I got to thinking about a framework that would allow a business to take advantage of outsourced accounting and control services.
What would the framework look like?
Here are three essentials that any outsourcing accounting firm must provide.
1. ‘Subject Matter Expertise’ in industry sectors that are needed by the client in Accounting, Taxation, Payroll, Treasury, Planning and Analysis.
2. ‘Best Practice Processes' in software, document control and comport hardware. This typically includes products and services from such companies as Intuit QuickBooks Accounting and Taxation, Microsoft Office, Dell Computers. PC House Call and other task specific software for business expense reimbursement, inventory tracking and planning.
3 ‘Scaleable Resource Capability' with MBA, CPA and Degreed staff levels that current in professional development programs.
The Stenson Group combines strategies in all these areas.
Sunday, August 7, 2011
Sunday, May 15, 2011
Why you might never have considered a Fractional CFO.
You might never think that the specific Financial or Office work you need done is offered by a Fractional CFO Service or if the service is provided it is too expensive and never timely. None of this is correct.
The Fractional CFO Service can provide as little as a couple of hours of advisory each month to monthly clerical support for payment of bills, calculation compensation and the preparation of valuable financial and cash management reports.
The single most import fact is that you should always expect to receive accurate, timely, professional outputs that are available and and specifc to your business.....at a fraction of the cost of hiring.
The Fractional CFO Service can provide as little as a couple of hours of advisory each month to monthly clerical support for payment of bills, calculation compensation and the preparation of valuable financial and cash management reports.
The single most import fact is that you should always expect to receive accurate, timely, professional outputs that are available and and specifc to your business.....at a fraction of the cost of hiring.
Monday, August 23, 2010
Your business must have a detailed forecast of cash flow.
Whether your business is a pre-revenue startup or a Fortune 100 company, one of the most important skills necessary to become a high-performing manager is managing cash flow, according to Sam Thacker, a partner in Austin-based Business Finance Solutions.
Unlike a Fortune 100 company chief financial officer, however, the average entrepreneur doesn’t have a staff dedicated to managing cash.
Entrepreneurs need to know a few significant rules about cash flow management.
Philip Campbell, a Round Rock-based certified public accountant has written a book about managing cash flow. “Never Run Out of Cash,” www.neverrunoutofcash.com provides easy to understand principles that new and experienced entrepreneurs can learn from.
Campbell’s 10 rules for managing cash:
• Never run out of cash. Running out of cash is the definition of failure in business, so do whatever it takes to never run dry.
• Cash is king. No cash equals no business.
• Know your cash balance right now. As a former bank commercial loan officer, I would often ask how much cash a prospective business has right now. If my prospect could give me a good answer, they were far more likely to get a bank loan. Why? Because it meant that business owner was updating himself or herself daily on one of the most important pieces of information in his business. It is a sign of a well-run business.
• Do today’s work today. Knowing what your cash balance daily means you to make adjustments to your cash flow forecast and your accounting system as they occur. Don’t wait until tomorrow.
• Either do your work or have someone else do it for you. If you don’t have time to keep your cash balance up to date, then delegate the duty to someone who can always keep it accurately.
• Don’t manage from the bank balance. It is easy to look at your online cash balance and believe that is the amount of cash you have to spend. Your bank balance and your cash balance are not the same.
• Know what you expect the cash balance to be six months from now. Campbell recommends monthly forecasting. An alternative, is to adopt a higher degree of scrutiny on cash with a forecasts of cash flow on a 13-week rolling forecast. This requires a business owner know what his or her anticipated cash should be based on a weekly forecast. Thirteen weeks is about as far out as you need to forecast for day-to-day purposes. The further out from the current week, the less accurate your forecast is going to be. The forecast is updated weekly, balancing the current week to the penny and making adjustments four weeks out as necessary.
• Problems with cash flow don’t just happen. Campbell is dead on here. There is never a reason for a business to realize on a Monday that they aren’t going to have enough cash for a Friday payroll. Businesses should be able to forecast accurately enough 13 weeks out. For business planning purposes, six or 12 months make sense.
• You absolutely, positively must have cash flow projections. This should be No. 1 on the list, Campbell says. “It’s impossible to run your business without them,” he adds.
• Eliminate your cash flow worries so you are free to do what you do best — take care of customers and make more money.
Campbell spends the rest of his 189-page book explaining each rule in lay terms and providing real-world examples.
Many people think managing cash flow is hard, but really it just takes a little education and regular consistent forecasting.
With a forecast of cash flow in place, better plans can be developed to survive and even thrive in this economy.
Unlike a Fortune 100 company chief financial officer, however, the average entrepreneur doesn’t have a staff dedicated to managing cash.
Entrepreneurs need to know a few significant rules about cash flow management.
Philip Campbell, a Round Rock-based certified public accountant has written a book about managing cash flow. “Never Run Out of Cash,” www.neverrunoutofcash.com provides easy to understand principles that new and experienced entrepreneurs can learn from.
Campbell’s 10 rules for managing cash:
• Never run out of cash. Running out of cash is the definition of failure in business, so do whatever it takes to never run dry.
• Cash is king. No cash equals no business.
• Know your cash balance right now. As a former bank commercial loan officer, I would often ask how much cash a prospective business has right now. If my prospect could give me a good answer, they were far more likely to get a bank loan. Why? Because it meant that business owner was updating himself or herself daily on one of the most important pieces of information in his business. It is a sign of a well-run business.
• Do today’s work today. Knowing what your cash balance daily means you to make adjustments to your cash flow forecast and your accounting system as they occur. Don’t wait until tomorrow.
• Either do your work or have someone else do it for you. If you don’t have time to keep your cash balance up to date, then delegate the duty to someone who can always keep it accurately.
• Don’t manage from the bank balance. It is easy to look at your online cash balance and believe that is the amount of cash you have to spend. Your bank balance and your cash balance are not the same.
• Know what you expect the cash balance to be six months from now. Campbell recommends monthly forecasting. An alternative, is to adopt a higher degree of scrutiny on cash with a forecasts of cash flow on a 13-week rolling forecast. This requires a business owner know what his or her anticipated cash should be based on a weekly forecast. Thirteen weeks is about as far out as you need to forecast for day-to-day purposes. The further out from the current week, the less accurate your forecast is going to be. The forecast is updated weekly, balancing the current week to the penny and making adjustments four weeks out as necessary.
• Problems with cash flow don’t just happen. Campbell is dead on here. There is never a reason for a business to realize on a Monday that they aren’t going to have enough cash for a Friday payroll. Businesses should be able to forecast accurately enough 13 weeks out. For business planning purposes, six or 12 months make sense.
• You absolutely, positively must have cash flow projections. This should be No. 1 on the list, Campbell says. “It’s impossible to run your business without them,” he adds.
• Eliminate your cash flow worries so you are free to do what you do best — take care of customers and make more money.
Campbell spends the rest of his 189-page book explaining each rule in lay terms and providing real-world examples.
Many people think managing cash flow is hard, but really it just takes a little education and regular consistent forecasting.
With a forecast of cash flow in place, better plans can be developed to survive and even thrive in this economy.
Sunday, August 1, 2010
Wall Street – Don’t Count on Federal Reform
“Gain the upper hand by making smart decisions” says Neil Weinberg in the August 8, 2010 issue of Forbes.
Weinberg suggests the following:
Ignore the Chatter
To make money over the long haul stop trying to outguess the market and focus on setting up a mix of stocks, bonds and other assets that it makes sense for you to own. Then stick to it!
Invest in Indexes
Wall Street has built a large industry of managed funds, futures, and options and leveraged products that in aggregate can’t do any better than market returns. Don’t get sucked-in. Buy the whole market, via a cheap and tax efficient index fund or exchange-traded fund.
Find a Fiduciary
Make sure that the person that is giving you advice is putting your interest ahead of their own. They may tout themselves as advisors but most are salesman whose vague legal duty is merely to sell you products that are “suitable”.
A fiduciary by contrast must put your interests first. Registered retirement advisors are fiduciaries. You can also access one by switching from a commission based account to a fee account at a traditional securities firm. Get the relationship spelled out in writing – and negotiate the fees.
Admit Mistakes
Many of us have a hard time doing this. Instead capitalize on your dogs by selling them and using your losses to offset up to $3,000 of ordinary income and an unlimited amount of capital gains.
Less Tax Liability
Taxes are probably second only to asset allocation in determining in what you end up with.
Put tax-inefficient investments like bond funds and real estate investment trusts, into retirement accounts. Their income doesn’t get taxed until it is taken out.
Stocks and equity funds are best for taxable accounts where, as noted above, loses can be used to minimize, if not eliminate gains on your winners. You can also use appreciated stock as gifts to low tax- bracket relatives and bequests.
Weinberg suggests the following:
Ignore the Chatter
To make money over the long haul stop trying to outguess the market and focus on setting up a mix of stocks, bonds and other assets that it makes sense for you to own. Then stick to it!
Invest in Indexes
Wall Street has built a large industry of managed funds, futures, and options and leveraged products that in aggregate can’t do any better than market returns. Don’t get sucked-in. Buy the whole market, via a cheap and tax efficient index fund or exchange-traded fund.
Find a Fiduciary
Make sure that the person that is giving you advice is putting your interest ahead of their own. They may tout themselves as advisors but most are salesman whose vague legal duty is merely to sell you products that are “suitable”.
A fiduciary by contrast must put your interests first. Registered retirement advisors are fiduciaries. You can also access one by switching from a commission based account to a fee account at a traditional securities firm. Get the relationship spelled out in writing – and negotiate the fees.
Admit Mistakes
Many of us have a hard time doing this. Instead capitalize on your dogs by selling them and using your losses to offset up to $3,000 of ordinary income and an unlimited amount of capital gains.
Less Tax Liability
Taxes are probably second only to asset allocation in determining in what you end up with.
Put tax-inefficient investments like bond funds and real estate investment trusts, into retirement accounts. Their income doesn’t get taxed until it is taken out.
Stocks and equity funds are best for taxable accounts where, as noted above, loses can be used to minimize, if not eliminate gains on your winners. You can also use appreciated stock as gifts to low tax- bracket relatives and bequests.
Sunday, July 18, 2010
An Amended Tax Return – Did you claim every tax?
Did you claim every tax break that you were entitled to in 2009? There were a lot of tax breaks. It was easy to miss a few according to Mary Beth Franklin in this month’s issue of Kiplinger. Here is the list.
Making Work Pay credit.
This is a 6.2% payroll tax worth up to $400 for individuals and $800 for married couples. There are phase out rules for those with high income. You must file Schedule M to claim the credit and have your tax adjusted. Check your 2009 tax return and if you didn’t claim the credit but are eligible for it, amend your return.
Breaks for Non-itemizers.
You needed to file a new form - Schedule L. Taxpayers who did not itemize their deductions could claim an enhanced standard deduction for net disaster relief, sales or excise tax paid on the purchase of a new car purchased after February 16, 2009 and a property-tax deduction of up to $500 ($1,000 for married couples filing jointly). If you missed these tax breaks, file an amended return.
Home Buyer’s credit.
If you bought a house this year and qualify for either the $8,000 first-time home buyer credit or the $6,800 credit for longtime owners who bought another principal residence, you don’t have to wait to file your 2010 tax return as long as you signed a binding contract before July 1. You will need to file Form 5405 and include a copy of your settlement sheet when you file your amended return.
Education Breaks.
If you paid college education tuition and related expenses in 2009, did you pick the best tax break for your situation? For most people the American Opportunity Credit, worth $2,500 per student was the logical choice. But if you had a freshman or sophomore who attended school in one of seven midwestern states that were declared federal disaster areas, you might be eligible for an enhanced Hope Credit up to $3,000.
How to file an amended return.
You have up to 3 years from the date of your return to file an amended return, which means April 15, 2012. Do it now and get your money as soon as possible. Go to irs.gov and download Form 1040X. Explain why you need to amend your return. You don’t have to redo your entire return. Just make the necessary changes and adjust your tax liability accordingly.
Making Work Pay credit.
This is a 6.2% payroll tax worth up to $400 for individuals and $800 for married couples. There are phase out rules for those with high income. You must file Schedule M to claim the credit and have your tax adjusted. Check your 2009 tax return and if you didn’t claim the credit but are eligible for it, amend your return.
Breaks for Non-itemizers.
You needed to file a new form - Schedule L. Taxpayers who did not itemize their deductions could claim an enhanced standard deduction for net disaster relief, sales or excise tax paid on the purchase of a new car purchased after February 16, 2009 and a property-tax deduction of up to $500 ($1,000 for married couples filing jointly). If you missed these tax breaks, file an amended return.
Home Buyer’s credit.
If you bought a house this year and qualify for either the $8,000 first-time home buyer credit or the $6,800 credit for longtime owners who bought another principal residence, you don’t have to wait to file your 2010 tax return as long as you signed a binding contract before July 1. You will need to file Form 5405 and include a copy of your settlement sheet when you file your amended return.
Education Breaks.
If you paid college education tuition and related expenses in 2009, did you pick the best tax break for your situation? For most people the American Opportunity Credit, worth $2,500 per student was the logical choice. But if you had a freshman or sophomore who attended school in one of seven midwestern states that were declared federal disaster areas, you might be eligible for an enhanced Hope Credit up to $3,000.
How to file an amended return.
You have up to 3 years from the date of your return to file an amended return, which means April 15, 2012. Do it now and get your money as soon as possible. Go to irs.gov and download Form 1040X. Explain why you need to amend your return. You don’t have to redo your entire return. Just make the necessary changes and adjust your tax liability accordingly.
Sunday, March 21, 2010
If you and your business have survived this far THIS IS WHAT YOU MUST DO.
It’s about intensity and customer traction in a very short time period!
Quickly build a small war-chest of funds/people resources without hurting your base business and use this war-chest to fund a plan to sell:
1. Existing products and services to new customer groups or,
2. New products and services to existing customers.
Here are the project rules.
1. Individual project budgets must not exceed $5,000 in total including staff time,
2. take no more than 6 weeks to complete.
3. The project must require at least 75% of the project time in face-to-face contact with the targeted customers.
4. Have a project objective that is measurable. The objective has to be measured in terms of a NUMBER OF CUSTOMER ACCEPTANCES.
5. Make sure the steps to achieve the objective are broken down into daily deliverables that are very measurable and then measure them.
6. Don’t get started too soon. Wait until you have a detailed plan that is really understood by everybody and you get the sense that there is a high degree of confidence in meeting the objective.
7. Get a daily report with a RED or GREEN sticker depending on whether the daily and project miles stones are met or not. If RED, stop the project until a corrective action is agreed upon and implemented.
8. Make sure that there is a 6 week intensive concentrated effort from yourself and other those on the team.
9. Finally, get a partner to share the project costs. This could be a vender, a service provider, another business, a non-profit even an employee!
After 6 weeks or before stop the project and decide how many immediate paying customers you have and how committed they are to doing repeat business. If you have no paying customers stop the project and move on.
It is about a measurable customer based project objective, intensity, short cycle times, very detailed daily plans, critical tracking of progress daily, honest evaluation and immediate correcting actions.
Quickly build a small war-chest of funds/people resources without hurting your base business and use this war-chest to fund a plan to sell:
1. Existing products and services to new customer groups or,
2. New products and services to existing customers.
Here are the project rules.
1. Individual project budgets must not exceed $5,000 in total including staff time,
2. take no more than 6 weeks to complete.
3. The project must require at least 75% of the project time in face-to-face contact with the targeted customers.
4. Have a project objective that is measurable. The objective has to be measured in terms of a NUMBER OF CUSTOMER ACCEPTANCES.
5. Make sure the steps to achieve the objective are broken down into daily deliverables that are very measurable and then measure them.
6. Don’t get started too soon. Wait until you have a detailed plan that is really understood by everybody and you get the sense that there is a high degree of confidence in meeting the objective.
7. Get a daily report with a RED or GREEN sticker depending on whether the daily and project miles stones are met or not. If RED, stop the project until a corrective action is agreed upon and implemented.
8. Make sure that there is a 6 week intensive concentrated effort from yourself and other those on the team.
9. Finally, get a partner to share the project costs. This could be a vender, a service provider, another business, a non-profit even an employee!
After 6 weeks or before stop the project and decide how many immediate paying customers you have and how committed they are to doing repeat business. If you have no paying customers stop the project and move on.
It is about a measurable customer based project objective, intensity, short cycle times, very detailed daily plans, critical tracking of progress daily, honest evaluation and immediate correcting actions.
Wednesday, February 17, 2010
Tenants can find deals on office leases….but don’t leave it too late in Dallas!
Dallas high office vacancy rate which routinely tops 20% is now at 26% and has kept lease rates from rising. In fact they are down 11% in the last 12 months. This is one of the largest vacancy rates in a central business area of any large city in the US. Average effective lease rates in Dallas at $19.94 per-square-foot are the lowest in the 12 largest US cities.
This presents a tremendous opportunity for tenants to save.
Most economists predict Dallas will be amongst the first to rebound from the recession because of the North Texas’ growing population, low business costs and better-than-average growth outlook.
If tenants wait a year or more, it’s likely that vacancy rates will be headed back down, leaving tenants with fewer options and less leverage.
Tenants need to move relatively quickly.
Some tenants are signing short-term leases while waiting to see what happens with the economy while others are locking in low rates on long-term deals.
Landlords are still hungry in this market. There is still a lot of downsizing going on and landlords still have to be pretty aggressive to attract and retain tenants because the deal volume is down.
Naturally, landlords in buildings that have experienced a substantial increase in vacancy are offering deep discounts.
Retain a commercial estate broker to obtain comparative property lease rates and investigate ‘blend and extend” arrangements to receive the lowest possible rates. Also, don’t forget to tap into leasehold improvement incentives that can be used as to pay rents if not used.
This presents a tremendous opportunity for tenants to save.
Most economists predict Dallas will be amongst the first to rebound from the recession because of the North Texas’ growing population, low business costs and better-than-average growth outlook.
If tenants wait a year or more, it’s likely that vacancy rates will be headed back down, leaving tenants with fewer options and less leverage.
Tenants need to move relatively quickly.
Some tenants are signing short-term leases while waiting to see what happens with the economy while others are locking in low rates on long-term deals.
Landlords are still hungry in this market. There is still a lot of downsizing going on and landlords still have to be pretty aggressive to attract and retain tenants because the deal volume is down.
Naturally, landlords in buildings that have experienced a substantial increase in vacancy are offering deep discounts.
Retain a commercial estate broker to obtain comparative property lease rates and investigate ‘blend and extend” arrangements to receive the lowest possible rates. Also, don’t forget to tap into leasehold improvement incentives that can be used as to pay rents if not used.
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