|
| |
| |
| ACCOUNTING |
| How to Account for Renovated Business Space |
|
When small businesses lease office or retail space, unusual bookkeeping measures are inevitable. Additions or changes to rented space create unfamiliar accounting situations. Untangling the tax treatment for these scenarios typically triggers a cascade of questions regarding improvements, depreciation, and repairs.
Improvements: The tenant, rather than the landlord, generally pays for customization of rented space. As a tenant, you cannot designate your cost for changes to rented property as an expense. Rather, the amount spent appears on the balance sheet in an asset account called "Leasehold Improvements." These include structural modifications such as adding walls or plumbing. The costs are depreciated over time.
Depreciation: Each element of improvement should be separately identified along with its cost. Depreciation periods vary depending on whether the improvement is floor covering, part of the building structure, or an appliance attached to the building. In most cases, the depreciation recorded for company bookkeeping is the same as the standardized amount established under tax law. When you move prior to the end of a tax-allowable period, the not-yet-depreciated improvement costs are written off upon abandonment.
Repairs: Minor repairs and maintenance are exceptions to depreciation as leasehold improvements. You may expense the cost to fix a floor tile or paint a room. Routine maintenance that makes the building fit to occupy counts as an expense on the income statement of your business, but a landlord will often pay for these measures. In addition, when the landlord pays for some of the tenant finish-out, that part of the leasehold improvements cost isn't counted as a depreciable cost for your business. |
|
|
|
|
| |
| HOT BIZ TRENDS |
| Should You Join the Subscription Movement? |
| |
Have you considered a subscription model for your business? With a subscription, customers receive regular deliveries of products or services rather than placing individual orders.
Why would you want to offer a subscription? The subscription model offers benefits for both you and your customers.
Subscription Model Benefits
For starters, the subscription model provides a predictable income stream. Knowing that you can count on a certain amount of revenue each month enables you to better manage cash flow, inventory, and resource allocation.
Because subscription billings are automatically deducted from clients' accounts, you also eliminate the cost and hassle of collections.
Another benefit is the opportunity to upsell. As you evolve your relationship with subscribers, you build brand loyalty and learn more about your customers.
This enables you to offer additional services targeted to their specific needs. These may be ancillary services, premium services, or discounts for longer-term subscriptions.
Finally, the subscription model provides data that you can use to keep track of recurring revenue, conversion rates, return on advertising investments, and much more.
Getting Started
The first step to adopting a subscription model is to design a version of your service with a standardized package of features that can be delivered each payment cycle. It's a good idea to offer several options.
You may also want to consider offering free trials when you're first starting out, to encourage early adopters.
Additionally, make sure the platform you are using supports automatic billing via credit card and the ability to collect customer data and preferences. |
|
| |
| ENTREPRENEURS |
| Transform Your Training from Monotonous to Memorable |
 |
Good trainers employ a blend of psychology, creativity, and thorough preparation to deliver truly effective and memorable learning experiences. They earn our engagement. Want to join their ranks? Here are some tips to make your presentations, trainings, and workshops soar.
Make the content relevant. Do some research or send out a preliminary survey to identify topics attendees want to hear about, issues they want to address, and information that will be useful to them. Create content and ask questions tailored to attendees' roles and responsibilities and the challenges they face in their jobs.
Create a conducive learning environment. A bright, airy, inviting space is way more conducive to learning than a bland meeting room. Also, remember that people learn in different ways, so use a variety of audio and visual presentations, interactive exercises, handouts, and small-group discussions. Avoid death by PowerPoint. Kick off every session with a brief overview of what attendees will learn and how the information will help them achieve their objectives.
Use props, games, music, and mini-contests. These liven up sessions and help people focus on learning goals. You can also use music to energize attendees before the session and during breaks and to settle things down when it's time to concentrate.
Tell stories. Make your content relatable to everyday life by using examples, case studies, and anecdotes. Stories, in fact, are central to how memory works.
Keep it short. Limit working sessions to two hours, and provide enough breaks so attendees don't get antsy and can check email, grab coffee, or return phone calls. |
|
| |
| ACCOUNTING BASICS |
| No Accounting Degree? No Problem |
| |
Small-business owners don't need an accounting or financial background to use a few key numbers to help their company thrive.
To keep the business on the right path for ongoing success, entrepreneurs should regularly examine central measures in their company's financial reports. This basic information can transform routine operations into productive actions.
This review begins with an assessment of overall profit trends as well as an examination of the profitability of specific products or projects. To do this, you must first ensure that the data being reviewed is providing useful and accurate information.
Keep in mind that you don't have to be a numbers person to recognize whether you have solid financial reports. But before you can review what your figures convey, they must be understandable. If your bookkeeping procedures and formats are off track, evaluating them won't help. If your books need a bit of organization, start with classifications.
Classify for Clarity
Your bookkeeper needs sufficient information to properly categorize all expenditures and revenue. Expense accounts should be grouped in a fashion that makes sense to you. You may want to generate reports by classification for various projects or product lines. This requires clearly identifying the classes for all amounts spent or earned. Some types of businesses may have recurring projects for ongoing clients. If you're one of these, each client may be a classification.
Having the right classification system and the procedures for providing category information to your bookkeeper allows you to create functional income statements. Examine the report by class to ensure that all sales have been properly classified. Confirm that all expenses are appropriately applied to the correct classes.
Now you can easily identify the profitability of projects, product lines, or specific clients. Better yet, you can generate an income statement that compares the period that recently ended with the same period a month ago or a year ago. This gives you the opportunity to quickly see trends in revenue categories and types of spending.
Balance for Better Business
Accurate bookkeeping relies on double-entry accounting. This is a system where every increase in cash is the result of a balanced increase in either debt or profit (from adding revenue). Every decrease in cash is triggered by either a decrease in debt or less profit (due to an expense). The only exception is that some cash decreases may add a different type of asset other than money, such as equipment or other property.
Regardless of what classification applies to incoming or outgoing cash, your bank account is always impacted. Making sure you've captured all bank transactions is simply a matter of reconciling your bookkeeping with your bank statements. Asking your bookkeeper for this reconciliation report ensures that all transactions are recorded and reconciled.
The company balance sheet is therefore an important report to inspect. This is the summary of your assets balanced against your liabilities owed and your business capital. The latter includes your investments plus cumulative profits you have not taken out of the business.
Obviously, your aim is to keep enough cash and incoming receivables to cover upcoming bills owed. And don't let debt vastly overtake capital.
This ongoing evaluation of financial statements will provide the foundation needed to build a solid business that consistently delivers outstanding products and services. |
| |
|
|
|
| |
| |
 |
| |
Michele Ball
Perfect Additions and Your CFO Solutions
401 Market Street
Suite 980
Shreveport LA 71101
318-423-4776 Office |
| |
| www.yourcfo.solutions |
| |
| info@yourcfo.solutions |
| |
| License # 616085 |
| |
 |
| |
 |
|
|
|
|
| How to Win Big in Today's Economy |
|
| The altered economic landscape presents innovative and nimble businesses with opportunities to thrive. |
|
| Find out how by requesting my free report "How to Win Big in Today's Economy" by replying to this email. |
|
| Just reply to this email and I'll send it right out to you. |
| |
|
| Share This Newsletter |
| |
  |
|
| Click here to forward this email to a friend |
|
| Click here to see a web copy of this newsletter |
|
|
| Quick Quiz |
| |
Each month I'll give you a new question.
Just reply to this email for the answer.
What hide was first used to cover baseballs in 1975? |
|
|
| Worth Reading |
|
25 Things to Do When You Retire
By Phil Taylor |
| |
|
USNews.com
Opportunities abound in retirement. You can remodel your home or downsize. You could purchase a mobile home or travel the world. You can take college classes, perhaps to learn the languages you'll need in your travels, or gather the knowledge you've learned and teach others. Just make sure you clearly understand your budget and how your plans fit within it.
Writing an "About" Page for Your Business Doesn't Have to Be Hard
By Pratik Dholakiya
Small Business Trends
Writing an impressive "About Us" section for your website is important, but it doesn't have to be complicated. The basics include understanding what your potential customers need, how your company's story and products fit their needs, and why they should trust you to fix their problems. You want visitors to desire further interaction with you after reading about you, so make sure it ends with a way to further the relationship.
10 Indicators It's Time to Expand Your Business
By Rieva Lesonsky
Fundera.com
Business expansions are only good if they're done well. Before you add a new product line, service, or location, consider the following: Make sure you have a reliable and loyal customer base and steady income. Have good employees or contractors and logistical processes to retain and train them. Make sure your expansion is profitable by managing it properly.
|
|
LINKS YOU CAN USE
This Month-Modernizing |
|
In today's fast-paced marketplace, businesses must remain on the cutting edge to survive. This means accessing the latest digital tools and continually striving to modernize operations. Sound like a daunting task? It can be, but the following links can make this process more manageable.
The right strategies are essential as you modernize. Find key principles to follow here:
10 Principles for Modernizing Your Company's Technology
Want to optimize your business with the most modern solutions? Here are 10:
10 Steps for All-Around Optimizing Your Business
Modernizing requires updating your marketing approach. Use these tips to transform your tactics:
How to Modernize Your Traditional Marketing Strategy
Finding it hard to decide what aspects of your business to focus on for modernizing? Here are four key areas that merit attention:
4 Ways to Upgrade and Modernize Your Business
What should you do with old systems as you update to today's tech? Use these tips:
Modernizing Your Legacy Technology? Follow These 11 Tips
|
|
|
|
|
|
|
|
|
