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Direct Deposit Has Many Benefits for Employers and Employees Alike

Direct deposit of employee payroll into workers’ bank accounts in lieu of issuing paper checks has advantages for both payers and payees. So great are the benefits of direct deposit that some employers no longer even offer their employees the option of receiving a paper check at all. Although some states’ labor laws don’t permit that kind of employer mandate of direct deposit, it’s such an overwhelmingly popular choice that about three-quarters of American workers opt for it anyway.

Surveys show that many, if not most, employees who don’t use direct deposit don’t have any objection to it – it’s simply not offered to them. They work for firms, often small businesses, that still haven’t recognized the savings in time, money, paper and even fuel that come with implementing a direct deposit program.

From an employer perspective, the benefits of direct deposit are fairly tangible:

  • Savings of paper, ink and printing costs
  • No outstanding checks to reconcile (and thus reduced accounting labor costs)
  • Savings of processing and handling costs, estimated to be roughly $3 per paper paycheck
  • Savings of time spent by employees taking breaks or longer lunchtimes to deposit or cash paychecks

NACHA, the national electronic payments association that administers the ACH Network through which money is moving electronically, estimates that even a business employing fewer than 100 people could save up to $19,000 per year by switching from paper checks to direct deposit. Statistically, small businesses are the least likely to be currently offering direct deposit, so the untapped potential for small business as a whole to realize savings – or for an individual small business to gain a competitive edge on its rivals – is great.

Selling employees on the idea of direct deposit shouldn’t be difficult, because in many ways the benefits to the employee are even greater than those to the employer:

  • There’s no physical check to lose or to be accidentally damaged or stolen.
  • Banks often waive fees for accounts that receive one or two direct deposits each month.
  • No trip to the bank is necessary.
  • Access to cash is immediate – often payroll is transferred early in the morning or immediately after midnight on payday. Combine that with the wide availability of online bill payment, and employees may be able to have their banking and personal finances taken care of before they even leave the house!
  • Many companies deposit payroll one or even two days early when payday falls on a major holiday.
  • Most direct deposit allows a paycheck to automatically be split among two or more checking and savings accounts.

For employees who like to have some paper record of their payroll deposit, a company can still issue paper pay stubs or vouchers with all pay information including current deductions and year-to-date totals listed. Or, to keep payroll management as paperless as possible, these stubs or vouchers can be issued to employees by e-mail.

Padgett Payroll Services can administer your small business’s complete payroll program, including direct deposit services for you and your employees at no extra cost. Call us today at (706) 548-1040 for a consultation to find out more about why Padgett should be your payroll processor.

Small Business Payroll Service & Payroll Administration

Payroll Manager / Payroll Specialist – Payroll Administration.

Contract Payroll Outsourcing And More…

Padgett is first in payroll services for small businesses, and we are here to help if you are tired of playing the role of payroll manager. If that’s you, our knowledgeable contract payroll specialists can come to your assistance. You need an expert in outsourced payroll administration who can handle all of your payroll outsourcing and employee payroll needs while freeing you up to concentrate on nurturing your business, and Padgett Payroll Services® knows exactly what to do. Improve your payroll management dramatically with the help of Padgett’s skilled payroll processors. With affordable rates and state-of-the-art technology, our skilled and personable accounts team are waiting for your call. Padgett’s payroll specialists provide only the finest in small business payroll services.

If you are looking to upgrade your present payroll administration practices, Padgett can help you by carrying out the following:

  • Contract payroll outsourcing
  • Employee payroll
  • Direct deposit
  • Workers’ compensation
  • Payroll tax filing
  • Online payroll entry
  • IRS form 941 filing

Businesses are starting to outsource their payroll management needs, and many call upon the payroll managers at Padgett Payroll Services®. Our professional payroll processors can begin streamlining and improving the payroll aspects of any small business.

When you need a qualified payroll manager to provide reliable payroll services on a consistently dependable basis, Padgett’s contract payroll services can provide a solution for countless small business owners just like you. Our payroll administration experts are leaders in employee payroll outsourcing, and we look forward to meeting and discussing our numerous finance solutions with you.

Padgett Payroll Services® are eager to introduce you to our successful line of payroll services, and to the many advantages of employing an experienced online payroll manager for your small business. Our trained specialists are available from coast-to-coast, and we have established long-term relationships with clients who have come to depend on our qualified payroll administration services.

The Small Business Guide to Hiring the Best Employees

Small businesses rely on their employees to help them become successful and maintain productivity overtime. Because small businesses are able to support only a limited number of employees, hiring the right people is essential. Below are some tips to help you optimize your hiring process and ensure that you are getting the best employees possible.

  1. Understand what makes a good employee.
    Before you begin interviewing potential employees, you need to know which qualities to look for. Make a list of the characteristics you want your employees to possess and keep this list at the front of your mind as you consider each job candidate. Before hiring anyone, make sure he or she possesses all of these characteristics and will fit well within the existing culture of your company.
  2. Develop a streamlined hiring process.
    To ensure that all job candidates are screened fairly and thoroughly, develop a streamlined hiring process that will apply to every applicant. This process should include a review of the initial application, scheduling of phone and/or in-person interviews, contacting of references and the final hiring decisions. Follow this process to the letter any time you are looking for a new employee.
  3. Cast a wide net.
    One of the most important things you can do to ensure that you are hiring the best employees is to spread the word about any job openings your company is offering. Be sure to advertise your job postings through as many channels as possible, including social media, online job search websites, the newspaper, postings in your office and by word-of-mouth.
  4. Offer a competitive benefits package.
    As a small business, it can be difficult to afford employee benefits. However, you should budget for a good benefits package in order to attract the best job candidates. The best candidates are more likely to apply for a position with your company if you offer appealing benefits like paid vacation, health insurance, life insurance and other perks.
  5. Review each candidate carefully.
    When you are searching for new employees, it can be tempting to simply hire the first candidate you encounter who meets your basic qualifications. However, this is not the most effective way to ensure you are hiring the best people. Instead, you should open the application period for a specific amount of time and then review each applicant carefully before proceeding to the next phase of the hiring process.

Hiring the right employees is essential for the health of your small business. By following these tips, you can ensure that you are attracting the best people to your company.

How to Prepare for the Impact on Your Small Business From the Tax-free Weekend

Many states offer shoppers a tax-free holiday as an incentive once each year. In Massachusetts, the tax-free weekend for 2019 will be August 10-11. Although these weekends encourage more retail activity, they can also create headaches for businesses. Below are some tips to help you prepare for the impact of this upcoming weekend.

  • Understand how sales tax holidays work.
    A sales tax holiday is designed to allow consumers to purchase certain items for a lower price by waiving the associated tax. In most cases, these holidays will be scheduled around the same time as sales on clothing, school supplies and other seasonal necessities. While many items will be exempt from tax during these holidays, some items will not. For this reason, it is important to review state laws carefully. For example, in Massachusetts, meals, motor vehicles, tobacco products and items costing more than $2,500 are not exempt from sales tax during the holiday.

    Keep in mind that Massachusetts requires you to participate in this holiday if you are a retailer selling qualifying items. You cannot use this holiday to make extra money by collecting tax anyway. Any tax you collect accidentally must be turned into the Department of Revenue.
  • Consider local taxes.
    Some local governments impose additional sales tax. If your sales are typically subject to additional tax, check with the local government to determine whether you should continue to collect these taxes on the state sales tax holiday. If you learn that you must continue to collect local tax on purchases made during the holiday, make sure your buyers are aware of this issue upfront.
  • Keep records.
    Even though you won’t be collecting state sales tax, you must still keep records of the tax-exempt sales you make during the holiday. You must include these records on the sales tax report you submit to the state. For each tax-exempt item you sell, be sure to record the amount of the sale and the amount of tax that would have been collected if the item had not been tax-exempt.
  • Consider your online sales.
    If you sell items online that qualify for the sales tax holiday, you may still be able to exempt them from sales tax. Be sure to let your online buyers know whether or not their purchases are exempt from tax during this time.

Collecting and remitting sales tax is one of a business’s more complicated functions, but the issue becomes even more complex during a sales tax holiday.

Why Cash Flow Analysis Is Important for Small Businesses

As a small business, you rely on a healthy cash flow to give you the resources to continue operating your company successfully. For this reason, you need to manage your cash flow carefully, which typically involves regular cash flow analysis. Below is some information to help you understand cash flow analysis and incorporate it into the management of your business.

What Is Cash Flow Analysis?

The term “cash flow” refers to the movement of cash in and out of your company. Analyzing cash flow is essential for a number of different reasons, regardless of the size of the business.

Cash flow analysis is the process of evaluating the flow of cash in and out of your company to and from all sources. The goal of cash flow analysis is to help business owners understand where their money comes from and where it goes so they can optimize cash flow and maximize profitability.

Why Is Cash Flow Analysis Important?

Engaging in ongoing cash flow analysis is important because it helps you to identify any problems with your incoming or outgoing cash. For example, if you have revenue streams that are not producing as much money as they should, cash flow analysis will shine a light on them so you can make changes. Likewise, if you have outgoing cash flow that is higher than it should be, cash flow analysis will help you identify the best ways to save money.

Effective Cash Flow Analysis

To perform cash flow analysis effectively, you need to examine every component of the business that affects cash flow, including your accounts payable, accounts receivable, inventory and credit. In order to analyze cash flow accurately, you must also keep accurate records of all of your company’s revenue and expenses.

Keep in mind that cash flow analysis is only part of the process of optimizing cash flow. When you find problems or weaknesses in cash flow, you must also be ready to make the proper changes.

Getting Professional Help

As a small business owner, you already have many responsibilities. Adding cash flow analysis to this list can be difficult or even impossible, causing you to neglect this important task. If you are not able to manage regular cash flow analysis in-house, however, you can outsource this responsibility to an accounting professional. An accounting professional can also help you with other aspects of your business, such as payroll, taxes and other important financial issues.

7 Effective Ways to Managing Remote Employees

Allowing your employees to work remotely helps to conserve company resources, improve efficiency and open up a much wider hiring pool. However, working with remote employees also comes with challenges. Below are seven tips to help you manage your remote employees effectively.

  1. Engage with them on a regular basis.
    Remote employees may not be able to meet with you in person regularly, but that doesn’t mean you can’t maintain open lines of communication with them. Use technology, such as video chat and instant messaging, to remain in contact with your employees on a daily basis.
  2. Develop a solid on-boarding process.
    When bringing a new remote employee onto your team, help the employee to adjust to your company’s culture and values through onboarding. The onboarding process also gives you the opportunity to make sure employees understand their responsibilities.
  3. Be inclusive.
    It is tempting to think of remote workers as secondary to other employees, or to view them in an impersonal manner. Help your remote employees to feel more like a part of your company by including them in virtual meetings with non-remote employees and encouraging them to build relationships with one another.
  4. Make sure they have the tools they need.
    Remote employees need certain tools to perform their duties successfully. It is up to you as the employer to make sure your remote employees have the information and guidance they need to complete all of their tasks. It is also important to ensure that remote employees have easy access to someone who can answer any questions or address any problems they may have as they work.
  5. Be clear about deadlines and expectations.
    When working with remote employees, it is especially important that you be clear about performance expectations and deadlines for completing projects. Because you won’t be able to walk by their desks and remind them to complete specific tasks, send reminders in the form of emails or other electronic notifications.
  6. Be respectful.
    When dealing with any employee, most employers know that it is important to be respectful. However, disrespect is easier with remote employees because you aren’t speaking with them face-to-face. Make sure that all of your communications with remote employees are respectful, and be aware of miscommunications that may occur when using technology to talk. If you feel that a miscommunication has occurred, clear it up as soon as possible.
  7. Invite feedback.
    Remote employees have a unique view of your company and its operations, especially with regard to employee management. Invite remote employees to provide feedback, and use this feedback to make changes as needed.

If you have remote employees, keeping them productive and happy is essential to the success of your business. These tips will help you to improve your remote employee management style.

The Best Annual Budget Template for Small Businesses

When you are operating a small business, having an accurate annual budget is essential. Your budget lets you know how much money you expect to bring in and what expenses you need to pay so you can make the best decisions for your company’s future. However, not all budgets are equally effective. For small businesses, the best way to create an accurate budget is often through the use of a template.

What Is a Budget Template?

A template is a pattern that tells you how to create your budget. Most budget templates include different categories you can fill in based on your business’s specific needs, goals and circumstances. Different budget templates may be available for your use. However, the best annual budget templates for small businesses usually include the following entries:

  • Different sources of revenue – Any accurate small business budget will incorporate all of the different sources of revenue your business maintains. Each source of revenue should be listed separately, along with the estimated amount you can expect to receive from that source during the year.
  • Various expenses – Your small business budget should also include all of the expenses you expect to pay during the year. Like your sources of revenue, expenses should be listed separately so you can see exactly where your money is going. Examples of expenses you may include are payroll, office supplies, rent, utilities, inventory purchases, professional services, transportation and marketing.
  • Important bottom-line calculations – After inputting all of your revenue and expenses, you can also calculate important amounts that help you understand your current financial position and make decisions for the future. Examples include total revenue, operating revenue, non-operating revenue, total expenses and profit. It may also be beneficial to break your annual budget down by month, so you have a better picture of what to expect throughout the year.

Developing a Budget Template

When developing a budget for your small business, you can either choose an existing budget template and customize it, or you can create your own annual budget template that you will use year after year. Although many of these templates are similar, it is important to compare your options carefully to find a template that works well for your needs. Most templates will need to be altered based on your business’s specific streams of revenue, expenses and long-term financial goals.

Creating and managing your own budget can be overwhelming, especially if you don’t have much experience in this area. If you are uncomfortable creating your own budget, or if you simply don’t have the time or the resources to manage your company’s budget in-house, it may be in your best interest to outsource budgeting and other important accounting tasks.

How to Keep Up Company Morale in Small Businesses

Company morale can have a significant impact on productivity. For this reason, it is important to keep employee attitudes as productive and optimistic as possible. Below are some tips to help you maximize company morale in your small business.

1. Monitor employee morale.

Before you can improve or maintain good employee morale, you need to know where you stand. Monitor employee morale by issuing surveys, talking to employees and/or paying attention to the atmosphere in the workplace on the average day.

2. Celebrate employee accomplishments.

When your employees exceed your expectations, reward them in a creative and memorable way. In general, it is more meaningful to speak to employees about their accomplishments in person than to send emails or other less personal forms of communication. 

3. Encourage employees to invest themselves in the success of the company. 

If your employees feel like they have a stake in the success of your company, they are more likely to feel satisfied when coming to work. Employee morale is always higher when employees have a sense of purpose and importance.

4. Offer a competitive benefits package.

Offering benefits aside from salary to your employees is an excellent way to set your company apart from other options, as well as to keep your employees happy. Examples of benefits you may offer include health insurance, life insurance, sick days and retirement packages.

5. Allow employees to have scheduling input.

Employees will be in a better mood at work if they have some input in the scheduling process. Allowing employees to make requests with regard to their schedules ensures that they are able to meet obligations and/or participate in activities outside of work, which improves morale.

6. Grant time off.

Employees need time off to relax and pursue their own passions. Granting your employees an ample amount of time off will ensure that they are able to maintain a good work-life balance, which will in turn boost their satisfaction with their jobs.

7. Take time for team building.

One of the most important factors in determining employee morale is the relationship employees have with one another. Spending time engaging in team building exercises gives employees an opportunity to get to know one another and build strong, positive connections. Keep in mind that team building isn’t important only when launching your company or welcoming a new staff member. Your company should be planning team building exercises on a regular basis.

8. Consider employee feedback.

Employee feedback gives you valuable information that you can use to improve the overall functioning of your company and boost employee morale. Give employees a chance to provide feedback on a regular basis, and review all feedback you receive carefully.

These are just a few of the ways you can keep your employees happy and productive at work. 

How to Keep a Rolling 120-day Cash Flow Forecast

If you want to keep your business as profitable as possible, you need to be able to predict the inflow and outflow of cash. One of the best ways to manage cash flow is with a rolling 120-day cash flow forecast.

What Is a Rolling 120-Day Cash Flow Forecast?

A rolling 120-day cash flow forecast is a cash flow management tool that includes cash flow predictions for the next four months. This forecast is called “rolling” because it always projects four months into the future. Keep in mind that this cash flow forecast will not be the same as your profit and loss prediction.

Creating a 120-Day Cash Flow Forecast

To create a 120-day cash flow forecast, you will need the prior 12 months’ profit and loss data, which is typically stored in your company’s accounting software. You will use this information to predict future cash flow for the next four months.

Initially, you will have a forecast that predicts only cash flow, as opposed to profit. However, you will then make some adjustments to the forecast that will make it more useful.

  1. Using your profit and loss statements, review the forecast and look for recurring cash payments. Make sure that all of the recurring cash payments you have seen in the past are included in the forecast.
  2. Add in any non-recurring cash payments or other income you are expecting during the next 120 days. If you are not sure about the exact amount of these payments, it is okay to estimate.
  3. Look through cash expenditures and make sure all of your usual expenses are included. Add in any expenses that did not appear on your previous profit and loss statements but are expected in the future.
  4. When making estimates of income or expenditures, remember to take seasonality into account.

Updating the Forecast

Once you have made these adjustments, you will have a reasonable estimate of the cash flow you can expect over the next four months. After creating your first rolling 120-day cash flow forecast, you will need to update the forecast on a monthly basis. To update the forecast, begin by reviewing your actual income and expenses for the previous month to evaluate the difference between your predictions and what actually happened. Use these differences to inform the methods you use to make forecast for future months. In time, your forecasts will become more and more accurate.

Creating and maintaining a rolling 120-day cash flow forecast is only one of many ways you can evaluate and manage cash flow. Because cash flow management and other accounting tasks can be complicated, it is often in your best interest to outsource these responsibilities to a third-party provider. 

How to Maintain an Affordable Expense Reimbursement Policy

Employees often incur extra expenses when performing their required duties, most often when they travel for business purposes. In many cases, employers reimburse these expenses, since they are part of the employee’s job. However, expense reimbursement can become expensive, especially if employees are tempted to take advantage of the opportunity to spend money. Below are some tips to help you create and maintain a fair and affordable expense reimbursement policy for your company.

  1. Make your policy as detailed as possible.
    When developing your expense reimbursement policy, include as many details in the policy as possible. The more details you include, the easier it will be for your employees to understand the policy. A more detailed policy will also help you to avoid loopholes and disputes.
  2. Restrict the number of days in employee trips.
    One way to reduce the amount of expenses you pay for employees is to put limits on the number of days you will cover in an employee trip. For example, some employees may be tempted to remain on a trip longer than required in order to get some time away from the office. Make it clear that the company will not cover these expenses.
  3. Negotiate special rates if possible.
    You may be able to reduce employee reimbursement expenses even further by negotiating special business rates with specific hotel chains in destinations your employees frequent. Negotiate these rates if possible and then require employees to stay in these hotels whenever possible.
  4. Put a cap on per diem spending.
    Most employers cover the cost of employees’ food and other expenses incurred in addition to lodging. However, it is common for employees to take advantage of this benefit by choosing the most expensive restaurants, ordering more drinks than usual or otherwise finding ways to spend extra money. Putting a cap on per diem spending ensures that employees’ extra expenses won’t exceed an appropriate amount.
  5. Hold employees to the policy.
    After you have created an employee expense reimbursement policy, make sure you hold your employees to the terms of the policy at all times. Making occasional exceptions to the policy will not only raise the total cost of your expense reimbursement efforts, but it will also create a cycle in which other employees expect the same treatment and/or become resentful of the employee receiving special treatment.

Employee expense reimbursement is necessary for most companies that ask employees to work outside the office. Having a clear, well implemented employee expense reimbursement policy in place minimizes the expenses associated with reimbursement while also ensuring that all employees are treated fairly.

How to Stretch Your Tax Refund Dollars

As a small business owner, it is not uncommon to receive a tax refund. Whether you were expecting to receive this money or not, it is important to put it to good use. Below are some tips to help you get the most benefit from your tax refund.

  1. Pay down business debts.
    Most businesses must take out loans or other forms of credit in order to operate, especially when they are getting started. If your business has unpaid debt, you can use your tax refund to pay some of your debt and save your business money in interest. Paying down debt can also eliminate payments from your monthly budget, freeing up your funds for other purposes. If you have more than one debt outstanding, be sure to pay off the one with the highest interest rate first to maximize your savings.
  2. Invest in your business.
    If you have been planning on launching a new product line or offering a new service, consider investing your tax refund in these efforts. If done properly, investing your tax refund in your business can increase your profits, effectively multiplying the money you received from the government.
  3. Put money toward marketing.
    Another excellent way to make your tax refund dollars go further is to invest them in marketing. An effective marketing campaign will help your business draw in more customers, which increases your overall profitability.
  4. Put your money in savings.
    If you don’t have a specific idea of what to do with your tax refund, it may be in your best interest to put it into a savings or other investment account where it can earn a profit. Having the money in savings also provides you with a safety net that you can use if you need extra cash in the future. Otherwise, you would be forced to apply for credit, which requires you to pay interest.
  5. Provide better employee benefits.
    Another way to stretch your refund dollars and maximize your benefits is to invest it in a better benefits program for your employees. Not only will this improve the morale of your current employees, but it will also give you a better package to present to potential hires if you decide to expand your staff.

Figuring out what to do with your tax refund dollars can be a challenge. If you aren’t sure what you should do with your money, or if you have other questions about your taxes, it is best to consult an accounting professional. PADGETT BUSINESS SERVICES® can help you with all of your accounting, tax and financial planning needs.

Tips for Getting Your Small Business Accounting Practices in Order

Regardless of the size of your business, having efficient accounting practices in place is essential to your success. Without the right accounting processes, you won’t be as profitable as you could be, and you may even find yourself subject to penalties. When you have a small business, establishing appropriate accounting practices can seem like a daunting task. Below are some tips to help you get started.

1. Distinguish between business and personal expenses.

Small business owners are often tempted to mix personal and business expenses for the sake of convenience. However, this can lead to problems with accounting. To simplify accounting, always keep your personal expenses separate from your business expenses. The best way to do this is to open a separate bank account and use separate credit cards for all business-related transactions.

2. Keep detailed records.

Without detailed records of every business-related transaction, accounting becomes much more difficult. Remember to keep a record of every sale, as well as receipts for every business expense you incur. You should also keep careful records of deposits, as well as your inventory. All of this information will be invaluable to your accountant, whether you employ accounting staff in-house or outsource your needs to a third-party company.

3. Establish a bookkeeping system.

In order to keep track of all of the detailed records you collect, you need an effective bookkeeping system. You can set up your own bookkeeping system in-house with the help of computer software programs, or you can hire a professional bookkeeper to handle these tasks for you.

4. Establish a payroll system.

If you have employees and/or you work with independent contractors, you will be issuing payments on a regular basis. To ensure that these payments are accurate, timely and in compliance with all applicable laws, you need to establish a payroll system to handle them. As with bookkeeping, you can establish this system on your own or you can outsource it to a third party.

5. Get professional help if necessary.

Some small businesses are able to handle all of their accounting needs on their own. However, if you don’t have staff trained to deal with accounting processes, or if your staff members simply don’t have enough time to add accounting to their to-do list, it is best to rely on a professional. Accounting is one of the most important aspects of your business’ operations, so you need to be sure that it is being handled properly. Although you will need to pay for professional help with accounting, many small businesses find that outsourcing their accounting requirements can save them money in the long run.

5 Ways to Manage & Increase Small Business Cash Flow

Small businesses need a healthy flow of cash in order to operate effectively and maximize their profitability. However, for many small businesses, maintaining a reliable cash flow can be a challenge. Below are five ways your small business can manage and/or increase its cash flow.

  1. Offer incentives for faster payments.
    One of your business’ primary sources of cash flow is payments from customers for products or services. When customers don’t pay on time, your business loses resources it needs to operate. One way to ensure that customers pay you quickly is to offer a reward to those who remit payment faster. For example, you may offer a discount on the cost of products and services or a coupon toward a future purchase.
    To further discourage customers from taking too long to pay, you can also consider imposing a penalty on those customers who fail to pay before their due date.
  2. Collect old debts.
    Many businesses have aging accounts receivable that have a significant impact on their cash flow. Although collecting old debts can be a challenge, successful collection improves your business’ ability to operate. If you don’t have the resources to engage in collection activities on your own, consider contracting with a collection agency to recover as much of these debts as you can.
  3. Deposit cash in accounts that earn interest.
    When you have cash on hand, you should do everything you can to maximize its value to your business. Instead of simply holding onto your cash or placing it in a basic bank account, consider placing your cash into an account that earns significant interest. Keep in mind that those accounts earning the most interest often limit the number of withdrawals you can make. For the best results, keep the bulk of your cash in a high-interest account, such as a money market account, and put the cash you need for operations into an interest-earning checking account.
  4. Replace aging equipment.When you have equipment that is inefficient or even obsolete, your efficiency suffers. Not only does this equipment take up space and slow down operations, but it may also require expensive maintenance or repairs to remain operational. Replace your aging equipment by either purchasing or leasing newer models in order to improve cash flow.
  5. Evaluate your pricing structures on a regular basis.
    When your prices are too high, customers are less likely to make a purchase. On the other hand, when prices are too low, you aren’t earning as much of a profit as you could. Evaluate your pricing structures on a regular basis to make sure you are getting the most possible benefit out of every sale.

Improving cash flow will help your business to be as efficient and profitable as possible.

What Can You Deduct on Your Small Business Taxes?

If you own a small business, you may be wondering how you can reduce your taxable income and save some money at tax time. Below are some of the best deductions currently available to small businesses.

  1. New equipment purchases.
    If your small business invested in new equipment, you may be entitled to a tax deduction. With most equipment purchases, you will have the option of either deducting the full cost of the equipment all at once or depreciating it over several tax years.
  2. Office supplies.
    Most small businesses will purchase a variety of office supplies throughout the year, from printer ink to paper towels. To reduce your tax liability, be sure to keep all of the receipts and deduct the total cost of your office supplies from your taxable income.
  3. Social Security.
    If you are self-employed, you will be paying more Social Security taxes than if you were employed by another company. However, you can deduct half of these taxes on your return at the end of the year.
  4. Travel expenses.
    If you travel for business purposes, you can deduct these expenses from your taxable income as well. Most expenses, such as the cost of your hotel or your plane tickets, will be fully tax deductible. However, you can deduct only 50 percent of the cost of meals purchased for business purposes.
  5. Cost of advertising.
    Many small businesses invest in advertising throughout the year in order to attract more customers and increase profitability. For example, you may film a commercial for local television, print business cards and/or purchase newspaper ads. In most cases, advertising expenses can be fully deducted from your taxable income, regardless of the structure of your small business.
  6. Fees associated with credit.
    If your business borrows money to finance its activities, you can typically deduct the associated fees. Examples include interest and other finance charges.
  7. Home office expenses.
    Self-employed taxpayers can deduct home office expenses from their taxable business income. In order to claim this deduction, the space in your home that you designate as a home office must be used exclusively for business purposes.
  8. Professional fees.
    Many small business owners hire professionals to assist them in the operations of their business. For example, you may hire an accountant to handle your bookkeeping or a lawyer to help with contracts. The fees associated with these services are usually tax deductible.

These are just a few of the tax deductions available to owners of small businesses.

Top 5 Payroll Priorities for Business Owners in 2019

Payroll is an essential component of any business’ operations. Like all aspects of business, however, payroll continues to evolve and change over time. As payroll changes, business owners develop new goals and priorities.

A recent survey of small business owners found that there are several distinct priorities when it comes to managing payroll during 2019. The top five priorities are discussed below.

  1. Offering direct deposit.
    Nearly 30 percent of business owners polled chose “offering direct deposit” as their top priority for payroll in 2019. Direct deposit allows payroll checks to be deposited electronically into the employee or independent contractor’s account without the need for a paper check. Not only does direct deposit save on time and resources, but it is also more convenient and appealing for employees.
  2. Providing electronic paystubs.
    The next most popular payroll priority was “providing electronic paystubs,” which was the priority selected by 15 percent of those businesses surveyed. Electronic paystubs allow employees to receive their paystubs instantaneously and keep track of them easily over time. Providing paystubs electronically also conserves business resources and is more convenient for everyone involved.
  3. Offering smartphone access to payroll information.
    Many employees and independent contractors now use their smartphones for a variety of purposes, from banking to paying for goods. As a result, more employers are looking into making their payroll information available via smartphone. One of the easiest ways to do this involves creating a smartphone app that employees can use to login and view their payroll information.
  4. Shifting to daily pay.
    In the past, most employees or independent contractors received their pay on a weekly, biweekly or monthly basis. Paying employees more frequently would have been too time-consuming and resource-intensive. However, thanks to the development of digital technologies, paying employees and other laborers is easier than it has ever been. In fact, nearly 10 percent of employers surveyed indicated that shifting to daily pay is a payroll priority for their businesses in 2019.
  5. Shifting to outsourced payroll.
    When it comes to handling payroll, businesses have two options: they can oversee payroll in-house, or they can outsource payroll to a third-party provider. Handling payroll in-house can be a challenge for many businesses, especially when the business hopes to make payroll more tech-friendly and convenient for employees. As a result, many business owners are now shifting to outsourced payroll.

This year, business owners plan to make a variety of changes to their payroll systems in order to improve efficiency and provide better services to their employees.

Small Business Tax Deadlines: When Are They & How to Prepare

Small businesses have a number of responsibilities and requirements when it comes to filing and paying taxes. Remembering deadlines and taking care of all of the required tasks can be daunting, especially when you have many other items on your to-do list. Below is some information to help you prepare properly and meet all of the necessary deadlines.

Tax Return Deadlines

The deadline for filing your 2018 tax return depends on the structure of your business. S corporations, multiple-member LLCs and partnerships need to file their tax returns by March 15, 2019. Single-member LLCs and self-employed taxpayers need to file their tax returns by April 15, 2019.

If you operate a C corporation that ends the tax year on December 31, your tax return is due on April 15, 2019. However, if you are a C corporation with a fiscal year ending on June 30, your tax return is due on the 15th day of the third month after your tax year ends.

Tax Return Extensions

If you are not prepared to submit your tax return on the required due date, you can file for an extension. If you are a sole proprietor or you are filing on behalf of a single-member LLC and you request an extension, your new deadline will be October 15, 2019. Your new deadline will also be October 15 if you are filing on behalf of a corporation. If you are filing on behalf of an S-corporation, a partnership or a multiple-member LLC and you request an extension, your new deadline will be September 16, 2019.

Keep in mind that any tax you owe must still be paid by the original due date even if you request an extension on your return.

Preparing to File Your Taxes

Tax filing preparation begins at the beginning of the year with careful record keeping. As tax time approaches, however, you will want to take other steps to make sure you are ready to file. For example, you will need to collect all of the documentation you need to complete your tax return. This may include inventory purchase receipts, proof of interest paid on business credit cards, documentation of business mileage and any other records related to your tax return. You will also want to be aware of relevant deadlines so you can be sure your taxes are filed on time.

Business tax returns can be complicated. As a result, many business owners choose to prepare their returns with professional help. If you are in need of professional help, it is important to find a provider well before your tax return is due so you can be sure that you have plenty of time to complete it.

How Will Tax Reforms in 2018 Affect Small Businesses in 2019

The government recently approved some of the most significant tax reforms seen in recent years. These reforms will affect all taxpayers, including small businesses. As you get ready to prepare your 2018 tax return, be aware of the following changes.

  1. Changes to tax rates.
    If you are a sole proprietor, you may be able to take advantage of a lower tax rate when you prepare your tax return in 2019. New, lower tax rates for individuals are in effect until 2025 because of the most recent tax bill.
    Corporations may also enjoy a lower tax rate because of these reforms. The corporate income tax rate has been lowered from 35 percent to 21 percent for 2018 and subsequent years, which represents significant savings.
  2. More bonus depreciation.
    Certain types of deductible expenses must be depreciated over a number of years, which means it takes a long time for your business to fully deduct the expense. Bonus depreciation, however, is a provision that allows you to deduct a large portion of the expense during a single tax year. The new tax bill increased bonus depreciation to 100 percent for 2018, which means you may be entitled to larger deductions when you prepare your tax return in 2019. This provision applies to most purchases of equipment or other similar assets that will be useful to your business for no more than 20 years.
  3. Business income deduction.
    If your business qualifies, and you operate as a pass-through entity, you may be able to deduct as much as 20 percent of your qualified business income when you complete your 2018 tax return. To qualify for this deduction, your business must be structured as a sole proprietorship, LLC, partnership or S corporation. To claim the full 20 percent deduction, your taxable income must also fall beneath a certain threshold. If your taxable income exceeds the threshold, you may still be able to claim the deduction, but there are additional restrictions to meet.
  4. Changes to expense deductions.
    The recent tax reforms also made some significant changes to deductible business expenses. For example, certain types of transportation expenses that were once fully deductible are no longer deductible at all, such as employee parking. Likewise, expenses incurred while entertaining clients are no longer deductible. However, you can still deduct 50 percent of the cost of client meals and meals provided to employees at work.

With all of the changes to tax law, many businesses will need to seek professional help when preparing their 2018 tax returns in 2019.

We encourage you to contact us with any questions.

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