If you don’t have the right tools, jobs take longer and don’t turn out well. Those jobs often need fixing or re-doing later. It’s the same with people. Trying to get a job done without qualified, experienced people costs your organization more money and aggravation in the long run.
Think that lower compensation saves money? Think your budget isn’t big enough to invest in the people you really need? Think about it this way: What does it cost not to invest in knowledgeable and experienced people?
Organizations are exposed to five risks by not investing in the right people:
- Limited Capacity
People without the necessary skills require more supervision and are less familiar with the latest practices, systems, laws, and other areas. To grow or to stay competitive, organizations need people that keep up with changing conditions and new methods.
Unqualified hires often result in higher turnover. Hiring and training takes time. Vacancies put stress on the rest of your team. Time and stress are not expense items on your financial statement, but those costs are real.
- Higher Error Rate
Unqualified employees make more errors, which is time-consuming and expensive to correct. And that assumes the errors are detected; undetected errors create costs you cannot identify.
Experienced people know what to do and how to it because they’ve seen it before. They assess new situations quickly and accurately. Inexperienced people take more time because they are figuring it out as they go.
- Regulatory or Legal Compliance Issues
Employees who are unaware of compliance issues can harm the organization, increase costs, and tarnish reputations. Issues can range from industry-specific issues to general business concerns, such as taxes and payroll.
Getting the right people on your team isn’t easy, but it’s impossible if you don’t pay enough to attract and retain them. Considering the five risks of not investing in the right people can reduce the expense of making a cheap decision.
After month of looking, you found your dream job! It’s everything you’ve always wanted. Only problem is that it’s located about 500 miles away. Moving is expensive. You heard somewhere that moving expenses are tax deductible. Is that true?
Moving expenses can be tax deductible for “reasonable” transportation, storage, and other relocation costs, other than meals. But the deduction is only allowed under specific circumstances when you experience a job-related home move.
Answering three important questions will help you determine whether your moving expenses are eligible income tax deductions:
Is the Move for Work or Business?
To be considered a deductible expense, your move must correspond with the timing and location of starting a new job or business. Moving expenses that are incurred within one year of starting that new job or business can be considered for the deduction, assuming other tests are satisfied.
Is New Work 50+ Miles from your Old Home?
Your new workplace must be at least 50 miles farther from your old home than your old job location was from your old home. If you had no previous workplace, your new job location must be at least 50 miles from your old home.
Did You Work Enough Post-Move?
Also known as the “time test,” employees must work for 39 or more weeks during the 12-month post-move period to take advantage of the moving expense deduction. Entrepreneurs and owners must engage in their business for 39 or more weeks during the 12-month period.
The distance and time tests rules do not apply if you are a member of the Armed Forces and your move was due to a military order and permanent change of station. To claim moving deductions, file IRS Form 3903. Want more info? Check it out at http://bit.ly/2ca0HlW.
Your organization probably has a budget. But is that budget helping you increase income and control expenses? If not, you can use your budget as a powerful financial tool starting now! Here’s how:
Follow these three steps to make sure that your organization’s financial goals are being met all year long:
- Set Expectations Upfront
Define the process and expected outcomes from the budget comparison. Establish a formal financial oversight process stresses its importance and sets clear actions and time frames. At a minimum, a budget comparison should include an income statement and a balance sheet with current and prior year comparative data.
- Take Action to Stay on Course
It’s not necessary to review every financial line item. Only significant line items and budget variances should be reviewed in detail. Those areas require more action to get to the root cause of variances or unexpected results. Explaining the root cause often helps you identify the corrective action that is needed to stay on course and meet budget goals.
- Keep your Results in Mind
Stay laser focused on your business objectives while comparing your budget with actual financial activities. Documenting the review and resulting decisions and actions help to track progress throughout the year toward meeting financial goals and overall business objectives.
Regularly comparing the organization’s budget to actual financial activity is worth the time and effort. It helps organizations to determine whether budgeted financial goals are achieved and provides an opportunity to make any changes needed to stay on course.
Even after investing tons of money in technology and security for data protection, organizations still fall victim to data breaches. Why? Because security doesn’t work if people don’t use systems securely. Recent news events and surveys of IT security professionals reveal that the biggest cybersecurity risk comes from people.
A prime example is when a system administrator fails to change the manufacturer’s default password. The door to that system is wide open to unauthorized access. Phishing e-mails are a popular mechanism for exposing systems to attack.
Traditional methods, like training and documentation, make people aware of cyber threats and vulnerabilities. Another way to drive home the risks and costs of a data breach is to hear about real life techniques used by hackers to manipulate people inside your organization.
If you think your business isn’t at risk, a few scary, true stories about accessing and stealing sensitive data will change your mind. One of my IT referral partners, Envision Consulting, is hosting a workshop where participants will hear from the World’s Most Famous Hacker – LIVE!
A top cybersecurity expert, once on the FBI’s most wanted list and now a trusted, worldwide security consultant, is the main speaker at Envision Consulting’s “Top Business Executive Cybersecurity Workshop of 2016” on October 19th. His experiences demonstrate why people are the weakest security link and how easily they can be manipulated into handing over the keys to the kingdom. Registration and details: http://bit.ly/29yV0yx
Walk away with concrete ideas and techniques to adopt immediately in your business to lower the chances of becoming the victim of the next high-profile cybersecurity attack. Your people may be your greatest cybersecurity risk. Attending this workshop could be the greatest investment you make to mitigate that risk.
Nonprofits promise donors to use funds to deliver programs in support the mission. Those same nonprofits also strive to keep expenses low, especially in non-program areas. But the cost of bootstrapping non-program areas, like accounting, can be huge – and invisible.
Nonprofits have a legal responsibility to protect and account for their funds. Using reliable and effective systems and processes are part of fulfilling that legal responsibility. Investing in accounting infrastructure is essential. Knowing WHY accounting is essential helps nonprofits talk to stakeholders about funding infrastructure investments.
Three benefits that nonprofits get from reliable, effective accounting systems and processes are:
- Clear, Accurate View of Finances
Manual or disjointed processes make it difficult to get accurate, up-to-date financial information. The Board, executive director, and program managers don’t get the information they need to make good decisions for the organization. Investing in qualified staff, efficient systems, and standard processes helps nonprofits control and safeguard finances.
- Fewer Errors and “Do-overs”
A lack of clear, coordinated, and complete processes results in mistakes. Correcting errors and re-doing tasks eat up time that could be spent doing something else. Automating processes reduces the chances of a human error. Coordinating processes between people, roles, and responsibilities increases the chances of getting things done right the first time.
- Time Savings for All
Not all accounting processes are performed by the accountant or bookkeeper. Program managers and others provide receipts, timesheets, and other information that impact the accounting records. Manual or inadequate processes to collect and record information from the organization pose a challenge to maintaining accurate and complete financial information. Everyone gets time back in her or his day when processes and systems are coordinated with the rest of the organization.
Knowing the benefits of reliable, effective accounting systems and processes can help nonprofits explain the importance of infrastructure investments to their stakeholders. Explaining WHY will result in donors understanding that nonprofits cannot afford to keep bootstrapping their accounting.
Last week, I took an IRS exam to earn the Enrolled Agent (EA) credential. Being an EA will allow me to represent clients or interact on their behalf with the IRS. That’s on top of preparing income tax returns for businesses, individuals, estates, and nonprofit information returns.
The EA or other tax credential is one thing to look for to find a qualified tax preparer. Clients need to know that a knowledgeable tax professional is helping them follow the tax laws and take allowable deductions.
So what other experience or background should tax payers look for when “shopping” for a tax preparer? Other than getting referrals from colleagues, family and friends, taxpayers should ask prospective tax preparers these three questions:
- How Do You Keep Up with Changing Tax Laws?
Tax laws are constantly changing so it’s important to work with a tax professional who keeps up, so you don’t have to. Your tax preparer should describe attending conferences, webinars, or other methods she or he uses to stay current.
- What are Your Experience and Credentials?
Tax preparation is an unregulated industry where anyone can participate. Get examples of tax situations, client types, and complex issues where the tax preparer has experience. Her or his answers will indicate if she or he will be able to address your needs.
- How Do You Communicate with your Clients?
Does the tax preparer you are interviewing meet regularly with clients? Are meetings in person? Is the person available for you if a tax-related question or issue comes up? Make sure you feel comfortable with the tax professional’s style, manner and process.
It’s important to have a qualified tax preparer that is prepared to meet your needs. Feeling confident and comfortable with the answers to these three questions is a good sign that your taxes will be prepared accurately and consider allowable deductions.
This week, my business is two years old! Anniversaries are cause for celebration and reflection — a good time to check your progress and feel great about your accomplishments.
Looking back on my business from its start to its Second Anniversary, growth and success depend on these four important activities:
Continue reading “Two Years in Business!”