Taking the Fear out of Retirement Planning

October 31, 2011 Leave a comment

RetirementI envision a future in which traditional Halloween decorations and haunting music will be replaced by stock market tickers and closing bells. For an individual nearing retirement, nothing is more bone chilling than reviewing their quarterly 401(k) statements. Although we’ve ended October 2011 in the black, the volatility of the market over the course of the month certainly hasn’t instilled any confidence in our employees ability to retire.

According to a recent Prudential white paper on defined contribution (DC) plan solutions, this poses challenges for employers as well:

  • Increased volatility in staffing needs: DC participants’ retirement decisions will be heavily impacted by fluctuations in the financial markets (a 1% increase in the S&P 500 index in any given year increases the probability that a pre-retiree will retire by 2.5%).  DC participants are more likely to delay retirement when financial markets decline, when employers are facing headwinds in their businesses and would therefore prefer that forecasted employee retirements take place.
  • Higher workforce costs: The relationship between the age of your workforce and cost is complex – wages paid to an older worker vs. a younger worker may play a factor, as well as healthcare costs.
  • Reduced workforce engagement: Morale may suffer in your organization if the lack of retirements prevent opportunities for staff members to advance in their careers.
Prudential recommends adding a Guaranteed Minimum Withdrawal Benefit (GMWB) to your sponsored plan. A GMWB allows a participant a guaranteed amount of income in retirement, regardless of how long they live or how the market performs. It may sound like an annuity, but unlike an annuity, allows the participant to retain full control of their assets, and pays remaining assets to a beneficiary designated by your employee. The guaranteed income feature may allow a participant to stay invested more aggressively than they would in a traditional plan, allowing them to benefit from market upswings without feeling the pain of market downswings.  These features, of course, don’t come free; generally, GMWBs tack on an extra fee above normal fund management expenses, but may be worthwhile for the peace of mind they provide.
From the case study included in the white paper, it appears a participant in a plan with a GMWB feature:
  • Has a higher probability of being able to retire on time
  • May be able to withdraw more during retirement
  • Will always have an income source in retirement
  • May or may not be able to leave a bequest – however, keep in mind that retirement savings should be designated for just that purpose. If it is important to your employees to leave something to heirs, whole life insurance may be a good solution.
The limits for 401(k) contributions are increasing for 2012 – for more info on retirement plan limits, as well as additional tips and tricks (and treats), check out the retirement planning section of our website.

Lattes and Loans: Starbucks Partnering with OFN to Provide Small Business Financing

October 24, 2011 1 comment

Earlier this month, Starbucks CEO Howard Schultz shared his plan to solicit donations from Starbucks customers to help fund small businesses in a joint program with the Opportunity Finance Network called Create Jobs for USA. Starting November 1, for every $5 donated at a Starbucks (roughly the cost of a second grande non-fat Pumpkin Spice Latte), you can walk out with a cool wristband and the satisfaction of helping fund Main Street. Starbucks has already made a $5 million donation, which, coincidentally, would yield enough wristbands for each QuickBooks user out there.

Important to point out is the subtle note that verifies each wristband is made in the USA!

Small businesses that have not been able to obtain a loan through conventional banking methods may be eligible to receive a Starbucks loan. Whether you’re just starting up or looking to expand,  there is one basic requirement: proof that jobs will be created (temporary or permanent) by the business seeking the loan. According to this NJ.com article, one new job will be created for every $3,000 donated to the program. If you think your business qualifies, you can start the process by visiting the OFN Community Development Financial Institution (CDFI) Finder. (Very easy to use – a quick search yielded two in my community).

While Starbucks is the latest to receive kudos for helping out the little guy, they’re certainly not the first. The Sam Adams brewery has provided small business loans and free business education seminars to the community since April, although clearly an additional requirement to receiving a Sam Adams loan is being at least 21 years of age (the website prompts you to verify your age twice before you can even get to the link provided above).

Regardless of your preference to fill your mugs with coffee vs. beer, I think we can all raise our glasses to these two companies and their positive steps towards investing back into entrepreneurship. Cheers until next week!

What other micro-lending ventures have you heard about? Leave a comment to share resources with other small business owners here. 

Small Business Investments with the Biggest Payouts

October 17, 2011 Leave a comment

As we dive into the last quarter of 2011, a key focus for business owners will be developing next year’s budget. This recent article from Inc. Magazine gathered expert advice on where allocating resources may be most beneficial for growing your business. Below is a summary of the recommended five best investments with our suggestions on how to integrate QuickBooks into each of these solutions.

1. Employee Training: Offering opportunities for growth and development adds to employee satisfaction and retention. You can find budget-friendly opportunities to help employees expand skills, such as our QuickBooks Training course via CD with telephone support.

2. Technology:  Outdated software inhibits productivity. If your QuickBooks is running too slow, it may be time for an upgrade to QuickBooks Enterprise.

3. Human Resources: If your business is big enough, it may make sense to outsource this function to someone with the expertise to stay on top of the productivity of your employees. Otherwise, invest your time through self-training in staying up to date on everything from hiring to starting a payroll. For a good start, check out our HR resources page here.

4.CFO (or part time consultant): Few small business owners have the capital to invest in a full-time Chief Financial Officer, but having someone who understands your company’s net flows is critical. QuickBooks can be an interim solution to get you started on your budget, and help raise red flags when profits aren’t meeting expectations. See here for a quick overview.

5. Acquisitions: As the Inc. article notes, you should only seek mergers if your own company is in a stable position. If you are in a position to acquire another business, contact us for help in reviewing the old file prior to transferring the information to your file.

Making wise investment decisions can help your business grow even in the midst of a struggling economy. Where will your business be spending next year? Feel free to comment and leave suggestions for fellow entrepreneurs!

Brainstorming for Small Business

October 10, 2011 1 comment

As your business begins planning for 2012, you may want to consider hosting a brainstorming session. Brainstorming is a technique that allows the creative genius inside your workforce to flow through for the common purpose of solving your company’s biggest problems. While brainstorming as a technique has been around for quite some time, the ways in which it is carried out have changed dramatically.

With more opportunities for telecommuting and alternative work arrangements, your best and brightest may be scattered across the country, rendering standard conference room whiteboard meetings difficult to carry out. Remote access programs such as GotoMyPC can be the solution to gathering your remote employees for a brainstorming meeting, as they allow you to collaborate with individuals in any time zone.

Smaller employers can look to online networking groups for assisting with idea generation. Be prepared to have patience with this method and collect ideas over the span of a week or two, as these forums allow members to generally participate on  their own time.  LinkedIn and Facebook have groups and pages dedicated to brainstorming.

Employers can tap into employee creativity outside of meetings using special mind mapping software. While there are plenty of programs to choose from, QuickBooks users may want to check out Intuit’s Brainstorm as a tool to gather and manage employee ideas. There may be benefits for sole proprietors as well, as you can save and organize your ideas as you go.

Regardless of format of your brainstorming meeting, creativity can quickly be stifled if your brainstorming session is not facilitated correctly. This article from Inc. Magazine shares the top 5 ways to kill a brainstorming session, summarized here:

1. Do not pass judgment – the purpose of the meeting is idea-generation, and any comment that is made regarding someone else’s idea is likely to promote hesitation amongst the members of the group from sharing their own thoughts.

2. Editing – checking spelling and punctuation is a left-brained activity that comes at the expense of creative thought. You can take care of tidying up after the session is over.

3. Thinking ahead – the goal is to generate as many ideas as possible while brainstorming. You can plan out how to carry out the best of those ideas in a different meeting.

4. Worry – set the tone of the meeting by being the first to throw out an outrageous idea. Your participants will be less likely to worry that their own ideas may not be good enough.

5. Wander – with all of the creativity flowing, you may find yourself getting off topic. If you feel the subject matter diverging from your original plans, create a “parking lot” list to revisit in another meeting.

QuickBooks Do-It-Yourself Payroll: Guide to printing W-2s

October 3, 2011 Leave a comment

    • Before finalizing and mailing the 4th Quarter 941 form, print up the W2 forms and determine if the amounts agree to what you have been reporting quarterly.  Buy W2 forms here and we will provide you with a checklist that will help you identify and uncover problems that may exist.
    • Next make sure you review the W2 tax form for the right amounts in the right boxes with the right codes. Be sure to read the instructions for the W2 form for 2011.  Click here for a sample 2011 W2 Form issued by the IRS.  Receive a free  W2 and 1099 Guide for printing your 2011 tax forms with instructions on preparing QuickBooks W2’s, including where you can get your tax questions answered by the IRS, with each order you place for W2 and 1099 tax forms here. Review the W2 forms before printing final copies to make sure the alignment is accurate. Learn how to align preprinted W2 forms in QuickBooks with our free W2 Guides when you purchase your QuickBooks W2 forms. Our W2 guide provides useful links to websites  that offer answers to  frequently asked questions about preparing W2’s. This is a worthwhile page to review for information you may not have been aware of, including how to include third party sick pay and common questions about each of the boxes on the W2 (its a long page, scroll 1/2 down for specific W2 information).
    • Modify W2 form amounts as necessary.  QuickBooks permits modifying the amounts that default to the W2s. Learn how to make these adjustments and where to add or change  state, federal and employee identification numbers in QuickBooks from our free guide available when you purchase your W2 tax forms.
    • Print the W2 forms.  We make available a step by step printing W2 Guide in QuickBooks that includes screenshots when you purchase your forms.
    • Stuff envelopes.
    • Visit our payroll tips page for more payroll tips and tricks, plus a complete knowledgebase where you can get  answers to your payroll regulation questions.
    • Our W2 instruction guide provides you with the information you need for printing W2s in QuickBooks version 2008, 2009, 2010, & 2011.
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Wellness Benefits for Small Business

September 26, 2011 Leave a comment

My day kicked off at 5:30am with a pot of coffee for breakfast, followed by an hour sitting at my desk trying to get through a mountain of personal e-mail. I then dealt with the strain of a 35 minute commute in pouring rain and low visibility, mildly less stressful than suffering through bumper to bumper  rush hour traffic. After 11 hours of additional sitting and exacerbating a case of computer vision syndrome that has developed over years of being glued to my monitor (only interrupted by re-fueling myself with a convenience lunch of champions: two slices of pizza and a bag of M&Ms), my conscience suggested I should make a stop at the gym. But after fighting through rainy, traffic-filled misery on my commute home, my exhaustion suggested otherwise. Over a microwave dinner, I consoled myself that the hard work and stress would pay off dividends when I can enjoy my retirement later in life.  But two additional hours remaining sedentary and reading e-mails delivered this ironic article: Study says women who sit all day put themselves at risk of premature death.

Small business owners across the country have all experienced days as I have described above. It is critical that we take a step back and consider how we can balance our goals and aspirations with maintaining our own wellness.

Wellness programs have been a fundamental component of benefits packages at many larger employers over the last few decades, but prohibitive costs have made these programs typically unavailable for smaller businesses. However, according to this recent article by National Underwriter, entrepreneurs can take heart in the fact that this trend is changing, due to two recent innovations in wellness programs.

1. Health insurers are increasingly providing robust wellness programs along with their health insurance. This integration provides a cost-effective method to distribute the wellness program to employers. In addition, education and enrollment efforts can be combined, minimizing the time commitment and reinforcing the close link between the programs.

2. Wellness providers have also developed screening methods that allow small employers to participate on a cost-effective basis. In addition to using on-site screening methods, the use of collection centers in alternate locations like grocery store pharmacies has decreased overall costs. Physician packets are also becoming increasingly popular.

For assistance in researching health insurance and wellness provider options that make sense for your small business, visit the insurance section of the office management section of our website. Then, be sure to get out of your chair and get some movement in your day!

Know Your 1099 Reporting Requirements and Track in QuickBooks

September 19, 2011 Leave a comment

It has been a few months since the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (say that five times fast) repealed the 1099 reporting requirements introduced in 2010 by the Patient Protection and Affordable Care Act, to the delight of harried entrepreneurs everywhere. As we come upon another year end and you prepare to order your W2’s and other forms (found here at a discount), here’s a refresher on what is and isn’t happening, and a quick tip on how to track 1099 information in QuickBooks.

Who Receives a 1099-MISC (instructions found here):

  1. Sole Proprietors, LLCs, and partnerships from whom you’ve purchased over $600 in services in the calendar year.
And that’s it. This is the same as it’s been in the past.
Consider what might have been:
  1. In 2011, sale of property, goods, and products, in addition to services, over $600 would be subject to the new reporting requirements.
  2. Corporations were brought into the mix.
  3. In 2012, purchases in excess of $600 to any vendor for the following would have required a 1099 to be issued:
    • Cost of Goods sold
    • Entertainment purchases
    • Office Supplies
    • Contractors for Repairs and improvements
    • Purchases for auto repairs or lawn maintenance if you deduct these for business
    • And pretty much every expense listed on your profit and loss report (although the law provided an exemption to sending a 1099 for all transactions purchased with a credit card)
  4. The Small Business Jobs Act defined that anybody receiving rental income was in the business of renting out real estate, and therefore also required to issue 1099s for the same items listed above.
Fortunately, legislators realized the administrative burden placed on small business owners and individuals receiving rental income to meet these reporting requirements, and have repealed these provisions. QuickBooks can still help you track the sole proprietors, LLCs, and partnerships from whom you’ve received over $600 in services.
    1. Get a W-9 Form from every vendor that provides you with a service or for whom you rent property from. This is important- this document will tell you whether the vendor qualifies for exemption from submitting a 1099 and how to report their name (so that it will match the IRS database) on the 1099.
    2. Enter into the vendor center —> vendor record —> additional information tab and check the box indicating that the vendor is eligible for a 1099.