Cross-training: Essential for Small Business Survival

Cross-training: Essential for Small Business Survival

Have you considered cross-training your employees to ensure more than one person knows all key functions? Cross-training can be a win-win situation for you and your employees. Large companies often use it to prepare managers for future promotions. But in small companies, it can be the difference between success and failure.

Why companies cross-train

Cross-training provides greater flexibility in scheduling, especially when dealing with unexpected workload and staffing issues. It also helps employees develop expertise in other areas and increases their awareness of the company’s roles and functions — helping them better understand where they fit into the big picture.

For employees, some of the biggest advantages include:

  • Learning new skills
  • Working more efficiently and effectively with other departments
  • Feeling more invested in the company
  • Enjoying growth opportunities

Create your cross-training plan

How you implement cross-training will depend on the size and nature of your business. Consider prioritizing the departments that need and/or want cross-training the most. These departments may be understaffed or have many new employees. Look for important functions that are currently dependent on a single person’s knowledge. These areas should be a focus of your cross-training program.

If you’re considering cross-training your team, here are a few tips to help you prepare:

  • Document your key processes. You cannot cross-train if you don’t know the process. These written processes will turn into training documents as you implement your program.
  • Communicate to your team. It’s essential to get everyone involved before you start a cross-training program. Help your team understand why the company is cross-training employees. Reasons may be to prepare for organizational growth or new industry standards, or to adjust to a changing structure around roles and responsibilities. Then continue to communicate with your team throughout the program with status updates and team meetings about progress and next steps.
  • Present cross-training as an opportunity. Your employees may be more resistant to cross-training if it feels like it’s an obligation or a threat to their roles. You can help them feel motivated by highlighting the benefits, like honing different skill sets and having a better understanding of how their contributions positively impact the business.
  • Start with a small pilot program. Test the waters with a select group of employees to get a better understanding of what works and what needs to be tweaked. You can then expand the program later as you gain insight and experience.
  • Determine cross-training hours. Figure out how much time can be dedicated to cross-training for each team to still run efficiently. This may include carving out a few hours each day, or setting aside full days for a certain period of time to focus on cross-training. If your business is seasonal, ramp up cross-training during your low seasonal period.
  • Listen to feedback. You may learn that some employees have already started practicing cross-training on their own. You can use this kind of valuable feedback to fine tune the program.

Keep in mind that some employees may resist having to train others, and productivity may suffer in the short term. But remember the cost of not cross-training. If you lose a key employee and no one else knows how to do their tasks, your business may be in trouble.

 

Cross-training: Essential for Small Business Survival

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

The Dos and Don’ts of IRS Audits

The Dos and Don’ts of IRS Audits

Every year the Internal Revenue Service audits a number of U.S. businesses. Knowing how to prepare for and handle an audit can minimize stress and even provide opportunities to improve company operations. In some cases, audits may even lead to smaller tax bills.

 

Tips for an IRS business audit

Regardless of the type of IRS audit you and your business is involved in (correspondence, office or field audit), the best way to deal with an audit is to know what to do and not to do. Consider the following:

 

  • Be professional

    •  Do: Auditors have a job to do, and it’s in your best interest to show them respect. If you’re called to their office, show up on time, dress appropriately and have requested documents in hand. If auditors visit your place of business, encourage staff to answer questions honestly and completely. Within reason, it’s acceptable to ask for more time to locate a particular record. If you can’t find supporting documentation, say so.
    •  Don’t: Avoid arguing with the auditor. Ask for clarification if needed, but don’t question every document request. If you disagree with the auditor state your case and understand you have appeal rights should the disagreement become costly.

 

  • Be organized

    •  Do: If you keep business records on a computer, know how to create and print easy-to-follow reports. Prepare for the audit by laying out checks, invoices and other records in a logical fashion.
    •  Don’t: Dump a box of receipts into an auditor’s lap. The easier it is for an auditor to find what they need, the shorter the time period required to complete the audit. Remember, the longer an auditor spends with your records, the more likely he or she will find something amiss.Also keep in mind that it’s rarely a good idea to create records during an audit. Exceptions may be if you’re honestly trying to reconstruct transactions from memory or your records don’t exist (for example, after a natural disaster or fire). IRS agents are often suspicious of hastily prepared documents that smell of wet ink.

 

  • Be honest

    •  Do: Make a straightforward effort to justify deductions. If you can’t locate a specific record, look for alternative ways to support your tax return. For example, if you’re claiming a deduction for depreciation but can’t locate the paperwork, redo the calculation for the auditor. A vendor, landlord or mortgage company may have copies of pertinent records if yours have gone missing.
    •  Don’t: Never create numbers that can’t be corroborated or reasonably explained.

 

  • Ask for help

    •  Do: Get an expert in your corner if you’re facing an audit.
    •  Don’t: Ignore your need for help. Remember, auditors conduct audits all the time. This is a rare event for you. Too many businesses provide more information than is needed, opening themselves for a higher tax bill. Make sure this is not you!

 

For U.S. businesses, tax audits are a fact of life. By knowing what to expect, you can be prepared if the IRS comes knocking. contact us for assistance.

As always, should you have any questions or concerns regarding your tax situation please feel free to contact us.

 

The Dos and Don'ts of IRS Audits

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Cash-handling Rules to Protect Your Business

Cash-handling Rules to Protect Your Business

Cash theft ranks as one of the most common frauds perpetrated on small businesses, according to a 2018 report by the Association of Certified Fraud Examiners (ACFE). To ensure your business is protected from theft, develop and implement a strong cash-handling policy. Here are some ideas to help create a working policy to protect your cash.

 

  • Keep duties separate
    If one employee receives cash, someone else should prepare or oversee preparation of the cash deposit. A third person may record transactions in the company books. Although such separation of duties can be hard to implement in a company with few employees, creative owners will find ways to prevent such transactions from being concentrated in the hands of a single person. For example, you might cross-train staff so that today’s accounting clerk is tomorrow’s cashier. Or a supervisor might periodically assume one of those functions.

 

  • Document cash transactions
    Develop a cash count sheet that records the names of people removing money from the safe. Also document the date and time money is transferred for deposit. Include signature lines for both employees involved in the task. Have another employee routinely compare deposit slips and bank statements with cash count sheets. When cash is placed in the safe, record transactions with a similar detailed record.

 

  • Store cash securely
    Lock cash registers when not in use. Minimize cash on hand by requiring employees to periodically transfer excess cash to point-of-sale (POS) safes. Because such a system allows for one-way access only, it helps prevent cash skimming. POS safes should be unlocked only when cash is transferred to the back office safe. Limit safe combinations to authorized employees and ensure that combinations are routinely changed.

 

  • Conduct internal audits
    Employees should expect their cash-handling activities to be scrutinized. Inform staff that there will be surprise cash audits and detailed reviews of company books if irregular transactions come to light. If your company uses a currency counting machine, you might also print and review a sample of cash-count reports.

 

  • Communicate policies
    Make sure your policy is clear and straightforward. Post it throughout the workplace. Discuss it with new hires. Share it in staff meetings.

 

  • Hire wisely and train
    Conduct thorough background checks. Once staff are on board, train them to implement your cash-handling policy until it becomes second nature.

 

Cash-handling Rules to Protect Your Business

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

What Is Real-Time Visibility and Why It Matters

Why Real-Time Visibility Matters

Business today moves fast—extremely fast—which places a lot of pressure on executives to quickly evaluate data and make informed decisions without delay. To do that, they need visibility into real-time metrics from across the organization, and they need that information to be readily available and easy to understand.

Take, for example, a retailer that operates two outlets. During a holiday sale (or on any given day), the manager might want to examine key metrics at one store and then see how those figures compare to those at the other location. By finding variances, the manager can identify opportunities and best practices to rapidly improve operations at each store.

Or consider another business that needs to track financial as well as business metrics. If executives need consolidated accounts receivable, or want to look at key data by programs or clients, how long should they have to wait? To be competitive, they need to be able to access that information, sorted as necessary, and take action within minutes.

 

The value of the latest accounting software

People who work in finance and accounting are often tasked with producing real-time reports to help executives make these types of on-the-fly decisions. That’s not easy to do with some accounting systems that require downloading accounting data to Excel and then combining it with statistical data. Sometimes IT has to get involved or new fields have to be added to accounting tables, which takes time and can lead to mistakes or oversights.

Every delay costs the organization in several ways: Employees are spending their valuable time on the task, executives are being delayed, and the business is losing out on whatever improvements could have been made in the interim.

These issues are why many organizations have adopted advanced accounting solutions such as Sage Intacct, the best-in-class cloud ERP platform. Sage Intacct is based in the cloud and can be accessed anywhere, anytime, from a range of mobile devices. The customizable dashboards are easy for decision-makers to understand, and they can drill down with ease to get to the bottom of the data that matters most to them.

In addition, Sage Intacct uses what it calls “Dimensions” to better capture the business context of transactions, budgets, and more. The eight built-in Dimensions include project, department, employee, and item, and additional Dimensions can be added as needed. That means organizations can quickly create reports that analyze real-time business performance by whatever business driver interests them—without having to create and manage a chart of accounts with hundreds of segments.

 

Get the visibility you need

With better visibility, decision-makers can make fast, smart decisions with confidence. Insero & Co. can help you evaluate best-in-class software solutions and transition to solutions that give you real-time visibility—and a competitive edge.

 

data available anywhere, anytime, from a range of mobile devices

10 Ways Automated Accounting Can Help Your Organization

10 Ways Automated Accounting Can Help Your Organization

Probably you know that automated accounting processes are more efficient than manual processes. And yet many businesses and nonprofits hang on to old, familiar accounting methods involving manual data entry, spreadsheets, and basic financial tools like QuickBooks.

One reason for maintaining the status quo might be that organizations don’t realize the full range of benefits of automation. With that in mind, here’s a list of 10 benefits of transitioning from manual accounting processes to advanced software solutions such as Sage Intacct that automate key processes.

Automate Your Accounts Payable

1. Save time

If your month-end closes are taking most of the month, it’s time to consider automating your accounting processes.

2. Focus on what matters

When employees no longer have to spend hours on mind-numbing manual tasks, they can instead devote those hours to strategic efforts that add real value to your organization.

3. Reduce errors

Automated accounting alleviates common data entry errors and ensures that every task is performed identically, so you and your clients or customers can trust in the numbers.

4. Lower costs

Manual tasks require more employee hours every week, month, and year. Automation makes you more efficient—and helps prevent errors that can lead to unexpected additional costs.

5. Make better decisions

By automating billing, collections, sales, and other processes, you can record and report on key metrics in real time, so executives have all the information they need to make smart decisions.

6. Reduce risk

Automated accounting solutions help ensure that you’re always in compliance with the latest regulations, as they’re automatically updated to adhere to the latest guidelines.

7. Be more secure

Top accounting software providers follow strict security protocols to ensure your organization and its data is protected against data breaches and other security threats.

8. Improve service

Manual processes lead to mistakes and oversights, like late payments to vendors and overlooked bill payments. With automated solutions, you can provide more reliable service to customers, partners, and your own employees.

9. Better audit preparation

By automating your accounting processes, you can prepare more effectively and efficiently for audits, ensuring that you have all the documentation you need to make the process as painless as possible.

10. Improved cash flow

By reducing the time it takes to get approved expenses into your accounting system, you can reduce the time between paying the credit card and getting reimbursed by the client.

Is it time to automate?

Insero & Co. can help you determine if it’s time to automate your processes and if so, help you make the transition as seamlessly as possible using best-in-class software. Contact us to talk about the relationship-based services we provide and how they might help save you time and money every month.

 

What to Consider When You Lease Commercial Property

What to Consider When You Lease Commercial Property

Decisions about location and leasing commercial space can be significant factors in determining a business’s long-term profitability. That’s because the cost of leasing space is often one of the biggest numbers on the profit-and-loss statement. Consider the following as you look for a space that fits your bottom line:

  • Give yourself time.
    At least six months before you plan to move in, begin the selection process. Scout out locations and narrow your choices. Waiting until you’re desperate for space may leave you with fewer options. Starting early may also provide opportunities to observe walk-by or drive-by traffic, the location’s visibility, and the habits of neighboring tenants. It may also provide more time to develop a better understanding of the level of lease payments your business can afford to pay.
  • Compare properties.
    In addition to identifying a property that’s located near your client base, comparison shopping can give you a better understanding of the value of the property you’re considering, as well as provide negotiating leverage. Develop a matrix of the must-have elements of your location. Then place each location you are considering into the matrix. It will give you a nice comparative visual to help make the right decision.
  • Negotiate terms!
    Use your location comparison matrix to begin negotiations with the landlord. Ideas include getting free rent while you build out your space, a longer-term lease with no or low escalation of rent, and getting the landlord to cover more of the maintenance costs.
  • Read the lease — then read it again.
    Once you’ve found your space and have the framework for a deal, you will receive your lease. Review the lease. Pay special attention to the length (term) of the lease, renewal options and scheduled rent increases. Scrutinize clauses describing your responsibility for utilities, maintenance and upkeep of common areas and systems. Make sure the lease agreement matches your understanding of the negotiated terms. The agreement must spell out your options for subleasing and delineate default provisions. Termination options, security deposits, allowances for leasehold improvements — all should be specified in the contract.
  • Work with professionals.
    It makes sense to hire a real estate attorney and other professionals to help find the right space and review the lease terms before signing. An experienced broker may also provide assistance when negotiating lease terms. Careful evaluation and bargaining at the front end may save dollars and avert headaches later on.

If you have questions about how leasing a commercial space will affect your business tax plan, contact us today.

commercial property for lease

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Is Crowdfunding for You?

Is Crowdfunding for You?

Let’s say you attend a small business convention to seek out potential investors to develop a new product. With each new contact, you share details about your latest business idea. You try to generate excitement about your idea, one person at a time.

Now consider having the same conversation with thousands of investors all over the world. That’s the essence of crowdfunding. If you’re interested in crowdfunding for your business, however, there are a few things you should know.

How it works

As the name implies, crowdfunding is the practice of pooling small investments from a large group of people to fund an activity. It can replace a bank, friends or private investment companies to start a company, fund the development of a new product or create a new service.

There are many online crowdfunding platforms, including Kickstarter, Indiegogo, Republic, CircleUp, Crowdfunder and GoFundMe. Each site requires that you set up a profile, establish a funding goal and publish your financing request. People can then donate to your cause or purchase shares in your business.

Of course, investors and contributors expect some form of reward for helping out companies through crowdfunding. For those donating to a non-profit organization, the reward might be as simple as a handwritten thank-you note or a tax deduction (if applicable). Others might gain early access to a discounted product. Some might invest with the expectation that share values will increase over time (known as equity-based crowdfunding). Others might purchase debt-based shares with a fixed interest rate (crowdlending).

What to consider before crowdfunding

Whether you’re considering an investment or trying to raise funds for a new product, ask yourself the following questions:

  • Are you comfortable broadcasting your plans? Be aware that competitors will have access to your idea and business profile. One of the initial developers of a digital watch, Pebble, used crowdfunding to fund their product only to see their business idea overtaken by others including Apple.
  • Are you prepared to create an appealing campaign? Review the crowdfunding site and see what appears to be working. You will need to be prepared to create an appealing campaign that will stand out on the crowdfunder’s site.
  • Will this platform reach my target investors or users? Different crowdfunding platforms focus on specific funding pools. Find out what would be the best for your business.
  • What’s the fee structure? Understand the models and the costs associated with the platform’s fundraising practices.
  • How much money do you plan on raising? Most crowdfunding requests are small. That makes the individual risk for any one donation or investment small as well.
  • How much time will be allotted to reach my funding goal? Companies levy fees to process investments or pledges, and you may be hit with increased charges if targets aren’t met.
  • What about shipping? Don’t forget to specify shipping terms in your campaign narrative and budget for those costs, when needed.

Crowdfunding is worth consideration as an alternative to traditional financing. But before you sign up, be sure to study the details.

 

considering an investment or trying to raise funds for a new product

As always, should you have any questions or concerns regarding your tax situation please feel free to contact us.

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Employee or Independent Contractor: Know the Difference!

Are some of your workers independent contractors instead of employees? Correctly classifying your workers will preserve the tax breaks that come with hiring independent contractors — and help you avoid major penalties.

Why it matters

Employers are required to withhold taxes for employees and pay the employer’s share of payroll taxes on wages. These amounts are reported to the IRS, as well as state tax obligations. An employer may also be liable for fringe benefits for eligible employees, like health insurance and matching 401(k) contributions.

Conversely, an employer doesn’t have to withhold or pay taxes on behalf of independent contractors. These workers take care of taxes, insurance and other benefits on their own.This is why the IRS pays special attention to how workers are classified.

Control is key. Generally, the issue boils down to control. If an employer maintains behavioral and financial control over a worker, he or she should be treated as an employee. Independent contractors, on the other hand, have a high level of autonomy and independence over the work being performed.

Avoid misclassification

The stakes are high. If the IRS discovers a misclassification, it will assess back taxes for the tax years in question, plus interest and penalties. For an intentional error, criminal sanctions may be imposed.

Here’s what an employer can do to avoid the IRS challenging an independent contractor classification:

  • Understand the tax rules. If you exercise a great deal of control over workers, they are likely to be considered employees.
  • Be specific. Spell out the services to be performed by independent contractors, their responsibilities and the expectations in a written contract.
  • Keep work schedules flexible. Avoid setting a regular work schedule for independent contractors. Allow them the ability to set their own hours.
  • Maintain separate payment practices. Compensate independent contractors on a per-job basis. Don’t pay them a regular amount each payroll period, like you do employees.
  • Review work arrangements periodically. Request invoices from independent contractors before payments are made.
  • Be careful about benefits. You don’t need to cover independent contractors under a health insurance plan or provide other fringe benefits that are typically given to employees.

Keep in mind that an employer that has experienced misclassification issues may qualify for tax penalty relief if it can establish it has a reasonable basis for treating workers as independent contractors. This is based on various factors and past history. Back taxes and penalties may be waived if the employer has been consistent in its treatment.

Call us if you have questions about your business situation.

definition of employee vs. indpenedent contractor in the dictionary

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Use Data to Make Better Business Decisions

3 Ways to Use Data for Better Business Decision-Making

Businesses today have access to more data than ever before, which you can use to measure metrics, track trends, and gain insight into just about every aspect of your customers, products, and services.

Although gut instincts still come into play some of the time, the availability of so much data—and advanced software to calculate key performance indicators (KPIs) and issue real-time reports—makes it imperative for businesses to use data to inform their key decisions.

Following are three ways you can use data to make better, faster business decisions.

 

1. Use data to optimize pricing

One of the basic questions for businesses is whether they have priced their products or services too low or too high. Just because items are selling doesn’t mean the business is profitable, or that a different price might not lead to better sales and margins.

To optimize pricing, you first need up-to-date data on all costs related to each product or service. An item that is selling fast, generating a high level of revenue, may also be expensive to produce, resulting in low profits. Raising the price to reflect those higher costs might be necessary—and any price change can be closely monitored to see how it affects sales.

 

2. Manage your margins

Total revenue is not a true indicator of business success. What matters more are profit margins, including both contribution and gross profit margins.

Contribution margins are revenue minus variable costs. Gross profit margins are revenue minus the costs of goods sold. By following both, you can better understand what your profits are and where your break-even point is for every product and service you sell. Using those metrics, you can then look for opportunities to increase your margins—which could mean scaling back low-margin products, promoting the sale of high-margin goods, or other steps.

 

3. Evaluate your revenue stream

To properly evaluate your revenue stream, it is important to run individualized profit and loss statements on every client. Gut instinct might suggest that your oldest, biggest, or most renowned client is your best client. But when you run the numbers, you might be surprised by what you find.

By running individual reports, you can identify low-margin clients that are damaging your cash flow or limiting your growth. Spend too much time on serving those clients, and you might lose others. Then too, there might be an opportunity cost if you fail to reach new, higher-margin clients because you’re working so hard to maintain low-margin clients.

 

Use Data for Better Business Decision-Making

 

Get the insights you need

Insero & Co. is one of the premier public accounting firms in Western, Central, Upstate, and the Southern Tier of New York. Contact us to learn about our outsource accounting services, audit services, employee benefit plan audits, and how we can help your business use data and the latest accounting software to make more informed decisions.

Ideas to Help Control Health Insurance Costs

Ideas to Help Control Health Insurance Costs

As health care costs continue to rise, businesses are facing some tough decisions to stay profitable while maintaining this important employee benefit. With insurance renewal season right around the corner, now is the time to evaluate your plan. Consider these cost-cutting ideas:

  1. Review your current plan and shop around. The first step to shoring up your health care benefits is to review your current insurance plan. What do you like about it? Where do you have issues? Engaging your employees and asking for their opinions can provide you some insight, as well. Having a full understanding of your plan allows you to effectively compare the costs of other insurance providers. In many cases you can save costs and add benefits simply by changing insurance companies or coverage options.
  2. Move to a high-deductible health insurance plan. The upfront savings realized by high-deductible health plans (HDHP) make them an enticing option for employers and employees alike. The monthly premiums for HDHPs are lower compared to traditional plans, but the employee has to pay more out of pocket for their health expenses because of the higher deductible. To offset the extra cost to employees, you can offer a health savings account (HSA) to pair with the HDHP. With this approach employees can pay for medical expenses with pre-tax dollars. You, as the employer, can help offset the cost of the higher deductible by making tax-free contributions to your employees’ HSAs.
  3. Consider self-funded options. If properly executed, self-funded insurance plans can save your business money and improve cash flow. The basic concept is that you (the employer) pay the medical claims directly, instead of paying premiums to an insurance provider. Switching to a self-funded plan involves hiring a third party administrator to process the claims, creating a reserve fund to pay the claims, and purchasing stop-loss insurance to protect your company from catastrophic events. All in, a self-funded plan can cut your health benefit costs by up to 10 percent, according to Hub International.
  4. Encourage alternatives to traditional doctor visits. When setting premiums, health insurance companies factor in the cost of covering the claims made by your employees. One way to help control these costs is to educate your employees on the alternatives to traditional clinics and emergency room visits. For example, there are now alternatives such as nursing lines, online doctor consultations and remote monitoring apps that can cut your costs and save your employees some money. With a lower claim history, your future insurance premiums may not be as impacted by skyrocketing health insurance costs.
  5. Promote employee wellness initiatives. Another way to lower medical expenses is to promote the health of your employees. Wellness programs can be as simple as offering flu shots, onsite cancer screenings or organizing a company 5k run. The options are endless, but choosing the correct approach is key to your program’s success. According to a study by Knowable Magazine, an effective program starts at the top. Before rolling out a wellness initiative, present your plan to your company’s leadership team to get them on board.

The proper approach to cutting health care costs is different for every company, so take the time to research your options to ensure the correct fit for your business.

Control Health Insurance Costs

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.