Category Archives: Blog

Making the Most of Next Year!

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Grow your business next year by making wise choices based on timely and accurate information!  This information is often at your fingertips and many clients don’t take advantage of this valuable resource. 

Each year I get many calls asking me to help companies gather their data and correct their records so they can submit them to their tax preparer for use in processing their tax return.  These clients tend to view their accounting system a recordkeeping device for tax preparation and forget the advantages of using their records to help make intelligent management decisions on a timely basis.  When you wait until after year end to enter transactions you’ve lost the ability to use the information timely for management purposes and you are more likely to have errors and omissions in your records.

My advice to you is to record transactions timely and use the reports and dashboards that your accounting system provides to you!

If your accounting system does not meet your information needs you may need more training or you may need to upgrade your software.  Now is the time to determine if you have a training issue or you need to upgrade.  If you need to Upgrade, I suggest contacting your tax preparer for advice, referrals, and/or assistance so you can start the New Year getting information that will help you manage your business.

Have a prosperous and healthy New Year and if there is anything I can do to help you please contact me at Ilene.eisen@ie-solutions.biz

Should I Process My Own Payroll or Use a Payroll Service?

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The best time to change payroll processing is at the beginning of the year.  Therefore it’s time to look at your payroll processing and determine if it meets your needs.

The first question is, to determine if you want to be responsible for preparing your payroll returns and paying tax payments…

  • I would suggest that only organizations with a full time Payroll or Hunan Resource specialist take on this responsibility since the fines and penalties can be substantial, if errors are made or deadlines missed.

The second question is, if you outsource your payroll, how do you choose a payroll processor or service?

  • If you are a small business and do not use accounting software, check with your Tax Preparer to see who they recommend or if they provide this service.
  • If your accounting software processes payroll ask if the accounting software company also offers full service payroll that will integrate with your software and post the payroll to your records saving you time and increasing efficiently, while handling the regulatory duties of filing payroll returns and making tax deposits.
    • Many large software vendors now provide full service options such as Intuit and Sage.
  • If you need job costing and/or you are billing customers for time it’s important to get a processor who will integrate with your accounting software.  Keep in mind that the best integration will be provided by the publisher of your accounting software as mentioned above.
  • If you need advanced Human Resources features you will probably be happier with a national payroll processor that has these options.

When making payroll decisions it’s always a good idea to check with your CPA and software consultant for additional information and insight on the issue.

 

 

Year End Strategy to Reduce Taxes and Increase Profitability

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Many companies will be closing their books for the year at the end of December.  Although many folks feel the year end activities start in early January with bank and account reconciliations, I believe the process should begin in the fall.   If management and the accounting staff takes the time to review the books 2 -3 months before year end and make any necessary adjustments and corrections, they can give their tax advisor a better idea of the annual income.  Doing this before year end gives the company a chance to estimate taxes, purchase fixed assets, make plans for funding retirement programs, and plan for cash needed in the next year.

I see too many companies go to their tax preparer just before the tax deadline and pay tax when there were purchases that they could have made to reduce the tax burden and increase productivity.  I also find companies that are unhappy with their accounting software and wait until the beginning of the year to replace it or begin the search for a better product.   Keep in mind that before year end is the time to purchase the tools and equipment that will help you achieve or maintain your profitability in the future.  Also this is the time to work with your financial advisor and tax preparer to plan for the best year ever.

Should I choose an In-House, Hosted, or Cloud based Accounting Software Solution?

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Lately I’ve received many calls asking about cloud based accounting software solutions and in particular QuickBooks Online.  My answer to these questions tends to be a lengthy discussion of the needs of the client.  Here are my thoughts…

Find the software that meets your needs first.  Many cloud applications require the use of various add-ons to achieve the total solution while in-house software may have all the functionality needed in one product.  If the in-house product is a better match for the business, it can be hosted by various companies and you still have the option of a 24/7 solution. 

If you have a cloud based or hosted solution, you can access your data and program 24/7 and multiple users have access from any location or device that connects to the internet.  That sounds great but there are the issues to address:

  • Connectivity – Vendor issues that may not allow you to access your data, what is their history?
  • Security – What security is available and does it meet the legal requirements of you industry?
  • Costs – Expect a monthly fee per user or company file.  I am not a fan of free solutions.
  • Backups – Do you have the ability to download your data in a usable format?

If you choose an in-house solution you have more control, however there are also issues to address:

  • Connectivity – Do you have remote users that need to log into the system?
  • Security – How will you provide the proper level of security for your business?
  • Costs –What are the software costs, annual renewals/updates, and cost of maintaining server?
  • Backups – What is your backup strategy?

These are just some of the issues you will need to consider.  

Participate in a Cancer Prevention Study (CPS-3) to help fight against Cancer

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Please take a moment to consider the following opportunity to help fight against Cancer.  If for any reason you are not able to participate, I would greatly appreciate you passing this information onto anyone you think may be interested. 

We have an unprecedented opportunity to participate in a nationwide cancer prevention research study that has the potential to protect future generations from getting Cancer.

This is the third long-term study that the American Cancer Society has done, Information from   http://epi.grants.cancer.gov/Consortia/members/cps.html on previous Cancer Prevention studies is noted below:

In 1952, the Statistical Research Section, forerunner of the present Department of Epidemiology and Surveillance Research, began its first large prospective cohort study, the Hammond-Horn Study, to study the effect of cigarette smoking on death rates from cancer and other diseases. By using 22,000 American Cancer Society (ACS) volunteers to recruit a cohort of 188,000 adult men and then to trace cohort members yearly through 1955, that study set the methodologic foundation for the two subsequent Cancer Prevention Studies (CPS I and CPS II). In contrast to the Hammond-Horn Study, both CPS I and CPS II were designed to address a wide range of potential exposures, in addition to tobacco use, that may be associated with cancer. CPS I included approximately one million men and women recruited by 68,000 volunteers in 25 states. Participants were followed for 12 years, through 1972. CPS I data continue to be analyzed today, often in collaboration with external investigators, or to compare with results from CPS II, a separate and more contemporary cohort. CPS II began in 1982 and encompassed 1.2 million subjects recruited by 77,000 volunteers in 50 states. The entire CPS II cohort continues to be followed for mortality. Cancer incidence follow-up is being conducted in The CPS II Nutrition cohort, a subgroup of 184,000 men and women who completed a second questionnaire in 1992. A total of five follow-up questionnaires have been administered every two years to obtain updated exposure information and self-reported cancer diagnoses.

Who Can Enroll?

  • Men and women between the ages of 30 and 65
  • Never been diagnosed with cancer

For more information:

 Monterey County:Call  888-604-5888.or www.cps3montereycounty.org  

Outside of Monterey County :call 800.227.2345 or http://www.cancer.org/research/researchtopreventcancer/participate-cancer-prevention-3

Do You Really Need Another Expensive Server?

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I was at a client’s office and they were talking about purchasing new computers and the bulk of the budget would be allocated to a new e-mail server.  This is an issue that many clients have to deal with and to add insult to injury they also need to hire IT professionals to update and maintain the server.

I talked to the client and we discussed Cloud applications (SAAS) such as Office 365 and Google Apps to replace a mail server and reduce the need for another server.  My client was thrilled with the idea and will investigate both applications which will help her company handle mail and will also allow the employees to view and send mail on the various platforms that employees use (Windows Computers, iPads, MAC Computers, Android Phones, iPhones, Blackberry…).

I have been using Office 365 for quite a while and I have found that it meets and exceeds my needs.  I no longer have to worry about a backing up my files.  If I am away from the office my Outlook is up to date on various platforms and I don’t have to plan ahead to access information.  In addition to the mail/calendar features I also have used SharePoint to store files that I may need when I’m out of the office.  I no longer worry about last minute changes in plans since I have access to my schedule, mail, contacts, and data as long as I have access to the internet!

Should I Upgrade or Replace My Accounting Software?

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Many businesses are not satisfied with their accounting software and use spreadsheets, databases, and/or manual systems to compensate for missing features in their software.  It’s expensive and intimidating to change software and choosing the new accounting software package is an important decision that can help a company grow or cripple an organization.  Here’s my approach:

  1. Document the unmet needs of the organization.
    1. This list can be quite extensive and it’s important to determine what is absolutely necessary and what items would be optional features.
    2. Contact the current software publisher and discuss the list of must-have features
      1. Is this something that an upgrade will satisfy or is the software too small for the organization?
      2. What is the cost of the software, installation, training, technical support, maintenance upgrades.
      3. Does the Software publisher have another product that will meet your needs?  Will the data covert easily to that product?
    3. Search for other software that may meet your needs and  (Ask your peers, Accountant, do web research)
      1. Pay close attention to the consultant or company contact.  Do you want to work with these folks?  How do they compare to your current provider?  The human interaction is can be more important than the cost in a successful implementation and ongoing support.
      2. Document the cost of the software, installation, training, technical support, maintenance upgrades.
    4. Take time to evaluate your options!!!  Keep you budget in mind but do not make a decision on costs alone.

 

QuickBooks vs Quicken, Which Software is Best for Me?

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This week I received a call from a potential client saying that their CPA requested that they move from Quicken to QuickBooks.  They needed help with the conversion but they were also curious if it was a good idea to  make the change.  After talking to many potential clients in this situation,  I find that some are great candidates for QuickBooks and some were much better off in Quicken.  Normally I recommend Quicken for Individuals and Property Management firms and I recommend QuickBooks for businesses.  However, I’ve included a summary below so you can decide for yourself.

Quicken is an excellent option for Individuals or businesses tracking personal finances, investments and rental properties. Quicken is available in multiple versions:

  • Deluxe – Least expensive version designed for individuals to manage their personal finances.
  • Premier – Includes Deluxe features and additional features to manage and track your investments all in one place.
  • Home & Business – Includes Premier features and can be used for very small businesses.  Does not include inventory or many of the features included in QuickBooks.
  • Rental Property Manager – Includes the features of Home and Business but it is designed to meet the needs of individuals or businesses that are managing rental properties. 

QuickBooks is an excellent choice for a Business that wants to invoice customers, manage inventory, or produce financial statements. There are multiple versions of QuickBooks that businesses can choose from to meet their needs:

  • QuickBooks Pro – Least expensive option allows user to manage basic inventory, invoice customers, calculate payroll, and it provides standard reports and the ability to customize reports.  I usually recommend this for very small business with a small number of transactions.
  • QuickBooks Premier – This product has industry specific reports and language to meet the needs of small to medium size businesses.  The industry versions included are General Business, Contractor, Manufacturing & Wholesale, Nonprofit, Professional Services, and Retail.  These versions include all the features of QuickBooks Pro but also have additional features to make the user more productive, industry specific reports and additional inventory features.
  • QuickBooks Accountant – This product has all the features of QuickBooks Premier and additional features designed for bookkeepers and accounting professionals.  It also includes Intuit Statement Writer.
  • QuickBooks Enterprise Solutions – This product  has all the features of QuickBooks Accountant and has additional features to manage inventory, larger files, larger volume of transactions, and more options to create user rights when configuring security.

 I hope this helps in determining which product(s) will meet your needs.  As always please call or e-mail me to get the latest specials on QuickBooks software and add-on services

 

Software Licensing – Better Safe Than Sorry

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I was recently talking with someone who needed help with his computer software and mentioned that his new computer consultant had installed software that he had not paid for, and really didn’t even need.  The computer consultant had the product codes and enough registration information from his employer that he was able to accomplish this illegal install.  The person I was talking to told me that the computer consultant worked for a large company and they really did not care if he did this ….REALLY…. Are you kidding me, I can’t believe you would repeat this comment in a court of law! 

I told this individual that the software should be uninstalled immediately and I would perform an uninstall if needed.  Instead I was informed that the computer consultant could do this on his next visit…REALLY…are you actually letting that fraudster back in your door??? 

This is a situation that I see more often than I would expect and I am always surprised who falls for this.  It’s folks who could easily afford the software and are ethical in other parts of their lives and businesses but somehow illegal software downloads are OK.  The fraudster, otherwise known as the computer consultant, is just one 16 digit number away from stealing your credit card number and just one 9 digit number away from your social security number. 

Keep in mind that when you let a computer consultant in the door you are probably giving them a password or two while they are assisting you with your computer and network issues.  You may even grant them remote access.  I have to admit that I have not met this individual  but I can tell you without a doubt they are only  one decision  away from committing a fraud with your information,  it may be a only a matter of time.

As a software reseller and consultant I work with a lot of clients and I sell software and perform installs for some clients.  Recently I’ve spent an increasing amount of time helping clients put their businesses back together after frauds.  These frauds were often committed by long time employees who were trusted and often socialized with the business owners.  Quite often I’m told the owner even attended weddings and other events of these fraudsters.  You never know what decisions a person might make, even after they have a history of making the right decision in the past.  It’s always a good idea to be careful and exercise common sense when dealing with a situation that just doesn’t seem quite right!

How Can I Reduce Bad Debts and Increase Cash Flow?

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I have many clients who offer credit to their customers in their businesses and the only similarity the have to each other is that their Accounts Receivable has doubled over the past five years.  They all have had many uncollectable amounts included in their Accounts Receivable for companies that can’t pay them, or are now out of business.    A few of these past due accounts are good customers who have had financial issues and are working diligently on paying off their debts.  Although the business owners want to help their customers, they need to consider the viability of the business so they can continue to employ the staff and have a profitable business.

 

I’ve been advising and all my other clients to limit or eliminate the amount of credit they give to their customers for the following reasons:

  • To reduce or eliminate bad debts in the Accounts Receivable
  • Most business owners and their staff do not have the time or expertise to evaluate a credit history or credit report and set reasonable credit limits. Therefore they give credit too often to those who cannot pay their debts.
  • Many business owners and/or bookkeepers are not good at collecting and following up on delinquent accounts, so a late payment often becomes a bad debt without any follow-up.

 

If you are not going to give your customers credit, there are several options that you should consider:

  • Have customers pre-pay for products and services.
  • Have customers pay upon delivery for products and services
  • Transfer the risk of loss to a 3rd Party
    • Accept credit cards – Merchant fees paid are usually less than bad debts and this method will also increase current cash flow.
    • Refer customers to a financing or leasing firm.

 

Although giving credit is the norm in many businesses, I have seen a shift in this policy over the last few years.  As businesses change hands, new owners do not extend credit and they do not lose customers as a result of this policy.