Business Lessons Learned from an Airplane
catherine |
The Watercooler |
Friday January 16 2015
You know, it’s easy to wax philosophic about so many things and today is no different. It’s amazing what can happen when you have a couple hours without anything but your thoughts and no social media or phone. I normally enjoy a faster pace, being around people and getting my energy from them. If I’m lucky, we usually share a good laugh.
I was recently on a 2-hour flight to Jacksonville and I realized how amazing it is to have this time to truly work on my business. And there is something cathartic going old school with just pen and paper. Once we took off, I immediately went to my notebook and I made some interesting observations as I was watching the flight attendants doing their thing.
Did you know that being successful is like an airplane?
The plane had to be conceptualized. Thank you Wright Brothers for your amazing creativity.
Then the plan had to be implemented. Simply having an idea does not mean the plane will take off. There’s a lot of math. Let’s face it, numbers are sexy.
Now that you have a plan you have to design it. If you just wing it (no pun intended), yes it may work but in the long run you can’t make modifications if you don’t track what’s worked and what hasn’t. Plus how are you going to know where to make improvements?
Even a design will not be successful unless you test it. Testing lets you know what is and is not going to work to achieve your final goal.
This leads to having people test your design. Without customers you may as well have a hobby. Doing nothing will produce nothing but a great design.
Now that you have customers testing your design, you need to make sure you have the right people helping your customers. Airline pilots, air traffic controllers, and flight attendants are all trained in a very specific role within the implementation of the design. These folks are directly responsible for the success of your design being embraced by your customers. Make sure you have the right people in the right position.
Finally and most important, this is always going to be innovation so you need to embrace. Initially airlines were concerned about folks using their cell phone on board. Now you can use the Wi-Fi provided by the airline. Adapting to your customers’ needs while keeping your core competencies allows you to maintain your integrity and expand your company’s value proposition in a strategic way.
It all comes down to having a vision, plan and implementing that plan. The new year always brings about these resolutions. Wouldn’t it make sense to have a “sexy numbers” plan for your business?
Is It Okay To Use Personal Credit Cards For Business Expenses To Get Airline Miles?
catherine |
The Watercooler |
Wednesday February 19 2014
Using Your Personal Credit Card For Business Purposes To Get “Airline Miles” May Get You “Grounded”
I got a great question from a bookkeeping client in Chicago. And it is a common one: “Can I use my personal credit card for my business expenses to get airline miles?”
My answer, as usual, is a defensive one. Defensive because I run a bookkeeping business. I am not a lawyer, CPA or financial advisor. I am just the one who makes you look good in front of them. So, my defensive answer is this:
It depends.
It depends on where you are going. Not on vacation but where you are going with your business. To you, owning your business may just be a means to earn a living. My view is that the business you own is more than that, it is an asset.
It is an asset because eventually you are going to get out of the business. Whether you sell it, pass it on to your heirs or just shut it down and move to Florida, it is still an asset.
To give value to a business as an asset, you have to demonstrate the flow of money.
And if you use your personal accounts for business purposes, it co-mingles the funds. For most businesses, it is just a bookkeeping hassle. But when you begin to view your business as an asset, co-mingling funds can make the value of your business a little fuzzy.
How could that effect things? Let’s say you want to sell the business one day. The interested party on the other side wants to know how well your business performs to determine a value. If they see inconstant bookkeeping practices, co-mingling of funds, they may raise questions or devalue their estimates of your business.
Now, what if you’re not selling but want to hang on and continue to grow your business.
You may need to open your books to a banker or interested investor to raise money to fuel your growth. That fuzziness begins to show up again. And what these people like to see is a sharp set of books.
They have seen too many small business owners who want to borrow or sell and their accounting looks like they have been flying by the seat of their pants. Therefore, they become more cautious in moving forward.
The general rule is to keep your business and personal expenses separate.
Now after that warning, it is still possible to use a personal mileage card. What you want to remember is that you are using these funds for business and not pleasure.
It is great to have the benefits of using a mileage card, yet even more important to demonstrate that you and your company show fiscal understanding and responsibility.
So understand that if the credit card that you use is in your name, you and not the company benefits.
And on the other side, if you are using a company mileage card, your company is able to use those miles for any individual paid by the company.
In either case, you have to have good bookkeeping records for accounting purposes.
If you use a personal card and the company reimburses you for your travel expenses, make sure you create an expense report each month and you get “reimbursed” by the company. This way you keep your records clear and your finances safe.
If you decide to use a company card for travel and points, just make sure the company pays for it, rather than writing a check from a personal account. Then the records will stay clear and accurate.
As small businesses, we tend to forget how our current decisions and how we handle our funds, can make long term impacts on our businesses. It really boils down to good record keeping. Generally, bookkeeping and record management is not a favored activity of my clients but that is why they hire us.
So do not get grounded by confusing record keeping and airline miles, give us a call and we will help you keep the books straight and your business flying high all year long.
How Can Putting Your Logo On A Wine Bottle Save You Tax Dollars This Year?
catherine |
The Watercooler |
Thursday December 19 2013
And 7 Other Great Tax Savers Uncorked.
Are You In A Giving Mood This Year? Put Your Logo On It For Possible 100% Deduction.
Typically there are two types of gifts you can give that can be written off 100% and are not taxable. An example of these gifts would be Thanksgiving turkey, a Bottle Of Wine, Flowers, or even entertainment tickets to a show or game for your employees. One of the features of these gifts, under IRS interpretation, is that they are nominal in value and are given infrequently. The other type of gifts include those you give out to your clients. Now the deal is, and you want to be very careful, you can only claim $25 per person in a given calendar year. After that, the expense is not allowable. Unless your gift has your company logo on it. Then it’s actually a promotional item and the rules change! Want more? Keep reading…
When Does Your Generosity As A Business Owner Become A Tax Haven?
One way that a lot of business owners miss opportunities to save tax dollars is failing to record their charitable contributions. I’m not talking about the annual gift to charity. I’m talking about all of it. When you’re active in your community you’re probably being asked for and responding to charitable requests all the time. You need to keep track of ALL OF THESE. Since these expenses are 100% deductible you can save more money. (It’s what we bookkeepers and virtual assistants help you with) The reason is…there is AN IRS THRESSHOLD. And, if you surpass that threshold, you can itemize these deductions and save even more tax dollars this year.
Do You Know Which Type Of Meals Are 100% Tax Deductible?
There are two different ways that your meals are recognized by the government – 100% and 50%. If you go have a meeting over a meal as a promotional opportunity, then it would be taxed at 50%. This means that you talk about business but essentially you are entertaining or paying for the food/meal. You still need to answer who, what, where, when for the expense to not be questioned by the IRS. If you are traveling for business, you have to eat. This would be taxed at 100%. With all things IRS, there is also the grey area 100% deduction in special instances, like a holiday party for employees or instances where you supply lunch for the office. When we are working with a client, we help them plan and track all of the info regarding this. Invariably we’ll find some savings just because the records are kept up better.
The Envelope Says…. “You Save Money!”
One of the nasty tasks we take off of our clients To Do pile is tracking all the cash receipts. You know, there are always those times when we all pull cash from the ATM for whatever reason. The thing that we all forget to do is keep track of that cash. So what we suggest is to keep a small envelope in your car, purse, jacket, or your office bag and throw all those cash receipts along with the ATM receipts into the envelope. Some of my clients just write out some notes and send them to us. We categorize it and review it with them. You see, when you pool all those receipts together, we find all kinds of real expenses that otherwise get missed and cost you needless loss. Why pay taxes on what you can rightfully deduct?
The Tax Man’s “Make Money From Home” program.
If you ever work from home, you should really establish a home office. The rules for the deduction are really simple. You’ll need to know your full home square footage to report to your accountant. Take a picture of your designated office area (a kitchen table does not count). Measure the square footage of the space you are using. You can deduct a portion of your utilities, cleaning fees, rent/mortgage and repairs/maintenance to your home. It’s amazing and it really does add up to a big savings. Ask your CPA, you have to do it right.
Did You Have A Good Year? Buy Something Big And Pay Less Tax For Years…
Buy that big piece of equipment. Let’s say your profit & loss (also known as an income statement) is showing a really large profit. You don’t want to pay a hefty tax so now is the time to purchase a large piece of equipment. That could mean a brand new computer set-up, a new piece of office furniture, etc. These items would be considered fixed assets, which add to the company’s overall value, and depreciate over time – expenses that apply over a 3-year up to 20-year period.
Deny, Deny, Deny Is Not A Good Strategy, Defer, Defer, Defer is…
As a small business owner, you want to defer the amount of taxes you pay. A great way to do this is to put money into a retirement account. By placing the funds into the account, you reduce the amount of taxes you have to pay the IRS and increase your overall personal wealth.
Don’t Sweat The IRS, They May Owe You Money.
I can’t tell you how many times someone will get a notice from the IRS. Usually this has to do with something you did not report to the IRS for whatever reason. The best example I have is a situation I heard from one of the many accountants I know and work with. A woman whose husband passed away cashed in some stocks to cover personal costs. She received a notice that she owed approximately $20,000 because she did not claim the sale on her taxes. Well, it turned out that she paid more money for the stocks than the cost of what they were sold. The difference was not significant but she ended up getting a refund from IRS because she incurred the loss on the sale of the stocks. So as you can see, don’t just assume the IRS is 100% correct. Take the information to an accountant, review all the details surrounding the issue and then you can make a proper assessment of what needs to be done.
Our job here at The Office Grapevine is to save our clients Time, Energy And Money. If you have any other great tips, leave a comment and share this with your friends.
Welcome
catherine |
Featured Post,Real Estate Tutorials,The Watercooler |
Friday January 29 2010
The Office Grapevine, a Chicago, Illinois-based firm, is your virtual assistant resource with a network of virtual assistants – seasoned executive assistants making a technological connection between businesses and the administrative, secretarial, and business support services they need.
We make the effort to understand your business, and the ways our virtual assistance services can support you, freeing you to focus on your priorities. We’re flexible. So you can get the smart, cost-effective virtual assistance you need, when you need it – hourly, monthly, or on a retainer.
We’re your virtual office, catering to busy and on-the-go professionals and executives. We adapt to new directions and the changing conditions in which you’re doing business. And we never forget that our endeavors are exciting and interesting and rewarding, and partnerships are the essence of success.
We have genuine respect for everyone who uses our services as virtual assistants.