Out of sight, out of mind, right?

Used to be, the boss could call an all-hands meeting in the company cafeteria and look everyone in the eye and interact.

Well, in the age of COVID, having off-site employees might mean they are out of sight, but they really aren’t out of mind. And when it comes to payroll and other basics of human resource management, they really should be top of mind.

They might be in California when HQ is in Texas.

Having a remote workforce, particularly one that that spans multiple cities and states—and maybe even countries—is more the norm than it has ever been.  However, when it comes to payroll and other things that impact them, things change dramatically if they are in L.A. and you are in Dallas.

Here’s a list of considerations:

• Payroll
• Income and other taxes
• Hiring rules
• Wage and hour requirements
• Immigration rules

Just because someone works for your company doesn’t mean the rules of your corporate home state (or even city and county) apply.  The fact is they reside some place else.  This means the rules where they are doing the work apply.  If an employee works for a Dallas company remotely in Atlanta, then payroll and income taxes for Georgia apply to them and must be paid to the state of Georgia.  Ditto the rules on the conditions of their employment and how their work hours are governed.

For more on how to manage your people, payroll and other important assets, 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 (Chris Montgomery, Keem Ibarra and Jamie Lopes, photographers)

The very utterance of the word makes even seasoned businesspeople cringe and cower in fear.

“Audit? Why do we need to do an audit?”

OK, before you go into hiding and crawl into the fetal position in a corner, let’s stop and realize just what an audit is, the kinds of audits there are and that an audit can actually be a good thing.

“Really? Oh, pray tell, please continue,” she said.

Actually, there are nine different types of audit.  And they all play a role in the success—or failure—of your business:

• Internal
• External
• IRS tax (the one we all think of)
• Financial
• Operational
• Compliance
• Information system
• Payroll
• Pay

Audits are a way to objectively examine and assess a company’s performance—operational, financial, and other aspects of the company—to ensure things are working and where there might be room for improvement.  They all involve:

• A review
• Assessment of findings
• Recommendations

In many cases, audits are a legal requirement.  But in the end, they all are about measuring performance and compliance with some entity’s rules. While having the IRS look at your books is daunting at the very least, if you are complaint and have kept up with your books, it will be a valuable exercise and worthy of lessons learned.

For more on how to manage your finances and use audit to your full advantage, 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 (Stephen Dawson, Markus Winkler and Mwangi Gatheca, photographers)

We all know two times two is four.  Is there ever a time when it isn’t?

Maybe when you’re selling online?

If you think business is business is business, look again.  Brick-and-mortar businesses operate differently than online, virtual stores or e-commerce concerns. And, as such, there are differing financial considerations. The differences lay in these areas and, consequently, impact your financials:

• Pricing.
• Shipping and handling and inventory.
• Payment processing (collections).
• Store build-out and “rent.”
• Sales commissions and compensation.
• Equipment.
• Online sales and marketing.

If your overhead is different (among other things), then your pricing model will change. Inventory and shipping and handling becomes all that much more important as goods move differently through your supply chain (no storefront). Payments are collected and processed all online or through alternative systems from a traditional storefront. Where you sell from (your own site or sites like Amazon) changes your expense model dramatically. Payroll and commissions also change because of how your sales are accounted for and who makes them. Instead of a sales floor and a traditional point-of-sale unit, everything from fulfillment to inventory to the final transaction has to be done by something—meet the new age equipment. And how you go to market is vastly different that having walk-up customers.

For more on how to manage your finances for your online enterprise, 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 (Mark Konig, Chris Liverani photographers)

*With apologies to Tom Lehrer and his song, “New Math.”

“I can’t afford it,” are some very dreaded words.  But we aren’t talking about a new car or special outfit here, or even a gourmet pie.  This is about your company’s finances.

What do you do when you can’t afford a high-dollar CFO but you need one?

You’ve come to the conclusion you need help with your company’s finances.  It’s grown beyond your ability to handle it and your current staff’s capabilities.  However, you still need to keep a handle on it and need to be able to delegate the responsibility. You’ve made a list of what you need in this new super hero with a green eye shade—but you’ve also looked at your budget. And you want them to either do, manager or oversee:

• The accounting function.
• Bookkeeping
• Payroll.
• Human Resources.
• Other tactical things related to your company’s finances.
• Oh, and throw in some strategy…

Hmmm…it works out that if you hired a W-2 employee with that skill set it would cost you easily $200k.  Here, let’s go diving in the couch cushions to see if you have that lying around…

Wait…what about outsourcing?  For a fraction of the cost (and without the overhead) you could have a talented, experienced and strategic CFO sitting next to you.

By outsourcing you buy that fraction of the talent you need and not the  whole person.  That’s not to say you will only get a fraction of the service.  Most fractional service providers (contractors) work by the project or offer specified services for a fee or packaged price.  That allows for a smaller company to have access to extreme talent for a fraction (and an affordable) price.

For more on how to manage your finances fractionally, 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 (Hugo Aitken and Ibrahim Boran, photographers)

Margins, that is.  Sure, they are the white space on a printed page around the text. But more importantly, they are the best way to measure profitability in your company.

You really need to be aware of your margins.  It represents the percentage of sales you’ve turned into profit, or, put more simply, how many pennies you made on each dollar of sales.

Keep in mind there are several types of margins:

• Gross profit
• Operating profit
• Tax profit
• Net profit

All of these are reflected on a company’s income statement.

Gross margin is what’s left after subtracting direct costs of the product or service from the sales revenue.

Operating profit or margin is what’s left after subtracting operating costs from gross margin.

Then pre-tax margin results when debt costs and unusual charges are deducted from operating profit.

Deducting taxes from that number results in the net profit margin.

It’s part of a larger process, but an important statistic (or set of statistics) to track. Without profitability, your company runs in the red.

Make sure those white spaces are wide!

For more on how to manage your finances, 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: Frank Busch, photographer) and Paul Maynard

Someone has to keep track of the “numbers” at your company and it looks like it is you!

Where does one start when it comes to choosing and then implementing an accounting and bookkeeping software package? With so many options to choose from, what attributes should I consider? Here are a few things to consider when choosing a software package:

• Features
• Usability
• Cost

Features.  What do you need it to do? Is this about receivables and payables? What kind of reports should it generate? Should it track inventory, payroll and project management?

Usability.  Can it be accessed from anywhere (cloud based) or is it a desktop-only package? How many users can access it at one time? Is there a mobile app version of it?

And cost.  Can you only afford a low-cost basic package, or can you ante up for something deep with features?

What are the advantages to using an accounting software package?

• Saving time.
• Being more accurate.
• Putting all financial tasks in one place.
• Reducing costs (see time savings above).

So, what’s available and how much should I be prepared to spend? Here’s a list of the most popular packages out there (in no particular ranked order):

• AccountEdge Pro
• FreshBooks
• GoDaddy
• Quickbooks
• Sage Business Cloud Accounting
• Wave Accounting
• Xero
• Zoho Books.

As with any service, product or offering, there is no one-size fits all: check out demos, read up and consider a trial before buying.

Do you do your own accounting internally using a third-party software package?  Are you up to managing this process efficiently?  If not, you should consider outsourcing your accounting needs to a third-party provider.  TFO Solutions is just such a company.

For more on how to manage your finances, 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 (Kelly Sikkema and Sigmund Quusek, photographers)