Three Good Reasons to Call Your CPA

We are down to the wire for the 2011 tax season. While filing your taxes is priority one, the following are also items you should ask your CPA about.  Here are three things to add to your next conversation:

1. Retirement Plan Contributions Deadline
The deadline for retirement plan contributions is April 17, 2012. By being thoughtful and timely, small businesses can maximum contributions by incorporating expenses into their annual operating budget. This is the perfect time to ask your CPA about how your business can take control of retirement planning because limits are dependent on the type of retirement plan, as well as other variables.  We can help you find a qualified and knowledgeable CPA in your area. Call us at 1-877-735-7693 or email sales@growthforce.com.

2. Changes to 1099 Rules
Last year’s changes to the 1099 rules mean businesses face increased penalties if they don’t meet the filing requirements and deadlines – up to $250 per form that isn’t filed! There are also questions on the income tax form that businesses must now answer in relation to the forms. Strict enforcement of penalties by the IRS is likely, so please call your CPA with questions about filing requirements. For more information on the new requirements, visit:

http://www.irs.gov/pub/irs-pdf/i1099msc.pdf
http://www.irs.gov/pub/irs-pdf/i1099gi.pdf


3.
IRS released revised Form 941
Due to the recently extended payroll tax cut for 2012, the IRS has released a revised 941 Form. Originally, the 4.2% Social Security tax rate was set to expire and return to 6.2% at the end of February. However, Congress acted to extend the 4.2% rate and so the revised Form 941 now reflects this payroll tax cut extension. If GrowthForce is currently handling your payroll, of course we will make sure this happens for your employees. If not, we can get you on the right track quickly so you can go about your business. You can also ask your CPA about the best way to make the transition to ensure nothing or no one falls through the cracks.

For more information, visit  http://www.irs.gov/formspubs/article/0,,id=234283,00.html

 

3.5 And One More Tip for Good Measure

A common bookkeeping error is improper coding of deposits that are not income, which means you pay unnecessary income tax on nontaxable items. Recently, while getting to know a new GrowthForce client, the business owner shared a story about an instance where their office bookkeeper deposited a sizable insurance payment for a wrecked vehicle into the business checking account. Because the bookkeeper had not properly coded the deposit, the owner ended up paying taxes on the reimbursement.

At GrowthForce, we ensure this oversight does not happen by instituting protocols to ensure proper coding and by attaching electronic documentation for each item in QuickBooks, so you and your CPA know what it was and where it came from. Spend time now to create an office-wide system for defining your coding processes, because an ounce of prevention is worth a pound of cure.

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Strategic Planning – Work On Your Business, Not Just In It.

Well run companies don’t rely on blind luck to build a successful business. The best run businesses have a thoughtful and thorough approach to planning for the future. Like driving a car, a business owner needs a solid grip on the wheel and to pay close attention to what’s up ahead,  as well as what’s coming up from behind. While developing your strategic plan may sound tedious and time consuming,  it has the potential to steer your business in the right direction and keep you on the road to success. Let’s explore the benefits and limitations of strategic planning, as well as tips for getting started.

More than just wishful thinking, strategic planning is an ongoing process involving systematic identification of opportunities and threats. It begins with the end in mind – what are we trying to achieve and what does success look like? Once you answer the why’s and what’s of your business by defining organizational aims and strategies, you can focus on the how’s, who’s and when’s  -  or your measurements for evaluating results and developing future plans.

Getting Started

While the components of a strategic plan are universal, the practice is far from prescribed. It doesn’t matter where you start, but it must be approached with equal parts planning and persistence.  In our outsourced bookkeeping and Controller business, we  began with our company mission –why does GrowthForce exist? Our mission is to reinvent the world of small business accounting so profoundly that our clients never go back to the old way.  Your motivation may be to solve a problem, find answers to drive forecasting, make R&D decisions, need a new strategy, have products/market opportunities to decide…it doesn’t matter.  What really matters is you just do it. Get started.

After reviewing and redefining our mission, we got the key leaders in a room to do a SWOT analysis of our core strengths, weaknesses, opportunities and threats. A SWOT of your business can help you reshape the way you view and do business. Get the key stakeholders in the business – sales, production, accounting, and HR, and delve into the good, bad and ugly of your business. Honesty needs to be the best policy. This way you emerge with a real perspective of where your business stands and what issues matter most to the success and longevity of your company.

How, Who and When?

Once you have a high level view of who you want to be (mission = why), and who are you are (SWOT = what), then you work backwards from “the end” to define how, who, and when Take your same SWOT analysis group and ask them to identify how you are going to get there. We call theses “Strategic Initiatives.”  At GrowthForce, we asked ourselves:

  • What do we need to focus our non-billable time on to reinvent the world of small business accounting?
  • How are we going maximize our Strengths and leverage Opportunities?
  • What can we do to minimize our Weaknesses or mitigate Threats?

Too many priorities mean nothing is a priority, so each stakeholder needs to buy into one initiative at a time. What is the most important strategic initiative for Sales, HR, Service, Operations, Finance….right now?  Pick one for each. Then define the major milestones to measure success.  Agree on due dates and the owner for each milestone, and you have the makings of a plan.

Benefits and Limitations

The benefit of being the business owner is you get to decide how detailed your process will be and, therefore, how much time you are willing to have your team invest in the process. The bigger the company, the bigger the investment needs to be.  No matter how easy or detailed, a lot of energy and expense is invested in creating a strategic plan for your business.  But when it’s done right, you will be able to see the forest and the trees. Ideally, the finished product will link four types of plans:  long-term plans, medium-range program goals, short-range budgets and daily operating plans.

While strategic planning can put your business in the fast lane for future success, you must resist the temptation to revert to cruise control, as a plan cannot replace wise decision-making based on current circumstances. Instead, your plan should be a flexible systems approach to help guide your business through situational changes, including crises, to reach your desired goals.

If you go down this path, you’ll find establishing a shared vision with measurable outcomes will help clarify the roles and responsibilities of employees and institute a framework for decision-making throughout your company.  Just aligning everyone on the same page when they walk in the door will give you a return on your investment in your staff.

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Financial Reporting 101 – Less is More

Today I’m going to start a new series on best practices for designing a Financial Reporting System. This is based on methodology I learned as a Manager of Accounting Systems at Ernst & Young, as well as designing accounting systems for hundreds of small businesses using QuickBooks as part of GrowthForce’s outsourced, online bookkeeping and controller service.

How do you develop a powerful financial reporting system? — by employing Stephen Covey’s 2nd Habit of Highly Effective People: BEGIN WITH THE END IN MIND. 

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Human Capital Strategy – Part 2

So what does strategic planning have to do with human capital?

What I like about having a formal human capital strategy is the ability to see how human resources fits together. When we first met with our Insperity recruiters they asked, what is your culture?  What kind of behaviors are successful at GrowthForce? I hadn’t ever considered defining the “culture” or the “behaviors” that were successful for us. Before Insperity, if you could communicate well, were presentable, had QuickBooks experience and would work for the salary I was paying, and could fog a mirror, you were hired.

Now we’re smarter. The first step to a human capital strategy is

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Human Capital Stategy – Part 1

Today I’m starting a blog series on human capital. Why?  GrowthForce is a service business.  By definition that means people are the most important part of our business.  When we talk about our outsourced bookkeeping and Controller services, we’re really talking about our bookkeepers and Controllers in Houston and the accounting technology and automated processes they use to deliver  financial reports from QuickBooks.

A second fact about all service businesses is labor is the biggest expense in the business.  In fact, after pricing, hiring is usually the most important decision the small business owner will make.

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