Let’s take a closer look at the steps you can take right now to ensure you end the year ready and organized for the final report of the FY2018 tax season.

Establishing Economic Nexus for Your Sales

Until very recently, retailers only had to worry about where they had physical nexus (with a few small exceptions). For a small business with a single location, this made things relatively easy. Since Wayfair, however, economic nexus laws in 17 states and pending laws in another 12 states mean you will need to track sales and collect sales tax in quite a few additional states if you have applicable sales there.

At the same time, there are sales thresholds in each of these states ranging from $10,000 in sales to $500,000 in sales, meaning you may still not need to collect sales tax if your sales volume is low enough. For this reason, it’s important that you have a clear sense of where you do business, what your sales volume looks like, and what you’ll need to do to file sales tax returns in those states when applicable.

Tracking and Managing Your Sales Volume

Economic nexus makes it more important than ever to have a very carefully tracked sales, organized by location so you can easily see which jurisdictions will require collection of sales taxes and which will not. Not only are there several states in which the laws are actively being changed, but the volume of sales required to reach that threshold is different in every state. This must be done across all sales channels, so your website, FBA sales, eBay sales – they’re all eligible in aggregate toward this threshold.

The Next Stage of Economic Nexus

This is the first fourth quarter sales season under the new Economic Nexus paradigm, meaning many businesses are not prepared for the differences in how they track and report their sales. Even for those businesses that have a clear sense of their Q4 sales volume as compared to the rest of the year, they likely didn’t have it broken down by state in the past.

That’s why it is so important to have a system in place that carefully manages and breaks up your transactions, so you can see total sales volume by state, by product type (in the instance that certain items are exempt in some locations but not others) and totaled across all sales channels. Do this properly and you’ll be better prepared for your next sales tax filing deadline, and for the full year ahead in 2019 when new Economic Nexus laws will be implemented and still more likely passed.

Creating a System that Works for You

Whether you are a small business that does business in only a handful of states or a medium sized online retailer with customers around the country, the shifting sales tax landscape will have an impact on your business. The best way to avoid surprises is to be as prepared as possible for these changes in advance of quarterly filings and the next fiscal year. The steps above will give you a good starting point but stay vigilant and up to date as new sales tax laws are passed that might impact your business.

The post Preparing Your Business for Q4 Sales Tax appeared first on AccurateTax.

But with the right preparation, and a keen understanding of why sales tax and use tax audits occur, and how to prepare for and address them, you can tackle the issue with hopefully a bit less stress. While avoiding a sales tax audit completely is ideal, having a good plan in place can help if one ever arises.

Why Are You Being Audited?

This is the big question – what exactly triggers a sales tax audit in the first place. As referenced in our recent article on avoiding an audit, there are a lot of factors – some in your control and some not:

• Industry – Certain industries are audited more often than others, and it can vary depending on the state.
• A Vendor or Supplier is Audited – While outside your control, the behavior of someone you work with can trigger an audit, especially if they have been audited and are found to be out of compliance.
• Review of Records – There are several triggers when reviewing your records that could lead to an audit. With more advanced technology, computers can analyze factors like perceived physical location, the format and frequency of your records, being late in your filing and other red flags that might lead to an audit.
• Prior Productive Status – Most states will evaluate your sales tax liability year over year. If your account yields an adjustment of more than a certain amount from prior audits, you’re likely to be audited again in the future.
• Business Format – Sole proprietors are audited more frequently than other business types, so it’s recommended that, if you are being audited regularly, you consider forming a corporation or limited liability company.
• Randomness – While there are some companies that undergo audits regularly and must always be ready for them, others are selected at random. It’s difficult to know when or why this happens.

Of the above, only one item is truly within your control. In many industries and states, an audit is inevitable, so the best thing you can do is prepare for it and have the right records and processes in place to ensure you aren’t found out of compliance.

What to Do After Being Notified

If you’ve been notified of an impending audit, there are several steps you should take immediately, including:

1. Gathering Your Records – Start by collecting your records so they are in hand when the time for your audit arrives. State auditors will provide a list of items they need in your notice, but common records include a general ledger, sales and purchase journals and invoices, journal entries, depreciation schedules, resale and exemption certificates, federal tax returns, financial statements, shipping documentation, sales and use tax returns, and bank statements.
2. Review Your Records – Don’t just collect and wait. Spend time checking your records for accuracy and completeness. Any gaps in the records should be filled before sharing documents with the auditor. This can take time, so don’t procrastinate if you can avoid it.
3. Address Systematic Issues – If there are any major changes or issues in your records, now is the time to address them. Information can get lost or improperly formatted when there’s a change in accounting systems, shift in how you maintain your taxes, if records are moved or lost, or if there are electronic records unaccounted for (such as EDI or ERS). The auditor needs to be able to trace and evaluate all records and these types of issues will make that difficult.

Handling the Audit Process

Once an audit is initiated and you’ve started to gather and review your records, take the time to prepare for what the auditor will look for and expect from you. Even if you normally do your taxes yourself, connect with a CPA who can provide support and insight into the process and help you ensure your records are in order.

Some other items to keep in mind include:

• Check if a reverse audit is necessary – Auditors won’t be checking for overpayments, so this may be a good time to ensure you haven’t in fact over paid.
• Identify external representation early – If you suspect you may owe a liability when the audit is completed and want an external representative to assist you, retain their services early to avoid any issues mid-or-post audit.
• Coordinate with the Right Representative – When looking for third party assistance, make sure you hire someone who has background in your industry and with sales tax audits in your location. This will help them identify potential unnecessary requests from the auditor, or issues you may overlook when evaluating your records.

Once you’ve undergone the audit, your auditor will propose an assessment in an exit conference. This may be presented in person or mailed to you, and will include a summary of what the auditor believes you owe the state. As long as you agree, the next step is to pay the liability and close out the audit. If you do not agree, however, additional steps must be made to appeal it, and in most cases you only have 30 days to do so.

The audit process is lengthy, stressful, and can be resource intensive, especially if your records were not as organized and prepared as they needed to be. Whether you’ve just faced an audit, are preparing for one, or are worried about the risk of one in the future, now is the perfect time to step back and evaluate how best to better organize your business processes to better prepare for future audits.

The post Surviving a Sales Tax Audit appeared first on AccurateTax.

Remember, the following information is not to replace legal advice, merely to help you better understand your options in advance of the decision making process.

Sole Proprietorship

Many small online businesses opt for a sole proprietorship as this is the simplest of the business structure options. Typically, this involves a single person who owns and operates the business. Since your expenses and business income go on Form 1040 of your personal income tax return, and profits and losses on Schedule C, this particular structure has some tax benefits.

Because of the way the Schedule C incorporates into your personal tax return, business losses can offset other earned income. Sole proprietors must also file Schedule SE and self-employment tax, and they need to make payments of estimated tax if they owe a minimum of $1,000 in federal taxes.

Sole proprietorship comes with a few disadvantages as well, including the fact that you have 100 percent responsibility for any liabilities related to the company. As a result, it puts your assets at risk. It can also make it more difficult to secure business loans, meaning you would likely need to depend on your savings or home equity.

Corporation

Corporations are independent legal entities fully separate from owners. Because of this, there are additional tax requirements and regulations. With liability protection, an owner has no responsibility for the debt of the corporation, giving this business structure a significant advantage over others. Corporations also have an easier time raising money through the sale of stock. It is even possible for corporations to continue indefinitely.

The biggest downside of a Corp business structure is the high cost and the legal complications involved. Keep in mind that every state has its unique laws and regulations. As such, you will likely need to hire an attorney to create your corporation. You also need professional tax preparation and auditing services to meet the regulations. It is also important to note that, if your corporation is small and you are the sole owner, you may pay additional taxes on your earnings – once as corporate income and again as personal income on your own taxes.

S-Corp

S-Corps or S corporations are better for small businesses that corporations, whether online or brick and mortar. This comes from the combination of liability protection and some tax benefits. With the S-corp business structure, losses and income end up on shareholders’ individual tax returns, meaning there is no double payment of taxes as with corporations. S corporations without inventory can even opt for the simpler cash accounting method. Because S corporations can have up to 100 shareholders, it is easier to secure capital.

In terms of downsides, S-corps have many of the same regulations and laws as corporations, meaning higher costs for legal and tax preparation fees. They also require minute taking, shareholder voting, director and shareholder meetings, and incorporation article filing.

Limited Liability Company (LLC)

Limited liability companies have only recently become popular among small business owners and entrepreneurs. This business structure combines the benefits of corporations with partnerships. LLCs provide liability protection without double taxation. Additionally, losses and earnings go on the owners’ personal tax returns. The big difference between an S-corp and LLC is in benefits. With LLCs, there is no limit for the number of shareholders, and all members or owners can have full participatory roles.

It is important to note that LLCs do not include perpetual statuses, with some states having a limit of 30 years. Because of variations in how states treat LLCs, ecommerce platforms operating in more than one state may find them somewhat complicated. If you choose to use an LLC, you need to hire an experienced accountant, someone familiar with the unique regulations related to this business structure.

Choosing the Right Structure

The business structure you select for your online business will impact everything from taxes to how financial losses can impact your life. Each business structure has a unique set of advantages and disadvantages. Choose the one that works best for your specific company.

The post Selecting the Right Business Structure for Your Small Online Business appeared first on AccurateTax.

Nexus Considerations

One of the easiest ways to run afoul of state sales tax laws is to fail to register with the appropriate jurisdictions when you have a nexus there. While the broad outlines of what constitutes a sales tax nexus are relatively consistent from one state to the next, there are also some small variations that can make all the difference depending on the nature of your business.

For instance, some states set a threshold for how often employees or other agents acting on behalf of your company can be working in the state before they trigger a nexus condition, while others stipulate that you have a nexus there if you ever have an employee or other agent present in an official capacity. Different definitions of what’s taxable, particularly when it comes to services provided as part of a sale, such as installation or assembly, also can impact whether or not you have a sales tax nexus in any given state.

Adapting to Changes

Even when you think you know what your status is in all of the states you do business, you need to be aware that changes in state law or in your business relationships can alter that nexus status under the right set of circumstances. For example, a change in the drop-ship vendor or fulfillment company you’re using can impact where your goods are stored, and so where you’re considered to have a nexus.

Creating or expanding your affiliate program is another way you can create a nexus for your business where you didn’t have one before. While this isn’t a reason not to explore ways to grow your business, you do need to keep track of these types of changes to ensure you’re registered to collect and remit sales tax anywhere you have a nexus.

Exemption Certificates

Another category of items that can draw the attention of auditors is exemption certificates. That’s why it’s essential to make sure that any sale you record as free from sales tax is accompanied by a valid exemption certificate. You need to make it a habit to periodically review those exemption certificates you have on file as well to see if any have expired or need to be updated.

Filing on Time

Late filing or payment is a good way to attract an auditor’s attention, and that’s always what you want to avoid. Using a sales tax software designed to automate the recording and filing process is a great way to address this issue, and it also eliminates another source of potential trouble, which is filing manually.

When you fill out a paper tax return by hand, you open yourself up to making any number of avoidable mistakes, including mathematical errors that would not occur if you used a computer program. You also have to make sure everything you write is perfectly legible, or simply the act of trying to read your handwriting could cause an auditor to scrutinize your return more closely. Even when you do use a computer to file, however, you need to double check your figures yourself and make sure you wait until all income is properly and thoroughly accounted for before submitting your return.

Dealing with Holiday Returns

Any time you have an order cancelled or have to process a return, it’s important to document it so that you can show why you no longer owe sales tax on that purchase. This can be a particularly grueling task during and just after the holiday shopping season.

If you’ve already filed the applicable sales tax return, you’ll generally have two options for how to recoup what you’ve overpaid. The one that’s often popular with retailers is to simply apply the overpayment as a credit towards your next regular sales tax payment. Doing this too often, though, or with large sums may attract the type of attention you don’t want. That’s why it’s often a better idea to file an amended return once you’ve accounted for the bulk of your returns.

Realistic Deductions

Along these same lines, it’s a good idea to only list deductions that you have receipts for and that don’t seem unrealistic. It can be tempting to push the boundaries in some of these categories, and while you may sometimes get away with it, the consequences and hassles that can result due to the extra scrutiny your return will get as a result makes these things often not worth it in the long run.

Even if you don’t wind up paying extra after an audit, the simple fact of having to go through the process can be a significant burden to you as you’re trying to keep your business running smoothly.

The post How to Avoid a Sales Tax Audit appeared first on AccurateTax.

Small Business Administration

One of the greatest resources for accessing funding for your small business is the Small Business Administration (SBA). The SBA operates a variety of programs geared towards helping small companies compete and expand, and it also acts as an intermediary between lenders and small businesses looking for funding.

The SBA loan programs don’t involve borrowing money from the agency directly. They do make loans from major lenders easier for small businesses to procure, however, because the SBA guarantees part of the loan, making it less of a risk for the lender. There are several categories of loans available through the SBA, and the one that’s right for you will depend on the details of your business, as well as what you’d like to use the money for.

Some of the most popular programs include:

• Microloans – These are available to small businesses and certain non-profits in amounts up to $50,000, and they can be used for the purchase of new equipment, supplies, or as working capital.
• 7(a) Loan Program – This is the most popular loan program available through the SBA, and the maximum size of these loans is $5 million, with no minimum. There are a number of specific factors that could disqualify your business, but in general, your company must be for-profit, satisfy the SBA’s definition of a small business, have a sound business purpose, and demonstrate a need for the funds.
• Small Business Innovation Research Program (SBIRP) – If you operate a high-tech or high-growth company, and you’re interested in a loan to fund research and development, the SBIRP program may be a good place to start. This program provides funds in the form of loans and grants to help small businesses compete with large firms, as research and development costs are often prohibitive. It also helps the federal government to meet its own needs in the areas of healthcare, defense, environmental protection, and more.

Credit Cards and Lines of Credit

If your funding needs are relatively small at the moment, credit cards and lines of credit may provide just the level of financial flexibility you’re looking for. Lines of credit in particular are a great alternative to loans for modest amounts because you only pay interest on the current balance. With a loan, on the other hand, you receive a lump sum up front, but then you have to pay interest on a much larger total as you pay it back.

Crowdfunding

Another great source of funds for small businesses is crowdfunding. This is available through a variety of sites including Kickstarter, Indiegogo, Crowdfunder, Equity Crowdfunding, Onevest, and more.

This type of funding is usually used to finance a new product or service, or to raise the money necessary to launch a new business. In order to have success on one of these platforms, you do need to plan ahead, starting your campaign at least 6 months before you plan on needing the money. You also should set your goal as low as possible while still being a viable amount to let you accomplish what you’re setting out to do, as these tend to be all-or-nothing endeavors.

Business Incubators

Depending on the details of your situation, a business incubator can open up all kinds of opportunities for you to grow your business. Some of these operate a physical space to facilitate in-person networking, while others are exclusively online. Finding one that’s the right fit for your company can provide access to vital resources, including accountants, lawyers and potential investors.

Other Sources

Some other sources of funding for your small business to keep in mind are:

• Prepayment – Asking customers to prepay for their goods or services is a good way to get yourself some working capital to devote to their order while freeing up funds in other areas to reinvest and grow your business.
• Supplier Credit – Similarly, asking your suppliers to allow you to pay up to 90 days after receipt of an invoice rather than 30 is a good way to get yourself some breathing room and expand your capability.
• Factoring Companies – While it’s standard practice for many larger companies to pay invoices 30 to 60 days after receiving them, it can create a huge cash flow issue for smaller businesses. Factoring companies allow you to receive the total due on an invoice immediately, with the bill being settled once the customer pays.

Not all of these funding sources will be appropriate for your business, but it’s important to remember that there are many resources out there if you know where to look. Even a small infusion of cash can go a long way towards getting you over the hump and enabling your company to grow and flourish.

The post Funding Sources for Small Businesses appeared first on AccurateTax.

Why do businesses often hire an accountant?

Online services and the growth of the Internet have made it easier for companies just starting out, to approach their finances with a do-it-yourself approach. But eventually, almost everyone in business has a relationship of some sort with a certificate public accountant (CPA) or enrolled agent (EA). Larger companies may have employees or even an entire department devoted to these activities, but the relationship still applies.

I generally think of four general aspects of this relationship. Some retailers may use all of these, while others only a few.

1. Advice When First Starting Out

A brand new company has to get established in a few ways before doing business. First, the decision of whether to run the business as a sole proprietor, to incorporate, or to form as an LLC or partnership is often helped by professional advice, whether it’s a lawyer or a CPA. Additionally, there are often business licenses to obtain, income tax elections to make, and other red tape to deal with.

2. Periodic Tax Filings

Like all businesses, online retailers must file taxes. They often turn to a professional for their yearly income tax preparation. Some may also have their accounting firm prepare and file their quarterly employer tax and other returns. A CPA can also help navigate the murky waters of IRS communications, as well as those from individual states.

3. Managed Bookkeeping and Financials

A company who doesn’t have the benefit of a full-time bookkeeping staff may choose to outsource this effort to bookkeepers employed by their accounting firm. This includes reconciling checking accounts, credit cards, and merchant accounts (the accounts used to charge customers’ credit cards). It may also include inventory tracking and reports, invoicing and managing accounts payable, and handling payroll.

4. Ongoing Advice

As a business grows, it often needs new or different advice than it did when it was first started. Here again, this might be provided by a lawyer, but is often part of the accountant/client relationship. For example, if you are looking to expand your offerings or buy out a competitor, you may want sound financial-based advice before making a final decision. Other times, advice is required due to external changes, such as new laws or regulations that may affect the business.

What Advice Do Retailers Want from their Accountants?

So what do online retailers wish their CPAs understood better? We interviewed several, and I’ve also injected some items based on my years of experience working with retailers of all sizes and in multiple product markets.

How to best structure your business

Someone just starting a business has to determine what their business structure should be: sole proprietorship, LLC, partnership, or corporation. To make the decision, the founders generally want to know two things:

1. How can I minimize what I pay in taxes?
2. How can I protect my personal assets?

Fortunately, the answers to both questions are usually common knowledge for CPAs, because the structure affects taxation to such a high degree.

Understanding Software

Ecommerce retailers have to deal with many different kinds of software, from accounting packages to order management, warehouse packages to the software that runs their website. Although the accounting software obviously has the strongest relationship to their CPA, sometimes other software ties in as well.

Additionally, business owners, even those who operate in the realm of the Internet, have varying levels of tech-savvy. When it comes to software, they may operate from two different ends of the spectrum.

1. The retailer who knows what software they plan to use: This person/company already has package(s) they are familiar with. It might be an online service like Freshbooks, an industry standard like Quickbooks, or more enterprise-level software such as Microsoft Dynamics or other ERP packages.
2. The retailer who wants guidance on what software to use: This person/company really doesn’t know what they need or the benefits/drawbacks of different software. They just want solid advice on what they need and how they can learn to use it.

No one (or no reasonable person!) expects their accountant to teach them to use Quickbooks. But when they have a question, they want help answering it. And if they need training, it’s great if the accountant can recommend a class or online course that meets the retailers need.

Merchant Accounts / Chargebacks

Almost all retailers need a merchant account, which allows them to collect payment from customers who pay with a credit card. There are hundreds of options (if not more) when it comes to payment processing, but in the end, they all eventually boil down to a merchant account.

An initiation into the world of merchant accounts can be extremely daunting. Selecting a provider is often difficult due to the way that different fees are calculated, and the odd wording used to describe such. (A “discount” sounds like a good thing – but it’s really the rate charged to the merchant.) Then, learning to read and reconcile a monthly merchant account statement can be difficult; it’s not as simple as reconciling a checking account. And who ever found checking accounts simple anyway?

Then there are chargebacks. A chargeback is when a customer complains to their credit card company that they shouldn’t have been charged. The credit card company then reverses the charge, taking it out of your bank account and giving it back to the customer.

There are a number of reasons a customer will issue a chargeback:

• Merchandise never received
• Merchandise faulty, damaged, or not as described
• Fraud on behalf of the customer

This post isn’t the best place to go into chargebacks, but they are certainly an area where retailers are often surprised and may seek advice from their accountant on how to resolve one or avoid them in the future. A good accountant will understand what these are, as well as the basics of fighting one and protecting the business against them in the first place.

Understanding Sales Tax

Sales tax is extremely complicated for many online retailers. A local business may only need to deal with sales tax in one state and at the local rate where their store is located. But an online business has a few other hurdles to leap:

• What rate needs to be charged on an order? If it’s a destination based state, the rate depends on where the customer lives, not where the retailer is located.
• Does the business need to deal with sales tax in multiple states? If they have certain business activities, especially using drop-shippers or storing inventory in a warehouse in another state, it’s very likely they may.

An accountant will do well to understand how to point a retailer in the right direction for answers, even if they don’t know the often intricate specifics of sales tax in multiple states.

What to Sell and How Much to Stock

Someone starting an ecommerce business probably knows what they plan to sell, at least in general. But they may not have the knowledge to ascertain what specific products to sell – and when to keep a product and when to dump it.

Being able to help retailers understand profit margins, carrying costs, inventory management, supply and demand – these are all concepts where retailers can typically benefit from an accountant with a much larger financial background than they likely have.

Glynn Gallagher of LockPickShop.com has a CPA who came highly recommended, but it turned out he didn’t have a lot of experience with retail businesses. One of the mistakes she made early on was keeping too much inventory.

“I wish he’d have warned me against carrying so much inventory. I thought if I kept investing money in inventory that it would be a good thing for my business. I figured if I had a lot of inventory that I wouldn’t have to worry during months that were lean. What I didn’t realize that since my business is a (1 person) LLC that all of the inventory is considered personal assets/income. I ended up with a $40,000 tax bill because I didn’t realize that stockpiling inventory was a big mistake.”

Cash Flow

Always having to make ends meet can be difficult for any business, especially those whose revenue fluctuates during the year. An accountant that can help a business keep its head above water during lean times is worth his or her weight in gold.

One unique example comes from Lee Rosenthal at Hotel Restaurant Supply. Certain restaurant equipment manufacturers and vendors provide value to their distributors and dealers by way of rebates. That is, the vendor may sell the item at a wholesale price to the dealer and then pay an annual or quarterly rebate on each invoice. This means they get back a percentage of their purchases from the manufacturer, and that percentage is based on how much they’ve purchased. Sometimes it is a flat percentage and more frequently based on tiers and volume thresholds.

For example, they might pay $5000 for a refrigerator. However, at the end of the period the dealer will get back, for example, a 10% rebate, or $500.00, the numbers add up.

This uncommon scenario is profitable, but presents some hard cash flow issues, as it takes the full 12-month timeframe to receive most of their profits.

Company Growth

My father has always said it’s almost impossible for a business to stay the same size. It has to either grow or shrink. It might be sometimes one or sometimes the other, but understanding company growth is just as important for online retailers as it is for any other business.

Company growth is a tough thing to manage. “Often the prosperity of the business can outpace the ability of the business to maintain that success,” says Matthew Swyers in an article published by Inc. Company needs change depending on the size of staff, infrastructure, and more. And external factors like the number of competitors and market demand determine a company’s ability to grow.

Solid advice on managing growth so as not to grow too fast, or to manage a decline when it happens, is invaluable.

These are just a few ideas of the advice retailers would like to be able to receive from their accountants. A solid understanding of retail and ecommerce can help solidify an accountant’s business, as it allows for consulting business on top of simple tax preparation. (We use the word “simple” quite tongue-in-cheek!)

The post What Ecommerce Retailers Wish their Accountants Understood appeared first on AccurateTax.

It’s also important to remember that you don’t have to implement these changes at once. As long as you keep environmentally-friendly concepts in the back of your mind, however, you’ll find ways to integrate many of these practices over time.

Go Green Around the Office

The first place to start thinking about going Green is around the office, and there are plenty of opportunities there. These include:

1. Recycling

One easy place to start your Go Green office initiative is with your recycling program. While it’s likely that your office already recycles to some degree, there’s always room for improvement. The best way to make sure your recycling program is functioning as efficiently as possible is to make it someone’s job to monitor it.

You also need to have clearly marked receptacles in various convenient locations around the office, and you need to make sure everyone knows what can be recycled and where to put it. Establishing a system for recycling electronics is another important element to include in your program, and many items like old cell phones that still work can be donated as well.

2. Energy Efficiency

Acquiring and using as many energy efficient appliances and fixtures as you can is a great way to reduce your carbon footprint while simultaneously bringing down your electric bill. This doesn’t mean you must go out and buy all new appliances on the spot, of course, but making it a policy to only purchase energy efficient replacements is a good place to start.

You may also want to invest in some motion sensors and timers to control lights in your offices, as well as purchasing multi-purpose machines rather than individual scanners, fax machines, copiers, and printers.

3. Go Paperless

Eliminating paper whenever possible is an excellent way to contribute to conservation efforts. This can include everything from eFiling all your business tax returns to offering paperless billing for your customers, and it will save you plenty of money in the long run. As a bonus, it also saves you space, since you’ll no longer have to find places to store all of that paper, but it is important to always have a reliable digital backup.

4. Powering Down

You may be shocked to learn how much energy your computers, appliances, and other machinery consume when turned off or on standby. Making it an office policy to turn off power strips at the end of the day, unplug unused appliances, and set computers to sleep when left idle rather than turning on screensavers will all help reduce your energy consumption substantially.

5. Heating and Cooling

Keeping your workplace comfortable for your employees is important, but you also want to do it as efficiently as possible. It’s a good idea to seal any windows and cracks to prevent drafts from coming in or heated or cooled air from getting out. You should also adjust thermostats to a reasonable level and then monitor them, and whenever possible, use portable AC units rather than central air.

6. Printing

Of course, there’s no way to avoid printing entirely, but when you do have to print, there are many steps you can take to ensure it’s not wastefully done. These include using draft printing mode whenever possible, printing on two sides, utilizing software like GreenPrint to maximize the area of the page that is used, and avoiding color printing.

Other printing-related ways to conserve include purchasing only post-consumer waste paper (PCW) and remanufactured toner and ink cartridges. Even simply using smaller font will save plenty of ink and paper in the long run.

7. Decorating

While you may not think of your office décor as something that can impact the environment, there is room to improve here as well. For instance, you can purchase used office furniture and fixtures, which are often in nearly new condition, rather than buying them new, and you can decorate with plants to improve air quality while also adding to the beauty of the space. Choosing lighter colors will help enhance any natural light your office receives, helping to reduce your reliance on electricity as well.

8. Water Conservation

You may consider your water bill just another cost of doing business, but there are real savings to be had here too. Installing aerators in all your faucets can significantly cut down on water usage, as can low-flow toilets. You can even improvise by placing an empty plastic container or two in your toilets’ reservoirs to reduce the amount of water used for each flush. And, of course, checking for leaks and dripping fixtures will help you conserve water also.

9. In the Breakroom

What you provide for your employees in the breakroom can have an impact on your carbon footprint as well. Providing reusable dishes and silverware is a great way to cut down on waste in this area, as is offering filtered water rather than bottled.

Go Green While Getting There

Another thing to keep in mind is how travel impacts the environment. There are several ways this can relate to your business, including how your employees get to work and what they do when traveling. Some steps to take include:

10. Work Travel

While not all business trips can be avoided, utilizing videoconferencing whenever possible is one good way to cut down on employee travel for work. When travel is necessary, make it your company policy to only rent hybrid or high MPG vehicles to limit damaging emissions.

11. Commuting

Helping your employees get to work in a more environmentally-friendly way is a good step to take as well. This can involve subsidizing transit passes, helping to set up and encourage the use of carpools, and instituting telecommuting whenever possible.

12. Energy Source

Many energy companies allow you to choose a Green energy source to purchase your power from. This is an excellent step to take, and it generally doesn’t change the rate you pay. Utilizing Green web hosting is another area you can consider that will have no actual impact on your business but that can have a real and lasting impact on the environment.

Making “Go Green” Work For You

No matter how well-planned and implemented your Green initiative is, it won’t have maximum impact unless you can get all your employees on board. That means making it part of the culture of your office and making sure everyone understands what you’re trying to do and why.

This can also have an upside for employees, as one easy step to take is instituting a casual dress code whenever possible to help cut down on the need for dry cleaning. Additionally, you can make certain employees responsible for different aspects of the program, possibly on a rotating basis so that everyone is involved at some point.

Providing incentives by creating a friendly competition between work groups is a good way to get people excited about your program as well, and the more your employees are involved, the more effective your program will be. Of course, taking any of these steps will help reduce waste and contribute to conservation efforts, but they will also almost certainly save you significantly in the long term, and that’s a big plus for your business by itself.

The post 12 Awesome Ways Companies Can Go Green appeared first on AccurateTax.

How does value affect a purchase?

Consumers may think they make purchases strictly based on their needs or desires as well as their budgets, but retailers should understand that the psychology of “seeing value” comes into play as well. A prospective buyer will spend more if they believe that the product they are purchasing provides enough benefit.

For example, when consumers buy large-scale electronics, the salesperson often tries to sell the client an additional warranty plan. Many people may consider that unnecessary, but the buyer who has recently broken a gaming system or blew their TV may look at that as an added value and is more willing to pay for it. Keep in mind that value doesn’t just mean an additional perk. Many companies offer the same product, but customers value one brand over another – often regardless of price. Consider stores like Starbucks or Whole Foods Market. They are traditionally more expensive than their competitors, yet have no problem selling their products to eager customers.

While online retailers can’t “read” a person to determine what they need on the spot, what they do have in common with all these specialty stores is that their success is dependent on finding and attracting the ideal customer. Ecommerce shops must be much more detailed about a prospective client’s needs in order to meet them right on the webpage. They have to understand not just their target market, but what that customer looks like in detail, everything from their demographics to their buying habits.

Entrepreneur’s article “Determining Your Ideal Customer” is a good starting point for figuring that out. Retailers need to dig into their invoicing records, access Google Analytics, engage in newsletters, track social media, gather customer satisfaction information, provide surveys and more to research their current customers, including what is driving them to the site and what is turning them away.

Once a brand has researched its ideal customer, it then must define what makes it stand out from its competitors: its unique selling proposition (USP). It helps to begin with a list of top successful competitors to see what is driving traffic and customers to their site. After that, brands need to consider what those competitors are not providing their customers and how that meshes with their own USP. In “What a Unique Selling Proposition Really Means & Why Your Business MUST Have One,” Kissmetrics offers this tip for brands developing their USP:

When you attempt to be known for everything, you don’t become known for anything.

They give a hypothetical example of a company that specializes in web design and does search engine optimization (SEO) on the side, and a company that specializes in SEO. Which would you pick when selecting an SEO firm? Ecommerce retailers need to laser focus on that one thing that makes them stand out from the crowd of online retailers rather than being all things to all customers. They must create a narrative that weaves that USP through all their interactions.

When a brand has determined its ideal customer and USP, marketing must use that information to drive traffic. SEO, functional site design, newsletters, social media, live engagement and advertising are some of the tools retailers should be utilizing to drive traffic in a way that reflects the retailer’s USP. Analytics tools for both website and social media are also a must-have in order to track engagement performance.

Once companies have a good grip on their marketing objectives, the next step is selling products and upselling additional items. Obviously, this means the ecommerce site must be functional and as bug-free as possible. Investing wisely in the best software solution and reliable web hosting services can provide customers with a valuable experience, but additional features that address convenience for the ideal customer also provides value. For example, online chat services for customers can help upsell additional products, address problems and provide the visitor with a feeling of real engagement.

Upselling can also be accomplished with a related items feature, warranty offers or a notice of progress towards the minimum free shipping requirement if there is one. Easy-to-find return policies, gift options and possible free offerings that target the ideal customer will also go a long way to providing increasing a retailer’s value.

This might have readers wondering if pricing matters. Of course, price points have to be competitive even with a stellar USP, especially for new companies. It is again useful to look at competitive ecommerce retail shops to not only discover pricing, but to review their policies on returns and shipping fees as well as when sales are taking place. Review their SEO, marketing and visual layout tactics. Every online store has a different approach to sales, but it should still keep in line with the brand’s USP in order to retain customers who have only come by for the first time due to a special sale price. Having a deep discount sale (50-75% off) will not entice customers to return for full price items. Brands will acquire sales and but not clientele.

Understanding value is a critical element for any online retailer that wants to remain competitive or dominate their field. Communicating value may have special challenges online but it’s a necessary factor in marketing. Price alone will not create loyal customers.

The post Price vs. Value: Communicating Value to Your Online Customers appeared first on AccurateTax.

Below are seven tips to improve cash flow management and ensure your business remains healthy, regardless of your current profitability.

1. Build Strong Relationships with Customers

The first thing on the list is the most important and often the hardest to manage. Especially if you operate a receivables business or work with large corporations or government agencies, delays in payment can lead to serious cash flow issues.

Stronger relationships with your customers will help to better manage this. Specifically you can do the following:

• Require Deposits for Large Projects – Require your customers to pay a deposit for long term projects for which payment may be delayed.
• Offer Discounts for Cash and Carry – Offer a 10% discount for upfront payment. Even if this eats heavily into your margins, it can be an important cash flow saver as you grow your business. Some businesses will even shift to all cash and carry transactions.
• Communicate Constantly with Your Customers – Make it very clear what your receivables policies are. Have it clearly outlined in documentation before you start a project and communicate with the customer at set intervals both before and after invoices are sent out to ensure they know when payment is expected.

Clear, consistent communication will often alleviate many of the most common problems related to receivables. Do the above and you’ll reduce your headaches significantly.

2. Negotiate Better Terms with Your Vendors

The sooner you have to pay your own bills, the harder it can be on your current cash flow. This is frequently the case for contractors and service businesses that need to purchase materials or hire subcontractors to complete a large project. While waiting for payment from their client, the subcontractors are expected or informed they will also need to wait.

There is risk in doing this, however. It can sour relationships with vendors or even result in late fees if you wait too long to pay. For this reason, negotiate better terms in advance for repayment. Net 60 or even Net 90 can be hugely beneficial in managing your cash flow concerns.

3. Have a Clear Collections and Late Fee Policy

On the other side of this, you have to be as strict as possible with your customers when it comes to on time payment. As much as you are trying to delay payment to your vendors, your customers are doing the same.

Negotiation of better terms is always an acceptable response to cash flow concerns, but non-payment or extremely late payment are not. That’s why you need a clear collections policy in place and a means to collect if someone is late. Make sure it is in writing, provided with the contract, and communicated to the customer frequently if you feel there may be an issue.

4. Optimize Inflow of Cash

Waiting on a handful of large payments throughout the year can be stressful and lead to potentially crippling situations if a company doesn’t pay or worse, closes and is unable to pay. To avoid this happening, diversify the inflow of cash for your business as much as possible.

There are many ways to do this. The easiest is to break down payment by your customers into smaller chunks – providing payment plans or offering installments will create more regular payments across your customer base to avoid those make-or-break deadlines. Another way to do this is to create new products.

Software companies have long since started shifting their business models to SaaS and ongoing support models because it results in monthly cash flow, often automated with credit card transactions. Service companies offer consulting and training to supplement their larger service contracts. Retailers sell insurance or replacement plans, and offer memberships with monthly or yearly fees for the recurring income and influx to their cash flow. Something similar can help offset delays in receivables.

5. Reduce Cash Outflow Where Possible

This is an easy one but often one that gets overlooked. Simply reducing your outflow can help improve the overall health of your business.

By reducing expenses, especially for large things like new equipment, monthly subscriptions, or ongoing payments, you can improve cash flow significantly. Also, streamlining large purchases and breaking them down with a line of credit will help you manage when the expenses are paid off, especially if you operate equipment vital to your business that might break down – like trucks, grills, or presses.

6. Receivables Funding Options

When there’s nothing to be done about slow or delayed receivables, there are funding options. These are particularly important for businesses that work with large companies or the government where delayed payment is the norm.

Factoring your invoices allows you to get paid faster, albeit for a fee. What is factoring? It’s when you sell your accounts receivable to a third party, who takes a percentage in commission or fees and provides the remainder to you up front, while waiting on full payment from your customer. By transferring the debt and the onus of collecting on that debt to a third party, you can maintain cash flow and focus on growing the business. This is especially important for companies that rely on a small number of very large contracts throughout the year.

7. Consider Fixed Deadlines for Certain Costs

By fixing the deadlines for payment of certain costs like sales tax remittance, payroll tax deposits, and unemployment tax, you can manage the outflow of cash from your business.

This allows you to better plan when expenses will be mandated and ensure invoices are collected by then or factored to cover the costs. What many consider to be a hindrance to their cash flow management can be a milestone for its measurement if carefully planned.

Ensuring Cash Flow Is Not an Ongoing Issue

While every small business faces and will continue to face this challenge, there are certain changes you can make to minimize its impact on your growth and allow you to maintain good relationships with your vendors, staff, and customers alike.

Use these seven tips to evaluate and improve the status of the actions you take to manage your cash flow and ensure this problem doesn’t have an outsized impact on how you run your business.

The post 7 Fundamentals for Managing Your Small Business Cash Flow appeared first on AccurateTax.