What is it and How to Implement it

I’m sure you’ve heard of Happy Hour, but have you heard about Power Hour?  Power Hour is something you should be doing every single day.   It’s the time that you carve out of your busy schedule to do the highest-payback tasks for your business.  These include items like strategic planning, product or service development, deal-making, and leveraged revenue-building activities.

Chances are some of these Power Hour tasks may not even be on your to do list.  Sometimes it takes some brainstorming and being away from working “in” your business to develop the innovative ideas your need to move your business forward.

To make Power Hour the most effective, schedule it on your calendar.  The entire hour should be uninterrupted and free of phone calls, email, and current clients.  I try to schedule it for a time at the beginning of the day.

Power Hour should NOT include:

• Doing billable work for current clients.  This will bring in income, but it will not move your business forward like higher-payback ideas.
• Checking email.
• Answering unscheduled phone calls.
• Putting out fires.
• Routine marketing work, such as going to a networking meeting or creating a web site.
• Administrative work or work that falls into your overhead bucket.
• Supervising employees.

We all stay very busy in our businesses, and if we don’t take the time to occasionally stop and evaluate we can become distracted working on things that are urgent but not important.

The things you do in a Power Hour should be a little bit (if not a lot) scary to you.  In fact, that’s why we put them off.  But they’re the exact things that will allow our business to really take off.

There are several things you can consider that would go into a Power Hour.

Power Hour should include:

• Identifying power partners that you can make major deals with to bring in substantial contracts or clients.
• Developing new revenue stream ideas.
• Developing human performance skills such as speaking, writing, or negotiating.
• Working with a coach or doing homework a coach gives you.
• Doing a survey to see how you can look for new ideas for new service lines to serve your customers better.
• Going after leveraged reputation-building opportunities, such as speaking to 1,000 ideal prospects or appearing in the news media.

What can you do that is going to bring in a significant amount of business across a multiple number of clients?  If you think of some things, make a note right now.

Power Hour also brings perspective.  It allows you to slow down and examine all of the tasks on your list to see what may not make sense to do.  As your Power Hour ideas take root and produce revenue, you may very well be able to delete some items on your to-do list that are less profitable.  That will free you up so that you’re working less and making more.  In effect, you’ve just given yourself a raise by implementing Power Hour.

Try Power Hour for a month and see what happens in your business.  If you’re already doing some form of Power Hour, formalize it, expand it, and leverage it so that you’re benefiting even more.  Make sure that you take time to receive the benefits of your Power Hour!

Direct notice from Intuit for my QuickBooks clients and friends.  If you don’t use QuickBooks please forward this notice to others that do:

If you have paid 1099 contractors or vendors in the past year using payment forms other than cash or check, you need to be aware that the IRS has issued new reporting regulations for tax year 2011 1099-MISC form. These regulations will exclude payment types such as credit cards, debit cards, and those from third party payment networks, like PayPal, from the 1099-MISC form that will instead be reported on the new third party form 1099-K.

For more information on the new regulations and how they impact your business click here:  http://www.payroll.com/1099_em.

To help comply with the new regulations using your QuickBooks 2009, 2010 or 2011 you have three options to choose from:

In tax year 2011, if you only paid a few 1099 vendors with credit cards, debit cards, or third party payment networks, like PayPal, you might consider the manual option.

In tax year 2011, if you paid more than a few 1099 vendors with credit cards, debit cards, or third party payment networks, like PayPal, we suggest purchasing the QuickBooks 1099 Assistant or upgrading to QuickBooks 2012 to access the updated 1099 Wizard.

If you have questions and are unable to find the answer you need from Intuit Support sites, please contact us at (775) 720-3282 or www.marie-gibson.com

As we move solidly into this new year, we want to take a look at our systems and make changes that will help us run our business profitably, safely and securely. The beginning of the new year is the time that feels like we can do anything….like we can do everything… and changes are so much easier now.

Improving our systems to reduce fraud and employee theft is imperative for a business owner. Becoming a victim of fraud is a horrible experience and we never think it will happen to us. However, if it does happen, it can wreak financial damage, sometimes significant enough to put us out of business. It’s a time-consuming business disruption which often involves accountants, lawyers, credit bureaus, bank executives, and IRS and state tax agents (our favorite people, right?). Worst of all, it’s a betrayal by one or more fellow human beings, sometimes relatives; an intimate violation that can leave us emotionally scarred for quite a while

The purpose of today’s article is to get you thinking about this business threat, demonstrate some common ways your accounting system can be used to hurt you, and urge you to make a plan to protect yourself against fraud so you reduce your chances of becoming a victim.

Here’s a partial list of just a few common ways that someone with access to your accounting system can make off with your money.

Paying bills you don’t owe

For example, if your business and your bookkeeper both owe Pacific Gas and Electric, make sure the check that is written from the business account is going to cover your account balance and not theirs. It’s a common fraud act to pay personal bills from the company account and although it seems like it might be a relatively small amount, it can add up quickly.

Also watch out for repeat requests for reimbursements of the same receipts as well as overstated expenses; or watch for vendors that you don’t recall. The easiest way to watch for this is to look at the original invoice and initial it when you sign the checks. Yes-that means that when you sign the checks that you should look at them and scan the associated invoices.

PayPal, ATM withdrawals, and petty cash violations

Make sure you have the same controls on your bank accounts as you do on your petty cash accounts. It’s easy for employees to abuse PayPal accounts, ATM withdrawals, and other cash equivalents if proper controls are not in place. If more than one person has access to these accounts, you must develop a checks and balances system to protect the funds.

Lackadaisical oversight

When the cat’s away…. don’t let the mice play.

One consultant’s clients were living overseas while a cousin was supposed to be handling their bills. The clients were unable to access their accounts online, so they began asking for bank statements. When they didn’t get them, they suspected something was up. They finally had to request the bank statements from the bank and found that their cousin was paying both the clients’ bills and their own bills from their account. It took four to five years to straighten out, plus a huge bookkeeping bill, and they never recovered all of the lost money.

You would hope people don’t take advantage of you when you are in a weak spot, but it didn’t happen in the next story. A Florida CPA tells of a bookkeeper and manager who stole over $250,000 while an owner was out trying to recover from a liver transplant. They took money that should have gone to pay payroll taxes. By the time the owner got the IRS letter telling him of the problem, the bookkeeper and manager were long gone.

If you will be away from the business for awhile, be sure that you hire a neutral third party to help oversee your finances and accounts while you are gone. Again, the term checks and balances come into mind-a system that prevents all the access to finances to belong to one or two people.

Sales irregularities

Another CPA alerted me to this story. When a customer attempted to return an item to the store, the receipt could not be found. A former employee pocketed over $19,000 worth of cash sales by deleting not only his sales receipts but the sales receipts of other employees. Journalist Tim Hahn of the Erie Times-News wrote, “the employee admitted to taking the money in order to pay his college tuition.”

Angry employees

An attorney terminated his bookkeeper but let her work a few extra weeks. The angry and indignant employee deleted billings worth thousands of dollars right before she left. The attorney ultimately had to hire a consultant to reconstruct the damage.

It’s dramatic in movies when the bad guy actors escort fired employees directly out of the building but it may be a good thing to limit the access that terminated employees have to your bank accounts and your records.

Collusion

When the bookkeeper is a close friend of a bank teller, it can spell trouble. They can go in together to draft fraudulent checks and pull money out of a business owner’s account, it can spell fraud. This happened to an attorney; and to his credit, he noticed some irregular transactions on the bank statement and blew the whistle. You may wonder-like I do-how people think they can get away with this, especially when it’s an attorney. It doesn’t matter if it’s an attorney, a doctor, a retail or manufacturing business…all business owners need to protect themselves from fraud.

Fraud never ends well, so the best thing to do is to put measures in place to prevent it as much as possible. It’s impossible to prevent fraud 100%, but it makes sense to do as much as is cost-effective to avoid catastrophic losses that can bring an entire business down.

If we can help you to set specific steps in place to protect your business, please don’t hesitate to contact our office. There’s a special chapter in Marie’s book, Smart Books=Smart Business; How to Take Charge of Your Accounting and Really Run Your Business Profitably that has some additional great tips to help you reduce the chances of theft and fraud in your business. Be sure to request a copy today from our website or from Amazon.com.

(Thanks to Caren Schwartz of Time and Cents Consultants, LLC for the Connecticut-based stories.)

Holidays are winding down…you’ve enjoyed them tremendously.  You’re refreshed and renewed.  Your resolve is strong! You’re going to make a profit this year and you’re ready to step back into the work week–running your business profitably.  One of the fastest ways to help with your cash flow is to collect money quicker from your current clients.

If your accounts receivable balances are edging up and getting older and older each month, then it might be a good time to bring out the aging reports.  But what if you started looking earlier in the cycle to see what you could do to collect the sales even sooner?  Let’s take a look at five potential changes you can consider that will speed up your cash flow, reduce aging receivables, and possibly reduce lending costs in your business.

1. Get paid in advance.
   Getting paid in advance manifests itself in a number of ways:
   •    Prepaid gift cards
   •    Deposits
   •   Prepayment plans
   •   Monthly or project retainers

   If it’s common to get paid in advance in your industry, then all you need to do is focus on doing more of it.  If it’s not common in your industry, I encourage you to see how you might apply one of these ideas to your industry.  You may be able to invent an entirely new way of doing business within your industry. If I’m working with an unknown client, I’ll ask for a deposit when I’m scheduling the appointment. This not only brings the cash in advance, but it also makes sure that they are committed clients.

2. Increase your cash-equivalent payment choices.If you’re not already able to take the following forms of payment, then it may be time to sign up for some of the standards and maybe a few of the unusual methods of payments.
   •   Credit cards, especially MasterCard, Visa, Discover, and American Express
   •   PayPal
   •   Wire transfers
   •   Cloud-based bill payment systems

   It’s surprising how many business-to-business payments come through PayPal, so if you don’t have this one as an option, you might want to consider it.  I love my PayPal account both for paying and receiving money for my business. There is a small service fee for receipts-just as with credit cards.

   You may or may not need all the credit card types, but having one or two certainly expedites the payments that customers like to make. If you are using QuickBooks, the Intuit company has reasonable merchant account fees and they charge only fifty cents for their cloud based bill-receipt system. For my clients, I use an email invoice with a link so that they can pay by credit card or use the cloud-based payment system.

   If you have overseas clients, being able to easily accept wire transfers keeps it simple if the client does not maintain a bank account in your country’s currency.  And although most wire transfers still need to be handled manually, you can systematize and automate the process as much as you can by having written procedures for your clients.

3. Streamline your time and billing system.If you can bill faster, you can collect faster.  Take a look at your processes and identify the bottlenecks in your billing system.  Are you the one who keeps the invoices on your desk for days before you approve them to be mailed?  Is it an antiquated time system that is not real-time?  Is it a duplicate data entry that can be streamlined?  Once you’ve determined your bottlenecks, you can take action to eliminate them. When you’ve worked with a client, most of them expect an invoice within a week. Be sure to send them quickly!
4. Implement eCommerce. An online shopping cart can help clients serve themselves and cut way down on your customer service.  Today’s online shopping carts can handle one-time payments, recurring payments, and variable bills.  The best of them offer a portal for clients to update their own credit card expiration dates, respond to declined card messages, and basically serve themselves.  It’s quite fun to come into the office each morning and find loads of cash sales already in your cart from the night before, without any help from you or your staff.
5. Card on file. For long-time clients, it might make sense to set up automatic approval on a monthly basis by having their card on file.  Some busy and successful clients will appreciate the time savings when using this method; and you will have more control and be able to get paid faster.  You can also use a hybrid of this method – semi-automatic approval – where a simple email exchange approves the current month’s amount.  If you keep the card on file, make sure that you provide adequate protection for your clients-it’s not only wise and ethical-it’s the law! Personally, I don’t keep card numbers on file-the risk to my clients and my company is one that I prefer not to sustain.
6. Try one or more of these five tips to speed up your cash flow, simplify collections, and lower the amount you need to borrow from the bank to finance your business.

Is finding enough time to do everything you need to do one of your top five small business challenges? If so, you’re not alone; just about every entrepreneur lists ‘time’ as a challenge that they face today in running their businesses. It’s not uncommon to feel stressed and overwhelmed at everything that you need and WANT to do.

Plenty of time management books will help you use your time more productively, but who has time to read a whole book these days? Instead, here are some quick tips to help you work smarter, ease any stress, and tame the time monster.

The 4 “D”s

You might have seen a strategy that allows you to evaluate how to handle each task or e-mail as it comes across your desk.

Here’s mine:

1.  Do
2.  Delegate
3.  Delete
4. Delay

It’s easier to Do than it is to explain. For each task you have, you choose one of the four. Do means drop everything and do it now.   Delegate means give it to another person to do. Delete means you didn’t really need to do that task in the first place and you can cross it off the list. And delay means you’re going to do the task later and not now.

Every single thing that comes into your life can be handled using this 4D filter: do, delegate, delete, and delay. It’s a great tool, and I’d definitely recommend trying it if you don’t have a system for yourself. But there’s an even better idea.

The Secret Sauce

Once you’ve applied your formula and you’ve decided on the tasks you’re going to do today, there’s another step that you can add that will actually start freeing up some time. With tasks you’re going to Do, use two more filters:

1. Can I automate this task?
2. Can I systematize this task?

Go ahead and do the task the way you’ve always done it. Afterwards, ask yourself, “is there a better, easier, simpler way?”

Take Your Biz Off Automatic Pilot

It’s funny how we keep doing the same things over and over again the same way, even though our business has long outgrown the way we’re doing it! Sometimes we don’t think to question whether there are new ways of doing things faster. We might not want to tackle the learning curve, even though we could save a lot of time in the long run.

A client showed me her invoices recently, and I asked her how long she had been doing invoicing that way. “About 15 years,” she said. The second she said it, it dawned on her to change. It hadn’t occurred to her to even consider changing before! Once she got the bug to change, you couldn’t stop her. She was able to both systematize and automate her invoicing, saving several hours each week. Once her mind was turned on by asking “Is there a better way?” she found dozens of tiny procedures she could change, freeing up even more time in her daily routine.

Workflow Improvements

It can happen when you add or replace an employee, too. You’ll see what systems need tightening up, and you can create procedures and implement new software and tools with the new employee to make the job even more effective. This happened recently to an associate when he hired a personal assistant.

Frank was a do-it-now, do-it-all sort of guy. When he needed something, he needed it now. He was making multiple personal errand trips several times a week to purchase groceries, make dry cleaning runs, do banking business, and mail packages. His new assistant, took over all of those tasks and she also systematized everything. She created inventories and re-order points on all his supplies and even his groceries. She set up procedures for all her new tasks.  What took Frank 10 hours a week now takes Beth 3 hours a week because she eliminated the redundancy and streamlined the job. That’s a time management tip worth implementing today!

More Important Things

The 4Ds-Do, Delegate, Delete, and Delay, are a great way to organize your time. To save even more time, take a look at automating or systematizing every process and system you can, and let us know how we can support you.

Won’t it be nice to have time for more important things in life?