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Archives for Accounting

KISS

Simplicity.  Unnecessary complexity. Overthinking things.

Applying the KISS principle to our business lives can pay dividends.  Originated in the 1960s by US Navy design engineers, it emphasizes that simplicity should be the key goal in design.

Carry that over from fighter jets to business, think about all of the things that could benefit from being looked at from an uncomplicated point of view: operations, marketing, sales, finance.

That last one really could benefit from simplicity.  And actually pay dividends.

Uncomplicating things could mean simplifying processes.  Do you have the latest software that manages your?

  • Accounting
  • Payroll
  • Project management
  • Email campaigns
  • Social media

Having plug-and-play options makes your implementation of things work more smoothly and efficiently.  Fewer steps can eliminate work and even reduce errors.

While getting to simple could be harder in the beginning, once you get there, it could (and will) pay dividends.  The process to get there will uncover things and reveal simple options to you.

We love simplicity.  If you are looking to simplify the financial aspect of your company, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Tim Mossholder and Etienne Giradet, photographers)

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It’s Already the Fourth Quarter!

Uh, oh.  Don’t look now, but the clock has just ticked into October and it’s…wait for it…THE FOURTH QUARTER!

And just like in football, you need to be managing your clock to make sure that you finish ahead.  Or maybe you’re playing catch up. Or you are so far ahead, you are coasting.

Whatever you do, don’t waste time or let up.  Just because you are on plan doesn’t mean that it’s time to let up on those players, coaches and officials…or yourself. A few things to think about leading into and during the fourth quarter:

  • Evaluate your business position. Are you on track to make plan?
  • Check up on inventory. Is it where it is supposed to be?
  • Be aware of your tax situation as the year ends and what you need to do going into the new year. Do you owe and are you prepared to pay?
  • Finish up your planning for the new year and begin preparation for first quarter. What are your expectations?
  • Talk with your staff—they are on the front lines and know what is going on and can help you finish those plans for the new year.
  • Plan for the holiday season—staff bonuses, partner and customer gifts and how to handle time off at the end of the calendar.

Above all, keep a positive outlook.  Yes, while this is a time of not letting down and pushing across that goal or finish line, it is also a time for reflection.  Of a job well done.  Positive companies thrive and succeed!

For more on how to prepare you and your company for the fourth quarter and beyond, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

**photos courtesy of Unsplash (Dave Adamson, photographers) and Paul Maynard

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Making Midseason Corrections

After the first two weeks of the NFL season it seems some fans are already looking ahead to next year.  Their teams have gone oh-and-two and the prospects for winning this year and making the playoffs are somewhere in the range slim to none.

“Better luck next time,” as the saying goes.

Whoa, hold on, isn’t it a 17-game season? Are they giving up too early?

Well, the truth is, as it is with business, an NFL team is really a week-to-week, real-time enterprise.  The defense and offense can make subtle or wholesale changes to get on track.  Two loses don’t make a season.

Same goes for your business.  It’s not that we don’t want to look ahead to next year, but we can manage this team from week to week (or financial quarter to financial quarter) quite successfully.

Remember when we talked about goals? By setting (and keeping on track with) goals you give your company direction, momentum and, really, lift.

Let’s say that at mid-year, your sales are slow or behind projections.  That’s when you gather your team together to reexamine your goals and discuss your options to getting back on track.  If sales are down, talk over how each part of the enterprise can help sales meet their goals. If production is behind, what can the team come up with to help meet customer demand if the supply chain is challenged?

You get the idea. This is about stepping up and taking action as a team that results in success for the greater good.

If you need help with the financial part of that equation, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

**photos courtesy of Unsplash (Manasvita S and Behnam Norouzi, photographers)

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“Going out of my head…”

Little Anthony and the Imperials sang it and most of us live it at one point of our lives:

“Going out of my head…”

Sure, life has its distractions, both good and not so good.  But the reality is that focus is a good thing.  Now that focus can be on that thing you are leaving your senses for.  Or it can be for the entrepreneurial business you are trying to keep straight.

Now, don’t get me wrong.  Sometimes distractions are a way to get creative and ensure a positive and free-thinking direction for your enterprise.  However, if you leave your head too often and don’t focus on the things you should, then things could get sticky with your partners, employees, local government and the tax man.

So, if you are the creative thought leader of your company and don’t have a head for the business side of the business, perhaps you should consider taking on employees or stakeholders who can help keep the things in your head that need to be kept in your head? Maybe you could use help with:

  • Operations.
  • Human resources.
  • Marketing.
  • Sales.
  • Supply chain management.
  • Finance.

Now imagine this team of phenomenal head-keepers all around your conference table with you leading them.  Smart people hire smart(er) people so they can take their enterprises to the next level.

Oh, and that last one on the list? We can help you with that.

For more on how to choose and implement a comprehensive approach to managing your company, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

**photos courtesy of Unsplash (Fakurian Design and Riccardo Annandale, photographers)

 

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It’s an Accrual World…or is it?

Cash or accrual? Accrual or cash? Which approach should I take?

Huh?

Yeah, we’re talking about accounting approaches…again.  But that’s ok.  It’s our business.  And it should be yours, too.

Sure, you’re the business owner, founder, inventor, chief creator or whatever. But if you don’t know how your expenses are handled then you might not be in business all that along.

So, please, pay attention, here.  You do have a choice in accounting approaches. And it has to do with timing.

If you use cash basis accounting, revenue is recorded when cash is received from customers and expenses are recorded when cash is paid out (payroll and bills).

  • Usually smaller businesses (less than $5 million in annual revenue)us this system as it is simpler.
  • It is not about how you are paid (cash) rather it means that invoices aren’t income until they are settled.
  • Same with bills—they aren’t expenses until they are paid.

Accrual basis accounting records revenue when it is earned and expenses are recorded when consumed.  That is:

  • Income is recognized as soon as an invoice is generated—not paid (payment received).
  • And bills—expenses—are recognized as soon as they show up, not when they are paid.
  • This system works better for larger companies, usually with $5 million or more in annual revenue.

Then there are hybrid systems, too. But be sure and understand your business and seek out the counsel of an accounting professional before you choose an accounting method for your company.

For more on how to choose and implement an accounting approach, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

**photos courtesy of Unsplash (Steve Johnson and Scott Graham, photographers)

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Graduation Day

There are milestones in every life and relationship—first meeting, marriage, births, graduation day.  And with each milestone comes a change.  Sometimes they are difficult partings, others joyful.

The same goes for business relationships. As a fractional CFO and controller, I have seen many companies of various sizes and values grow right in front of me.  Some start out with little financial strategy or processes and grow into companies of substance, size and scale.  In the case of the Big Dot of Happiness, the owners decided to sell the business.  Through the acquisition, I worked with their team, assisting with purchase price allocation accounting, processes and implemented accrual accounting practices.

When I first met Big Dot, a year ago, my assignment with them was to help establish financial processes and to act as their fractional controller.  Recently, the time came to “graduate” them to the next level.  They had grown significantly, production was higher, and they needed additional resources to help them grow.

My work here was done.

While it was sad to not be continuing as their day-to-day financial expert, it was gratifying to know that I had an impact on their growth and future.

Some of the things we put in place to make the financial aspect of their business come into focus:

  • Established uniform accounting practices; that is, put an accounting system in place.
  • Created and implemented a system for following accrual accounting.
  • Established a financial reporting package.
  • Assisted with creating a better way to look at inventory system and cost-of-goods sold infrastructure.
  • Attended to daily cash flow management and monthly close procedures.
  • Built balance sheet reconciliations and more.

It was a fun ride and I thoroughly enjoyed working with them.  I got to implement some needed financial strategies and along the way met and worked with some talented, smart and gracious people. This was living proof that sometimes the best thing you can do is help someone to the next phase of their business.  As the Tim McGraw song says, “when you get where you’re going, turn around and help the next one in line…”

Glad I could do my part and help in the transition to their new full-time controller at their Wisconsin headquarters.

Tina

For more on how to transition your business to the next level, call or write to us.  TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.

*photos courtesy of Unsplash (Good Free Photos) and Tina O’Banion

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