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Aug 27 2015
Keep An Eye On Kpis As Your Company Rolls Along

Posted in business

Like race car drivers, business owners need to monitor gauges on their dashboards to keep an eye out for serious operational failures before a total breakdown occurs. These gauges are commonly referred to as key performance indicators (KPIs).

There are two broad categories of KPIs: financial and nonfinancial. Financial KPIs often take the form of ratios, such as:

  • Debt to Equity: Total Debt / Shareholder’s Equity,
  • Current Ratio: Current Assets / Current Liabilities, and
  • Days Sales Outstanding: Number of Days × Accounts Receivable / Credit Sales.

Nonfinancial KPIs may include measurable metrics in the areas of customer service, sales and marketing. For example, if a company’s goal is to improve its response time to customer complaints, its KPI might be to initially respond to complaints within 24 hours, and to eventually resolve at least 80% of complaints to the customer’s satisfaction.

KPIs differ from one company to the next based on industry, company type (B2B or B2C, for example) and, most important, strategic objectives. Your KPIs will stem mainly from your mission statement and your short-, medium- and long-term goals.

We can help you target the KPIs best suited to your business, and ensure the calculations are accurate and based on the timeliest financial data. Contact us today!

© 2015

Last Updated by Admin on 2015-08-27 11:18:04 AM

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Aug 12 2015
6 Ways to Mitigate Uncertainty in Strategic Planning

Posted in business


To succeed at strategic planning, business owners must look to actively mitigate the many uncertainties under which every company operates. Here are six ways to do that:

1. Be curious. Identify the demographic, technological, cultural and other changes occurring outside your company and industry.

2. Assess how those changes might impact your organization and industry. For example, trends toward a more ethnically diverse and older population have been well documented. How will they affect your business?

3. Gain insight on how to succeed in today’s world. Talk with employees at all levels and from across departments. Network with peers at companies within and outside your industry.

4. Figure out what you know. Soak up as much information as you can through industry journals, trade association gatherings and social media.

5. Challenge your assumptions. As markets, technology and industries advance, determine whether your current plans are still relevant. If they aren’t, make competitive adjustments.

6. Focus on flexibility, agility and resilience. Continually ask “what if” questions and plan for a range of scenarios. For instance, what if your supply chain breaks down?

Strategic planning should be approached prudently and decisively — not rashly or hesitantly. We can help chart your company’s course toward a brighter, more profitable future. Contact us today!

© 2015

Last Updated by Admin on 2015-08-12 08:33:17 AM

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Aug 05 2015
Tread Carefully When Determining Compensation For S Corp. Shareholder-Employees

Posted in business


By distributing profits in the form of dividends rather than salary, an S corporation and its owners can avoid payroll taxes on these amounts. Because of the additional 0.9% Medicare tax on wages in excess of $200,000 ($250,000 for joint filers and $125,000 for married filing separately), the potential tax savings may be even greater than it once would have been. (S corporation dividends paid to shareholder-employees generally won’t be subject to the 3.8% net investment income tax.)

But paying little or no salary to S corporation shareholder-employees is risky. The IRS has targeted S corporations, assessing unpaid payroll taxes, penalties and interest against companies whose owners’ salaries are unreasonably low. To avoid such a result, S corporations should establish and document reasonable salaries for each position using compensation surveys, company financial data and other evidence.

Do you have questions about compensating S corporation shareholder-employees? Contact us — we can help you determine the mix of salary and dividends that can keep tax liability as low as possible while standing up to IRS scrutiny.

© 2015

Last Updated by Admin on 2015-08-05 07:02:25 AM

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Aug 05 2015
Independent Contractors Offer Expertise, Potential risks

Posted in business

Turning to independent contractors can be a smart option in a number of situations, such as when you have a seasonal upswing in workload or need a specialized skill for a short period. But independent contractors come with potential risks, too. They may not help you trim your total workforce costs if you use them excessively. More important, there can be tax and legal ramifications if you mishandle the relationship.The IRS has long scrutinized employers’ use of independent contractors as a way to avoid payroll tax obligations. If the IRS recharacterizes an independent contractor as an employee, you could be on the hook for:

Back payroll taxes you should have paid,

Back payroll and income taxes you should have withheld, and

Interest and penalties.

  • Also, earlier this year, the Department of Labor renewed its focus on employee misclassification. Its Wage and Hour Division released Administrator’s Interpretation No. 2015-1, which includes six factors to help employers determine proper classification and warns of serious potential penalties.Independent contractors can give you flexibility to even out the peaks and valleys of your workforce needs. But these arrangements have risks. We can help you understand the tax implications and work with your legal advisors to keep you in compliance. Contact us today!

© 2015

Last Updated by Admin on 2015-08-05 06:57:02 AM

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