New Business Direction LLCSales tax laws are constantly changing, and sales tax audits have increased since states and local agencies have become creative about finding new ways to generate revenues. If you haven’t made any changes in your sales tax procedures in a while, you are probably at risk.
Taxability
From state to state, the taxability of items varies. For example, data processing services including web hosting and graphics are taxable in Texas but not California. Because of these intricacies, it makes sense to consult an expert in this area. Some states have been taxing certain services for many years now.
Nexus
The new buzzword in sales tax is “nexus,” which simply means presence. If your business has a presence in a state, then certain items you sell could be taxable. “Presence” is a little gray, but here are a few examples of some characteristics that the courts have decided prove nexus.
- If you have employees or contractors working in a state, you are liable to collect and remit sales tax. This can play havoc if you hire virtual or remote workers. Even if they are part-time, you have nexus in that state.
- If you outsource inventory fulfillment in any way (think Amazon sales), you have nexus in states where there is a physical warehouse that houses your products.
- If you own business property in a state, you must file sales tax.
- If you participate in trade shows or are a public speaker, you have nexus in states where the conferences are held.
The Risk
If you fail to collect taxes where you should, the risk is easy to calculate. Take the potential taxable sales times the sales tax rate, and add any penalties. The numbers get scary if you’ve been in business for several years.
Let’s say your annual revenues are $5 million. You didn’t realize that your Texas sales were taxable, and this amounts to 10% or $500K. Your tax liability is $41,250 per year. If you have been doing it wrong for five years, well, you can add it up. Add penalties on top, and it’s not a small amount. It can wipe out your entire year’s profit.
Sales tax liability becomes more important if you plan to sell your business. A traditional valuation will always include a sales tax risk analysis. Even if you don’t plan to sell, the odds of you getting audited or a disgruntled employee blowing the whistle can be too much to risk.
If you want help calculating your risk or assessing nexus or taxability for your business, reach out and we can help.
Unfortunately, spam is an inevitable part of today’s digital world. The bad news is if you have your spam settings set too tightly, you will lose good emails. If you receive new prospects via email, you may miss out on good clients and revenue. If you have your settings too loose, you have to take up extra time to wade through the spam emails.
Here are some tips and facts that can help you control it.
Anti-virus software
Desktop-based (not cloud-based) anti-virus software is a must anyway, and most have an anti-spam component that can be activated to mark spam and move it to a junk folder in your Outlook or email software. You can then periodically review and delete the items in the junk folder.
Web hosting software
Many website hosting packages come with SpamAssassin which you can set up via your website’s control panel. You can choose whether to delete the spam and you can set the level of deletion which is based on an email scoring system as to how spammy it is. Your webmster can help you set this up.
Third-party email
About half of all businesses have gone to third-party email solutions such as Google mail, Rackspace, Office 365, and many others. Many of these have built-in spam protection on their servers.
Gmail, which is free, is also very popular and filters the spam automatically. You can set up your gmail account so that it sends from your business email.
Challenge and response software
Some business owners have gone to a challenge and response software such as SpamArrest. All emails coming in require validation via a captcha (those boxes that have you prove you’re a person and not a robot by entering letters and numbers) on the sender’s part.
Old email addresses
Older email addresses are subject to more spam than newer ones. Also, if you use common emails such as info@yourdomain.com, you probably get more spam than most. Start over every 3-5 years with new emails. It is worth the time.
Too many email addresses
Spam will come in to all the email addresses you use, so if you have two email addresses, you may get twice as much spam. Keep the number of email addresses you use to an absolute minimum.
Scrapers
Avoid placing your email address on your website or in public forums where it can be “scraped” by robots that will place your email on lists without your permission. Even so-called reputable companies employ scrapers; it’s more common than we’d like to think.
Also, some of the more aggressive websites will capture your domain and/or email address from cookies, so beware. With Google Chrome, you can browse “incognito,” and we recommend you do that.
If you’re challenged with spam, try one or more of these ideas to save time.
Wow, can you believe that 2015 is half over already? Now that we’ve crossed the halfway mark, it’s time to see if we’re on track for our 2015 goals. To do that, we need to see if we’ve met our mid-year milestones.
Managing By Milestones
A milestone, in project management terms, is simply a point along a project timeline. It’s marked so that project managers recognize when that portion of the project has been completed. We can use milestones to see how we’re faring toward financial goals as well.
Assuming our business is not seasonal, we should have earned half of our target revenues for 2015 as of the June 30, 2015 income statement. If we’re falling short, we can recognize that and perhaps add some promotions or sales to spike revenues so that we can correct the shortfall before the year has ended. If we’re ahead of the game, we can see what is working so well and make sure to replicate it.
Either way, with milestones, we can be more proactive in reaching or surpassing our goals.
By the Numbers
Some of the numbers you may want to set milestones for include:
- Revenue to date
- Expenses
- Profit to date
- Debt paid down or debt taken on
- Assets acquired or sold
- Number of employees added or lost or both
- Number of clients added or lost or both
- Accounts receivable aging
Project Performance
Milestones don’t have to be numeric. You can also use them to determine if you’re on track with internal projects. Perhaps for 2015, your goal was to replace 5 PCs and convert your shopping cart software. You can set milestones to monitor specific phases of these projects or just monitor when you start and complete them.
Mid-Year Milestone Report
Document your accomplishments in a mid-year milestones report. It feels good to write them down, plus you’ll have a history of how much you accomplished as well as what worked.
The report can include the milestones as well as a narrative explaining the performance to date. If you’d like our help creating this report, please feel free to contact us.
Accounting for milestones can help you become more proactive toward reaching your business goals. Plus, it’s great to see how far you’ve come since the beginning of the year.
Cool Tech Tools: Customer Portals
If you have a business where you have to send documents of any kind to your customers, then you may benefit from a portal. You can save time on customer service and possibly postage and labor. You will also look most professional while increasing service delivery.
What Is a Portal?
A portal is software in the cloud that allows users to upload and download files from a secure space that only they have access to. For each client you have, you can set up a private virtual filing cabinet where only you and the client will have the key. Your client will have their own user ID and password into their area of the portal. There, they can upload and download documents. Some portals also have secure signature capability to help you take the paperwork out of obtaining signatures.
How Can I Use a Portal?
Think of all the paperwork that occurs between you and your customer, and that will give you several ideas about how to use a portal. If your business is data-intensive, you will definitely benefit from a portal; imagine moving all of those documents out of email and into a clean, private filing folder in the cloud.
Businesses that would benefit the most include:
- Any small business with remote employees: a portal can be where they pick up and drop off work.
- Mortgage companies where the loan officers are collecting a great deal of information for the underwriters.
- Construction companies: each subcontractor could access the schedule, estimates, material details, invoices, and certificates of insurance.
- Real estate agents to collect the details of home purchases and sales
- Accountants, attorneys, consultants, coaches, and other professionals who deal with private customer information.
- Web design, ad agency, and marketing companies
Types of documents and files you can upload and download from portals include:
- Contracts, estimates, and legal documents
- Invoices and credit card authorizations
- Instructions and training materials and aids
- Company policies and procedures
- Brochures and marketing materials
- Reports and spreadsheets
- Forms and applications, blank and completed
- Graphics, drawings, and photos
You don’t necessarily have to set up a portal for every client; perhaps it’s cost-effective to use a portal on your largest customers or vendors.
Where Can I Find a Portal?
One of the leading vendors in the portal space is Citrix Sharefile. You can find them here: http://www.sharefile.com/. Your industry may have specific solutions for you as well, especially if you have regulations such as HIPAA that you need to follow.
You may also have heard of DropBox and Box.net. These companies offer file transfer and don’t have a dedicated user area, so they are useful, but a bit different than a portal.
Look for software that provides each user with their own unique login, and that will distinguish the software as a true portal.
If you decide to implement portals for your business, you can private-label them with your logo and place a direct link to your portal login page for easy client access.
Using portals will keep your inbox cleaner, save time looking for lost emails and documents, and help you look professional in the eyes of your clients.
Just about every business relies on “word-of-mouth” marketing to get the vast majority of its clients. If this is true for your business, then it just makes sense to figure out how to boost your referrals from all sources. Referrals are almost always easier to sell and they keep your marketing costs low. But how can you do that?
The first step is to make sure that you know who your best current referral sources are. If you’re not already asking the question to new clients “How did you find out about us?” then I’d recommend you implement that right away.
If you do know the answer to that question for each customer, then you can make a list of your referral sources. Take a look at the list, and see what these referral sources have in common. Here are some questions to ask:
* Are they all customers?
* Do they all have a profession in common? For example, are they all lawyers, massage therapists, plumbers, or pediatricians?
* Have you properly thanked each of these individuals? If not, you can send out a thank you card or take them to lunch with no other agenda.
The last question to ask yourself is “where can you find more of the same type of people that are referring you?” If you discovered that you get a lot of business from dog groomers, then you may want to consider visiting every grooming salon in your zip code. You may also want to present a speech to a dog groomers Meetup group that you find.
You really can be proactive about your referrals so that business comes to you more easily. Try these tips to boost your referral sources in your business.
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