Smart and Easy Business

Unemployment Conversations-Are They Right

2012-01-19T12:48:00.000-06:00

The unemployment conversations tend to focus on older workers, duration of unemployment, and professions. But are they right? The unemployment numbers for December 2011 have been crunched and published by the Bureau of Labor Statistics, U.S. Department of Labor. While the results are unremarkable in that they confirm that unemployment is still too high, hovering around 8.5%, drilling down reveals a different unemployment conversation than is currently circling the Internet.

When looking at the unemployment percentages by age group, those ages 25-34 are the highest group of unemployed at 24.4%. The unemployed workers 55 and over constitute 14.7% of the unemployed, with the remaining age groups 20-24, 35-44, and 45-54 hovering at 17%. This changes the conversation in terms of "older workers" that range from 40 and over to 55 and over depending on what you read. This suggests that employers are actually more receptive to "older" workers than the hype would have us believe.

There is concern over the recent revelations that employers are considering those who have been unemployed for more than six months undesirable. Unfortunately, the report does not present a breakdown by age for the duration of unemployment. What the report shows is that 44.5% of those actively collecting unemployment have been active for 27 or more weeks.

The highest areas of unemployment are construction at 16%, professional and business services at 9.3%, and leisure and hospitality at 10.8%. The lowest areas of unemployment are government workers at 4.1%, education and health services at 5.5%, financial services at 5.6% and mining at 6.9%.

The percentages are based on the number of unemployed persons as of December 2011. This number adjusts for those not actively seeking work and those who are institutionalized. The remaining unemployed population is 13,097,000. Of this number, the greatest population of unemployed is the age group 25-34. Over the flip side, of the 140,681,000 employed in the labor force the highest percentage of employment is seen in the 45-54 age group.

The conversations can change towards older workers that are the largest percentage of the employed work force and have lower unemployment ratios than their younger counterparts. Long-term unemployment is a chronic condition at this stage in the economy not limited to age. Education and health are indeed fields to explore. The unemployment in construction is a real key for economic growth.

Bureau of Labor Statistics-The Employment Situation December 2011

Which Version of QuickBooks Accounting Software is Right for Your Business

2011-12-08T18:38:00.000-06:00

Is QuickBooks accounting software right for your business? QuickBooks offers a range of products for use in desktop, server and on-line accounting environments. QuickBooks signature is ease of use and behind the scenes accounting that occurs as users enter transactions for accounts payable, sales and accounts receivable, payroll processing and inventory management. QuickBooks accounting software includes industry specific forms and general ledger accounts ranging from 65 industries (QuickBooks Online) to more than 150 industries (Enterprise).

Evaluating QuickBooks Accounting Software provides a detailed look at the accounting functions available in each version of QuickBooks and an overview of the pros and cons of using QuickBooks accounting for your business.

QuickBooks Customer Credit/Refund Processing

2011-11-29T14:57:00.000-06:00

Understanding customer credit/refund processing in QuickBooks is critical to maintaining the general ledger account balances and easing the burden of bank reconciliation. QuickBooks has three options to process customer credits and/or refunds:

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.

Issuing credit memos for customer credit processing ensures that the original transaction is reversed properly to the accounts receivable, inventory, income and cost of goods general ledger accounts (See example). Choosing one of the three customer credit options ensures the customer is receiving the type of refund application he or she desires.

However, many organizations 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 is overstated by the amount of the refund. If the customer's refund check does not use the item tab, 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. For many organizations, customer credit card payments flow directly to the operating account. When the customer credit card payments are part of the operating account, the customer refund can be issued as if it were a check. This will then be reflected in the credit card processing software maintained outside of QuickBooks. For example, using the bank's credit card processing software, a customer refund is issued to the credit card. The customer refund must also be entered using the QuickBooks customer credit processing to ensure cash and the customer account are correctly recorded. To issue the customer credit in the credit card processing software only causes cash 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 is overstated and inventory is understated if the goods are returned. This also puts additional strain on bank reconciliation process by increasing the amount of time needed to reconcile the exceptions that occur in the credit card processing and in creating the journal entries needed to reset the general ledger accounts affected circumventing the process.

QuickBooks Budgeting Tips

2011-10-29T17:58:00.000-05:00

Using QuickBooks to create and monitor your annual budget is simpler 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 simply changes you can create a budget that works for your business, is easy to review and 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 are reviewing your organization's performance? Only if there is a question, and using the budget report can provide one click detail.

Review your chart of accounts, whether numeric or alpha. It's easier if you print a profit and loss statement and highlight the results that matter, for example, 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 have marked as important, set up an account that will be the parent account, for example, payroll liabilities. The individual payroll liabilities 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. By modifying the reports and saving them with a new name, you can control how often you review and modify your budget.

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 amount of data shown on the report, choose the advanced tab and choose show only rows and columns with budgets.

Entering the Budget in QuickBooks

QuickBooks budget is set up for monthly entries. If your organization generates only annual budget amounts take the annual budgeted amounts and divide the amount 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 when you are compared to your budget, and what you need to change. Using the budgeting module may seem like a lot of work, but in the end, it saves time and prevents surprises.

Occupy Wall Street and Stir the Corporate Conscious

2011-10-04T13:44:00.001-05:00

The move to Occupy Wall Street is a direct outcry of an economically impoverished people unemployed due to poor investment and credit management compounded by corporate cash hoarding. The frustration is directed at Wall Street but is representative of corporate practices in the U.S. Hopefully the protests are a wake up call to organizations that it is time to exercise corporate social responsibility.

The economic crisis hit the wall in 2009, but it was a slow decline coupled with the result of sub-prime lending. As early as June 2007, Bloomberg Businessweek warned about The Real Cost of Offshoring. The attractiveness of cost cuts lured U.S. organizations offshore. However, the gross domestic product, reported as healthy by the Bureau of Labor Statistics, was actually a phantom index.

While rumors abound with whispers of conspiracy, accusations of greed and government favoritism, what do these rumors accomplish? We are a capitalist society, based on supply and demand, production and consumer. What can make the U.S. capitalistic economy great is self-regulation of wealth.

Henry George, sometimes referred to as the father of modern capitalism, summed this up in the preface of his book Progress and Poverty:

"To those who, seeing the vice and misery that spring from the unequal distribution of wealth and privilege, feel the possibility of a higher social state and would strive for its attainment."

Henry George's theory of capitalism is based on four ideas:

he who makes should have;
he who saves should enjoy;
what the community produces belongs to the community for communal uses; and God's earth, all of it, is the right of the people who inhabit the earth.

Taxing the rich will not change the economic situation. Making the federal government responsible for the economy will not change the situation. What can influence change in the U.S. economy is best accomplished by enacting the community premise: what the community produces belongs to the community for communal uses.

This is not socialism. The U.S. economy functions on consumerism, supply and demand. The concept of community in capitalism means that production belongs to the same community where the organization is incorporated and the fruits of production, the working capital realized by the organizations, should be reinvested in the community for communal use.

As of the second quarter of 2011, ten U.S. corporations are holding a total of $508 billion dollars in cash on their balance sheets. While this is theirs to have (1), these organizations have a corporate social responsibility to the community of the U.S. This means that organizations, not the federal government, are responsible for creating and sustaining the economic well being of the U.S. community by operating, hiring and producing on U.S. soil.

Simply put, organizations have a right and a responsibility to profit and are also the guardians of the economy. It is socially irresponsible when profits rise at the expense of the community and government where the profits are reported. Rather than shrinking from the economic crisis in the U.S., corporations should act to relieve the pressure.

Analyze the percentage of production completed offshore. If this amount is greater than 20%, consider bringing back the production to U.S. soil. Contribute at least 50% of production to the U.S. economy.
Shared services centers make sound business sense. North America currently has 29% of shared services centers. U.S. corporations can return their share of global shared services centers to North America.
Analyze purchases and ensure that 50% or more are purchased from vendors operating within the U.S.
Choose U.S. based technology, contractors, and personal service firms.
Consider aggressively improving business-to-business transactions that will circumvent the need for credit lines. One method is electronic invoice presentation and payment, which will marry the seller and the buyer in an agreed upon payment cycle that fits the needs of both.

As senior leaders issue a collective gasp, proactive leaders will see the benefits. At some point, all the cash hoarding will end as the consumer fades and products gather dust. Just as the sub-prime mortgage industry ended, so will the cash stores. Instead, organizations should invest in processes that will improve production, maintain U.S. employment and still turn a profit.

But that's just me.

Is Corporate Cash Hoarding a Lack of Corporate Social Responsibility

2011-09-26T16:57:00.005-05:00

Corporate social responsibility is not a high priority for U.S. organizations. There is a viable alternative to raising taxes on the wealthy and on corporations available to the American economy. This alternative 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 that success. Currently, American organizations are stockpiling cash while the American economy is experiencing joblessness and loss of disposable income. I can't say I know what they are doing with all that cash. I can say it sits on the balance sheet as a current liquid asset yielded insignificant returns. And I wonder-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 cash in a shrinking economy. The average American household's disposable income has shrunk, so consumer spend certainly isn't a major factor. Digging deeper, I realized that many of these American corporations are offshoring jobs and reaching for increased automation in 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 implications, so I decided to do a little analysis on an American organization I was familiar with. Using the annual 10-K reports filed 2007 through 2011 for this U.S. organization, I found that the organization increased net earnings by 36.5% across the five-year period. 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 this five-year period, has offshored a large 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 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?

The impact of the payroll shift for this one organization on the U.S. economy equates to a 32% loss of federal revenue (individual states of residence lose taxes also). For example, the shift of $803 million dollars in wages and salaries to offshore locations denies the federal government $200 million in individual federal payroll tax, $50 million in social security tax, and $12 million in Medicare tax.

While the economy is composed of many factors, think about changing just this one factor in the U.S. If American corporations could loose their death grip on cash and exercise their American corporate social responsibility, these organizations could infuse the U.S. economy with the jobs that exist offshore. And, as a side note, the organization analyzed in the above example showed a loss in the basic earnings per share of 17.9% during the five-year period.

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Credit Policy Makes Uncollectible Accounts Obsolete

2011-09-23T19:55:00.000-05:00

A sale that cannot be paid is a waste of resources. A good credit policy can make uncollectible accounts obsolete. Make sure your credit policy is rock solid. If the percentage of uncollectible sales is more that one percent, your business is moving towards non-profit. That may seem strong, but really, are you in business to make a profit? Even paying for one percent of the cost involved in moving product and invoicing the customer is useless cost. Instead, use the percentage as a measure of how much time you should spend managing credit and collections.

However, the best way to manage credit and collections is to stop extending credit to unworthy buyers. To make sure that your business realizes the profit from sales, use the checklist to analysis your current credit policy. Redo the credit policy if necessary to safeguard your cash.

There is an established amount for new customers that can be invoiced without a credit application.
Current customers have credit applications on file that are newer than three years old.
Customers who have not ordered in the past year are placed on hold. When an older customer wants to purchase, ask the customer to complete the business credit application before processing the sale.
A report is generated at least every quarter listing invoices equal to and below the amount sold without a credit application. This report does not include credit worthy customers with small orders. Based on this report, these customers are placed on hold until the credit application is received.
Customers have the option to pay by credit card if they don't want to complete a credit application.
The sales commission strategy includes a procedure for uncollected sales.
The current business credit application clearly states the seller's payment terms, return policy and dispute policy. (If you don't have a standard business credit application, or your application is out of date download the template from Microsoft.)
The business/trade reference includes how many years the applicant has worked with the business/trade reference. Follow up with the business/trade reference includes the high credit and number of days to pay for the applicant.
The business contact information section includes information from the applicant regarding previous businesses under a different name in the past five years with information on the previous business name, start date and stop date.

Organizations can guard their cash and improve profit by aggressively pursuing a rock solid credit policy. Any customers lost probably wouldn't pay anyway.

Easing the Burden of AP with Electronic Invoice Presentment and Payment

2011-09-23T12:02:00.000-05:00

So why aren't more U.S. banks offering electronic invoice presentment and payment solutions? After searching with Google and Ask, I found only one U.S. bank that offers this service, while at least ten European banks had this in place. Electronic invoice presentment and payment (EIPP) is really so simple. The process takes the guess work out of invoicing customers, receiving customer payments, and, for the buyer, makes accounts payable processing so much easier.

It is a matter of accepting the software constraints, selling employees on using the process (many employees are afraid of being replaced), and onboarding buyers. However, the buyers are the ones who benefit the most. The acceptance of the electronic invoices from suppliers carries the ability to send buyers files that can be imported directly into the buyer's software. The import carries all the documents needed to prepare the accounts payable invoice for payment-the original purchase order, the proof of delivery, and any buyer required document. This process automatically matches product price and quantity and rejects discrepancies. The invoices that match are entered directly, so employees only deal with the rogues.

Even though banks may not offer the service directly there are several third-party vendors who offer this, and buyers need to take this seriously. When I look at this from the AP managers view, I want it.

Roll in the Dough with Rolling Forecasts

2011-01-16T09:50:00.005-06:00

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 large organizations undertake these with some regularity.
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 be profit wise in, say, five years. Lets say you want your profit level to be at $5 million, or $500K. Either way set the target.
What you are going to do is make a plan. But, instead of setting a one-year plan and going through an exercise of sticking to that plan, you are going to set a plan 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 nickel and diming your financial expenses set the main levels of production and inventory expense, sales and marketing expense, and administration.

Have patience and wait under the end of the first quarter. How did you do? Where did you fall short? Is there a product that needs to be marketed more? Or costs too much to be 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, and add another. Second now is the first quarter, third is now the second, etc.

After you do this for a few quarters, you'll get the hang of it. And you will be able to see where your business is going, and decide where you want it to go.

Easy Business is Hard Work

2010-11-05T21:39:00.003-05:00

The holidays are coming. In the joy of the season, and the rush for gifts, don't forget....take a few moments every weekend to start sorting your tax receipts. Get your medical bills together, if there are any behind, pay them now. It can save you later. Don't forget your charities, especially at this time of year. Donations help those in need, and are still deductable.

Need help or just some more information? Leave a comment, or give me a call. I am listed in the business section in Google Real Accounting and Bookkeeping Solutions

Tax Time for Small Business

2010-02-17T20:35:00.004-06:00

Just thinking about trying to get all your records together for your CPA or tax guru can be overwhelming. Take a breathe, and use these simple steps.

From your accounting software, run a trial balance.

Look at the income - does it seem in line with your year to date deposits? If not, how old are your accounts receivable? Maybe you should write the old ones off to bad debt.

Look at the expenses - Is Office Exense really high? Take a look to see if there are printers and other high dollar purchases that were classified as expense, but should be assets. You can write off up to $250,000 of equipment and software in 2009.

Get your forms together.

Check the payroll tax returns and make sure your 2009 payroll taxes are paid.
If you paid estimated taxes, organize these.
Find your personal property tax receipts.
Check your accrual accounts to make sure these are in balance and equal what is left to pay. If not, write off or write up the accrued amounts.

Check your asset accounts for items that should be expensed. Small purchases, usually under $500 dollars, can be expensed.
When you look at the items classified as assets, ask yourself if these are used up already. Letterhead, virus software, small printers and toner are good examples of items sometimes classified as assets that are actually expense.

Has your CPA sent you a checklist for your tax return? Take the time now, before the crunch, to review this checklist. It will help you find all the items you need to ensure you receive all the deductions your business is entitled to.

Payroll Liabilities

2010-01-21T10:13:00.003-06:00

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?

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

Maybe you are using your accounting software for payroll. Do you know how to set up the payroll module to perform the correct calculations?

Simple explanation of payroll calculations.

Independent Contractors How to calculate taxes

2009-12-05T12:06:00.003-06:00

If you have your own small business and offer services, you could be an independent contractor. Before the end of 2009, calculate what your personal income tax will be. If you have not made tax deposits, it's a good idea to make personal federal tax deposits before December 31st to avoid any penalties.

Calculate the tax due on contract work

Get Your Business Out of Debt

2009-11-16T17:30:00.002-06:00

If your business profit is on the downward path, review the key elements of your financial information. Review your Accounts Receivable for slow pays. Look over your vendor month end statements for invoices you already paid, or duplicate bills.

Review your selling, and administrative costs. Look at the details. You'd be surprised how much you can save with a simple analysis of your business expenses.

For information and a detailed guide, How to Get Your Small Business Out of Debt provides a detailed step by step program to get your business out of debt.

QuickBooks Easy to Use Easy to Misuse

2009-11-13T12:44:00.002-06:00

QuickBooks for accounting and business is very friendly. Setups are done with walk-through promts. The HELP funtion is easy to read. But sometimes difficult to navigate.

QuickBooks promotes this product as user-friendly, and it is, for standard accounting functions. When using the more complicated functions for inventory, it's important to spend some time reading the HELP articles to understand the logic of QuickBooks. Each module, such as Accounts Receivable, Sales Orders, and Inventory, are dependent on the proper setup.

There are also some problems users don't pick up on until it's too late. For a summary of the common problems and solutions, review my article QuickBooks Problems.

If you have any questions, please email me, using the form on the website Penstruckbiz.com. I will be happy to help you.

Working from Home takes discipline

2009-10-29T17:44:00.002-05:00

I work from home, and it can be challenging. I babysit a two year old, perform accounting and payroll for clients, and freelance for Examiner, Demand Studios and other sites. I have been letting my blogs slide. Try chasing a two year old between calculating and trying to formulate a thought!

I found an article in my email this morning. I subscribe to several newsletters in an attempt to remain in contact with the world, and gain knowledge. The article is 10 Tips to Make Working from Home More Productive,

This article contained great information. Some items I knew, but didn't practice. I only tracked my time when I was doing client accounting work, but it's makes sense to track how long it takes to research and write my articles. One article really can take 4 or 5 hours.

When I write for Parenting Teens, I don't want to through out the same old stuff. Some of what I find is a little verbage, and a lot of advertisement. Some just repeats what others say. I want to give new information to readers.

Working from home is okay. Learning to control time, remain productive, and maintain a semblence of work hours, with start and stop times, is a little harder to do.

Why get a financial statement audit

2009-09-22T17:25:00.003-05:00

Has your bank or another creditor asked you for a set of audited financial statements? Ever wonder why?

When you contract a CPA to audit your statements, the CPA firm tests for proper accounting practice. They also test to make sure all of the transactions are recorded. Then they issue a letter, which is an attestation, which says whether your current practices are in line with GAAP.

To find out more about financial statement objective, read Objectives of a Financial Statement Audit.

Credit card debt-How to avoid it

2009-09-02T08:49:00.002-05:00

Most people think the only way to establish credit is to get and use credit cards. But these convenience cards can be deadly if not managed. For businesses, a line of credit may be a better consideration. The bank will stop you when you reach your limit. Credit card companies just smile and raise your spending limit.

For new small businesses, consider the alternatives to establishing credit without using a credit card. While this is a slower process, there are real advantages.

You cannot spend more than you make.
You have to budget your money.
You will have a better relationship with your bank.
You will learn to adjust your markup to reflect the costs, and cover your debt.

Your business can benefit from this. As it grows, you will have a solid, clean credit history when it matters. You will have learned the difference between want and need. Yes, even business owners get caught up in this cycle.

For example, you may not need a laptop on every desk, and a slick server. You could get by with cheaper desktops, and a tower with server software and enough memory. You could learn that not all employees need Internet access daily to do their jobs. Email access is sufficient.

This is a term known as 'bootstrapping'. Once a popular buzzword, and a term of honor, in some business circles, it is unpopular. We concentrate so much on employee satisfaction, we forget that a simple 'thank you', or 'good job' does more for a person than Internet and laptops.

Say "Thank You" more to your employees, and spend less.

US National Debt-What it Means to You

2009-09-01T15:18:00.003-05:00

Right now the economy is really slow. Unemployment rates are high, and businesses are stretched to their limits. People discuss the National Debt as if this debt was somehow the cause of the poor economy.

Historically, a high level of National Debt in the U.S. has been successful in reviving the economy. Starting with the stock market crash in October of 1929, America plunged into the Great Depression. In 1940, the US National Debt was roughly around 50%. When America entered into WWII in 1942, the US National Debt began to rise, reaching 120% before the war ended.

The US government offered public investment opportunities, tax cuts and increased borrowings to get the funds needed. As the veterans returned home, they found low interest rates and increased job opportunities.

What the National Debt means for the average citizen is lower income taxes, and lower interest rates . In the current economy, this also equates to increased educational funding and increased government investment in businesses to increase employment.

How to Hire the Best Person

2009-08-28T12:54:00.002-05:00

Businesses have the pick of the market right now when it comes to hiring an employee. The unemployment rate is high, and submissions for job applications provide a mountain of material to go 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.

These are some ideas to narrow the field.

Look at the job history of the applicant. Job seekers who have a history of frequent job change are a poor 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.

Prepare of list of the 10 most desired qualifications for the open position. Use a highlighter and find those resumes that contain all 10. Your list may be larger, but look for those applicants will all the traits.

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

Again, review the resume for the experience of the applicant. How deep is the experience? Can the person “hit the job 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 history of experience.

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

Ignore enclosed letters of recommendations. These are easily obtained. Always perform your own verbal verification or email verification of the potential applicants experience.

Prepare a list of questions that directly relate to the position. Conduct a screening interview by phone. Use the answers to eliminate more of the applicants.

For example:

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

Suggested answer: I found that the revenues for the month did not match what I expected based on 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 will to learn.

You get the picture. Structure your questions directly for the qualifications of the job. Personality assessments can be done at the face interview.

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 the 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 actually are more productive in the sense that they have already been around the learning curve. They have a basis for their decisions, and they have already experienced the outcome.

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

2009-07-20T16:25:00.002-05:00

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

2009-07-16T15:12:00.000-05:00

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

2009-07-09T11:10:00.000-05:00

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

2009-07-04T07:47:00.002-05:00

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

10 ways to make Home Based Bookkeeping Easier

2009-07-02T13:26:00.003-05:00

Debits towards the window, credits towards the door. 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 concentrate on sales, blogging, contacting customers, and providing service. You know that accounting is part of the business, but, frankly, it’s a pain and you don’t want to deal with it.
These are 10 things you can do to keep your accounting simpler.

1. Keep track of your cash coming in. On ebay, seller has summary reports to let them know what they have sold for the last sixty days. Paypal has account activity reports. These are good tools to use, but also use a columnar pad or spreadsheet to show your income, and keep track of when it was deposited in the bank.

2. Make your expense tracking easier. If you share a checkbook with your business, it is more difficult to separate the business expense from personal. Open a checking account for your business. Open a credit card just for your business. And don’t share.

3. If you open a business checking account, do it where you do your personal banking. This will enable you to share funds.

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

5. Use a spreadsheet to track your expenses. Create one spreadsheet, named "My Business", and use the individual sheets within this to log sales, cost of goods, and expenses.

6. Buy a simple plastic bin for holding files. Using hanging folders, label them "Jan Sales", Jan Cost of Goods, Jan expenses, etc and file your customer invoices and receipts by month. If you only want to track detail every few months, this will make it simpler.

7. Don’t let your filing stack up. Do this every day. It takes 10 minutes a day, and you won’t have to suffer anxiety looking at the stacks.

8. Order you supplies on-line and have them delivered to your home. The delivery will come with a packing slip, which will make it simpler 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, address and email contacts. 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, such as QuickBooks Pro. After the initial setup, this makes your life much simpler. You can track cash in from customers, inventory items and their costs, jobs you are working on, customer information, information on people you pay, and also how many hours a day you work for each customer.

Simple Financial Statements for Small Business

2009-06-30T07:30:00.001-05:00

So, you are running your small business. It takes a lot of time and effort to market and retain customers. You may spend hours promoting your blog or website. There are products to ship, inventory to purchase and bills to pay. Why are financial statements necessary? There is money in your bank, so you know your making some.

Financial statements show the health of your business. Financial statements are made up of a Balance Sheet, Income Statement, and a Cash Flow Statement. The Balance Sheet shows your assets, what you own, and Liabilities, what you owe. The Income Statement gives you monthly and year-to-date information on Sales, Cost of Product or Service, and the expenses incurred in operating your business. The Cash Flow Statement shows where the money went.

Instead of throwing your receipts into a box or drawer, and paying your accountant to sort these out at tax time, save yourself some money and begin simple methods of keeping track yourself. You can purchase accounting software, such as QuickBooks, which is very easy to use and does a lot of the work for you. Or, you can set up a spreadsheet to track sales, costs and expenses. You can even use a notebook to write these down. Whichever method you choose, it will help you make sure you are being paid by all your customers, and paying your expenses on time. QuickBooks even does payroll, so you don’t have to figure this by hand.

To get a better understanding of financial statement concepts, and how to prepare them, please refer to my article “How to Prepare Financial Statements”. http://www.helium.com/items/1500362-making-financial-statements

This will give you step-by-step instructions on preparing the Balance Sheet, Income Statement and Cash Flow Statement. It also explains what makes up the items on each financial statement, and how they relate.