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Getting out of the Business Purgatory

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When you started your business, you knew there would be some administrative tasks that would need to get done. I’m sure you think of tax time as some sort of purgatory for business owners. You got a reprieve this year with the date being pushed out; however, that due date is now looming.

You started your business to help people and now the thought of getting your books in order for your CPA is causing you stress.  The good news is – you don’t have to be in that purgatory state.  Just imagine it – you get to tax time and your books are completely in order.  You just have to fill out the tax organizer for your tax person – collect the documents and you are done. That’s not a fantasy—it can be your reality.

Sooter Consulting Inc. makes business bookkeeping just that easy. Here’s how:

  1. We bring your bookkeeping up-to-date
  2. We keep your books up-to-date with monthly financials
  3. If you have commission reports, we can gross your revenue up monthly
  4. We reconcile your broker 1099 with your books to ensure income is correct and verified
  5. We provide year-end reports or access to the QuickBooks file for your tax professional
  6. We answer questions from your tax professional about the business books

How would like to be having [insert your beverage of choice] on Tax Day rather than stressing about getting the last minute information to your CPA? Call us today at 408-413-0911 and schedule your free 30 minute consultation.

 

 

Getting to Know Quickbooks and their Partners

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QuickBooks Online may work for you just fine as is. After all, it was designed to meet the needs of the millions of small businesses that want to manage and track their income and expenses, create records and transactions, and run reports to gauge their financial health. QuickBooks Online was also designed to grow along with your business. But there’s no need for Intuit to add internal features to do so. In fact, that would make it too expensive and unwieldy for many companies.

Instead, Intuit has partnered with other small business websites to provides add-ons–applications that extend the usefulness of QuickBooks Online in one or more areas, like accounts receivable and payable, inventory, and expense-tracking. They integrate easily to share data and do the extra work you need. Here are some of them to consider.
Bill.com

Bill.com automates your accounts receivable and payable processes. It supports electronic billing and payment, as well as multiple approval levels.

You can certainly enter and pay bills using QuickBooks Online. And you can send invoices to customers and receive payments. But adding a connection to Bill.com gives you more advanced options for accounts receivable and payable. Simply send your bills to Bill.com by scanning, emailing, faxing, or taking a picture with your smartphone. The site’s automation tools turn them into digital records and route them through your specified approvers. Once approved, they’re paid electronically or by paper check. Invoices are just as easy to process; customers can pay by using PayPal, credit card, or ACH. Bill.com’s mobile app makes it possible to keep up with invoices and bills while you’re out of the office.

Expensify

Are your employees still paper-clipping receipts to handwritten expense reports? This method is unnecessarily time-consuming – and often inaccurate. Expensify solves both problems. Your staff can take photos of receipts with their smartphones. Expensify then converts the expense information into coded digital records and submits them for approval based on your company’s policies. Credit card purchases can be automatically imported, too. All data is synchronized with QuickBooks Online in real-time and coded to reflect your preference of QBO’s expense accounts, customers/jobs, etc. Once you’ve approved a report, you can have the money deposited in the employee’s bank account the next day.

TSheets Time Tracking


TSheets employee scheduling software automates tasks that QuickBooks Online doesn’t do: scheduling and remote time-tracking for your hourly employees. Your staff no longer has to fill in paper timesheets. Instead, they can use their smartphones to track their hours and GPS location points. And while Excel is certainly better for creating schedules than paper, TSheets takes over that task, too. After you’ve approved timesheets, that information is sent over to QuickBooks, ready for use in your payroll processing.

Your employees can easily “punch” in and out using their smartphones. TSheets also uses GPS technology so that your staff members’ locations are always known to you.

SOS Inventory

QuickBooks Online performs some basic inventory management tasks. You can create records for items and use them in transactions, and keep track of the number of items in stock so you know when to reorder (or have a sale). SOS Inventory goes well beyond those capabilities. You can create sales orders, track cost history and serial numbers, and document work-in-progress (WIP). SOS Inventory supports multiple locations and the entire pick/pack/ship process.

Insightly CRM

You can create thorough customer records in QuickBooks Online and document some of your interaction. But it doesn’t facilitate true Customer Relationship Management (CRM) nor project management. Insightly CRM does both. It lets you build exceptionally thorough customer profiles so that you can view social streams, email history, and any events, opportunities, or events related to them. Its project management features include the ability to track by pipelines or milestones, define contact roles and custom fields, and generate advanced project reporting.

QuickBooks Online Integration Key

All of these apps can work in standalone settings, but their integration with QuickBooks Online and their mobile capabilities create powerful partnerships that help you serve both your customers and your employees in ways that QuickBooks Online alone can’t.

We’re not trying to sell you applications here. Our concern is that you’re getting as much out of QuickBooks itself as you can. We can steer you toward add-on solutions if that seems necessary, but we’re always happy to work with you on getting to know QuickBooks Online better and matching its capabilities to your company’s needs.

The Importance of Clarity

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I’m currently reading Dare to Lead by Brene Brown and although I’m not ready to do a newsletter series on it yet, I wanted to borrow something from this book.  Let’s rumble with vulnerability.  There are many attributes to Daring Leadership, but I just want to bring out 2 for now.  I’m Daring to lead my team, clients and followers with Clarity, Kindness and Hope as well as acknowledging, naming, and normalizing collective fear and uncertainty.  I’m by no means an expert in this area, but I’d like to give it a try.

As we wait… and wait… and wait to hear if we will be a lucky recipient of the SBA EDIL and/or PPP, we can be doing something to help our businesses survive, and maybe even thrive during this uncertain time.

We need CLARITY around our business (and yes personal) finances.  Make sure your bookkeeping is up to date because we are about to need this information to make Daring, Courageous and Bold decisions.  I recommend getting a detail P&L out for the last rolling 12 months.  If you have the book, I’m going to refer to chapter 7.  This chapter deals with our “wants” and “needs.”  Many business owners now find themselves in a place where they have no choice but to do this exercise.  Get out your red pencils, we are about to mark up that detail P&L with our “needs” and “wants.” Remember, “the goal is to cut cost, not to compromise the business.” 

For example, I have worked from home for over 15 years.  I like meeting clients at the Capital Club.  It’s a private club in the heart of Silicon Valley.  It’s plush, convenient and now that its not even open, it may even be completely unnecessary.  As a matter a fact, Zoom meetings will become so natural for people that I don’t even know if that expense will ever come back.  It just might not be necessary.  I may like it, but I don’t have to have it.  That’s now on the Unnecessary column.

There is a free version of Asana (a task management system for my team) and a paid version.  The paid version has bells and whistles that are nice, but I can live without them in this climate.

Labor is of course the hardest one to deal with.  The words said above are worth saying again – Cutting cost NOT compromising the business is the goal.  However, with most businesses’ payroll is between 30 and 50% of revenue and it can not go ignored.  We need to be careful on this one. If you do receive a PPP loan in order for it to be forgiven you have to keep the same head count, hours and pay for the 8 weeks following receiving the funds.  Considering that unemployment has also been fortified by the government, it might be hard to rehire those that may be receiving more on unemployment than they would if they came back to work.  I’ve already heard the rumblings of this problem as some businesses that are considered essential are having problems with recruitment.  The rules that you must be looking for a job has been tossed out the window.  It might be easier to reduce hours while we wait for the answer of PPP than to layoff or furlough.  Just something to consider.

No matter whether you receive an SBA PPP or not, it is inevitable that you will need to go through this process.  The bottom line is that many businesses are looking at a loss of revenue for 2020.  We need to be practical and get real clarity on what we really need and what we just really want.

I want to leave you with encouraging news.  I was a new business during the great recession.  I had not fully matured as a business or a business owner; however, I made it through the recession, and I can say my business revenue grew through the whole thing.  It can be done if we are willing to take the time now to make smart decisions … be proactive rather than reactive.

Need help getting the bookkeeping up to date.  Give Sooter Consulting Inc. a call – we are here to help you gain clarity.

 

 

 

 

Facts About the PPP and the SBA’s EIDL

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The Payroll Protection Program is one of the hottest topics around.  The rules state that it can be used for payroll, rent, mortgage interest or utilities.  However, 75% of the funds must be used for payroll.  You must retain/rehire back your employees for the 8 weeks after you have been granted the loan.  Forgiveness of the loan can be reduced based on headcount and reduction of hours.

To apply for this loan, you will need to use an existing SBA lender.  There is a sample application on the SBA website.  https://www.sba.gov/document/sba-form–paycheck-protection-program-ppp-sample-application-form

The application looks basic.  I believe the real work will be on the other side where we have to prove the funds were used to keep employees on the payroll.

Please remember that this is not free money … you do have to prove that you used it for the intended purpose and there is a hefty fine if you are found guilty of untruthful information.

There is also the Small Business Administration’s Economic Injury Disaster Loan or SBA EIDL which is offering a $10K advance.  Again, the 10K advance is to be used for payroll and you will need to show that you have kept your employees for that portion to be “forgiven”.  If they find that you didn’t qualify, it will turn into a normal SBA loan.  This loan can be applied for on the SBA website. https://covid19relief.sba.gov/#/

Yes, you can apply for both; however, the important thing to remember is that you cannot double dip on the forgiveness part.  The SBA will be cross referencing and determining if what your forgivable parts are.

This can all be a bit confusing especially since not all the information is available.  The Sooter Consulting Team is keeping up with the information being distributed and making it available to our clients as soon as we get it.

I’m in contact with Bank of America and Heritage bank and they are going to give me their requirements very shortly.  We have basically agreed the more information they give us the cleaner the applications from my clients will be.

Some of you are working with Hjerpe & Tennison and I know they announced they would be applying on behave of their clients.  I will let them take the lead on that for you.

If you want to talk about it, just give me a call.  I have been fielding calls all week and I’m happy to make sure I get your specific questions answered.

 

 

 

Emergency Family Laws and What you Need to Know

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HR 6201 is in response to the massive amounts of people now out of work and school.  The first part of the bill deals with food programs and I’ll let you read up on that for yourselves. For now,  my focus will be how this changes our businesses.

First there’s a change on the existing Family Medical Leave Act.  Originally this law was for businesses with 500 or more employees.  Now, it’s for all businesses.  It’s for all employees whether they are full-time or Part-time.

The first 10 days will be without pay OR they can use the new Emergency Leave Day Act which I will talk about shortly.  The remaining 10 weeks will be 2/3 of salary with a maximum payment of $200 per day and a total of $10K.

The key here is that the employee MUST be caring for a minor child.  Now that schools have been closed around the country, the kids are home, and many people may be looking towards the Emergency Leave Day Act.  Most of the time, this option will be utilized for those that can not telecommute.

Emergency Paid Sick Leave Act is new.  Unlike FMLA, an employee is immediately eligible for paid sick leave.

Who is eligible for “emergency leave day”?

  1. the employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
  2. the employee has been advised by a health care provider to self-quarantine because of COVID-19.
  3. the employee is experiencing symptoms of COVID-19 and is seeking a medical diagnosis.
  4. the employee is caring for an individual subject or advised to quarantine or isolation.
  5. the employee is caring for a son or daughter whose school or place of care is closed, or childcare provider is unavailable, due to COVID-19 precautions; or
  6. the employee is experiencing substantially similar conditions as specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

Employee’s Paid Sick Leave

  • Full-time employees:
    1. 80 hours at their regular rate of pay up to a maximum entitlement of $511/day or $5110 (for reasons 1, 2 & 3, employee’s own illness).
    2. When caring for a family member (for reasons 4, 5, 6 above or school closure), sick leave is paid at two-thirds the employee’s regular rate. Pay is limited to $200 per day ($2,000 in total)
  • Part-time employees: the number of hours that the employee works, on average, over a 2-week period.

I’m still seeking the answer to this question – I have the question into a few HR consultants, so stay tune… BUT here’s what I don’t know.

Can you do a temporary lay-off, prior to doing the Emergency Paid Sick Leave Act?  I’ll report on that as soon as I get an answer.

If you offer health insurance and are considering doing a temporary lay-off, it is advisable to work with a broker to understand how it would affect your employees.  In California, the person can apply for Coverage California.  There is a special open enrollment going on through June 30, 2020 and sometimes that can be less expensive than trying to keep them on your group plan without a paycheck.

California Unemployment

https://edd.ca.gov/

  1. Care giving for family member effected by the COVID-19
  2. Reduced Work Hours
  3. Potential Closure or Layoffs
  4. Eligible individuals can receive benefits that range from $40-$450 per week.
  5. Tax Assistance for Employers experiencing hardship may request 60 days extension on filing payroll reports/taxes

I know I have followers in other states.  Please check your state website for information.

AND…

How are small business owners going to pay for the sick leave?  The Government will be providing payroll tax credits for you in your quarterly returns.  Make sure you are labeling your payroll as sick leave.  This will help substantiate the claim.

U.S. Small Business Administration Disaster Loans

Businesses adversely affected by the coronavirus now qualify for up to $2 million in disaster loans due to economic hardship. Interest rates are 3.75% for businesses, and 2.75% for nonprofits. Repayment can be deferred for up to twelve months. Terms may be extended to up to 30 years for repayment. https://www.sba.gov/funding-programs/disaster-assistance

 

Tax Time: The Right Business Entity

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When you started your business, you may have formed a corporation to protect your personal assets from lawsuits against your company. However, you must also operate your business like a corporation — or risk losing the liability protection you expect to have.

The corporation’s name should appear on company letterhead, checks, and invoices. Contracts should be made in the corporation’s name, not yours or another individual’s name. No matter how long you’ve been in business, always treat your corporation as a separate legal entity.

Avoid mixing your personal affairs and your corporation’s business. Maintain separate bank accounts and credit cards and keep careful records of corporate transactions. File tax returns and pay any corporate taxes due on time.

Meet and Document

Hold shareholder and director meetings according to a regular schedule and keep official minutes of those meetings. Corporate minutes provide documentation of key financial and legal decisions, such as:

  • Authorization for a substantial loan to or from the corporation
  • Adoption of a retirement plan or approval to make a contribution to an existing plan (e.g., a profit sharing contribution)
  •  Issuance of stock
  •  Purchase of real property or approval of a long-term lease

By observing the formalities, you can protect yourself and have the records you may need if the IRS, a creditor, or a company insider challenges critical decisions that were made.

Don’t get left behind. Contact us today to discover how we can help you keep your business on the right track. Don’t wait, give us a call today.