Tag: small business

  • A Guide to Reopening Your Business After Covid-19

    A Guide to Reopening Your Business After Covid-19

    You can almost hear it.

    Across the country light switches are flipping, the roads are getting busy, computers and other machines are powering back up. People are getting back to work.

    After months of closing workplaces, businesses, and enforcing social distancing, countries have begun to reopen their economies. We are slowly but surely getting back to our normal day to day living. This has presented business owners with new risks.

    Businesses that reopen may be affected by the post lockdown risk, and companies that reopen irresponsibly may find themselves not faring well in a recovering economy.

    Like me, I’m sure everyone is eager to get back to work, but life after COVID-19 can be confusing. The way things worked previously isn’t how it will work now, especially early on after the lockdown. The best way to be successful is to ensure the safety of your workers and customers.

    Below is a list of guides or tips that will guide you as you reopen your business. Remember, every business is different, so you must tailor each of these to suit your type of business.

    Avoid Personal Contact

    Making a “no personal contact” rule will go a long way in ensuring the safety of your workers and customers. Handshakes and hugs are the most common form of physical contact, especially in the business world, but they don’t belong in a post COVID-19 world.

    But you have to make rules to ensure no physical contact until later phases of reopening. You could also use an alternative way of communication in your workplace that doesn’t involve physical contact.

    Avoid Large Gatherings

    As we all know, humans are social animals. There is an uncontrollable need to communicate and gather. Every community has a place where people gather to make jokes, gossip, and talk in general, and so does every workplace.

    Right now, this must be stopped. So, it would help if you made rules that prevent people from gathering people in a place.  

    Readjust Your Floor Plan

    Readjusting your floor plan to create more distance or space between your employees and also your customers is a good safety measure. Also, adjust your employees to face walls instead of each other.

    Avoid Item Sharing

    Items like pens, notebooks, and folders could be assigned to specific workers, or you could simply digitalize your workplace. This will reduce contact between your workers and also maximize work time.  Shared tools must be sanitized before and after each employee uses them.

    Adjust Breakroom Rules

    Everyone needs a respite from working, so how you handle the breakroom rule is essential. If your business has a breakroom, then adjusting the break time of each department will help avoid large gatherings.

    Limit the Number of People In a Closed Room

    It’s best to limit the number of people in closed rooms like conferences, seminars, and board meetings.  Each phase will have different specifications.

    Hand Sanitizing Stations

    Creating sanitizing stations is compulsory. Maintaining sanitizing stations for both your workers and your customers ensures both safety and customer confidence. If your place feels risky, customers might not do business with you.

    Disinfecting and Cleaning Your Business Place

    Coronavirus can survive on the surfaces of objects for some time, so it’s best to disinfect and clean your business periodically. This helps to kill the virus on every surface in your office. You might think this is too stressful, but remember safety builds customer confidence and, in turn, generates profits.

    Proper Disposal

    Ensure your employees dispose of used items properly. Providing lined trash bins for disposal is important.

    Posters and Notices

    Office rules, including placing notices about COVID-19 precautions, safety, and contact procedures, can help inform and educate both employees and clients.

    Laws and Policies

    Reviewing and updating your policies following the country and state laws will help your business avoid issues.

    Thanks for checking our guide, and if you find this article useful, please pass it on. Or if you need someone to look over your policy, contact us. Stay safe.

  • Physical Distancing vs. Social Distancing

    Physical Distancing vs. Social Distancing

    The changes we are experiencing from the Covid-19 pandemic might run deeper than we think. In just 4 months, so much has changed: the way we conduct businesses and relate with each other.  And now, even our psychological well-being during and after the pandemic might be affected as well due to social distancing.

    Steps have been taken all over the world to contain the spread of this virus as much as possible. The core idea behind these steps is keeping a certain distance from each other. For example sheltering-in-place, quarantine, and lockdown work under the premise of social distancing.

    The idea behind social distancing is one that scientists and health professionals believe will stop the spread of the virus. It demands that we stay away from gatherings and maintain at least 6 feet from each other.

    While this is effective (after all the society has bought into it), are we practicing social distancing the right way?

    The question then is, “Is this really social distancing, or do we need a reframing?” Many psychologists seem to think that we do need a new phrase to better embody the idea of staying apart to stay safe. Social distancing implies a total cessation of human interactions – both physically and mentally.

    Rather than social distancing, psychologists think that what we need is physical distancing.  Simply put, physical distancing means reducing close contact with others. The problem with social distancing is that its effects might not be so glaring now.

    After the pandemic is over, social distancing could have serious negative impacts on the psychological well-being of people.

    Jamil Zaki, Associate professor and psychologist at Stanford explains in this article that humans need to maintain a connection with each other, especially now. In times of distress, people stay grounded when they feel the care and presence of others around them.

    While we practice physical distancing, we need to find a way to be together even while apart. Thankfully, technology makes it easy for us to interact socially. Some apps and social media platforms make virtual social interactions accessible. Let’s take a look at some of them.

    Zoom

    This pandemic would forever change the trajectory of businesses and the way they are run. With Zoom, people can still carry out their business activities with video calls and make deals from the comfort of their homes. Alternatively, friends can also use Zoom to organize virtual coffee dates with each other.

    Video Calls

    Voice calls can only go so far. At some point, you’ll want to see your friends and family in real-time.   Whatsapp, Messenger, Instagram and very recently, Facebook all have video call options. You can stay apart from your friend physically, but nothing says you can’t call them up. These apps are more common than Zoom, so even if your friend doesn’t have Zoom, you can still see them in real-time.

    Group Activity Apps

    This pandemic has made some group activity apps very popular. Applications like House party, Netflix Party, and TikTok are making waves. These applications have provided a way for humans to remain social with each other.

    Since the lockdown, TikTok challenges have provided a virtual bridge where friends can meet and do fun stuff. House Party is another application that is providing the necessary service of human interaction.

    Being on lockdown doesn’t mean you can’t keep yourself entertained with your family and friends. Netflix Party has made it possible for friends to watch movies together and even chat while at it.

    To conclude, social distancing might not be what you and I need at this point. Being socially distant at this time could have severe psychological impacts on us. Hence, the need for socialization through virtual means.

    Remember also that the only way to flatten the curve of infections is to distance ourselves from each other but only physically, not socially. Stay home, stay safe, stay connected.

    From all of us here at Sound Accounts, we are wishing you a safe and speedy end to this quarantine. Please feel free to connect with us virtually

  • COVID-19 Resources for WA Business Owners

    COVID-19 Resources for WA Business Owners

    We want to be a resource to our clients, friends, family, and other small business owners.  Therefore, we have put together information on various programs available in response to COVID-19.

    Small Business Administration

    The Small Business Administration is going to be a central resource for business owners in this crisis.  Information on the Paycheck Protection Program, the Economic Injury Disaster Loans and Loan Advance at this website.

    Internal Revenue Service

    Additionally, the IRS has established a special section focused on steps to help taxpayers, businesses, and others affected by this crisis.  Their page is updated as new information is available.  For example, the IRS has extended tax filing and payments until July 15. They also offer advice for deducting COVID-19 costs from your taxes here.  The IRS has also dedicated an entire page to the economic impact payments here.

    Consumer Financial Protection Bureau

    Additionally, planning for the financial impact of COVID-19 can be daunting. To help, the Consumer Financial Protection Bureau has put together some great resources and ideas on their website. These include links to articles about meeting your financial obligations, experiencing a loss of income, and being targeted by scammers.

    Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

    You could spend your days reading over this 335 page act. Or there is a great summary of this act available through the SBA, as mentioned above. The Department of the Treasury has also put together a comprehensive summary.

    Washington State Coronavirus Response (COVID-19)

    The state has put together a conglomeration of information all in one place on this website.  On their Business & Workers page, you can find guidance on what businesses are considered essential. You can also find a form you can submit to clarify if your business is essential, here

    Washington Department of Revenue

    Whether your business is essential or not, the Washington Department of Revenue has announced some relief for businesses. These address a broad range of taxes and programs including business and occupation tax, leasehold excise tax, and many more.  Find more information here.

    Washington Employment Security Department

    However, if taxes are the least of your worries, eligibility for unemployment benefits has been expanded to include many Washingtonians that have not been eligible in the past.  The Employment Security Department has information regarding COVID-19 here and you can subscribe for updates to this information here

    Washington State Department of Labor & Industries

    While this department is focused on workers’ compensation, there is a PDF on their website about Paid Sick Leave, Paid Family and Medical Leave, and workers’ compensation here.  Governor Jay Inslee and L&I Director, Joel Sacks, have also spoken about extending workers’ compensation coverage to quarantined health workers and first responders on this site.

    United Way of Washington 

    While financial help for small businesses is amazing, what if you need other types of help? Assistance through the United Way is managed on a county level.  This site will help you connect with your specific county.  The county sites have links to health updates; health information; financial assistance for individuals, businesses, and non-profits; expense support; food support; school operation plans and meals; various supportive services; a list of hiring employers; and other employment related resources.

    Other Assistance

    We encourage everyone to reach out to their landlord, creditors, and lenders if you find yourself having difficulty making payments.  Many will continue to work with you throughout this crisis, but communication is key. 

    Your Sound Accounts team hopes you are all staying healthy and well. We look forward to seeing you once we have made it through this crisis, together!    Please feel free to reach out to us with any questions or concerns you may have.

  • Small Business Owner’s Guide to the CARES Act

    Small Business Owner’s Guide to the CARES Act

    In this time of unprecedented uncertainty, here is a comprehensive guide to the recently-passed CARES Act.

  • 10 Purchases You Didn’t Know Were Tax Deductible

    10 Purchases You Didn’t Know Were Tax Deductible

    The tax season is almost here, and several small businesses defer their tax proceeds in fear of what’s to come. No worries, we have come to remind you of some tax items you may have overlooked.

    A lot of small businesses exclude daily expenses in their tax return deductibles. Usually, these expenses reduce what you can reinvest. But you don’t need to worry (even though you’re a new to tax), this could be an opportunity to earn back some money.

    Keep reading to see some purchases you didn’t know were tax-deductible – hopefully, you might get to save extra cash to help with cash flow.

    Medical and Dental Bills 

    Nothing strains your income like emergency medical or dental bills, but the IRS makes these out of pocket expenditures easy for us.

    Medical and dental bills that exceed 7.4% of your adjusted income are considered tax deductible by the IRS. That means you can save extra cash out of those sudden medical bills. Great, right?

    Student Loan Interest Paid by You or Someone Else

    Student loans are bad, and we all know it but what is even more horrible is the interest. Some stipulations make student loan interests tax-deductible.

    If your student loan interest is more than 4%, the IRS allows you to deduct $2,500 from your taxable income. And get this; this deduction still works even if someone else paid the interest on the loan for you. However, this golden gift is only for people whose individual income is less than $80,000 per year. 

    Donations to Registered Charitable Organizations

    Giving is an act of kindness and the IRS rewards that by awarding a tax deductible for charitable work. If you’ve been an ardent giver to local charities and this does not have to be large monetary donations, you can deduct these from your taxable income. 

    So, collate and add up the cost for that cake you made for a charitable organization. And remember to include 14 cents per mile for every trip you made for a charitable organization. 

    Home Improvement Renovations 

    Yes, the IRS recognizes and offers tax deductibles for home improvement renovations but only when they are done for medical purposes. So forget about getting a tax-deductible for that new pool you installed. 

    If you have had to make certain changes to accommodate a medical situation, the IRS would consider this expenditure and deduct it from your taxable income.

    Compensation from Jury Service 

    Being a Jury is a great opportunity to play an active role in the criminal justice system and society. In addition to the salary concessions made for juries which make provision for them to be paid even while on jury service, they receive compensation from the state.

    Although this money is often remitted back to the company where they work, it is tax deductible. If you’ve been a jury this year, just deduct the compensation from your taxable income. 

    State Sales Tax / Local Tax 

    If you haven’t been making use of this tax-deductible, then you’ve been missing out on saving extra money. You can deduct either your local income tax or your state sales tax. You can choose to deduct whichever tax would benefit you better.

    For states like Texas and Washington that don’t pay income taxes, there is no choice; they have to deduct their state sales tax. For people living in the other states, pick between your state sales tax and your local income tax and subtract from your taxable income.

    Expenses Incurred While Job Hunting

    Looking for a job does take its toll not only on your finances which is a heavy impact but also on your mental well-being. While the IRS can’t do anything about the latter, they can help out with the former. 

    Any expense you incur while Job hunting and even after you get a job is recognized as a tax-deductible by the IRS. But you need to meet some conditions for this. One of them is that the job you’re going for must be within your field of study. 

    The following expenses are tax deductible under this heading:

    • You can itemize any amount incurred from having your resume reviewed by professionals as long as you have receipts for this service. 
    • Travel expenses are also tax-deductible, and they cover gas expenses for transporting yourself for interviews. 
    • Moving costs necessitated by a new job are also tax deductible by the IRS. If you move within 50 miles, you should calculate 23 cents for every mile. 

    Child Care Tax Credit 

    Expenses double when you have kids and during the holiday, those expenses triple, especially when you have to pay for summer camp or babysitters to watch them.

    The Child and Dependent Care Act recognize these expenses, and you can deduct $3000 for each child or dependent and $6000 for two or more. This tax-deductible is only valid as long as the babysitters aren’t family or relatives. 

    Loss from Disasters or Accidents

    Any damages that aren’t covered by your insurance company can be claimed as tax deductibles. 

    Out of Pocket Teaching Expenses

    Many teachers often have to make out of pocket expenses to aid their teaching. The IRS offers a tax deductible for these expenses even if they aren’t itemized. All teachers are allowed to subtract $250 from their taxable income. 

    Final Thoughts

    You need to keep evidence of purchase and written records for every item you claim. Also, make sure you check with your tax expert to know how much and if you qualify for these tax claims.  If you have any questions, feel free to contact us.  We’d love to help you!

  • The Reality of IRS Scams

    The Reality of IRS Scams

    When fraudsters engage in phishing, they often use the Internal Revenue Service to deceive victims. It is, possibly, the most mimicked government agency used in scams to get your personal information.

    Sadly, many people have lost a lot of money and their personal data to tax scams. Theses scammers employ the usual telephone, email, or mail to set up companies, people, and tax professionals. 

    While the authorities are doing all that they can to bring the perpetrators to justice, there’s a lot you can do to protect yourself. Information is key, and this article contains substantial information to help you avoid being scammed.

    What You Should Know About Scams

    It is essential to know how these scammers go about their criminal acts. Knowing this will help you be more vigilant and alert.

         I.       Scammers make contacts through emails, text messages, or phone calls. Here they hide under false identities to ask for your personal information. With these vital details, it’s easy for them to defraud you.

       II.       Scammers go under the guise of the Taxpayer Advocacy Panel (TAP) to make claims of a possible tax refund. This usually results in taxpayers revealing their personal information to get these refunds. TAP never requests personal information; they only play advisory roles to the IRS.

      III.       Some of these scammers are very sophisticated, big, and well organized. They operate on a high level of impersonation and usually have a lot of information on their targets. They could even have real IRS employee badge numbers or logos. Therefore, these aggressive identity thieves are very careful and thorough, so it’s easy to fall prey to them.

     IV.       With the help of some vital information, they can infiltrate and doctor your tax returns. They can also make changes to your tax liability and then demand immediate payments. Some of them can go as far as threatening you with criminal fraud charges.

       V.       Additionally, scammers target information on the W-2 forms to initiate their fraudulent activities. The W-2 form reports the employees’ annual wages and the amount of taxes deducted from their paychecks. Scammers use data from these forms to carry out the W-2 scam.

    The Red Flags You Should Look Out For

    Below we will give you some tips on how the IRS operates. With that, you can easily detect the fraud attempt when you notice the contrary.

         I.       IRS never contacts taxpayers or businesses to request personal or financial information, not through emails, text messages, social media, or phone calls. It makes contact through mail delivered by the US Postal Service. Even in the few cases where it calls or visits taxpayers, the IRS will have sent a series of “notices” before that.

       II.       The IRS does not call taxpayers to demand payments through debit cards, gift cards, or wire transfers. However, it does usually send tax bills to taxpayers through the mail.

      III.       The IRS will never threaten taxpayers with police arrests or revoking of licenses. It, rather, gives guidelines on how taxpayers can pay their taxes to the United States treasury.

    Sound Accounts is an establishment that understands licensing. If they handle the licensing and notary aspects of your business, scammers don’t stand any chance.

     IV.       As a taxpayer, you have every right to contest your tax liability. The IRS always gives you the fair opportunity to do so.

       V.       The IRS can use private debt collectors to collect taxes. Note, however, that these debt collectors are not the ones that receive the payments. When real payments are sent, the taxpayers pay to the US treasury through the IRS.

    What You Should Do

         I.       Any contact via email or text message will likely be a scam. It’s therefore advised that you don’t respond to such messages or download file attachments. You should forward such emails and texts to phishing@irs.gov, and then delete the message

       II.       When you get phony phone calls, make sure you don’t disclose personal or financial information to the caller no matter how authentic the number looks. Hang up instead and call the IRS phone number (1-800-366-4484) to verify the authenticity of the caller.

    Unfortunately, IRS scam is real, and it has caused a lot of taxpayers millions of dollars. It may be challenging to be completely free of these scams, but you can increase your chances of safety. Some of these scammers, as we read, tend to target your filing system as a business or even individual.

    It, therefore, becomes important that you have competent professionals to handle vital and delicate administrative roles for you. Such precautionary measures, coupled with the information we’ve provided above, will go a long way to protect you from scams. Good luck!

  • COMMON BOOKKEEPING MISTAKES

    COMMON BOOKKEEPING MISTAKES

    Data from the United States Small Business Administration show that about 50% of every new small business in the United States will fail within the first 5 years. So why do small businesses fail? Bad financial management.

    Good financial management begins with knowing some key rules of bookkeeping. From small businesses to big corporations, bookkeeping is a vital part of any business effort. Although it’s typically not the best job, your business needs bookkeeping services to succeed. After all, errors can cost your business significantly.

    Small businesses often make bookkeeping errors in their first years of operation, due to the lack of knowledge concerning correct accounting procedures. If you don’t have the money, time, or wish to become a certified bookkeeper, you can avoid some key pitfalls, which can impact on your business’ bottom line.

    So here are some common bookkeeping mistakes made by small businesses — and how to prevent making them.

    Doing it Yourself

    We only have 24-hours daily. So as a small business owner, you need to ensure that you’re filling them with just the most vital tasks. Although managing money is absolutely an important task, you don’t need to do it yourself.

    In actuality, if your bookkeeping and accounting skills aren’t strong, it’s best you hire someone to do it. Delegating this job to an expert will help you cross check for errors. Also, it gives you time to work on your business – and not in it.

    Employing the Wrong Accounting Method

    There are two principal business accounting methods: accrual and cash. The accrual method is simpler since it’s founded on the actual flow of money in and out of your business. The cash accounting is used essentially by sole proprietors without any inventory. That said, the accrual method documents expenses and income as they happen.

    As your business grow and get more complex, you should change to accrual accounting. This method makes it easier to match income to expenses correctly. Otherwise, your business might appear profitable during periods with some expenses and profitless during months with huge expenses, without understanding the difference.

    Failing to Monitor Reimbursable Expenses

    Often, small business owners pay for purchases with their credit card. After paying, they fail to follow these expenses.

    In essence, don’t mix business and personal spending. Keep your business and personal finances separate always. We advise small business owners to open a company checking account and keep business income into the account.

    Next, get an accountant to devise an income management strategy directing how money is removed from your business. The following factors will drive your income management strategy:

    • The profits that need to be reinvested back into your business
    • Your long-term personal financial plan.
    • Your annual cash flow needs

    Not Negotiating Vendor Terms

    A lot of small business owners often buy items from the same vendor always. If you do this, it’s essential to build a relationship with your vendors. Even if the purchases are little, always call and ask questions. Also, you can bargain longer payment terms or reduced pricing, allowing you to maintain more cash flow

    Not Keeping Hard Copies of Records

    In a world of Internet banking, several small business owners feel comfortable depending on the Internet to safeguard their records. Although going paperless is a no-stress and an eco-friendly option, always keep hard copies.

    Most banks only allow access to these records for some months. As a result, you may come up short if you wait till tax time to reconcile your bank statements.

    Lack of Communication

    Bookkeepers can do their job effectively if they’re filled in and briefed on every financial transaction. A common mistake is paying someone without reporting it or getting supplies and not giving the bookkeeper the necessary information or receipts.

    The Bottom Line…

    You can avoid these costly bookkeeping mistakes. Prepare accordingly and watch out for warning signs. When in doubt, get the right information, know the right bookkeeping rules, and ensure that your books are accurate all year-round.   If that all seems like too much work, please contact us today!  We are here for your bookkeeping needs.

    Your final balance sheet will thank you.

  • Tricks to Maintain Balance

    Tricks to Maintain Balance

    As a small business owner, it is easy to lose sight of business and personal goals. Try these 10 tricks to keep you, and your business, in balance.

    Take A Class

    Being a life long learner is important to running a business.  Find a class that will enhance your business or excite you.  Many colleges or community centers have free or inexpensive classes on topics that feed the mind, body and soul.  Check them out to find one or more that can give you a temporary break and recharge your batteries.

    Take A Walk

    Studies have shown that taking a brief break can help refocus during the work day. Take a 15 minute walk in the morning or afternoon to help clear your head and change your perspective. The results will surprise you.

    Stick to Your Calendar

    We are all guilty of working to long on a particular project. Budget your time and put it in a plan. Stick to it and when the time allotted is up, move on to the next thing on your agenda.  Doing this enables you to take a break when you are getting bogged down and approach it with a fresh perspective.

    Make a Call to a Friend

    To many times we get bogged down and forget about the connections we make along the way. On a regular schedule (daily, weekly, monthly) take the time to reach out to a connection from the past. You will enjoy the break and the connection; and be reminded that the struggles you face aren’t unique. It will also lay foundation for reaching out when you have a crisis and need an extra hand.

    Volunteer

    It is true, we make time for what we feel is important. Find something that you are passionate about and put a little of yourself into it. There are numerous groups that have a multitude of volunteer opportunities. You will feel a sense of accomplishment as well as boost your self-esteem by helping a cause you feel strongly about.

    Read a Book

    We are not unique in the struggles we have, the joys we find or in the way that learn from others. Set a plan to read 1 book a month. Learn from leaders of your industry, as well as leaders in others. Do not overlook this simple method of adding to your knowledge reservoir.

    Set Goals

    This one seems simple but can be a little more complicated.  Set goals, for the hour, day, week, month, year. More than that, write them down. It gives you something to measure yourself against, and there is a very satisfactory feeling in crossing something off the list that you have accomplished.  Remember that goals aren’t static but dynamic, so adjust them as needed.

    Evaluate Your Customers

    We all have that one customer that takes up 90% of our time for 10% of our revenue. Review your customers and what you are providing for each other. Is there a symbiosis there, or is it one-sided? Are you a partnership with them, or simply a means to an end? Examine how you can improve those relationships and discover how you can improve the ones that weigh you down.

    Balance Your Books

    Not all of us are experts at balancing the books but take a look at what you do know. When needed, call us at Sound Accounts and we are most happy to help you examine your business and personal financial health.

    Smell the Roses

    Life is to short to not enjoy it. Take time to do something special that will invigorate you.  Only you know what that one thing is. Take time to do it.  Stop and smell the roses in your business and your life.

    If you are finding that you are needing help in any of these areas, contact us here at Sound Accounts. We are always available for a consultation.