Tag: Entrepreneur

Managing your Business Expenses

Posted on by sharice927

Everyone wants to manage their expenses, whether it’s in their personal lives or their professional ones. And many business owners are so focused on growing their sales, they forget to manage business expenses. It is possible to control costs without jeopardizing quality in your business.

Track expenses. The first thing you need to do is make sure your expenses are tracked and allocated to the “right bucket”. Categorizing your expenses can give you a look at where you spend the most money and track cyclical changes in those expenses throughout your business cycle. This can help with future purchasing, identifying potential discounts from vendors or spending waste.

Keep business and personal expenses separate. Separate credit cards for purchases and bank accounts are a must. Even when I worked at a company and had to use my personal card for travel expenses, I used a different card than i normally would for my personal expenses so I could track my spend and make sure I didn’t miss any expenses.

Consolidate purchases. Typically the more you purchase from the same vendor the better pricing you’ll receive. So perhaps one item you need is 50¢ cheaper at another vendor, in the long run, consolidating purchases will give you more buying power. Also, never underestimate the cost of processing invoices from multiple vendors.

Outsource. Outsource instead of employing a full time person. Outsourcing an expert can seem like you are spending more money, but if it’s done faster and more accurately you’ll save money. For example, maybe a handyman can fix your electrical but it’ll take twice as long as hiring an electrician. Do you need to hire a full time human resources director instead of a consultant to assist with recruiting or dealing with employee policies. You need to determine how many hours and what level of expertise do you need and can afford before you start adding head count.

Go paperless. Instead of printing invoices and mailing them out can you email your customers? Can you make electronic payments to your vendors instead of cutting and mailing checks?

Cloud storage. The cost of purchasing and maintaining servers for your various software or email programs can be expensive. Look into cloud versions of your software to decrease costs, not only of the servers, but the space necessary to store those servers. Also, determine whether you need physical paper copies of records or if electronic record keeping will suffice. If paper copies are required, then look into off site secure storage instead of taking up valuable office space.

Process Improvement. Many times your workflow is inefficient, causing extra steps to complete a task or involving too many people. Look at your processes and determine if there are any ways to cut out steps or people to streamline your process, thus saving you time and money.

Easy expenses. Save money on easy expenses such as swapping out regular lightbulbs for LED lights, not heating or cooling your offices when no one is there, checking for organizational discounts. If you’re a member of a chamber of commerce or a professional organization, check what vendors they offer discounts with. I was shocked by how much money I saved on printing paper when I used my chamber’s discount.

Review vendor contracts annually. Don’t allow for automatic mark ups in your contracts or automatic extensions. Make sure your vendors are reviewing their expenses to give you the best price and there may be other vendors in the marketplace that want to give you a better deal.

Engage your employees. The more your employees are engaged whether it’s by identifying inefficiencies, turning off lights or eliminating wastes, the more opportunity you have to save money and can manage business expenses.

Do you know how to protect your business from theft?

Posted on by sharice927

 

I don’t mean random customers stealing a shirt; I mean an employee stealing your money?

The embezzler is probably not who you’d think they are. I know I was surprised to read that on average they are primarily women, around the age of 47 and have worked for you between 1-5 years. Also, approximately 41.5% of perpetrators worked in the accounting and finance department – just the people you need and want to trust the most. They will also seem like your most dedicated employees, wanting to understand how everything works, details on procedures and who has access to what information and systems.

The median loss per embezzlement is $145,000, but for companies with less than 100 employees the median jumps to $155,000. Larger companies typically have various departments, so one person doesn’t touch a transaction from beginning to end.

There are simple ways they can steal. Using the corporate credit card or corporate business accounts to purchase personal items while purchasing items for work. Then moving to using the credit card to purchase items just for them or paying for meals and entertainment.

Then they may move onto setting up new “vendors” so they can create fake invoices and pay those invoices (to themselves). Some embezzlers may go so far as to setup a fake employee or add overtime to their pay.

This does not mean that you can’t have employees or that you have to perform all tasks yourself. There are ways to protect yourself. First step is to do a background check on all employees, including a credit check for people working in sales, accounting and finance. This would give you an idea of how over leveraged they are in their personal life.

Once you actually hire the employee it’s important to segregate duties, keeping key areas away from one singular person. For example, your accounts payable person should not be able to set up a new vendor, enter and approve invoices in your system, cut checks and sign them. It’s important to keep a couple of these areas separate. For really small companies, it could be as simple as you signing the check – you know what vendors you use and approximate how much you’ve spent with them. For larger companies, you may need the individual who requested the item be purchased to sign off on the invoice stating they received everything they ordered and this invoice is “O.K.” to pay.

Don’t be afraid to question a vendor you haven’t seen before.

Don’t be afraid to question charges on a credit card statement or expense report.

If you ask very casually and simply, then an honest employee should not appear nervous to answer at all. Now, keep in mind, if you start acting like you’re interrogating any employee, whether they are guilty or not, they may appear nervous, so be aware of your tone when speaking to your employees.

On a monthly basis, while reviewing your P&L statements, review expense categories that suddenly jump up, like office supplies doubling or meals and entertainment expenses are totally out of whack, landscaping expenses seem extremely high and you didn’t have any additional work completed. This will help with any expenses that an embezzler is trying to hide. It will also help you with expense control if suddenly you’re spending more money or perhaps vendors raised prices without your knowledge.

Lastly, make sure all your employees take vacation time. And I’m not talking about one day here and there, but a week or two. If employees seem afraid to take vacation they could be hiding something and could be afraid that they aren’t there to hide expenses or invoices that come through while they are gone. Kind of like me always wanting to be home on delivery days when my packages show up.

Splitting up duties to protect yourself isn’t difficult. And fear of embezzlement shouldn’t keep you from hiring employees you need to grow your business. Background check, segregation of duties, vacation time and frankly, following your gut will help keep your business safe. Of course, if you want a second opinion, ask your fellow small business owners, your accountant or a small business consultant to help evaluate your vulnerabilities.

 

Sources and other articles:

https://www.inc.com/kevin-kerridge/most-employee-theft-happens-at-small-companies-warning-signs-3-ways-to-stop-it.html?cid=sf01001&sr_share=twitter

https://quickbooks.intuit.com/r/trends-stats/fraud-statistics-every-business-should-know/

https://www.acfe.com/article.aspx?id=4294976289

Does Your Small Business Need a Social Media Policy?

Posted on by sharice927

 

 

There are so many difference social media platforms and most, if not all, of your employees probably engage in some form of social media. Many employers don’t have a social media policy for their employees’ personal accounts. It’s important to put one into place BEFORE someone posts something that doesn’t represent your brand in a positive light.

The policy should be a straight forward, simply to follow social media policy for both you and your employee. The policy safeguards you by protecting your company’s reputation and values. The policy will also protect your employees by telling them upfront what is expected of them.

Every company is different and therefore there is no right way to write a policy. You must ask yourself many questions.

Do you want your employees to post on their personal social media on your company’s behalf?

Do you want your employees to state they work at your company in their bio?

If you allow them to state they work at ABC Corporation, then it could look like their thoughts are thoughts of the company. Therefore, do you want them to post a disclaimer about their own thoughts are not necessarily the thoughts of the company?

Do you want your employees to be “friends” with your clients or vendors on social media?

Along with the above answers, you should state that their posts should honor your employee handbook, such as your discrimination & harassment prevention policy, disclosure of company’s private information and following all laws. They should never disparage the company or the company’s products.

It’s also acceptable to state, that employees that don’t follow the social media policy may be subject to disciplinary action up to and including termination.

Now you can write up a policy. It’s important that it’s short and easy to follow otherwise it’ll make it very hard for your employees to follow and also hard for you to enforce it.

If you have any questions or need help with writing this policy or your overall employee handbook, please send me message via my Facebook or Twitter page or by emailing me at solutions@CreativeBiznessSolutions.com.

There are also some great resources online to help you think through your policy, see links below.

https://www.shrm.org/resourcesandtools/tools-and-samples/policies/pages/socialmediapolicy.aspx

How to Write a Social Media Policy for Your Company

Are You Running Your Business? Or is Your Business Running YOU?

Posted on by sharice927

When you started your business you dreamed of creating and serving food, hearing the hustle of a salon or the quiet of a spa, or seeing patients in your very own office. Then you had to hire people, file for licenses, fix a leaky faucet, design your website, plan your office, install IT systems and now you find yourself not doing what you really love. And wasn’t that the point?

I’ve read a ton of articles and spoken to a lot of small business owners and there are a couple of pain points everyone agrees on. It’s exhausting and it’s overwhelming.

As a small business owner you are CEO, CFO, COO, IT, maintenance, receptionist, marketing, etc., etc. It can feel overwhelming. Whether you are just starting out or are at a point where your business is taking off but you’re not ready to take on another employee – what do you do?

The goal is to do what you do best and like to do. If you don’t like to do something, then you tend to put it at the bottom of the list – like me doing laundry, I wait until someone is screaming they don’t have any clean socks. But what if the task you like the least is extremely important like filing your annual business license forms or posting products on your Facebook account to draw in more customers? What if you want to upgrade your salon or office space, but have no idea where to start? Then you need to outsource.

Outsourcing can be a very scary decision. It can feel like you’re giving up some control over your business. But do you have a choice? How much money are you losing by not seeing clients or not growing your business because you’re drowning in administrative work?

First, determine your pain point. What is the task that gives you the most pain? Whether that’s because you hate doing it, you don’t feel like that’s your strength, or you’re simply running out of time in the day.

Second, is your pain point a short term issue? or a long term issue? If short term – then find a temporary employee or consultant that can help you get over the hump. If it’s long term – then you need to determine if this is a task to be outsourced or hire a permanent employee.

Third, sit down and outline what you need help with. Be specific where you can – need help setting up my new POS system or creating business social media pages. Be general if necessary – I need help determining if I need a new POS system and then researching which one is right for me or I need help creating a social media / marketing plan.

Fourth, don’t be afraid to move forward, DO be cautious when interviewing consultants or employees. Be sure to have a predetermined list of interview questions. Know what tasks you want them to handle for you. Outline your expectations including hours needed, communication methods, code of conduct (for both employees and consultants). If you are hiring a consultant, include when reports and summaries are due, an out clause for both of you and who owns the work.

That last part may seem strange, but some companies will cite work product is owned by them even if being performed for you. So if you have them create an HR manual, marketing collateral, policies or procedures – make sure everything is owned by you and they must give you electronic editable copies of all work completed.

If you’re not sure of how to tackle this task or this just seems overwhelming, then brainstorm with friends, speak to someone in your local chamber of commerce, other entrepreneurs or a business consultant that’s willing to do a free consultation.

The important thing to remember is, do you want to run your business? Or do you want it running you?