DISASTER RECOVERY PLAN

HERE'S STEPS TO TAKE TO PROTECT YOUR BUSINESS FROM ANY DISASTER:

Set up an emergency response plan and train employees how to carry it out.

Compile a list of important phone numbers and addresses.

Decide on a communication strategy to prevent loss of customers. Post notices outside your premises: contact clients by phone, e-mail or mail; place a notice in local newspapers.

Consider the things you may need initially during the emergency. Do you need a back-up source of power? Do you have a back-up communication system?

Consider the possible impact a disaster will have on your employees' ability to return to work and how customers can return to receive goods or services.

Even if your business escapes disaster, there is still a risk the business could suffer sufficient losses due to the inability of suppliers to deliver goods or services or a reduction in customers. Discuss disaster preparedness and recovery plans with suppliers and markets.

Back up computerized data files regularly and store them off-premises. Keep copies of important records and documents in a safe deposit box and make sure they are up to date.

Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you require to run the business at another location.

Find alternative facilities, equipment and supplies, and locate qualified contractors. Consider a reciprocity agreement with another business. Try to get an advance commitment from at least one contractor to respond to your needs.

Protect computer systems and data. Data storage firms offer offsite backups to computer data that can be updated regularly via high-speed modems or through the internet.
source: Challenger, Gray & Christmas, Hurricane Insurance Information Center.

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50 Ways to Save Money from Entrepreneurs.com

We can sit down, go through this list of money saving ideas. Once we do this I can develop a "penny-pinching" plan for your small business and find these resources in the Memphis area that will reduce your costs and improve your productivity.   This is my area of strength.

50 Ways to Save Money in Your Business

Save your company thousands of dollars with these penny-pinching tips. 

On a shoestring budget (and what entrepreneur isn't?), it really pays to scrimp and save. Just in case you've forgotten the value of a hard-earned penny, we've come up with a slew of money-saving ideas to boost your business's bottom line-from cutting your legal bills to inexpensive ways to draw in customers. Though some tips will save you more money than others, the end result of your overall spendthrift strategy could add up to a bundle.

Penny-Pinching Promotions

1. Piggyback your advertising. Including advertising material in other mailings, such as in invoices, saves postage and other costs, says J. Donald Weinrauch, co-author of The Frugal Marketer. Likewise, make the most of your point-of-purchase opportunities by tucking coupons, newsletters or other promotional fliers in the bag with customers' purchases.

2. Be a good neighbor. Split advertising and promotion costs with neighboring businesses. Jointly promote a sidewalk sale, or take your marketing alliance further by sharing mailing lists, distribution channels and suppliers with businesses that sell complementary goods or services.

3. Ask the people you know for help. The kind of support you'd most like to get from your contacts is referrals-the names of specific individuals who need your products and services. So go ahead and ask! Your contacts can also give prospects your name and number. As the number of referrals you receive increases, so does your potential for increasing the percentage of your business generated through referrals.

4. Got a happy customer? By telling others what they've gained from using your products or services in presentations or informal conversations, your sources can encourage others to use your products or services.

5. Make a special TV appearance. Local cable TV stations often have very reasonable advertising rates at time slots throughout the day and night. Though you won't necessarily reach prime-time viewers, you will make an impression where it counts-in the comfort of potential customers' homes.

6. Offer expert advice. Teaching a class, speaking at a community meeting, or writing an article for a local paper not only makes you look like an expert but garners low-cost attention for your business.
· Read more online here.

Internet Ideas

7. Start your search engines. Research your market and find potential visitors for your Web site by looking through Usenet newsgroups (forums on the Internet where people post messages for public viewing) and special-interest groups related to your target market, product or service. Or, if you have America Online, visit their Small Business Center, which includes libraries of small-business information you can download at no charge.

8. Cut costs when setting up your online store. Think going online has to cost an arm and a leg? You can start out by selling items for next to nothing on online auction sites like eBay and Yahoo! Auctions. If you want to create a professional storefront, there are several "Web site in a box" solutions available, usually for a low monthly fee.
· Read more online here.

9. Start chatting. Find newsgroups that cater to your audience, and join the fray. "I didn't start [participating in online discussion groups] to generate business, but as a way to find information for myself on various subjects," says Shel Horowitz, owner of Northampton, Massachusetts-based Accurate Writing & More and author of several marketing books, including Grassroots Marketing. "But it turned out to be the single best marketing tool I use. It costs only my time. [One] list alone has gotten me around 60 clients in the past five years." Always include your URL in your signature, but don't do any hard selling-most groups will ban you immediately. Instead, provide useful information that'll make people will want to click on your site.

10. Spread the word yourself. Are you letting people know what your URL is? Try putting it on your letterhead and business cards and in e-mail signatures-wherever potential visitors are likely to see it. Include it on employee uniforms, any promotional items you give away, all press releases, in your Yellow Pages ad and on company vehicles.

Location Logic

11. Get a suite deal. You don't have to run your office full-time from an executive suite to benefit from its services. Many homebased entrepreneurs find executive suites meet a range of needs, including access to a private mailbox and a receptionist to answer or forward calls to your home office. Visit the Office Business Center Association International Web site for more information.

12. Be mobile. While the costs of establishing a permanent retail location can be steep-you may spend up to $100,000 or more, with leases spanning three to 10 years-carts, kiosks and temporary spaces can be an easier way to get a foot in the door with a lot less risk. The upfront investment for a kiosk or a cart ranges from just $2,000 to $10,000, according to Patricia Norins, publisher of Specialty Retail Report. License agreements for carts and kiosks are shorter and are usually renewed every month up to one year depending on the location. This arrangement makes it easy for entrepreneurs to "come in, try it out for a month, and if their product isn't working, shift to a new product line or close up shop and move to a new location," Norins says.

Office Overhead

13. Buy recycled printer cartridges. Check Google or your Yellow Pages for a local recycled printer cartridge supplier. Or if you want to mix your charitable instincts with your printing needs, visit www.lasermonks.com, a remanufactured printing supply company run by a group of monks in Wisconsin who, after business expenses are paid, donate their profits.

14. Fill it out for free. Instead of buying forms at your local office supply store or spending time creating them yourself, you can find tons of free forms online that you can download, customize and print. Our free forms on Formnet can get you started.

15. Get free software. Visit Download.com to try hundreds of software products for free through trial downloads, freeware and limited versions of the full product. Visit our Complete Guide to Software to find the best software options for small businesses, including many links to the free trials of those brands. Another tip: If you haven't found what you're looking for through Download.com or our software guide, check out the manufacturer's site. Most offer free trial downloads.

16. Buy used equipment. Save up to 60 percent by buying used computer equipment, copiers and office furniture from stores such as the nationwide Aaron Rents & Sells chain. Auctions and newspaper classifieds are other good sources of used equipment.

Insurance Intelligence

17. Save by association. When looking for insurance, check with your trade association. Many associations offer competitive group insurance.

18. Be prepared. Buying appropriate insurance upfront saves money in the long run, says Jeanne Salvatore of the Insurance Information Institute, a nonprofit organization in New York City. Consider what situations would be catastrophic to your business and protect yourself with adequate insurance. "Disaster recovery," says Salvatore, "is one area where business owners shouldn't scrimp."

19. Make a foul-weather friend. By arranging for an alternative place to run your business in case of a major disaster, you may be able to save on business interruption insurance, advises the Insurance Information Institute. For instance, you could arrange with a firm in the same industry to use their facilities in case of damage, and vice versa.

20. Check up on your medical insurance. Before choosing a medical insurance carrier, ask for information on past claims and the loss ratio of paid claims to premiums, advises the Council of Better Business Bureaus in Arlington, Virginia.

21. Raise your deductible. Raising the deductible on your insurance usually lowers your premiums. Even if you end up having to pay the deductible, it's likely to be less than the amount you save.

Employee Economics

22. Aim to lease. Employee leasing-in which you turn over your work force to a professional employer organization that leases your employees back to you-can save you substantial cash on employee benefits, says Bruce Steinberg at the American Staffing Association (ASA). For referral to a leasing company near you, visit the ASA online at www.staffingtoday.net.

23. Go with the flow. Rather than paying for employees who sit idle when business is slow, consider hiring temporary employees to handle surges in business.

24. Make experience count. Get free or low-cost help-and give local college students a chance to learn the ropes-by hiring interns.

25. Use independent contractors. Employers generally don't have to withhold or pay any taxes on payments to independent contractors. But be very careful that your independent contractors fit the definition provided by the IRS or you could face penalties.

26. Commission your sales force. Overhead, salaries, incentives, training costs, fringe benefits and expenses add up when you're hiring your own sales representatives. Contracting independent manufacturers' sales reps, paid on commission only, is less expensive-and often equally effective.

Shipping Savings

27. Clean up your mailing list. The U.S. Postal Service will clean up your mailing list for free, correcting addresses, noting incomplete addresses and adding ZIP+4 numbers so you'll be eligible for bar-code discounts.

28. Prune that mailing list even more. The Direct Marketing Association offers this checklist of cost-cutting ideas. Eliminate nonresponders and marginal prospects; print "Address Correction Requested" on the face of your mail; investigate co-mingling your mail with that of other small mailers to take advantage of discounts available mainly to large mailers; and stockpile mail to build up larger volumes.

29. Be an early bird. Send mail early in the day, and you can usually expect to get one- to two-day delivery for the price of a first-class stamp.

30. Shop around for an overnight courier. Overnight delivery rates for the major couriers are competitive; however, if you're willing to wait a few hours-or even an extra day-you could save.

Tax Tactics

31. Mind some petty pointers. Don't get careless about your petty cash account. "Though you don't need receipts for expenses under $75, you should still track these expenses since they can add up," advises Holmes Crouch, author of 18 tax books.

32. Hire your children. If your children are at least 14 years old and pay their own taxes, it pays to take advantage of their lower tax bracket. "You can essentially transfer income from your business to them [to save money]," says David L. Scott, author of The Guide to Saving Money (The Globe Pequot Press).

33. Take a stand on taxes. If your business is new in the neighborhood, you may be at a higher tax rate than those who have been there longer. "Go to city hall to determine what your neighbors are paying, and use this to negotiate a better rate," says Pete Collins of New York City-based PricewaterhouseCoopers LLP. "Expanding businesses can often negotiate with community authorities, who want them to stay in town rather than move and take jobs elsewhere."

34. Homebased? Don't overlook crucial tax deductions. In addition to being able to deduct a portion of your rent or mortgage interest and utilities as a business expense, you can also deduct a percentage of various home maintenance expenses, along with a portion of the cost of services such as house cleaning and lawn care. Check out the IRS's Web site, or check with a knowledgeable tax advisor for more information.

35. Get out on the town. If much of your business is conducted at restaurants or you find yourself driving to clients' offices, make sure you take those deductions. If you entertain clients or potential clients to discuss a current or future project, you can deduct a portion of your entertainment costs. To qualify for this deduction, you must maintain a log of entertainment-related expenses you plan to deduct. For mileage, you can deduct 37.5 cents per mile in 2004. This figure usually changes annually, so check with your accountant at the beginning of each year.

Financial Focus

36. Make credit comparisons. If you tend to run unpaid balances on your credit cards at the end of the month, shop for a card with a low interest rate. If you pay in full, it's more important to avoid an annual fee and look for a longer grace period. "Often credit card issuers waive the annual fee or reduce the interest rate if you ask," says Scott. "Just tell your credit card company you've had several solicitations from other companies with more favorable interest rates or no annual fees, and ask if they will reduce yours."

37. Avoid cash advances. "Credit card companies usually charge an upfront fee of up to 2 percent of the advance, with interest accruing immediately," says Scott.

38. Bank on an early deposit. Make bank deposits early enough in the day so you get credit (and start earning interest) that day.

39. Get checks in the mail. Ordering your checks from a printing company often costs less than getting them from a bank. Options include Checks in the Mail and Designer Checks.

40. Form a buying alliance. Join with another business or a trade association for bulk purchasing discounts.

41. Take it with you. If you're near your suppliers, pick up your order yourself-or perhaps have a friend or family member do it for you, suggests Sarah Williams Steinman, president of Casco Bay Herb Co., an herbal soap manufacturer in Cumberland, Maine. For example, Steinman's husband travels throughout the Northeast. "He keeps me updated as to when he might be near one of my suppliers," she says. "He often travels through the town where my olive oil supplier is, and he'll pick up a few hundred pounds of oil on his way home. That saves me about $75 in shipping." Caution: Pick up supplies yourself only when it truly saves you money. If it's taking you away from a revenue-producing activity, you're not really saving.

42. Be reluctant to give credit. If you do extend credit, thoroughly check the client's credit background, says Collins. For less-than-creditworthy accounts, Collins advises considering the following actions: Collect cash in advance; send partial shipments; request letters of credit, personal guarantees and a pledge of assets; take out credit insurance; or think about factoring (see below).

Professional Policies

43. Query your consultants. The professionals you work with regularly are often easy to bargain with, thanks to the rapport you've developed with them. Ask your insurance agent, accountant or attorney how you can cut back on their costs. You'd be surprised at the suggestions they might offer on ways to cut your premiums, reduce billable hours or avoid huge retainers. You might also barter your services.

44. Be a legal eagle. When hiring an attorney, make sure you have a written fee agreement to prevent surprises. It should include an estimate of the time to be spent on your case and specify what's covered in the fee-including typing or copying-and what is not.

45. Learn something new. Rather than pay a consultant to write your press releases, for example, hire one for an hour or so to show you how to do it yourself.

46. Run from the law. "Avoiding lawsuits is a big factor in business success," says tax book author Crouch. "Even arbitration can get expensive." The best alternative: Try to work out any problems before they grow to the point that attorneys get involved. "Don't ignore any written or phone complaints."

Buying Brainpower

47. Stretch your budget with barter. Swapping one product or service for another is a good way to avoid cash outlays-and unload slow-moving inventory. If you'd rather not bargain with other businesses directly, hire a commissioned barter broker (listed in the Yellow Pages under "Barter"), or join a commercial barter club or exchange. The National Association of Trade Exchanges (NATE) is a clearinghouse for member exchanges across the country, allowing business owners to swap just about anything with anyone. Participants typically receive "trade dollars" for their goods or services, which are brokered across cities nationwide with the help of NATE. Visit NATE at www.nate.org.

48. Time your payments. Ask suppliers if they give discounts for early payment. If not, it's to your advantage to pay your bills-including utilities, taxes and suppliers-as late as possible without incurring a fee, advises Scott. "The longer funds are under your control," he says, "the longer they're earning a return for you rather than someone else."

49. Join an association. Many trade and business associations have reasonable membership fees and offer discounts on everything from insurance, travel and car rental to long-distance phone service, prescriptions and even golf course fees.

50. Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor's lower price, a supplier or vendor will often match that price to win your business.

Contributors include Jacquelyn Lynn, Ivan R. Misner, Chris Penttila, Guen Sublette and Laura Tiffany

The Importance of Good records

Here are some very good reasons to keep good financial records.  

IMPORTANCE OF GOOD RECORD

Unless your business is accounting or bookkeeping, keeping financial records is probably not what you do best. Most likely, you'd rather spend your time selling your product or service. However, if you are going to run a successful business, accurate and timely financial information is a must. Here are some of the reasons why you need a good financial record keeping system:

• Monitoring the success or failure of your business. It's hard to know how your business is doing without a clear financial picture. Am I making money? Are sales increasing? Are expenditures increasing faster than sales? Which expenses are too high based on my level of sales? Do some expenditures appear to be "out of control?"

• Providing the information you need to make decisions. Evaluating the financial consequences should be a part of every business decision you make. Without accurate records and financial information, it may be hard for you to know the financial impact of a given course of action. Will it pay to hire another salesperson? How much will another production employee cost? Is this particular product line profitable?

• Obtaining bank financing. A banker will usually want to see financial statements: a balance sheet, income statement, and cash flow budget for the most current and prior years, as well as your projected statements showing the impact of the requested loan. A banker may even want to see some of your bookkeeping procedures and documents to verify whether you run your business in a sound, professional manner.

• Obtaining other sources of capital. If your business has reached the point where you need to take in a partner, any prospective partner will want to become intimately familiar with your financial picture. If you need capital and are thinking of taking in an outside investor, you will need to produce a lot of financial information. Even your suppliers and other creditors may ask to see certain financial records. Such information may be produced by your outside accountant, but it is based on your day-to-day record keeping.

• Budgeting. All businesses should use a budget for planning purposes. A budget will help keep your business on track by forecasting your cash needs and helping you control expenditures. In addition, if you are seeking bank financing or other sources of capital, a banker or prospective investor will probably want to see your budget as evidence that your business is well planned and stable. You must have solid financial information to prepare a meaningful budget.

• Preparing your income tax return. Whether your business is a sole proprietorship, partnership, or corporation, you must file an income tax return and pay income taxes. With good records, preparing an accurate tax return will be easier and you're more likely to be able to do it on time. Poor records may result in your underpaying or overpaying your taxes and/or filing late (and paying penalties). If your accountant prepares your income tax return, poor records will almost certainly result in your paying higher accounting fees. If your business is a partnership, not only will you have to prepare a partnership tax return, but partnership return amounts will pass directly to the tax return of each partner. So your recordkeeping will directly affect the tax return of each partner.

• Complying with federal and state payroll tax rules. If you have employees, you are aware of the myriad rules and regulations relating to payroll taxes. Payroll tax deposits must be made according to strict deadlines. Late payment of payroll taxes results in severe, and unnecessary, penalties. Also, you must file a payroll tax return every quarter, which you must reconcile with the payroll deposits made during the quarter. Then at the end of the year, you are required to give your employees and the government W-2 forms, which must agree with your quarterly payroll returns. Sound bookkeeping practices will make compliance with all these payroll rules easy. Poor records will make it impossible.

• Submitting sales taxes. If you collect sales tax from your customers, good records will make it easy for you to compute the tax due and prepare the required reports.

• Distributing profits. If your business is a partnership, you will need good records to determine the correct amount of profits to distribute to each partner. If you are operating as a corporation, you must determine the company profits that you will be paying out as dividends to the shareholders.

Hurrican victims get tax relief from IRS

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Hurricane victims get tax relief from IRS

The Internal Revenue Service is providing tax relief to victims of Hurricane Gustav in affected areas of Louisiana.
The IRS is postponing until Jan. 5, 2009 deadlines for taxpayers who reside or have a business in the disaster area. The postponement applies to return filing, tax payment and other time-sensitive acts otherwise due between Sept. 1, 2008 and Jan. 5, 2009. This includes:

Individual estimated tax payments due Sept. 15, 2008.
Corporate extended 1120 tax returns due Sept. 15, 2008.
Individual extended 1040 tax returns due Oct. 15, 2008.
“As residents of Louisiana return to their homes following Hurricane Gustav, taxes are one thing they won’t need to worry about,” IRS Commissioner Doug Shulman said. “This relief gives them extra time to get their lives in order before having to deal with their tax matters.”

In addition, the IRS will waive the failure to deposit penalties for employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 as long as the deposits are made by Sept. 16, 2008.

Other provisions are listed in the Grant of Relief section below.

Taxpayers who reside in or have a business located in the following parishes qualify for the relief announced by teh IRS: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Cameron, East Baton Rouge, East Feliciana, Evangeline, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, Rapides, Sabine, St. Bernard, St. Charles, St. James, St. John the Baptist, St. Landry, St. Martin, St. Mary, Terrebonne, Vermilion, Vernon, West Baton Rouge and West Feliciana.

IRS computer systems automatically identify taxpayers located in the covered disaster area and apply automatic filing and payment relief. Affected taxpayers who reside or have a business located outside the covered disaster area must call the IRS disaster hotline at 1-866-562-5227 to request tax relief.

If an affected taxpayer receives a penalty notice from the IRS, the taxpayer should call the telephone number on the notice to have the IRS abate any interest and any late filing or late payment penalties that would otherwise apply. Penalties or interest will be abated only for taxpayers who have an original or extended filing or payment due date between Sept. 1, 2008 and Jan. 5, 2009.

Covered Disaster Area

The Louisiana parishes listed above constitute a covered disaster area for purposes of Treas. Reg. § 301.7508A-1(d)(2) and are entitled to the relief detailed below.

Affected Taxpayers

Taxpayers considered to be affected taxpayers eligible for the postponement of time to file returns, pay taxes, and perform other time-sensitive acts are those taxpayers listed in Treas. Reg. § 301.7508A-1(d)(1), and include individuals who live, and businesses whose principal place of business is located, in the covered disaster area. Taxpayers not in the covered disaster area, but whose books, records, or tax professionals' offices are in the covered disaster area, are also entitled to relief. In addition, all relief workers affiliated with a recognized government or philanthropic organization assisting in the relief activities in the covered disaster area are eligible for relief.

Grant of Relief

Under section 7508A, the IRS gives affected taxpayers until Jan. 5, 2009 to file most tax returns (including individual, corporate, and estate and trust income tax returns; partnership returns, S corporation returns, and trust returns; estate, gift, and generation-skipping transfer tax returns; and employment and certain excise tax returns) or to make tax payments, including estimated tax payments, that have either an original or extended due date occurring on or after Sept. 1, 2008 and on or before Jan. 5, 2009.

The IRS also gives affected taxpayers until Jan. 5, 2009 to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2007-56, 2007-34 I.R.B. 388 (August 20, 2007) that are due to be performed on or after Sept. 1, 2008 and on or before Jan. 5, 2009. This relief also includes the filing of Form 5500 series returns in the manner described in section 8 of Rev. Proc. 2007-56. The relief described in section 17 of Rev. Proc. 2007-56, pertaining to like-kind exchanges of property, also applies to certain taxpayers who are not otherwise affected taxpayers and may include acts required to be performed before or after the period above.

The postponement of time to file and pay does not apply to information returns in the W-2, 1098 or 1099 series, or to Forms 1042-S or 8027. Penalties for failure to timely file information returns can be waived under existing procedures for reasonable cause. Likewise, the postponement does not apply to employment and excise tax deposits. The IRS, however, will abate penalties for failure to make timely employment and excise deposits due on or after Sept. 1, 2008 and on or before Sept. 16, 2008 provided the taxpayer made these deposits by Sept. 16, 2008.

Casualty Losses

Affected taxpayers in a presidentially declared disaster area have the option of claiming disaster-related casualty losses on their federal income tax return for either this year or last year. Claiming the loss on an original or amended return for last year will get the taxpayer an earlier refund, but waiting to claim the loss on this year’s return could result in a greater tax saving, depending on other income factors.

Individuals may deduct personal property losses that are not covered by insurance or other reimbursements but they must first subtract $100 for each casualty event and then subtract 10 percent of their adjusted gross income from their total casualty losses for the year. For details on figuring a casualty loss deduction, see IRS Publication 547, Casualties, Disasters and Thefts.

Affected taxpayers claiming the disaster loss on last year’s return should put the Disaster Designation “Louisiana/Hurricane Gustav” at the top of the form so that the IRS can expedite the processing of the refund.

Free Return Copies and Transcripts

The IRS will waive the usual fees and expedite requests for copies of previously filed tax returns for affected taxpayers. Taxpayers should put the assigned Disaster Designation in red ink at the top of Form 4506, Request for Copy of Tax Return, or Form 4506-T, Request for Transcript of Tax Return, as appropriate, and submit it to the IRS.

Affected taxpayers who are contacted by the IRS on a collection or examination matter should explain how the disaster impacts them so that the IRS can provide appropriate consideration to their case.



AccountingWEB.com Sep-4-2008








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