- Part 8

Signs You Might Be Outgrowing Your Accounting System

November 10, 2016 by Mandy Leave a Comment

business-growth If you’re struggling with your accounting system, it might be a sign that you’re ready for something new. Perhaps your company has grown so much that it’s outgrown its older accounting solution. Here are several indications to look for that justify moving to an accounting system with more features and scalability.

User Permissions

Some companies have a need to limit certain functions to certain users. Most systems come with basic functional limitations, such as restricting Accounts Payable and Accounts Receivable functions. But what if you need more granular user permissions such as access to only purchase orders or a certain bank account? Mid-market systems like QuickBooks Enterprise provide those features.

Multiple Companies and Consolidated Financial Statements

Do you have multiple companies that are the “children” of a parent company? You might need consolidated financial statements and the ability to open multiple companies at the same time.

Number of Customers and Vendors

If your business is growing and the number of customers and vendors you do business with exceeds 14,500, you will have reached a list limit in QuickBooks Premier. Each system has their own list limits, and these limits can get complex quickly, so check with us if you feel you are getting close.

File Size and Performance

There may also be file size limits that you need to watch, especially if you have a high volume of transactions or multiple years of history in one file.

You could also have performance issues. If you have a new PC and your accounting system is still running slowly, we can help you improve your performance by condensing your file or setting preferences differently before you have to switch.

Inventory Features

A mid-market system like QuickBooks Enterprise provides advanced features, such as tracking inventory in multiple locations, using the FIFO method, and managing lots or serial numbers. If you need these features, it may be worth it to switch.

Enhanced Customization

Most mid-market accounting systems provide better customization such as additional custom fields, better reporting, and improved form design.

Number of Simultaneous Users

The final reason to switch to a larger accounting system is if you need more simultaneous users. QuickBooks Pro allows for up to three simultaneous users, QuickBooks Premier handles up to five, and QuickBooks Enterprise makes room for up to 30 simultaneous users. QuickBooks Online allows up to 25 simultaneous users. Check with us if you are curious about your system’s license limits.

Did any of these reasons resonate with you? If so, let us know so we can discuss your needs.

Filed Under: Bookkeeping, Business Tips

A Quick Primer on Crowdfunding

October 27, 2016 by Mandy Leave a Comment

funding An interesting way to fund your dream project, whether you are a startup or a more established business, is to consider crowdfunding. Crowdfunding is when many people provide the money in small amounts for a project.

Although crowdfunding is not new, it became much more popular when organizations like Kickstarter, Indiegogo, RocketHub, and GoFundMe created web platforms to enable this method of raising funds. The 2015 crowdfunding market is estimated at $34 billion and is growing exponentially.

In crowdfunding, the person who initiates the project receives the money that the people contribute. The web platform that supports the project usually gets a percentage of what’s raised. It varies as to what the people who contribute to the project receive in return. It can be the payback of a loan with interest, shares of stock, rewards, or a possible tax write-off in the case of a donation.

You probably hear about companies that get funded overnight, making it look easy to create a successful crowdfunding campaign. There is a lot that goes into the launch of a successful campaign. Here are some steps:

Design your project and research how much money you need
Choose your platform (Kickstarter, Indiegogo, etc.). This requires careful research about which platform is best for your type of project as well as a complete understanding of the rules and limitations of that platform. For example, on Kickstarter, if you don’t reach your goal, you don’t get any money, including what you have partially raised.
Create a video that tells your story and makes the pitch. You must not only grab attention but appeal to both the rational and emotional sides of your followers. You must also provide an enticing reward for your followers.
Count your followers. Do you have enough to raise the capital you need? If not, create the marketing you need to build your followers and make your numbers.
Gain some big name backers if you possibly can.
Develop a carefully orchestrated launch using multiple marketing channels, including social media and press.

With the explosive growth in crowdfunding, it’s here to stay. Consider how it may help your business grow.

Filed Under: Business Development

5 Steps to Move Your Marketing into the 21st Century

October 13, 2016 by Mandy Leave a Comment

21st-century-marketing If it’s been a while since you’ve adopted new marketing methods, it might be time, especially if you want to attract younger customers. Here are five ideas to do just that.

1. Video

With YouTube as the second largest search engine, using video in your marketing is a slam-dunk return on investment. If there is an educational aspect to your sales cycle, a video is perfect to get the message across.

Even better news is that many companies still haven’t caught on to how powerful video can be in marketing, so you will have an advantage. There is no longer a financial barrier to entry as most videos are no longer professionally made.

There are so many ways to create video: using a webcam, capturing your screen with webinar software or TechSmith’s Camtasia®, or even using your cell phone. If you have a gmail address, you already have a YouTube account, and you can easily crate and customize your own YouTube channel.

The hardest part of adding video to your marketing is to simply take the leap.

2. Social Media

Social media is now one of the best places for a business to expand brand awareness. LinkedIn provides customers with a way to discover your background. It’s also a good source of new employees. Facebook and Google+ enable you to build community and learn more about the interests of your customers.

Twitter is perfect for announcing sales and boosting event excitement. YouTube enhances education and motivation. Pinterest for Business and Instagram are perfect for retail to showcase new products. Tumblr is a must if you market to teens.

If you’re new to social media, choose one or two sites and set up your profile. If you already have some social media profiles, consider expanding or increasing your activity.

3. Content Marketing

Content marketing is another way to educate your customers before and during the sales cycle. With content marketing, you creates a report, white paper, or educational video that describes a topic congruent with your services. The content is typically “gated,” meaning the prospect needs to provide email address or phone number or both, so that you can follow up on the lead. The content should be enticing and educational and should also introduce the prospect to your brands and services without being heavy handed about it.

Content marketing is a great lead generator, especially if you have a sales staff that can deliver scripted follow-up calls.

4. Mobile and Wearables

Over a year ago, Google proclaimed there are now more mobile searches than desktop searches. For the last few years, it’s been increasingly important to make sure your website delivers a great experience via mobile technology.

Wearables are growing as fast as mobile did. Innovative companies are providing a rich customer experience through wearables. It’s now common to see wearables in health, sports, household automation, and virtual reality entertainment. But others are having fun with creative solutions, such as British Airways blankets that turn a color based on a passenger’s mood and Nivea’s children’s sunblock that comes with a GPS bracelet tracker so the kid doesn’t stray too far away.

5. Marketing Automation and Integration

Today, the entire marketing funnel can pretty much be automated, from SEO-enhanced social media posts to landing pages using content marketing to follow up emails, videos, and shopping cart links. Almost every business needs a website, list management system, shopping cart, social media automation app, and a CRM, Customer Relationship Manager. With this automation, you may be able to reduce sales labor as well as customer support expenses.

Integration of multiple marketing channels and methods is essential as the buying decision has become more complex and trust is built slowly over time. Successful marketers are integrating SEO (search engine optimization) with social media, video with content marketing, and email marketing with landing pages, to name a few.

Try any of these five trends to give your marketing a future-focused boost.

Filed Under: Business Development

Beyond Saving Trees: New Trends in Receipt Management

September 29, 2016 by Mandy Leave a Comment

online-business

Accounting automation has come a long way in the last few years, and the process of handling invoices and receipts is included in those changes. No longer is there a mountain of paperwork to deal with. In this article, we’ll explain some of the changes in this area.

Vendor Invoices

Most invoices are now sent electronically, often through email or from accounting system to accounting system. Some accounting systems allow the invoice document, usually in PDF format, to be attached to the transaction in the accounting system. This feature makes it easy for vendor support questions as well as any audit that may come up.

Some systems are smart enough to “read” the invoice and prepare a check with little or no data entry. Others are able to automate three-way matching – this is when you match a purchase order, packing slip, and invoice together – so that time is saved in the accounts payable function.

Receipts

Today’s systems allow you or your bookkeeper to scan in or take cell phone photos of receipts – whether cash or credit card – and then “read” them and record the transaction. This type of system cuts way down on data entry and allows the accountants to focus on more consultative work rather than administrative work.

Some vendors will email you receipts so all you have to do is use a special email address where your accountant is copied or forward the receipt as you receive it.

The biggest challenge for business owners is getting into the habit of photographing the receipt and sending it to the accountant. The days of shoebox receipts are not completely over, but cloud-savvy business owners are definitely enjoying the alternative options of today’s paperless world.

Approvals

Some systems automate bill approval. This is especially handy for nonprofits or companies with a multi-person approval process. It cuts down on approval time and the time it takes to pay the bill.

New Systems

Here is a short list of new systems that automate a part of the vendor payment or receipt management system. There are a lot more, in addition to your core accounting system, and all of them have different features, platforms, software requirements, integration options, and pricing.

Bill.com
Hubdoc
Receipt Bank
Expensify
SmartVault
Doc.it
Tallie
Concur
LedgerSync
ShoeBoxed
ShareFile
DropBox

If you are interested in finding out more about automating your accounts payable invoices or receipts, please reach out anytime.

Filed Under: Bookkeeping Tagged With: online bookkeeping, receipt management

Add a VIP Revenue Stream to Your Business

September 1, 2016 by Mandy Leave a Comment

vip

If you’re looking for more ways to bring in additional revenue, then a VIP revenue stream is one option for many businesses. Here are a few examples:

A plastic surgeon has a long waiting line of patients. The surgeon sets up a special membership fee of $3,000 per year for patients who wish to work with her. These patients get first access to her appointment schedule. They get priority surgery dates and personal care. Her other patients that do not pay are able to see her physician assistant. She earns an extra $300K — insurance-hassle-free — for the hundred patients who join her VIP group.

A pizza restaurant always has long lines during rush hours. The owner sets up a VIP membership of $75 per year for customers who want to bypass the long lines. He dedicates one of his cash registers to the VIP line and staffs it accordingly during rush hour. He sends specials by email and a birthday coupon to the VIP members. Five hundred customers sign up, grossing an extra $37,500 with little or no additional expenses.

A consultant has a couple of clients that want to have access to her 24/7. She sets up a special retainer of $1,500 per month for these clients and provides her cell number. Since they are busy CEOs, they only call a few times a year, but when they do, she drops everything to be of service. With four clients on retainer, it’s an extra $72K per year for a few days of work.

No matter who your clientele is, there are always a few who demand extraordinary service and are willing to pay extra for it. Capitalize on this by adding a VIP revenue stream to your offerings.

What you include in your VIP package will vary by industry, but here are a few thoughts:

Increased access to you
Special service, perhaps via another phone line or checkout lane
Invitation to exclusive events or sales or previews
Free gift wrapping
Free shipping
Special gifts
Friends are free
A richer experience
Birthday acknowledgement

A VIP offering is not the same as a points program. A points program encourages volume sales, while a VIP program is all about special perks, exclusivity, and a higher level of service.

Does your business lend itself to a VIP offering? If so, give it a try.

Filed Under: Business Development Tagged With: loyalty, membership, special offer, vip

5 Metrics to Gauge Your Business Performance

August 18, 2016 by Mandy Leave a Comment

performance

Sometimes, the most telling numbers in your business are not necessarily on the monthly reports. Although the foundation of your finances revolves around the balance sheet and income statement, there are a few numbers that, when known and tracked, can make a huge impact on your business decision-making. Here are five:

1. Revenue per employee.

Even if you are a solo business owner, revenue per employee can be an interesting number. It’s easy to compute: take total revenue for the year and divide by the number of employees you had during the year. You may need to average the number in case you had turnover or adjust it for part-time employees.

Whether your number is good or bad depends on the industry you’re in as well as a host of other factors. Compare it to prior years; is the number increasing (good) or decreasing (not so good)? If it’s decreasing you might want to investigate why. It could be you have many new employees who need training so that your productivity has slipped. It could also be that revenue has declined.

2. Customer acquisition cost.

If you’ve ever watched Shark Tank®, you know that CAC is one of the most important numbers for investors. This is how much it costs you in marketing and selling costs to acquire a new client. Factors such as annual revenue, or even lifetime value of a client will affect how low or high you can allow this number to go.

3. Cash burn rate.

How fast do you go through cash? The cash burn rate calculates this for you. Compute the difference between your starting and ending cash balances and divide that number by the number of months it covers. The result is a monthly value. This is especially important for startups that have not shown a profit yet so they can figure out how much cash they need to borrow or raise to fund their venture.

4. Revenue per client.

Revenue per client is a good measure to compare from year to year. Are clients spending more or less with you, on average, than last year?

5. Customer retention.

If you are curious as to how many customers return year after year, you can compute your client retention percentage. Make a list of all the customers who paid you money last year. Then create a list of customers who have paid you this year. (You’ll need to two full years to be accurate). Merge the two lists. Count how many customers you had in the first year. Then count the customers who paid you money in both years. The formula is:

Number of customer who paid you in both years / Number of customers in the first or prior year * 100 = Customer retention rate as a percentage

New customers don’t count in this formula. You’ll be able to see what percentage of customers came back in a year. You can also modify this formula for any length of time you wish to measure.

Try any of these five metrics so you’ll gain richer financial information about your business’s performance. And as always, if we can help, be sure to reach out.

Filed Under: Blog

What’s Your DSO?

August 4, 2016 by Mandy Leave a Comment

calculator

If you grant credit to customers, then you have a balance in accounts receivable. DSO stands for Days Sales Outstanding, and this helps you measure how fast your receivables are being converted to cash.

Here’s how to calculate it:

DSO = Accounts receivable balance / Annual net credit sales * 365.

DSO is measured in days and it represents how many days it takes to collect the customer invoice balance and convert it to cash.

Whether the DSO measure is “good” or not varies by industry as well as the terms you’ve set for your clients. If you’ve set your invoices to be due in 30 days and your DSO is 45 days or less, that’s pretty good. If you’ve set your invoices to be due in 10 days and your DSO is 60 days, then you might want to consider a more aggressive collection policy to speed up your cash flow.

Here are some tips to reduce DSO:

1. Invoice clarity.

Make sure your invoices are accurate and clear. Make it clear whom to make the check out to, where to mail it, the due date, and the amount due. All of these features should be easy to find on the invoice.

2. Consider discounts.

A common discount term is 2/10, net 30. This means the customer can take two percent off their invoice if they pay in 10 days; otherwise they owe the whole amount in 30 days. If you have customers from large companies, discounts are often required by policy to be taken and this can speed up your payments from them.

3. Consider electronic payments.

Going paperless with your invoicing as well as your payment process can speed up the entire billing cycle. Customers getting their bills earlier will also pay earlier.

What’s your DSO? If you need help calculating it, give us a call.

Filed Under: Bookkeeping, Business Tips Tagged With: accounts receivable, days sales outstanding, dso

5 Tips to Implement to Give Your Clients 5-Star Service

July 21, 2016 by Mandy Leave a Comment

champagne Are you interested in being known for your extraordinary customer service? Or perhaps you just want your customers to feel like it’s easy to work with you or purchase from you. If so, try these five tips for five-star client service.

1. A good old-fashioned handwritten thank you note.

Almost extinct, this customer pleaser shows you are willing to go the extra mile for a personal touch and connection with your client. You can purchase boxes of thank you notes from any stationery store or order them with your company logo from a local printer.

2. Remember your customer’s preferences.

High-end hotels are good at remembering what you like, and almost any business can add this idea by using a CRM – customer relationship management system – that stores customer preferences, order history, last conversations, and any notes you want to remember about the client. The trick is keeping the system notes updated and using them when it counts.

3. Deliver an unexpected extra.

When your customer least expects it, give them more than what they paid for. This manifests itself in many ways, depending on your business type. Here are some examples:

Restaurants: Give an appetizer, dessert, or coffee at no charge or pick up the bill of a regular once in a while.

Retail or offices: Offer an unexpected beverage and fruit tray or snacks like you would find at a spa or country club.

Real estate: Provide a list of local phone numbers, a fancy map or GPS app, or coupons to restaurants you partner with.

Construction: Offer a tool, a warranty, a list of reliable repairmen, or a full set of replacement lightbulbs.

Landscaping: Offer a birdfeeder, a fertilizer schedule, or a lawn tool.

Any office: Partner with a business that has your same client base and exchange coupons so that you have a book of them to give to all your clients.

4. Give clients your cell number.

Giving clients your personal or business cell number is not as risky as you might think. Very few clients will actually call you. Surprisingly, the goodwill you gain by sharing your personal number far outweighs any disruption. But here’s a warning – don’t share your number with sales reps of vendors; you’ll get relentless calls every day from them.

5. Offer a VIP membership.

Some customers care about and are willing to pay more for excellent service, and others don’t. Separate your customer base by offering a VIP membership. By paying a nominal fee each year, these members get priority access to your appointment time, sales, overnight shipping, or whatever else you can distinguish. The good news is it’s a new revenue stream as well.

Choose one of these ideas and implement it to increase your customer service to five stars.

Filed Under: Business Development, Business Tips Tagged With: client retention

Do the New Overtime Rules Affect You?

July 7, 2016 by Mandy Leave a Comment

forms Effective December 1, 2016, federal overtime regulations will change and may affect how you are paying your employees. These overtime updates will affect 4.2 million workers across the country.

The new rules will raise the salary overtime-eligibility threshold from $455/week to $913 ($47,476 per year). This new threshold will increase every three years. Salaried workers already entitled to overtime will get increased protection.

Employers have a choice of three actions they can take to employees who become eligible for overtime that weren’t before.

Pay time-and-a-half for overtime work.
Raise worker’s salaries above the new threshold.
Limit worker’s hours to 40 per week.

Let’s say you have an employee that earns $500 per week and works 50 hours a week. Previously, you didn’t pay overtime, but beginning December 1, 2016, you will need to. At $12.50 per hour, you would owe them the regular $500 plus 10 hours of overtime at $187.50.

Let’s say you have an employee earning $800 per week and they work 50 hours. Previously, you didn’t pay overtime, but now you will need to consider it. You could pay them overtime, which works out to a weekly pay of $1100. Or you can choose to give them a raise to $913 per week – the new threshold – and continue to exempt them from overtime. The latter is the lowest cost alternative.

In both cases above, it may be cheaper to hire an additional part-time worker to work the 10 extra hours per week.

You can find more about the new overtime law here:
https://www.dol.gov/featured/overtime/

And if you have any questions about your payroll, feel free to reach out anytime.

Filed Under: Payroll Tagged With: overtime