work and the consequences of not paying them can help you take the proper steps to better manage your business.

"Payroll taxes are assessments on employee compensation the government collects from the employer," said Michael Law, a certified public accountant with Canopy.

Payroll taxes were established in the early 1940s as a way for the government to fund certain social programs. Instead of directly taxing employees, who may or may not pay their taxes on time, the government decided to have employers withhold certain amounts from employee paychecks.

"The rationale is that employers are easier targets to collect from because of deeper resources than millions of non-compliant tax payers," said Anthony Parent, owner of tax law and business tax services firm Parent & Parent LLP.

This means small business owners are responsible for withholding the appropriate taxes from their employees' paychecks. Business owners can handle this process on their own, get the help of a tax professional or employ a payroll service to handle all of their payroll and payroll tax responsibilities.

What are payroll taxes?
Payroll taxes are comprised of two main parts. There is the portion of an employee's paycheck that's withheld by the employer, as well as contributions that the employer must make.

Law said these payments are used to pay for several programs, including Social Security and Medicare. Payroll taxes also include income taxes.

"States and some localities also have payroll taxes and often include such things as State Disability Insurance," Law said. "If any of your employees earn over $200,000, there is an additional Medicare Surtax withholding on them."

In addition to withholding taxes from an employee's paycheck, employers must match contributions to Social Security and Medicare, and issue other payments like state and federal unemployment taxes.

Sonya Muenchen, founder of The Payroll Gal, has been a small businesses payroll tax consultant for more than 20 years. She said it's important for business owners to understand exactly what they're responsible for.

"As an employer, you are responsible for … keeping track of time, calculating payroll based on employee's tax certificates, and depositing a payroll check on a weekly, bi-weekly, semi-monthly or monthly basis," she said.

As businesses head in to 2019, there are a couple of new payroll tax issues they should be aware of. When it comes to Social Security taxes, high income earners will see a larger portion of their paycheck withheld for Social Security. The Social Security tax previously had only been applied to the first $128,400 of an employee's salary. In 2019, that amount is being increased to $132,900.

According to the Society of for Human Resource Management, the taxable wage cap for Social Security is typically raised each year based on increases in the national average wage.

Paying payroll taxes
Law said how often you make payroll tax payments typically depends on the size of your business, how often you run payroll and the type of employer you are.

"Household employers with small payrolls have the most lenient deposit requirements with annual deposits," Law said. "Those with larger payrolls need to make deposits either as monthly or semi-weekly."

Law said businesses that are unlucky enough to be caught in a federally declared disaster area may have their required payments relaxed for a short period of time.

While completing payroll taxes on your own is possible, it can be complicated – especially when it comes to keeping track of making payments and withholding the right amount of money.

"The most solid yet basic advice I give business owners is to get a payroll company and get in the habit of depositing everything they tell you to deposit," Parent said.

How to manage payroll taxes
There are several ways you can manage employee payroll taxes and ensure that your business is compliant with the IRS:

Do them yourself: You can complete the payroll taxes for each employee in your company. This process involves analyzing each employee's W-4 tax form, calculating allowances, referring to income tables and doing basic arithmetic to withhold the right amount of money. Keep in mind that you'd have to calculate for state and federal payroll tax withholding.
Payroll services: Payroll services are third-party payroll processing companies that manage employee payroll. These services come fully baked with tax compliance, payroll processing and various other features. These companies make money off a monthly fee or on the interest of the money it collects for payroll taxes. Payroll services pricing typically includes both a flat monthly fee and per employee fee. The base monthly costs generally range anywhere from $20 to $100 per month, with the per employee fees ranging from $1 to $15.
Work with a tax professional: Besides working with a payroll service, you can also work with a tax professional. Muenchen, for example, works with business to solve payroll problems. You can also talk with an accountant about completing payroll taxes, although they may refer you to a payroll service.

If you invest in a service or work with a tax professional, rather than taking care of payroll taxes yourself, you can spend less time working on business operations and more time handling important projects and issues within your business.

What happens if you don't pay?
Making sure your payroll taxes are paid to the right agencies and on time isn't a task small business owners should take lightly. If you don't make your payments on time, you could face huge fines, see your business shut down and possibly be forced to spend time behind bars.

Law said any money that you withhold from your employee's paychecks for payroll taxes technically belongs to the government.

"You have a fiduciary duty to turn over those funds to the applicable government agency'" Law said. "You are not compensated for the fiduciary relationship, but you are penalized if you fail to pay over the amount due at 100 percent of the amount that should have been paid."

If you don't pay the correct payroll taxes or send in payments later than they are scheduled, you will likely be paid a visit by the IRS.

"Should you get behind in paying the payroll taxes, you will get IRS notices and eventually a personal visit from the IRS," Law said. "Continual failure to pay the payroll taxes will result in the IRS shutting down your business and possible jail time."

Parent said the IRS can get aggressive when it comes to missed payroll taxes. The structure of payroll taxes means that when a company doesn't withhold the right amount of money, the government can miss out on a lot of funding. That means IRS officials will be up-to-date on whether you're paying your share of taxes.

"A Revenue Officer will likely get assigned and make an up close and personal inspection of your affairs," Parent said. "Many people, including myself, think that skipping payroll deposits to make ends meet is truly a deal with the devil."

Payroll taxes are an important part of your business. While it may be easy to focus on your day-to-day operations and forget about high-level organizational aspects, payroll taxes are something your business must contribute. You should consider either partnering with a payroll service or working with a tax professional to protect your business from the IRS.

Source: https://www.businessnewsdaily.com
Image Credit: Shutterstock

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media

Is it Time to Reevaluate How You Manage Payroll?

noreply@blogger.com (Business_Finances) — Tue, 29 Jan 2019 15:30:00 +0000

The start of the year is a great time to reassess your business.

To grow sales and profits in 2019, you’ll need to process more transactions and serve more customers. You may also need to hire more staff, and managing payroll can be challenging for a growing company.

You need a system that will process payroll for more people in less time. Does your current process meet that standard?

Use these tips to decide if it’s time to reevaluate how you manage payroll.

Five Important Steps for Payroll

To evaluate your payroll system, consider how you manage each of these important tasks:

Data collection: When an employee is hired, you need to collect information to withhold the proper amount of federal and state income taxes, and possibly withhold dollars to pay for company-provided benefits. If, for example, you offer a retirement plan, a worker may want payroll dollars withheld and invested in the plan.
Calculating net pay: The net amount you pay each worker is the gross pay less tax withholdings, less any benefit payment withholdings.
Payments: You must pay each worker by check, or by an electronic transfer to a bank account.
Reporting: Federal and state tax withholdings for each employee must be reported to the IRS and state department of revenue. In the same way, retirement plan payments are reporting to the investment firm. Note that retirement plans typically include both a worker and an employer contribution amount.
Withholding payments: All of the tax and benefit payments must be forwarded to the taxing authorities, retirement plan firms, and to any other benefits providers.

Keep in mind that your business must address changes to payroll, which complicates the process and requires more time. Every year, employees may be added, promoted, or let go. Workers may also change their tax and benefit withholdings, based on salary changes or family changes.

Your payroll data is a constantly changing, and that’s an issue you have to manage.

Start your payroll evaluation by documenting your current process in a procedures manual, if you haven’t already. The manual documents how to perform routine tasks, and you should include each task you perform and who is responsible for task completion.

Meet Kim

Kim owns and operates Elegant Catering, which provides high-end catering services to corporations and individuals. The catering business operates with three full-time employees who cook and prepare food, and four independent contractors who deliver food and serve at catering events.

After considering her current customer base and her marketing plans, Kim estimates that her sales will grow by 20% in 2019. She plans on hiring more workers to handle the growth.

To process payroll, Kim records gross pay, all withholdings and net pay in a spreadsheet. Each payroll period, she posts the company’s payroll expense and other data into accounting software and sends the data to her accountant.

The accounting firm creates all of Kim’s withholding reports, which Kim uses when she sends payments to each entity. At the end of each year, the accounting firm prepares the tax return, along with the employee W-2s and independent contractor 1099 forms.

After the accountant reviews her spreadsheet work each pay period, Kim pays the staff.

Changing your payroll process is a big deal, and it will require time and effort to make the change and possibly train your staff on the new procedure. Here are some key factors to consider:

Key Factors to Consider

Errors: Are you making errors? If so, how much time are you spending to correct them? Even with a small staff, Kim makes an error in her spreadsheet 4-5 times a year. Fortunately, the accountant reviews her spreadsheet for accuracy and notifies Kim before any payroll is processed. Each error requires about 30 minutes of Kim’s time to correct.
Delegation: Because of the sensitive nature of payroll data, Kim believes that she must keep responsibility for creating the Excel document each payroll period. She’s decided that delegation isn’t appropriate, using the current system.
Employees vs. contractors: Independent contractors are paid their gross pay without tax or benefit withholdings, and adding contractors to payroll is less complicated. Kim, however, plans on hiring both employees and contractors during 2019, so she will have to deal with withholding issues for new employees.

Kim discusses these issues with her accountant, and with several peers who manage local catering companies. She concludes that her current system can’t handle company growth, due to an increased error rate, a lack of delegation on Kim’s part, and the added complexity of hiring more full-time workers.

You need to perform this same analysis for your business. Is your current process sustainable as you grow? If you’re struggling with managing payroll for five people, how much time will you personally spend with a staff of 20?

Reach out to other people who can help you with this decision.

More Accounting Support

One payroll option is to get more help from an accountant.

For example, Kim decides to send payroll information on wages and withholding amount to her accountant, who will calculate net pay. She also invests in software that allows her accountant to enter the net pay amounts, send payments to employee checking accounts, and to generate physical checks for payroll, as needed.

When the process is complete, the accountant sends a report that documents the net amounts paid by worker, and the total net pay coming out of Kim’s business account. The accountant handles the sensitive payroll information, rather than someone in Kim’s business.

Improving Your In-House System

Many small business owners prefer to keep payroll in-house rather than through an accountant, there are do-it-yourself and do-it-for you payroll software options out there that calculate deductions, withholding, and tax payments. An outsourced full-service payroll that pays and files state and federal taxes on your behalf is another good option that takes the workload off your busy schedule.

Change is Hard

Change is difficult, but often necessary.

If you don’t improve your business procedures, you may not be able to manage growth. Ask for help, and make the decision to change your payroll process, so you can increase sales and profits.

Source: https://wordpress.intuit.com

10 Payroll Changes for 2019

noreply@blogger.com (Business_Finances) — Mon, 28 Jan 2019 15:30:00 +0000

According to the SBA, small businesses employ nearly half (47.5%) of all workers in the U.S. If you have employees, your payroll likely is different for 2019. Here are 10 changes to note:

2019 Payroll Changes

1. Watch for new minimum wage rules

While the federal minimum wage rate is unchanged for 2019 ($7.25 per hour), state and local rates apply if they are higher than the federal rate. About 20 states have increased rates effective January 1, 2019.

2. Get new employment posters

Employers are required to display posters reporting applicable minimum wage rates and certain other information. Check with DOL, OSHA, and your state labor department for free posters. You can also purchase all the required posters for your location from Amazon, Staples, etc.

3. Note new Social Security wage base

The Social Security tax, which is part of FICA, applies to taxable compensation up to a set limit. The employer and the employee pay 6.2% of Social Security tax up to the wage base limit. For 2019, this limit is $132,000; it was $128,400 in 2018.

4. Implement employee elective deferrals

If your business offers a qualified retirement plan with salary reduction contributions (elective deferrals by employees), such as a 401(k) or SIMPLE IRA, the limits for 2019 have increased over 2018 amounts.

5. Implement new FSA limits

The amount of compensation that employees can commit to medical flexible spending accounts (FSAs) in 2019 is increased to $2,700 (https://www.irs.gov/pub/irs-drop/rp-18-57.pdf) (up from $2,650 in 2018). However, the limit for dependent care FSAs is $5,000, which is a fixed amount that’s not adjusted annually for inflation.

6. Consider medical coverage options

While there is a question of whether the Affordable Care Act remains viable, for the moment the employer mandate for companies with 50 or more full-time and full-time equivalent employees is still in place. Smaller employers can choose to provide coverage and should note changes for 2019:

Health savings account limits have increased .
Qualified small employer health reimbursement arrangements (QSEHRAs) have increased contribution amounts.

Also, look for increased offerings of coverage through Association Health Plans. These are plans in the group market that can be offered to members (including sole proprietors) of chambers of commerce and trade associations.

7. Check for other employee benefits

If you offer transportation benefits to employees—free parking, transit passes, or van pooling—the amount that can be received tax free is $270 per month in 2019 (up from $265 per month in 2018). But you can’t deduct this benefit. The IRS has provided guidance to employers on how to figure the nondeductible portion of their lease payments if they include free parking for employees.

8. Note any state unemployment tax changes

Check with your state on whether you have any changes in your unemployment tax rate. Changes can result from:

Law changes (e.g., increased state unemployment tax base amounts in Oregon and Washington)
Your claims experience

9. Review workers compensation costs

Your premium rate may be higher, lower, or unchanged for 2019. Check with your state to determine what you have to pay, and for whom. For example, an S corporation owner may be able to opt out of coverage.

10. Note new employment laws

Your state or municipality may have other new rules for 2019 in addition to those listed above. For example, an Oregon Equal Pay Law, effective January 1, 2019, prohibits employers from paying employees different amounts for the same or comparable work. A California law requires employers with 5 or more employees to provide at least 2 hours of sexual harassment training to all supervisors (and 1 hour to non-supervisors) by the end of the 2019, and once every 2 years after that.

Conclusion

Keeping up with law changes related to payroll can be daunting. Work with your CPA or payroll service to adapt to tax law changes. And consult with an employment law attorney if you have questions about federal, state, or local law changes.

Source: https://smallbiztrends.com
Image Credit: Shutterstock

9 Money Habits To Keep In Mind

noreply@blogger.com (Business_Finances) — Fri, 25 Jan 2019 15:00:00 +0000

“Save for a rainy day” isn’t just an adage; it’s an age-old advice that applies to everyone from all walks of life. It’s important to have savings because the future is unpredictable. Unless you’re already super affluent, extra funds come in handy when the time to use them comes.

Anybody can save, and for those who may not have much after paying bills, there are money-saving habits you can develop. Whether your goals are to establish a financial safety net, saving up for an investment, or something else, it’s never too late to learn how to be a better saver. Here are some habits that can improve your money management.

1. Sell What You Don’t Need

A quick and easy way to get cash is to use the things you have but don’t have a use for anymore. Nowadays, it’s easy to set up an online shop because of platforms like Shopify and other e-commerce websites. You don’t need to be a programmer or designer to use it since everything you need is there.

All the items you don’t need, like clothing, gadgets, shoes, and even jewelry can be sold online. Once the shop has been set up, it will only be a matter of time before someone buys the products. The payment you get from the profit is instantaneous too, and you can easily connect your Shopify account to your bank.

2. Use Coupons and Discounts

You don’t have to go out of your way to not spend for anything at the cost of basic necessities and even comfort. There are products that you need to purchase, and most of them are found in groceries. Using coupons and discounts is one of the best ways to keep your spending down.

It may take a bit of searching, time, and effort to find deals, especially for specific household items. You can find coupons and discounts on several websites and even local papers. Most coupons and discounts nowadays can be claimed using your smartphone, but if you see paper ones, cut them out and take them with you when you go grocery shopping.

3. Keep Utility Bills Down

Electricity and water bills are some of the most expensive things that you can pay with your salary. Collectively turning on lights and appliances without turning them off for a long time can really add up to the bills, and fortunately, there are ways you can keep utility bills down. In fact, you only need to simple adjustments and form the habit of turning off electronics when they’re not in use.

Other ways you can save are by using energy-efficient light bulbs and making your appliances work more efficiently. If you have electronics that can be programmed to run for a few hours, set them up, and you won’t have to worry about turning them off if they have an automatic shutdown switch. Air-drying your clothes and even dishes can really help keep down the water bill as well.

If you’re looking into how much more you can keep the utility bills down, take a look at this article.

4. Go for Alternatives

Everyone knows that name-brand items can sometimes be more expensive. If you absolutely must have something branded, then go for those items that you want. If you are fine with less-expensive alternatives, the generic items are usually just displayed alongside the branded ones.

5. Avoid Takeout

You may consider eating takeout more than twice a week a normal thing for you especially if you don’t know how to cook. However, it is one of the biggest wastes you can do with your money. You can actually save more through meal planning and prepping, and you get to eat more healthily too.

A $10 takeout may not be extravagant for you, but considering you do it several times a week, the costs will add up. To make the most of your money, packing your own lunch and setting your breakfast and dinner for the week really help. You can even choose to snack healthily too, using choice fruits that are portion controlled.

6. Extra Money Goes to Savings

Anytime you score an incentive, get a work bonus, or basically get paid extra on top of your salary, delegate some of it to your savings. It doesn’t have to be everything; some percentage will do as you need to treat yourself some way or another for a good job done. You’ll thank yourself later when you see that your savings have increased when you have this kind of habit.

7. Gather All Spare Change

It is inevitable to have some spare change in your pocket or bags, especially if you use cash in your daily transactions. You may find it annoying jangling inside your pocket, basically weighing down your wallet or wherever you keep your money.

While it is good to keep some with you, put away some spare coins inside a jar or piggy bank, and let them accumulate until full. When you have enough, change them to paper money, and put them into your savings. You’ll be surprised by how much money accumulates in the form of spare change scattered around your home.

8. Automate Payments, Savings, Contributions

When you have the option to automate your paycheck, do it. What happens is that your bills will be paid, some money will be deposited to your savings account, and contributions to social security and others will be taken care of. It does good to check how the process goes every month to ensure that everything is as planned, and make adjustments as needed.

9. Plan Purchases Carefully

It’s easy to go to a store to buy what you need and add some things here and there, even items you don’t really need. To avoid that, make it a habit to plan and list down your purchases carefully so you can oversee where your budget is going. See to it that you stick to your list as much as you can so you can avoid sudden expenditures.

It’s a little bit difficult for online purchases, but yes, you still need to plan them out. Since the internet is very helpful in today’s world, utilize it by doing comparison shopping in different sites to see where you can buy cheaper.

It helps to know that, if it is not an item that is essential to your life, you should let a few days pass before making the purchase. You’ll save yourself a lot of money after finding out that the impulse to buy it will go away after a while.

Cut Back on the Unnecessary

Another great money-saving tip is to cut back on anything unnecessary. For some people, it could be their landline phone or cable service. Why keep a landline phone when you can use cell phones instead? Additionally, there a lot of better alternatives for cable TV out there as well.

If you already do some of the things mentioned above, know that there are many more ways to cut back on spending. You may need a little bit of tracking here and there to identify which areas you can save more on. Remember that small changes can make a drastic difference in your savings and other financials.

Source: https://www.theselfemployed.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

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6 Ways to Set Your Finances on Auto-Pilot

noreply@blogger.com (Business_Finances) — Thu, 24 Jan 2019 15:00:00 +0000

When I’m on top of finances, I’m all up in my money management apps, checking my balances and the swift progress I’ve been making on my savings goals.

But when things aren’t going so hot? I’m like an ostrich with my head buried in the sand, and I avoid thinking the “M word” at all costs. As you might suspect, this sort of behavior is quite common, and is called information aversion, explains Kristen Berman, principal and co-founder of the Common Cents Lab at Duke University.

“Money is something we don’t like to think about, especially when we have less than we want to have,” says Berman. “We don’t want to step on the scale when we’re heavier than we’d like to be, and we don’t want to manage our money when the balance is lower than we want.”

Enter one of my favorite tactics: automation. By setting your finances on cruise control, you get to think less about your money. Plus, you can rest assured that your savings goals are being taken care of.

Here are 6 ways to set your finances on auto-pilot:

Pay Bills Online

I am a huge fan of the “set it and forget it” approach, from what I eat and wear and how my money is spent. By auto paying your bills, you won’t have to manually pay each bill each month. Plus, you won’t need to fret about forgetting a payment and incur late fees.

Worried about not having enough in the bank when it comes time to pay your bills? One way you can avoid this is by assigning different bills to different paychecks. For instance, let’s say you get paid twice a month. Your rent and money for an emergency fund can come from one of your paychecks, and you can pay the remainder of your bills from the second one.

You can also do the math to figure out how much your fixed expenses are, set that amount aside. Then spend the rest. There are a few checking accounts that allow you to safely sock away money for all your bills, and will “release” these amounts near the due dates.

To simplify things a tad, you can also pay your bills with a credit card. This only works if you designate a single credit card to paying your bills, and that you pay the balance in full each month. Instead of a bunch of transfers out of your bank account throughout the money, you only need to pay a single bill.

Auto Save When You Get Paid

There’s nothing like a chunk of money dropping into your account during payday. The danger lies in having a lump sum of cash in a single account. Because if you have, say $3,000 in your checking, chances are you’ll spend all of it.

Instead, pay yourself first. Divvy up some of your paycheck toward your savings goals. Your paydays are when you have the most money to work with. Use that power to allocate your earnings as you like. When I had a 9 to 5, I would set up an auto transfer to pay off my student debt, and for different savings goals: An emergency fund, vacation fund, and for retirement.

Figure Out Your Daily Spend Number

For someone who thinks far more about money than, the average bear, I actually loathe making money decisions on a daily basis. What I do instead is figure out how much I can roughly spend each day on discretionary stuff. How much I have for variable spending is determined after all my bills and saving goals are accounted for.

I don’t need to quibble over whether I can afford that lunch out or that fancy cheese at the market. That daily number keeps me on track. I just check in on my balance once a day or so to make sure I’m not overspending.

Set Up a Transfer When You Slash Expenses

If you’ve been working on lowering your living expenses, put the money you saved toward auto savings. Say you’ve committed to carpooling a few times a week with coworkers. You’ve estimated that it saves you $20 a week, or $80 a month. While it’s tempting to blow that money on a few extra lunches out, auto save that $20.

Last month I switched providers and saved $50 a month on my cell phone bill (score.) It’s far too easy for those 50 buckaroos to quickly disappear. Because I’ve freed up some cash, I bumped up the auto save amount for my emergency fund to $50.

Save Money from a Side Hustle

If you’re a side hustler, consider auto-saving part of your earnings from one of your gigs. It’s easier to set up an auto transfer from a gig where you get paid the same time each week or month, and you know roughly how much you’ll make.

Let’s say you earn about $200 a week from ride sharing, and you get paid every Friday. If you can swing it, set up an auto-transfer of a portion of that every week. If you save $25 weekly, $1,300 a year.

Of course, only do this if you have money to spare. If you have a day job and are picking up side hustles to “get ahead,” then by all means sock a bit away toward your savings goals. But if your side hustles are going toward your bills, you’ll need to be a bit more judicious as to how much you can reasonably save.

Make Automatic Contributions for Retirement

If your workplace has an employee-sponsored retirement option, such as a 401(k) plan, save as much as you can. Because the money will come directly out of your paycheck, chances are you’ll hardly even notice it. If your employer offers a matching contribution, aim to contribute at least enough to get the full match.

A 401(k) isn’t the only type of plan you can make automatic contributions for. The same goes for other retirement plans, such as an IRA, or if you’re self-employed a SEP IRA, Simple 401(k) or Individual 401(k). I auto transfer a set amount into my IRA each month.

The beauty of setting your finances on autopilot: If you can’t see it, you won’t spend it. Auto saving means fewer decisions you have to make about your money. Plus, it means the rules and systems you’ve set in place for your finances overrides any bad habits or behavior you have with your money.

Source: https://blog.mint.com

4 Steps to Resolving Sales Tax Notices Successfully

noreply@blogger.com (Business_Finances) — Wed, 23 Jan 2019 15:30:00 +0000

Do you stress when you receive a sales tax notice? The good news is that not all notices are bad news. When dealing with any agency notice there are generally 4 steps to follow to help ensure a positive resolution:

Read and understand any notice to clarify action needed
Account for informational changes on time
Gather supporting documentation for non-informational notices
Respond and follow-up in a timely manner

1. Read and understand the Notice to clarify action needed

Sales tax notices vary widely, regardless of what State’s agency is sending the notice. First and foremost, take time to read and understand the notice as soon as you receive it. That way you know the reason for the notice and any action you need to take.

Notice Categories – You may receive a sales tax notice for one of these three main reasons:

Informational

New form or form change
Rate change
Other – e.g., Alabama or Colorado’s expanded reporting related to the Wayfair ruling

New Requirements or Requirement Changes

When & How to File – e.g., filing frequency change from quarterly to monthly; rounding update, no longer report by whole dollar; or new mandated electronic file rules, etc.
When & How to Pay – e.g., need to make prepayments; or mandated electronic payments, etc.

Filing-related Issues

Return – incorrect, missing or late

Payment – incorrect, missing or late

Note: Lack of response for filing-related issues may lead to a warrant, demand, lien, so do not ignore them.

2. Account for informational changes on time

Sales tax notices that are purely informational often do not require any action on your part. Beware, that is not always the case! It all depends on the notice and the process you use to manage your sales and/or use tax responsibilities.

For example, if you manually maintain tax rates then an “Informational Notice” of a rate change may require that you manually update your rate table(s). Failure to make these updates will cause future reporting to be incorrect which could trigger another notice.

Fortunately, if you are utilizing QuickBooks Sales Tax, the functionality inside the sales tax system automatically accounts for these generic Informational changes related to rates, thereby reducing the administrative burden on merchants to track and account for these changes happening all the time throughout the U.S.

3. Gather supporting documentation for non-informational notices

When dealing with a notice regarding incorrect, missing, or late filings or payments, it is best practice to take time to gather your records for the specific tax period(s) at issue from your retained records ahead of time. That way when you contact the Agency that sent the notice, you have the relevant information you need to resolve the issue efficiently and effectively.

If you have your taxes processed by a third-party tax preparer/filer, like the QuickBooks Sales Tax team, you should alert that filer of the notice, within 3-business days of receipt. Once they have been informed the team can timely respond to the notice on your behalf and avoid further expenses or prevent additional notices from being issued.

4. Respond and follow-up in a timely manner

State and local sales tax agencies make mistakes too! If you get a notice stating a return or payment was wrong, missing, or late, then once you have gathered your retained documents supporting the relevant filing and payment, contact the agency as instructed in the notice to provide the proof needed to clear the matter.

If you have made a mistake, however, here are three further actions to help:

Request Penalty Waiver

If there was a mistake on your part, a tax jurisdiction will usually impose penalties and interest. If this happens, most agencies provide a process for waiving penalties, but the window for requesting a penalty waiver is usually limited.

This issue reinforces the need to follow Step 1, which is to read the notice as soon as it comes and understand any action needed. If you ignore a notice, another notice will issue usually with more money due, and if you continue to ignore, the agency might file a lien or shut down a physical business location.

At that point, the opportunity to request a penalty waiver may be long gone!

Option to Remove Interest

Typically a tax agency cannot remove interest charges but do not assume that is always the case. For example, if you filed under the wrong tax type (Sales v. Seller’s Use) an agency may move the filing to the correct ax Type and remove all penalties and interest assessed.

In this instance, update your systems and/or processes, including your filing requirements in QBO, if any, to make sure an incorrect filing does not happen again.

Calendar Follow-up

If you send the missing return or payment to the Agency, calendar a follow-up with them to make sure the account is fully clear and no additional expenses, liens or attachments apply.

Summary

As your business grows in the e-commerce market, QuickBooks Sales Tax is here to help you remain tax compliant. If you receive a Sales Tax Notice, follow the 4-STEPS to follow to help ensure a positive resolution: Read the notice, account for changes, gather documentation and respond quickly.

Source: https://quickbooks.intuit.com
Image Credit:

When Outsourcing Will and Won’t Help Your Business

noreply@blogger.com (Business_Finances) — Tue, 22 Jan 2019 15:00:00 +0000

I love the idea of outsourcing. I hired my first contractor, not even a year after starting my business. At that time, I didn’t even know I had a business. I just knew I was making a little money online and wanted to increase my efforts.

Outsourcing can be great for your business if done correctly. Hiring others to help you in various areas can free up more of your time to focus on other areas of your business.

However, outsourcing can also be ineffective if you don’t do it right or try to start too early. In the post, we’ll go over the circumstances where outsourcing will and won’t help your business.

When to Outsource

You’re Spending Too Much Time on Tasks

Entrepreneurs wear various different hats in their business. One on end you have to strategize and plan everything out. On the other, you need to also do a sizeable amount of the work in the beginning.

You may find yourself being the content writer, social media marketer, PR person, and general staff member all in one. The problem with wearing so many hats is it’s time-consuming and can take you further from getting the results you want with your business.

Instead of being an entrepreneur, most business owners are simply technicians trying to make sure the day-to-day tasks get completed. If you want to scale up and bring your focus back to your goal, you can outsource some of your tasks to other to buy back your time.

You Don’t Like Performing Certain Tasks

The first thing I outsourced in my business was the creation of my graphics and social media management. I’m not crazy about social media and I don’t always keep up with the trending strategies or algorithm updates.

Since I run a blog, I know how important it is to have quality graphics on the site and use Pinterest to market blog posts. I had no interest in doing this so I hired someone to do it for me.

If I had tried doing it myself, I would have wasted a ton of time and grown to resent that side of my business.

You Need Help Implementing Proven Strategies

Outsourcing can seem like a risk sometimes because you have to pay someone to do something for you and you don’t always know what your ROI will be. This is why it’s best to slow down and outsource only tasks that have been proven to pay off.

How will you know this? Maybe it’s something you did in the past to get results but no longer have time for. Or, the person you’re hiring can have a proven track record with lots of referrals. If you’re hiring an expert, your business can benefit from their experience and everything they bring to the table.

You can also start working together on trial basis to see if things will be a good fit before you commit to something long-term. This could be a great way for you to measure the initial results you get when hiring someone for your team.

You Have a Clear Strategies For Your New Hire(s)

What do you wish to gain by outsourcing? Saying you want more time is a nice sentiment, but it’s too vague. What will outsourcing help you accomplish? And when do you plan to accomplish it.

It’s so important that you have clear goals so you can implement a clear strategy for your new hire(s). I see so many business owners who have a team and pay others to complete tasks simply because it’s a routine. They have no end goal for outsourcing and no idea what they want to use it to accomplish.

Ultimately, your team should be helping you build your business in a specific way.

When Not to Outsource

You’re Not Really Saving Any Time

Do you have to check over every single thing that your team does or do you expect to do this? If outsourcing is still costing you lots of time and effort, it may not be worth it.

This may also be a red flag that you didn’t hire the right person. But if you’re very type-A and used to doing everything yourself, you may have a hard time successfully passing off tasks to other people and truly benefiting from it.

You’re Not Yet Making Any Money

I understand that often times you need to spend money to make money. That said, you do need to have some money at least before you consider outsourcing.

If you’re in debt or aren’t yet making a business income, you should try doing the bulk of the upfront work yourself first before hiring someone else. Without any income, it’s risky to hire someone and be able to consistently pay them.

You can also try quick ways to make money like freelancing so you can have a budget to work with. When you do start outsourcing, you want to remain in the positive as much as possible. This means your income should exceed your expenses.

You can have a deficit occasionally or even in the beginning stages, but it’s not normal to have one all the time.

You’re Handing Off Too Many Tasks?

Ever ran into that business owner who outsourced so many things that they often had no idea what was going on in their business? Don’t be that person. Handing off tasks to other people can seem awesome but it doesn’t help much if there are no systems in place.

You need checks and balances to make sure people have a clear role and that you are still the main decision maker. Handing off too many tasks to others and automation programs can make it difficult for you to measure your progress and ROI. Don’t be one of those people who spends way too much on services and team members but still gets no results.

Have you ever thought about outsourcing in your business? Do you think now is a good time? Why or why not?

Source: https://www.business2community.com
Image Credit: geralt / Pixabay

B&M Financial Management Services, LLC

Why You May Just Be Bad With Money

Tax Tips and Traps for Your Startup Business

How Often Should Your Business Run Payroll?

Payroll schedules

Salaried vs. hourly employees

Payroll schedules for small vs. large businesses

Legal requirements

The cost of running payroll

Complications

6 Tax Hacks For Small Business Owners

Improve Your Accounting by Using SKU Numbers

SKUs vs. UPCs vs. Serial Numbers

Advantages for the Accounting Process

Creating SKU Numbers

Miscellaneous SKU Tips

Need Accounting Help? Learn How to Use QuickBooks for Less Than $20.

Receipt and Expense Tracking Still an Obstacle for Small Business Owners & Self-Employed

Can and Should Your Business Go Paperless

QuickBooks Apps to Improve Your Small Business

2019 Tax Scams Targeting Your Small Business

Prevent Cash Flow Problems in Your Small Business – Read These 3 Tips

Hiring An Outside Expert For Your Family Business

4 Ways to Teach Your Children Financial Responsibility

5 Reasons You Should Not Spend Money On Valentine's Day

Federal Workers: How to Protect Your Finances During the Government Shutdown

Valentine’s Day Spending Statistics

Options for Managing Payroll

Choosing the Right Small Business Accounting Software

Everything You Need To Know About Small Business Payroll Taxes

Is it Time to Reevaluate How You Manage Payroll?

10 Payroll Changes for 2019

2019 Payroll Changes

Conclusion

9 Money Habits To Keep In Mind

1. Sell What You Don’t Need

2. Use Coupons and Discounts

3. Keep Utility Bills Down

4. Go for Alternatives

5. Avoid Takeout

6. Extra Money Goes to Savings

7. Gather All Spare Change

8. Automate Payments, Savings, Contributions

9. Plan Purchases Carefully

Cut Back on the Unnecessary

6 Ways to Set Your Finances on Auto-Pilot

4 Steps to Resolving Sales Tax Notices Successfully

1. Read and understand the Notice to clarify action needed

Informational

New Requirements or Requirement Changes

Filing-related Issues

Return – incorrect, missing or late Payment – incorrect, missing or late

2. Account for informational changes on time

3. Gather supporting documentation for non-informational notices

4. Respond and follow-up in a timely manner

Request Penalty Waiver

Option to Remove Interest

Calendar Follow-up

Summary

When Outsourcing Will and Won’t Help Your Business

When to Outsource

You’re Spending Too Much Time on Tasks

You Don’t Like Performing Certain Tasks

You Need Help Implementing Proven Strategies

You Have a Clear Strategies For Your New Hire(s)

When Not to Outsource

You’re Not Really Saving Any Time

You’re Not Yet Making Any Money

You’re Handing Off Too Many Tasks?

Return – incorrect, missing or late

Payment – incorrect, missing or late