It can be hard for a business owner to know how to take their business to the next level of growth and profitability. If you’ve reached a revenue or profit level plateau, it could be that knowing how to scale your business is not a skill in your skillset — yet.

A classic management book on scaling has made a recent comeback and could be your ticket to leveling up your business. High Output Management, written by ex-chairman and CEO of Intel Andrew Grove was originally published back in 1983 but has resurfaced in popularity in Silicon Valley. While not widely known outside of the Bay Area, many readers claim it’s the best management book they have ever read; some even claim it’s life-changing. It is certainly a timeless and invaluable read for business owners and managers.

In the book, Grove applies the principles of engineering and manufacturing production to management. It’s all about process: developing processes and procedures so that you can track what’s going on and measure the results, or output, every step of the way. Only then can you improve the process so that it leads to high output.

Grove also delves into the ways managers can motivate their team members and affect production outputs. He focuses on the concept of leverage, which enables scaling both positively and negatively, and how it can affect employees’ output. An act of positive leverage might occur when a manager adds a “nudge” activity to enable their employees’ work, while a negative example might occur when a manager meddles with the progress an employee is making. 

We’ve all been the victim of an ineffective meeting, and Grove breaks down the idea of holding purpose-driven meetings while touching on key meeting topics such as decision-making, planning, motivation, performance reviews, and values.

One of the most significant highlights from the book, however, drives home a message we’ve all heard before: change starts from within. If you’re a business owner who’s motivated to improve the output of your organization, the first, most important step is to train yourself. Only then will you be able to rally the troops and push past your profit plateau.

In accounting, “internal control” is a key term to know. Internal control is the series of processes and procedures that are performed within the organization to ensure the integrity and accuracy of the financial information and reporting of that organization. It is an important means of protecting the business owners, employees, vendors, investors, and stakeholders. 

In a small business, maintaining good internal control is often a challenge since team size is smaller and resources are limited. Yet, it is essential to understand so that owners understand what risks they are taking every day in their businesses.  A good system of internal controls can help the organization reduce the risk of fraud, safeguard against loss, and demonstrate good business practices.

In this article, we’ll discuss the three key concepts of internal control–segregation of duties, delegation of authority, and system access–and optimizing business operations.

Key Concepts

Segregation of duties is the first key concept of internal control. It dictates that tasks be assigned to different people when there is a risk of hidden errors or theft as a result of having all responsibilities assigned to one individual. For example, the employee who opens the mail and receives checks should not also be the individual responsible for applying the check to the correct customer in Accounts Receivable.

Delegation of authority is the second key concept of internal control. While the owner has ultimate control, they cannot accomplish everything that needs to be done. They must delegate assignments to their team, who are then responsible for maintaining internal controls in their area of work.

System access is the third concept of internal control. Access to documents, rooms, computers, applications, and other items should be on a need-to-know basis to reduce risk. While one person might have system access to enter a transaction, they should not also be the one to have system access to review or approve that same transaction. We’ve made two YouTube tutorials to help you add users to QuickBooks. For QuickBooks Online, click here. For QuickBooks Desktop, click here.

Business Operations

Every aspect of the business should be considered while setting up the company’s policies and procedures. In a small business, an easy way to develop internal controls is to review each major transaction flow and implement the controls needed.

On the customer side, this includes receiving the customer order, sales contracts, shipping, invoicing, managing accounts receivables, collections, bank deposits or merchant reconciliations, and cash management. It can also include customer service, pricing, and promotional activity.

On the vendor side, the process includes adding controls for vendor selection, purchase orders, receiving, bill pay, managing accounts payable, payments, managing travel and expense accounts, and company credit cards.

Depending on the company, additional areas that need to be reviewed for internal control include inventory and supply chain management and government contracts, if any.

When hiring, the process of hiring, onboarding, training, evaluating performance, and payroll should be considered. Safety is also an important consideration.

A very large part of internal control development should focus on the information technology operations of the company. Areas include user access and controls, password management, naming conventions, physical security, disaster recovery, and network and applications development, updates, and change control. Data entry should also be considered and is best included when developing controls for the customer, vendor, and employee functions.

Additional functions that need internal control processes include treasury and financing; financial reporting, budgeting, and planning; records storage, access, retention, and destruction; asset management; and insurance.

Internal controls can be applied to small businesses as well as large organizations. It’s all about being able to feel confident that your business is operating with financial integrity, accuracy, efficiency, and a reduced risk of failure. If you have questions about how internal control applies to your business, be sure to reach out to us at any time.

It seems like we’ve been in “pandemic mode” for an indefinite amount of time. Has it been a year, or five? Some days, it’s hard to tell. Many people are finding themselves feeling a heightened level of restlessness surrounding the 1-year anniversary of the shutdown of the world. 

While working from home certainly has its benefits (especially during a global health crisis) if you’re someone who enjoys going to the office every day, chatting with co-workers in person, attending meetings that aren’t all virtual, and having a little spontaneity each week, then we’re here to help you tap back into that magic without risking your health. Here are five tips to improve upon your WFH (working from home) environment.

  1. Take Short Breaks often

Taking regular breaks throughout the day will help improve mood as well as productivity and quality of output. These breaks don’t need to be—and shouldn’t be—long or strenuous. Just a quick 5 or 10 minutes every hour can have a positive effect.

Walk the dog. Stand up and do some light stretches. Run (or walk) up and down your stairs. Sit on your balcony or out in a backyard. Put on a pump-up song and dance. Do a quick chore, like emptying or loading the dishwasher. The goal is to get the blood flowing and the fog cleared from your mind, and encourage you to establish some healthy boundaries around work and home.

  1. Switch Up Locations

If you can, get creative and switch up your location or refresh your home office. If the weather allows it and you have a yard or patio of some sort try taking your work outside for an hour or two. If not, working from a new spot, even if it’s just the dining room versus the couch, can help foster a sense of newness and shake up your routine. 

  1. Treat Yourself with Lunch

Everyone needs something to look forward to, and lunch at a socially distant restaurant or delivery from your favorite comfort food spot can be the mood booster you need. Not only will this be fun for you, but you will also be supporting small, local businesses. Win-win!

  1. Dress for Success

We can probably all agree on one thing: sweatpants are comfortable! As such, it can be difficult to trade in the sweats for more restrictive, but professional, options like jeans or a dress shirt. But wearing your “zoom shirt,” styling your hair, or accessorizing for the first time in 6 months can give you a burst of inspiration to get through the day

  1. Create a New Playlist

Does music motivate you? Are you able to work and listen to music at the same time?  If so, create different playlists to listen to throughout your day. You might find an Elton John playlist to be the driving force that gets you through a sluggish afternoon, or a Lo-Fi Hip Hop station to keep you cool while you prepare for a big meeting.

The Chart of Accounts is the foundation of your accounting system. It is a list of every account – bank, loan, asset, revenue, and expense – in your General Ledger, and it contains all of your accounting transactions.

Think of your Chart of Accounts as a collection of buckets. These buckets need to be meaningful in their purpose because they’ll hold dollars of items relating to your business. For example, if you have three checking accounts, you need three buckets on your Chart of Accounts to hold the transactions for each bank account.  It would not make any sense to have more or less than exactly one bucket for each checking account.

While it’s standard for most companies to have certain universal buckets (accounts) for assets, liabilities, and equity, the buckets you choose to categorize your business’s revenue and expenses will vary greatly in number and purpose because these are based on your business’s unique operations. It makes sense to create and design your accounts for your specific tax, accounting, and decision-making purposes needs. 

Having certain expense accounts matched to the tax requirements can reduce extra work at tax time. For example, separating travel costs – hotel and airfare – from meals and entertainment is a common one.

The ultimate goal is to have a Chart of Accounts that works for you. If, when you first set up your accounting system, you accepted the default Chart of Accounts, it may be time to redesign and restructure the list so it serves your needs better. Below, you’ll find some questions to help guide this process:

  • What revenue or expenses do you want to watch more carefully? Should they be broken out in more detail? You may want to use sub-accounts to group transactions.
  • Is there cleanup work to do due to misspelling, duplication, or vague account names?
  • Have you interviewed all the financial information users in your company to see how they need the data organized?
  • What spreadsheets could be eliminated if the Chart of Accounts was better organized?
  • Does your Chart of Accounts support your budgeting process? If two people are responsible for controlling spending from one account, would it be useful to break it out?
  • Do you have too many accounts? Too few? (Most people have too many due to poor data entry hygiene.)
  • Are you properly using other categorizing features in the accounting system, such as items, classes, and custom fields?
  • What reports could produce better information for taking profit-focused actions in your business if the Chart of Accounts stored the transactions differently?
  • How could key performance indicators be better linked to the Chart of Accounts?

These questions can help you begin thinking about how your Chart of Accounts can better serve you. After all, it’s your business, your accounting system, and your Chart of Accounts. If we can help you through the redesign process, let us know–and be sure to check out our YouTube video to learn more about the Chart of Accounts in QuickBooks with Rhonda Rosand, CPA.

All small businesses need cash to operate, and there are many ways to generate the required funds. Most commonly, owners will make an initial investment from their savings or other personal resources to get started. But what if that isn’t enough? In this article, we’ll explore a few ways to finance a business.

Community banks

Most community banks are big supporters of small businesses, so this is a great place to start. Establish a relationship first by opening business checking and savings accounts. Then apply for a line of credit, which is a pre-approved loan that you can tap when you need it for working capital.

If you plan to purchase a building or equipment, you should be able to get a loan by using the asset as collateral. Business expansion loans are also an option; you may be able to borrow against your accounts receivables or other contracts with guaranteed income. Always match the term of the loan with the life of the asset being purchased. In other words, don’t use your line of credit for purchasing assets such as equipment.

Beyond community banks, you might also consider applying for a loan with an online lending agency, bank, credit union, or community development financial institutions (CDFIs).

When applying for a loan, keep in mind that you’ll likely need a good personal credit rating and either a strong business plan or financial statements to show the financial condition of your business.

Partners and investors

Investors such as angel investors or venture capitalists can provide cash in exchange for a position of debt or equity in your business. Obtaining financing in this manner is a significant decision since you are no longer the sole owner of the company once you give away some of your equity (think: Shark Tank).

Another option is to bring a partner into your business. Typically, the partner will provide cash as well as management or other professional skills that complement yours, and they’ll be actively engaged in the process of running the business.

Government support

Plenty of government programs exist to help small businesses obtain financing, especially as we continue to navigate the pandemic. The Small Business Administration has loans and programs available to small businesses on a consistent basis. This year, they are also overseeing the forgivable Paycheck Protection Program (PPP) loans, economic disaster funding, shuttered venue operator loans, and restaurant relief grants, to name a few.

You should also research what’s available to you locally, as your county, city, and community governments may be offering grants or loans. Last but not least, organizations like the Small Business Development Council (SBDC) can provide space, funds, and training to small businesses in their area.

Nonprofits and educational institutions

Some nonprofits and educational institutions also provide grants, scholarships, and other funding opportunities to local businesses and even business owners who are part of a special interest group, like veterans, women in STEM, etc. 


Factoring is an option for businesses with accounts receivable balances. It is a transaction in which a business sells its accounts receivable as collateral to a third party at a discount in exchange for a cash advance to meet its immediate needs. This type of loan is common in the retail fashion industry where items are ordered months in advance of when they are sold, causing a cashflow gap.


Crowdfunding has been made popular in the last decade by popular platforms such as Kickstarter. A business can apply on these platforms for funding, and individuals can make contributions. Sometimes the business will promise goods or services in exchange for funding. This type of funding requires a strategic marketing campaign and in some cases, a sales funnel. It’s a popular method of funding for start-ups that intend to sell goods but needs assistance in production costs. 

Credit card advances

It’s common for owners to charge startup expenses and use cash advances from their personal credit cards. Convenience comes at a cost, however, as this is one of the most expensive ways to fund a business and should only be used as a last resort.

The fine print

All financing options come with fine print. Terms and interest rates vary significantly. Sometimes, there is a balloon where you have to pay everything back all at once. Be sure to carefully read any agreements you sign and review them with your lawyer. Some agreements prohibit certain business decisions, which could leave you in a dire position financially. For example, businesses that obtained a PPP loan may not be able to accept a buyout offer because the loan agreement prohibits them from doing so. If they don’t read the fine print and sell the company anyway, they are now personally liable to pay back the PPP loan proceeds.

If you have questions or want to discuss the best financing options for your business, please feel free to contact us anytime.

Many small business owners focus on generating more revenue every year, and that’s a wonderful goal.  But not all revenue is created equally since some items are more profitable than others. If you sell more than one product or service in your business, then you may benefit from looking at your revenue mix.

While it’s fun to watch revenues grow, your business profit is what really matters. If your expenses grow faster than your profits, then you have a lot of activity going on, but you don’t get to keep as much of what you make.

An insightful exercise to try is to take a look at your revenue mix. Then you can ask “what if?” to optimize your profits.

Your Revenue Mix

Let’s say you offer three different services: Services J, K, and L. Your revenue pie looks like this:

J:  $700K or 70% of the total
K:  $150K or 15% of the total
L:  $150K or 15% of the total
Total:  $1.0 million

In this example, Service J is clearly the service making you the most revenue in your business. But is it making you the most profits?

The profit you receive from each of these service lines is as follows:

J:  $80K
K: $10K loss
L:  $30K
Total:  $100K

While Service J is generating the most profit volume for your business, it’s actually Service L that’s the most profitable.  Earning $80K on $700K yields an 11.4% return on Service J, but earning $30K on $150K yields nearly double the return at 20%.  Service L generates the most return. And if possible, Service K may need to be discontinued or turned around.

Optimizing Profits

Your strategy for a more optimum revenue mix might be to sell as much of Service L as possible while eliminating or fixing the problem around Service K.

It’s fun to experiment with different revenue mixes. And of course, there are many more variables besides profit, such as:

  • What services/products do you prefer to work on/sell?
  • Are you able to sell more of the most profitable service or are there marketing limitations?
  • Is one service a loss leader for the others?
  • Are you able to adjust the price on the lower margin services to increase your profits?

There are many more questions to ask and strategies to consider to make you more money, which is why we love being accountants.

A New Mix

We hope you’ll spend some time analyzing your revenue mix and having fun asking yourself “what if?” If we can help you expedite the process or add our perspective, please reach out anytime.

The Employee Retention Credit is one of the many IRS tax breaks for businesses that was included in the 2020 CARES Act as well as the recent Consolidated Appropriations Act, 2021. This credit is intended to provide financial relief to businesses that suffered from the effects of coronavirus but retained their employees.

The credit is available to eligible employers that paid qualified wages from March 13, 2020 through June 30, 2021. To be eligible, a business’s operations must have been fully or partially suspended as a result of national, state, or local orders or it must have experienced a significant reduction in gross receipts within a single quarter of 2020 compared to the same quarter of 2019 (this is defined as fifty percent or more in the first three quarters of 2020 and twenty percent or more in the fourth quarter of 2020 and first two quarters of 2021).

Wages and health costs paid by the employer on behalf of the employee can be counted for the credit, and there is a cap of $10,000 per employee per year in 2020 and $10,000 per employee per quarter in 2021. For 2020, the credit amounts to fifty percent of qualifying wages, and for 2021, the credit covers seventy percent of qualifying wages. Any wages used in a Paycheck Protection Program loan forgiveness process are not eligible; in other words: no double-dipping.

This tax credit is a little different as it interplays with payroll taxes and not income or business taxes. The credit can be taken on the IRS Form 941. Some employers can request an advance by completing Form 7200. Tax professionals are awaiting further guidance on details of the expanded program.

For qualifying employers, the amount received from the credit can be substantial. Since this credit affects your payroll taxes, payroll tax forms, and payroll tax filings, you will want to make sure it doesn’t fall through the cracks, especially if your payroll function and income tax preparation are handled by two different companies.

If you believe your business may be eligible, contact your tax professional to see how to get started.

A great way to start 2021 is to take a fresh look at your business finances. Many things changed in 2020, and if you are in the habit of spending on the same items year after year, it’s the perfect time to decide what is essential and what can go.

There are only a few ways to increase profits when you think about it in black and white terms. You can either raise revenues or cut costs. Let’s take a look at where we can potentially cut costs.


These expenses tend to be monthly or yearly, and we tend to just let them automatically renew time after time. But do we really need them? Take a look in your Dues and Subscriptions account to evaluate what you really need to stay informed, and cancel the rest.


If you are a member of an organization or two, what benefits are you getting from your investment? Does it raise revenue for you? Do you use everything the membership offers? If not, it might need to go on the chopping block.

Memberships are especially tricky if the organization provides a local meeting component as a benefit and your state or county has been shut down. There’s a tradeoff right now between supporting the organization so that it’s still there when we can freely meet again and being responsible about your own business costs.

Office/Store Rent

With many employees working from home, the question has come up in many businesses about how much space they really need. As leases expire, consider how much space you really need. Some employees may love to work from home permanently, which frees up space.

Retail stores that have moved their business online may be able to cut back on customer-facing space but might need more inventory storage space. A restaurant that has successfully transitioned to pickup and delivery orders might be able to get by with a smaller seating area.

Software Apps

Are you paying for any technology applications that you are simply not using?  This is a good place to look for cuts.

Some applications charge by number of contacts.  Keeping your lists clean inside these apps will avoid increases and cut costs in some cases.

Office Supplies

Do you really still need things like staplers and scissors on everyone’s desk? If your business is going paperless, you can save a lot on office supplies.


Do you need to spend money on printing, or can the printed item be delivered electronically?


While information can be delivered electronically, physical goods still need to be shipped.  Make sure you have the best deal with your shipping vendors based on your volume.  You may also need to consider building your shipping costs into the price of the product or add a shipping fee to the bill if you don’t already.


A great way to increase profits is to become more intentional about your marketing costs. Are you able to measure what’s working and what isn’t? Or are you doing the same thing year after year?

Marketing has changed so much, even in the last few years. It might be time to implement digital marketing methods, which can be more cost-effective than older, outdated methods.


Make sure employees manage their time effectively by providing the right training and supervision. This should help to reduce labor expenses.


Has your business changed?  Do you need all those extra features you are paying for?  Could you do without those extra lines?  Would another phone plan save you money on long distance or international calls? Many telecommunication companies will often bargain with you or offer you a new deal just for checking in with them.

This gives you ten places to look to cut costs and correspondingly increase profits for 2021. If you need help reviewing your income statement, please reach out.

Qualifying small businesses can now apply for Paycheck Protection Program (PPP) loans through certain lenders. The Small Business Administration (SBA) reopened its PPP portal on January 11, 2021 after Congress passed and the President signed legislation in December 2020, authorizing the continuation of the program and an additional $284 billion in funds.

The program allows for two types of applications:

  • First Draw Loans to qualifying entities that did not receive a PPP loan in 2020, and
  • Second Draw Loans for previous PPP loan recipients and with a narrower set of qualifications.

First Draw PPP Loans for First-Time Borrowers

Borrowers that qualify for first-draw PPP loans can apply for up to 2.5 times their average monthly payroll costs (with caps), for a maximum loan amount of $10 million. Generally speaking, the applicants must have been in operation on February 15, 2020 and be among the following types of businesses:

  • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans
  • Sole proprietors, some self-employed individuals, and independent contractors
  • Nonprofits, including churches
  • Sec. 501(c)(6) businesses
  • Food or lodging operations with NAICS codes that start with 72 and with fewer than 500 employees per location
  • Certain news operations with qualifying NAICS codes in the 51 range

A number of entities are specifically prohibited from receiving loans.

The SBA application for First Draw Loans is here:

The applicant must attest to the necessity of the loan, among several other declarations.

Second Draw PPP Loans for Borrowers That Received a PPP Loan in 2020

Borrowers that qualify for a second-draw PPP loan can apply for up to 2.5* times their average monthly payroll costs (with caps), for a maximum loan amount of $2 million. Generally speaking, the applicants must qualify as follows:

  • Employ no more than 300 employees
  • Have spent all of their first PPP loan on eligible expenses
  • Do not have to apply for forgiveness for the first loan ahead of receiving the second loan
  • Can show a 25 percent drop in gross receipts in any one 2020 calendar quarter from 2019. If it’s easier to show a 25 percent drop for the entire 2020 year compared to 2019, applicants can submit their tax returns as proof.

*Companies with NAICS code 72, which generally speaking are food and lodging operations, can borrow up to 3.5 times their average monthly payroll costs (with caps).

The SBA application for Second Draw Loans is here:

The applicant must attest to the necessity of the loan, among multiple other certifications and declarations.

Loan Forgiveness

PPP loan recipients can apply to have PPP loans forgiven if the funds are used within a specified covered period from 8 to 24 weeks on the following eligible costs: payroll (60 percent of funds), rent, covered worker protection and facility modification expenditures, covered property damage costs, certain supplier costs, accounting (!) expenses, and a handful of other qualifying expenses.


The SBA portal opened Monday, January 11, 2021 for first-draw loans by lenders (about 10 percent) that cater to underserved communities. These include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries.

On Wednesday, January 13, 2021, the SBA application portal began accepting applications for Second Draw loans. A few days later, additional lenders will be added to the portals.

SBA says it “plans to dedicate specific times to process and assist the smallest PPP lenders with loan applications from eligible small businesses.”

What to Do Next

Here are some suggested steps to get ready for this next round of PPP funds.

  1. Determine which lender you want to use to apply for PPP funds.
  2. Visit your lender website to see if they have a PPP notification signup so you can get notified of updates.
  3. Collect the documents you need for the application.
    a. Payroll summary reports
    b. Profit and loss statements
    c. Tax returns
  4. Begin calculating the amounts you’ll need for the application:
    a. Gross receipts by quarter for 2020 and 2019
    b. Average monthly payroll costs, including cap limits for wages over $100,000, for the year you want to use (2020, 2019, or the year from the application date)
  5. Contact us if you need help with documentation or calculation or other advice.
  6. Contact your tax preparer about tax ramifications.
  7. Contact your attorney to evaluate the loan agreement.

Further PPP Resources

Updated PPP Lender forms, guidance, and resources are available at

CARES Act Treasury page:

Jan 6, 2021 SBA PPP Interim Final Rule – 82 pages

Jan 6, 2021 SBA PPP Second Draw Interim Final Rule – 42 pages

A cashless business is one that processes all cash transactions electronically. There is no paper or coin money taken or handled. While no one society has become 100 percent cashless yet, most organizations are moving in that direction.

A business can become cash-free by providing multiple electronic alternatives to payment.  Credit cards are the most common electronic payment implementation. This option most likely includes MasterCard, Visa, Discover, and American Express.  Some businesses also have a PayPal account and offer that method for payments. Venmo, owned by PayPal, is an efficient mobile alternative, but it is mostly used for consumer-to-consumer transactions. And there is also cryptocurrency.

Cashless businesses are more efficient, help to reduce crime, and have a better audit trail of transactions. Going cash-free also saves money and time spent counting the money, storing the money, safeguarding the money, protecting employees at risk of becoming theft victims, and physically going to the bank.

On the negative side, credit card companies charge fees to merchants, although these can now be passed to the customer in most states. Electronic transactions also require a higher level of technology, and privacy is reduced. And while security is an issue, all merchants that take credit cards must comply with PCI (Payment Card Industry) security standards and sign a document each year stating so.

If your clientele does not keep their money in a bank or if they are not able (or have chosen not) to have a credit card, you may need to rethink going cashless. About 20 percent of U.S. households are challenged when it comes to having access to checking and savings accounts. This has led to several state and local laws being passed in the U.S. prohibiting a business from going cashless. Nothing has been passed at the national level as of this writing, however the Payment Choice Act was introduced in both chambers in mid-2020.

The pandemic has accelerated the move to cashless with the desire for contactless transactions. Several countries are leading the way to becoming cash-free as an entire country, including Sweden, Finland, Norway, China, and South Korea. Sweden’s government has been the most aggressive, claiming they will become a 100 percent cashless society by 2023.

Is going cashless right for you? Meeting your customers’ needs is a prime consideration. At the very least, you can move to increase the percentage of electronic transactions and decrease the percentage of cash transactions when feasible.  This measure will save time and money in and of itself.