1 BIG IDEAS FOR Small business: Money MANAGEMENT How the right technology can help your business keep track of its finances and avoid getting shortchanged.
2 02 ONLY 25% of small business owners believe they have the know-how to manage their finances on their own. 1 To keep your finances in check, consider: Tax Strategies Credit Management Payroll Protocol Payment Types Leasing Options FORM 1120 WHAT S YOUR FISCAL POLICY? Every small business is in the business of making money. But not all are in the business of managing it. From payroll and taxes to credit management and payment types, a little money management now can save you from costly consequences later. 1 Intuit, The Modern Small Business Owner,
3 04 HOW TO PREPARE FOR A LESS TAXING TAX SEASON 1 KEEP A PAPERTRAIL Save all paper receipts or scan them into accounting software, should you require proof of business expenses at a later time. TAX STRATEGIES. STAYING OFF THE IRS RADAR. April 15th. It s the single day that every small business must anticipate all year round. Learn how to prepare for yours with some tips for a less stressful, more favorable tax season. 2 TRACK FINANCIAL REPORTS For easy reference, summarize your finances on a regular basis to determine monthly profit, net business value and expenditures. 3 REPORT ALL INCOME In addition to sales income, businesses must report all: Goods and services The market value of any goods or services traded for your own. constructive income The value of any income received but not redeemed, e.g., an uncashed check. Worldwide income For organizations doing business outside of the U.S., the value of all foreign income. FINANCE TECH TIP Stay organized and digitize your receipts with outstanding scanners from Canon. 7 Businesses should retain their tax records for 7 years after filing.
4 06 THREE STEPS TO MANAGING YOUR CREDIT: ESTABLISH A BUSINESS CREDIT HISTORY Many business owners rely on their personal credit early on. But it s important to build business credit as you grow. This can be established by placing expenses in your organization s name and using a commercial bank account to pay them. CREDIT MANAGEMENT. THE WORTH OF BEING CREDITWORTHY. Building a successful business takes a bit of luck, a lot of hard work and no shortage of good credit. After all, your credit score can: Help you secure better financing and terms Alert you to signs of business identity theft Support business growth into the future IMPROVE YOUR CREDIT RATING To improve your credit score, the most important thing you can do is pay your bills on time. The higher your credit rating, the easier it will be for your business to quickly obtain more substantial financing and at better terms. KEEP AN EYE ON YOUR SCORE By monitoring your credit rating and keeping your financial records organized, you can detect any changes including signs of business identity theft before they have a chance to affect your business relationships. FINANCE TECH TIP Keep your financial activity organized with the help of software from companies like Intuit. The credit rating of one in three businesses declines over a three-month period. 2 2 US Small Business Administration, Managing Your Business Credit, sba.gov/content/managing-your-business-credit
5 08 PAYROLL PROTOCOL. Though an integral part of your financial operations, payroll can easily be overlooked. Follow these nine steps to a well-balanced system: PAYMENT TYPES. POSITIVES AND NEGATIVES Cash, check, credit or debit? While they are all forms of payment, you can t take each at face value. There are advantages and disadvantages to each payment type Obtain an employer ID number (EIN) from the IRS Check whether you need state/local IDs to process taxes understand the difference between employees and independent contractors Handle employee paperwork on time Decide on a pay period document employee compensation terms: time off, overtime, hourly reporting, etc. Choose any number of in-house or outsourced payroll systems Keep detailed records for the specified time period Report payroll taxes THE PROS AND CONS: CASH ONLY Immediate payment, minimal bookkeeping, less fraud risk, no processing fees. Risk of loss, security risk, IRS forms to fill out for transactions over $10,000. CREDIT/DEBIT CARDS Ease of transaction, customer satisfaction, increased chance for impulse purchases. Increased fraud risk, mounting transaction fees, complex recordkeeping. CHECKS Ease of transaction, viable alternative to card payments, no transaction costs. Increased fraud risk, complex recordkeeping, requires employee training (to define acceptance policies and limit fraud). FINANCE TECH TIP Spreadsheet software like Corel Quattro Pro can make it easier for you to keep track of your payroll processes. ONLINE PAYMENTS Increased customer base, easy purchase process (especially with stored payment info for repeat customers). Transaction fees, fraud risk, risk of purchase abandonment if customers are redirected to a separate payment website.
6 10 Our small business account managers are dedicated to finding technology solutions that help your business succeed and fit your budget. LEASING OPTIONS. MAKING IT HAPPEN. Once you know how to manage your finances, leasing can help you get the tools to do it. Most small business owners are familiar with this concept, but there are also many common misconceptions. CDW offers leasing for all their technologies, from standalone products to combinations of solutions. THREE LEASING MYTHS We can t lease I.T. products namely software. Software is indeed available for lease, along with other technology products. READ ALL ABOUT IT: Document Management See how managing documents now can help you prepare for audits later. Read more at biztechmagazine.com/docmgmt BUT The leasing process is too complicated. Not at CDW. Our partnerships give you access to leasing specialists who can guide you through the process, customizing the lease to your budget. owning is cheaper than leasing. Not necessarily. Technology has an average useful lifespan of three years. Leasing gives you the option to purchase, upgrade or renew the lease after that period is up.