If you want to grow your company, you’ve got to learn to let go of any task that doesn’t set you apart from the competition. For a small-business owner, this means giving up some level of control and delegating or outsourcing tasks to others.
There are many reasons you may want to maintain control and avoid delegation – there’s not enough time, to do it right you must do it yourself or perhaps you enjoy the task. However there’s another important issue to consider: the “pain/gain” equation. People first want to eliminate a pain or prevent a loss before they will be interested in generating any kind of gain.
In business, when we focus on overcoming a challenge that’s perceived as a threat, the pain motivates us to eradicate the problem immediately. Conversely, when we focus on overcoming a challenge that’s perceived as an opportunity, we’re less inclined to take action. If this same concept is applied to control, it makes sense why most business owners struggle with relinquishing it. Most people think about the opportunity or gain associated with giving up control, however this isn’t enough to motivate business owners to actually let it go. The pain or threat associated with giving up control, increased errors, reduced quality and upset clients, often outweighs the benefits of delegating tasks.
Business owners can address this dilemma by rethinking the situation of relinquishing control. Don’t think of giving up control as having the opportunity for more free time; reframe it to focus on the downside or threat of not giving up control. A few questions to consider: What is the cost associated with not giving up control? What will you lose by not giving up control? What is the pain that will be created if you don’t give up control? Focus on the cost of not changing a behavior and you’re more likely to take action. What are you doing in your business that you shouldn't be doing? Chance are, you're probably over-involved.
To reframe your view, write down all the costs associated with not giving up control. Be honest with your list and keep these “pains” front and center as you are deciding which tasks to delegate. When the perceived cost of not giving up control is greater than the pain associated with relinquishing control you will be able to make a shift. One of the easiest (and wisest) things you can outsource today is your bookkeeping. A business owner often has a skewed sense of finances when it comes to their "baby". A competent bookkeeper can give you a fresh set of eyes to see what potential there is for growth and where. Need a highly recommended bookkeeper? We've got an entire team of them waiting to take on your books. Contact us today.
Creating an inner circle of fans of your business is almost a no-brainer when it comes to generating revenue. You can use your biggest fans as a product-generating test audience and of course offer them the best promotions and discounts. It’s up to you how you choose to conduct business, but one thing is for sure - catering to your business's biggest fans (or inner circle) can increase your income substantially.
Offer Exclusive Webinars
When you have an idea for a webinar or in person event, try it out on your inner circle first. If you have a paid group, offer them a steep discount, or offer the webinar free as part of the monthly fee. You can then sell the recording of the webinar or event as a product to others, or use what you learned to improve the content for a wide open audience in general sales.
Offer Private Training
A really effective fan base offering often means training; either included or at a discount to members. Training can be anything from an email course to a video drip course, depending on the technology you offer. It can be an add-on to the initial membership or it can be offered for free or for a low price to the inner circle.
Have Members' Only Sales
When you have members, push out everything you ever sell to them first, with a members’ only price, for a limited time. This is a great way to get testimonials, feedback and ideas for improvement before general release.
Host Value-Packed Teleseminars
A great benefit for a paid membership is a monthly teleseminar based on a particular topic of interest for your audience. Let’s say you’re an organizational coach. You could have a call that is all about the best ways to organize a closet. You can even have special guests.
Send Special Offers to Members
Your members want to feel special. If you know about a product or service that is exceptional and relates to them, you can promote it to them even if you will make affiliate income. It’s okay; if you are a high producing affiliate, talk to the product creator and ask for a special discount for your audience.
Host Elite Small Group Coaching Sessions
You can upsell your inner circle members to a smaller inner circle, such as a mastermind session with a small group of five or less individuals. You can lead the call and charge a premium for your time. Say the session is for one hour on FreeConferenceCalls.com, you allow five in a group, and you can offer a limited availability of four groups a week charging each person $29.97 or more each week to attend. This will increase your income by $600 or more a week.
Offer Special One-on-One Coaching
Your most expensive asset is your one-on-one time. In the example above, you’re making $149.85 an hour. For private coaching you should at least double that fee for one-on-one access to your expertise.
Create Products Especially for Members
Periodically ask your members what types of products or services they need. Then work hard to produce at least something that they’ve asked for. If you’re not sure what to go with, just send out a survey and let them pick one thing from the other.
An inner circle can earn money in so many ways.
Just staying connected with your target audience in a close way will help you create so many more products and services for your audience that you may not have considered. You’ll have, right at the tip of your fingertips, the ability to ask your audience in a direct manner what type of products or services they want. Then you can test them on that audience first before opening them to the general public. Inner circles are a win-win for you and your audience.
How many times have you found an old crumpled up receipt hidden somewhere deep beneath the passenger seat of your car or jammed into your wallet? Regardless of how insignificant you think these pieces of paper may be, as a business owner, you must keep your receipts for bookkeeping and tax purposes. Keeping receipts for all of your business expenses will not only keep your bookkeeper sane, it will also assist you and your CPA at tax time in getting an accurate number for your business deductions.
Many of you may be thinking, “Why should we keep our receipts? We’re living in a digital age” or “Why keep a paper trail, if it will only create more clutter? Right?” Wrong. We’ve compiled a list of tips to help you keep accurate, organized records for your business.
1. Keep Every. Single. Receipt.
This point cannot be overstated. It is just as important to keep the $2.38 receipt from Staples for pencils, as it is to keep the $1022.54 receipt for the new laptop you purchased for your business. If you were ever subject to an IRS audit, the auditor will want to see receipts for every expense for which you have claimed a deduction.
2. Make notes on receipts about their business purposes.
This is an especially great idea for dining and entertainment expenses. It can be easy to remember why you bought a copier, but it could be a lot harder to remember who you went to dinner with at that fancy steakhouse three years ago and what the business purpose was.
3. Scan receipts and keep them for at least six years.
The IRS can come looking for documentation to support expenses up to six years back in some cases. Purchasing a scanner and storing them on an external hard drive ensures that you will have adequate documentation in the case of an audit. You can’t count on the ink from a receipt not fading in the next 6 years, so it’s better to be safe than sorry.
4. Take a picture with your Smartphone.
With today's technology, it's easy to say “Forget the receipt, I'll just make a note on the receipt and then take a picture of it.” This is a great idea and there are a whole host of apps for the iPhone and Android that can help you better track your expenses. As long as you save all of these pictures in a safe place (external hard drive, Google Drive, Dropbox, etc.) you will have no problem reproducing these receipts when tax time comes or in the case of an IRS audit.
5. Don’t rely on credit card statements and canceled checks.
Credit card statements and canceled checks are important documents but are insufficient without a receipt to detail the expense. The IRS may see on the statement that you spent $85 at Lowe’s but they don’t know what was purchased on this shopping trip. Statements may be sufficient for your bookkeeper but the detail of the expense is critical for an IRS auditor.
6. Try to avoid using cash for business purchases.
Dave Ramsey may be adamant about using cash for purchases to stay within your budget, but using cash makes it difficult to keep good records for bookkeeping and adequate documentation for an audit. Cash is hard to track, easy to spend and nearly impossible to reconcile with receipts. Stick to debit and credit cards for business purchases to better track your expenses and leave you with adequate documentation to support the expense.
All small business owners know that it can be burdensome to keep track of all those receipts. However, for accounting and tax purposes, you will have to prove that everything expensed to your business is correct and necessary. The extra time and effort it takes to keep accurate records will be worth the extra burden if you were ever subject to an IRS audit.
Need help tracking receipts? Our bookkeeping services will integrate with your business, allowing you to snap a picture of your receipts and email them to us for safe keeping. We can even get you caught up if you've been putting off this important task. Contact us today for help.
Deciding whether to deduct an expense in full or capitalize and amortize it over its useful life is usually a difficult question for small business owners. The accounting treatment of a major purchase can sometimes make the difference between a year-end income statement that shows a profit and one that shows a loss. Business owners don't often understand how each method affects your income statement as well as the tax ramifications of the decision. Here's a breakdown when to expense and when to capitalize.
Capitalizing a purchase
This is an accounting method that delays the recognition of expenses by recording the expense as a long-term asset. Instead of expensing the full cost in the year of purchase, you will spread the cost over an extended period of time, which provides a more accurate picture of your profitability. For example, you decide to capitalize a $20,000 expense and amortize it over a five-year period. Instead of taking all of this expense in 2017, you will record $4,000 per year over the next five years as amortization expense. In order to capitalize an asset, it must have a useful life that extends beyond the current year and you must use the asset to conduct your business. Assets may be fixed assets, such as equipment and furniture, or even intangible assets, such as copyrights and patents.
Expensing a purchase
Deciding to expense a large purchase in the current year can be both beneficial and detrimental to your business. Incurring a large expense will lower your taxable income and therefore reduce the tax liability of your business and its owners. Everyone loves to avoid paying taxes but beware that expensing all of an asset in a single year may prevent you from receiving the benefit of depreciation or amortization expense in the future. You may get a huge tax break in the year of purchase, but could end up owing more money over the next three to five years. Expensing an asset in a single year can also skew your income to expense ratios and provide an inaccurate picture of your company’s profitability.
Deciding to expense or capitalize doesn’t have to be a difficult decision for small business owners. Some companies set a purchasing limit and anything below this amount will be expensed and anything above that amount will be amortized (capitalized). This is a quick and effective way to simplify the decision. Just remember that the item must also have a useful life beyond the current year in order to be capitalized.
Not sure what to do? Contact a reputable bookkeeper, like The Bean Counters Bookkeeping who can not only keep track of your expenses, but advise on the best way to handle large purchases come tax time.
Marketing your business online inexpensively is not hard to do. Many business owners avoid spending money on marketing because they think it's not affordable or worse, a waste of time. The beauty of online marketing is that you can practically market your business for free if you know what to do. That’s why online marketing is so affordable and fun. The barriers to entry are low, and even the learning curve is small. So before you know it, you will bring your business to profit with free or very affordable marketing.
1. List Your Business
There are many directories that are either free or inexpensive that you can join to help market your business. Ensure that the directory you pick is niche oriented, and that it is run by a reputable person so that you are listed with other reputable business owners. You don’t want to be on a list that is associated with spam. Your local chamber of commerce is one such list that you can get on for the price of your membership.
2. Use Social Media Liberally
Social media sites like LinkedIn, Facebook, Twitter, Pinterest and Instagram all have a place in your online marketing endeavors. Well, they might. You have to determine which social media networks will work for you and it will depend on your niche and your target customer. Where do they hang out? Be there.
3. Content Marketing
This is one of your most important marketing weapons in your arsenal. In fact, you’ll use content for all types of marketing including every inexpensive way listed in this article. Content is needed that sells, educates, engages, informs, solves problems, and excites. You need content for all aspects of marketing - up to and including customer relations.
4. Blog Frequently and Consistently
Blogging is a big source of traffic, and in some instances the only source of traffic for many website owners. Not only that, it boosts your SEO which means more people will find your site when they search for your product or service. It’s a great way to get the message out to your customers while not spending much money. You can write the posts yourself or you can outsource blogging. Most people write them themselves when starting out. It can take time to get used to doing it, but writing a post a week can help gain momentum. You'll also want to consider doing longer blog posts, less often, to get results.
5. Remember SEO
If you are not familiar with SEO (search engine optimization), it’s important to learn. SEO changes constantly and is how you optimize your website for search engines. There is both on-page and off-page SEO that you can do for your business. Learn all you can about it. Or hire an expert to provide an SEO audit and strategy.
6. Send Out a Press Release
The good, old-fashioned press release is still a thing, believe it or not. You can still get a lot of value out of sending out free press rereleases if you know how to do it. The trick is to have contacts to which you send the press release directly and not just out to never-never land.
7. Hone and Perfect Your Small Business Website
Your website is your store front, and even if you have a bricks and mortar store front, your website is the store front your customers will likely see first. If it doesn’t look great, why would anyone purchase from you? Spending time on beautiful design, compelling copy, and making sure everything works (don't forget to put your social media links in a prominent spot), is key to giving a great first impression.
8. Join Relevant Communities
Communities are a great way to get your name out there. There are groups you can join on Facebook and LinkedIn, as well as self-hosted and owned “inner circles” and mastermind clubs that you can join. They can help you get known as an expert, as well as help you get more links to your website.
Finding inexpensive ways to market your business online is a great way to get started. But even after you have a profitable business, you’ll want to keep using these inexpensive ways to market your business. If you're wondering if you're business can afford these marketing investments, ask your bookkeeper to find areas that aren't providing a good ROI and where you can cut the fat in your current expenses.
Sometimes the legalities of doing business as an independent contractor can seem daunting. But don’t be overwhelmed. It’s not hard to make a contract at all. A contract can be very simple or very complicated (it’s up to you), but the important point is that you do have one. Many of the reasons you need a contract as an independent contractor are listed below, but take note that this list is not exhaustive. You can likely think of some additional reasons on your own.
To Avoid Misunderstandings
Having a contract to look at when a gray area comes to light about what is expected, can help you avoid costly misunderstandings of what is supposed to be accomplished during the relationship.
To Define the Relationship
While you can’t make a contract stating someone is an independent contractor then treat them like an employee, this can help both parties understand more their roles and place within the work.
To Institute a Description of Responsibilities
If both parties have a good description of what each is to do, when they are to do it, how the deliverables should look and who is going to do what, this can help create a well-oiled machine for your business processes.
To Bind Each Party to Their Particular Duties
If everyone knows what they are supposed to do, the work will go much more smoothly. Define deadlines, the work, and more in this part of your contract to ensure that everyone is on the same page.
To Establish a Time Frame for the Work
Avoiding scope creep is an important part of a contractor’s job. Giving all work a time frame will help avoid problems. You may want a contract for a year for ongoing work, or even an unlimited contract that gives information about what to do if you go over the specified work.
To Help to Secure Payments
Contracts can set in stone the payment you’re expecting and give you recourse if something goes wrong with the payment or work.
To Provide Recourse If Problems Develop
When anything goes wrong, each party can go back to the contract to identify the issue and find the solution to resolve it.
To Establish Professionalism
When you set up a contract and have procedures identified and processes established, you look more professional and people will take your business more seriously.
Contracts are an important part of doing business and can help protect both parties from issues that may arise during the course of the relationship. Not only will the contract help, but the process of creating the contract between the parties can help establish the relationship better. Developing clear, collaborative contracts helps ensure compliance and a great relationship today and in the future. Independent contractors can also benefit by having a bookkeeper. If books are not your specialty, or you simply don't want to deal with the hassles of filing taxes and keeping on top of the paperwork for your 1099 job(s), give The Bean Counters Bookkeeping team a call at 912-376-9918. We'd LOVE to help you sort through your tax liabilities!
When interest rates are fairly low, bank fees usually make up the main source of revenue for banks. In the United States, banks are required to disclose fees and other associated costs for accounts and loans up front. These fees are usually "hidden" in the fine print, which most business owners fail to read in entirety. Not only that, but especially with loans and credit cards, fees are often subject to change depending on various factors. Reading the fine print in detail, and consulting with an accountant or even your lawyer, can illuminate a potential problem down the road and save you quite a lot in the long run.
Common reasons for fees associated with checking and savings accounts include:
It's critical, especially for the small business owner, to be fully aware of any changes or charges associated with their bank. The first step is to review all accounts and make yourself aware of the various fees. The second step is to understand that not all fees are normal, or even the same across various institutions! The best way to find out if you're being unfairly penalized by fees is to ask questions. By not asking questions or obtaining clarification, bank fees continue to increase while your wallet continues to decrease. Don’t just look up your questions online; ask a real person.
It may sound like common knowledge, but with today’s fast paced society many of us skim through documents and sign on the dotted line. Instead, take the time to read and understand all rules both in print and online. To further avoid those unpleasant surprises, mix and match accounts. It may seem like a hassle, but in the long run it’s well worth it. One bank may have a convenience that the other bank doesn’t. For instance, ‘bank A’ may provide free checking and ‘bank B’ may have beneficial small business services.
If you find a better deal at another bank, go to your bank(s) in person and request to close your accounts. Chances are, they'll at least match, or even provide a better offer rather than risk losing your business. This will save you a lot of hassle from having to switch banks.
If your business vehicle is used strictly for businesses purposes you may be able to deduct the vehicle. However, business insurance taxes may apply. These insurance taxes may also fall at a higher rate. If you do choose to use a business vehicle, decide who will be the main driver(s) ahead of time. It’s useful to let the employees access a business vehicle for resourceful time and management purposes. However, insurance rates will increase when you add an additional party.
If you drive your personal vehicle for business reasons you may be eligible for a deduction on your taxes. As of Jan. 1, 2016, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 54 cents per mile for business miles driven, down from 57.5 cents for 2015. 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015.
Make sure to keep track of the mileage in order to receive a discount. If you do choose to use a personal vehicle for work, it will not be represented in the financial statement or the assets of the business. Since the vehicle is owned by you and not the business, it will not be an asset of the business. The personal vehicle will be your own separate responsibility.
There are two options for deducting vehicle expenses: the per diem rate or the expenses sustained. To find out more regarding the two options speak to your personal accountant or visit the IRS website. To read more details and options for tax deductions, visit TurboTax's handy breakdown here.
The Bean Counters Bookkeeping Team hold accounting degrees and can help you identify the correct classifications for vehicle use in business. If you need help keeping on top of your books, we'd love to help you grow!
Starting a small business can be very challenging. You have to know how to productively manage time, money, and customers. While these skills may sound simple, they’re often the key components which small business owners struggle with the most. In order to succeed in the business world, sometimes we all just need a helping hand.
Kaylin Leland, owner of The Bean Counters Bookkeeping says that business owners take on several different tasks at once. “As a business owner you have the five hundred different hats that you have to be responsible for at any given time and outsourcing the bookkeeping requirements gives you time to go home and have dinner with your family. Or even focus more on growing your business without the overhead of hiring an in-house bookkeeper." Thus began the vision of a bookkeeping firm that provides financial support services to small businesses in the Wilmington, NC area and all across the United States.
The Bean Counters Bookkeeping was first launched in April 2013. Leland’s entrepreneurial passion first started in a small, but successful bike shop called Bike Cycles. While there, she helped manage the shop on a day to day basis. Not too long after, she graduated from the University of North Carolina Wilmington with a Masters in Science in Accountancy. She followed her accounting degree with a career in the federal government as an auditor for the U.S. Army. Her passion did not stop there. Leland reminisces, “After working for the Army for a couple of years I wanted to get back to that small business relationship. You know; seeing the passion in people’s eyes when they start their business and it starts to work and grow and I wanted to work in that realm again.” The Bean Counters Bookkeeping started out like many small businesses - a local focused service based company helping other like minded business owners in the community. As technology became more widespread, and online accounting systems increased functionality, The Bean Counters Bookkeeping branched out and now serves business across the U.S. in a virtual setting.
Leland’s bookkeeping business provides budgeting, cash flow analysis, QuickBooks setup and training, and many other services. “The biggest thing I hope to achieve is to help my clients grow. It isn’t just about me growing, it’s about helping them grow as well,” she stresses. Thus far, she has helped numerous small businesses not just in her local area, but many others who are embracing the savings of time and money (and other benefits) of cloud based accounting.
To find out more go to BeanCountersBookkeeping.com. You can contact Kaylin by phone at: (912)376-9918 or by email at: Info@thebeancountersbookkeeping.com.
You're probably well aware of the rise of cloud based bookkeeping programs such as QuickBooks Online, Wave, Xero, Freshbooks, etc. These programs certainly make a business owner's life easier. We couldn't agree more! In fact, these programs are incredibly helpful to bookkeepers and accountants as well. Never before in history has bookkeeping become more streamlined, transparent, and flexible.
Despite the advantages of these platforms, cloud based systems still have their limitations that prevent them from automatically deriving a complete, reliable and accurate result that a professional bookkeeper will provide.
However, we're commonly asked why one of these cloud based bookkeeping systems can't replace the need for a bookkeeper. Software is commonly used to store data "in the cloud" instead of on your local server, making it accessible from wherever you may be, as long as you have an internet connection. Plus, due to this software being available on a subscription basis, business owners save upfront costs involved in buying the software outright and installing it locally where its accessibility is limited. These are definite advantages, but because of the automated processes of importing bank feeds, many business owners assume that this replaces the need of a bookkeeper.
That couldn't be further from the truth, and if you are using a cloud based service INSTEAD of a bookkeeper (and not in tandem with a GOOD bookkeeper), you're making a big mistake.
Yes, you now have the ease of accessibility and definite cost benefits, there are several other factors that should be taken into consideration. Bookkeeping requires knowledge, accuracy, and precision when handling the complexities of the business transactions. Especially when a company needs to pay quarterly taxes, has various loans, imports payroll transactions, and on and on.
A professional Bookkeeper can handle complex transactions, oversee the data and systems and spot an oversight or error which a cloud program can't detect. At least not yet. We routinely hear about business owners who get rid of their bookkeeper because they now think these software programs are all they need. Then they run into problems. When they come to us, we end up finding mistakes in postings, discrepancies between profit and loss items, balance sheets, and incorrect reconciling. A software system like QuickBooks online is needed, yes, but you still require a certified bookkeeper who can process the information correctly.
In conclusion, a cloud based bookkeeping system cannot replace a bookkeeper, yes, it will reduce the time required for bookkeeping (which is why we ALWAYS suggest using one) however, it should never replace your bookkeeper. If you have questions about how to best utilize these systems, or even receive savings on QuickBooks Online at our discounted wholesale price, give The Bean Counters Bookkeeping a call at 912-376-9918.