Resources
“I am always doing that which I cannot do, in order that I may learn how to do it.”
-Pablo Picasso
Business owners often have to do new things. This resources page exists for anyone to use whether your our client or not. We would love to be able to support you directly and encourage you to reach out. We believe our services are an excellent value and will more than pay for itself, by improving the quality of information within your business and improving efficiency. If you're not ready to chat yet, we hope that the information on this page proves valuable. Please note the intent of this section is not to be an exhaustive set of resources. Instead, we hope to provide resources that can be broadly applied to most cases.
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Compliance Resources
Compliance for Employers
Fair Labor Standards Act (FLSA) this is federal legislation that controls things like the federal minimum wage and overtime pay. You must comply with all state laws in every state where your business operates so you may be subject to additional regulations. Every state has their own Department of Labor you should explore those as well as they apply to your business. Wisconsin's Department of Labor can be found here.
The Family and Medical Leave Act (FLMA) This is federal legislation that protects an employee's job if they are and qualified medical leave. This law only provides for unpaid medical leave and does not apply to all businesses. Businesses that are covered under this law may find it helpful to provide this resource guide to their employees.
Continuation of Health Coverage (COBRA) This law applies to employers who offer health insurance to their employees. It provides for an employee to continue their coverage at their own expense in their employer's plan for a period of time. In general employers should rely on their health insurance provider to comply with this regulation. Your organization should make employees aware of this option especially at the time of separation or layoff.
Employee Retirement Income Security Act (ERISA) This law governs employees retirement plans and pensions offered by employers. In general the organization that administers these benefits of the employer's behalf will manage compliance. However this information is critical for the human resources people within your organization to ensure that they accurately provide information to employees.
Occupational Safety and Health Administration This is the federal administration that oversees workplace safety. Regardless of the industry your business operates within workplace safety should be at the forefront of everything you do. A safe workplace is the very minimum the you own your employees. It's critical for employee morale and retention. A safe workplace is also good for the bottom line and can save you significant expenses in lost work time legal expenses and Worker's Compensation insurance premiums. Often your insurance carrier will have resources to help you ensure a safe workplace. But multiple resources are available at the OSHA website.
Compliance for Retailers
Sales and Use Tax Retailers need to be aware of state and local regulations related to sales tax. In Wisconsin most products that are resold for profit are subject to sales tax. It is the retailers responsibility to collect the tax at the time of the sale and send it in as appropriate on regular intervals. The specific sales tax rates and circumstances for exemptions very significantly by location and circumstances. It is strongly recommended that retailers use a point-of-sale software program to maintain accurate records and ensure compliance. Information on the state of Wisconsin sales and use tax can be found here
Understanding Cash Flow
An Introduction
Cash flow is one of those things that sounds relatively simple, but it impacted by every decision that every person within an organization makes. Understanding your cash flow is the real benefit of having a bookkeeper that knows their stuff. It's helpful the break cash flow into FOUR core parts.
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Liquid assets (cash in the bank)
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Accounts Receivable (money your are owed and have not yet collected)
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operating expenses (stuff you have to buy to run the business. Payroll, rent, utility bills as some examples)
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capital expenses (big items that only come up once a year or less. Property tax payments, equipment replacement are some examples) building processes that help you understand these four broad categories will help you plan to always have the cash you need.
The Moving Parts of Profits
There is a very simple formula to profit. The amount of money that comes in the door must be greater than the amount of money going out. That seems obvious. In the first day you're in business you'll know immediately if you achieve that are not. The real trick to success is doing that consistently day after day, week after week, quarter after quarter, and year after year. Identifying the key things that impact your business is profits are critical. Just as critical is responding quickly when those numbers change. A trucking company for example may want to keep an eye on the following expenses:
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fuel costs
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employee wages
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vehicle maintenance and depreciation expense.
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Even with an eye on these expenses, profit may be more significantly impacted by how efficiently the routes are constructed, how often the trucks are full. or the safety records of the drivers. Knowing how to respond to dynamic changes within your business can ensure your bottom line remains healthy.
Tracking Your Cash
Accounts Receivable is money your business is owed for work you have done or will do is one important part of cash. Staying on top of who owes you money, whether or not they pay on time, how much they owe you and whether or not they are a significant portion of your total receivables are all very important pieces of information. Like putting together a puzzle you need to keep track of all these pieces. QuickBooks has lots of tools in place to help you quickly and reliably find answers to these questions. Depending on how complex your accounts receivable is additional may be needed to complete the picture. Once you understand what your receivables look like you can implement strategies to collect the cash more quickly and reduce those outstanding balances.
Some examples of steps you can take to improve your receivables are:
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Make it easier for your customers to make payments. QuickBooks payments is one solution so that you can take credit cards or directly debit from client accounts. You may also consider buy now pay later options such as Afirm to collect money more quickly and increase sales. Beware though fees exist for many of these products so understanding the trade-off between improving cash flow and fees impacting profit margins is critical.
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Offer terms or discounts for prompt payment and charge late fees or interest for late payments. Customers who receive goods in advance of paying for them need to be aware of the terms of that arrangement. You should have clear agreements in place with plainly identified consequences and incentives. (If you are charging fees and interest rates make sure to not violate any federal, state or local laws.)
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Drop customers that don't respect payment terms. Unless you are bank your customers should not treat you like a bank. Many business owners think that all customers are good customers. There's an old adage "the customer is always right." This is not nor has it ever been true. Some customers are better off at your competitors. Don't be afraid to end relationships that are not healthy or beneficial. Consider sending potentially uncollectible accounts to a collection agency. Don't do business with people or organizations that can't abide the terms of your agreements.
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Keep excellent records. Even customers that have been with you for a long time can run into short-term cash flow constraints. Knowing how valuable customer has been over time can provide insight on how best to work with them. Should you ever end up with a legal dispute. Having clear and easily understood records will give you the best chance to collect what you are owed. Keeping good records also allows you to evaluate your current policies to determine if they are effective or where they may be able to be improved.
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Regularly review and cleanup all invoices. Every time you create an invoice you're expecting your customer to pay you promptly and on time. That's not always the case. Regularly reviewing Accounts Receivable to find and address overdue invoices should be part of your regular accounting process. Handling these uncollectible invoices correctly in your accounting software is critical to ensure accurate records. Uncollectible accounts that are open could even affect your taxable income you are filing taxes the accrual basis. We recommend at least quarterly review of your receivables. Always check with your tax pro to make sure you understand how receivables and payables impact your taxes.
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Accounts Payable is money you owed to other businesses. A lot of the same principles that apply to Accounts Receivable apply here simply in reverse. QuickBooks offers a lot of tools to help track accounts payable. Many businesses make the mistake of not using the accounts payable functions even if they are currently using a system like QuickBooks. They only enter a bill as an expense when the cash is used. There's nothing wrong about this approach but is a missed opportunity and it creates potential for things to fall through the cracks. Many bookkeeping programs like QuickBooks allow you to create recurring transactions. Using these to create bills allows you to make sure things are paid in time and you can avoid additional fees. It also allows you prioritize bills based on how urgent they might be. Having a clear picture of your accounts payable will let you see potential cash flow shortfalls before they happen so that you can move money or if necessary secure financing or lines of credit. Often lines of credit can be easily obtained if you can demonstrate Accounts Receivable as collateral. Which is another important reason to track both of these important components of cash flow. Keep in mind staying on top of your accounts payable will demonstrate to your vendors that you are the kind of customer they want. This may allow you to push for better terms in the future or otherwise expand your working relationship.
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