Posts in category: Advisory

Getting the Most From Selling Your Business

This article discusses how there are many factors at play when a business gets bought or sold. Specifically, topics such as reoccurring revenue, why someone sells, buyers' interests, evaluation criteria, and the 4 P's (People, Platform, Processes, and Product) are all outlined within this link. No matter where you are at in the mergers and acquisition process, be sure to check out this link for more information and to be as educated as possible!

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Which Meals Qualify for the Temporary 100% Expense Reduction?

This article discusses how the IRS released guidance explaining deductions on food and beverage within a restaurant. There was a temporary 100% deduction which was “designed to help restaurants, many of which have been hard-hit by the COVID-19 pandemic.” However, as we continue to move forward, there were questions regarding when the 100% deduction and when the 50% limitation applied. Be sure to check out this link for more information and details that are relevant as an employer!

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Creating a Post-COVID Workplace

This article discusses how businesses are starting to return to the workplace following the relaxing of COVID-19 regulations. However, this process may be more difficult than anticipated. This article outlines three steps to consider when implementing your return to work process. For example, determining what this process looks like operationally, prioritizing what employees need, and supporting growth in both work and personal aspects is going to be key these next few months. Be sure to check out this link for more information and details!

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Marketing Your New Startup

This article discusses how many startup firms are having similar problems in marketing and getting their new ideas out there. Whether your startup is 5 years old or 5 days, utilizing tips such as email best practices, social media, blogs, and truly staying authentic can prove beneficial in the long run. Be sure to check out this link for more information and details!

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Tips for Family Business Success

This article acknowledges and discusses how running a family business can be difficult at times. From balancing a family work-life balance to communication issues, this industry can be very challenging. However, by following tips such as actively managing family dynamics, hiring externally when necessary, establishing a structure, and succession planning, your family business can be at the top of its game. Be sure to check out this link for more information and details!

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Financial Mistakes Business Owners Made During the Pandemic and How to Avoid Them

This article discusses how many businesses felt a significant negative impact due to the coronavirus pandemic this past year. Although most of the setbacks were unavoidable, it is important to do everything in our power to avoid making the same mistakes in the future. For example, mistakes such as not keeping good business records, not having cash reserves, not having multiple streams of income, and not being somewhat educated on your numbers are all instances that can lead to avoidable setbacks. Be sure to check out this link for more information and details about the things you can be doing to prepare for the future!

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Congress at Work: Advancing Healthcare Initiatives, Small Business Funding and Protecting the Elderly from Scams

The Congress at Work series of articles is designed to give you a glimpse of various types of legislation currently under consideration. While either the Senate or the House of Representatives may initiate a bill proposal, be aware that many bills never become law. They may never make it out of committee, be blocked by a Senate filibuster, be delayed, lack sufficient votes, never be agreed upon by the two houses, or be vetoed by the president. 

FASTER Act of 2021 (HR 578) – This bill expands the definition of major food allergens for food-labeling purposes to include sesame. It is designed to protect Americans with food allergies and related disorders that could be affected by anaphylaxis, food protein-induced enterocolitis syndrome, and eosinophilic gastrointestinal diseases. It also authorizes the Department of Health and Human Services to report on food allergy research and data collection activities. The bill was introduced by Rep. Tim Scott (R-SC) on March 3. It was passed by Congress on April 14 and is currently awaiting enactment by the president. 

Advancing Education on Biosimilars Act of 2021 (S 164) – This bill was introduced by Sen. Margaret Hassan (D-NH) on Feb. 2. The legislation requires the Food and Drug Administration (FDA) to educate and promote awareness about biological products and biosimilars among healthcare providers. The FDA may also host a website to provide educational materials. This bill was passed by Congress on April 14 and is awaiting signature by the president. 

TRANSPLANT Act of 2021 (HR 941) – This bill reauthorizes the Stem Cell Therapeutic and Research Act of 2005, which makes genetically matched cord blood stem cells available to patients who need them. The legislation was re-introduced by Rep. Doris Matsui (D-CA) on Feb. 8 and passed in the House on April 15. It is currently under consideration in the Senate. 

504 Credit Risk Management Improvement Act of 2021 (HR 1482) – Introduced by Rep. Dan Bishop (R-NC) on March 2, this bill passed in the House on April 16 and goes to the Senate next for consideration. It amends the Small Business Act to require the administrator of the Small Business Administration to issue rules relating to environmental obligations of certified development companies and for other purposes. 

504 Modernization and Small Manufacturer Enhancement Act of 2021 (HR 1490) – This bill was introduced by Rep. Angie Craig (D-MN) on March 2 and passed in the House on April 15. It is currently under consideration in the Senate. The bill would amend the Small Business Investment Act of 1958 to improve the loan guaranty program in order to enhance the ability of small manufacturers to access affordable capital. In addition, the bill adds policy goals such as facilitating reduced costs via energy-efficient products, generating renewable energy, and providing aid to revitalize disaster areas. The bill also would increase the maximum loan amount from $5.5 million to $6.5 million for small manufacturers and reduce the amount that they must contribute to project costs, among other provisions. The legislation authorizes each SBA district office to engage a resource partner to provide training for small manufacturers. 

Fraud and Scam Reduction Act (HR 1215) – This bill would establish an office within the Federal Trade Commission and an outside advisory group for the purpose of preventing fraud that specifically targets the elderly, including mail, telephone, and internet scams. Furthermore, the bill would form a Senior Scams Prevention Advisory Group to create educational materials for distribution to employees of retailers, financial services, and wire-transfer companies to help them identify and prevent scams that affect older adults. The FTC also would establish an advisory office within the Bureau of Consumer Protection to monitor scams targeting older adults, educate consumers, and receive complaints. The bill was introduced by Rep. Lisa Blunt Rochester (D-DE) on Feb. 23. This bill passed in the House on April 15 and goes to the Senate next for consideration.

How Businesses Can Hedge Against Increasing Inflation

Inflation is on the rise. According to a recent Economic News Release from the U.S. Bureau of Labor Statistics (BLS), the Producer Price Index for final demand grew by 1 percent in March. February saw “final demand prices” grow by 0.5 percent; January's final demand prices increased by 1.3.

According to the BLS, the Producer Price Index (PPI) consists of many indicators and evaluates the mean difference over a period of time for the “selling prices received by domestic producers of goods and services.” In other words, PPI is a way to gauge how much manufacturers and similar businesses face in increased costs due to inflation.

This inflation gauge takes a broad survey of approximately 10,000 unique manufactured items and the amount of inflation businesses face. The BLS’ PPI measure looks at items produced by fisheries, food growers, miners, manufacturers, etc. It also includes 72 percent of production of the service sector, as the 2007 Economic Census found.

Hedging with Futures 

One way to reduce risk is by hedging. A popular example is with futures contracts. Much like buying an insurance policy, futures contracts can reduce the impact of a negative event, such as a spike in commodity prices.

If a company is worried about the price of oil for their planes or coffee for their cafes, they can enter into a futures contract to buy a designated quantity of that particular commodity at an agreed-upon price, with the ability to exercise it on or before the expiration date.

With a futures contract, a company can better plan its budget based on the contract's parameters and the cost of the contract. If the price of the commodity rises in the future due to increased demand or limited supplies, the business can save money by taking delivery of the particular commodity at the originally agreed upon price through the futures contract.

Since the goal of hedging is to protect against losses, it is important to weigh the cost of the futures contract. If the price of the commodity falls for the above-mentioned futures contract example, the company would still be forced to buy the commodity at the contract's price, which would be a poor investment. If, however, it sells the futures contract before its expiration to avoid receiving the physical commodity at a poor price, that would lead to a loss. Having a contingency plan to reduce losses in futures contracts is always a good part of a hedging strategy.

Negotiate with Suppliers

Much like businesses enter into specified timeframes with suppliers, companies can do the same with their purchased supplies to provide more predictable prices. When the PPI measurement is used, the purchasing company can contract with its supplier to settle on the initial product's price, and how price fluctuations will be determined going forward. Since the PPI is released monthly, the price can adjust accordingly (decrease or increase, depending on the PPI) for the supplier and purchasing company. It can be re-evaluated every three, six or 12 months, for example.

While there is no predicting the future and if and how much commodity prices may rise and impact businesses, the more tools that businesses have to mitigate increased costs, the more likely they are to survive rising inflation.

Sources

https://www.bls.gov/ppi/ppifaq.htm

https://leg.mt.gov/bills/2007/fnpdf/HB0204.pdf

https://www.bls.gov/news.release/ppi.nr0.htm

E-Invoicing Presents Opportunities for Businesses to Save

Invoicing is an important process in any business. Unfortunately, it is also a laborious process that requires accuracy. With technology advances, businesses have tried to use various means to ease the invoicing process. Some outfits send scanned invoices; others might transfer PDFs through email; and some still use manual invoices. In this technology age, many businesses are choosing to automate functions in a bid to increase overall business productivity and efficiency. E-invoicing is a technology that promises to help entrepreneurs add value to their businesses. 

What is E-Invoicing?

E-invoicing is the exchange of an invoice between a buyer and seller using an integrated electronic format. This allows the buyer to pay online through a card payment, direct debit, or another option after receiving the e-invoice. 

E-invoicing is not a new technology; it is already used by large scale businesses and governments. Some governments have mandated the use of e-invoices from their suppliers and even for taxpayers. These programs have been running onsite, making it expensive for small and medium businesses (SMB) to use. Another challenge for SMBs has been dealing with multiple providers who have different platforms and technologies. This is a challenge because it requires a business to support extra business processes when sending or receiving invoices. 

However, the rise of cloud computing and Software as a Service (SaaS) technologies has become an enabler for SMBs to implement e-invoicing. 

Making e-invoicing available as SaaS eliminates complicated system installations and integrations that have previously been a challenge to SMBs. The SaaS systems come with features that allow users to automate the invoicing process, send reminders, accept online payments, and generate reports, among other things. 

Benefits of E-Invoicing

Here are some reasons that businesses are moving to e-invoicing: 

• Eliminates the manual process of sending invoices between a buyer and seller.
• Prevents human error with the use of a template. The automated e-invoice ensures correct data is used with a validation process. This ensures there is no mistyped information, no data entry errors, no double entry, missed details or wrong data. Therefore, it improves accuracy.
• Has lower processing costs, since it helps to cut down on administration costs and printing invoices. It also saves a business from the task of sending emails back and forth concerning an invoice.
• Maintains a more predictable cashflow as e-invoicing facilitates the seller receiving payment faster.
• Enables ease of tracking invoices as you can track and trace the entire document journey. This means better accounting.
• Offers enhanced convenience. Businesses create a different number of invoices depending on their transactions. E-invoicing provides a convenient way to store the invoices and easily retrieve them when needed.
• Saves on time so users can concentrate on other business activities. There is no need to waste time looking for client information and entering data every time a user needs to send an invoice.
• Improves the accounting process. When a business integrates e-invoicing with an accounting system, the invoicing function is faster and easier to handle.
• Enhances invoice security and guaranteed delivery. There is no risk of invoices getting lost in the mail or landing in junk email. Encrypted file transfer and digital signatures are used to enhance security.
• Uses real-time processing, which allows one to view the live delivery and processing status of an invoice.
• Is accessible from anywhere via remote handling. This makes it possible to send an invoice anytime and from anywhere as there is no need for printers or scanners.¬†

Conclusion

The business environment is becoming increasingly competitive, and the adoption of technology that automates processes can only help. E-invoicing provides an opportunity for business owners to effectively use their time on growing their business instead of spending it on a labor-intensive administration process. This service also helps SMBs align themselves with large corporations. 

Finally, as with any technology, business owners should take time to research which e-invoicing service provider will best serve their unique business needs. 

Strategy of Time Clock Rounding

This article discusses the business strategy of time clock rounding in order to ease payroll calculation and prevent employee time theft. With many employees still working from home, these practices are important to review frequently. Legally, if you participate in rounding, there are three approved rules that you must follow. One is the 15-minute rounding, the second is five-minute rounding, and the third is six-minute rounding. Be sure to check out this article for more information and details on what practice is best for your business!

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