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5 Reasons You Should Consider Hiring Millennials for Your Business

In some circles, millennial’s are described only in negative terms, leading business owners to believe that they would make poor employees. However, millennial’s have a lot to offer your small business. Below are five reasons you should consider bringing members of this generation to your company.

  1. Millennial’s bring a new perspective to your company.
    Millennial’s will soon make up the largest consumer demographic. Bringing millennial’s to your company gives you a chance to tap into the way this generation thinks as you plan your marketing strategies, explore ideas for new products and work to optimize your company’s operations. Although people from other generations may be able to guess how millennial’s’ minds work, they can’t provide the same level of insight as someone who is actually a member of this group.
     
  2. Millennial’s value collaboration.
    Millennial’s love to collaborate with one another and work on projects in teams. When members of this generation work together, their out-of-the-box thinking and innovative skills are enhanced. In addition, millennial’s are open-minded, and their comfort level with technology makes them capable of collaborating online when necessary. If your company utilizes teamwork on a regular basis, bringing millennial’s into your company is highly recommended.
     
  3. Millennial’s are community-oriented.
    As a group, millennial’s tend to be committed to community, culture and fighting against social injustice. All of these tendencies can help them add value to their company as new hires, whether they are helping with the creation of new marketing campaigns or brainstorming ways to improve your brand image. Having millennial’s on staff can also improve the culture and sense of community within the company itself.
     
  4. Millennial’s have superior tech skills.
    Millennial’s have grown up using technology. As a result, they are comfortable with most of the devices, software and platforms they will need to use to function well in the digital age. This can be highly beneficial for your business, especially if you don’t have people on staff with these skills. While other employees may need extensive training, millennial’s can learn to use your company’s tech tools quickly and easily.
     
  5. Millennial’s know digital marketing.
    While many older employees may need extensive training in order to understand digital marketing and participate in the implementation of digital marketing campaigns, most millennial’s are already familiar with this concept. As a result, they will require less training, guidance and assistance than older employees.

Despite the negative descriptions of millennial’s that exist in the media, members of this generation can be an asset to any business. These are just a few examples of how millennial’s can improve operations at your company.

Best Practices for Small Businesses This Holiday Season

The holiday season can be a lucrative time for businesses. However, it is also one of the busiest times of year. If small business owners are not prepared to handle this busy season properly, they may miss out on important opportunities and/or lose money because of errors that could have been avoided. Below are some tips to help your business make the most of the holiday season.

  1. Hire and train seasonal employees.
    Many companies experience an influx of business during the holiday season. In many cases, this causes employees to be overwhelmed and more prone to making errors. Extra business can also slow down service, leading to frustrated customers. To avoid this problem, consider hiring some seasonal employees to help lighten the load. However, be sure to let these employees know how long they can expect to work for your company so they aren’t surprised when the season ends. You should also spend some time training these employees to ensure that they are prepared for the job.
     
  2. Decorate your store.
    Decorating your store for the holidays is one of the best ways to draw in consumers. Consumers are much more likely to enter a store that is festively decorated than one that looks the same as it does on every other day of the year. If possible, decorate both the exterior and interior of your store.
     
  3. Purchase extra inventory.
    Increased business during the holiday season means that you are likely to make more sales. However, if you run out of your most popular products, you will miss out on an opportunity to boost your bottom line, and your customers will be disappointed when they are not able to purchase the products they want. To prevent these problems, invest in extra inventory at the beginning of the season.
     
  4. Optimize your accounting practices.
    As you begin doing more business during the holidays, ensuring that your accounting practices are accurate and efficient is more important than ever. Before the holiday season is in full swing, take some time to review your accounting procedures. If you are having trouble handling all of your accounting needs in house, consider outsourcing your accounting needs to a third-party provider.
     
  5. Create a holiday-themed marketing campaign.
    Rather than just using the same marketing strategies and advertisements that you use during the rest of the year, create a holiday-themed campaign to excite consumers and highlight special products or deals you are offering during this season.

Benefits of Outsourcing Your Business’s Bookkeeping

Businesses of all sizes must complete certain bookkeeping tasks. In some cases, businesses are able to complete all of these tasks in-house. However, when a business’s bookkeeping needs are too complex or time-consuming, it may be better to outsource them to a third-party company. Below are some of the benefits of outsourcing your business’s bookkeeping needs.

  1. Money saved.
    When you outsource bookkeeping to a third-party company, you will need to pay for their services. However, in many cases, this will actually be less expensive than hiring a part-time or full-time employee to take care of your company’s bookkeeping. In addition, a third-party bookkeeping company is more likely to provide accurate services, which will prevent you from losing money due to mistakes or oversights.
  2. Better services.
    Third-party companies that specialize in bookkeeping usually employ a team of professionals that will focus all of their energy on your bookkeeping needs, as opposed to a single employee who may have other obligations outside of bookkeeping. In addition, the professionals on staff at a dedicated third-party agency are specialists who understand all of the nuances of bookkeeping and can ensure that your company receives the best services possible. Mistakes will be less likely, and all tasks will be completed on time.
  3. More time to focus on other tasks.
    When you outsource bookkeeping, you no longer need to worry about it. This means that you and your employees will have more time and energy to focus on other important tasks, allowing for better productivity and higher profits.
  4. Scalability.
    Outsources bookkeeping operations can be scaled up or down based on your needs. If your business grows, the third-party company can provide increase in the services they provide to compensate for the growth. On the other hand, if your company downsizes or needs fewer services, the bookkeeping provider can alter its approach accordingly.
  5. Access to better software.
    Bookkeeping software is expensive and may be updated frequently. If you are trying to handle bookkeeping inside your company, you will need to purchase this software on your own and upgrade it as needed. If you choose to invest in the best software and upgrade it on a regular basis, this can become expensive quickly. On the other hand, if you try to save money by purchasing inferior software and/or avoiding upgrades, your bookkeeping operations will suffer. You can avoid all of these issues by outsourcing bookkeeping to a company that uses the best software and keeps it up-to-date.

Common Mistakes Small Business Owners Make and How to Avoid Them

Owning a small business isn’t easy. However, with proper planning and careful implementation of these plans, small business owners are often able to build successful companies. One of the best ways to improve your company’s chances of success is to avoid some of the most common and damaging mistakes made by small business owners. These mistakes include:

  1. Failing to engage in financial planning.
    Many small business owners lack the time or expertise to create detailed financial plans for their companies. Unfortunately, if you don’t plan properly, you may find that you don’t have enough money to operate your company effectively. Even if you are able to make a profit without financial planning, you won’t be making as much of a profit as you could. For this reason, you need to manage your finances carefully.
  2. Setting unrealistic goals.
    When creating your business’s financial plans, it is important to be realistic. When you set unrealistic goals for your company and fail to meet them, you harm your reputation among competitors, consumers and even your staff. You may also find yourself feeling discouraged. Instead, make sure that all of the goals you set are reasonable and attainable.
  3. Cutting prices too much.
    One of the easiest ways to set yourself apart from your competitors is by selling products or services at lower prices. However, if you mark down your prices too much, you will lose money. For this reason, it is important to perform a careful analysis of how any price cut will affect your bottom line before you implement it.
  4. Trying to handle too much on your own.
    As a small business owner, you may be tempted to try to handle as many aspects of your company’s operations as possible. Handling everything on your own may seem like a good idea because it allows you to be in control and it prevents you from needing as many employees. However, taking on too much can also be problematic. For example, if you have too many things to think about, you may make mistakes that lead to financial loss, legal problems and other issues.
  5. Trying to handle complex operations in-house.
    Some operations may be too difficult for you to handle without professional help. One of the most common examples is payroll. For many companies, payroll is simply too complicated and time-consuming. Trying to handle payroll on your own when you don’t have adequate resources can lead to serious problems for your company, such as inaccurate paychecks, tax problems and even legal disputes. If you can’t handle this task on your own, it is better to outsource to a third-party company.

Small Business, Big Talent: How to Find the Best Employees to Hire for your Small Business

Most business owners are already aware that hiring the right talent is essential to the ongoing success of the company. However, when you are operating a small business with limited resources, you may find that it is more difficult to find quality employees. Fortunately, there are steps you can take to ensure you are bringing in the best candidates.

  1. Create an environment that appeals to potential employees.
    One of the best ways to attract top quality talent is to create a company culture that is attractive to potential employees. Make your company an exciting and rewarding place to work by providing a competitive salary and benefit package, putting your employees’ needs first and making it clear that you value their contributions to the company. For example, when an employee does something that benefits the company, you should always take the time to acknowledge the employee’s efforts. Employees who feel valued and respected are more likely to speak positively of your company to others, including new job candidates.
  2. Use multiple channels to solicit new talent.
    When you are actively trying to hire new talent, you need to bring in candidates from as many sources as possible. The wider you cast your net, the better your chances of finding the most qualified individuals. Be sure to advertise job openings on job search websites, social media platforms and your company’s website. You should also reach out to new graduates from local colleges. Some companies may also benefit from advertising jobs using more traditional methods, such as printed advertisements.
  3. Create a carefully structured interview process.
    The recruitment and interview process is your chance to evaluate candidates and identify the individuals who will bring the most benefit to your company. Develop a streamlined recruitment and interview process that includes a clear plan for finding candidates, reviewing resumes, inviting candidates for interviews and evaluating them. Make sure that all personnel involved in the hiring process understand and follow this process.
  4. Pay attention to employee morale.
    After you have built a team of quality employees, it may be tempting to stop worrying about whether your employees are happy and focus on maximizing profits. However, if you don’t pay attention to your employees, you will deal with high turnover rates and poor productivity. Retain the best talent in the field by measuring employee morale on a regular basis and taking steps to make sure your employees are satisfied with their jobs.

How to Solve the Biggest Problems with Payroll

If you have employees, payroll is part of your everyday life as a business owner. Managing payroll can be a big job, especially when you have many other tasks to handle. As a result, many business owners find themselves dealing with payroll problems. Below are some of the most common payroll problems business owners experience, along with tips for solving them.

  1. Misclassifying workers.
    If your company works with both independent contractors and employees, it is important that you classify them correctly. Independent contractors and employees are not treated the same for payroll purposes. For example, while you must pay payroll taxes for employees, you are not required to pay these taxes for independent contractors.

    Failing to classify employees and independent contractors properly can lead to fines and other problems. For this reason, it is important to understand the rules and apply them carefully in every case.
  2. Keeping track of hours worked.
    Labor laws require you to pay employees at least a minimum amount of money for every hour they work. You are also required to pay at least 1.5 times the employee’s normal wage for any overtime hours worked. In order to comply with these laws, you must keep careful track of all of the hours each employee works. This can become challenging, especially if you are still trying to use paper time cards or another outdated system.

    To deal with this payroll problem, develop a reliable system for tracking time and make sure all of your employees understand how to use it. For example, you can track time easily using a mobile time tracking application.
  3. Slow processing times.
    Employees rely on you to provide them with payment in a timely manner. In most cases, they will expect to receive their paychecks on a certain day each week, every other week or every month. Unfortunately, because payroll is so complicated, it is easy for businesses to fall behind in processing. If you are late issuing paychecks, employees will be unhappy. In some cases, you may even face legal trouble because of slow payroll processing.

    Stay on top of payroll by creating a streamlined process for tracking hours, paying taxes and preparing checks. If you don’t have the resources to handle this task in house, consider outsourcing payroll to a third-party provider.
  4. Wage garnishments and child support.
    If your employees are responsible for making child support payments, or if your employees are subject to wage garnishment for unpaid debts, your company is responsible for complying with these orders. Unfortunately, this complicates payroll processing considerably. To prevent legal problems, you need to make sure you are withholding and submitting the proper payments to the appropriate recipients.

The Top Accounting Challenges Small Businesses Face

Accounting is an important component of business operations, regardless of the size of the company. However, smaller businesses often face unique accounting challenges that larger businesses may not encounter. Below are some of the most common accounting challenges small businesses can face.

  1. Payroll.
    Payroll is a big job for businesses of all sizes. Every pay period, you must calculate wages and withholding accurately based on the number of hours worked. You must also make sure that your employees, the state government and the federal government receive their payments on time. Payroll mistakes can be incredibly costly for your business, so it is important to ensure that this task is in good hands.
  2. Unexpected expenses.
    Many small businesses operate with limited capital. When unexpected expenses arise, your business may not have enough money available to cover it. To avoid problems related to unexpected expenses, businesses should try to put away some money for emergencies. Small businesses should also have a contingency plan in place to cover any expenses they cannot afford, such as access to a line of credit.
  3. Cash flow problems.
    All business need reliable cash flow in order to continue operating properly. However, many small businesses suffer from cash flow problems that can make it difficult to maintain smooth operations. To avoid cash flow problems, small businesses should manage their cash flow carefully by minimizing expenses, invoicing customers immediately and being proactive about collections.
  4. Taxes.
    All businesses must pay taxes. Missing out on tax deductions and/or overestimating how much you owe can lead to over-payment, which harms your business’s profitability. On the other hand, taking deductions for which you don’t qualify and/or underestimating what you owe can lead to an underpayment of taxes, which may result in IRS penalties. Thus, making sure that you are paying no more and no less than you need to pay is essential. Unfortunately, tax law is complicated, so many small businesses struggle with this issue.
  5. Managing data.
    In order to ensure accurate payroll, taxes and business financial reports, businesses manage significant amounts of important data. For smaller businesses, this task can be daunting. Software exists to help your small business keep track of financial records, but you must still make sure that these records stay up-to-date and accurate.

Many of the accounting challenges faced by small businesses can be managed with the help of a third-party accounting provider. When you entrust your business’s accounting needs to a reliable company, you don’t have to worry about dealing with these challenges on your own. PADGETT BUSINESS SERVICES®
provides a wide variety of accounting services for small businesses, from payroll management to tax consulting.

Employee or Contractor? What is the Gig Economy and Why is it Blurring the Line?

When any individual is working for your company, you are faced with the task of classifying that person as an employee or an independent contractor. This classification has implications for both wages and taxes, so it is important to classify every individual correctly. However, thanks to the rise of the “gig economy,” it has become more difficult for businesses to accurately distinguish between employees and independent contractors.

What Is the Gig Economy?

The term “gig economy” refers to the trend of hiring workers to perform a specific, short-term job or “gig.” When workers are hired for gigs, they are usually able to maintain substantial control over the way they work, and most companies classify them as independent contractors. Classifying an individual as an independent contractor is advantageous for these companies, as this exempts them from needing to follow certain wage and hour laws. When you hire an independent contractor, you can also avoid withholding and paying payroll taxes in most cases.

Unfortunately, the distinction between independent contractors and employees can become blurred in many cases. For example, if a business begins working with a specific contractor exclusively and/or for a long period of time, the contractor starts to seem more like an employee.

Why Is Misclassification a Problem?

Employees are entitled to benefits that independent contractors don’t receive. For example, most employees are covered by minimum wage and overtime laws. Employees may also be entitled to other perks, such as health insurance and paid vacation, depending on the situation. Furthermore, a business is typically required to pay employment taxes for each employee based on the amount of wages he or she earns.

In cases where the lines become blurred, someone classified as an independent contractor may decide to file a claim against the company to recover employee benefits or additional wages. Tax consequences may also result.

Avoiding Misclassification in the Gig Economy

To avoid all of the issues that come with misclassifying workers, businesses need to be careful to classify each worker properly. In order to determine whether an individual is an employee or an independent contractor, businesses must consider three different factors: the nature of their relationship with the individual, financial aspects of the arrangement and the business’s level of control over the worker’s activities. For example, if the business has considerable control over how the worker does his or her job and how he or she receives payment, the individual may be classified as an employee.

In many cases, these relationships are not black and white, and making the right call can be difficult. To prevent errors, many businesses choose to consult professionals for assistance. PADGETT BUSINESS SERVICES® can help you determine whether your workers should be classified as independent contractors or employees. We can also assist with payroll, accounting and other important business tasks. 

Effective Ways to Keep Your Business Finances Well Organized

As a business owner, you need to manage your finances effectively in order to operate your business successfully and maximize profitability. In order to manage your finances well, you need to be organized. Below are some tips to help you keep your finances organized and easy to understand.

  1. Set aside a regular time to review your finances.
    One of the best ways to make sure that everything stays organized is to spend time reviewing your finances on a regular basis. Set aside some time each week or month to look over your finances carefully. If you notice discrepancies or disorganization, resolve these issues as soon as possible.
     
  2. Use technology to simplify organization.
    In the past, businesses were forced to manage all of their finances on pen and paper. Today, however, business owners have access to a wide range of software that helps them keep their finances organized with much less effort. This technology also increases accuracy by reducing the incidence of human error. Take advantage of these programs to improve organization of finances within your business.
     
  3. Keep business and personal finances separate.
    If you operate a small business, you always run the risk of mixing your business and personal finances. Not only can this practice make your finances more confusing, but it can also complicate things if you are subjected to a tax audit or a lawsuit. For this reason, it is best to keep your personal and business finances separate at all times. To keep these finances separated, consider opening a designated business bank account and/or obtaining a business credit card. Do not use your business bank accounts or credit cards for personal reasons under any circumstances.
     
  4. Make sure your records are always up-to-date.
    One of the quickest ways to become disorganized is to neglect data entry. If you aren’t updating your financial information as soon as it changes, it is easy to make mistakes and even lose certain records altogether. When you receive financial information, whether it be a customer payment, an invoice or some other record, enter it into the system immediately.
     
  5. Talk to a professional.
    Business owners are busy, and keeping finances organized can be a challenge. If you are having trouble in this area, help is available. A professional can help you organize your finances and keep them that way. If you don’t have the resources to handle this task in-house, you can also turn over management of your finances to a third party.

5 Accounting Challenges Startups Face and How to Fix Them

When you start a new business, establishing solid accounting practices is essential to your success. However, many startups face accounting challenges that make it more difficult for them to get off on the right foot. Here are five of the most significant accounting challenges your startup may face, along with tips for dealing with them.

  1. Maintaining a healthy cash flow.
    A steady cash flow ensures that you have what you need to hit the ground running. On the other hand, if the cash leaving your company exceeds the cash coming in, you are going to experience problems. New companies can avoid cash flow problems by staying on top of their finances, minimizing expenses and maximizing revenues. To minimize expenses, look for ways to reduce debt payments and/or lower the cost of inventory. To maximize revenues, invoice your customers as soon as possible and establish a clear, effective procedure for collecting accounts receivable.
     
  2. Keeping track of financial information.
    Startup businesses are overwhelmed with financial information related to their revolving debts, payroll, operating expenses, accounts receivable and more. Keeping track of this information allows the business to optimize cash flow, pay taxes on time, evaluate the success of the business, attract new investors and accomplish other important tasks. To deal with this accounting challenge, small businesses need to invest in software to help them keep track of important financial information. Alternatively, startups can also delegate these responsibilities to a third party accounting service.
     
  3. Bringing in enough capital.
    Another challenge commonly faced by startups involves acquiring enough capital. Many businesses accomplish this task by acquiring investors. However, with so many startups competing for investments, this can be a challenge. One of the best ways to bring in capital is to create a solid business plan and clear, concise financial records that you can show to potential investors with an interest in the company.
     
  4. Handling payroll.
    Most startups have employees, which means that payroll is an unavoidable task. Making sure that payroll is accurate is essential in order to avoid unexpected expenses, tax complications and other issues. However, establishing effective payroll procedures is often a challenge. When startups don’t have the ability to handle this task in-house, outsourcing payroll to a third party is the best way to avoid problems.
     
  5. Paying taxes.
    Nearly every business is required to file and pay taxes. Unfortunately, tax law is complicated, especially as it applies to businesses. Tax requirements vary based on many factors, including the business’s structure, income and more. For startups, this can be one of the most difficult challenges to overcome. Some startups are able to handle taxes on their own if they have people on staff who understand these laws and can make sure the business is always in full compliance. However, other businesses will need to outsource their tax needs in order to overcome this challenge.

How Small Businesses can Recover Debt and Improve Cash Flow

Small businesses rely on a solid flow of cash to keep their businesses operating efficiently and profitably. However, when you have un-recovered debts, your cash flow suffers. Below are some tips to help you recover unpaid debts and improve your cash flow.

  1. Contact people who haven’t paid their bills.
    The first step in collecting unpaid debts is to contact the individual or company who owes the money. Most companies begin this process by sending letters and/or calling the debtor directly. In many cases, people haven’t paid their bills simply because they forgot, so you may be able to collect a substantial amount of unpaid accounts simply by reminding your customers to pay.
  2. Send a letter of demand.
    If you have contacted a debtor several times without receiving payment, it is time to issue a letter of demand to encourage them to pay. This letter should include clear instructions for making payment, as well as a warning regarding your company’s next action if no payments are received. When consumers see that they can pay their bills with less trouble and less expense if the act quickly, they may be more willing to remit payment immediately.
  3. Taking the matter to court.
    If making contact with the debtor and sending a letter of demand does not result in payment, you can take the matter to court to force the individual to pay. In most cases, this process is relatively simple. When you file your claim, you can typically include the amount of the unpaid debt, along with court costs. If this process is successful, the court will be able to force the debtor to pay his or her debt.
  4. Getting help.
    Because handling debt collection in-house can be difficult, some small businesses decide to hire an agency to handle the bill collection process on their behalf. However, it is important to note that taking this approach will require additional expense. Be sure the amount of money you are able to collect through this agency will justify the amount you must pay for their services.
  5. Selling debts.
    If you don’t want to pursue aggressive collection actions in court, it is also possible to sell unpaid debts to a third party. In general, this option will allow you to collect only a portion of the debts you are owed. The third party will then attempt to collect as much from the debtors as possible, but you won’t be entitled to any further payment.

However you decide to pursue unpaid debts, the process can be time-consuming and resource-intensive. Many small businesses choose to utilize a combination of methods in order to maximize recover and minimize collection expense.

Common Cash Flow Issues and How to Avoid Them

A healthy cash flow is a necessity for any small business. Unfortunately, cash flow problems are all too common among businesses of all sizes. Avoiding the most common cash flow issues is one of the best ways to ensure that your business continues to operate successfully. Below are some of the most common cash flow problems you may encounter, as well as tips for avoiding them.

  1. Your cash flow isn’t being monitored properly.
    One of the most common mistakes businesses make is ignoring their cash flow altogether. In such cases, you may not become aware of a cash flow problem until it has already done significant damage to your bottom line. To avoid this mistake, spend some time mapping out your income and expenses so you can understand where your money comes from and where it goes. After you have an idea of your current cash flow, you can begin optimizing it. You should also continue to monitor your cash flow over time so you can resolve potential problems as early as possible.
  2. Inventory ties up too much of your money.
    It is important to have enough inventory in stock to fulfill all orders quickly. However, holding too much inventory for an extended period of time can compromise your cash flow. Analyze your sales cycles and current inventory carefully to determine if this is a problem for your business. If you find that you are holding too much inventory, make changes for the future to free up some capital.
  3. Expenses are too high.
    Perhaps the most obvious cause of cash flow problems is taking on too many expenses. When your expenses are too high, your cash flow suffers as a result. In some cases, exorbitant expenses can even cause you to lack the capital you need to continue operating your business without taking on debts. To avoid this problem, analyze each of your current expenses carefully to ensure that they are both necessary and as low as possible. For example, if you have expenses related to credit, look for ways to lower your interest rates and/or your monthly payments.
  4. You aren’t collecting from customers.
    Another obvious cause of cash flow problems is a lack of income from sales. If your business sends invoices, you need to do everything you can to make sure your customers are making their payments on time. Be sure that you send invoices immediately after a customer makes a purchase, and consider offering an incentive for customers who pay their bills early. If a customer doesn’t pay on time, take collection action as soon as possible to recover the debt.

When your business has a healthy cash flow, you have the freedom you need to make wise decisions and continue to grow. By avoiding the issues above, you can ensure that your business’ cash flow is as steady and reliable as possible.

Payroll Mistakes Your Business Must Avoid

If you have one or more employees, payroll is an essential component of your business operations. Mistakes in payroll can be expensive and inconvenient for your company, so it is important to ensure accuracy at all times. Here are some of the most common payroll mistakes businesses make and how you can avoid them.

  1. Failing to withhold the proper amount.
    As an employer, you are responsible for withholding the proper amount of state and federal taxes from your employees’ checks and submitting these funds to the appropriate taxing authority. if you fail to withhold the proper amount or turn it in on time, you may face expensive penalties and other consequences. One of the most common withholding errors involves misclassifying employees as independent contractors and failing to withhold any taxes. However, you may also make withholding errors because of inaccurate calculations, incorrect deductions or accidental exclusion of taxable benefits.
  2. Keeping inadequate records.
    Inaccurate or incomplete records lead to a wide variety of payroll problems, from inaccurate calculations of employees’ wages to late checks and overdue tax payments. For this reason, keeping detailed, accurate records is essential. Careful data entry and data management will help you to avoid mistakes related to problems with payroll records. Whether you entrust this task to your on-site staff or to a third-party provider, accuracy should always be a priority.
  3. Calculating wages inaccurately.
    Problems with wage calculation lead to over payment or underpayment of employees. If you overpay your employees, your company loses money that may be difficult or even impossible to recover. If you underpay your employees, you will deal with angry personnel and mountains of paperwork. Make sure your wages are calculated properly by ensuring that every individual is classified accurately as either an employee or independent contractor, streamlining data entry processes and using high quality software for all calculations.
  4. Not relying on the right professionals.
    Some businesses try to handle all of their payroll needs without any help. Unfortunately, if you don’t have staff members who are capable of handling these tasks accurately, this choice can lead to countless payroll problems. Likewise, if you decide to outsource your payroll needs but you choose a provider that isn’t reliable, you may find yourself facing fines, unhappy employees and even legal action. To avoid this common payroll mistake, make sure your company’s payroll is in the hands of staff members or third-party providers who understand all of the relevant laws and can calculate payroll and taxes accurately during every pay period.

Is Tax Reform Really Helping Small Businesses?

Those in favor of the new tax law argued that it would boost small businesses by giving them much-needed breaks on taxation. However, since the law has been passed, the idea that it would be truly helpful for small businesses has been up for debate. Although this reform certainly provides some benefits for smaller businesses, not all businesses will enjoy the same advantages under the new law.

What Does Tax Reform Do for Small Businesses?

One of the main changes for small businesses has to do with the way pass-through income is taxed. This new tax law allows certain small businesses to deduct as much as 20 percent of their qualifying income on their tax returns. However, not all businesses will meet the requirements for this deduction, and the actual amount that is deductible may vary based on several factors.

Another positive change for small businesses is the expansion of the Section 179 deduction. While this deduction once applied only to machinery and computers, it can now be used to deduct security devices, fire alarms, HVAC units, roofs and residential rental property. This can be helpful for small businesses that want to invest in any of these items while also saving money on their taxes.

Business vehicle depreciation has increased as well, making it more advantageous for many businesses to purchase vehicles instead of leasing them.

The new tax law also lowered corporate tax rates. However, most small business will not be able to take advantage of these lower tax rates.

Will it Help?

These changes to the tax law will be beneficial for many small businesses. However, the exact amount of benefit each business will receive is heavily dependent on the specifics of the business’s situation. In addition, because these laws are new and can be confusing, it is important for businesses to make sure their tax returns are completed by someone who understands the law in order to avoid penalties.

At this time, most of the provisions in the new tax law that are helpful for small businesses are set to expire in 2025.

Getting the Most out of Tax Reform

The latest tax bill has changed several important tax laws for small businesses. In order to make sure that you are getting the most possible benefit out of this reform while also complying with relevant laws is to find an experienced tax professional to help you prepare your return. It is also important to begin planning for next year’s taxes as soon as possible, as the changes to the law may affect the way you conduct your business now.

Pros and Cons of Outsourcing Your Small Business Payroll

If you own a small business and you employ one or more people, payroll is part of your responsibilities. Because handling your own payroll can be overwhelming if you don’t have the time or resources you need, you may decide to outsource this task to a third-party provider. Here are some of the pros and cons of outsourcing your small business payroll:

Pros of Outsourcing

Some of the advantages of outsourcing your payroll responsibilities include:

  • Improved accuracy – When you trust a reputable provider to handle your payroll, you may enjoy improved accuracy. Your payroll provider has the knowledge and expertise to make sure that all tasks are completed properly.
  • More time– When you don’t have to complete payroll on your own or assign this task to staff members, you and your team will have more time to focus on other more important tasks, which improves productivity.
  • Fewer resources used– If you try to handle your own payroll, you will expend resources as you print checks, create reports and perform other essential payroll functions. However, if you outsource these responsibilities, you won’t expend as many resources, which can save your company money.
  • Better regulatory compliance– Professional payroll providers are familiar with all of the regulations that apply to your small business. They can make sure you are in compliance with these regulations at all times so you won’t incur fines or deal with other problems.
  • Less hassle, greater peace of mind– Outsourcing provides you with more flexibility. For example, while you are away enjoying your vacation, the payroll is still being processed and employees paid in your absence.

Cons of Outsourcing

  • Extra expense– If you choose to outsource payroll responsibilities, you must pay a fee for this service to your provider. Although this fee varies, it does add to your overall costs. You may save some money on resources, such as paper and ink, but you may still experience a net loss.
  • Difficulty obtaining important information – When you outsource payroll, your payroll provider will have control over the information collected during the payroll process, such as important data related to your employees. If you need access to this data, you will have to request it from the payroll provider.
  • Risk of loss – In some cases, payroll providers suddenly go out of business. If this occurs, you may lose access to important information, as well as suffer other losses. You may also deal with payroll delays while you are looking for a new provider. You can avoid this problem by choosing a reputable provider with a long history of providing good quality services.

Why Hiring Recent Grads Makes Sense for Your Business

Recent college graduates often have a hard time finding jobs. In order to qualify for many positions, a graduate needs experience. However, they can’t gain this experience without first getting a job. Although it may seem like it is a risk to hire a recent graduate, bringing these individuals on staff can actually provide many benefits for your company. Some of the benefits of hiring a recent graduate include:

  1. They are fresh and ready to work.
    More experienced employees may have built knowledge and skills over the years, but they have also acquired baggage during this time. This baggage may have caused them to become burned out and lethargic, making them less willing to give their all to their jobs or put in long hours when necessary. Recent college graduates, on the other hand, are fresh out of school and ready to demonstrate their abilities. They have not had a chance to become discouraged or fatigued with their work.
  2. You have someone to handle less appealing tasks.
    Recent college graduates are eager to prove themselves. As a result, they are often willing to handle tasks that may not seem as appealing to older employees. A recent graduate is more likely to take on these responsibilities happily and give his or her full effort without complaining about the nature of the task or attempting to pass it off to someone else.
  3. A recent graduate may have new skills.
    The world of business is always changing. New skills, new knowledge and new technologies are continuously emerging. Unfortunately, employees who are already in the workforce may not be able to keep up with these new developments. However, a recent college graduate is much more likely to be informed about new developments and/or proficient with new technologies.
  4. Recent graduates are open-minded.
    Spending a long time working in the field can cause employees to become set in their ways. They are often resistant to learning new things or changing the way they handle their responsibilities, even if better methods become available. However, recent college graduates haven’t had a chance to become attached to current protocols or workflows. As a result, they tend to be much more open-minded and accepting of new ideas than employees who have been working in the field longer. They can also think more creatively, allowing them to be more effective during brain-storming sessions.

Don’t Forget These 4 Factors When Hiring Seasonal Employees This Summer

As the summer approaches, many businesses are preparing to hire seasonal workers to deal with the resulting increase in customers and orders. Before you begin the hiring process, take some time to consider each of the important issues below.

  1. Seasonal workers need to know that their position is temporary.
    One of the most common problems employers with seasonal workers face relates to workers’ understanding of their positions. If you don’t make it clear that seasonal workers are being hired on a temporary basis, you may find yourself dealing with an angry or belligerent employee when the season ends. Likewise, if the employee takes the job without knowing it is temporary and finds out a few weeks later, he or she may become less productive and/or quit altogether. To prevent these problems, make sure that every temporary employee you hire is aware of the end date of his or her position.
     
  2. Seasonal employees should still be vetted.
    When you are hiring an individual for a short time only, you may consider saving some money by reducing the amount of work you put into the hiring process. However, each seasonal employee you hire represents your business and will have an impact on its profitability. To ensure that you hire reliable employees that won’t put your company in jeopardy, take the time to vet each candidate thoroughly. Be sure to review applications carefully, conduct comprehensive interviews and perform background checks before you bring anyone new on staff.
     
  3. Seasonal workers are often considered “employees,” regardless of how long they remain on staff.
    Because seasonal workers are part of your company for only a limited time, it may be tempting to view them as non-employees. However, unless they meet the qualifications of independent contractors, these workers are still considered employees in the eyes of the law. Thus, you must provide them with certain benefits when required, such as workers’ compensation insurance, minimum wage, overtime pay and more.
     
  4. You must still withhold taxes.
    Like all other employees, seasonal workers are subject to tax withholding and reporting requirements. To avoid penalties and other problems, make sure you are in compliance with all of these regulations.

If you are hiring independent contractors instead of employees, you don’t usually need to withhold taxes unless special circumstances apply. However, you must report each contractor’s earnings to the Internal Revenue Service if they exceed $600.

The Best Ways to Reap the Benefits of Your Small Business Tax Refund

If you paid more taxes than you owed during the previous year, or if you qualify for certain credits, you may receive a small business tax refund after you file your tax return. Although it may be tempting to simply deposit your refund in the business bank account as a cushion, you can often use your refund more effectively in other ways. Here are some suggestions to help you decide how to use your small business tax refund to build your company this year.

  1. Invest in new technology.
    Technology is always changing and evolving. If your business is currently using outdated equipment or software, consider using your small business tax refund to upgrade your company’s technology for the sake of efficiency and accuracy. Conduct in-depth research before making any purchases so you can be sure you are investing in technologies that will improve your company’s operations.
     
  2. Boost the morale of your employees.
    Another way to use your tax refund appropriately involves using it to improve the lives and job satisfaction of your employees. Depending on the amount of your refund and your preferences, you may issue bonuses, or you may simply provide your employees with some form of reward, such as a catered lunch or a fun outing.
     
  3. Invest in marketing.
    Marketing is one of the best ways to improve your business’s productivity and profitability. If you have extra money in your coffers because of a large small business tax refund, consider investing it in marketing efforts, such as a new website, social media campaign or some other promotion. Do your best to select a marketing strategy that offers a solid return on investment so you can be sure you are getting the maximum benefit from your tax refund.
     
  4. Lower your future tax bills.
    If you think you may owe taxes during the following year, applying your refund to that year’s taxes may be the best way to use it. If you use your refund in this way, you won’t have to worry about paying as much next year. To estimate what your tax liability will be during the following year, you must be able to estimate your revenue and liabilities. You must also have an understanding of the current tax code. If you aren’t sure how much you may owe in taxes next year, consider consulting a tax professional.

Spring Cleaning: 4 Things Small Business Owners Can Do to Freshen Up This Spring

As winter disappears and the weather gets warmer, people everywhere are preparing for spring cleaning. Although spring cleaning may seem like a task for home, it can be beneficial to your business as well. Here are four things you can do to clean up your small business operations this spring.

  1. Optimize your cash flow.
    A healthy cash flow is essential to the success of any business. However, many small business owners possess only a limited amount of information about the money flowing into and out of their businesses on a daily basis. During the spring, take some time to analyze your cash flow carefully. Make sure that you have enough cash on hand to meet all of your financial obligations. If you notice any problems with your cash flow, make an effort to resolve them. For example, if you find that you are sending out more money than your budget can handle, consider analyzing each of your expenses and looking for ways to cut back.
  2. Streamline your bookkeeping.
    Keeping accurate books is important for businesses of any size. Not only do accurate books ensure that you aren’t missing any bills or failing to collect on all of your accounts payable, but it also simplifies the tax preparation process. Use spring cleaning as an opportunity to evaluate your accounting procedures and improve their efficiency. If you accounting procedures are lacking and you aren’t sure how to improve them, consider hiring a professional to assist you.
  3. Move to digital.
    Many businesses have already moved from paper bookkeeping to digital records. However, some businesses are still holding onto some of their paper documentation. If you are still using paper to keep records or bill clients, consider making the switch to digital this spring. Not only will the switch make your bookkeeping simpler and more accurate, but it will also reduce your business’ consumption of paper, which is better for the environment. In addition, many consumers find digital invoicing and payment more convenient than paper-based methods. PADGETT offers a simple-to-use record keeping software called PADGETT Connect that can help streamline your record keeping activity.
  4. Do some real cleaning.
    If your office isn’t well organized, your business won’t be as productive or as profitable as it could be. This spring, spend some time cleaning your workspaces, filing cabinets and all other parts of your office. This is also an excellent time to cut down on clutter around the office so you and your employees can be less distracted and more focused on important tasks throughout the workday.

5 Ways to Keep Your Cash Flow on Track in During Tax Season

Tax season is one of the most difficult times of year for any business. If you are going to owe additional tax on the income you earned during the previous year, this season becomes even more stressful. To ensure that you have the money on hand to pay your tax bill, keeping your tax flow on track during this time of year is essential. Here are five ways you can keep your cash flow healthy during tax season.

  1. Give incentives to customers who pay quickly.
    One of the best ways to boost your business’ cash flow is to collect payments from customers promptly. To encourage customers to pay their bills quickly, reward them for early payment. For example, you may provide a small discount to customers who pay up front or submit payment by a certain date after receiving an invoice.
  2. Send invoices right away.
    Most customers won’t pay what they owe until they receive an invoice from your company. To ensure that customers pay as soon as possible, send all invoices immediately after the sale. Make sure you ask customers to update their contact information regularly so you can be sure you are sending the invoice to the right place.
  3. Don’t pay your bills until the due date.
    When you are trying to maintain a healthy cash flow, you want to keep your business’ money in your possession for as long as possible. For this reason, you should avoid paying your own bills early. Instead, don’t make payments on these accounts until shortly before the due date.
  4. Collect overdue accounts.
    Most of your customers will pay their bills on time. However, some may fail to pay what they owe before the due date. Although you may be hesitant to pursue collection action against these customers, ensuring that all of your customers make their payments is essential to maintaining good cash flow during tax season. Be proactive about calling customers with overdue bills and/or sending them notices. In many cases, a customer has simply forgotten about his or her bill and a quick reminder is all it will take. For customers who continue to avoid making a payment, more aggressive collection action may be necessary.
  5. Don’t make unnecessary purchases.
    During tax season, you should avoid making any unnecessary purchases that could damage your cash flow and make it difficult for you to pay your tax bill. Before making any purchase, consider the effects on your finances, as well as whether you could put the purchase off for another time.

Top 4 Factors to Consider When Avoiding Scams This Tax Seasong Scams This Tax Season

Tax season is upon us again, and scams are always a concern. If you fall victim to a tax scam, you may find yourself losing money or even putting your identity at risk. To avoid tax scams, consider these four factors.

  1. IRS representatives identify themselves.
    Some scammers may come to your home or business and try to pose as IRS representatives. However, if an individual is actually a representative of the IRS, he or she will offer two different forms of credentials: an HSPD-12 card and a pocket commission. If someone says he or she is an IRS representative but cannot supply these credentials, you should suspect a scam. Until you have verified that the individual actually works for the IRS, do not give him or her any sensitive information, and don’t make any payments.
     
  2. The IRS will not call you to demand immediate payment.
    One of the most common scams involves calling taxpayers directly and trying to strong-arm them into making a “tax” payment over the phone. However, the IRS does not operate in this way. If you owe unpaid taxes, the IRS will send you a written bill first. They will not call you and ask for credit card payments, debit card payments or wire transfers. Always wait until you have seen a written tax bill before making any tax payments.
     
  3. The IRS won’t threaten you.
    Another common tactic used by scammers involves trying to get the taxpayer to make a payment using threats. The scammer may threaten to revoke the individual’s immigration status, take his or her driver’s license or even have the individual arrested. However, the IRS will not make these threats. If someone has called you or come to your home to threaten you, you are probably the victim of a scam.
     
  4. You always have the right to an appeal.
    Many taxpayers fall victim to scams because the scammer makes them believe they must pay an outstanding balance immediately to avoid serious consequences. However, when dealing with the IRS, you always have the right to appeal your tax bill before you are required to pay it. When someone tells you that you need to make a payment immediately, you should always view it as a red flag.

During tax season, scammers prey on taxpayers by trying to incite fear and force them to make payments they don’t owe or provide information they shouldn’t give. However, when you know your rights and you know how to identify a true representative of the IRS, you won’t fall victim to these scams.

How Will the Tax Cuts and Job Act Affect Small Business Owners?

As a small business owner, taxes are always a concern. With the recent passage of the Tax Cuts and Jobs Act, many small business owners are wondering how their tax benefits and liabilities will change during 2018 and the years that follow. Below are some of the ways in which this bill could impact your small business.

  1. Payroll withholding requirements will change.
    If your small business has employees, you may need to change the amount of money you withhold from your employees’ checks for tax purposes. The new tax bill eliminated personal exemptions and doubled the standard deduction, which changed withholding recommendations. Because the change takes effect in 2018, it is important to ask your employees to complete new copies of Form W-4 as soon as possible.
     
  2. You may not need to itemize your deductions anymore.
    Prior to the new tax bill, many small business owners itemized their deductions in order to reduce their tax liability. After this bill, however, the standard deduction will double. For many business owners, this means that itemizing will no longer be beneficial. For small business owners who still want to itemize, some deductions will be different or no longer available.
     
  3. Tax rates have changed.
    Depending on the type of business you operate, your tax rate may change in 2018 and beyond. For example, if you own a C corporation, your tax rate will drop considerably. However, if your business is structured as a sole proprietorship, S corporation or LLC, this change won’t apply to you. Even so, individual tax rates have changed too, so you may still see some changes to your tax liability because of the bill.
     
  4. You may be able to deduct some of your business income.
    If you receive income through a pass-through entity, such as a sole proprietorship, S corporation or LLC, you may be eligible for a new deduction because of the Tax Cuts and Jobs Act. The bill creates a deduction that allows business owners to deduct 20 percent of their business income, which means your tax liability may be reduced.
     
  5. Bonus depreciation will change.
    Bonus depreciation allows business owners to deduct a sizable portion of a new asset’s cost in the year it was purchased. Before this tax reform was passed, bonus depreciation was capped at 50 percent. However, the new tax law will allow business owners to deduct 100 percent. This limit increase will remain in place through 2022.

These are just a few of the changes small business owners will notice because of the Tax Cuts and Jobs Act.

The Burden of Payroll Processing

Payroll processing can be difficult. There are a lot of nuts and bolts to this process that can overwhelm small to mid-sized businesses. People who see it as just a matter of ‘getting folks paid’ probably don’t have a lot of experience with this type of financial administration.

I Want My Paycheck!

The burden of payroll processing starts with the basics. Every week, or pay period, employees expect to be paid.  The proper Social Security numbers need to match with each name, accurate compensation calculated and with holdings applied.

There is a significant amount of labor that needs to take place to make this happen consistently. Even for companies with just a few employees, it’s easy for payroll accounting to become one of the biggest responsibilities on the owner or payroll administrator’s plate – and it’s time-sensitive, too, which means it can be one of those key tasks pushed into holidays and weekends.

The Only Thing Certain is Change

Then you have all sorts of changes, such as recent changes in with holdings because of tax code revisions. Withholding is tricky enough without tax rates being changed — now a payroll administrator has to go in and verify new withholding rates, which can take hours and get incredibly difficult.

Other Extras

Benefits and payroll processing have to deal with straight time and overtime, vacation time and sick time, PTO and accrued leave. All of these elements have to be fit together in a good way. It’s enough to make anyone’s hair stand on end.  That’s why many business owners have decided to outsource their payroll processing to a payroll service provider.  

Try Padgett Payroll for a better and easier way to handle your payroll needs. You will be outsourcing this important work to a company with an excellent track record in customer service and reliability. Utilizing a third party to do your payroll can be a great way to free up your own resources to focus on your core business and work smarter and better every day.


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