Preparing for Proposition 206 Implementation

Preparing for Proposition 206 Implementation

With the recent approval of Proposition 206, many Arizona employers find themselves needing to revamp their payroll and sick leave procedures. The changes go into effect January 1, 2017, and it’s imperative that employers and small business owners understand what will be required of them under Proposition 206.

What is Proposition 206?

Proposition 206 raises the minimum wage in Arizona to $12 per hour by 2020. Proposition 206 also entitles employees to earn one hour of paid sick leave for every 30 hours worked, with time limits based on the size of the employer. It also broadens the conditions under which paid sick leave may be taken.

You’ll Need to Plan for Wage Increases

The first key component of Proposition 206 is the minimum wage increase, which could stress small companies who rely on minimum wage workers. The minimum wage will increase from $8.05 per hour in 2016, to $10 per hour by 2017, and incremental increases to $12 an hour by 2020. For comparison, the federal minimum wage is $7.25 per hour.

Proposition 206 increases the minimum wage in Arizona to:

  • $10.00 per hour on January 1, 2017
  • $10.50 per hour on January 1, 2018
  • $11.00 per hour on January 1, 2019
  • $12.00 per hour on January 1, 2020

After 2020, Arizona’s minimum wage will increase, according to increases in the cost of living.

Proposition 206 also preserves the employer’s right to pay $3 per hour less than minimum wage to an employee who regularly receives tips or gratuities, such as food servers.

You Need a System in Place to Manage Sick Leave

Beginning in July 2017, you’ll need to have a process in place for managing paid sick time (PST). Arizona law previously did not require any private or municipal employers to provide PST for their employees. Under Proposition 206, however, private employers and municipalities would be subject to the following requirements, starting on July 1, 2017.

Employees accrue a minimum of one hour paid sick leave per 30 hours worked, within the following guidelines:

  • Employers with 15 or more employees must permit employees to accrue up to 40 hours of PST per year and to allow them to use up to 40 hours of accrued PST per year.
  • Employers with fewer than 15 employees must permit employees to accrue up to 24 hours of PST per year and to allow the use of up to 24 hours of accrued PST per year.

Some additional requirements to consider: Part-time and temporary workers are considered employees and are entitled to PST.  Employees are protected from retaliation and PST absences may not count against them.

Employers may not require employees to find their replacements as a condition for receiving PST leave. Also, unused accrued sick leave carries over from one year to the next.  Accrued paid sick leave does not need to be paid to terminated employees.

Proposition 206 also specifically outlines a number of situations for which an employee may use paid sick time, including when:

  • The employee has a mental or physical illness
  • The employee needs to care for a family member who has a mental or physical illness
  • A public health emergency arises
  • An employee must address issues related to domestic violence

If your business currently does not have a paid sick leave system in place, or if you’re struggling to find ways to increase your payroll to meet the new minimum wage requirements, it’s imperative that you begin implementing new procedures right away to meet the Arizona law deadlines.

Don’t wait to put your system in place. I can help you create system and processes that make this easy. Schedule your consultation today.

How to Reign in Vacation Requests to Stabilize Operations

How to Reign in Vacation Requests to Stabilize Operations During the Holidays

The holidays are a popular time for vacation requests. The days around Thanksgiving and Christmas are the most  requested days of the year as well as the most widely traveled, according to the U.S. Bureau of Transportation Statistics. While the employee handbook may encourage vacations, most managers dread having to find coverage for out-of-office employees taking their well-deserved breaks. It’s far better to become a better vacation time manager than to worry about covering employee vacation gaps. Here are a few tips to reign in vacation requests and stabilize operations during the holidays.

Recognize the Importance of Time Off

First, it’s important to recognize that vacations are important for employees’ rest and rejuvenation. Employees are entitled to the time off they’ve earned, and research shows that time off is crucial for engagement, resilience, and preventing long-term burn-out.

It’s also important to take a vacation yourself. Actions speak louder than words, and if you claim to have employees’ best interests at heart while working nonstop yourself, there will be a disconnect that employees feel. This can raise their anxiety about taking their own vacation time. It’s vital that managers set the standard for a healthy workplace culture.

Create a Process for Vacation Requests

If you don’t already have a process in place for managing vacation requests, it’s time to put one in place. Planning in advance for vacation requests and adequate employee coverage can alleviate the stress that comes with employees being out of office.

  • Encourage collaboration and cross-training among team members. No one employee should be so critical that another couldn’t step in and cover temporarily, or even longer term. Build in overlap and back-up so your business is prepared for any future coverage issues.
  • Plan vacation time together as a group. Instead of having one manager in charge of approving or denying all vacation requests, sit down as a team to discuss the annual calendar and work through possible coverage shortfalls.
  • Consider a rotating system. List out employees, with those at the top getting to choose their days off first. Next year, rotate the list so that those people at the top move to the bottom.  Over time, everyone has a chance to choose their days off first.
  • Consider a full business shutdown. No one has to argue about days off if the entire company shuts down for a holiday vacation, even if only for a couple of days. This system is widely used in Europe for a summer vacation break, but can also work well for the winter holiday time off.
  • Recognize that employees may have other ways they prefer to refresh themselves. It could be an occasional afternoon or day off for an enrichment course, flex time to attend their children’s school special activities, or longer lunch hours. Being more flexible with those types of requests could cut back on full-day vacation requests during peak periods.

While it’s often difficult to perfectly balance the need for adequate coverage for your business with your employees’ desire to use vacation time over the holidays, proper planning can ensure the vacation plan works well for both managers and employees.

I can help you get processes and systems in place to reign in vacation requests. Contact me today.

Phoenix Bookkeeping Services - Your Guide to Finding the Best

Phoenix Bookkeeping Services – Your Guide to Finding the Best

Whether you’re just starting your business or you’re fine-tuning your financial strategies, a professional bookkeeper can be a tremendous help.  They can balance your daily expenses and earnings, and manage your invoices. By handing these jobs over to a Phoenix bookkeeping service, you can lower your risk of error and use those extra hours to create strategies to grow your business.

Why You Need a Bookkeeper

Regardless of the company’s size, having a great bookkeeping service is an essential part of any business. Efficiently kept books do a lot more than make filing your tax returns easy. Bookkeepers can expertly put together a balance sheet or profit and loss statement that can help determine credit worthiness when you apply for a loan. They can also show you where you need to spend less or more money, how much you’re making, how much you’re spending, who takes the longest to pay you and who gives you the most business.

But where do you find a bookkeeper, and what do you need to know to ensure that you hire the best? Well, here are four keys to finding the best Phoenix bookkeeping services.

Experience

Bookkeeping services vary, so it’s a good idea to find a Phoenix bookkeeping service that knows your accounting software, and understands your industry and clients. Some bookkeepers focus on corporate businesses, where they typically become proficient one thing, like accounts payable. There are also bookkeepers that specialize in small businesses, with experience in all facets of bookkeeping.

Technology Skills

The best bookkeeper will have strong technology skills. During the interview process, make sure that they not only have experience with your software, but the same version. Also ask them how if they stay current with new technology.

Business Acumen

Choose someone who has a strong business acumen and exercises sound judgment. They are a valuable addition to any business because they can assimilate information and innovate bookkeeping related strategies and solutions. These abilities ensure a more profitable future.

References and Reviews

Since you’re going to be entrusting the bookkeeper with sensitive financial information, make sure they’re trustworthy. Ask the Phoenix bookkeeping service you’re considering for referrals, and do your due diligence by contacting them. A bookkeeper is an important part of a growing business, however hiring the wrong person can hinder your business operations and consume much-needed cash flow.

If you’re struggling to keep your books in order, contact us today. Our Phoenix bookkeeping services can ensure you have accurate data so that you can make the best decisions for your business.

Delegate Work the Right Way

Delegate Work the Right Way

A business owner’s hours should be spent running the business, and if they delegate work the right way, they can. We’re talking about crucial tasks like developing relationships with prospects, clients, investors, partners and board members, creating and implementing income-generating strategies, coordinating projects and hiring staff. As a business owner, it’s your job to solve problems and grow the company, not burn away your time on routine matters. Delegating is reported to be one of the most challenging things to do. It’s hard to let go sometimes and avoid micro-managing.

Delegating Work = A Successful, Organized Business

Delegating work is the key to a successful, well-run organization. When a business owner learns how to delegate work, they’ll be able to give their employees the opportunity to hone their skills and contribute to their organization’s success. It’s important to make sure that the job you delegate is done right. Once you feel you have the right person for the job, it’s even more important that they feel that you trust them.

No one will be as passionate about your business as you are. By trusting your employees, you’ll build a bond that creates a work environment where everyone wants the business to succeed.

Delegate Work Now

If you’re just starting to build your business, create an environment in which you can delegate as it grows.  You will learn to trust your employees and avoid micro-managing through time. You can then focus on setting and achieving important goals, building lucrative partnerships and organizing company initiatives.

Solid Processes Supported by Systems

Great leaders also remain open to suggestions. And it’s important to have internal controls in place to ensure that everything plays out smoothly. Delegating without having a clear internal control system in place for accountability is poor management. The business owner is responsible for providing the leadership, and the internal control systems help them achieve their goals and objectives.

When you notice exceptional work, reward it. Business leaders who delegate are typically also grooming leaders. If you need support developing optimal processes supported by systems and accountability, contact me today.

6 Simple Steps to Conduct Pre-Employment Screening

6 Simple Steps to Conduct Pre-Employment Screening

Conducting pre-employment screening makes hiring the perfect employee a less complicated process.

Hiring the right employee for the appropriate job is one of the most important challenges an employer has to deal with. It’s grown to be even more difficult, thanks to the increasingly mobile workforce and social media. Gone are the days when employers solely relied on the interview process to make their hiring decisions. Businesses today can get the assistance they need through pre-employment screening.

Why It’s So Important

Employers who use pre-employment screening as part of their hiring process are well aware of the important benefits. One of the most significant advantages is an overall improvement in the quality of candidates. This leads to far better employees, which means higher productivity and a decrease in employee turnover. Businesses that employ workers for direct service to the public are held responsible if an employee that has a criminal history does harm to another employee or a customer. Pre-employment screening helps uncover critical information about a candidate including any potential risks posed by them.

Following are 6 Simple Pre-Employment Screening Steps

  1. Background Checks 

A background check is the most common pre-employment screening process.  It looks up an applicant’s personal, criminal, financial and professional records. It is typically utilized by employers, law enforcement, schools and non-profit organizations.

  1. Pre-Employment Drug Screening

Employers use drug testing via urine tests to proactively protect the company from the negative effects of employing people with drug related issues.  Drug screening is required for federally-regulated employers that hire individuals for safety-sensitive jobs. Active drug testing programs can help ensure that the workplace is drug-free.

  1. Medical Pre-Employment Screening

The purpose of the pre-employment medical examination is to determine if a potential candidate is fit for a job that can affect public safety, and is not a risk to themselves or others.

  1. Personality Testing

Personality tests assess the applicant’s personality, cognitive ability, current and potential skills and other traits. This information can help employers find the best employees for the job and weed out potential problem hires.

  1. Credit Checks

This screening step checks out the 7-year financial history of the candidate and includes public records, collection accounts, bankruptcies, charge-offs, judgements, trade lines, monthly payment histories and more. Credit checks look at the payment history on mortgages, student and car loans and credit card accounts, uncovering habits that include living beyond their means and possession of large debts with no apparent means of repayment. These are all indications of financial irresponsibility that could impact the work environment. Pre-employment credit screening does not include the credit score.

  1. Social Media Pre-Employment Screening

Today, gaining insights into a potential employee’s character can be obtained via their social media accounts. Employers often use platforms like Facebook and Twitter, looking for insights regarding personality traits, alcohol or drug abuse, or any other characteristics that could influence their hiring decision. Using social media to screen potential employees can also get an employer in legal trouble, so it’s best to consult a lawyer first.

The long-term benefits of pre-employment screening far outweigh the costs, including the quality of the employee, work productivity, and improved customer satisfaction.

Conducting pre-employment screening doesn’t have to be hard. Contact us today for more information on how to proceed!

Why You Need a Great Bookkeeping Service for Your Business

Why You Need a Great Bookkeeping Service for Your Business

Hiring a great bookkeeping service can not only keep you from losing your sanity, but it can also help protect you from a potential lawsuit because your books are a mess. All businesses need a great bookkeeping service on their team.

What is bookkeeping?

The first thing you should know about bookkeeping is that it’s not just a tax savings tactic. Bookkeeping includes documenting, storing and retrieving financial transactions for businesses, individuals, and nonprofit organizations. Bookkeeping in the past involved copying numbers into a ledger book; today it involves downloading data from your bank into your accounting software system. Clearly, downloading is much faster and less vulnerable to input errors, but the initial setup of your bookkeeping system has become much more critical to your success.

Why is Proper Bookkeeping Important?

It’s common for small businesses to make bookkeeping mistakes during their early years. They usually lack knowledge when it comes to the appropriate bookkeeping practices. Those that don’t keep their books current make their situation even worse. Hiring an experienced bookkeeper will help you avoid devastating pitfalls that can have a negative impact on your business. Good bookkeepers notice developing trends, see important patterns and are highly skilled; abilities that not only protect the companies they work with but improve their bottom line.

Once you get to the point where your books suffer because your business is thriving, it’s time to hire a good bookkeeper. With a good bookkeeper on your team, potentially costly mistakes will be found faster, and your business will operate more efficiently. Let’s face it, as the owner of a small business, you need to spend your time doing the things you do best and not doing the bookkeeping.

Future Consequences of Having Poor Bookkeeping

Inadequate bookkeeping practices can lead to a long list of problems including:

  • Late creditor payments and a poor commercial credit rating
  • Banking records that are impossible to maintain efficiently, having a disastrous effect on your business
  • Inventory overages or shortages due to financial mismanagement
  • Under-reported or unreported items, like investment income, rental income, revenues, or other types of earnings
  • Tax problems with the IRS or local and state government agencies
  • Incurring late fees and various other penalties, causing devastating hits to your budget
  • Late payments, overdraft fees, and even account closure status
  • When it comes to payroll, employees can end up with erroneous year-to-date earnings on their end of year W2 form and pay stubs

If you have poor bookkeeping habits, it’s time to contact a professional service to discuss creating a system that’s right for your business.

Bookkeeping is critical for business success. Contact us today if you’re interested in our bookkeeping services!

Should You Use Accounting Apps in Your Business?

Should You Use Accounting Apps in Your Business?

Accounting apps are a type of computer software that is used by business owners or accounting and bookkeeping professionals to manage and perform a variety of accounting tasks. The most basic accounting apps, often referred to as “personal finance managers”, are single entry programs that automate tasks like record keeping and check writing. Double entry accounting apps incorporate functions for accounts payable, accounts receivable and general ledgers. More advanced programs also include functions for inventory, invoicing, payroll and fixed assets. Several of the higher end accounting systems on the market even support time billing and sales analysis.

Features Available in Accounting Apps

You may be thinking that accounting apps are all basically the same, but they’re not. While the primary function is similar, some have several other features, functions, and services built in as well. Some of the most indispensable features include the following.

Security

Businesses of all sizes need to have their financials under control if they want to succeed, and the best way to ensure this is to use an efficient and secure accounting app. Financial data can be lost or tampered with, releasing important financial secrets, profits and sales data. If the damage is bad enough, it can be devastating for the company.

Reporting and analysis

In today’s complex business environment, information is power. This is why the accounting apps you consider should include great analysis and reporting features. Apart from helping business owners obtain insight into important financial activities, reporting and analysis capabilities help businesses conform to industry and government regulations.

Scalability

Look for an accounting app that’s scalable, meaning that it can be upgraded to, or already accommodates, a substantial growth in the number of users, transactions, and financial data. Before you sign up for an accounting app, make sure to have the vendor confirm that they have you covered when it comes to scalability.

Advantages of Accounting Apps

Accuracy is critical for all business related computations because mistakes have the potential of leading to substantial losses or other problems. Accounting apps can prevent you from making these types of mistakes. Accounting programs also improve workflow, improve record organization, and the right one can be modified to expand as the business grows. These apps make it possible for you to see finances at a glance and are developed to suit one purpose, to manage your financial tasks.

Disadvantages of Using Accounting Apps

A disadvantage of using accounting apps is the learning curve, which can feel daunting.  But using the app can far outweigh the potential for mistakes for business owners who are still trying to do the bookkeeping manually.

Accounting apps have hundreds of features that can benefit your business and workflow. That said, nothing is a substitute for accurate and systematic bookkeeping. Let us help you get your financial side of the house in order. We’ll put your mind at ease.

5 Consequences of Using Spreadsheets in Your Business

5 Consequences of Using Spreadsheets in Your Business

Initially, spreadsheets were designed as computerized simulations of traditional paper accounting worksheets. While in some cases spreadsheets still serve a purpose, this old school financial management strategy can lead to inefficiencies and errors that will eventually have a major impact on the business’ value. Following are 5 reasons why spreadsheets will ruin your business and how to avoid it.

  1. Keeping Financial Data Up to Date

If you use spreadsheets, you need to consider who controls the master to know which version of the file is up-to-date. What happens if several people need to use it at the same time? With spreadsheets, you need to email what you think is the most recent version to and from recipients which opens the door to errors. With good accounting software, approved individuals can sign in between devices online. This is one of the most beneficial differences because you’ll always know that the numbers you’re seeing are current.

  1. Errors Go Unnoticed

Meticulously reviewing spreadsheets and looking for errors is an undertaking that no one enjoys doing, meaning that errors are certain to slip past undetected. Studies have shown that errors have even slipped by professional auditors whose main function is to comb through them to identify errors in formulas and data.

  1. Time Consuming

Spreadsheets are time-consuming and put businesses at a considerable disadvantage. Spreadsheets slow down processes and have a noticeable impact on how long it takes to get work done. A significant amount of time is spent consolidating, correcting and modifying spreadsheets. And when used in collaborative, repetitive business processes, they become huge time wasters. Closing the books more efficiently and faster is a perennial objective, which is why successful businesses are moving away from using spreadsheets.

  1. Unsuitable for Adaptive Business Practices

Spreadsheets are typically created by people who have little knowledge when it comes to the software’s functionality. Ultimately, their spreadsheet files turn into highly personalized applications. What this means is that when someone else takes over during a large scale business change, the new person put in charge might have to start over again from scratch. We live in an age when significant changes are consistently transforming the business landscape. Acquisitions, mergers, new technologies, and management buyouts can have an effect on today’s companies. If an organization doesn’t have adaptive business practices in place, it could easily be left behind or worse, face extinction.

  1. Fraud Vulnerability

Of the previous spreadsheet drawbacks listed here, this one has the potential of being one of the most damaging. Fraudulent manipulations in company spreadsheet files have resulted in billion dollar losses. The primary reason behind this vulnerability is the lack of controls, which makes it easy to modify values and formulas without being detected.

Spreadsheets vs. Accounting Apps

Accounting applications are the best solution for businesses because they are built to make it possible to record your accounting data efficiently with minimal mistakes.  They are also more easily audited. Although they are created for the specific purpose of accounting, they include contact management as well. Spreadsheets, on the other hand, leave too much room for error and are much more time-consuming.

Spreadsheets vs. Bookkeepers

Many new business owners spend more time and money than they save when they attempt to do their bookkeeping themselves. According to the Small Business Administration, not having a bookkeeping system in place and bad bookkeeping are the top reasons why many new businesses are unsuccessful. Also, as a business expands, it outgrows simple financial tracking solutions, and the bookkeeping gets more complicated, making it essential to hire a bookkeeper.

Although spreadsheets can be helpful at times, they can also ruin your business. That’s why it is important to consider using accounting software and a reputable bookkeeper for your business. Contact us today!

SEO Title How to Develop an Internal Control Framework

How to Develop an Internal Control Framework

Internal controls play an essential role in an organization’s success. However, an alarming number of finance and accounting professionals start their businesses without having an internal control framework.

Why are Internal Controls Important?

An internal control framework helps businesses accomplish vital objectives, improve and sustain optimal performance, and reduce risk and exposure. It’s important that business owners put procedures in place that protect their financial and management information, in accordance with the federal and state laws and regulations. Internal controls create a system for how a business handles receiving and reporting revenue, and management and administrative tasks.

Components of an Internal Control Framework

The following five key components of a highly effective internal control system encourage the achievement of a business’s mission, strategies, and objectives.

1. Control Environment

A good control environment foundation includes an organized management structure, and effective Human Resource policies and procedures. By establishing internal controls, business owners establish protocols that their consultants and staff are required to follow. The employees are informed of these protocols and are expected to follow them as they carry out their daily work duties. The established protocols in a controlled environment will develop cohesiveness and order for businesses because everyone knows what is expected of them.

2. Risk Assessment and Mitigation

Every business entity encounters risks from internal and external sources that need to be assessed to be successful. Risk assessment is defined as the identification and analysis of associated risks to achieve objectives. They lay a foundation for identifying how the risks should be handled. Because operating, economic, industry and regulatory conditions will continue to change, systems are necessary to discover and address the risks associated with those changes. An effective internal control framework is the most important step when it comes to mitigating any involved risks.

3. Control Activities

All personnel play a part in the organizational representation of internal controls, regardless of whether their work responsibilities are directly related or not. Responsibilities should be divided between different employees to lower the risks of errors or improper actions. For instance, responsibilities for receiving checks or cash, and reconciling deposits, need to be separated. Also, transactions should always be authorized and approved to ensure that the process is consistent with institutional or departmental goals and objectives.

4. Information and Communication

Successful information and communication systems can be formal or informal, ranging from informal staff meetings to sophisticated computer technologies. The purpose of both styles is to provide input, feedback, and data that is relative to operations, compliance objectives and financial reporting. An additional factor is the informal conversations with customers, regulators, employees, and suppliers that have the potential of providing critical information about opportunities and risks.

5. Monitoring

The monitoring of an internal control framework is executed by separate and ongoing evaluations that determine if other elements of internal control are continuing to function as intended. The outcomes should be communicated to the people responsible for taking the appropriate, corrective action. Serious issues should be communicated to management level personnel or the board of directors.

Start Now

Unfortunately, some businesses don’t recognize the need for an internal control framework until it’s too late. When important information and data is in the right hands, it can be an extremely beneficial tool. If that critical data is placed in the wrong, deceptive or inexperienced hands, and used in an uncontrolled environment, it can lead to the crippling or end of the business. For this reason, having an internal control framework in place is critical.

Contact us when you are ready to develop your internal control framework.

7 Actions for Business Growth

7 Actions for Business Growth

Business growth is vital. But it’s easy to get stuck at a certain level and be unsure of how to move forward. Here are a few ideas to get your business out of a slump.

Focus on What You Have

It’s easier to market to existing customers and prospects than it is to get new leads.  Your current customers are the lifeblood of your business so do everything in your power to keep them happy. Finding new customers costs a lot more than reselling to one of your current customers.  Keep in contact with all your past customers by email, postcards or even phone calls.

Go Beyond Wow

Find the one thing that makes your business different than your competitors. If there isn’t anything, then create your wow factor. Offer something that makes your customers say, “Wow, I can’t believe they’re doing that!”

Grow as a Leader

Never stop increasing your skill level by continuing to learn through new books and courses. Also, learn to communicate better and listen closely to your customers and employees.

Create Partnerships

Recognize your limits. Build partnerships that will cover any areas that you’re weak in but will improve your overall business. A valuable partnership is where you both feel you got the better end of the deal so make sure you give as much value as you receive.  Business growth will occur when you partner with other companies in mutually beneficial ways.

Eliminate Bottlenecks

Spend some time studying every system in your business. You may have increased sales but then have trouble delivering the product on time. Or you may have an amazing product but poor customer service. The turnover of your employees may be dragging you down.

Find the systems that have bottlenecks and work to improve them. All systems must work smoothly before you experience the business growth you want.

Systematize Your Sales and Marketing Funnel

There must be cash flow to keep your business thriving. Nothing happens in any business until someone makes a sale so make sure your sales and marketing funnels are working at the highest level. See what your competitors are doing or hire an outside consultant. Test and retest until you build strong funnels that work over and over for different products.  These systems will be your secret to business growth.

 Grow Your Employees

Offer training to allow your employees to expand their knowledge. This not only makes them more valuable but it keeps them engaged and growing with the company.  You shouldn’t be the only leader in your company. Build up your employees so they can take leadership roles in various areas.

By following these easy steps, you will be well on your way to achieving the business growth you desire! We can help you achieve the growth you’re looking for. Contact us today at (602) 703-4285.