New Business Direction LLCEffective December 1, 2016, federal overtime regulations will change and may affect how you are paying your employees. These overtime updates will affect 4.2 million workers across the country.
The new rules will raise the salary overtime-eligibility threshold from $455/week to $913 ($47,476 per year). This new threshold will increase every three years. Salaried workers already entitled to overtime will get increased protection.
Employers have a choice of three actions they can take to employees who become eligible for overtime that weren’t before.
- Pay time-and-a-half for overtime work.
- Raise worker’s salaries above the new threshold.
- Limit worker’s hours to 40 per week.
Let’s say you have an employee that earns $500 per week and works 50 hours a week. Previously, you didn’t pay overtime, but beginning December 1, 2016, you will need to. At $12.50 per hour, you would owe them the regular $500 plus 10 hours of overtime at $187.50.
Let’s say you have an employee earning $800 per week and they work 50 hours. Previously, you didn’t pay overtime, but now you will need to consider it. You could pay them overtime, which works out to a weekly pay of $1100. Or you can choose to give them a raise to $913 per week – the new threshold – and continue to exempt them from overtime. The latter is the lowest cost alternative.
In both cases above, it may be cheaper to hire an additional part-time worker to work the 10 extra hours per week.
You can find more about the new overtime law here:
https://www.dol.gov/featured/overtime/
And if you have any questions about your payroll, feel free to reach out anytime.
The New Business Directions Team is bringing the #1 employee-rated and requested Time Tracking Software to you. Sondra Love, Wayne Kukuruza, and Rhonda Rosand, CPA have recently joined the 6000+ TSheets PRO community by participating in an exclusive TSheets PRO certification course accredited by CPAacademy.org.So what exactly is TSheets? TSheets is a time tracking and scheduling software designed for businesses that track, manage, and report time. TSheets provides the alternative to paper timesheets and/or punch cards to simplify human resource and data processing roles for companies of all sizes.
But here’s the best part, TSheets fully integrates with QuickBooks by syncing accurate timesheets to your QuickBooks file and eliminating manual, duplicate time entries. Tracked and approved time can now be easily exported to either QuickBooks® Online or Desktop with just one click. Management can then use their favorite tools within QuickBooks to process payroll, calculate job costing, and create invoices in a more simplified work flow.
TSheets is also a scheduling software making it faster and easier to build and share schedules with employees, assign jobs, and alert shifts while increasing profitability and improving communication. In other words, we want to keep your workforce running like a well-oiled machine.
Oh, and have I mentioned their amazing customer service department? The TSheets team who’s behind the product is just as amazing as the software itself. Customer service team is passionate about their customers and provides exceptional support in times of need. They make your entire TSheets experience FUN and might even give you a smile or two.
The best cakes have layers and layers of different delicious flavors to enjoy. Stacked on top of one another, each layer is baked separately and becomes part of the whole. Like a layer cake, your business expenses have layers of meaning to them. When you can understand how expenses play a part in profit, you can manage them better.
Here’s how to make a layer cake of your business expenses. Let’s start with the most direct expenses.
Direct Costs
If you have inventory you will have a balance in the Cost of Goods Sold account. It should represent how much you paid for product or inventory that you are selling. It is the most direct expense of all the expenses; if you don’t spend this money, you would not have a product.
If you sell services, you should not have a balance in Cost of Goods Sold, but you will have direct expenses that are tied to performing your services. These might include labor from wages of the employees who carry out the services for clients. Any supplies directly involved with delivering services should be included as well.
You may also have other direct costs related to selling specific products or to servicing specific accounts.
Indirect Costs
The next layer includes indirect expenses. These expenses do not make up your product directly and might contribute to several different lines of products. Indirect costs might be attributable to a group of products or projects and can be apportioned accordingly.
Overhead
Although overhead is technically a form of indirect cost, it’s good to create a separate layer for it. It includes management salaries, rent, utilities, and other fixed costs that cannot be directly allocated to a product or service.
Assembling the Layers
A wonderful exercise is to classify each of your expense accounts in your Chart of Accounts as direct, indirect, or overhead. In that way, you can see how each account contributes to the costs of running your business. Some questions to ask yourself:
- What is my gross margin before indirect costs and overhead?
- What is my gross profit after indirect costs and before overhead costs?
- How can I cut down on any of these categories of expense?
- What is my breakeven volume in sales before overhead is factored in?
- Can my profit margin be changed if I spent less in a certain area?
This layered view is just another way to view the financial aspects of your business and can help you make better decisions down the road.
You can also break the layers down even further by classifying the expenses as critical and non-critical. This will help you determine where best to invest while maintaining the level of profit you desire.
You can’t manage what you don’t measure. Layering your expenses will help you have your cake and eat it too. And if we can help, just reach out as always.
Have you ever wished you didn’t have to buy yet another server? Do you have to delete old files on your hard drive to make room for new ones? If disk space is an issue in your company, the good news is there may be a better and cheaper way: cloud storage.
You might think cloud storage is only for large companies, but it’s surprisingly easy to use no matter whether you have a full technology department or you simply call your neighbor when your PC starts doing something strange.
One such vendor is Amazon with their S3 product in their AWS or Amazon Web Services division. The three S’s stand for Simple Storage Service. It works just like your PC’s hard drive. Think of a filing cabinet where only you have the key to all your business’s private files. Instead of folders (or file drawers), Amazon calls them buckets, and instead of files (or Pendaflex®), Amazon calls them objects. Once you set up your account, you can create buckets and upload your files as objects in the cloud.
If you have large files like video files, old records you need to keep for tax purposes but don’t access any more, or just a need for more disk space, this service is perfect. Amazon charges three cents per GB monthly, which is much cheaper than an additional server, website hosting rates, or even external disk drives.
There are many options beyond basic storage, including who can access your files. You can also use it to store data used in programming and there are developer guides for companies that have that need. The S3 product is not designed to be used to share files like a DropBox-type product although you can make certain files publicly accessible. The S3 is also much cheaper than file-sharing products as well.
You can check out the S3 product here: https://aws.amazon.com/s3/
Get smart about storage options and you’ll save a lot of money down the road.
This year’s theme was “epic” designed as the epic conference to empower small business advisors to develop and sustain the epic practice that distinguishes itself and embraces the key differences that separate ProAdvisors around the good, the great and the “epic.”
Sessions
The four-day conference kicked off each morning with Power Breakfast Sessions followed by main stage presentations with keynote speakers such as Daymond John of Shark Tank, Joe Buissink of Canon Explorer of Light, and author Mike Michalowicz of Profit First. In between general session, attendees dispersed around the conference center into rooms where cutting edge training sessions were being held. Training sessions were broken down into 5-tracks for Practice and Professional Development, Practice Growth, In-Depth QuickBooks Training, ProAdvisor Certification Training and QB Integrated Apps.
If you were fortunate enough to attend, Rhonda Rosand, CPA
taught a 100-minute informative training session titled Successful Implementations from Initial Contact through Ongoing Support on Sunday, May 22nd. As the evenings came around, networking sessions were held consisting of ICB Bookkeeper’s Symposium, the Woodard Network Social hosted within Atlantis’ stunning marine life exhibit, The Dig and of course, the infamous TSheets dance Party on TSheets Tuesday.
Sondra’s Take on Vendors
In between training, I was able to visit the exhibit ballroom which held over 90 vendors, some of which were very familiar. I came across software I use everyday to make my work flow run smoothly and now I am able to put a face to the product. For example, SmartVault allows me to access files anywhere, anytime and from any device. I also have the capability to securely share files with clients and our team.While at Scaling New Heights, I learned the importance of technology and how it relates to strengthening our firm and supporting our clients.
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