10 ways to make Home Based Bookkeeping Easier

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

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

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

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

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

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. 

1. Retain credit on the customer account for use when paying another invoice.
2. Issue a refund by check or credit card, and
3. 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

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.

1. 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.
2. 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.

 

Accounting in Everyday Life

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 look at your pantry and take inventory of canned goods and other products 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 know where your money is going and how to best 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 incoming and the outgoing. 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: the gas, the electricity, the groceries, and the supplies used to make the product you sell or use in the service you sell. 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. The Accounts Receivable is the money others owe you. When you record accounts receivable, you record Income.

Credits and debits can be best understood by understanding the Balance Sheet and the Income Statement. On the balance sheet, the assets are debits, and the 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 of the money coming in and the debit of the cash going out is a credit balance. This credit balance passes to the Balance Sheet Equity portion and reduces the liability 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, horizontally to the left of the Asset line, is the income-credit to Asset. 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). Income minus Expenses is Net Income. A positive net income is a credit balance that moves to 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 have and do not have and how to manage the cash coming in to pay your expenses and have some left over.

What the payroll tax increase means to you

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.

Easy Business is Hard Work

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

Independent Contractors How to calculate taxes

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

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

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

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

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

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

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

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

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

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