Smart and Easy Business

How to Hire the Best Person

2026-08-26T14:18:00.000-05:00

The current job market is highly competitive, leaving businesses with a mountain of applications to sift through. How do you decide whom to hire when the qualifications are so similar? Your eyes begin to blur, and the task of interviewing is daunting.

If you have not begun the process, follow the advice below when preparing questions for the interviewee. Adding questions to the job advertisement can sometimes help eliminate some of the applications you will receive.

If you have applicants in process, these are some ideas to narrow the field.

Look at the applicant's job history. Job seekers with a history of frequent job changes are a high risk. Most applicants will submit the past 10 years. How long have they been at any one job? Everyone can have a "bad luck" job, but there should be one or two jobs that lasted more than 5 years.

Do yourself a favor and don't allow age bias to discount an applicant. A seasoned professional brings a high level of skills, problem-solving ability, and wisdom to the position.

Prepare a list of the most desired qualifications for the open position. Use a highlighter to find the resumes that contain most of the qualifications. Finding one person with all the traits may be difficult. Ask yourself which traits are truly important and which traits will most benefit the business. Some advice: skills can be learned; integrity and commitment cannot. This is important to productivity and directly affects workplace culture.

Once you have a set of applicants with the skills and traits you desire:

Read the cover letters of the chosen applicants again. Is it well written? Does it highlight and add value to the position you are trying to fill? If not, set those applicants aside.

Again, review the applicant's resume for experience. How deep is the experience? Can the person "hit the ground running", or will they need to grow with the position? Since you are a busy professional and your organization needs immediate direction, put aside those resumes with a less proven track record.

Review the salary history, if you have requested this. Compare these with the budgeted salary for the position. Ask yourself whether you are willing to pay more for a seasoned professional. Based on the value the candidate offers, will this offset the cost to your business?

Ignore enclosed letters of recommendation. These are easily obtained. Always perform your own verbal verification or email verification of the potential applicant's experience.

Now that you have the second set of applicants with the skills and traits you are looking for:

Prepare a list of questions that directly relate to the position. Conduct a phone screening interview or include the questions in the job post. Structure your questions directly around the job qualifications.

A benefit of including questions in the job application posting is that it can help you eliminate, at the start, applications that don't answer the questions or provide unsatisfactory information.

For example:

In analyzing the Income Statement, what issues have you come across that affected the organization?

An acceptable response: I found that the month's revenues did not match my expectations given the inventory levels. I investigated and found that several sales had not been recorded.

Instead of: Well, I have never done an actual Income Statement analysis, but I am willing to learn.

Avoid using personality tests as a determinant to hire an applicant.

This is a current trend, but it does not measure the applicant's actual ability. While the tests do measure conscientiousness and emotional stability, applicants can readily adjust their responses based on the employer's job description and by researching the company's culture. Overall, the tests do a disservice to the employer by eliminating unique problem solvers and diverse backgrounds. These kinds of tests are currently under Federal scrutiny. "The Equal Employment Opportunity Commission (EEOC) actively penalizes companies whose tests create a discriminatory "disparate impact"." Cowen Partners "Ethics of Personality Tests in Hiring"

As a business professional, I know that it costs money to hire and train a new person. It takes time to build trust. Look for applicants who bring value and experience to the position. A seasoned person brings more than technical knowledge to the workplace. They bring wisdom. There are decisions and actions in daily business that more experienced workers have already plowed through. They have already learned to overcome business obstacles. They have dealt with all levels of employees and all types of personalities. They are actually more productive because they have already gone through the learning curve. They have a basis for their decisions, and they have already experienced the outcome.

Accounting in Everyday Life

2026-08-24T21:47:00.000-05:00

Whether you are managing a business or a home, accounting is an integral part of everyday life.

You look at your salary, pay the bills, and decide where else to spend your money. You also check your pantry and take inventory of canned goods and other items before grocery shopping.

Two accounting statements, the balance sheet and the income statement, are valuable to understand and practice for business and personal use. These statements can help you understand where your money is going and how best to use what you have.

The Balance Sheet is a statement of your assets and liabilities. Your home is an asset because it is worth something, and the amount you owe on it is a liability. After subtracting the cost of mortgage payments, the equity portion is what you have left in the home's value. The equity portion is also called your net worth.

In the simplest terms, income statements represent the inflows and outflows. The incoming are your paychecks, customer payments, or dividend and interest income. The outgoing is what it costs you to maintain your home or business: gas, electricity, groceries, and supplies used to make the product you sell or the service you provide. When the incoming is less than the outgoing, you are "in the red." This means you are not making a profit and have a negative net worth.

The balance sheet and the income statement are dependent on each other. On the balance sheet, there is a liability called Accounts Payable. These are bills you have to pay. When you record accounts payable, you also record an expense. Accounts Receivable is the money others owe you. When you record accounts receivable, you record Income.

Credits and debits are best understood by examining the Balance Sheet and the Income Statement. On the balance sheet, assets are debits and liabilities are credits. Equity and net worth are also credits.

On the Income Statement, Income is credited (and the asset increases to Cash or Accounts Receivable), and expenses are debited (Cash is reduced and Accounts Payable are reduced). When you record your paycheck, you debit your checking account and an asset, and credit your Income. When you pay your bills, you credit your checking account and accounts payable and debit your expenses. When you balance your checkbook and have cash left over at the end of the month, this is your net worth.

Because you have cash left, the credit from the money coming in and the debit from the cash going out result in a credit balance. This credit balance is recorded in the Balance Sheet's Equity portion and reduces the liabilities portion. Hopefully, your assets equal liabilities, and you are "in balance."

Clear as mud?

Think of it as an X. At the top of the X, on the right and left sides, are the Assets (on the right) and the Liabilities/Net Worth (on the left). At the bottom of the X, to the left of the Asset line, is the income credit to Assets. At the bottom of the X, horizontally to the right of the Liability/Net Worth are expenses (decrease to Accounts payable) and Equity (cash).

Assets increase cash and Accounts Receivable. Liabilities increase Accounts Payable, and Equity (the net Income left over after all bills are paid) increases. Income minus Expenses is Net Income. A positive net income is a credit balance that is reported on the balance sheet. The Assets minus the Liabilities equal Net Equity or Net Worth.

Can't you hire someone to do this? Of course, but you need to know how much cash you have at the end of the day. When you apply for a loan, the bank looks at your net worth in this way. That is why they ask about how much you owe on your home, what investments you have, and what you owe. It helps, especially in today's economy, to understand what you do and do not have and how to manage the cash coming in to pay your expenses while leaving some left over.

10 ways to make Home Based Bookkeeping Easier

2026-05-15T13:26:00.000-05:00

Debits and credits are fundamental accounting terms-debits increase assets or expenses; credits increase liabilities or income. Or debits on the right, credits on the left. What does this mean to your business? You have cash coming in, and cash going out. You need to focus on sales, customer contacts, and products and services. You know that accounting is part of the business, but, frankly, it's a pain, and you don't want to deal with it.

You want to design your product, not spend your time doing bookkeeping

Here are 10 things you can do to simplify your accounting and avoid common mistakes that can lead to confusion or errors in your financial records.

1. Keep track of your cash coming in. Using tools like summary reports or spreadsheets can help you feel more confident and in control of your business finances, making it easier to manage your cash flow effectively.

2. Make your expense tracking easier. Opening a separate business checking account and a credit card helps you feel more organized and better able to manage your business finances effectively, reducing stress and giving you peace of mind.

3. When you open a business checking account, do it where you do your personal banking. This separation can give you peace of mind, making tax time less stressful and helping you feel more secure about your record-keeping. Check your sales sites and make sure your sales are credited to your business bank account.

4. Keep track of what you purchase to make your product. This is your cost of goods sold and will help you mark up your items to ensure you make a profit.

5. Use a spreadsheet to track your expenses. Creating a single 'My Business' file with tabs for sales, costs, and expenses can help you feel more empowered and organized in managing your finances.

6. Don't let your filing stack up. Dedicate 10 minutes daily to filing customer invoices and receipts in labeled folders like 'Jan Sales' or 'Jan Expenses.' This routine keeps your records organized and reduces stress during tax season.

7. Order your supplies online and have them delivered to your home. The delivery will include a packing slip, making it easier to separate the items into Office and Cost of Goods. It also saves your valuable time.

9. Use a spreadsheet to keep track of your customers. Keep all their information in one place, including phone numbers, addresses, and email addresses. Also track when you last called them, worked for them, etc. You can also use this to track the hours you worked for them.

10. Consider purchasing accounting software. I recommend QuickBooks Desktop or Online, but choosing the right one depends on your business size and needs. After the initial setup, this makes your life much simpler. You can track cash from customers, inventory items and costs, office expenses, jobs you are working on, customer information, people you pay, and how many hours you work per day for each customer.

If you choose a QuickBooks version, there are legitimate, licensed third-party retailers that sell different versions of QuickBooks desktop. These versions usually come with a lifetime license. This will help you bypass the annual subscription costs of Intuit. However, QuickBooks Online is only available from Intuit.

Payroll Liabilities Effect on Taxes and Net Income

2025-10-26T10:13:00.001-05:00

Payroll is perplexing. It would seem straightforward enough, but if you offer health, dental, or retirement benefits to your employees, the calculations become more complicated. And how can you be sure you are doing it correctly?

You could outsource your payroll. You should still perform a verification calculation to make sure your service is correct. As an employer, it is your liability.

You may be using your accounting software for payroll. To verify the payroll, it's essential to know what does and does not affect net income. The accounting software used will include the federal and state tax tables. While federal taxes are applied equally, states differ in how they apply withholding taxes.

Payroll accounting software should contain the federal tax tables for the current year and the state tax tables for each year. Benefits may be offered pre-tax or after-tax. Pre-tax reduces the employee's gross income by the benefit amount before calculating the federal tax.

However, not all pre-tax benefits reduce the FICA (Social Security and Medicare) withholdings:

Pre-tax benefits that reduce FICA

Employee share of health insurance premiums
Employee contributions to a Health Savings Account (HSA)
Contributions to the Flexible Spending Accounts (FSAs) that can include healthcare FSAs and Dependent Care FSAs
Commuter benefits: Pre-tax deductions for transit passes and qualified parking also lower your FICA liability.

Pre-tax benefits that do not reduce FICA

Traditional 401(k) and 403(b) contributions
Adoption assistance
Group-term life insurance: This is a pre-tax benefit; however, if the coverage exceeds $50,000, this will be subject to FICA tax

FICA tax is contributed in two parts: one by the employee and an equal share by the employer.

When calculating the validity of the payroll:

Gross Income less Federal Tax less Employee FICA (calculated using the pre-tax and after-tax contributions) plus Employer FICA (using the same pre-tax and after-tax contributions) less the state tax withheld.

States differ in their assessments of withholding tax and in the pre-tax and after-tax benefit calculations. For example, the state of Missouri follows federal withholding guidelines, while some states, such as Florida, Texas, and Wyoming, have no withholding tax. The state of California has its own policies on pre-tax and after-tax benefits.

Roll in the Dough with Rolling Forecasts

2025-08-28T09:50:00.000-05:00

I am working on rolling forecasts, a good way to replace your annual budget process and position your business for future growth. Rolling forecasts are not new. Rolling forecasts have been in use for some time, and successful organizations regularly undertake these exercises.

As a small or mid-size business, rolling forecasts can give you real power to control your financial future. The concept is simple and involves setting targets for where you want to achieve your profit, say, within five years. Your profit level could be $5 million or $ 500,000. Either way, set the target.

Next, make a plan. However, instead of setting a one-year plan and going through the exercise of sticking to it, you will employ a strategy that involves real-time business operations. The plan will be set up by quarters, so you will be setting up the first five quarters, or the next 15 months.

Now, instead of drilling down into your financial expenses, set the primary levels of production and inventory expenses, sales and marketing expenses, and administrative costs.

Have patience and wait until the end of the first quarter. How did you do? Where did you fall short? Is there a product that needs more marketing? Or are the costs too high to make the product profitable? Are you paying too much?

After the first quarter is complete, decide how you will achieve your sales and profit again for the next 15 months. Redo the second through fifth quarter of your original rolling forecast, adding a 'new' fifth quarter. In the process of the rolling forecast, the second becomes the first, and the remaining "roll forward".

After you do this for a few quarters, you will see where your business is headed and decide where you want it to go.

Corporations offshore manufactuing-Are the Tariffs changing Corporate behavior

2025-06-14T20:03:00.004-05:00

Corporate social responsibility is not a high priority for U.S. organizations. A viable alternative to raising taxes on the wealthy and corporations is available to the American economy.

However, there is an alternative that can restore funds to the federal and state governments and decrease the U.S. unemployment rates. It may take courage, but exercising this alternative can result in a win-win situation for the American economy. And it is as simple as fulfilling corporate social responsibility.

Harvard's corporate social responsibility initiative defines corporate social responsibility as encompassing "not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm."

Fulfilling corporate social responsibility helps keep capitalism in check. Harvard's initiative places economic success, in part, on the organizations that benefit from it. Currently, American organizations are stockpiling cash, while the American economy is experiencing joblessness and a decline in disposable income. I don't know what they're doing with all that cash. It sits on the balance sheet as a current liquid asset, yielding insignificant returns. Are these stockpiles a shirking of American corporate social responsibility? The echo from the depths of the economy might say yes.

Seeing all that unproductive cash, I wondered how organizations were obtaining so much money in a shrinking economy. The average American household's disposable income has decreased, making consumer spending an unlikely significant factor. Digging deeper, I realized that many of these American corporations are offshoring jobs and increasing automation in their processes. According to the U.S. Department of Labor, "Cost-cutting by U.S. industries in almost every sector of the economy will continue to change the workforce. To reduce labor costs, some jobs are being sent offshore while others are being replaced by technology or are being filled with lower-cost workers."

This has real implications for the U.S. economy. As an accountant, I wanted to see the impacts, so I decided to do a little analysis on an American organization I was familiar with. Using the annual 10-K reports filed from 2007 through 2011 for this U.S. organization, I found that the organization increased its net earnings by 36.5% over the five years. During this same period, the organization experienced only a 10% increase in cost of goods, and a 25% increase in G&A This same organization, during these five years, has offshored a significant portion of its back office finance and product production, equating to a shift in payroll dollars of approximately $803 million.

Could this organization be remiss in managing its economic, social, and environmental impacts, as well as its relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm?

The payroll shift for this one organization in the U.S. economy amounts to a 32% loss of federal revenue (individual states of residence also lose tax revenue). For example, shifting $803 million in wages and salaries offshore results in a loss of $200 million in individual federal payroll tax, $50 million in Social Security tax, and $12 million in Medicare tax to the federal government.

While the economy is composed of many factors, consider changing just this one factor in the U.S. If American corporations loosened their grip on cash and exercised their corporate social responsibility, these organizations could infuse the U.S. economy with the jobs that currently exist offshore. Additionally, as a side note, the organization analyzed in the above example experienced a 17.9% decline in basic earnings per share over the five years.

Benefits of Unit Cost Analysis

2025-06-11T16:29:00.001-05:00

I worked for Monsanto in the Agricultural Division as a young accounting assistant. I was transferred from corporate to agricultural, entering a whole new world. At that time, the agricultural division was the most profitable part of the organization. What made it a new world for me was that there were no computers within this accounting department.

My first responsibility was to compose the domestic gross profit statement. I asked where to find the computer so I could begin setting up the spreadsheet. My boss laughed and handed me a columnar pad with thirteen columns and a calculator.

Each month, I used a 20-pound report for each product and transferred the respective product's gross sales, freight, quantity sold, and cost-related expenses onto my paper. I calculated the sales and cost units by product, compiled all the information, and generated a gross profit statement. During this process, I needed to explain why any sales or cost unit deviated from the budget by $.005.

I realized I was the computer. In this accounting environment, the belief was that computers are good, but people are more intelligent. A spreadsheet can't tell you why. To know why, you must understand the nature and components of unit cost.

A unit cost reflects the costs incurred to produce, store, and sell one unit of a particular product. Unit costs include:

· Fixed costs - depreciation, monthly rents, organizational cost allocations, and any cost incurred, whether or not production occurs; and
· Variable costs - labor, materials, electricity, any cost that increases or decreases depending on the output produced.

Total cost/total output equals unit cost. Total cost and total output are typically derived from a budget or forecast and can change on an annual, quarterly, or monthly basis. The static unit cost is a "best guess" based on past results, used to analyze the variance between the static unit cost and the actual unit cost. This variance analysis creates awareness of input costs, planned output, and planned productivity.

Input costs refer to the products and services used to produce output. Examples of variances are:
· Increase/decrease in the cost of material,
· Increase/decrease in freight in,
· Loss of vendor discounts,
· Missed vendor discounts.

Planned output is the estimated number of units. Examples of variances are:
· Material shortages,
· decrease in available labor,
· Equipment breakdown,
· Raw materials spillage,
· production for a customer who later canceled the order,
· Over-production based on incorrect scheduling,
· Overtime required due to unscheduled production,
· Overtime required due to a labor shortage,
· Increase/decrease in labor benefits,
· Increase in hourly wage.

Planned productivity refers to the number of units produced by current employees. Examples of variances are:
· Acquisition of new machinery that is less labor-intensive,
· Improvements in the production process.

A change in fixed costs can also contribute to the variance. For example,
· Change in fixed cost allocations,
· Increase/decrease in support staff costs,
· Change in monthly depreciation or rents.

Unit cost variance analysis can reveal these changes. Sometimes, poor communication results in an over- or understated standard cost unit. These variances also alert management to changes that can be addressed quickly before the end of the next monthly cycle, such as negotiating discounts with vendors or identifying new suppliers to provide materials at a lower cost. A monthly cost variance analysis completed within the short closing cycle can increase profit and efficiency.

QuickBooks Customer Credit/Refund Processing

2025-04-19T14:57:00.008-05:00

There are instances when the accountant must apply a credit to a customer's account. Understanding customer credit/refund processing in QuickBooks is critical to maintaining the general ledger account balances and easing the burden of bank reconciliation. QuickBooks accounting software has built-in options to handle these situations. Understanding how to utilize these options will ensure that the correct general ledger accounts are used.

Retain credit on the customer account for use when paying another invoice.
Issue a refund by check or credit card, and
Apply the credit to an outstanding invoice on the customer account.

The customer requests a credit and rebill of a previous invoice.

This is an example of 3-Apply the credit to an outstanding invoice, and also how to create the new invoice (rebill)

Using the disputed invoice as a 'model,' choose 'Refund/Credit' from the ribbon menu to create a credit for the current period and apply it to the disputed invoice.
To issue the rebill, choose 'Create a copy' using the disputed invoice from the ribbon menu. This will assign a new invoice number and a new date. The original invoice date can be used if the rebilled invoice is from the same period. The latest period date is used if the disputed invoice is from a prior period. Make the requested corrections and save the invoice.

This will ensure the credit memo and the reissue invoice are recorded in the same period.

The new credit memo will be applied to the disputed invoice, reducing the amount due on the customer account.

Retain a credit on the customer account.

When a customer returns a product for which they have already been invoiced and paid, use the original paid invoice as a model. Choose 'Refund/Credit' from the ribbon menu to create and save a new credit memo for the customer to use in future payments.

Issue a refund by check or credit card.

. Access the paid original invoice and create the credit memo. Since the invoice has been previously paid, choose 'use credit to give a refund'.

In the Account section of the refund, choose the checking or credit card account to issue the payment.

Utilizing credit memos for customer credit processing ensures the original transaction is properly reversed to the accounts receivable, inventory, income, and cost of goods general ledger accounts.

Workarounds don't work.

Some organizations want to circumvent the accounts receivable refund process by setting the customer up as a vendor and issuing a refund check through the check-writing option. Reimbursing a customer by writing a vendor check does not reduce the income incurred through the original invoice. This procedure leaves income overstated by the amount of the refund. If the customer's refund check does not use the item tab, the inventory will not reflect the return of the product.

In addition, organizations processing customer payments by credit card often misunderstand the flow of credit card receipts to the operating account. Customer credit card payments flow directly to the operating account for many organizations. When the customer's credit card payments are part of the operating account, the customer refund can be issued as if it were a check. This will be reflected in the credit card processing software maintained outside of QuickBooks. For example, a customer refund is issued to the credit card using the bank's credit card processing software. The customer refund must also be entered using the QuickBooks customer credit processing to ensure that cash and the customer account are correctly recorded. Issuing the customer credit in the credit card processing software only causes money and income to be overstated.

Circumventing the established QuickBooks process for handling customer refunds can cause cash to be overstated, income to be overstated, cost of goods to be underestimated, and inventory to be understated if the goods are returned. This also puts additional strain on the bank reconciliation process by increasing the time needed to reconcile the exceptions in the credit card processing and creating the journal entries required to reset the affected general ledger accounts, circumventing the process.

QuickBooks Budgeting Tips

2025-04-14T17:58:00.000-05:00

Using QuickBooks to create and monitor your annual budget is more straightforward than it appears. Because QuickBooks budgeting requires month-by-month entry for the annual budget, users often shy away from using the budget module. However, with a few simple changes, you can create a budget that works for your business, is easy to review, and is easy to change.

The Secret to a Painless Budget

The secret to a great budget is simplification. Do you really care about each detailed account when you review your organization's performance? Only if there is a question, and using the budget report can provide one-click details.

Review your chart of accounts, whether numeric or alpha. It's easier if you print a profit and loss statement and highlight the important results, such as total income, total cost of goods sold, total sales expense, and total general and administrative. The goal is to budget at a high level to make monitoring performance quicker.
For the accounts you marked as important, set up a parent account, such as payroll liabilities. The individual payroll liabilities, such as FICA, Federal, State, State Unemployment, Worker's Compensation, etc., will become subaccounts of this parent (this becomes clearer when viewing the chart of accounts in the hierarchical view).

Reviewing Budget Reports in QuickBooks

QuickBooks supplies basic reports for reviewing budget performance. You can control how often you review and modify your budget by modifying the reports and saving them with a new name.

For example, using the basic QuickBooks budget report Profit & Loss Budget Performance run the report to the screen. Choose Modify Report from the menu bar. Several tabs will appear. On the Display tab, change the report range date to quarterly. To view the difference between actual and budget, on the Display tab choose show actuals and show dollar difference. To reduce the data in the report, select the advanced tab to show only rows and columns with budgets.

Entering the Budget in QuickBooks

The QuickBooks budget is set up for monthly entries. If your organization generates only annual budget amounts, take the annual budgeted amounts and divide them by twelve. Enter the monthly amount in the January field and choose "Carry this across."

To enter a budget based on quarters, individually divide each quarter by 3 and enter the correct amount for each month of the quarter.

Using QuickBooks budgeting helps businesses stay on track. You can easily see where you are compared to your budget and what you need to change. Using the budgeting module may seem like a lot of work, but it ultimately saves time and prevents surprises.

What the payroll tax increase means to you

2013-02-06T14:53:00.001-06:00

Now that the government has repealed the payroll tax cuts U.S. take home pay is cut by two percent. In addition, the IRS has restricted the federal income tax tables so middle-income folks may be subject to additional federal tax increases.

To reduce the strain on your income you may need to adjust your spending habits. Learn how to reduce your everyday spending with a minimal impact on your lifestyle.

Getting Credit without Using Credit Cards

2009-08-24T09:40:00.002-05:00

Are you a small business just starting out? Are you trying to rebuild you credit, or trying to establish credit? Credit Cards are convienent, and sometimes too easy. You can run up your credit limit with just a few purchases for your business, like a computer, phone system, or copier.

There are ways to establish a credit score while avoiding credit card traps. Using this method, you can qualify for a small business loan or an automobile loan, and know that you will be able to manage your finances and your debt without surpizes.

Read Pros and Cons of Establishing Credit without Using Credit Cards for an in-depth analysis of the pros and cons of an alternate way to establish credit.

Increase Your Business with a Business Blog

2009-08-10T09:36:00.000-05:00

Running a small business is like running a marathon. You need to make sure your customers have great service, your employees are happy and productive, and you’re generating new leads and contacts.

Have you thought about maintaining a business blog? Just creating a blog post, short or long, will keep your customers, and potential customers, up to date on the newest services and innovations offered by your business.

While there are many blog services out there, Google Blogger is free, and easy to use. 1&1 offers domain name registration for about $24.00 every 6 months, and comes with a website builder, and a blog.
As a business owner, you are always looking for ways to improve and increase your business. Blogs are a good way to let customers know you have the services they need

Insurance for Non Profit Business

2009-08-05T12:53:00.000-05:00

Operating a Not for Profit business requires many of the same insurance requirements as a For Profit Business. While directors and managers may believe that a non profit business, set up for family assistance, education or development of the Arts is perceived as an organization designed to help the general public, and therefore immune from frivolous lawsuits and claims, this is not the truth.

In my article, Nonprofits: Types of Liability Insurance, I have outlined the important business liability insurance that all nonprofit organizations should carry.

Google Checkout-Big Help for Small Business

2009-08-03T18:29:00.000-05:00

Do you want to set up an on-line store for your products, but don’t think you understand the web techniques. Google has introduced Google Checkout, a gadget you can add to your website or blog that will allow your followers and customers to purchase directly from your site.

Customers Shop, Begin the checkout process, Sign into Google Checkout, Buy, and Receive a Confirmation. Sellers receive Fraud Protection, Have the Potential to Increase Sales, and offer Google Convenience to their Customers.

There are minimal transaction fees, based upon sales volume.

If you are looking for ways to expand your business, Google Checkout can be an excellent assistant.

Small Business Consultants

2009-08-03T14:00:00.001-05:00

Last night, a group of friends got together to celebrate the fact that they are “survivors” of the current shrinking employment economy. With all the talk of anti-discrimination, we, the older but not unemployable of the nation, have found it very difficult to get interviews. And even more difficult to land the job.

Employers have downsized to cut costs in the current recession. If they do need replacements, they are looking at younger workers to fill the positions. Today’s employers, watching costs so closely, know that it is more expensive to employ experienced older workers.

Employers state “salary commensurate with experience”, but want to shy away from the higher salaries paid for the actual experience. And, not only do older workers have experience that is worth the higher salary, the payroll taxes on this salary are higher. Consider FICA 7.65% of 40,000 is $3,060, compared to 65,000, which is $4,972.

Health insurance premiums are much higher for employees over 50. The older employee is contributing more to the 401K plans, so, if the employer matches, this amount is higher.

What you have is an aging unemployed force of valuable collective experience. More older people, still bright and ready to work, are forming alliances with each other, and selling their services to small business. As small business consultants, the professional can provide excellent technical and business tools for a reasonable price.

Small businesses that hire the professionals benefit from the knowledge and experience once employed at larger firms. This enables small business to compete with confidence, and can enable them to outshine their larger competitors, who have chosen lower salaries over experience.

Sales Tax made Easy-er

2009-07-30T20:49:00.000-05:00

If your business sells product in several states, keeping up with the sales tax tables is always a challenge. And selling in a new state just adds to the burden. To make finding tax rates simpler, The FTA Links page presents a map of all 50 states.

When you click on the state in question, you will be taken directly to the states Department of Revenue. Here you can link directly to the sales tax rates and tables by county, if applicable.

Calculating sales tax for a home based business, such as Arts & Crafts, can be done using a spreadsheet, if you do not have a software package for inventories. My article How to Track Sales Tax in Your Arts & Crafts Business will give you step by step instructions on how to create a spreadsheet and set it up to calculate your sales tax.

What is the difference in Accrual and Cash Accounting

2009-07-27T15:02:00.002-05:00

Accrual verses Cash Accounting can be one of the more difficult accounting concepts for non-financial people to understand. For the small business owner, every transaction is on a cash basis. They understand revenues and expenses, but what is all this accrual stuff?

Why not just use cash as the method for looking at profit and loss. After all, when the bills are paid, the cash account is checked to see how cash is available.

Accrual accounting records revenues earned and expenses incurred for the specific period. For example, paying the annual business insurance premium depletes cash in the month paid. This insurance is going to cover the business for a 12-month period, but the cash outlay occurs in one month or over a nine-month period.

When trying to obtain a line of credit or a business loan, the bank will ask for the financial statements of the business. The statements will include the Profit & Loss and the Balance Sheet. One thing to remember, a Balance Sheet is always on an accrual basis. Balance Sheets record Assets, Liabilities and Owners Equity, which includes the net worth of the business.

Since the cash basis method of accounting only shows revenues received and deposited in the bank, and expenses paid by cash, check, ACH or credit, the Profit and Loss statement may not fairly represent the business sales and revenues.

Cash Basis may seem simpler to use for the business owner. But using a cash basis can have results that make it more difficult to monitor the business profitability on a monthly basis. While your sales may be booming, your customers may be delinquent in paying. Using the cash method, you may see revenues well under the actual monthly sales. Or the net profit is distorted because there were larger purchases in the given month. Accrual accounting takes these events into account when creating the monthly Profit and Loss statement.

Choosing an accounting method is necessary when preparing the taxes for the entity. The method of accounting must be chosen and stated on the first tax return submitting for the business. When choosing, the method chosen should most closely represent income and expense, and the IRS suggests that the method chosen be used for the business record keeping.

In order to fully understand the difference in accrual and cash accounting methods, refer to my article on Helium.

Managing Difficult Customers

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As a business owner, how do you deal with difficult customers? These customers may be the “hard to please”, they may be dissatisfied with the level of service or product, or they may simply be difficult people.

Each situation will need the same set of skills.

Listen.

If you are face to face, keep a neutral face and make eye contact. Nod, and look sympathetic. If you are on the phone, keep you voice calm. Actively listen to what the customer has to say. This will diffuse the customers anger, make the situation easier to reach a solving point, and give you time to think.

Act, don’t react.

After the customer has finished, let them know that you understand their frustration. Ask them what you can do to remedy the situation. Would they like the work re-done, or is there a simple repair? Would they like to return the product? Based on their answer, focus on a plan of action that will satisfy this customer, retain their business, and control your costs.

Offer an apology and don’t explain blame.

Apologizing to the customer for their inconvenience will let them know you understand their frustration. Remember, you may offer solutions, but not blame. If someone in the company is to blame, that is your problem as the owner. Always present a pleasant front to the customer, and let them know you are in control. Accessing blame to a process or an employee may give them the impression you don’t know what goes on in your business.

When you make a promise to deliver a solution, keep the promise.

Customers hear promises, they believe actions. As you are growing your business, one of your goals is to maintain the integrity of your company. Maybe the product was less than promised, but your company will not be.

Exceed your promise.

If you have agreed to replace the product, send the replacement and something extra. If you are replacing a printer, send an ink cartridge. If you are re-doing a service, offer an additional service for free.

Additional resources:

Managing Difficult Customers

Difficult Customers-Restaurant Managers

Small Business Success-Difficult Customers

Tips for Managing a Small Business

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Face it; we get really busy just trying to get the business off the ground. In addition to performing the work, supervising a construction crew, managing properties, blogging, writing and maintaining records, small and home business owners want the business to grow.

Take some time to stretch yourself and think outside the box.

Step back and imagine yourself as the customer of your business. What would be the main thing you would be looking for?

Networking means more than face-to-face, cold calls and reliance on referrals. Look for assistance on the Internet, to help you meet other business owners and solve your daily problems. We don’t need to re-invent the wheel.

Starting a business and facing common challenges

Get a lot of information in one spot, from tax tips to building a web site

Instead of plowing through oceans of links, business tax, sales tax and employee tax by state can be found on one site.

The Kiplinger Letter is has calculators, interesting articles, personal and business investment advice, and a special section for small business.

Home and Small businesses don’t need go it alone. They don’t have to pay big bucks for sound advice. There are networks of small businesses and useful advice for free.

Business Bookkeeping, Payroll and Accounting

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When did it become so complicated? Now that you have your small business or home business running, there are more issues to deal with that you hadn’t thought about.

How do you deal with the never-ending payroll taxes and the federal and state filings and payments?

There are customer deposits to apply to outstanding invoices, checks to be written, and cash management.

You need to spend time making your products. You want to spend time selling your service. And now, there isn’t enough time in the day to do everything you want to do.

Do you have to hire a CPA, or a full-time employee to take care of the bookkeeping and accounting issues?

No. Allowances, my bookkeeping and accounting service, can provide the help you need at a price you can afford.

You pay only for the services you want. You pay by the hour, or by the monthly assignment. And you don’t have any additional expenses, like employer social security or medicare payments, state unemployment taxes, federal unemployment taxes, or benefits.

It makes sense, as you are trying to make a profit, that you keep your costs low.

Allowances, penstruckbiz.com, can do this for you. Visit my website and complete the form letting me know what you need. Or send me a quick comment here, and I will get back to you.

Small Business-Ways to Cut Costs

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Electricity

This is an easy, simple fix. Turn it off. At their desk, employees have a radio or CD player, a fan, a heater, a computer, and other office equipment, like calculators and printers. Require employees to turn these off each evening.
If you don’t run a second or third shift, power down machinery each night. It is less expensive to bring an employee in 15 minutes before start to power these up.
When replacing equipment, purchase energy efficient. Use copy machines, monitors and faxes that power down when not in use.

Purchases

Analyze who you spend the most with, and ask for a discount. While inventory controls may only want to stock immediate use, if you have the space, buying in bulk can save money.
Take advantage of all discounts vendors offer. Pay your bills on time. This can improve your credit rating and your business financing rates.

Paper and Printing

These are necessary costs for business. I don’t advocate re-using paper in printers, as this reduces the life of the printers, due to ink buildup and debris. But I do suggest that you use recycled toner and ink cartridges. You may have to try one or two providers, but recycled cartridges produce excellent quality.
Shop paper. Choose four paper providers and get quotes. The larger providers will allow you to place an annual order at a reduced price, and warehouse the paper for you.

Employee Costs

Employee costs are always an issue. As you seek ways to reduce these costs, keep in mind that benefits are a big part of an employee’s choice to stay. With the skyrocketing costs of health insurance, it may be wise to ask the employee to contribute a larger portion to retain benefits.
Take advantage of state probationary periods for new employees. Most states have a 28-day policy, where these employees are reported quarterly and receive a lower unemployment rate. You will know within 27 days whether the employee will work out or not, don’t pay higher rates.

Credit Cards and Travel

Establish limits and accountability for company credit cards. Be vigilant. Set up a travel policy based on the IRS current per diem rates. These are the reasonable food and lodging costs of a day’s travel. While employers want to make travelers comfortable and happy, they don’t want to pay for mini vacations.

Business Insurance

Shop this insurance at each renewal date. Even if you have a broker, shop some on your won. Remember, brokers make commissions from their recommendations.

Be Creative

Based on your specific business needs, brainstorm ways to save costs. You may be able to move to 10 hours days four days a week, and save a day of electricity, paper and printing, and more. There may be a scheduling method of production that is more cost efficient. There are possibilities.

To learn more, see my article on Helium. http://www.helium.com/items/1463052-cost-control