Bogged down with Paper and Receipts?

As we close 2010 and look to 2011, many small businesses and individuals are thinking of ways to implement ideas for an organized new year. Now is the time to take those ideas and put them into action. There is nothing more frightening then a desk filled with receipt after receipt, mail envelope after mail envelope. Going paperless, though it sounds like a lot of work, is much easier than you think and can really streamline your procedures and make for a more organized work flow. There are many things to consider when making the commitment:

1. How much of your office do you want to convert and is it something you want to implement going forward or convert previous years?
   
2. What new equipment will be needed and does it fit within your budget? A scanner that can accommodate how much paper you will be scanning is needed as well as a document management system to hold all your digital files.
   
3. How will you handle going paperless on an ongoing basis? Policies and procedures will need to be changed to keep your office paperless on an ongoing basis.
   

The main benefit is cost savings. Paper costs money; for printing, mailing, paper supplies, storage for all the paper and storage space, this can all be reduced. By having all records in a central place, allows you to have quicker response time to clients or customers because the information is easily accessible.

The amount of space it takes to store all of this paper will be greatly reduced. Of course this will be a gradual process, especially if you plan to implement on a "going forward" basis. Document security is an added advantage but it is important to make sure you have a good back-up plan for all your digital files and records. There are many inexpensive options such as box.net, dropbox.com or mozy.com.

PacWest Accounting has already started the transition for many of its small business clients and individuals looking to eliminate the headache of papers and receipts by implementing a paperless system. Have I tweaked your interest at all? Stay tuned for more ways to reduce the headache of mounds of papers and receipts and streamline your businesses or personal information so that you can focus your time on what really matters. If taken one step at a time, switching to a paperless office doesn't have to be as scary as you think.

 

 

 

It's not too late

It is hard to believe that year-end is fast approaching and 2011 is staring us in the face. Some of you have probably thought about it for a second, others might not even be fazed by it. If you are a small business owner, it is an important time to see where you are at financially for a number of reasons. Take the time to make sure you have your books up to date, make sure you are not missing any valuable deductions. It is also a great time to see how you are going to end the year versus how you forecasted for 2010. Have you achieved all you thought you would or did you fall short? What were the reasons why you might not have ended the year how you thought? What can you do a little differently for next year's planning? I have said it before in previous posts, it is most essential for small business owners to write things down. It holds you accountable, especially at year end to see where your short falls were and more positive, all the you accomplished.

Other tips:

Increase your expenses by purchasing those items you will be need to buy in the immediate future to maximize the deductions for this year. It might be a good idea to stock up on supplies OR pay bills before year end such as cell phone bills, utilities, or rent.

It might be a good time to contribute to a Retirement plan or if you do not have one yet, set one up. You need to be certain to check the contribution limits for the type of plan you.

Of course all these tips will apply differently to each business owner's situation

Take the time to review the best strategy with a professional advisor and make the most of the year-end tax planning for your small business.

Grow Smart

With owning a small business, there come endless responsibilities. If you are just starting out, you need to balance your time and energy on getting new business and impressing the new business you have already gotten. The process in the beginning is filled with learning; learning what to do, what not to do, what to do a little differently the next time around. You then come to a point where there is a steady rise, business is growing and so is the endless list of "TO DO's".

It is most essential for small business owners to make sure that while in growth mode, you are organized and have a well thought out plan to handle growth. Often times we get so busy trying to get new clients and bring in new business that we often lose a grip on what we initially set out to do.

Here are some tips on how to grow smart:

1. Talk with your peers, pick their brains. When I first started out, I had a handful of peers who were my “go to” pals. Even though they were in a sense my "competitors" they were a great source of information on what worked for them and most importantly, what mistakes they made along the way and how they modified their original plans to compensate.

2. Have a plan. In order to be successful at anything, I am a strong believer in having a plan, having goals and most important, write them down. To see it on paper is a constant reminder that they even exist. Whether your plan is 2 pages or 30, have it handy so you can always go back to it. Make lists and keep those handy too so you can check off what you have finished. There is nothing more satisfying to me than having a list and being able to check off what I have completed, it is a great feeling.

3. If you have a growth plan and you have employees, make sure you tell them what it is. Your employees are your driving force and can get you to where you want to be.

4. Hire an accountant. Many small business owners are great at being creative but when it comes to items such as cash flow and forecasting, they choose not to get bogged down with the financial figures. I cannot express to you enough how important it is to see where you are at on a monthly or quarterly basis. If you are a smart leader who is not a number cruncher, hire someone who is.

As small business owners we need to always be seeking ways to reinvent ourselves, differentiate who we are compared to our competitors. By having a plan, you are able to handle growth and most important be able to handle all that you set out to do initially when you had that little dream of starting your business to begin with. Reach high, be organized and it will all play out a little easier.

Beware

How is the government going to bridge the tax gap of over $300 billion plus in lost tax revenue? They are going to do it with a little help from all of you. You see, as it stands now, if you own a small business and have say a painter come in and do over $600 of work in your office, you have to issue them a 1099 at year end. Now starting in 2012, the burden will fall on you to issue 1099's for any vendor who provides goods or services over $600. That means even the $600 or more in toilet paper you buy for office supplies at Target will bring the need to issue a 1099.

In order to do this, small businesses will need to track how much is being spent throughout the year to each vendor (this should be a step already being done by your trusty accountant). Also, the way it is written, if a vendor refuses to give you their federal tax ID number, you will be forced to withhold 28% for taxes.

Only those companies that issue 250 or more 1099's per year are able to file electronically. This means for all those who fall below this number, 1099's will have to be issued in paper form. Sounds to me like the IRS might be hiring soon.

Outsourcing your accounting

There are several reasons why outsourcing the accounting function of your business is most beneficial to your operations. The most important factor to consider is allowing yourself to be the expert in what you do and letting someone who is an expert in the everyday accounting functions be the expert in what they do. This in return provides a win-win situation, allowing you to focus on growing your business and also having up to date, valuable financial information that is reliable and will allow you as the business owner to make important business decisions. Here are the top three reasons why outsourcing is most essential:

1. Higher Profits
Through financial analysis and having an accountant use tools such as budgeting and forecasting will allow you to make effective decisions as to what is working, what might need some changing and what should be eliminated all together. If you are just starting out, finding where that breakeven point is will allow you to see where you need to be for growth

2. Stress Free Tax Time
Believe it can happen? Sure it can. By having an experienced accountant handle your day to day accounting functions, you can be certain that your financials are accurate and also allow for proper tax planning throughout the year.

3. Financial Data on demand
There is nothing worse than scrambling through piles of receipts and check stubs to find that bill you paid or trying to figure out what receivables are past due. By outsourcing the accounting function of your business, this information should be available on demand.

Did I mention that by hiring an outside bookkeeper, you’re typically saving an average of 20-30% what you would, had you hired a fulltime accountant? Learning to let go and leave the accounting to someone else can be a challenge at first, but it is an effective way to make your business better over time.