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6 Tips For Managing a Small Business’s Finances

 

Managing every aspect of a small business is time-consuming and requires tons of research. You may have to go through the trial-and-error process, but you will eventually find a way that works for your business. One major part of running a business is keeping track of finances. Small mistakes can cost the business time and money. These are some of our professional tips for managing your business’s finances.

 

Overestimate Your Expenses

Many of us have recently seen that each month is unpredictable. Identify trends to the best of your ability, even though there is uncertainty. Thus, overestimating your expenses is helpful. Planning to spend extra money will not hurt your company because the unused money can be put right back into next year’s budget.

 

Find a Trusted Mentor

Build a relationship with someone that fits your financing needs. This person should be knowledgeable and experienced. A mentor is important because the internet does not always have all the answers to your questions. If you are having trouble finding a mentor, ask your surrounding network if they know someone that is reliable. 

 

Revise Your Budget

Consistently revise your budget throughout the year. Again, everything is unpredictable and you need to adjust your budget to trends that are occurring. As your business grows, pay attention to your priorities. This helps you make smart financial decisions and allow your business to thrive.

 

Incorporate Time

Time gets overlooked sometimes when planning finances. Include the time and money that is incurred by your employees when they are on the clock. Consider big projects that need to be done, holidays and sales, or other times that your business is usually busy. 

 

Set Goals

Setting small goals will help enforce the right behavior that you need to help with financing. These small goals might not be noticeable at first, but in the long run they will make a major difference in your business. These goals can gradually be increased as you accomplish them.

 

Hire a Bookkeeper

Consider hiring a bookkeeper to take over the mundane financing tasks. A trustworthy bookkeeper will keep things running on the back end of your business. This will open up your availability so you can focus on what you love doing as a business owner. 

 

How PL Consulting Can Help You

Business financing is not always an easy task. PL Consulting hopes that these tips make it easier to understand and manage. 

 

We offer a diverse range of bookkeeping and budgeting services. We are here as your business’s go-to resource when you have questions. We customize our services to each of our clients and their business plans. 

 

If you have questions about managing a successful small business, call us at 410.764.3731 or book an appointment through https://calendly.com/michaelplc.

6 Tips For Family-Owned Businesses

Family-owned businesses start small, then grow into successful entities. Each family member has their vision of the business’s success. These owners work hard daily. If your family-owned business has been around for years or you are just starting, these 6 tips for family-owned businesses will keep your business running efficiently and prosperously. 

business man at desk

Networking

An important tip for small businesses in any industry is to make connections. These connections lead to strong relationships and loyalty. Relationships take time and effort to build. They can positively result in collaborations, discounts on materials/services, or shared experiences with suppliers. 

Trust

Trust goes beyond building strong relationships with your connections. Continue to trust your family members that you work with. If you hire employees outside of your family circle, make sure they are someone that the team believes in. 

Communication

Effective communication is key to a small business’s success. Find a way that works best for everyone to communicate. This could be weekly meetings, email, or phone calls. Since a small business can make decisions much quicker than a corporation, use that to your advantage. 

Unity

Families are brought together through unity, so keep the same unity when running a business together. When making a big decision, do it as a team. If that is not possible, consider how everyone will feel about it. It should not be hard to agree. Ensure that everyone is on board with how the business is running. 

Values

Every business needs core values and standards that they believe in. Many family-owned businesses base these values and standards on how their own family runs. These will make an ethical decision-making process involving customers, employees, and vendors. Values and standards entice customers to buy from your business.

Community

Family-owned businesses are more than just their own family. They include the community that surrounds them. This community includes new employees that are brought onto the team when the business starts expanding. The community also includes the area that the business is based in. People want to see your business support the city they live in. The purpose of a community is to keep unity with people that are both inside and outside of the family. Share your objectives and mission with everyone in your community to develop a cohesive business model. 

Success

Building a successful business with your family has trials and errors, but it is well worth it. This article covers some basic tips, but we know there is so much more to running a family-owned business. 

 

PL Consulting offers a diverse range of bookkeeping and other financial services. We customize our services to each of our clients and their business plans. Our one-on-one interactions are a valuable resource for both your team and ours. 

 

If you have questions about running a successful family-owned business, call us at 410.764.3731 or book an appointment through https://calendly.com/michaelplc.

 

3 Tips to Maintain Your Small Business’s Credit Score During and After the COVID-19 Pandemic

The COVID-19 pandemic may impact your small business credit score once the PPP program ends. A good credit score qualifies you for a better interest rate. The less money spent on interest, the faster debt is paid off. You will have more money to pay for your business’s expenses. Maintain your business’s credit score with these 3 tips. credit card for tips to maintain your small business' credit score

Take Inventory of Debt, Expenses, and Current Cash

Before you think about your credit score, determine what your debt and expenses are. From there, calculate your incoming cash flow if you do not have those numbers already. Keep tabs on these amounts every single month. Check your credit report for errors. Mistakes or errors could bring your credit score down. Many companies will give you a report for free. 

Cut Costs

After making a list of what your expenses are, you can see where your money is going every month. Decide if these costs are worth paying for. An easy way to go through your list is to ask yourself if each cost provides value to you or your customers. 

One way to cut costs is to reduce traditional marketing and increase your activity on social media. Customers and clients are more likely to support your small business if they recognize and feel a connection to it. They are less likely to choose you because of traditional advertising. That is why networking and interacting on your business’s social media platforms is important. 

Another way to cut costs is by narrowing your focus. Limit what you offer instead of offering everything in terms of products or services. By doing this, you will produce higher quality work. 

Last, minimize your outsourcing costs by utilizing your current employees. Give responsibility to in-house employees that possess skills and efficiencies in those areas. 

Continue Making Payments

Some essential, online, or delivery businesses continued operating during lockdowns without losing their regular income. These businesses should continue making payments on time like normal. If they cannot make a full payment, a partial payment is better than not paying at all. Interest payments make up 35% of your credit score, so it is important to pay attention to making payments on time when possible.

Many other businesses have lost money because they were shut down or lacked consumer spending because of the unknown. If your business cannot afford to make a payment on time, talk with lenders and insurance companies. Speak with these companies as soon as possible because many of them are helping by making payment plans or deferring payments. 

PL Consulting Is Here For Your Business

PL Consulting offers a diverse range of bookkeeping and other financial services. We customize our services to each of our clients and their business plans. We consider one-on-one interactions a valuable resource for both your team and ours. 

Our team can help you with budgeting, which directly impacts credit scores. If you would like to set up an appointment for our services, call us at 410.764.3731 or book an appointment through https://calendly.com/michaelplc

How COVID-19 Has Changed the Future of Money

COVID-19 has spread across the world and closed down businesses everywhere. There have been changes to the world in ways that we never could have imagined. It will have a major impact on the way businesses and individuals handle money.

credit card changes the future of money due to covid-19

Consumer Spending

Spending is low in most industries because of lockdowns and limited locations being open. Some particularly low industries are travel and transportation, apparel, and services. Consumers are expecting lower household incomes for the upcoming months, so money spending is focused on necessities. The uncertainty causes irregular buying behaviors. These behaviors have businesses scaling back on production. 

Industries that have been thriving include grocery stores, house supplies, and at-home entertainment. This is caused by the increased amount of time people are spending indoors. Consumer spending drives economic growth. Although it is positive that these industries are still doing business, it is vital to the economy that other industries pick back up again. 

It is unknown if buying behaviors will go back to normal or not. Gyms may not completely recover because of the increase in at-home workout equipment and virtual fitness subscriptions. Restaurants have lost tons of money from canceled trips and lack of orders. Without a steady income, many of these businesses have had to permanently close their doors. 

Retirement Plans

The CARES Act made three changes to certain retirement accounts. These changes have increased the number of early withdrawals to people’s retirement plans.

  1. It doubled the amount a person can take out as a 401(k) loan. 
  2. It allowed people to take early hardship withdrawals of up to $100,000 from 401(k)s and IRAs in 2020 without paying a 10% penalty before the owner turns 59 1/2.
  3. It allowed retirees and those who have inherited IRAs to skip taking a required minimum distribution (RMD).

This may cause people to feel more comfortable taking out extra money when the CARES Act is not in place. There are rules and restrictions on that you can find here. 

Cash Payments

Many stores started to only take plastic cards and virtual payments like Apple and Samsung Pay. This is one way to reduce the spread of germs. There might be a shift in some of these places to only accept these payments over cash permanently. Some people have opted out on using cash on their own for the same reasons- to flatten the curve.

Other businesses have completely reduced contact with payments. Their solution to this is mobile payment applications. Venmo and Cash App are two increasingly popular examples of this. These apps are easy to download. After the pandemic, people will be more likely to use this form of payment after they feel more comfortable and trust that it works. 

Future of Money

Businesses need to adapt to the changing world. Changes in spending habits, retirement plans, and cash payments are some ways COVID-19 has affected money. We can help you navigate the future of your business’s money. Serving the Baltimore area for several years, we are dedicated to providing customized services to fit each one of our client’s unique needs. 

Please contact us at (410)-764-3731 or at https://www.plcfo.com/contact/ for questions or to book an appointment.

How to Take Action in Uncertain Times

 

Show customers that you are resilient during uncertain times. Keep your business thriving instead of shying away from running your business altogether. Although it may seem challenging, there is always an opportunity waiting to happen. Follow these steps to get your business on the right track during this unprecedented time. 

Host Virtual Workshops

 

While most people are staying home, they are looking for virtual events to attend. These events can be free or paid. Host a workshop that teaches something that resonates with them and the current situation that we are in. 

 

Provide a call-to-action at the end of the workshop. An idea for this could be to link a landing page on your website that provides them with further information on the topic. You could also give out a coupon code for those that attended the workshop as an incentive to purchase from your business. This can land you new customers and keep your current customers satisfied.

 

Reach Out to Customers 

 

Call, email, text, or send a letter to current and past customers. See how your customers are doing and offer them support. It is okay to continue to sell your product or service, as long as you are not pushy with those that are not ready to buy. You may need to tailor your messaging to fit with what is happening right now. Be sure to share it promptly so that it fits with their current mindset.

 

Build Your Relationship With Vendors

 

Build relationships with vendors in your industry. Keep in mind that relationships take time to establish. Introduce your business, ask how they are doing, and let them know you are here for them if they need anything. These connections can lead to future partnerships or collaborations. Collaborations can be on products, virtual workshops, or campaigns to give back to the community. 

 

Focus On the Positive

 

Instead of looking at what your business does not have, find what it does have. Use your available resources to create an innovative campaign, socially safe service, or useful product. Show your community that you are a leader by controlling the situation to the best of your ability.

 

Create New Opportunities

 

Utilize these uncertain times to create opportunities for your business. Take an inventory of what your business currently offers. This can be tangible or intangible. Does this offering benefit your business and its customers? You may need to add, change, or remove parts of your inventory to increase your business’s value. Try incorporating customer engagement in these new opportunities. This increases the business to consumer interactions.

 

Take Action

 

PL Consulting has taken action in these uncertain times. We can help you navigate the future of your business. Serving the Baltimore area for several years, we are dedicated to providing customized services to fit each one of our client’s unique needs. 

Please contact us at (410)-764-3731 or at https://www.plcfo.com/contact/ for questions or to book an appointment.

 

Employers Can Defer Employment Tax Deposits Until Payment Protection Program Loan is Forgiven

 

April 2020 – The IRS has issued frequently asked questions (FAQs) on the payroll tax deferral opportunity provided by the Coronavirus, Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136). Under that provision, employers of all sizes (including tax exempt/non-profit employers) can defer the deposit and payment of the employer’s share of Social Security taxes. Self-employed individuals can also defer payment of some self-employment taxes.


Background

 

To help employers conserve cash while retaining their workforce, Section 2302 of the CARES Act allows all employers to defer depositing the employer’s share of Social Security taxes for payments due from March 27 (CARES Act enactment date) through December 31, 2020. Generally, employers are required to deposit timely 6.2% of employee wages up to $137,700 (which is the 2020 Social Security wage base), along with 1.45% of Medicare (or “hospital insurance”) taxes (with no wage base cap). But Section 2302 of the CARES act allows employers to defer depositing the 6.2% of wages, interest-free and penalty-free. Payment of half of the amount deferred is due on December 31, 2021, and the remainder is due on December 31, 2022.

Insight

 

  • Employers’ 1.45% Medicare tax cannot be deferred under the CARES Act and must be deposited unless it is being used to offset payroll tax credits allowed under the CARES Act or the Family First Coronavirus Response Act.
  •  There is no application form or approval procedure to use the payroll tax deposit deferral. Rather, employers simply do not remit the amount that would otherwise be due. IRS will update the Form 941 for the second quarter of 2020 to track the deferred deposits.
  • While not addressed by the IRS in the recent FAQs, it appears that an employer who paid their social security tax liabilities due on or after March 27 could take advantage of the full deferral amount allowed by recovering the previously paid, but not required, amounts from other 2020 federal tax deposits. Employers using third party payroll-providers should discuss system capabilities and procedures for taking advantage of the allowed deferral and the possibility of recovering any previously paid amounts that were eligible for deferral.

Coordination With PPP Loan Forgiveness

 

There was some confusion over whether employers who obtain a Paycheck Protection Program (PPP) Small Business Administration (SBA) loan could use the payroll tax deferral, since Section 2302 of the CARES Act states that employers who obtain forgiveness of a PPP loan may not defer deposit of payroll taxes. The FAQs clarify that employers who obtain PPP loans may defer deposit of payroll taxes until such time that the employer receives a decision from its lender that all or any portion of their PPP loan is forgiven.

 

Once loan forgiveness has occurred, the employer must resume timely payroll tax deposits. The FAQs confirm that the amount that was deferred through the date that the loan was forgiven will continue to be deferred. Accordingly, half of the deferred amount will be due on December 31, 2021, and the other half will be due on December 31, 2022.

 

Insight

 

To maximize the payroll tax deferral opportunity, employers with PPP loans may wish to consider delaying their request for PPP loan forgiveness until December 31, 2020. PPP loans are for two years, at 1% interest and do not require any payments during the first six months. Employers can request PPP loan forgiveness for qualified payroll costs and certain other expenses incurred during an eight-week period beginning on the date they receive the loan proceeds (lenders must disburse proceeds within 10 days after the loan is approved). Lenders generally have up to 60 days to consider the loan forgiveness.  There does not appear to be any time limit for when an employer could submit its request for loan forgiveness, and many will wait until after June 30, 2020, to take advantage of provisions that maximize loan forgiveness.

 

For example, if an employer submits a request for loan forgiveness on July 15, 2020, the lender could forgive the loan anytime through September 15, 2020. Assume the loan is forgiven on August 15, the employer could no longer defer payroll taxes from August 15 through December 31, 2020. But if the employer does not request loan forgiveness until December 15 (and assuming the lender does not forgive the loan until early 2021), the employer could continue deferring payroll taxes through December 31, 2020.

 

5 Ways Sustainability Can Save Your Business Money

 

Consumers are using their spending power to effect change. They are purchasing products and services that are created sustainably. Your company can save money by adopting these sustainable practices into daily operations.

 

Electronic recycling

Instead of throwing away your old electronics when upgrading your business, you can:

 

  • Find a company with a buyback program and receive cash for your old products
  • Donate old electronics to 501(c)(3) organizations as a charitable contribution and get a tax break
  • Recycle toner cartridges at stores such as Office Max, Walmart, Walgreens, and Best Buy

 

Lower utility bills

Implementing LED lights is one of the easiest ways to slash your electric bill. If the bulbs are used 8 hours a day, they can last up to 17 years! This will reduce your spending and waste production with its long life span.

 

Money is being lost every time someone flushes a toilet or washes their hands at your business. Consider purchasing low-flow water fixtures for your sinks and toilets. Less water is being wasted while the pressure levels remain the same as a traditional appliance.

 

Commute efficiently

Do you provide your employees with company vehicles? To efficiently commute keep these tips in mind:

 

  • Provide a well-planned path for employees to take their routes on to reduce the amount of gas the cars are using
  • Find vehicles with efficient gas mileage
  • Consider investing in an electric or hybrid cars

 

If your business doesn’t supply company cars, encourage employees to carpool, walk, bike, or use public transportation to get to work.

 

Shop smart

By resisting the urge to purchase the newest products or services, you can reduce the amount of waste generated by your business. If your business purchases do not add value to the company, don’t buy them. Try setting a budget if you are still struggling with this. PL Consulting can help you with budgeting and planning if you need it.

 

Provide reusable products

Offer your customers and employees reusable products. This creates stronger relationships with the people that value sustainability. Consider making these changes:

 

  • Install water dispensing systems instead of one-time-use water bottles
  • Provide reusable bags instead of plastic bags
  • Give away reusable promotional products instead of paper products

 

Save your business money

Saving money while running a sustainable business isn’t as difficult as it seems and has many advantages. Consumers are more likely to support your business. The community will be less polluted. It just takes a few adjustments, and over time your actions will become habits.

 

PL Consulting can help with saving your business even more money through budget planning and forecasting. This can also help when purchasing pricy sustainable products that will generate revenue in the long run.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each one of our client’s unique needs.

 

Please contact us at (410)-764-3731 or at https://www.plcfo.com/contact/ for questions or to book an appointment.

 

CARES Act Resources for Small Businesses

 

“Every business owner needs to be taking advantage of at least one of these programs”

 

COVID-19 has had an extreme impact on small businesses. We understand this is a tough time for many people. At PL Consulting, we are running at full capacity while taking safety precautions to keep our staff, clients, and community safe. We are here to get you through this abnormal situation. If you have any questions, please reach out to us. We have already submitted 20+ applications for our clients and can help you too. 

 

CARES ACT

 

The CARES Act was signed into law by President Trump on March 27th, 2020. The Act is broad in scope and can be confusing. In the links below we break down everything you need to know about it. 

 

CARES ACT Information: https://ecs.page.link/1ASqM

 

More information on the CARES Act: https://ecs.page.link/bXmdC

 

Economic Injury Disaster Loans

 

Economic Injury Disaster Loans (EIDL) are available to businesses suffering from COVID-19 related financial hardship. This can cover up to $2M in operating expenses. These loans have favorable repayment terms and an up-front grant of $10K. The grant portion of the loan should be received within three days after applying with the SBA. The application for this loan can be submitted online directly with the SBA.

 

EIDL Application: https://covid19relief.sba.gov/#/

 

Payment Protection Program

 

This information we compiled about the Payment Protection Program (PPP) will help determine your business’s eligibility. We also answer questions about the amount businesses are eligible for and the circumstances for loan forgiveness. More information on the loan is provided in the links below. 

 

PPP Information: https://ecs.page.link/4s7qD

 

PPP Application: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf

 

Payroll Tax Deferral

 

50% of Social Security tax payments from 3/27/19-1/1/21 can be deferred until 12/31/21. The other 50% is due by 12/31/22. This relief is not available to those who receive SBA loans.    

 

Payroll Tax Credit

 

Businesses that suspended operations or have seen a 50% decrease in revenue from the same calendar quarter of the prior year can claim a quarterly credit for the employed portion of Social Security taxes up to $5K per employee. The credit is refundable if it exceeds the total Social Security taxes otherwise payable in the quarter. This relief is not available to those who receive SBA loans.

 

Additional Resources

 

Below are some more resources you may find helpful and relevant for your small business.

 

 

Contact PL Consulting For Your Small Business Needs

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each one of our client’s unique needs. We understand you may still have questions about the CARES Act, so please contact us at 410-764-3731 or https://www.plcfo.com/contact/. Please be patient as we attempt to respond to all inquiries in a timely manner. You can also follow us on Facebook and LinkedIn for more updates. 

 

Managing the COVID-19 Impact as a Business

 

 

COVID-19 is impacting businesses and organizations large and small around the world. Businesses are dealing with quarantines and shut-downs, making it necessary for them to take action to protect their employees and customers while minimizing economic damage. Some of the direct business impacts we’re seeing include customers, supply chain, leadership, and the workplace.

 

Customers

 

Since most non-essential stores are closed, brick and mortar businesses are struggling with selling products or services. By delivering customer experiences that are in line with the rest of your business through social media, websites, and phone calls, you can reduce the potential negative impact and revenue loss. 

 

Customers also want to know that even though you are still in business, your workers are safe and the products that they will receive through the mail will be packaged and manufactured with safety protocols in place. 

Supply Chain

 

supply chain

 

The supply chain is especially important right now in delivering products and services quickly and securely to medical staff helping those affected by COVID-19. With that being said, businesses still have the responsibility to protect their supply chain workers and the areas they operate in. By executing a safety plan and informing all workers of it, the flow of the supply chain can continue. It is important that the plan is continuously being tested, redeveloped, and communicated to the employees.

Leadership

 

workplace

 

Having strong leadership and guidance is vital in maintaining trust. Show people that you care for your workers, the industry, and the community that you are operating in. Be transparent when deciding and communicating with them. Do something to stop the spread or help the unemployed such as:

 

  1. Donate to a local food shelter.
  2. Gift your employees with a gift card to pay for groceries.
  3. Allow your employees to work from home.
  4. Provide extra safety measures if you are still operating as normal.

Workplace

 

If your business and employees can shift to remote work, you can safely continue your business operations. This might not be the norm for some people, so here are a few tips on how to keep you and your team productive:

 

  1. Hold virtual meetings to keep some human interaction instead of talking only through emails and instant messages.
  2. Keep everyone organized and on the same page through calendar apps.
  3. Use collaboration tools to reduce the feeling of isolation in your employees and increase motivation.

PL Consulting Can Help You

 

We can help ease any stress that you or your company are having. We consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each one of our client’s unique needs.

 

Please don’t hesitate to contact us at (410)-764-3731 or at https://www.plcfo.com/contact/ for any questions or concerns that you may have.

Implementing Telework for Employees

 

Businesses across the world are worried about having to close their doors as the COVID-19 pandemic spreads. However, for many businesses, there are other options. Not only can implementing telework for employees benefit your company right now, but it could help save you money for years to come. The good news is that it’s not that complicated. We’re breaking it down for you below.

 

How Telework for Employees Can Help You

Have you ever had an employee leave your company because they were moving to a different town or state? When a valued employee leaves and you suddenly find yourself needing to replace them, it can be devastating.

 

Allowing that person to telework means they can continue working for you long distance. Additionally, if they’re not too far, you can always do weekly or monthly in-person check-ins. You’ll save money on attempting to recruit and hire someone new and you’ll show your employees that you value hard work and dedication.

 

Additionally, many employees are willing to telework when they have colds or other minor illnesses. Giving them the tools to work remotely prevents germs from spreading around the office and causing other employees to have to call out sick.  

Create Ways to Connect

Most businesses are already using software for inter-office chat or client video conferencing. This software can easily be adapted to work for remote employees as well. Just because a person isn’t in the office doesn’t mean you can’t have a face-to-face chat with them. Options like Zoom, Google Hangouts, and Slack are making it easier to stay in touch and get work done.

 

If you’re requiring people to telework, it’s good practice to provide them with the technology they need to do it. Most people have the internet already, but providing a laptop or desktop and monitors is fairly standard. 

 

You’ll also want to make sure that the computers you provide have all the same software as in-office computers. The idea is for employees to have the same resources at home as they do in the office so they can continue doing their best work.

 

The good news is that you can write off both the hardware and software at the end of the year. In addition, Adobe is currently offering two months of free Adobe Creative Cloud to assist businesses that are implementing telework for employees. 

Stay Secure

One worry that many businesses owners have about setting up telework for employees is data security. There is a risk associated with remote work, especially if you don’t go through the proper channels to secure your information.

 

Working with your IT department or a local IT company can help, though. They can set you up with a VPN (virtual private network). This network allows employees to sign in from the computer that they’re using at home, but their internet connection will go through your secure network, just as if they’re in the office.

 

Even with this measure, you’re still going to want to go through some cybersecurity information with all employees before you allow them to telework. Your IT company should be able to help you out with this.

 

There’s no doubt that this is a time of uncertainty and stress for many, but with a little bit of adjusting, most businesses should be able to pivot and adapt to allow telework for employees. 

 

Please don’t hesitate to reach out to us with any questions. We are still available via phone and email for anything you may need. You can reach us at 410-764-3731 or on the website here