How and Whom to Give Incentive Payments?

  This article is to share – and hopefully start a discussion on – the reasoning for giving incentives to some of your employees. How leaders, managers reason for incentives? What do we see as different approaches in the small business world? Which approach would you prefer?

In the today economy the financial challenges are very quickly and often negatively change the direction a business have to take to stay profitable and competitive. Often, business revenue is tied to government and/or commercial contracts. If any of the major contracts is lost, the business may change strategy in every segment.

So if your business learns today that one of your major revenue-earning contracts is not going to be extended and will expire in 6-9 months, how do you make sure you keep your best and brightest people, and those who you can’t keep but you need until the full completion of the project?

The two ways to deal with the situation I often see are:
1. The business makes a decision who would have continued employment with the company following the expiration of the contract, no matter what. These are key talents who must stay so the company can bid for more new work. These ones receive the incentive payment only and the conversation with their supervisors about their job security.
2. The business gives incentive to those only, who will not have a job following the expiration of the contract but play a key role in the completion of the project. Often enough these incentives are coming in installments, the earlier the smaller; and the last, biggest piece at the very end of the project.

Can a business in the given situation afford doing both? Incentives are costs to the company. It also adds to the payroll taxes businesses pay after every paycheck given to an employee. Since these are not “direct working hours”, incentives can’t be invoiced to the clients – it often comes out of the overhead or profit.

Overhead  dollars however are badly needed to work on new proposals, spend on marketing – all the necessary activates to put the business in a better position on the marketplace.

Would you pick one of these, or mixing them into a different option? What would be the message to the other employees if you mix it – because people talk? What would you do? What was the best and worst scenario you ever seen? What would be your personal solution in a given situation?

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team (www.myvirtualcorporate.com), and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com

When the Flu Hits Your Business

  When the flu hits you or your loved one you care for, your billable hours may be close to none for a few days. Not being able to provide billable work to your clients is hard enough since they count on you – but they would understand. It also means that you do not recognize any revenue at all.

If you are personally hit by the flu, it is not only your clients you can’t care for, but your own business. You need to send invoices out to secure steady cash flow. You need to pay the bills. At the personal level, you need to do the groceries, check on your elderly parents. With the flu, these are all on hold.

Can you afford not to care for these? How can you care for your business when you have a hard time to care for yourself?

Our virtual corporate group can be an answer to this question. A designated accountant would care for your invoices and bills, not to mention payroll, as scheduled. Your cash flow would not be in jeopardy for a minute. You do not even have to email or call – this is what we usually do for a client anyways.

When it comes to these “personal”, “out-of-ordinary” items, our clients can always count on our WishTeam with confidence. They would reach out to your grocery store to arrange home delivery, including your medication. Also, an elderly home care service can be dispatched to attend your elderly parents’ needs.

Sound just unbelievable to have a consulting company with full-scale back-office services on your side caring for YOU? Well, we do that. Would you consider paying about the equivalent of 3-4 hours of your monthly billable time to make sure your books are taken care of, bills paid in time, bank and credit card statements reconciled, taxes are filed, payroll processed and related taxes filed in time? Also, have immediate access to business consultants, management consultants, HR, web, benefit and WishTeam professionals assisting you with your related needs?

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team(www.myvirtualcorporate.com), and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive – even when you are fighting the flu. Please email me personally: spacher@myvirtualcorporate.com

Count With Me, Busy Professional, Count With Me!

  As an accounting and legal professional, our hourly rate could be – depending on the case we are working on – averaging between $250-$650/hour. Let’s lowball it and average it to $300 for the sake of this exercise.

So, if you have a not-too-busy month, you are charging about 50% of your 8-hour day. That would take us to 8 hours x 50% x 22 days, equal 88 hours. At the above mentioned $300/hour rate, you are invoicing clients for $26,400. After taxes and paying all the benefits (about 35%), your net is around $17,000. Paying for your office rental, cell phone, office supplies, LexisNexis subscription, and smaller incidental payments (like lunch with clients and such) cost about $5,000. You have about 12,000 left.

Would you consider paying about the equivalent of 3-4 hours of your monthly billable time to make sure your books are taken care of, bills paid in time, bank and credit card statements reconciled, taxes are filed, payroll processed and related taxes filed in time? Also, have immediate access to business consultants, management consultants, HR, web, benefit and WishTeam professionals assisting you (for some additional low hourly or fixed fee) with your related needs as needed?

If so, you are invited to discover what a virtual corporate service group (www.myvirtualcorporate.com) can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com

Who Will Do My Taxes?

  You may have a tax accountant for years preparing your tax return and an accountant taking care of your books. Or it may be you or your business partner doing the books. How much does it cost you to have such business setup? Is there a more cost effective solution?

Often enough you are facing an expense of a few thousand dollars to take care of your tax filings. Our client, a small non-profit school, was asked to pay about $3,000 for a simple 990 return filing by an independent preparer, when the school did not even recognize any income by the end of the fiscal year.

Why so much? How to reduce such expense but still secure a CPA’s full attention to your taxes?

Based on experience I can say this rule of thumb: if you have the same person taking care of your books and your taxes, it should cost less. If it is a traditional consulting firm, you may have someone caring for your books, but when it comes to your taxes, your files go to a tax specialist who do not know your business. This person will need more time to go thru records and will need to ask more question, go back to different schedules before even starting the work. More time spent means higher cost to do the work. Again: same firm, different persons. And tax preparation results in the same high charges if you are spending valuable time caring for your own books as well – not to mention the cost of additional lost billable time when you try to do your own taxes yourself.

So what is the most cost effective way to go?

First, do the math and have a virtual accountant care for your business administrative matters. So you can charge your clients billable time and make money. For a fraction of your one-day earning you can have a CPA keeping your books straight, and if you need to, you have access to HR, contract, grant, web and
WishTeam professionals as well.

When it comes to taxes, since you have a qualified CPA caring for your books, the same CPA could do your taxes much quicker, without bothering you with questions someone working with you during the year would know anyways. Again: same firm, same person – it makes a difference!

Using virtual corporate services are the most flexible and comprehensive business solution you can have for the least of your money (Accounting and Tax).

Such corporate services can take care of your accounting and tax needs, but if needed, can assist you with full HR assistance, benefit search, web design services. Moreover, your out-of-ordinary needs can also be cared for by the WishTeam (WishTeam).

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team (www.myvirtualcorporate.com), and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com

An Unparalleled Service

  Have you heard of a consulting firm providing the old-fashioned set of services like accounting, business services, grant administration, tax support and so on, to offer services to make your life easier so you can truly maximize your time and worry less?

Probably you have not.

Well, let me introduce you to the WishTeam. Yes, it is a team making your wish come true. Well, not every wish, of course. And of course, there is no magic involved.

I hear busy professionals often saying something like “I wish someone would just come and make dinner every time I am scheduled for a long day” or “I wish someone would be able to check on my elderly parents while I am on the road”, or “I wish I had more time organizing a nice get-together with friends in a restaurant for my husband’s 50th birthday.”

Now, these wishes, and any other non-business related, out-of-ordinary ones that you do not have time for making true (or you just do them at night or too late in a hurry) can come true. This is what the team does.
Do you want a cruise vacation but have no time to shop around and compare? Or you may want to marry on a cruise ship? Do you need tickets for Disney On Ice next time when they are in your city? Do you want to make sure someone does the grocery shopping for your parents while you are away? It is just a call away, a discounted service complementing all the other “serious” services, like accounting, offered.

I see you wondering: and what would that cost me? You will be pleasantly surprised. Look at it this way: if you can charge an extra hour to your client knowing that all you “wished for would come true”, would you pay a fraction of that hourly rate for it (also knowing that it is more than an hour to do it)?

Keep in mind: it is all about giving time back to you, so you can do what you do best – take care of your clients, stay focused, make money, and live a life you always wanted to. The hour you did not charge today, but could have, is lost revenue.

My name is Sylvia Pacher, and I am always here to assist you along the way to grow your business bigger, stronger, more competitive and profitable. Visit us at (www.myvirtualcorporate.com).

Your 1st Paycheck in 2013 – And What It Tells You About Your Business Practices

  Most of you and your associates probably received the first paycheck already in 2013. It is less than it was last time, right? How much less? Have you multiplied the “loss” by the number of payrolls in 2013?

Well, I just got off the phone with someone making $150,000 a year, gross. The first paycheck in 2013 is about $344 less than the last one in 2012 was. There are 26 payrolls in 2013, so it means losing thousands of dollars this year. The temporary Social Security tax cut (also referred to as payroll tax cut) will not be extended for 2013. Therefore, everyone will see the Social Security withholding increase from 4.2% back to 6.2%.

In a nutshell, what does it really mean to you, a solo or small business owner?
- If you are a solo or small business owner who also made “capital infusions” or “loans” to your company, you will have less to lend.
- You have to spend wiser.
- Since other people are getting less money on their paychecks as well, they will spend less – or at least look closer before they buy goods or services. It means you have to focus on what you do best and spend more time with current and future clients.

What may be some reasonable steps to consider in 2013 bringing change to the way you do business but in a good way! Take a close look at your time management. What percentage of your time generates revenue?

What are those tasks you do that would not generate revenue? Can you take them away from your list by having someone else doing them? Would you be able to generate revenue (do you have enough clients or customers) to do revenue-generating activities if you get some or most of that time back?

If your answer to the last question was “yes”, than you are looking at “delegating” work.

What type of activities are those you could take off the list? Let me guess: mostly administrative ones.
How would it be the most beneficial to delegate such work? You certainly do not want to spend more on office space or computers. You can’t increase your overhead costs further by hiring a part-time full-charge office manager with full benefits to take the tasks over. But you need these tasks to be done, in a professional matter, not to mention ad-hoc tasks.

What is the easiest and most beneficial way to go from here? I recommend a consulting firm offering full-scale back-office services virtually. So you do not need to hire anyone and do not need more space to be rented. You would have your own accountant taking care of the books, who can also do the taxes and process payroll, invoice clients and customers. If you have any additional ad-hoc tasks, HR related (job advertising, background checks, ect.,), web service assistance, just to mention a few, you just pick up the phone and it is taken care of.

What does it mean to you? You are gaining more time that you can charge to clients so more revenue is generated. You have spent significantly less than what additional earnings you made to make it happen – so it was worth doing it. You are less frustrated with business administration because you do not have to worry about it.

You just promoted yourself benefiting YOU and your Clients.

My name is Sylvia Pacher, and I am always here to assist you along the way to grow your business bigger, stronger, more competitive and profitable. Visit us at (www.myvirtualcorporate.com)

The Daunting Task

  This blog article is based on a comment I had as a reply to an earlier blog article. The Reader complained about the daunting task of faxing or scanning and emailing bills to the accountant for processing.

Every day when the mail comes, solo or small business owners may spend 10-20-30 minutes sorting, opening, trashing pieces of the delivery. Then usually the bills received go to a box. If the business has an accountant coming to do the bookkeeping, the box will be emptied by the accountant. If the business owner does the bookkeeping, it often happens after the daily work is completed.

Would not it be great if you should not even go to the mailbox but get your bills received, paid and booked (!!) at the same time! How much time and effort could be saved?

Yes, it is possible.

Here is what I can offer as a solution: as you may know our firm offers full-scale back-office services (accounting, HR, tax, benefits, WishTeam, grant and contract management, web services and much more), so using the internet and the Cloud are must-haves. We do everything paperless, virtually, so our intent is to keep it that way for you as well.

As a business buyer, one can pay for goods and services usually by credit card or by check. Almost every vendor you have a relationship with offers online statement or payment options. You need to give them the email addresses to send the statements to, and from that time on you do not need to open your mailbox.

I strongly recommend any potential Clients having concerns about the time and effort of sending us the bills to give these vendors two email addresses: his own and ours. That way both of us are receiving the statements at the exact same time, and we could save a copy in the Client’s folder in the Cloud and book it as well. Payments can also be scheduled as appropriate.

At the same time I have to add: I always recommend paying for everything possible using a credit card. You can benefit from the points accumulated, and also most of your transactions would be on one statement. If any needs to be disputed, it is much easier to do than doing it after a check payment is completed. Booking for those may also be a bit easier – it depends on the software the business is using.

I hope this short communication assisted you all and cleared some concerns. My name is Sylvia Pacher, and I am always here to assist your entity to save more, to grow stronger and bigger, benefiting you and your Clients.

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team, and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com

Losing Control or Promoting Myself?

  The other day someone asked me how to give up taking care of her own business administrative tasks (doing the day-to-day bookkeeping in particular) without losing control. Great question. It is something every solo and small business owner faces one day. The business grows and bigger Clientele requires more of your time and attention. At one point you will realize: there is just not enough time any more to do it all.

While you were an early-stage startup, you may have time to do other things but caring for Clients and Customers. It at that time it might have been a good use of your time. Now it is different. And it is a good thing!!! But let’s admit: you still want to see your cash flow statement, P&L more than once a month to be sure your business is securely financed, your bills are paid and Clients invoiced.

Coming to the rescue of an overwhelmed business owner also means that the least changes introduced the better. Often enough there is no need to change the software used. VPN access would make it easy for both the virtual consultant doing the books and the owner to have 24/7/365 access.

Access to the consultant is also imperative –some business owners got used to having a bookkeeper coming to the business location and working from there. Questions could be asked and answered, solutions could be discussed.

I am personally not a fan of allowing a bookkeeper independently running an entity’s books on an offsite computer, without allowing full visibility to the business owner. Today’s fast-paced business environment demands access to real-time data and financial information. A business owner may need to look at cash situations, work on scenarios, look at client payment schedules any time – and it is not something hard to provide.

Having VPN access to an existing system in your office, or setting a new system up available in the Cloud for everyone is the way to keep full visibility and control of your books, and also promoting yourself. There is no more excuse for a DIY. Since all records are in the shared folders, there is no “lost control”. But it will benefit you, the solo or small business owner with more time to focus on your business and not on your business administration.

If you ever entertained the idea of going virtual on any or most of your business administration tasks, but feel like not seeing the full picture, worried about losing control or the level of security provided, please let me know. It would be my pleasure to answer any related question. Please visit us at (www.myvirtualcorporate.com)

Flexible Holiday Schedule Can Make You More Competitive

If you have foreign-born staff members, you may face some challenges when it comes to holiday scheduling. Most companies do not show sensitivity to the different religious and national group’s holidays. The holidays schedule is often based on the US holidays. However, I came across a very interesting way dealing with the matter.

This company is a small biotech. They have pharmacology labs, chemistry labs, an animal facility. More than 50% of the staff members are foreign-born nationals representing over 10 countries. Their Employee Manual stated that everybody has 10 holiday days a year, but the employee has to pick the days.

What is the result of such policy?

First, everyone is happy and feels respected more. Employee morale increased.

Second, experiments can be done on “long weekends”, or big national holidays. There are always enough people at work to safely run the experiments. The biotech’s productivity increased, there is no “shut down” period.

Third, there is no need to pay overtime or work on a “special schedule” to complete a longer experiment when there is a US holiday on the calendar. The HR specialist scheduled all the holidays in one “company holiday” calendar and posted it on the intranet. Managers can plan the work accordingly.

Forth, most interestingly, most people did not take all the 10 days available.

If you have a small business and you are producing a product, shutting down your entire production line costs you much more than just operating at a lower “weekend level”.

If you are a small business, would you be able to distinguish yourself by such schedule? Could you bill more hours annually as a lawyer? Could you be more available by your clients?

If you are a physician sharing a practice with other physicians (for example a pediatrician or ob-gyn), you can be open every weekday. You will attract more regular patients in your practice and your revenue will increase further. You are open another 10 days (2 weeks!!!) for business every year.

I strongly encourage you to look at your work force. Look at your business. Would some changes like this be possible to introduce? Would it benefit your business?

Remember, little changes can make big differences in your life, work, business and your bottom line.

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team (www.myvirtualcorporate.com), and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com

Learn to Keep Your Top Talents

Small businesses can’t strive and reach the skies without retaining top talents. Big company CEOs have all sort of retention plans and still losing their best and brightest. There is nothing as costly as losing top talents. It is also very unsettling to your operations and may be demoralizing to the staff.

We need to remember, people do not quit jobs – they quit companies, company cultures, and quit bosses. I personally witnessed only one company with the “promotional policy” stating that if you are hated by those working for you on engagements, no matter how great you are professionally, there is a “glass ceiling” stopping you from being promoted over a certain level. And for that one company – even if it was a very unusual way to decide about promotions – it worked. The employee turnover was very low. Because top management knew: people primarily quit they bosses.

So what makes these top talents walk out of your door or stay with you until retirement?
• You do not build on his interest. If you recognize what the most interesting part of the job for him is and make him strive on that, you have a lot more done, much better, under less time, and you can keep a happy employee.
• If you recognized his interest, challenge him with additional tasks related to this interest. Work will turn into an interesting thing, worth getting up in the morning and taking work home for the evening.
• You do not recognize what your top talents added to your business? It shows lack of appreciation and attention. Often enough a “thank you” would be enough to recognize contributions – and it does not cost anything. Not thanking could cost you significantly.
• Your talent is contributing a lot to show you he is able and willing. It is a cry for more responsibility. Not recognizing it and not increasing the responsibilities hurt you twice: you could have gotten more work done happily and willingly for the salary you are paying, and not recognizing makes him looking for some place else where he would be recognized.
• If he comes back with an idea, listen! New ideas and creativity take your business to the next level. You may have a dreamer who may not have the perfect solution or product but may have the “seed” to grow.
• Send him to courses to grow further on his interest. You will get your investment back multifold.
• Learn about him. What is his drive? Is it money? Promotion? Or being mentioned as the employee of the month in front of everyone? How can you personally show that you have an interest in having him at your company?
• You, as a leader, lose your people immediately when you do not keep your promises. People remember. Credibility and trust are lost quickly – and very hard to build them back. You just failed to lead.

I do know that it is hard to do; it means you need to talk to everyone, know a lot about your people. But as a small business leader, isn’t it just as important as knowing your customers? You truly can’t afford losing either one of them.

My name is Sylvia Pacher, managing director for the Virtual Corporate Services team (www.myvirtualcorporate.com), and I invite you to discover what a virtual corporate service group can take off of your shoulder to make you more billable, profitable, and probably happier because you can focus on what you do best. Please let me know if you have questions – I am always here to assist you with making your business grow bigger, stronger, more profitable and competitive. Please email me personally: spacher@myvirtualcorporate.com