Author: kathy-beck

The running of a small business requires more than just knowledge of the trade; it requires knowing how to manage your expenses and set clear budgets. Budgeting is crucial for the success of any business. Knowing how to estimate and match your expenses to your revenue helps you determine whether or not you have enough money to fund operations, expand your business and generate profit. Without a budget in place, businesses run the risk of spending more money than they take in or not investing enough in the prospect of growing the business.

While every business has a slightly different way of creating and maintaining a budget, there are some key practices that companies should follow when attempting to create their budget. The following tips were created to help small businesses finesse the perfect small business budget.

1. Check Industry Standards
   While every business is different and unique, there are always similarities between any type of business. Research the industry, speak with business owners in your area and check the IRS website to get a clear picture of what percentage of the revenue coming in should be allocated to each cost area. As you get a good look at industry standards, remember to look at for an average, not specifics.
2. Create a Spreadsheet of Estimated Costs
   Create a spreadsheet to estimate your business’ total cost and the percentage of your revenue that will need to be allocated toward raw materials and additional costs. Contact suppliers prior to working with them and get an estimate of their costs. If you are just starting your business, do the same thing for rent, insurance, taxes, etc.
3. Prepare for Changes in Your Budget
   Remember that these are estimates, not figures that are set in stone. Just because you estimated that the business would generate a certain rate of revenue growth or that certain expenses would be fixed or controlled doesn’t mean that it will happen. The business world is always changing and companies need to be prepared for whatever comes their way. It’s wise to factor in some breathing room in your budget and make sure that you have enough money to cover expenses before deciding to expand or hire new employees.
4. Cut Costs When Times Get Tough
   Consider cutting your costs when times get tight. Start with the items that can be controlled to a large degree. Ask yourself the following questions:  What costs can you cut back on without affecting your company’s revenue generating capability? What costs can you better control in order to cut costs?In addition to cutting costs, you should wait to make purchases until the start of a new billing cycle, or take advantage of payment terms offered by suppliers or creditors. Carefully examine your costs and options in order to create more breathing room in your budget.
5. Review Your Budget Periodically
   While many larger businesses draft a yearly budget, small businesses should re-evaluate their budget more often. In fact, it is wise for a small business owner to plan only a month or two in advance due to the volatile nature of business and unexpected expenses that could affect revenue estimations.
6. Re-evaluate Services/Suppliers
   Do not ever hesitate to research new suppliers or ways to save money on services being performed for your business. Re-evaluation should occur at various stages of the business cycle, including at the start-up of a business, annual or monthly budget creation, and during periodic business reviews.

As you can see, budgeting is an easy – but essential – process designed to help companies forecast (and then match) their current and future revenue to their expenses. The ultimate goal of a small business budget is to ensure that there is enough money to keep the business running, grow the business and have funds available should emergencies arrive. For more information on budgeting for small businesses, click here.

The most important part of fundraising is connecting with your supporters on a personal level. People are more likely to respond when the cause affects them, or someone they know, personally. Nonprofits today have an advantage that their counterparts years ago did not: social media. With the rise of sites such as Facebook and Twitter, nonprofits have the opportunity to connect their cause with volunteers, donors and prospective contributors. Keep the following tips in mind when considering using social media to further your fundraising efforts.

Sharing
Social media is all about sharing information. Whether personal, humorous or compelling, the media that people transmit to one another can take on a life of its own and reach a large amount of people.  Requesting people to draft their own status updates and tweets about your charitable cause is a lot to ask, but simply embedding a “like” or “share” button on your website, blog or specific pages is an easy way to engage your supporters.  When preparing for an event, be sure to embed a “Like” button on the event’s webpage, email invitation and other digital communications related to the event. It’s not only easy to do, but it also helps spread the message about your event and, ultimately, about your organization.

Lots of Links
Search engines such as Google are always updating their algorithms that govern how certain terms appear on results pages. Once social media was determined to be a staying force, search engines took social media into account in the results pages. The more links a page has to blogs, Facebook, Google+ and other services, the more likely it will be deemed worthwhile and deserving of attention by search engines.  Make sure that your organization can be found on all of the major social media networks, including Facebook, Twitter, YouTube, Google+ and LinkedIn. At a minimum, claim your organization’s profile or page and include a link back to your website.   Each tweet or status update builds new links to your cause. Once you have established your presence, begin connecting and interacting with related causes. All of these efforts will make it easier for people to find you online and learn more about your cause.

Turn Links and Likes Into Donations
Social media is successful for many reasons; however, it’s primary benefit to organizations is that it allows for feedback from your constituents, donors and supporters. Donors want to know that they are doing something tangible to help a cause. The addition of platforms that allow them to contribute their own thoughts and feelings about a topic keeps them engaged and committed to the organization for a long time.

Of course, social media is not the end-all to be all of fundraising, but using technology to build support does give you an advantage. With the abundance of information, not to mention the accessibility, many people turn to the web to look for causes to join. Don’t let technology leave you behind; use it to gain an even greater following and, ultimately, more donations.

In order to run an effective and efficient business, companies must select financial reporting software that will provide them with the information they need at the time they need it. Access to timely and accurate data is essential to running and maintaining a business. Implementing a monthly reporting package can help businesses measure their success and plan accordingly for their future. Consider the following when choosing and implementing your financial reporting software:

Get Commitment from Management
Make sure that all members of management have established exactly what is going to be measured, how often it will be measured and at what level. Ask yourself these questions: Do you need an ERP package, or will a tiered implementation that measures financial and operational reporting, HR, budgeting, etc. work? If some elements of your current system fit what you need, implementing a monthly reporting package could be the answer to getting all the company’s pertinent information in one central location.

Once management has established the criteria, make sure that they are committed to the financial and organizational expenses that will be incurred.

Establish What Information You Want Captured
Attempting to get every single detail of information out of your systems will only cause more work for you and result in bogging your system down. Determine what information you need and find a way to easily get that information. Make sure that the data can be understood by everyone involved by creating a central language for what you are measuring (include common data and metric definitions).

Know Your Limits
Will your current IT employees understand your new system? Can they support this new system as is? Or will you need to bring in new skill sets? Whether or not your current IT employees can support this system will greatly affect the decision you make.

Decide Who Will Own the Process Once It’s in Place
Early on, decide who will set the direction and monitor success once the system is implemented. Who is in charge of the reporting package, process and underlying data? Make sure that the owner is thinking about the end goal. Communicate all potential reporting parameters you wish to see in reports from the onset. Clearly communicating your requirements from the beginning will make the process easier for everyone involved.

As you can see, implementing financial reporting software takes a considerable amount of time and preparation. However, the benefits of these reports are never-ending. Once a financial reporting system is in place, companies can use those reports to identify problem areas, as well as see what is working for their business. If you would like to learn more about choosing a financial reporting system, contact us today.

Data security should be a top priority in today’s business world. With companies around the world storing sensitive financial, employee and customer information, one breach would be enough to seriously damage any solid business. However, with a few good tips and some smart online habits, you can protect your business from unwelcome predators.

1. Establish strong passwords.
   The safest thing you can do for your company is to implement strong passwords. Follow this simple tip to create hard-to-crack passwords: use a combination of lowercase and capital letters, numbers and symbols, and make it 8-10 characters in length. Avoid any personal data (such as your birthdate), and avoid common words (even spelled backwords). All passwords should be changed every 90 days (or sooner for highly-sensitive data).
2. Set up strong firewall protection. 
   Firewalls are a must when discussing company-wide protection. They protect your network by controlling the internet traffic in –and out of – your business. Any major brand will be beneficial in protecting your network.
3. Install antivirus protection. 
   Like firewalls, antiviral and anti-malware protection is a necessity. Should an unwanted attack get through your network, the antiviral protection will identify and wipe out the virus or harmful agent.
4. Update your programs regularly.
   Updating your computer and programs is a necessary step if you want to protect your business. Your software is only as good as its most recent update, so keeping each application updated will help keep your data safe.
5. Secure your electronic devices (computers, laptops and mobile phones). 
   Because of their portable nature, laptops and mobile phones present a much higher risk than the company desktop. Taking preventative measures before they are lost or stolen is key. Encrypt your laptop and mobile phone so that the data on the hard drive cannot be accessed without the proper password. Never leave your phone or laptop where it can be stolen or left. Lock it up when you are not using it to further protect your company’s information.
6. Backup your system regularly. 
   Schedule regular backups to your hard drive and information in the cloud. The general rule of thumb for backups are as follows:
   – Servers: Complete backups weekly, partial backups nightly.
   – Personal computers: Backup every week (incremental backups every few days)
7. Be careful with email, IM and web browsing. 
   You’ve seen it happen before. An unsuspecting employee clicks on a link or downloads an attachment that seems harmless, only to find out that their computer has been infected with a virus.Links and attachments are the number one ways malware ends up on computers; therefore, never click on a link that you were not expecting (or that you do not know the origin of).
8. Educate your employees. 
   Finally, teaching your employees about safe practices online and in the office are crucial to protecting your company’s data. Help employees become proactive with your company’s security and show them how what they are doing could lead to serious security breaches. Make sure your employees are aware of how important your company’s data is and ensure that they learn all the measures they can take to protect it.

Nonprofits set and determine budgets based on what it will cost to run their programs and organization for the coming year. A thorough budget gives those in higher positions a full spectrum view of the organization, allowing them to take a proactive approach to situations that arise during the course of the year. Whether you are already in the middle of your fiscal year or if you are just now determining your budget, the following tips were designed to help you develop and maintain a healthy budget for your organization.

1. Match the budget line items to your organization’s chart of accounts.
A chart of accounts classifies the types of revenue and expenses your organization incurs within your accounting system. Salaries, wages, rent, utilities, printing, promotional costs and more are accounted for in the chart of accounts. By using these same categories in your budget, you easily monitor these items against your budget and pull the necessary financial reports as needed.

2. Include indirect costs in your program budgets.
If your organization has more than one activity or program throughout the year, it’s likely there will be some administrative or indirect costs that have no place. These costs can include the cost of your accountant and auditor, property and liability insurance, and some portion of your staff time. By planning ahead and budgeting for these indirect costs in your program budget, you can recover a portion of these shared expenses.

3. Be conservative/realistic about your projected revenue.
When determining your budget, make sure that you are realistic about your organization’s expected revenue. Go back through the funds you’ve budgeted for and identify them according to these three categories: committed, likely or possible. It’s smarter to add a new program into your budget in the middle of the year when its funding is confirmed rather than having to cut it back midyear due to insufficient funds.

4. Involve staff from every level in the budgeting process.
Including your staff in the budgeting process will not only keep them more committed to your budget, but it will also open up avenues for them to share with upper management what programs need to be included in the budget. Someone else may be able to think of things upper management hadn’t included or discuss additional options that may have been overlooked. By including staff from every level within the organization, the nonprofit increases its accountability among staff and expands its awareness of what is happening within the company.

5. Keep notes.
Make sure you keep record of the assumptions, or the source of an estimate, made when developing the budget. Take full advantage of the comment features in spreadsheets, or type your notes in a text file and keep them on hand. Since your budget will most certainly change from now to the end of the year, having these notes to refer back to will save you the headache of tracking down the information used to determine that specific number.

If you would like to learn more budgeting tips geared toward nonprofit organizations, click here.

Does tax time sneak up on you, leaving you feeling unprepared and stressed? Are you so on running the day to day operations of your organization that you lose sight of planning for the financial future? Do you need help navigating through the many forms and documents nonprofits are required to file? If you answered yes to any of these questions, a CPA may be just the answer to what your business or nonprofit needs.

A certified public accountant (CPA) is in charge of monitoring and maintaining financial records for individuals, businesses and nonprofit organizations. A CPA may work on their own or as part of an accounting firm. In order to become certified, a CPA must meet certain requirements imposed by the American Institute of Certified Public Accountants (AICPA), pass a CPA exam and have a particular amount of work experience before practicing as a CPA. These requirements ensure that when you hire a CPA, you are hiring an experienced professional in the field of accounting.

While a CPA can bring nonprofits much-needed relief during audit and tax time, many companies and organizations would benefit from hiring a CPA year-round to make sure their finances stay in order. While most accountants are hired on a long-term basis, there are some accountants that are hired solely to prepare tax returns. CPAs are trained to complete multiple federal and state returns, as well as the various forms nonprofits are required to file yearly.

When hiring a CPA, nonprofits should consider the amount of experience or qualifications a particular CPA has in their industry. Although many individuals feel more comfortable working with a local CPA, there are many accountants that work for successful firms or operate their own personal accounting business nationwide. Each business or nonprofit will have to make their own decision as to what type of CPA they wish to hire for their company.

From addressing your ever-changing and growing needs to helping you establish effective business operations and plan for maximum profitability, a certified public accountant (CPA) can be an essential partner to your business or nonprofit organization. Learn more about choosing a CPA for your business or organization here.

Whether you are an employee or business owner, we are all looking for ways to excel in our business. The key to excellence is looking outside of your immediate world and adopting practices that other businesses and organizations are doing well. While many companies stick to seeking advice from similar businesses, looking outside the business world will offer an even greater insight. Nonprofits are often overlooked by businesses who think they are solely “nice people doing nice things”. However, most nonprofits are also corporations striving to deliver better results, maximize revenue and increase productivity. The following are three lessons businesses can learn from nonprofit organizations:

1. Focus  on mission before quarterly profit. Requiring management to meet measurable financial goals in an allotted period of time can certainly result in productivity gains. However, if employees are only focusing on the goal for the near future, they will miss the heartbeat of the company.A nonprofit’s focus is on mission, not profit. By focusing on the mission before the profit, nonprofits are able to produce amazing results with the little resources they possess. When you focus on your mission, such as creating products that exceed customer expectations, your profit will soon follow.
2. Tap into experience of the board of directors. Just as the board of directors in a for-profit board offers experience, perspective and contacts, a nonprofit board offers the same wealth of information. However, most nonprofit boards do not pay their members to serve on the board. Members of a nonprofit board are volunteers and have a personal commitment to the organization’s mission.Because most nonprofits lack financial and human resources, they have learned to utilize the strengths of their board members. For example, when nonprofits need to make a decision that will have a long-term impact (such as outsource certain aspects of their back-office work or enter into a new project), board members offer insight and help the organization come to a decision. When the organization has made the decision, board members can often identify the consultants and contractors the nonprofit needs.Boards serve as highly competent advisors to a nonprofit organization. As any need arises, the organization has instant access to the board’s highly-trusted advice and insight. A for-profit that adapts this method will not only benefit internally, but they will also gain a competitive advantage.
3. Collaborate as both a means and an end. Nonprofits leverage their limited resources by collaborating with people in the community to accomplish their mission. In the language of for-profits, this is called the formation of strategic alliances.Nonprofits have learned that collaboration can be an end to itself. With the barriers between the organization and the community gone, many nonprofits find that collaboration produces many benefits that are not otherwise achievable. For example, a nonprofit’s mission could be to reduce the length of time a person might be homeless. While collaborating with the circle of stakeholders that are needed to make improvements, the nonprofit can turn to businesses, labor unions, government officials and community activists. The stakeholders can create bonds that carry influence and reduce unproductive conflict in future interactions. Through this process, the larger community becomes aware that there is a process available to address problems, questions and concerns. In turn, the community acts more cohesively and responds better in circumstances.

In order to become successful, businesses and nonprofits can learn from each other. By blending together both worlds, businesses can strive to make a profit and focus on the mission of their company at the same time.