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Hire Nothing but the Best

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How can your company attract and retain top employees? It’s not always easy, especially for small businesses. Having a streamlined hiring process and ensuring that your salaries and benefits package are comparable to other, similar companies in your area can help make your company an attractive destination for high performers. Here are some pointers to jump-start your thinking.

Simplify the Process

Make sure job responsibilities are clearly described when posting your openings. Candidates should be able to easily ascertain if they have the appropriate qualifications for a position. Also, describe any documentation candidates may need to submit with their applications.

Be Open and Professional

Let candidates know early in the process, preferably in the job posting or during interviews, how much the position pays. Top candidates appreciate candor about such matters. Treat candidates professionally during every stage of the process — it sends a strong signal about your company’s culture.

Evaluate your Benefits Package

Compensation and benefits are important factors when it comes to attracting and retaining top talent. Salaries should be in line with what other companies in your region pay for specific occupations. Attitudes toward health and retirement benefits can influence employment choices and how committed and engaged employees are after they are hired. Your company will have a leg up on attracting and retaining the employees it needs to succeed and gain a competitive advantage if it can offer the benefit options top performers want.

If you are unsure whether your current benefits package is competitive, please contact our Sooter Consulting Team. An analysis of your current retirement and insurance benefits will help you identify areas that may need to be improved if you are to attract and retain the best employees.

 

 

How to Withdraw Profits from your Corporation Without Overpaying on Taxes

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Owners of closely held C corporations are often interested in withdrawing profits from their companies in ways that minimize taxes. What are the options?

Pay Salary/Bonus

If the owner is a company employee, taking more salary or a year-end bonus is an option, as long as the total amount of compensation the owner receives is reasonable. The company deducts the payments as a business expense; the owner is taxed on the money.

The “cost” of this option depends on the corporation’s and the owner’s tax rates. Payroll taxes are an added expense.

Pay Family Members

Reasonable amounts paid to an owner’s family members for services actually rendered to the company are

deductible by the corporation and are taxable at the family members’ own tax rates. Often, these rates are much lower than the owners.

Pay a Dividend

Dividends the company pays out will, in effect, be taxed twice — once at the corporate level (dividends are nondeductible) and once to the owner personally. No payroll taxes will be due. With the individual tax rate on qualifying dividends currently capped at 20% for taxpayers in the 39.6% regular bracket (and 15% for most other taxpayers), this option may have more appeal.

Utilize Fringe Benefits

Certain fringe benefits are deductible by the corporation but not includable in the owner’s gross income. Examples include qualifying group life insurance, health care benefits, and disability insurance. (Most fringes must be provided on a nondiscriminatory basis to other company employees.) To the extent an owner is paying for these items individually, having the company pay for them increases the cash available to the owner.

Take a Loan

If an owner borrows money from the corporation, the owner is not taxed on the loan amount. The loan must be a legitimate debt, with proper documentation and timely interest and principal payments.

Lease Assets to the Company

An owner might consider leasing property to the corporation. The company deducts the lease payments; the owner includes the amounts received in income and deducts expenses associated with the rental activity.

The only way to make the best choice for you and your company is to have your books up-to-date.  The Sooter Consulting Team are experts in getting books in order.

Five Fall Projects to Refresh your Financial Results

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As we move into the fall season and the final quarter of the year, it’s a perfect time to commit to a project in your business that will help you reach the year’s end in better shape.  Here are five ideas:

1. Back-to-School Time
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If payroll expenses are one of the higher costs in your business, then it makes sense to boost your team’s productivity and maybe also your own.  Fall is back-to-school time anyway, so it’s a natural time of the year to take on a course, read a business book, or hire an organizer to help you get more from your work-space.
If you spend a lot of time doing email, consider taking a course on Microsoft Outlook® or even Windows; learning a few new keystrokes could save you tons of time.  If you need more time, look for a book or course on time management.  Look for classes at your local community college or adult education center.
 
2. A Garage Sale for Your Business
Do you have inventory in your business?  If so, take a look at which items are slower-moving and clear them out in a big sale.  We can help you figure out what’s moving slowly, and you might even save on taxes too.

 

3. Celebrate Your Results
Take a checkpoint to see how your revenue and income are running compared to last year at this time. Is it time for a celebration, or is it time to hunker down and bring in some more sales before winter?  With one more quarter to go, you have time to make any strategy corrections you need to at this time.  Let us know if we can pull a report that shows your year-on-year financial comparison.

 

4. Get Ready for Year’s End
Avoid the time pressure of year’s end by getting ready early.  Review your balance sheet to make sure your account balances are correct for all transactions entered to date.  You will be ahead of the game by getting the bulk of the year reviewed and out of the way early.
Also make sure you have the required documentation you need from vendors and customers. One example is contract labor that you will need to issue a 1099 for; make sure you have a W-9 on file for them.  If we can help you get ready for year-end, let us know.

 

5. Margin Mastery
If your business has multiple products and services, there may be some that are far more profitable than others.  stock-investment-pennies.jpgBreaking these numbers out to calculate your profit margins or contribution margins by product or service line can help you see the areas that are adding the most income to your bottom line.  Correspondingly, you can determine if you have any items that are losing money; knowing will help you take the right action in your business.

 

Refresh your financials this fall with your favorite idea of these five, or come up with your own fall project to rejuvenate your business.