Keep an eye out for rising Michigan minimum wage. What is interesting about this ballot petition is that it includes language that will make ALL jobs increased to a new minimum wage level by 2022 of $12 per hour, including tipped employees. If you own a restaurant or bar, you need to keep this on your radar. Current minimum wage for tipped employees in Michigan is only $3.38 per hour! Huge changes may be coming…. See more details at this link.
As I mentioned last week in my post titled: Accounting what does it mean to you? I mentioned that accounting is the business of information. Without useful financial information your business can falter, or experience stagnated growth.
Today, I will spend a little time talking about quality financial information, and the unintended consequences of having poor, or outdated, or useless accounting information/records.
If high quality, accurate and timely financial information is important for businesses to make accurate decisions about their businesses, then why do so few businesses invest in quality accounting and financial information, and what are some of the consequences of poor investments?
Why do so few businesses invest in quality accounting and financial information?
- They believe this information is too expensive
- They do not have the right type of training to use or analyze the information they have
- They spend more time working in their business than working on their business
- They have other problems that are more pressing
So what are some of the consequences of having poor financial and accounting information available?
- Bills are not paid timely, and interest charges and penalties are incurred
- Major decisions are made before taking the proper time to analyze how those decisions will affect things like client relations, cash flows, client acquisition/retention, capital improvements, employee needs…the list goes on and on…
- Taxes- while not usually the driver of the bus, taxes are very important and most small businesses do not spend enough time forecasting how they will pay their bills, and the tax man
- Funding sources/Investor relations- There are few things that will turn off an investor quicker than finding out that your reports are incomplete, inaccurate or non-existent.
- Increased receivable balances- So you are working harder, but making less money…Usually the problem is in receivables. As businesses grow, they can no longer rely upon their old collection methods with clients.
- Inaccurate break-even points for product or service analysis by type.
So, this is part two of this post sequence. In part one, I talked about how not planning ahead for capitalization of your business can kill your dreams. Having a very distinct plan for cash and cash flow is very important for a new business. But, in part two we are going to focus more on the psychological change that you have to go through when starting your business.
But, surprisingly I agree with item #3 the most: Do you have the humility and willingness to do it all? This is one factor that I think most aspiring entrepreneurs take for granted. Can you operate your business effectively with limited/non-existent resources? While at the same time being able to envision goals for you and your business? While blocking out all the noise that surrounds your business/personal life?
So I ask you, what question do you agree with on this list? Or what question do you wish you had asked yourself before starting your business?
Check out the full article here.
To all our friends and family we want to wish you a very Merry Christmas!
Thanksgiving is a time to reflect on everything we are thankful for. With that in mind, I wanted to take a minute to thank my family, friends and loved ones for all of their love and support in the last year.
I love Thanksgiving because it is a time to get together over a meal with everyone I love and catch up with them.
I hope you have a wonderful Thanksgiving with everyone you love.
Happy Thanksgiving from Anthony Momany, managing partner – Capstone CPA Group
Outsourcing- Definition: Obtain goods or services from an outside supplier in place of an internal source.
American companies embrace innovation almost as much as they embrace outsourcing. If you think about it objectively there are very few manufacturing companies that obtain goods from an internal source, in the truest sense.
So why would you consider outsourced accounting services:
- Save time and money- Time and Money, if only we had more of each. If you only had more time or money (or both), most of our problems would go away. How many of your vendors are offering you time and money savings? Outsourced accounting services can offer both.
- Real time access to accurate data- Large companies agree that having access to accurate reports is invaluable to decision makers. So why would small business be any different? If anything this information may be more important to Presidents, CEOs and CFOs.
- Your documents/files stored securely- If you ask any client that has had to recreate lost data due to a computer crash, they will tell you what it is worth to have multiple layers of backups available in case you lose that data.
- Eliminating the knowledge power holder- Most small to mid-sized businesses have gone through this transition. They had a bookkeeper/controller employee who knows how all the systems come together. What happens when you need to replace this employee? Or worse, what happens if they quit expectantly? Sometimes an in-house knowledge base is fine, but how do you deal with one person who runs everything, and maybe knows a little too much about employee compensation.
- Other benefits- When you outsource, inherently you are going to avoid many concerns associated with hiring employees. Benefits like: avoiding sick-time calculations, unemployment claims and miscellaneous employee baggage. Usually our business owners also find that due to the fact that they do not have to worry about execution of specific objectives they can focus their time executing their own business growth objectives. This re-allocation of time can be very beneficial for business leaders (and their investors).
If you would like more information about outsourced accounting services, please reach out to us. We offer many different service levels for many different sizes of clients. We tailor our accounting services to your particular business needs.