Friday, December 19, 2008
Wednesday, December 10, 2008
Saturday, December 6, 2008
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
Monday, October 27, 2008
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.
Thursday, September 4, 2008
Hurrican victims get tax relief from IRS
http://www.accountingweb.com
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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
Copyright © 2008 AccountingWEB, Inc. All rights reserved.
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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
Copyright © 2008 AccountingWEB, Inc. All rights reserved.
Friday, August 29, 2008
How to set up a home based business
How To Set Up a Home-based Business
Home-based businesses are fast becoming a popular way to operate your small company, while reducing expensive start-up costs such as leasing space, lease hold improvements, utility and phone deposits and major office equipment. Thousands of people across the country are finding that working from home provides them with the advantages of earning an income with the flexibility to work when it is best for them and take care of family and other responsibilities that often arise throughout the work day. However, before starting your home-based business, consider the following advice:
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Determine local and state requirements for licensing and zoning regulations. Be sure to check with your local zoning office to find out how the zoning regulations in your area may affect your business plans. Determine if your business requires any licenses and file the necessary forms.
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Rent a post office box and use that address on your promotional mail and stationery, doing this will make it less obvious that you are working from home. The professional image you portray is very important to your clientele.
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Install a phone line in your home dedicated to your business.
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Use an answering machine for incoming business calls.
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Organize your work space with great care. Make sure that you have sufficient space to meet your needs.
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When scheduling appointments with clients, consider meeting at your client's office or renting a conference room to maintain a professional image.
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Establish contacts with your competitors and join associations pertinent to your business. Have your clients suggest possible new clients and ask if they will recommend you.
*
Keep excellent records of entertainment and travel expenses. The Internal Revenue Service (IRS) tends to audit home-based businesses more frequently—especially when they are writing off a variety of expenses, including the percentage of the mortgage or rent for your office space. There are several good record keepers such as Day Timer®, Franklin Quest® and Day Planner that will help you keep track of your expenses. Your accountant, a CPA is recommended, can advise you on deductions you can take and records you must keep for the IRS.
*
And above all, put some of your earnings into a savings account for those times when your business is in a slump . . . and it will happen.
*
Discipline yourself. You must be a self-starter and follow a routine, just as if you were working for any other business. In many cases, you are the only person you can rely on to get the job done. Unless it's an emergency, do not baby-sit or chat with your neighbors.
Brought to you by SCORE "Counselors to America's Small Business"
Ask SCORE
Home-based businesses are fast becoming a popular way to operate your small company, while reducing expensive start-up costs such as leasing space, lease hold improvements, utility and phone deposits and major office equipment. Thousands of people across the country are finding that working from home provides them with the advantages of earning an income with the flexibility to work when it is best for them and take care of family and other responsibilities that often arise throughout the work day. However, before starting your home-based business, consider the following advice:
*
Determine local and state requirements for licensing and zoning regulations. Be sure to check with your local zoning office to find out how the zoning regulations in your area may affect your business plans. Determine if your business requires any licenses and file the necessary forms.
*
Rent a post office box and use that address on your promotional mail and stationery, doing this will make it less obvious that you are working from home. The professional image you portray is very important to your clientele.
*
Install a phone line in your home dedicated to your business.
*
Use an answering machine for incoming business calls.
*
Organize your work space with great care. Make sure that you have sufficient space to meet your needs.
*
When scheduling appointments with clients, consider meeting at your client's office or renting a conference room to maintain a professional image.
*
Establish contacts with your competitors and join associations pertinent to your business. Have your clients suggest possible new clients and ask if they will recommend you.
*
Keep excellent records of entertainment and travel expenses. The Internal Revenue Service (IRS) tends to audit home-based businesses more frequently—especially when they are writing off a variety of expenses, including the percentage of the mortgage or rent for your office space. There are several good record keepers such as Day Timer®, Franklin Quest® and Day Planner that will help you keep track of your expenses. Your accountant, a CPA is recommended, can advise you on deductions you can take and records you must keep for the IRS.
*
And above all, put some of your earnings into a savings account for those times when your business is in a slump . . . and it will happen.
*
Discipline yourself. You must be a self-starter and follow a routine, just as if you were working for any other business. In many cases, you are the only person you can rely on to get the job done. Unless it's an emergency, do not baby-sit or chat with your neighbors.
Brought to you by SCORE "Counselors to America's Small Business"
Ask SCORE
Wednesday, August 13, 2008
Tuesday, August 5, 2008
Who Am I
Hello, My name is Claudia Tanzer
I am a Full charge Bookkeeping/SAccountant with an Associates degree from State Technical
Institute of Memphis in Computer Accounting and a 2nd AS in Business Data Processing.
I have A Bachelors in ElementaryEducation and Liberal Arts from the University of Memphis.
The bulk of my accounting work background involved Accounts payable(paying the bills) and
receivables(getting the money) working through an accounting and financial contract staffing
agency,Robert Half/Accountemps.
My most recent contract job was working for a medical device manufacturer as a document
quality auditor. I was so efficient at that job that I was assigned the accounts payable and
quality administrative assistant responsibilities. This saved the company money and increased
efficiency. Prior to that contract project I assisted in implementation of Great Plains software
A/P and inventory modules for an agricultural manufacturing company. I had a number of
Accounts Payable,receivable,purchasing and general accounting projects.
My key strengths are my computer skills and knowledge, my solid knowledge of bookkeeping practices and strong team playing skills.
My current plans are to work as a full charge bookkeeper for myself and or on monthly contractual basis.
Based on my research and work preferences I am targeting sole proprietorships and small
businesses who choice not to or are not able to hire a bookkeeper full time.
Claudia Tanzer
I am a Full charge Bookkeeping/SAccountant with an Associates degree from State Technical
Institute of Memphis in Computer Accounting and a 2nd AS in Business Data Processing.
I have A Bachelors in ElementaryEducation and Liberal Arts from the University of Memphis.
The bulk of my accounting work background involved Accounts payable(paying the bills) and
receivables(getting the money) working through an accounting and financial contract staffing
agency,Robert Half/Accountemps.
My most recent contract job was working for a medical device manufacturer as a document
quality auditor. I was so efficient at that job that I was assigned the accounts payable and
quality administrative assistant responsibilities. This saved the company money and increased
efficiency. Prior to that contract project I assisted in implementation of Great Plains software
A/P and inventory modules for an agricultural manufacturing company. I had a number of
Accounts Payable,receivable,purchasing and general accounting projects.
My key strengths are my computer skills and knowledge, my solid knowledge of bookkeeping practices and strong team playing skills.
My current plans are to work as a full charge bookkeeper for myself and or on monthly contractual basis.
Based on my research and work preferences I am targeting sole proprietorships and small
businesses who choice not to or are not able to hire a bookkeeper full time.
Claudia Tanzer
Tuesday, July 29, 2008
Features of new housing bill
The new housing bill has been described as the most comprehensive housing legislation in more than a generation. Features of the new housing bill include:
$300 billion in guarantees to help refinance troubled mortgages.
An opportunity for as many as 400,000 homeowners to qualify for low-cost, government-backed mortgages to refinance existing mortgages that they are no longer able to afford.
Government support of mortgage lenders Fannie Mae and Freddie Mac including an opportunity for the government to buy stock in the mortgage backers.
$3.9 billion to help local governments and communities buy and rehabilitate foreclosed homes.
Tax credits for first-time home buyers.
$1.3 billion in tax relief to Gulf Coast homeowners and businesses recovering from Hurricanes Katrina and Rita in the form of relieving taxation on Road Home Tax grants for affected taxpayers who took hurricane-related casualty losses on their tax returns.
Thursday, July 24, 2008
Top 10 Bookkeeping mistakes by Small Businesses
This is why you should hire me to do your bookkeeping . Costly mistakes hurt the bottom line.
Top 10 Bookeeping Mistakes by Small Businesses |
 |
| From the AllBusiness.com Finance & Accounting Center From one-person entities to major corporations, bookkeeping is a significant part of any business endeavor. While it is typically not one of the more glamorous jobs, bookkeeping is at the heart of a company's success, and errors can cost the company significantly. Below are 10 of the most common errors that you want to avoid.
Copyright 2006 AllBusiness, Inc. |
Wednesday, June 25, 2008
Interpreting the Cash Flow Statement
From Daniel Richards
How to use financial statements as a management tool, Part 3
The following is the third in a series of three articles on using financial statements as a management tool. The series references the 2006 annual report from Target Corp. from the retailer's web site.
A cash flow statement, along with the balance sheet and income statement, are the three most common financial statements used to gauge a company’s performance and overall health. The same accounting data is used in preparing all three statements, but each takes a company’s pulse in a different area.
The cash flow statement discloses how a company raised money and how it spent those funds during a given period. It is also an analytical tool, measuring an enterprise’s ability to cover its expenses in the near term. Generally speaking, if a company is consistently bringing in more cash than it spends, that company is considered to be of good value.
A cash flow statement is divided into three parts: operations, investing and financing. The following is an analysis of a real-world cash flow statement belonging to Target Corp. Note that all figures represent millions of dollars.
Cash from operations: This is cash that was generated over the year from the company’s core business transactions. Note how the statement starts with net earnings and works backward, adding in depreciation and subtracting out inventory and accounts receivable. In simple terms, this is earnings before interest and taxes (EBIT) plus depreciation minus taxes.
Interpretation:This may serve as a better indicator than earnings, since noncash earnings can’t be used to pay off bills.
Cash from investing: Some businesses will invest outside their core operations or acquire new companies to expand their reach.
Interpretation: This portion of the cash flow statement accounts for cash used to make new investments, as well as proceeds gained from previous investments. In Target’s case, this number in 2006 was -4,693, which shows the company spent significant cash investing in projects it hopes will lead to future growth.
Cash from financing: This last section refers to the movement of cash from financing activities. Two common financing activities are taking on a loan or issuing stock to new investors.
Dividends to current investors also fit in here. Again, Target reports a negative number for 2006, -1,004. But this should not be misconstrued: The company paid off 1,155 of its previous debt, paid out 380 in dividends and repurchased 901 of company stock.
Interpretation: Investors will like these last two items, since they reap the dividends, and it signals that Target is confident in its stock performance and wants to keep it for the company’s gain. A simple formula for this section: cash from issuing stock minus dividends paid, minus cash used to acquire stock.
The final step in analyzing cash flow is to add the cash balances from the reporting year (2006) and the previous year (2005); in Target’s case that’s -835 plus 1,648, which equals 813. Even though Target ran a negative cash balance in both years, it still has an overall positive cash balance due to its high cash surplus in 2004.
How to use financial statements as a management tool, Part 3
The following is the third in a series of three articles on using financial statements as a management tool. The series references the 2006 annual report from Target Corp. from the retailer's web site.
A cash flow statement, along with the balance sheet and income statement, are the three most common financial statements used to gauge a company’s performance and overall health. The same accounting data is used in preparing all three statements, but each takes a company’s pulse in a different area.
The cash flow statement discloses how a company raised money and how it spent those funds during a given period. It is also an analytical tool, measuring an enterprise’s ability to cover its expenses in the near term. Generally speaking, if a company is consistently bringing in more cash than it spends, that company is considered to be of good value.
A cash flow statement is divided into three parts: operations, investing and financing. The following is an analysis of a real-world cash flow statement belonging to Target Corp. Note that all figures represent millions of dollars.
Cash from operations: This is cash that was generated over the year from the company’s core business transactions. Note how the statement starts with net earnings and works backward, adding in depreciation and subtracting out inventory and accounts receivable. In simple terms, this is earnings before interest and taxes (EBIT) plus depreciation minus taxes.
Interpretation:This may serve as a better indicator than earnings, since noncash earnings can’t be used to pay off bills.
Cash from investing: Some businesses will invest outside their core operations or acquire new companies to expand their reach.
Interpretation: This portion of the cash flow statement accounts for cash used to make new investments, as well as proceeds gained from previous investments. In Target’s case, this number in 2006 was -4,693, which shows the company spent significant cash investing in projects it hopes will lead to future growth.
Cash from financing: This last section refers to the movement of cash from financing activities. Two common financing activities are taking on a loan or issuing stock to new investors.
Dividends to current investors also fit in here. Again, Target reports a negative number for 2006, -1,004. But this should not be misconstrued: The company paid off 1,155 of its previous debt, paid out 380 in dividends and repurchased 901 of company stock.
Interpretation: Investors will like these last two items, since they reap the dividends, and it signals that Target is confident in its stock performance and wants to keep it for the company’s gain. A simple formula for this section: cash from issuing stock minus dividends paid, minus cash used to acquire stock.
The final step in analyzing cash flow is to add the cash balances from the reporting year (2006) and the previous year (2005); in Target’s case that’s -835 plus 1,648, which equals 813. Even though Target ran a negative cash balance in both years, it still has an overall positive cash balance due to its high cash surplus in 2004.
Interpreting the Income Statement
From Daniel Richards
How to use financial statements as a management tool, Part 2
The following is the first in a series of three articles on using financial statements as a management tool. The series references the 2006 annual report from Target Corp. from the retailer's web site.
Like a balance statement, an income statement is a means for measuring a company’s financial performance. Some of the ratios discussed draw data from both the income statement and the balance sheet.
We’ll continue using the published data from Target as an example. Note that all figures represent millions of dollars.
Gross profit margin: The money Target earns from selling a T-shirt, minus what it paid for that item -- known as cost of goods sold, or COGS -- is called gross profit. Sales minus COGS, divided by sales, yields the gross profit margin. According to Target’s income statement, that would be 59,490 minus 39,399, divided by 59,490, which equals 0.337, or 33.7 percent.
Operating income: This is gross profit minus operating expenses minus depreciation. It is also called EBIT (earnings before interest and taxes). Using Target’s data, the formula would be expressed as: 59,490 minus 39,399 minus 12,819 minus 707 minus 1,496, which equals 5,069.
Operating profit margin: Use the total derived in the previous step and divide it by total sales. In this case the equation is 5,069 divided by 59,490, which equals .085, or 8.5 percent.
Interpretation: This tally is also known as EBIT margin and is an effective way to measure operational efficiency. If you find this number to be low, either raise revenues or cut costs. It may help to analyze which of your customers are the most profitable and concentrate your efforts there.
Net profit margin: Net earnings divided by total revenue yields the net profit margin. In this case, 2,787 divided by 59,490, which equals .047, or 4.7 percent.
ROA: This stands for return on assets and measures how much profit a company is generating for each dollar of assets. Calculate ROA by dividing the revenue figure from the income statement by assets from the balance sheet. For Target, that equates to 59,490 divided by 14,706, which equals 4.04. In other words, for every dollar Target has in assets, it is able to generate $4.04 of revenue.
ROE: The same idea as above, but replacing assets with the equity. In this case, 59,490 divided by 15,633, which equals 3.81.
Accounts receivable collection: Many businesses experience a lag between the time they bill customers and when they see the revenue. This may be due to trade credit or because customers are not paying. While you can note this potential revenue in the balance sheet under accounts receivable, if you’re not able to collect it, eventually your business will lack sufficient cash.
Interpretation: To measure how many days it takes to collect all accounts receivable, use this formula: 365 (days) divided by accounts receivable turnover (total net sales divided by accounts receivable). In Target’s case, that equates to 365 divided by the sum of 59,490 divided by 6,194, which equals 38. This means that, on average, it takes Target 38 days to collect on its accounts. If you find your business has a healthy balance sheet but is short on cash, increase collection on outstanding accounts.
How to use financial statements as a management tool, Part 2
The following is the first in a series of three articles on using financial statements as a management tool. The series references the 2006 annual report from Target Corp. from the retailer's web site.
Like a balance statement, an income statement is a means for measuring a company’s financial performance. Some of the ratios discussed draw data from both the income statement and the balance sheet.
We’ll continue using the published data from Target as an example. Note that all figures represent millions of dollars.
Gross profit margin: The money Target earns from selling a T-shirt, minus what it paid for that item -- known as cost of goods sold, or COGS -- is called gross profit. Sales minus COGS, divided by sales, yields the gross profit margin. According to Target’s income statement, that would be 59,490 minus 39,399, divided by 59,490, which equals 0.337, or 33.7 percent.
Operating income: This is gross profit minus operating expenses minus depreciation. It is also called EBIT (earnings before interest and taxes). Using Target’s data, the formula would be expressed as: 59,490 minus 39,399 minus 12,819 minus 707 minus 1,496, which equals 5,069.
Operating profit margin: Use the total derived in the previous step and divide it by total sales. In this case the equation is 5,069 divided by 59,490, which equals .085, or 8.5 percent.
Interpretation: This tally is also known as EBIT margin and is an effective way to measure operational efficiency. If you find this number to be low, either raise revenues or cut costs. It may help to analyze which of your customers are the most profitable and concentrate your efforts there.
Net profit margin: Net earnings divided by total revenue yields the net profit margin. In this case, 2,787 divided by 59,490, which equals .047, or 4.7 percent.
ROA: This stands for return on assets and measures how much profit a company is generating for each dollar of assets. Calculate ROA by dividing the revenue figure from the income statement by assets from the balance sheet. For Target, that equates to 59,490 divided by 14,706, which equals 4.04. In other words, for every dollar Target has in assets, it is able to generate $4.04 of revenue.
ROE: The same idea as above, but replacing assets with the equity. In this case, 59,490 divided by 15,633, which equals 3.81.
Accounts receivable collection: Many businesses experience a lag between the time they bill customers and when they see the revenue. This may be due to trade credit or because customers are not paying. While you can note this potential revenue in the balance sheet under accounts receivable, if you’re not able to collect it, eventually your business will lack sufficient cash.
Interpretation: To measure how many days it takes to collect all accounts receivable, use this formula: 365 (days) divided by accounts receivable turnover (total net sales divided by accounts receivable). In Target’s case, that equates to 365 divided by the sum of 59,490 divided by 6,194, which equals 38. This means that, on average, it takes Target 38 days to collect on its accounts. If you find your business has a healthy balance sheet but is short on cash, increase collection on outstanding accounts.
Interpreting the Balance Sheet
From Daniel Richards
How to use financial statements as a management tool, Part 1
The following is the first in a series of three articles on using financial statements as a management tool. The series references the 2006 annual report from Target Corp. from the retailer's web site. The financial statements begin on document p. 24 (p. 43 of the PDF file).
The information provided here allows you to calculate several financial ratios that measure company performance. Additionally, current balance sheets should always present data from at least one previous period, so you can compare how financial performance has changed.
Identify a public company in the same industry as your startup and download their financial statements from their Web site. Using Target Corp. as an example, we’ll analyze the data in their balance sheet. Here are a few key ratios to calculate. Note that all figures represent millions of dollars.
Quick ratio: This measures Target’s ability to meet its obligations without selling off inventory; the higher the result, the better. It is expressed as current assets minus inventories, divided by current liabilities. In Target’s case, that is 14,706 minus 6,254, divided by 11,117, which equals 0.76.
Interpretation: If this number declines over time or falls short of your benchmark, you may be investing too much capital in inventory or you may have taken on too much short-term debt.
Current ratio: This is another test of short-term liquidity, determined by dividing current assets by current liabilities. In Target’s case, that is equivalent to 14,706 divided by 11,117, which equals 1.32.
Interpretation: This number should be above 1, and it’s usually a sign of strength if it exceeds 2. If this number is below 1, that means your short-term liabilities exceed your short-term assets. A liability is considered current if it is due within a year. An asset is current if it can be converted into cash within a year.
Debt-to-equity ratio: In brief, divide total debt by total equity. In Target’s case, the denominator is termed a shareholder’s investment because Target is a public company. Using Target’s data, that ratio is expressed as 8,675 divided by 15,633, which equals 0.555.
Interpretation: Long-term creditors will view this number as a measure of how aggressive your firm is. If your business is already levered up with debt, they may be reluctant to offer additional financing.
Working capital: This refers to the cash available for daily operations. It is derived by subtracting current liabilities from current assets, which in this example is 14,706 minus 11,117, which equals 3,589.
Interpretation: If this number is negative, that means your firm is unable to meet its current obligations. To improve this number, examine your inventory management practices; a backup of goods and the resulting loss in sales can take a toll on your business’s cash resources.
©2007 About.com, Inc., a part of The New York Times Company. All rights reserved.
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Tuesday, June 24, 2008
When to hire a bookkeeper
These points should help businesspeople looking to hire a bookkeeper.
When to Hire a Bookkeeper:
Company Start-up: A bookkeeper's services make sense for average start-ups with no plans on building an empire. A bookkeeper on your small business accounting team will help you start off with a good record keeping system, handle financial transactions, and produce financial statements.
Lack of Numbers Understanding: If cash flow planning and balance sheets make your head spin, you need help. Enlisting the services of a bookkeeper can help you gain a basic understanding of the financial aspects of running a business.
One-Person Company: A home-based lifestyle business will have a need to keep expenses low. The cost of an accountant on a monthly basis can be too much for a small one-person business. Either prepare the books yourself or have a bookkeeper involved in the process. Use the accountant for your year-end tax planning.
When to Hire a Bookkeeper:
Company Start-up: A bookkeeper's services make sense for average start-ups with no plans on building an empire. A bookkeeper on your small business accounting team will help you start off with a good record keeping system, handle financial transactions, and produce financial statements.
Lack of Numbers Understanding: If cash flow planning and balance sheets make your head spin, you need help. Enlisting the services of a bookkeeper can help you gain a basic understanding of the financial aspects of running a business.
One-Person Company: A home-based lifestyle business will have a need to keep expenses low. The cost of an accountant on a monthly basis can be too much for a small one-person business. Either prepare the books yourself or have a bookkeeper involved in the process. Use the accountant for your year-end tax planning.
Tuesday, June 17, 2008
I found this article on putting more cash at your disposal
This is an excellent article for my clients to read.
Guide to Filling a Cash Flow Shortage
How to put more ready cash at your disposalBy Daniel Kehrer
SupremelyUseful
9.6
out of 10
Choose your rating
9.6 - Supremely Useful
Bringing cash in the door is one of the most basic requirements of operating a successful business and cash shortfall is as common as the common cold. But don't get caught up in fancy cash predicting formulas. The basics of cash flow are common sense.
Translate sales into real money (cash) as fast as possible
Bank that money
Guard that cash zealously.Action StepsThe best contacts and resources to help you get it done
Use online invoicing or invoicing softwareA messy, unclear or inaccurate invoice is far less likely to be paid on time, if at all. Make sure what you send out reflects care and attention to detail. I recommend: Inexpensive, easy-to-use invoicing software can help pull in more cash. MyInvoices is an excellent choice. Web-based invoicing services are also a great solution that has come on strong in recent years. FreshBooks and Bill.com are both terrific places to send, track and collect payments quickly. FreshBooks has been especially popular with freelancers and service providers. Not only to you save time billing, but you get paid faster.
Sign up for a merchant accountMerchant accounts allow you to take payments by credit cards. For speedier cash flow, credit cards can't be beat. You get your money fast and customers are accustomed to paying with plastic. I recommend: Visa, MasterCard and American Express all have super helpful small business sites that can get you set up to accept credit cards. You might also consider PayPal if you are an internet business.
Use Remote Check DepositRemote check deposit lets you easily convert paper checks to electronic checks and have the money magically deposited into your business bank account via your computer. I recommend: Plus, the now-electronic checks can launch your accounting software and automatically enter the check deposits and update your ledgers. Wow! The tools for creating electronic checks, or echecks, from regular paper checks are being offered by banks and Web-based providers. Using a special desktop scanner, you convert checks to digital images, and then deposit them to your bank account via the Internet. The efficiency is jaw dropping. DepositNow is a complete Web-based service that can set you up to use remote check deposit to your existing bank. See why it's like having a tiny ATM on your desk, and how the additional accounts receivable service can automatically enter information to help balance your books. The National ACH network is another provider of remote check deposit services.
Crank up your collectionsIf you aren't having any luck collecting from clients, call in the collections cavalry. Get a collection agency specialist to help you out. I recommend: Find one at The Association of Credit & Collection Professionals.
Get a line of credit with a bankTap the credit line to cover short term cash shortfalls. I recommend: Wells Fargo, Washington Mutual and Bank of America are three major banks that cater to small business and offer credit lines nationwide. Or check out the SBA CAPlines Loan Program which helps small businesses meet short-term and seasonal cash needs with a revolving line of credit.
Create a cash-in/cash-out budget. This will allow you to estimate your cash in and cash out over a six-month period. I recommend: Go here to download a cash flow budget worksheet template that will get it done.
Tips & Tactics Helpful advice for making the most of this Guide
Try asking for all or a portion of payment up front.
Create a detailed "aging schedule" for your receivables. Call overdue accounts quickly, focusing on the largest amounts first.
Offer a discount for overdue amounts, but only after you've pressed for full payment. Set a short deadline and make it sweet enough to draw a response.
Prepare invoices in advance and send them out at the earliest possible moment
Guide to Filling a Cash Flow Shortage
How to put more ready cash at your disposalBy Daniel Kehrer
SupremelyUseful
9.6
out of 10
Choose your rating
9.6 - Supremely Useful
Bringing cash in the door is one of the most basic requirements of operating a successful business and cash shortfall is as common as the common cold. But don't get caught up in fancy cash predicting formulas. The basics of cash flow are common sense.
Translate sales into real money (cash) as fast as possible
Bank that money
Guard that cash zealously.Action StepsThe best contacts and resources to help you get it done
Use online invoicing or invoicing softwareA messy, unclear or inaccurate invoice is far less likely to be paid on time, if at all. Make sure what you send out reflects care and attention to detail. I recommend: Inexpensive, easy-to-use invoicing software can help pull in more cash. MyInvoices is an excellent choice. Web-based invoicing services are also a great solution that has come on strong in recent years. FreshBooks and Bill.com are both terrific places to send, track and collect payments quickly. FreshBooks has been especially popular with freelancers and service providers. Not only to you save time billing, but you get paid faster.
Sign up for a merchant accountMerchant accounts allow you to take payments by credit cards. For speedier cash flow, credit cards can't be beat. You get your money fast and customers are accustomed to paying with plastic. I recommend: Visa, MasterCard and American Express all have super helpful small business sites that can get you set up to accept credit cards. You might also consider PayPal if you are an internet business.
Use Remote Check DepositRemote check deposit lets you easily convert paper checks to electronic checks and have the money magically deposited into your business bank account via your computer. I recommend: Plus, the now-electronic checks can launch your accounting software and automatically enter the check deposits and update your ledgers. Wow! The tools for creating electronic checks, or echecks, from regular paper checks are being offered by banks and Web-based providers. Using a special desktop scanner, you convert checks to digital images, and then deposit them to your bank account via the Internet. The efficiency is jaw dropping. DepositNow is a complete Web-based service that can set you up to use remote check deposit to your existing bank. See why it's like having a tiny ATM on your desk, and how the additional accounts receivable service can automatically enter information to help balance your books. The National ACH network is another provider of remote check deposit services.
Crank up your collectionsIf you aren't having any luck collecting from clients, call in the collections cavalry. Get a collection agency specialist to help you out. I recommend: Find one at The Association of Credit & Collection Professionals.
Get a line of credit with a bankTap the credit line to cover short term cash shortfalls. I recommend: Wells Fargo, Washington Mutual and Bank of America are three major banks that cater to small business and offer credit lines nationwide. Or check out the SBA CAPlines Loan Program which helps small businesses meet short-term and seasonal cash needs with a revolving line of credit.
Create a cash-in/cash-out budget. This will allow you to estimate your cash in and cash out over a six-month period. I recommend: Go here to download a cash flow budget worksheet template that will get it done.
Tips & Tactics Helpful advice for making the most of this Guide
Try asking for all or a portion of payment up front.
Create a detailed "aging schedule" for your receivables. Call overdue accounts quickly, focusing on the largest amounts first.
Offer a discount for overdue amounts, but only after you've pressed for full payment. Set a short deadline and make it sweet enough to draw a response.
Prepare invoices in advance and send them out at the earliest possible moment
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