You probably think I am going to say a good accountant is the most important thing your business needs. Although a good accountant is essential, it is not the number one priority. The most important thing your business needs is sales! Call it sales, revenues, fees, customers, or clients, but it is all the same. Without sales you do not have a business, therefore nothing else matters.
The recession has taken its toll on business owners, which is why it is even more important to focus on sales. The way to increase sales is to increase your marketing efforts. It doesn’t have to be expensive, but it should be effective. Your marketing efforts should be planned and focused.
As part of your marketing, you need to focus on who you want to target and how. For example, a veterinarian should only target pet owners. Lists can be obtained from database companies, such as infousa that are very specific.
The next step is how to contact your target market. Maybe the veterinarian can send a postcard to the pet owners. Maybe he/she can even get more creative and partner with a local, independent pet shop to cross market his/her services.
Just remember that a good marketing strategy is to diversify your marketing methods. I recommend marketing in at least 5 different ways because not all usually work at the same time. To obtain a list of marketing techniques for your products or services, please feel free to email me and I will send you the report right away.
Wednesday, July 14, 2010
Tuesday, July 13, 2010
Are You Overwhelmed By Debt?
The number of bankruptcy filings has increased over the last several years due to the increase of household debt. Statistics can be found at www.abiworld.org, which is the website for the American Bankruptcy Institute. Bankruptcy is a tough decision to make and should be well thought out before filing. The focus of this article is not bankruptcy though, but debt management.
Why or how do so many people get into trouble with debt? When does it become a problem? There are so many reasons, such as job loss or, health problems, but overall it is a disconnect between income and spending, and not enough focus on financial management.
I’d like to share a few simple ways to reduce your debt and help to minimize its use in the future. If you keep it simple, you are more likely to be successful.
Stop incurring more debt: You can’t get out of debt if you are still using your credit cards. Do not increase your debt or you will never get out.
Emergency fund: By building up an emergency fund, you are less likely to take upon more debt for something unexpected. For now, it can be around $1,000 to start. Ideally, you will want to work towards 3 to 6 months worth of expenses, but it doesn’t make sense at this point to save $10,000 and simultaneously have a $10,000 credit card balance.
Budget: If you are serious about reducing your debt and improving your financial situation, you need to take the time to make a budget. You can use software, such as Excel or Quicken, but a very simple and effective way is to use envelopes. For example, if you are paid weekly by your employer and spend an average of $100 a week on groceries, then place $100 in an envelope labeled groceries. When you go food shopping, bring this envelope so that you can only spend$100 or less. This can be done with all other expenses. It is simplistic, but if it is done right it is extremely effective. My father taught me this one.
Know what you owe and prioritize: Make a list of all of the debts you owe, including credit cards, auto loans, equity loans, mortgages, student loans, etc. Now you need to work at chipping away those debts. The rational place to start is with the highest interest debt, but I don’t recommend this. You should actually try to pay off the smallest balances first because it will give a sense of accomplishment. Once the smallest is paid off, then use that payment toward the next balance. Finances are extremely psychological, as most of our financial decisions are emotional-based.
These few steps are a good place to start to manage and reduce your debt. If you are serious about debt elimination, you will not look for shortcuts, but rather ways to increase your income to pay off your debt sooner and take control. Focus and simplicity are the keys. If you need more help you can contact my office. Additionally, there is an excellent book on this topic that parallels my thoughts on debt, entitled “The Total Money Makeover” by Dave Ramsey.
Why or how do so many people get into trouble with debt? When does it become a problem? There are so many reasons, such as job loss or, health problems, but overall it is a disconnect between income and spending, and not enough focus on financial management.
I’d like to share a few simple ways to reduce your debt and help to minimize its use in the future. If you keep it simple, you are more likely to be successful.
Stop incurring more debt: You can’t get out of debt if you are still using your credit cards. Do not increase your debt or you will never get out.
Emergency fund: By building up an emergency fund, you are less likely to take upon more debt for something unexpected. For now, it can be around $1,000 to start. Ideally, you will want to work towards 3 to 6 months worth of expenses, but it doesn’t make sense at this point to save $10,000 and simultaneously have a $10,000 credit card balance.
Budget: If you are serious about reducing your debt and improving your financial situation, you need to take the time to make a budget. You can use software, such as Excel or Quicken, but a very simple and effective way is to use envelopes. For example, if you are paid weekly by your employer and spend an average of $100 a week on groceries, then place $100 in an envelope labeled groceries. When you go food shopping, bring this envelope so that you can only spend$100 or less. This can be done with all other expenses. It is simplistic, but if it is done right it is extremely effective. My father taught me this one.
Know what you owe and prioritize: Make a list of all of the debts you owe, including credit cards, auto loans, equity loans, mortgages, student loans, etc. Now you need to work at chipping away those debts. The rational place to start is with the highest interest debt, but I don’t recommend this. You should actually try to pay off the smallest balances first because it will give a sense of accomplishment. Once the smallest is paid off, then use that payment toward the next balance. Finances are extremely psychological, as most of our financial decisions are emotional-based.
These few steps are a good place to start to manage and reduce your debt. If you are serious about debt elimination, you will not look for shortcuts, but rather ways to increase your income to pay off your debt sooner and take control. Focus and simplicity are the keys. If you need more help you can contact my office. Additionally, there is an excellent book on this topic that parallels my thoughts on debt, entitled “The Total Money Makeover” by Dave Ramsey.
Friday, July 9, 2010
Thursday, July 8, 2010
Update to the Homebuyer's Credit
The homebuyer credit has been extended until September 30th for eligible taxpayers. If you entered into a binding contract to purchase a home by April 30th, then you have until this time to close on your home.
Tuesday, May 4, 2010
A Primer on QuickBooks
What exactly is QuickBooks? QuickBooks is an accounting program that is used primarily by small businesses. It is very user-friendly, which makes it ideal if you are not an accountant.
QuickBooks will enable you to take control of your business finances to help you to make better decisions. Business owners can keep track of receivables from customers and clients, bills that are due, and account balances such as checking accounts, inventory, and credit cards. You can even reconcile your accounts to your statements to make sure your records are accurate. Can you imagine not knowing how much your customers owe you?
Ideally, you will want to be able to generate financial reports such as profit and loss statements, as well as balance sheets. A profit and loss statement will tell you how much your sales, expenses, and profits were, while a balance sheet reflects assets (such as checking accounts), liabilities (such as loans), and equity (the difference between assets and liabilities, which is your ownership stake).
Successful small business owners know how their business is performing on an ongoing basis. This is where QuickBooks can help. Your decisions should be made based upon the financial results of your business. Just remember not to do it alone. While QuickBooks is very user-friendly, many people do need assistance from an expert. It can be extremely advantageous to consult with us on an on-going basis. We can advise you on how to best set up QuickBooks, how to use it effectively, and how to interpret your business results to help you to save money, taxes, and increase profits.
QuickBooks will enable you to take control of your business finances to help you to make better decisions. Business owners can keep track of receivables from customers and clients, bills that are due, and account balances such as checking accounts, inventory, and credit cards. You can even reconcile your accounts to your statements to make sure your records are accurate. Can you imagine not knowing how much your customers owe you?
Ideally, you will want to be able to generate financial reports such as profit and loss statements, as well as balance sheets. A profit and loss statement will tell you how much your sales, expenses, and profits were, while a balance sheet reflects assets (such as checking accounts), liabilities (such as loans), and equity (the difference between assets and liabilities, which is your ownership stake).
Successful small business owners know how their business is performing on an ongoing basis. This is where QuickBooks can help. Your decisions should be made based upon the financial results of your business. Just remember not to do it alone. While QuickBooks is very user-friendly, many people do need assistance from an expert. It can be extremely advantageous to consult with us on an on-going basis. We can advise you on how to best set up QuickBooks, how to use it effectively, and how to interpret your business results to help you to save money, taxes, and increase profits.
I Received a Notice from the IRS – Now What?!
If you receive a letter in the mail from the IRS, the first thing you should do is open it! It might not be as bad as you think. The most common notice I see is that a client forgot to include interest, dividends, or wages from a W-2 on their income tax return and now they owe additional taxes, interest, and penalties.
Just because you receive a notice that you owe money doesn’t mean the notice is correct. You want to see why there is an increase, and compare the figures in the letter to your tax return. Then you want to see what the proposed changes are. I have seen notices that have actually showed incorrect W-2 wages.
Usually you have 30 days to respond to the notice before additional interest and penalties will be assessed. There are several options to take at this point.
The first option, if the notice is correct and the additional penalties and interest are very insignificant, should be to pay the amount due as soon as possible. If the notice is correct and you have a valid reason for not including a portion of income, you should then include payment of the taxes and interest on those taxes only. Additionally, you will need to respond to the notice to state why the penalties should be removed. The IRS will remove penalties if you have a justifiable reason. As a caveat, if the penalties are not removed then you will owe not only penalties, but possible interest on the penalties as well. The cost/benefit has to be weighed carefully. If the notice is completely wrong, then you should not send any payment, but include an explanation in your written response to the IRS, along with any supporting documents to show why you do not owe additional taxes, interest, and penalties.
As you can see there are several options when receiving a notice from the IRS or one of the state taxing authorities. Do not hesitate to contact our office if you receive a notice. We can clearly explain it to you and guide you through the next step to take.
Just because you receive a notice that you owe money doesn’t mean the notice is correct. You want to see why there is an increase, and compare the figures in the letter to your tax return. Then you want to see what the proposed changes are. I have seen notices that have actually showed incorrect W-2 wages.
Usually you have 30 days to respond to the notice before additional interest and penalties will be assessed. There are several options to take at this point.
The first option, if the notice is correct and the additional penalties and interest are very insignificant, should be to pay the amount due as soon as possible. If the notice is correct and you have a valid reason for not including a portion of income, you should then include payment of the taxes and interest on those taxes only. Additionally, you will need to respond to the notice to state why the penalties should be removed. The IRS will remove penalties if you have a justifiable reason. As a caveat, if the penalties are not removed then you will owe not only penalties, but possible interest on the penalties as well. The cost/benefit has to be weighed carefully. If the notice is completely wrong, then you should not send any payment, but include an explanation in your written response to the IRS, along with any supporting documents to show why you do not owe additional taxes, interest, and penalties.
As you can see there are several options when receiving a notice from the IRS or one of the state taxing authorities. Do not hesitate to contact our office if you receive a notice. We can clearly explain it to you and guide you through the next step to take.
Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act is 906 pages long. It can be easily found by typing it in at google.com. One of the highlights of the Act is to provide a credit to small business owners who provide health insurance to their employees starting in 2010.
The amount of the credit is equal to a maximum of 35 percent of the premiums paid by an eligible small business during 2010. This will increase to a maximum of 50 percent of premiums paid during the year 2014. The employer must have paid at least half the cost of single coverage for their employees to be eligible.
Since the credit was designed to help small business owners that employ low and moderate income workers, average wages per employee must be less than $50,000 per year. Generally, an employer must have fewer than 25 full-time equivalent employees. Employers with less than 10 full-time equivalent employees with average annual wages per employee of less than $25,000 will receive the maximum credit.
Unfortunately, employees such as dependents, including spouses and children, and most business owners are excluded from the definition of employee.
Hopefully this credit will be of help to many small business owners who are on the fence about providing health insurance for their employees due to cost concerns.
The amount of the credit is equal to a maximum of 35 percent of the premiums paid by an eligible small business during 2010. This will increase to a maximum of 50 percent of premiums paid during the year 2014. The employer must have paid at least half the cost of single coverage for their employees to be eligible.
Since the credit was designed to help small business owners that employ low and moderate income workers, average wages per employee must be less than $50,000 per year. Generally, an employer must have fewer than 25 full-time equivalent employees. Employers with less than 10 full-time equivalent employees with average annual wages per employee of less than $25,000 will receive the maximum credit.
Unfortunately, employees such as dependents, including spouses and children, and most business owners are excluded from the definition of employee.
Hopefully this credit will be of help to many small business owners who are on the fence about providing health insurance for their employees due to cost concerns.
Subscribe to:
Posts (Atom)
