On June 24th, from 8am to 1 pm, bring any old papers that need shredded to Penn Hills.

Raffle gifts and Food!

We’ll do it for free!

View Larger Map

Sponsored by the Goldmine Network Group and Iron Mountain.

I am so happy we were introduced to each other — you have been a tremendous help in really showing me the side of business I was never really keen on.  You have made my financial situation much clearer to me, as well as the direction in which I need to, and want to, take my business.

Ashley Moss,

Ashley Moss Events

With so many invoicing web apps available choosing one can be a daunting task. Even limiting your options to the most popular services doesn’t help that much, as the costs of the various plans vary so little.

Click Here to see the article in it’s natural habitat

Just a friendly announcement:

The National Association of Professional Organizers – Pittsburgh Chapter has teamed up with Business Records Management and select Staples locations for a Shred-a-thon.  What better way to protect your identity while celebrating the end of tax preparation and Earth Day?

• WHEN:  Saturday April 18, 10:00 am – 2:00 pm
• WHERE: Staples; 999 Freeport Road in the Waterworks Plaza (Fox Chapel) —and— Staples; 2515 Banksville Road
• WHAT: Up to 4 banker boxes of paper at no charge (Each additional box $6.0)

NOTE:Electronic and digital media are disposable as well. For example, internal or external hard drives, jump drives, floppies, CDs, DVD.Please keep these items separate from the paper.

This article says it all. But, I think it is funny (and Embarrassing for Congress) that Congress is blaming the IRS. The IRS has no choice but to enforce the laws that Congress passes. I don’t think that there is a person in the IRS that actually thinks the antiquated regulations regarding the cell phone deductions are appropriate. But what are they going to do? Just ignore the law?

If Congress would change the law, then “IRS Weenies” (see the last paragraph of the quoted article) would be enforcing the appropriate laws instead of being saddled with an unwieldy tax code.

I just kills me how Congress likes to blame the IRS. If Congress passed and update laws as appropriate, then these issues wouldn’t occur. I think that such out-in-out pandering and posturing makes Texas Representative Sam Johnson the “Weenie”.

When I explain this Regulation (or any of the many other inappropriate regulations) to my clients, I place the blame where it belongs: on Congress, not the IRS

Bet you didn’t even know: If you use a cell phone for work (one provided by your company), you’re supposed to keep a detailed log of every call you make on that phone, recording whether each call is for work or for personal use. If you don’t, and even if 100 percent of the calls are for work purposes, your employer, by law, can’t consider your phone a business expense. Instead, it has to consider the phone a perk provided by the company, which means its value has to be treated as taxable income to you.

If this sounds crazy it’s because virtually no one follows the letter of the law on this issue. (If anyone out there has a work-provided cell phone and has the value of its service tacked on to their W-2 at the end of the year, let me know.) But it is the law, and it’s basically remained unchanged since cell phone service began as an outrageous luxury for the rich in 1989.

While most employers have simply been ignoring the law—the same way that no one itemizes and pays taxes on out-of-state purchases—the IRS has of late been cracking down on the issue. According to the L.A. Times, UCLA got slapped with a $239,000 bill for back taxes because employees hadn’t been keeping the aforementioned logs. UC San Diego received a similar, $186,000 bill. The University of California system provides some 13,000 workers with University-issued cell phones, so its potential liability is huge. Nationally, 5.5 million people have phones provided by their employers, which must have IRS agents’ eyes lighting up with giant dollar signs like Scrooge McDuck.

The good news? Our Congressmen are trying to ride to the rescue to change the law that requires the absurd recordkeeping. Both the House and Senate have pending legislation to take cell phones off the list of taxable fringe benefits, and even the IRS’ Advisory Committee now considers the rules to be overly “burdensome for any employer” and recommended relaxing the requirements.

See more details from the Times at the link below, including this gem of a quote from Texas Representative Sam Johnson: “In 1989 when cellphones were huge and when it cost a lot of money to make a phone call. Nowadays they’re a dime a dozen and the cost is way down. If you don’t log all your telephone calls, you’re going to have some IRS weenie after you. That’s why we’re trying to get the law changed—because it just doesn’t make any sense anymore.”

Click Here to see the article in it’s natural habitat

The vast minority of Small Business Owners actually do this. I’m as guilty as anyone for not crafting a message about how “remarkably unique” my business is.

With a message that communicates how remarkably unique your business is, targeted at a narrowly defined ideal prospect, price pressure goes out the window. Find you message, raise your prices and grow through increased average dollar per sale.

I use an hourglass image to illustrate the idea that every customer that comes into your funnel and squeezes through that small part to become a customer needs to immediately go into another expanded set of offerings (the bottom widening part of the hourglass) that includes complimentary products or services, introductions to strategic alliances and an acute focus on referral generation – that’s how you build real growth momentum.

Click Here to see the article in it’s natural habitat

In an unprecedented move……

IR-2008-82, June 23, 2008

WASHINGTON — The Internal Revenue Service today announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.

In recognition of recent gasoline price increases, the IRS made this special adjustment for the final months of 2008. The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

Here is an interesting take on this event from the Seeking Alpha investment web site about what this says about inflation:

But its more than a bunch of whiny consumers, vicious, lying short sellers, pajamed bloggers — and PIMCO’s Bill Gross — that have recognized the absurdity of our inflation rate. Even the IRS has finally thrown in the towel….

…..As the table below shows, deduction of gasoline expenses was 44.5 cents in 2006; this deduction increases to 58.5 cents by year’s end. As measured by the IRS, we have a 32% rise in energy costs over two years.

Does this mean the IRS is sympathetic to the business community?

Click Here to see the IRS Announcement in it’s natural habitat

Click Here to see the “the IRS is Hip to Inflation” article from the “Seeking Alpha” website in it’s natural habitat

Peter Drucker – “Plans are only good intentions unless they immediately degenerate into hard work.”

Just goes to show you what a little empirical analysis will do:

A study published on Thursday by the Dutch Centre for Insurance Statistics (CVS) showed that fewer accidents and reports of fire and theft occur when the 13th of the month falls on a Friday than on other Fridays.

Friday 13th not more unlucky, study shows | Oddly Enough | Reuters

I can’t help but remark about how this reflects on Small Business Accounting.  How many times have you thought that you’ve had a great month, only to look in your bank account and see a smaller balance than expected?  Or found that you spend more money on labor than you thought? 

A little accounting can go a long way….

I use my cell all day, everyday.  Maybe I should stop?

“We cannot say with any certainty that cellphones are either safe or not safe,” Dr. Black said on CNN. “My concern is that with the widespread use of cellphones, the worst scenario would be that we get the definitive study 10 years from now, and we find out there is a correlation.”

Well – Debate Over Link Between Cellphones and Cancer Is Revived – NYTimes.com

My fourth grader’s science teacher taught her class about work. But not the kind of work that us non-engineers think of……she was talking about the unit of measure: “Work = Force X Distance“

She didn’t teach them the equation above; she had them do an experiment. One student pushed against the wall with all his might for 5 minutes and another student moved paper clips (one at a time) from one pile on the left side of her desk to a pile on the right side of her desk.

She then asked the students who did more work. They were all surprised to learn that the girl moving paper clips did more “work” than the boy pushing against the wall.

The boy pushing against the wall had plenty of force, but no distance. The girl had both force and distance in her movement of the paper clips, however negligible it may have been.

In our businesses, how often do we use plenty of force without getting anything to move? How many lunches and one-to-one meeting do have with other professionals that don’t actually move the business any distance to our goals? How many times have we filled two hours with a series of 5-minute tasks that don’t move a project to completion?

And how many times do we ignore the “paper clips” because they are just too small to worry about? Like accounting, cold calls, paperwork, paying bills, returning phone calls, keeping track of mileage, identifying key sales ratios, maintaining and tracking a business plan, etc…

Maybe Gustave Coriolis was the first business coach.

I don’t think anybody would ever dispute Disney’s Preeminence as brand but thre are some who question exactly how they got there.

Here is an article at Church of the Customer about Disney’s curious decision to close down a successful and profitable web site simply becuase it doesn’t fit “their model”.

Disney’s Virtual Magic Kingdom is a virtual representation of the real-life Disneyland theme park. It’s also an online community for evangelists of Disneyland.

More than a million avatars have been created at VMK. By almost any standard, it’s a popular site.

But Disney plans to shutter VMK tomorrow night, and that’s caused consternation in paradise. Petitions have been signed, protest sites have been created. VMK citizens wonder why Disney would want to close something that solidifies and extends their loyalty.

Here’s one reason: Disney envisioned VMK as an 18-month promotion, not a long-term loyalty effort.

What confidence they must have in their plan to take this action. Here is another article at Small Business Branding:

I took away a lesson in how to make customers love you. Give them a consistent message and over deliver on everything you do for them. I loved the experience so much, I was willing to pay $8 to $10 for a Manhattan (my favorite drink). Back home in a restaurant I would shell out half that amount. Everything cost more, but the brand delivers and so I was smitten. When you love something you are willing to pay more to prolong the experience. Are your customers willing to pay more for your experience? Maybe it’s time you have a hard look at how you deliver to your audience.

I just thought that it was interesting….two different perspectives on Disney’s branding effort.

I think I will actually do the exercise laid out in this Article. Here are some excerpts:

Start by writing down what you think your current goal is.

As an end state, it should sound something like:

1. I have created a successful site that promotes our products well and creates over a hundred sales leads a month
2. I am confident in my web design expertise and about going for that job, and I feel relaxed hanging out with those other new media professionals
3. Because of my work on the site, my colleagues respect me as the authority in web design, and my boss wants to give me that promotion

Note that these goals are expressed in the present tense! That’s what you focus on – what it feels like and looks like to have created something.

…

Avoid “My goal is to create…” or “My goal is to design…”, because these represent doing processes, not being places.

If you make doing your goal, that’s what you’ll receive – continuous effort. Focus on the end result, and your mind will find its way directly through the doing.

[I love riding my mountain bike over rocky terrain. I've learnt to focus my eyes down the trail, and to look at the spaces between rocks, not at the rocks themselves. If I look at the rock, I ride into it. Moral: You hit what you focus on.]

If you’ve got even a rough idea of where you wish to be, great work! You’re already ahead in the design game.

Click Here to see the article in it’s natural habitat

Great post from a the freelance programming blog, Freelance Switch:

This expresses my accounting philosophy perfectly. I just wish I had written it.

Here are some basic accounting steps for a freelancer:

• Step 1 – You need a system to bill people.
  There are tons of invoicing tools online, (BlinkSale, FreshBooks). Most have free accounts for you to try out, and it’s worth utilizing these great resources. Web based systems are best, I lost all my 2002 data due to a HD crash and no, I didn’t have backups. It cost $3500 to recover my accounting data for that year.
• Step 2 – You need to know who owes you money.
  You need to know who is past due, who is paid up. Some of these invoicing apps allow for due date tracking. Or you can use a calendar app (gcal, ical etc) to do that.
• Step 3 – Track your expenses with a fine tooth comb.
  Tracking business expenses will save you thousands of dollars at the end of the year. Save every receipt – gas, food, mileage on your car, parking fees, computer expenses, phone lines, internet connections anything related to your business. In a future article I will talk about commonly missed business expenses and what you need to record in addition to the receipt. There are several ways to track expenses. Using a shoebox for handling expenses is asking for trouble. There are many expense tracking services online. Or you can use a google spreadsheet and enter them in by hand.
• Step 4 – Don’t use your personal bank accounts to make purchase for the business.
  Have at least one business bank account and use it exclusively. If you violate this rule you risk “piercing the corporate veil.” Which means you loose your business and your house and your car and money if you got into legal hot waters.
• Step 5 – Find a good accountant, preferably someone you feel comfortable with.
  Someone who is affordable and will answer your questions. I found an accountant that not only helped me with my books he referred clients to me! Make sure you find out how much it will cost you at the end of the year for his or her services. Be sure to be up front about your expectations as a client, do you need financial planning? Do you need an accountant or just a tax service?
• Step 6 – Don’t allow accounting to take over your life, accounting won’t make you money.
  If you find yourself too busy to handle it ask your accountant about bookkeeping services. Do what makes you money, you’re not an accountant don’t try to be one. Having a good accountant might cost you money but he or she should be able to save you money every year.

The orgininal post is here.

This is the kind of stuff that gets me. As a Small Business Owner, when I read something like this I think “give me a break….don’t you have anything better to do?”

But, as I stop and think about it, I realize that the distinction being examined here is important and potentially expensive.

This must be what Small Business Owners think when I start talking about depreciation.

A long-running California lawsuit over whether all megabytes and gigabytes are created equal may have reached its end on Friday.

The class action lawsuit against Kodak, Sandisk, Lexar Media, and other memory card makers alleges that the defendants intentionally misrepresented the capacity of their flash memory devices by using decimal definitions, in which a megabyte is 1,000,000 bytes. The suit says a binary definition is appropriate, meaning that one megabyte equals 1,048,576 bytes and that the memory card sizes were overstated by 4 percent to 5 percent.

When memory capacity was smaller, the difference didn’t mean much. A decimal kilobyte, at 10^3=1,000 wasn’t very different from 2^10=1,024.

But as capacity grows, the differences become more significant (technically, the ratio between the decimal and binary representations increases). This explains why your new terabyte drive isn’t as capacious as you hoped it might be. A 10^12=1,000,000,000,000 decimal terabyte is roughly 10 percent smaller than the binary equivalent of 2^40=1,099,511,627,776. Here’s more background on why computers work this way.

You can read the original article here.

You know, doing your taxes wouldn’t be so bad if it wasn’t just like, well….doing your taxes.

Taxes are one of the more important and complex aspects of owning and operating a successful business. Many businesses pay a mixture of local, state, and federal taxes. Although you may not think you have to pay much attention to this topic because you have an accountant, payroll person, or tax advisor, there are still many facets of tax law that you should know. The Internal Revenue Service is a great source for all of this information. Padgett Business Services of Greater Pittsburgh has partnered with the Small Business/Self-Employed Division of the IRS to help keep you informed of your tax responsibilities.

Got Issues?

In an effort to help make taxes less taxing, the IRS Stakeholder Liaison (SL) function has asked us to ask our members to help identify any system or procedural problems you encounter in meeting your tax responsibilities. For instance:

• Are there any particularly burdensome issues you encounter in your business regarding federal taxes?
• Are there any IRS issues or areas for which you would like more information or clarification?
• Did you utilize any of the electronic filing and paying options offered by the IRS?
• Did you encounter any problems or burdens with these systems?
• Are you familiar with the electronic filing and paying options or would you like more information?
• Have you used the IRS Website to find information, forms or publications for your small business?
• Did you find what you needed, easily and quickly?
• Are you familiar with the products and services the IRS has available for small businesses or would you like more information?

If you have any issues you would like to identify, please contact Tina Wilson @ 412-395-4523, tina.m.wilson@irs.gov, IRS 1000 Liberty Ave., 6th floor, Pgh, PA 15222, or fax 412-395-6948. When organizations notify the IRS of concerns about policies, practices and procedures, Stakeholder Liaison researches the issue to bring about resolution using the Issue Management Resolution System. Progress on issues is closely monitored to assure proper response and communication.

The IRS Stakeholder Liaison function also organizes a Small Business Forum two or three times a year to bring representatives from our organization together with IRS and other government agencies to learn about new issues and hot topics that are helpful to our members. This also provides us an opportunity to identify any new issues.

Check out these links

You might want to check out some of this information before you file your taxes this year.

• e-News for Small Business
• 1040 Central
• Small Business and Self-Employed One Stop Resource
• Extender Legislation
• Telephone Excise Tax Refund
• Tax Gap Fact Sheets
• The Electronic IRS: File, Pay….and More

Here is a great article on basketball. Yes, I know this an accounting blog, but this article makes a great point that can be considered to have an analog in the business world:

BYU statistics professors Gil Fellingham and Shane Reese and master’s student Garritt Page compared the value of 13 box score statistics from an entire NBA season across the five player positions to see how much each contributed to winning games.

Their findings? Small forwards who assist teammates and don’t turn the ball over are golden. Of all the combinations of stats and positions, the study found that assists by small forwards contribute the most to a team’s likelihood of winning. Meanwhile, turnovers by small forwards do more harm than turnovers by players at other positions.

….

That’s because they found passing the basketball to set up a score is more important than actually making a field goal when it comes to winning, according to the analysis.

I constantly preach that a good accounting system is essential to a business’ overall profitability. I don’t mean measuring profitability; I mean having profit.

That new idea or that new equipment or that new strategic alliance are all important and exciting, but they mean nothing without an easy-to-use/ease-to-peruse accounting system.

Being able to “score the ball” is useless when there is to nobody to get the ball to the scorer.

Maybe the most important player on your business advisory team is your Small Business Accounting specialist.

I love this story. This is the kind of stuff that happens daily in Small Business — but the problems of Small Businesses don’t get the publicity that this does. So don’t feel too bad if you published the wrong effective date or forgot to include a specific instruction in your last bulletin to the field.

Chaos at airport after clocks fault

Flight times are being advertised an hour late because a computer failed to recognize the clocks going back.

Arrival and departure times at Gatwick airport are being published incorrectly on Teletext, Ceefax, the Gatwick website and within the airport itself.

Not every flight is affected. Airport operator BAA said it was mainly domestic flights and some European flights.
advertisement

Spokesman Stuart McDonald said staff were working hard to put the fault right as soon as possible.

He said: “It was noticed at 6am. They have been working on it all day.”

See the original article here.

The other day, after a follow-up telephone conversation with a ‘future client’, I realized it was a pretty good microcosm of how most of my conversations with clients go:

For instance:

• This Small Business Owner had “back-burnered” his decision about retaining an accounting professional in favor of running his business’ day-to-day operations.
• He was happy that I called about it. (Although I must admit, only slightly happy that I called. It wasn’t like he was sitting around pining for a good conversation about why he should retain my services — he was just happy that I reminded him of this important thing he had been putting off.)
• He had somebody knowledgeable with whom to discuss the issues.
• Once we shared a common understanding of the issues and options, he made the decision about our next course of action.
• And when this Small Business Owner hung up the phone, there was a plan in place.

Instead of discussing the status of his decision-making process, we could have easily been discussing payroll process, estimated tax payments, allocation of expenses, or any number of accounting issues that are extremely important, but not urgent. My clients don’t need to be distracted throughout the course of business by these issues, because I’ll be watching them.

One day, after I have reviewed this Small Business Owner’s file for that month, he’ll get a phone call:

• It will be about an important accounting or tax issue that had “back-burnered” in favor of running the business.
• This Small Business Owner will be (slightly) happy that I called about it. (Not happy that he had to think about something that can be boring and dry, but happy that it is a small problem that will never grow into a large one.)
• This Small Business Owner will have had an expert with whom to discuss the issues.
• Once we share a common understanding of the issues and options, he will make the decision about the course of action.
• And when this Small Business Owner hangs up the phone, there will be a plan in place.

Here is an observation from Seth’s Blog:

Jason is running a long comment-thread at his blog about what a seamless user experience might be. What’s seamless, he asks… The answers are pretty predictable, and mostly correct.

The thing is, seams are important.

Try throwing a baseball or a football without seams.

Wear clothes without seams and you look like you’re on Star Trek.

Seams make it possible to get a grip.

The goal, it seems to me, is not to create things that are seamless. It’s to put the seams in places where they are actually useful.

I think this observation is important. You need clear lines of demarcation. In the accounting word, putting something on the wrong side of a seam (depreciating v. sec. 179 expense or travel expense v. vehicle expense) can sometimes mean the the difference between compromising your business’ health and ensuring it.

Do you think paying your state payroll withholding, employer taxes, sales tax etc…is confusing? Do you forget your E-tides password every month? Do you get nervous when you see the e-tides home page:

Paying state taxes is just as required as your federal taxes. If you are a Small Business Owner, you know about “E-tides” (the Electronic Tax Information and Data Exchange System). The Commonwealth of Pennsylvania has tried to make it easy for themselves by instituting E-tides..You are required to pay your payroll withholding, employer taxes, sales tax remissions, etc…via this system.

I speak to many Small Business Owners who are consistently late on their state taxes. Many times, it is simply the cognitive friction and emotional turmoil of interfacing with the E-tides system that leads to the chronically missed payments.

We’ll schedule your payments for you. All you have to do is make sure that you have enough money in your account. Or we will hold your hand as you navigate the confusing E-tides system. We provide an itemized list, every month, of ALL your tax liabilities.

Our Clients don’t miss payments or pay penalties. Wouldn’t you like that assurance?

I liked this video so much, I bought the book.