Snack 2: Be”Lazy” – Automate!

Around the office, I like to say: I’m”lazy”! I don’t mean I’m actually lazy, in the traditional sense, but I am always looking for ways to make the computer do my job for me, and if there is a way, I will use the computer until it flips the breaker! I do this by looking for opportunities to automate some of my tasks, so that I can do more in less time, and also increase my efficiency.

This is actually a great approach to running a business. Below are several specific tasks that I try to shove off on my computer, so that I have time for more important things!

  1. Emails: This one seems so basic, but I see so many accomplished professionals who struggle with this.When it comes to emails, I have my inbox color coded, run by rules, a huge list of folders, I manage the calendar through the email application, I maintain a phone book, and assign tasks to myself and employees through the calendar, just to name a couple things I make my email do for me.
    How did I learn this? Well, typically you can find short how-to videos about whichever email application you are using. These break down the application for you and will show you little things that you probably never knew about the software! (For example, did you know that in outlook you can actually save search folders? Meaning: if you search your inbox for a particular thing on a regular basis, you can save this search as a folder and then all you have to do is click on the folder to see the results of the search…this saves time in waiting for the search to load).
  2. Customer SupportWhile we are on the topic of emails, imagine not having an inbox overflowing with emails from customers or clients asking for or needing something. Imagine not needing to ask your employees for updates  and being able to log into a system and know the progress of a task or project. Using one of these brilliant ticket managing systems will allow managers to track the progress of various ongoing projects as well as other issues that are being addressed by their team. This facilitates better communication, a more cohesive team and allows for a more comprehensive and continuous service, even and especially if you manufacture a product.
  3. Going (Mostly) Paperless: Using a full PDF software can enable you to toss your printers out, and kiss those toner cartridges good bye and then, for nostalgia’s sake, take a walk in the woods (if you are missing all that paper)! Implementing a full PDF software, like Adobe Acrobat (the paid edition), can help you merge existing PDF’s into one savable file, extrapolate one (or more) page(s) from a PDF document, sign, edit, and comment on digital PDFs. Combine this with a e-sign software and all that time you waste standing at the printer/copier/scanner/fax machine can be put to better use! Pair those two with a cloud based fax service and you have  a nice little set up to save both time and money (both in labor and office supplies).
  4. Bookkeeping: Last week we mentioned that bookkeeping is essential to know how your company is doing.  There are bookkeeping programs that can be used to ease the burden of running your books. While none of these are completely autonomous, some can save you hours of time. (Or, if you decide you want your bookkeeping fully automated, we just might be able to help you out)!

Some of these changes can seem a little daunting and some of them will take a bit of time up front for set up and implementation.  But, at the end of the year, you will notice that being “lazy” will have really helped fatten up your bottom line!

For additional tips on automation and Saving Time with Technology, please see our previous blog seriesSaving Time with Technology

To your success!

Chelsea Auton
The Volpe Consulting & Accounting Team

Sources:

https://www.sba.gov/blogs/7-tedious-office-tasks-you-can-and-should-automate

https://www.americanexpress.com/us/small-business/openforum/articles/tasks-not-to-automate/

Snack 1: Measuring Success

Before we embark on this weight gain journey, we need to have a scale, so we can track our progress. In business and accounting there are several ratios that are used to measure the weight of a company.  Some of these are used to compare companies of different sizes, but there are several income based ratios that can provide insight on how your money is (or is not) working for you. The key to using these ratios is to have a reliable set of books that reports can easily be pulled from. I know that bookkeeping can easily get pushed back and put on a back burner because it is a chore and not something that seems to increase the value of a company to its customers. While that may be true, I can guarantee you that having access to reports that depict the financial health of your business at your fingertips will enable you to run a leaner company and fatten up your bottom line – That will ensure that your customers will have you around for years to come!

roiWhew! Now that we are through that, lets talk about the fun stuff: watching your money grow! For this I like to use two different “Return On…” ratios: Return on Investment and Return on Stockholders’ Equity.

Return on Investment: (for those of us that think in math equations)
ROI = Net Income/Operating Assets
For those of us that hate math, and wish we never had to learn addition and subtraction and are still holding a grudge for that poor elementary school teacher who forced us to do those flashcards..all this means is you are looking to see how many times you have made the value of your assets. The bigger this number, the more times you have earned the value of your assets.
For example:  A manufacturing company uses manufacturing equipment, that cost $110,000.00 to produce shoes (no other assets are involved in the production or shipping of the shoes). Their net income (or income after expenses) for the year is $330,000.00 This means that in 1 year they made 3 times the value of their operating assets. OR ROI = $330,000.00/$110,000.00 = 3.00

Return on Stockholder Equity: Is essentially the same concept as ROI, but instead of comparing net income to operating assets, we are comparing net income to how much money stock (or share)holders have invested into the company. So, ROE = net income/total stockholder’s equity. This means that the larger this number, the more times the company has earned the value of the equity holdings in the company.

For Example: Say Sarah and Dave started a company on January 1 of 2016. Sarah contributed $100.00 in cash and Dave contributed the same. This means that total stockholder’s equity is $200.00. If the company’s net income for 2016 was $300.00, that means that the
return on stockholder’s equity  = $300.00/$200.00 = 1.5 OR, that in 2016, the company was able to make 1.5 times the amount that was invested in the company!

Special Note: There are multiple ways to calculate ROI and ROE. The key to using these as the scale to measure a company’s performance, and compare it to previous years, is to use the exact same formula. Also, both ROI and ROE can be negative values, this will occur when there is a net operating loss.

Should you have any questions, we are here to help you increasing those “Weight Numbers“!!!

Chelsea Auton

The Volpe Consulting & Accounting Team

 

https://smallbiztrends.com/2016/05/strategies-to-increase-your-bottom-line.html

https://www.optimizesmart.com/7-powerful-methods-improve-business-bottomline/

http://www.businessknowhow.com/money/bottom-line2.htm

How to Gain a Couple Extra Pounds This Year by Focusing on Bottom Line Growth!

Hello and Happy New Year!

It’s that time of year again when everyone is making their New Year’s Resolution.  This year, I want to encourage you to take a slightly unconventional approach and focus on Gaining Weight and Increasing your Bottom Line.

imagesOkay, so maybe we are not talking about eating more sweets or salty treats to tick up that number on the scale, but we are talking about something just as exciting: finding creative ways to keep more of the money that you make in your business this year! Now that sounds like an excellent reason to be talking about a little weight gain (at least on your books) this year.

During the month of January we will be releasing one article each week sharing a little tips and tricks on ways to keep more of your hard earned money this year! So, stay tuned, and visit us each week on Wednesday for your weekly treat to help fatten up your Bottom Line!

Bon Appétit!

Chelsea Auton
The Volpe Consulting & Accounting Team

Business BootKamp: Week 4 – The Elevator Pitch

Now, you have your Vision and your Mantra, but how do you distill this information into a short, concise, engaging and meaningful proclamation of your company  (and you)?elevator-pitch

Imagine getting stuck on an elevator with your dream investor, client/customer, or even employee. How do you make those 60 seconds or less stand out and make an unforgettable impression? The solution is to have your elevator pitch prepared and ready.

In essence, an elevator pitch is a short spiel, aimed at helping a complete stranger remember you and/or your company. There are 5 key components to a successful and memorable elevator pitch:

  1. Have a good hook: this means, having something that will grab their attention and makes you light up.
    • When I meet a new business connection for the first time, my favorite icebreaker is to introduce myself by starting [after my name of course] with”I accidentally started my first company when I was 19…” This is 100% true, but sounds ridiculous and grabs their attention. At that point, they want to hear what I will say next and I am chuckling about whichever memory that little phrase has made me think of!
    • Body Language is a big part of your hook: your passion and excitement for what you do should shine through in your facial expression and posture as you are speaking
      • In the Western culture, strong eye contact, a firm hand shake & a smile will go a long way.
  2. Make it short! Keep your spiel to 20 – 45 seconds, and allow time for follow up questions
  3. Communicate your mission: when doing this, keep it simple.
    • Start with the problem you are fixing
    • Present your solution
    • Identify what makes your solution special
    • Follow up with just one (or two) data points that can be taken away
  4. Engage your audience: when you have finished your 20 – 45 second spiel, ask an open ended question to engage your audience in a dialogue.
  5. Practice! This may not feel natural at first, but practicing every chance you get, will make it roll off your tongue with ease.
    • When I have a change that I want to make to my elevator pitch, I like to take it for a test drive, in low risk situations. I have been known to ‘test out’ portions of my elevator pitch on my friends’ friends, especially if I am meeting them for the first time and it is the correct situation, or to try it out on people that are in my continuing education classes with me. I always let them know (after the fact) what I was doing and thank them for their time!

Ready to make your elevator pitch? I found this amazing website on how to make an elevator pitch. Just click here, and then let us know how making your elevator pitch went! If you feel like posting your elevator pitch in the comments section of this post, we would love to read them!

Looking forward to hearing from you!

Chelsea Auton
The Volpe Consulting & Accounting Team

Sources

https://www.americanexpress.com/us/small-business/openforum/articles/5-keys-to-a-great-elevator-pitch-1/

https://www.mindtools.com/pages/article/elevator-pitch.htm

Bonus Content my elevator pitch…as it currently stands:
Hello, I am Chelsea Auton, and I accidentally started my first company, in my dorm room, when I was 19 years old. While running this company, I realized the true value in fully understanding the financials of a company. I now use my accounting expertise to manage the books of various types of small businesses and to work work with their owners understand their financials and help them maximize their profits.

After working with our firm for 1 year, 95% of companies see an increase in profits. What is the most difficult or frustrating part of keeping your financial books?

TaxesTuesday: Mileage Deduction

How many days do you drive to the office and just sit and work your eight hours and then go home? If you are anything like us, that is a rare occurrence. Fortunately, any vehicle expenses incurred as the result of a job or a company that you own can be used to reduce your tax liability! There is just the small task of proving it…

The IRS requires that, if taking a deduction for vehicle expenses that a mileage log be kept [don’t worry there are apps to help with this] . Mileage logs must include the following information about the business miles and it must be broken down by vehicle:

  1. Date
  2. Starting and ending addresses for each drive
  3. The purpose of each
  4. The over all miles traveled

In addition, the IRS also wants to know how many total miles were driven by each vehicle that a deduction is being claimed on that year.

Generally speaking, as long as the vehicle that you are deducting expenses for has not and is not being depreciated, there are two ways that vehicle expenses can be taken. (And YES, regardless of which method you use, you must keep that pesky mileage log)!

Standard Mileage Deduction: This is simply taking the business miles that you have driven and multiplying it by the standard mileage rate. Then this entire amount then comes off on your taxes either as a business expense, or [if you are an employee and not a business owner] as a Schedule A, unreimbursed employee expense.

Note for the individual: if travel is reimbursed by the company that you work form then this is NOT tax deductible. Likewise, if travel reimbursement is offered by the company that you work for, but you do not take the reimbursement then mileage expense is NOT tax deductible either.

Actual Car Expenses: For this method, you would save all vehicle related receipts and keep your mileage log. At the end of the tax year, you would then prorate the vehicle expenses incurred, based on percentage of business usage of the vehicle.

For Example: If you have a car whose total miles driven were 30,000 and 27,000 of those miles were business miles, then 90% of most vehicle expenses for that year will be a deductible expense.

Note for the individual: if you are driving a company vehicle, then you must use the Standard Mileage Deduction method.

Situations when Vehicle Deductions are Disallowed: if a vehicle has been or is being depreciated, then the miles and expenses from that vehicle are not tax deductible.

Hope this drives your success!

Chelsea Auton
The Volpe Consulting & Accounting Team

Sources:

https://www.irs.gov/tax-professionals/standard-mileage-rates
https://www.irs.gov/uac/newsroom/2016-standard-mileage-rates-for-business-medical-and-moving-announced
https://www.irs.gov/pub/irs-pdf/p463.pdf

TaxesTuesday: Charity Travel Expense as Tax Deduction?

Many organizations have service trips that they do during the summer months. From the mission trips to Guatemala, to local service weeks, some of your expenses incurred while volunteering can be taken as a tax deduction. This means that you can use this to either increase the amount of your refund or reduce the amount that you will have to pay when you file your taxes!

Let’s run through some quick rules that the IRS publishes, just to make sure that everything you are planning on deducting is an allowable deduction.

The Basics:

  • You must be volunteering for a Qualified Charity. Most churches and governmental organizations qualify, but the IRS does provide a tool that you can use to check on the status of a charity.
  • Volunteer Image PNGWhat you spent must be:
    • Necessary
    • Unreimbursed
    • Directly related to your volunteer work
    • Expenses that were only incurred because of the volunteer work
    • Real expenses (meaning you must have a receipt for these expenses; or in the case of mileage, a mileage log)
  • Can NOT be personal, living or family expenses

For Service Trips

  • You must play a substantial role in the trip throughout. If you play a nominal role, then none of the expenses are deductible
  • Your time is not a deductible expense, regardless of any income that may have been forfeited so you could go on the service trip.
  • Travel expenses that are deductible:
    • Airplane, Train, Bus tickets
    • Car & Taxi expenses
    • Lodging expenses
    • Cost of meals
    • Transportation expenses incurred to get to and from the airport, or station and hotel.

Note: if a significant portion of the service trip involves recreation or vacation, none of the above are deductible.

For more information, please visit the IRS website and review Publication 526.

Happy Travels!

Chelsea Auton
The Volpe Consulting & Accounting Team

Sources:
https://www.irs.gov/uac/about-publication-526
https://www.irs.gov/pub/irs-pdf/p526.pdf

Business BootKamp (TM): Realizing Your Vision

Happy Saturday!

Now that you have your mantra, and you have that little beacon off in the distance to keep you focused on your goals, how do you practically achieve that goal? If the mantra is the lighthouse, then your vision is your treasure map. It shows where you are going and how to get there! When your break your vision down into smaller achievable parts, realizing your vision is simpler, and often times comes to fruition faster. These parts can be broken down into three basic questions: who & why, what, and how.

Image processed by CodeCarvings Piczard ### FREE Community Edition ### on 2016-04-19 12:22:45Z | http://piczard.com | http://codecarvings.com
Do you know where you’re going and how to get there?

The first step bringing your business vision into fruition is to fully know what you are offering and why you are offering it. This means understanding the solutions that you offer or the problems that you solve. Even if you are in a luxury market segment, you still solve a specific ‘problem.’ Take golf courses, for example, they are a luxury, but they are incredibly successful. Why? Because they understand that they solve the ‘problem’ of entertainment, socialization, and business meetings. The more successful courses cater to this through having club houses, halfway houses, restaurants, and ballrooms, for members to gather both before and after a round, and without playing a round, and to rent out for whatever they choose. They understand the role they play in people’s lives.

Next, determine who is your target market and begin focusing your offerings on those customers. To do this, ask yourself who will gain something of value from what you are offering? There are many different types of golf courses, from equity courses, to public courses. Each has their place in the market, and knows that while golf may appeal to a large number of individuals, different people want different things from their golf experiences. Some people just want to learn to play and use it for recreation and to relax, others want tournaments and competitions, and others want a place to show off and do business, just to name a few reasons a person would golf. The key is that a golf course cannot cater to all these desires, but will specialize in one of the other so that they can meet the expectations of their target market (or their customers).

Now that you know the what & why and who it is important to decide on the how. How do you want your target market to perceive you? This is determined largely through your interactions with them. These interactions come in all shapes and sizes from marketing campaigns, to the products/services themselves right down to their presentation at a retail store, or at an initial meeting with a potential client. These interactions set the tone for your brand. Wal-mart, for example has a strong brand. They may not be everyone’s favorite company, but everyone that knows Wal-mart, has a clear set of expectations about their products and even their experience when shopping there. This is the result of past experiences, hearing stories of other’s experiences, and experiencing the marketing strategies of Wal-mart. So how do you become as predictable as Wal-mart: Consistency. In all interactions with customers, whether it be through advertisements, an employee of the company, the product experience itself, or the product presentation at a shop, keeping it consistent with your brand, vision, and mantra will create that brand continuity.

As always, when it seems like it is two steps forward and one step back, fall back on your mantra to give you the strength and resolve to just keep going. If you can focus on your steps, reaching your vision is closer than it may appear!

By the way, if you missed our band performance last weekend , click the following link for some photos – Yahoo!!! That was fun — https://www.linkedin.com/company/volpe-consulting-&-accounting-services

Looking forward…

Chelsea Auton
The Volpe Consulting & Accounting Team

Sources:

http://www.cbn.co.za/news/is-there-real-value-in-having-a-vision

http://www.marketingdonut.co.uk/marketing/marketing-strategy/your-target-market/six-steps-to-defining-your-target-market

TaxesTuesday: Withholding Tax

Hi Everybody,

It’s Friday; not Tuesday. Sorry again for the delay and our temporary inability to keep up with our posts on a weekly basis. Well! lately we have been pretty busy with work, especially quite a few business events with both of our local Chambers of Commerce that we are currently participating in. To be more specific, feel free to stop by if you are in Westport Plaza area in St. Louis MO, we will be in the band and playing the all time favorite songs such as Hotel California, Desperado, Faithfully, etc. Click the following link for more detail 2016 MHCC Pub Crawl

Now it’s tax time —Besides the complication of Sales Tax previously mentioned on our last post, accounting for payroll or employment taxes can also be very tricky, especially if you have your payroll functions outsourced. But isn’t out sourcing payroll supposed to make it easier?! Well, it should, but that all depends on how your account is set up with your payroll company and how well your general ledgers can be integrated. Most payroll companies bill first for direct deposits made to employees, then for the tax payments and last for payroll processing fees, so there is an average of 3 withdrawal transactions per pay period. The trouble with that is those expenses seem to be often and easily mis-classified among wages, payroll taxes, and payroll liabilities accounts. Let’s take a look at an actual scenario below:

If an employee makes $2,000.00 a month, their take home pay is actually less than that. Taken out of their gross pay is usually both federal and state withholding tax and local (if applicable), in addition to medicare, and social security tax. The amount that they will pay in federal and state withholding tax will vary, depending on how their W-4 forms were completed, but the employer’s cost will not change based on each employee individual tax situations. The amount on the books for wage for any employee paid $2,000.00 a month will always be $2,000.00. For clarity’s sake, here is an example of the breakdown that can be made for this transaction as the first journal entry.  Please note that I am choosing arbitrary numbers for the withholding tax.

4/30/2016     Wages expense                                    $2,000.00
Federal Withholding tax liability*                             $200.00  (assuming 10%)
Social Security liability* (6.2%)                              $124.00
Medicare liability*  (1.45%)                                   $29.00
State Withholding tax liability*                               $100.00  (assuming 5%)
Cash                                                           $1,547.00

*This represents accrued payroll liabilities incurred when payroll is run, but the taxes are paid at a later date, for instance quarterly. When these taxes are paid, the payroll liability account is debited and cash is credited.  Thus, no portion of the wages is ever classified as a tax expense.

When it comes to payroll taxes the employer has their own separate responsibilities, above that which is taken out of the employee’s paycheck. The employer is responsible for matching the medicare and social security taxes and for paying state and federal unemployment taxes. These are expenses that are coming directly out of the company’s pocket, so they are considered payroll tax expenses. Let’s look at the second part of the above journal entry.

4/30/2016     Payroll Tax Expenses**                                                                $235.20
Federal Unemployment tax liability*  (0.6%; Capped at $7K)                                   $12.00
Social Security Employer liability* (6.2%; Capped at $118,500)                                 $124.00
Medicare Employer liability* (1.45% generally; No capped amount)                   $29.00
State Unemployment tax liability*(3.51% for new businesses in Missouri; Capped at $13K) $70.20

*This represents accrued payroll liabilities incurred when payroll is run, but the taxes are paid at a later date, for instance quarterly. When these taxes are paid, the payroll liability account is debited and cash is credited.  Thus, and again, no portion of the wages is ever classified as a tax expense.
**This account can be broken down into the individual types of taxes, however to keep this journal entry simple, all tax accounts have been consolidated into one payroll tax expense account.

The good news about this is that when all of these expenses are properly captured, not only can all actual payroll tax expenses correctly be deducted on your business tax return, but business financials will also be appropriately represented when making decision or performing the analysis.

Hope this helps when dealing with payroll transactions and its taxes. However, if you still need help, please do not hesitate to reach out!

Chelsea Auton

The Volpe Consulting & Accounting Team

Sources: https://www.irs.gov/publications/p535/ch05.html#en_US_2015_publink100020883

BootKamp (TM): A Follow up on the New American Dream – The Spark! Program

In the first week of Business BootKamp™ I wrote about the evolution of the American Dream. I proposed that for many, the current American Dream is owning a business, citing the increase in entrepreneur programs offered in high schools throughout the country. This past week, I met up with Dustin Loeffler, Jd., a professor at Maryville University who is also involved in the Spark! program in the Parkway School District High Schools, to get a closer look at one of these high school entrepreneur programs.

Loeffler is the director of graduate studies in business at Maryville University. He first got involved in the Spark! program when the director of the program was looking for a university to partner with. Recognizing that these programs “really fill a void in the high school and college curriculum”, according to Loefler, he was eager to partner with them, and in his words, “They are providing students with the practical experience that cannot be found in the classroom.” Loeffler is most intricately involved in the newest threads of the program: Cyber Security and Engineering. In fact, Maryville University is currently constructing a Cyber Security and Engineering lab for these Spark! students to come and work in a real life environment. Students in these programs will perform PIN testing and other various Cyber Security and Engineering services at low to no cost for Not for Profit institutions and Small Businesses. (For more information about receiving these services, please contact Dustin Loeffler: dloeffler@maryville.edu).

Spark!

Spark Program

The Spark! program is offered to juniors and seniors attending high schools in Parkway School District in St. Louis County, Missouri. Loeffler reports that parents and students alike have received this program well, and have caused it to really take off and grow. This program is one of many throughout the country that gives high school students the opportunity to explore business and small business ownership in a relatively safe space, with lots of mentors and guidance. Loeffler believes that this hands on experience is something that is missing in high schools and business schools alike, throughout the country. One of the main objectives for students in Spark! is to help them to develop characteristics as high school students such as a strong work ethic, confidence and business skills, to insure that they are successful no matter what they choose to do when they graduate the program. To find out more details about the Spark! program, click the following link: parkwayspark.com

I asked Loeffler to comment on what some of the students are doing now.  He replied that it is actually quite easy to follow most of the Spark! student’s stories because one of the projects that they complete is to develop and maintain a LinkedIn profile.  He continued to say that it is really neat to see these high school students graduating with fully developed LinkedIn profiles and real life experience on their resumes.  Many of these students have continued on to business school or to pursue a college degree in the field that they studied in Spark!. Some, have even chosen to continue running their business, while attending college. Whatever the future holds for these bright, young entrepreneurs and this amazing program, one thing is for certain: the American Dream is alive and well.

Thank you to Dustin Loeffler, Jd. for sitting down and sharing your thoughts insights into one of these incredible programs with me.

~Chelsea Auton

The Volpe Consulting & Accounting Team