Category Archives: Budgeting

7 habits of highly effective retirement savers

Saving for retirement can be a slog, yet some people have a better time of it than others.

Planning ahead helps a lot. The best retirement savers are more than four times as likely to have given “a great deal” of thought about their retirement age, their lifestyle during their golden years, their future health-care costs and their financial goals than the worst savers, according to a new survey by Voya Financial, which scored more than 1,000 full-time workers on how prepared they were for retirement.

Overall, Voya found that Americans had middling scores for retirement readiness, but the best savers shared some common financial traits.The top scorers did more than think about retirement, they took action. Here are seven habits they had that you can use to boost your retirement savings:

Create a budget. Seems obvious, but 65 percent of the highest scoring workers had a budget compared with 19 percent of the lowest-scoring savers. “This attention to detail here allows for a more predictable glide path through the retirement years,” said George Clough, vice president of wealth management strategies at People’s United Bank in Bridgeport, Connecticut.

Max out your workplace retirement plans. The highest-scoring workers were twice as likely to contribute the maximum amount to their workplace retirement plan than lowest-scoring workers. The top savers were also more likely to at least contribute enough to their retirement plans to receive their employer’s matching contribution. It’s free money.

Read more via 7 habits of highly effective retirement savers.

Top 10 Tips for Starting a Small Business

1) Do what you love.

You’re going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it’s really important that you truly deeply enjoy what you do, whether it be running fishing charters, creating pottery or providing financial advice.

2) Start your business while you’re still employed.

How long can most people live without money? Not long. And it may be a long time before your new business actually makes any profits. Being employed while you’re starting a business means money in your pocket while you’re going through the starting a business process.

3) Don’t do it alone.

You need a support system while you’re starting a business (and afterwards). A family member or friend that you can bounce ideas off and who will listen sympathetically to the latest business start up crisis is invaluable. Even better, find a mentor or, if you qualify, apply for a business start up program such as The Self-Employment Program. When you’re starting a business experienced guidance is the best support system of all.

4) Get clients or customers first.

Don’t wait until you’ve officially started your business to line these up, because your business can’t survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can’t start marketing too soon. (See Attracting New Business on a Shoestring Budget and The 7 Best Places to Find Clients for tips.)

5) Write a business plan.

The main reason for doing a business plan first when you’re thinking of starting a business is that it can help you avoid sinking your time and money into starting a business that will not succeed. (See Why You Need a Business Plan for other good reasons.)

Remember, you don’t have to work through a full scale business plan for each new business idea you come up with; my Quick-Start Business Plan, for instance, will let you test the potential of your business idea much more quickly.

6) Do the research.

You’ll do a lot of research writing a business plan, but that’s just a start. When you’re starting a business, you need to become an expert on your industry, products and services if you’re not already. Joining related industry or professional associations before you start your business is a great idea.

7) Get professional help.

On the other hand, just because you’re starting a business, doesn’t mean you have to be an expert on everything. If you’re not an accountant or bookkeeper, hire one (or both).(These Tips for Finding a Good Accountant may be useful.) If you need to write up a contract, and you’re not a lawyer, hire one. You will waste more time and possibly money in the long run trying to do things yourself that you are not qualified to do.

8) Get the money lined up.

Save up if you have to. Approach potential investors and lenders. Figure our your financial fall-back plan. Don’t expect to start a business and then walk into a bank and get money. Traditional lenders don’t like new ideas and don’t like businesses without proven track records.

9) Be professional from the get-go.

Everything about you and the way you do business needs to let people know that you are a professional running a serious business. That means getting all the accoutrements such as professional business cards, a business phone and a business email address, and treating people in a professional, courteous manner.

10) Get the legal and tax issues right the first time.

It’s much more difficult and expensive to unsnarl a mess afterwards. Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers’ Compensation Insurance or deal with payroll taxes? How will the form of business you choose affect your income tax situation? Learn what your legal and tax responsibilities are before you start your business and operate accordingly.

Following the advice on starting a business above will make starting a business both a smoother, less stressful process and go a long way towards ensuring the business you start lasts and thrives.

via Top 10 Tips for Starting a Small Business.

2014 State Minimum Wage Adjustments Require Careful Employer Review | ADP@Work Blog

The federal minimum wage for covered nonexempt employees is $7.25 per hour effective July 24, 2009. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, an employee is entitled to the higher of the two.

On February 12, 2014, President Obama issued Executive Order– Minimum Wage for Contractors, which increases the minimum wage for employees under a federal contract that becomes effective on or after January 1, 2015. The Executive Order increases the minimum wage for those employees covered under its provisions to the higher of either $10.10 per hour or the state or local prevailing wage. Employees covered are those who are employed by contractors, subcontractors, or under a contract-like instrument for services or concessions that are covered under the Davis-Bacon Act, Service Contract Act, and any other related acts, such as the Fair Labor Standards Act.

In the upcoming year, it is likely we will see many states adjusting their minimum wage rates.

Impact on Employers: Employers must comply with these minimum wage laws and should review their employees’ hourly rates of pay and make any necessary adjustments to bring their employees to the correct minimum wage if they have not already done so. Please take careful note of the effective dates, as they may vary by state.


via 2014 State Minimum Wage Adjustments Require Careful Employer Review | ADP@Work Blog.

How Painless Is Your New Customer Experience? | Your Administrative Solutions

Is your business easy to do business with?   The answer could impact your revenue as well as your reputation for service.  Here are a few tips to help you stand in your customer’s shoes for just a few minutes to answer those questions.


First Impressions

What is the first image of your business that your future customer sees?  Is it your website?  A sign in your office window?  An ad?   Whatever it is, take a look at it with fresh eyes, like you’ve never seen it before.  You may have several images to consider if clients approach your business in many different ways.

What do you notice first?  Is the website simple or cluttered?  Is your sign rusty and crooked or new and attractive?  Do you need to make any changes based on what you see?

Voice Time

If a customer calls, how many times does the phone ring before it’s picked up?  Does the voice sound inviting and excited that someone called, or is it as if you were just interrupted?  Or worse, did they get a recording?

If they walk in, how are they greeted?  What does your waiting room look like?


What is the interaction like with you?  Are you able to answer the prospect’s questions?  Do they feel comfortable with you or are they intimidated? What do you suspect it’s like for your clients?

If the prospect becomes a client, what do they have to do?  Are there lots of forms to complete?  How organized are you in getting the client started and serviced for the first time?  Are you respectful of their time if they are in a hurry?

Mystery Shoppers

You’ve probably heard of mystery shoppers who are hired to give their opinions of what their client experience was like for them.  They go through a similar process, evaluating every client touch point and suggest ways to make it a smoother experience.

Almost every business could benefit from periodically reviewing the client experience to discover where the weakest links are and how they can be fixed.  Ask yourself these questions to see where you can improve your client’s experience and make it easy to do business with you.

Read more here: How Painless Is Your New Customer Experience? | Your Administrative Solutions.

Succession Planning: The Talk You Need to Have – AICPA Insights

According to the 2013 Private Companies Practice Section CPA Firm Top Issues Survey, succession planning is among the top five concerns for four out of five firm sizes. The 2012 PCPS Succession Survey, however, shows that only 46% of multi-owner firms have a written succession plan in place. A mere 6% of sole practitioners have a Practice Continuation Agreement with another firm.

These numbers are concerning, and the consequences are real. As CPAs, we know it’s easier (and wiser) to plan for tomorrow before tomorrow comes. In the absence of a formal succession plan, your firm’s transition could lead to confusion and oversights, resulting in the loss of time, money and clients. Firms, and especially their clients, need new leaders and a clear plan to ensure uninterrupted delivery of critical services.

Fortunately, it’s not too late. Consider these three aspects of succession planning, and help ensure your firm’s longevity:

(read more at:  Succession Planning: The Talk You Need to Have – AICPA Insights.

ATTN BUSINESS TAXPAYERS! Section 179 Deductions will dwindle to 25,000 in 2014

The bonus depreciation tax break is set to expire on December 31st, and the dollar limits for Section 179 are to drop from $500,000 with a $2.5 million to $25,000 with a $200,000 ceiling.

Ashlea Eberling suggests that it makes sense to accelerate purchases before year’s end citing that under section 179 as it presently stands, a small business owner may deduct the entire cost of up to $500,000 of equipment that has a 20-year life.



Ask The Taxgirl: Taxing Social Security Benefits – Forbes

Taxpayer asks:

If you have turned full retirement age and are receiving your retirement and also still working full time, how does this effect your taxes?

taxgirl says:

This is a pretty common scenario these days – and a popular question!

Once you reach retirement age, whether your Social Security payments are taxable depends on your filing status and how much other income you receive. Check your federal form SSA-1099 for the total of your benefits. Once you have that number, here are a few key points:

If your only source of income is Social Security benefits, your benefits are generally not taxable.

If you received income from other sources, your benefits will not be taxed unless your modified adjusted gross income (MAGI) is more than the base amount for your filing status. Whether that income is taxable is based on a formula. The quick and dirty version of the formula is to add one-half of the total Social Security benefits you received (that’s what is reported on the form SSA-1099) to all your other income, including any tax exempt interest and other exclusions from income. Then, compare this total to the base amount for your filing status:

The base amounts (which are never adjusted for inflation) are:

•$32,000 for taxpayers who file as married filing jointly;

•$25,000 for taxpayers who file as single, head of household, qualifying widow/widower with a dependent child, or married filing separately who did not live with their spouses at any time during the year; and

•$0 for married persons filing separately who lived together during the year.

If the total is more than your base amount, some of your benefits may be taxable.

Ask The Taxgirl: Taxing Social Security Benefits – Forbes.

Stress-Free Bookkeeping | Virtual Bookkeeping Company – Your Administrative Solutions

Stress Free Bookkeeping

laptop with numbersManaging your books is a cumbersome but critical task for any business. It can be very time-consuming, frustrating, and could mean working late hours. However, it has to be done to know the worth of your business and to satisfy the government for taxes. You also need to do this on a regular basis to get an accurate idea of your financial health.


How do you make this stress-free task work for you?

Some small and medium businesses either employ part-time bookkeepers or do the work themselves. No matter how it is done it is still a mundane task involving shuffling papers and working extra hours. Often there is a twinge of doubt that you are not doing something quite right or are missing important information.

Ask any entrepreneur why they went into business and you’ll get a hundred different answers. Odds are that “do bookkeeping” was not on the list even though bookkeeping is the core of any successful business. It is the way to measure growth, keep cash flow positive and track expenses.

Bookkeeping is like learning to play a musical instrument. The secret is to learn the fundamentals and create a system that works for the company.

Here are a few tips that could prove helpful to make the right decision for bookkeeping and accounting needs:


Don’t mix business and pleasure:

Get a business credit card to enable you to separate your business expenses from your personal. By this time you have already started your business checking account. So adding that business credit card will help you establish and build business credit and points. Co-mingling funds between personal and business is not a productive or efficient way of doing business and can prove to be a headache at tax time.


Keep it simple:

When creating your business in your accounting software doesn’t create too many categories in the chart of accounts. For example, office supplies will be a sufficient category rather than separate categories for paper, letterhead, printer supplies, etc. This complicates profit and loss and adds time to the day-to-day activities when items are being expensed.


Automate your invoicing:

There are many online invoicing services that allow you to schedule invoices for clients who are charged on a regular basis. You will find that most accounting software has the ability to memorize invoices that reoccur monthly. The day of the re-occurrence can even be set such as the first of the month.


Use the right accounting software:

There are many accounting software packages out there that you can use to assist you with your accounting and bookkeeping needs. Of course, I highly recommend QuickBooks but there is also a wide variety of Open Source software which is free to download. Additionally there are a wide variety of free manuals and tutorials online.


Outsource to a virtual bookkeeper:

Outsourcing to a virtual bookkeeper saves time, money, worry, and headaches. Many business owners take two common approaches to tackling the issue of bookkeeping. They try to do it themselves – which is time consuming and can lead to costly mistakes. They pay large firms to do it – which is unnecessarily expensive. A professional bookkeeper has the skills and experience to do the job right. There are many advantages to outsourcing your books. Save money, save time, and the need for extra help. The biggest benefit is your bottom line.

  • Books that are inaccurate do not reflect the true health of the business
  • Being clueless at any level about where the money is going is not being in control of your business.

Business people need to focus on the business:

There are many aspects to running a business and the most important is earning money. Some things just have to be delegated in order to maximize time and productivity. Bookkeeping can be a painful and time consuming process and many business owners do not have the expertise or knowledge to get the job done right. Time spent on bookkeeping activities is time away from making money.

If you liked this article by Fran McCully, you’ll want to hop on over to where you can find more articles, resources and strategies to help manage the finances of your business. We also create business plans (with full market analysis and competitor research), do cash flow analysis, and assist companies with budget set up and implementation.

How to Read a Cash Flow Statement | Intuit Small Business Blog

Business papers and red pencilHow much money does your company have available right now? That’s a question your cash flow statement can answer.

As its name suggests, a cash flow statement charts the flow of money into and out of your business. It’s all about gauging liquidity — or cash on hand — so that you can make smart decisions about paying bills and buying additional assets or inventory.

When viewed with your company’s income statement (a report of sales and expenses during a specific time period) and balance sheet (a summary of the net worth of your company on a given day), your cash flow statement gives you a complete view of your company’s financial profile. (Publicly traded companies are required to disclose all three statements to the SEC each quarter.)

Let’s break down a typical small-business cash flow statement and review each of its sections. Print or view this sample statement [PDF] to follow along.

Read more:

How to Read a Cash Flow Statement | Intuit Small Business Blog.

Mid-Year Tax Planning: Do It Now to Save Later |

With just about half of the year already in the books, now is the ideal time to take stock of your business activities year-to-date. This will enable you to take wise tax actions that will pay off on your tax bill when you file your 2013 income tax return next year.

What to look for in your books

Determine whether you’ve been profitable so far, and whether your numbers meet, exceed, or fall short of your estimates at the start of the year. Also, face up to losses that you may have experienced to date. If your analysis shows:

Better than expected, you’re looking for ways to reduce your taxes, so explore traditional actions such as:

Setting up a qualified retirement plan, such as an SEP or 401(k) plan, to save for your retirement in a tax-advantaged way

Buying new equipment and machinery to better run your business while capturing tax write-offs (explained later)

Also, make sure that your remaining estimated tax payments for 2013 are increased to avoid underpayment penalties.

Lower than expected, tax savings can still be helpful but may not be the most important action now. If your profits aren’t what you expected, or you experienced losses, reduce your remaining estimated taxes to conserve your cash and avoid making an interest-free loan to the government. (You can%E

via Mid-Year Tax Planning: Do It Now to Save Later |