Building the Financial Team That Will Help Your Business Thrive

By Robin Lancaster

For many entrepreneurs and small to mid-sized business owners financial management is one of the most challenging aspects of running their business. For some it makes sense to hire knowledgeable staff to manage financial processes internally; for others, contract services make more sense. So what are the different financial roles and services available, and what can they do for your business? I’d like to help define three roles—Bookkeeper, Controller, and Chief Financial Officer—and talk a bit about the different ways these roles can support your company’s overall growth, health, and wellbeing.

Your bookkeeper keeps you organized by entering all the data of your daily transactions into your database. She tracks all your invoices and receipts, cuts checks for you, bills your customers, reconciles your bank accounts, and does your payroll, all with a smile!

The controller manages the workflow of the finance department, keeping up on all cash flow needs, and helping to set up efficient financial systems. She creates tools for analyzing when you might have a shortfall, and advises you when you need to take advantage of a line of credit. She makes sure the accounts receivable are done in a timely manner and the bills don’t get paid too early.  Your controller will be your liaison to banks, tax agencies, and your Certified Public Accountant. Sometimes some of these tasks are blurred in smaller organizations.

Many small to mid-sized businesses don’t have a Chief Financial Officer; they feel the CFO role is too expensive, and why would a small to mid-sized business even need one? The CFO is there to help you with planning, projecting, measuring and tracking the financial and operational progress of your company. The CFO role creates complex financial projections that can aid in high-level strategic decision-making, and is an active player in the strategic management of the business. She allows you to focus on what you do best, and brings to your attention what you might not otherwise see in your numbers. In short, a CFO helps grow your business.

 Even if a full-time CFO seems out of reach for your business, having someone in that role who helps you see strategic possibilities in your numbers will give you an extra edge. In this situation you might consider hiring a contract CFO—someone who gets to know your business, but serves in the CFO role for a limited number of hours per week, per month, or per quarter.

Clarity can support you in building your team, whether through providing referrals to trusted contractors, providing oversight to your in-house staff, or helping you make sense of the numbers in a way that allows you to take your business to the next level ; we are your partner in designing financial health. Want to learn more? Contact us!

Get ready: Paid Family & Medical Leave is on its way!

All Washington employers must provide paid family and medical leave under a bill signed by Gov. Jay Inslee on July 5. 

The new law creates an insurance fund that employers and employees both pay into, with a 0.4 percent payroll tax. Payroll deductions will begin on Jan. 1, 2019, and benefits will become available to employees on Jan. 1, 2020.  https://www.paidleave.wa.gov/ 

Washington joins a handful of other states (California, New Jersey, Rhode Island and New York) to have enacted a paid-family-leave law. 

Quick Facts: 

  1. This statewide insurance plan requires employers to report employee wages, hours worked, and additional information every quarter. 

  2. Premiums are 0.4% of gross wages paid. 

  3. Premium collection begins in 2019 and claims for leave benefits start in 2020. 

  4. Workers can take leave for qualified events for up to 12 weeks generally, and up to 18 weeks under exceptional circumstances. 

  5. Businesses with fewer than 50 employees are not required to pay the employer portion of the premium but are required to collect and remit the employee portion of the premium and abide by all reporting requirements. 

  6. Small business assistance grants are available to businesses with 50-150 employees, and businesses with fewer than 50 employees who have opted-in to the employer share of the premium. 

  7. Voluntary plans are available to employers who want to manage a plan internally that meets or exceeds the state plan’s requirements. 

Download the Employer Tool Kit from ESD. This will give you the employee paystub insert.   https://paidleave.wa.gov/employers 

Confused? This shared benefit will bring peace of mind and increased wellbeing for many of our citizens here in Washington State beginning in 2020—but starting something big, new, and aspirational is often hard. We are happy to help! Call Clarity with you questions, for assistance setting up the payroll deduction, and for help with creating your plan for reporting to Washington ESD. (360) 385-9963.

Six Steps to Hiring the Right Person for the Job

This article is excerpted from an HR best practices webinar that Clarity presented in partnership with Washington Nonprofits.

Human resources are the people that make up your workforce—from the largest corporation to the smallest business or nonprofit organization. They are the engine that power your ability to invent things, produce things, or deliver services. Humans bring the value to your enterprise. As a business or nonprofit organization, your employees are your greatest expense and your greatest opportunity.

Once hired, it takes 6 months for an employee to learn all aspects of their job, and an additional 6 months to become proficient at it. This means it takes a full year to begin to offset the cost and investment of the employer. To receive a return on investment of a full year of expenses associated with hiring, on-boarding, training, and supporting your new employee to proficiency, you really need to keep an employee for two years. This is why it’s important to find just the right fit for your position during the hiring process!

Here are six steps every organization should take to boost their chances of finding and hiring a great match.

1. Assess. First, take the opportunity to assess the needs of your organization. Do you have a strategic plan? Does the position you’re hiring for support the strategic needs of your company or organization? Is the position really needed? It could be that your organizational needs have evolved since you last hired. Would a restructuring of the position or different reporting structure better meet your needs and vision?

2. Determine organizational culture & values. This may be the most important facet of the hiring process. What are your organization’s core values, and how are those communicated to applicants, job candidates, and existing employees? If you have clearly identified your mission, values, and goals, you have a much better chance of honing in on a good match. A good match increases the likelihood that a candidate will be able to align with and adapt to the core values, expectations, and behaviors that make up an organization. A good match will minimize work drama, save money through reduced hiring and training, and increase retention.

3. Create, update, improve the job description. Make sure every employee has a job description containing the knowledge, skills, and abilities needed to perform the core functions of that position. It can be short and sweet, or detailed and complex, depending on the needs of the position.

4. Advertise. First you should consider whether internal recruitment will best serve your needs. Internal recruitment brings the advantage of knowing whether a candidate is a good fit for your organizational culture; they also likely have existing knowledge of the job responsibilities and may be able to quickly come up to speed in a new role.

Sometimes there isn’t an internal candidate that would make a good fit. If you decide to advertise externally, cast as broad and diverse a net as possible. Here is a list of common sites for posting and searching job openings: Indeed.com, monster.com, Craig’s List, Philanthropy NW, LinkedIn.

If there are relevant membership organizations, industry organizations, or list-serves, include them, as well as local & regional newspapers. Are there any means of advertising in minority communities? This will encourage diversity in applications.

You may also decide you want to include a supplemental survey that gives you more information about what the candidate is looking for in a job, if they will be a good fit for the culture of the company, or whether they bring other sorts of skills, experience, or perspective that might be beneficial for your organization.

5. Screen. Screen applications with HR staff and the manager, or person on staff who has the greatest knowledge of the job requirements. Ensure the confidentiality of the application and resume screening process. Screen all applications and resumes for qualifications, values and mission fit, job experience and achievements, and references before going to the interview stage.

6. Interview. Only interview top candidates. Establish who will conduct the interview—will it be a single manager or team? Prepare 10 quality interview questions in advance; questions that provide a good sense of skill set and organizational fit. Maintain consistency between candidates of interview team and questions asked.

This may seem like an exhaustive and exhausting process, but we can’t stress this enough—hiring the wrong person can be an expensive, time consuming mistake.  Hiring the right person for your job can bring stability, sustainability, and significant return on investment.

With a little luck, and a lot of legwork, this six-step process can yield an excellent candidate for your position.

Next month we’ll talk about the on-boarding process. Can't wait until then? Watch the recorded webinar here: The Lifecycle of an Employee: HR Best Practices

 

 

 

Celebrate Earth Day, Green Your Business

There are so many reasons to go green! Increasingly, people are recognizing we have a shared responsibility to lighten our collective environmental impact—for our children, and future generations of all living things. More and more business and nonprofit leaders see the potential their sectors have for pushing our culture and economy toward sustainability, and are stepping up to do the good work.

In addition to being the right thing to do, did you know that taking steps to become more environmentally conscious can also be good for business? Studies show customers want greener choices, they view green businesses as innovative and progressive, and are willing to pay a premium for responsibly and sustainably produced goods and services. This is especially true of Millennials, who represent an increasing share of the adult population.

Here is a list of ideas, both small and large, for making your business more environmentally friendly:

  • Create a company or organizational Environmental Policy Statement. There are many good templates available.
  • Assess your organization’s Carbon Footprint.
  • Energy conservation: turn off and unplug at the end of the day. Even sleeping machines can draw energy through the evenings and weekends.
  • Convert to natural & biodegradable cleaning products and equipment. Besides, who wants to work among toxic chemicals anyway?
  • Get rid of your single use coffee pods. Sure, it’s a convenient way to brew coffee—but remember, K-pods are non-recyclable, and plastic doesn’t biodegrade. Every plastic coffee pod you use will be around FOREVER.
  • Start a workplace recycling program. Here is a link to what’s recyclable in Jefferson County.
  • Get a water cooler and a set of reusable glasses.
  • Begin an office walk/bike/bus challenge. Consider providing employees with transit passes as a non-traditional benefit.
  • Give your staff the ability to flex-work from home. This cuts down on CO2 emissions from car travel.
  • Consider going paperless (or nearly).
  • Cloud-based computing. Move your server to the cloud, and implement a file storage system that reduces the need to print hard copies. Google Docs, Office 365, Dropbox, and other cloud-based systems can help.
  • Considering upgrading your office equipment? With your next upgrade, purchase energy saving office equipment. And be sure to recycle your old e-waste.
  • Practice Green Procurement—take care to source locally and sustainably, when possible.
  • Include an environmental impact analysis when adding new products, programs, or services.

Remember, small steps can lead to big impacts over time. If you’re starting from scratch, choose one or two things that seem doable and implement them this year. Sustainable business practices will mean healthier, happier lives for all people today and in the future—and they might just lead to a healthier bottom line.

Dashboards Can Be Springboards!

“Measure everything of significance. Anything that is measured and watched, improves.” - Bob Parsons, founder of GoDaddy
 
Most businesses and nonprofits today are swimming in data, and generating more all the time. It’s stored in customer databases, inventory software, QuickBooks, marketing programs, social media platforms, and even Google Analytics. Many entrepreneurs and leaders know intuitively that this can be a powerful tool for smart decision-making, but feel overwhelmed by the prospect of mining and making sense of it all. This is where dashboards come in.
 
A Digital Dashboard is an information management tool. Dashboards create visualizations of your Key Performance Indicators (KPIs) by pulling them into charts and graphs that are displayed side-by-side and updated in real time. This allows you to see trends, patterns and opportunities as they emerge.
 
Organizations of all kinds can use dashboards to help track meaningful metrics, for example: nonprofit fundraising or grant administration, marketing strategies, accounts payable and receivable, sales, lead generation, web traffic, project management, etc. Businesses and nonprofits working in healthcare, finance, insurance, small manufacturing, retail sales, customer service, education, conservation, and more. See some examples of different industry dashboards here.
 
With all of this information clearly visualized, accessible, and at your fingertips, your stress will go down and your productivity will increase!
 
Need help honing in on your KPIs? Would a few tweaks to your existing systems help you gather data that can be translated into a dashboard for smart decision making? Give Clarity a call or drop us a line. Together we can design a system that works for you, keeping you fit and moving forward.
 
Sources for this article:
Wikipedia 
The Best Business Dashboard Apps for Small Businesses
 
Best practices when designing dashboards:
Data Dashboards for Small Business
 
For Nonprofits:
Models & Components of a Great Nonprofit Dashboard
 
A few examples of companies providing dashboards for small business:
Klipfolio
Dasheroo 
Tableau 
iDashboard 

Why Human Resources Management is Essential for Small Business

By Lisa Minnihan, MBA-HRM

What is Human Resources Management (HRM), and why is it important to your business? Human resources are the people that make up your workforce—from the largest corporation to the smallest business or nonprofit organization. They are the engine that power your ability to invent things, produce things, fix things, sell things, or deliver services. Humans bring much of the value to your enterprise.

When your team is strong, healthy, and efficient, you can stretch to reach your goals. When you must spend a lot of time putting out fires, untangling messes, or managing high employee turnover, you don’t have the time or resources to fulfill your core mission. Chronic personnel issues can serve as a slow bleed for your bottom line; the loss of a key employee or two can be like a hemorrhage as you scramble to recruit, interview, hire, and train replacements.

This is why Human Resources Management can make a difference to your profitability. Human Resources programs help create organizational structure, develop job descriptions, maintain employee manuals, manage employee benefits packages, conduct performance reviews, manage training and professional development opportunities, ensure employee satisfaction and motivation, address discrimination and harassment issues, and ensure businesses are following employment law. They help everyone understand roles, responsibilities, performance expectations, and what to do if there’s a problem.

It’s a lot. Many small organizations don’t have the time, energy, or expertise to create and maintain a dedicated human resources program, and they may not have the resources to hire a dedicated staff person. But that doesn’t mean they should turn a blind eye. Besides protecting you from legal exposure, I believe HRM is a key ingredient to small business success.

Over the next several months we will share a series of short articles that can help you think about Human Resources Management issues in your small business or nonprofit. They will focus on a topic, introduce a few ideas, and provide resources for digging deeper. 2018 is a good year to build a Human Resources Management program that will help you survive and thrive for years to come!

Need some help right now? Call 385-9963, or email me at lisa(at)clarityei.com to set up a conversation.

New Sick Leave Law Begins January 1, 2018

Washington State’s paid sick leave initiative, I-1433, will go into effect on January 1, 2018.  While this initiative covers new minimum wage rates for future years and important language regarding tips and service charges, most of the initiative revolves around the new requirement of Washington State employers to provide paid sick leave to employees. Wondering if this applies to your business? Chances are good that it does!
 
As a part of the State’s Minimum Wage Act, as of January 1st, employers must provide most employees with 1 hour of paid sick leave for every 40 hours worked.  Employees entitled to paid sick leave are those covered by the Minimum Wage Act.  The initiative covers when and how employees may use their paid sick leave, exact increments of sick leave accrual vs. usage, for whom paid sick leave can be used, notification and reporting requirements, regulations on record-keeping, and employer parameters around reasonable notification and lawful use. 
 
If you are interested in learning more about how implementation of this initiative will impact your business, two local workshops will be held in January: 1/11 and 1/25, at the Chamber / EDC Team Jefferson classroom. Each will include a core presentation from Washington State L&I, followed by question and answer with Clarity's HR expert Lisa Minnihan, and attorney Eileen Baratuci of AIM Services.

Co-presenting partners include Clarity, Jefferson County Chamber of Commerce, EDC Team Jefferson, Washington State Department of Labor and Industries, and AIM Services. 

There are a limited number of spaces in each workshop, so don't delay! For details, and to register, send your name, the name of your business, and your contact information to Lisa Minnihan at lisa@clarityei.com.  

Build An Annual Plan for 2018

Annual Plans help you focus your energy; they help you say yes to the right things and no to the things that won’t serve your business. (No doesn’t have to be forever! It can just mean ‘not right now.’) They also help you measure your progress.

Here's a summary of steps you can take to create a rock solid annual plan. 

Start with a quick SWOT analysis. (Assess your Strengths, Weaknesses, Opportunities & Threats.)

Mission & Vision Statements.

  • Mission: Where are you going? Why are you in business?
  • Vision: Paint a picture of the business you would like in the long run. This is not time-specific. Don’t be afraid to dream big!

Annual Focus or Theme: You can pick a couple. Break them down into outward facing themes, (like adding a new product, program or service, or increasing customer satisfaction,) and inward facing themes, (improving systems, building your HR program, addressing strategic weaknesses.)

Goals: Bring in goals from your goal planning exercise —if needed, rewrite them so they are SMART. (Specific/Simple, Measurable, Attainable, Relevant, and Time Focused.)

  • Sales goals. They should be easy to understand and measure. For example: add three more desert sales each night. Add 5 more customers in your store per day.
  • Operations goals. For example, improve your database. Shift to QuickBooks Online. Revamp your website. Create an employee handbook.

Prioritize & Sequence: Review your goals to prioritize or consider necessary sequencing. Do some naturally come first? Are there goals (sales, for instance) that are specific to a season?

Breakdown: Break your large goals into component pieces. What are all the steps needed to accomplish each goal? Now assign a best-guess budget to each goal—you will feed this info into your 2018 Budget. (We’ll talk about this process next month.)

Anticipate obstacles and challenges: How will you overcome them? Imagine a worst-case scenario. How will it impact your business? Are there steps you can take now to ensure your business will survive, should the worst come to pass?

Timeline: Look at your 12-month calendar, and consider the natural ebb and flow of activities. Split your goals appropriately throughout the year, based on prioritization, natural synchronicity, or the most reasonable windows to devote time and energy to them. Working backward, break the steps needed to achieve your goals into quarterly or monthly goals.

Schedule regular times for reflection. Each week, each month, each quarter, review the timeline you’ve created. Celebrate your accomplishments, measure your progress, and adjust your deadlines.

*Remember, your plan doesn’t need to be perfect! Assume it is a starting point that will require revision and finessing as the year goes by.

Want help setting sales goals? Ready to shift to QuickBooks Online, but would feel more confident with a coach? Interested in building a database or a website? Need professional HR help in creating an employee handbook? Contact us. We’re your partner in creating financial health. We empower you to reach your goals.

Resources for this article:

 

Build A Marketing Plan for 2018

First things first: marketing is not the same thing advertising, though advertising can be an important part of a marketing plan. Marketing is promoting or selling products, services, or programs. It includes activities like market research, building your brand, identifying customers or constituents, building relationships with them, developing creative partnerships, among other things. 

The marketing plan that's right for you is as unique as your business. Here are a few tools and resources to consider.

To go beyond advertising in the yellow pages or on the web, start with this ten-point guide from Alyssa Gregory at The Balance. We have included a summary below, but click through to her post for more details: 10 Questions You Need to Answer to Create a Powerful Marketing Plan. 

"A marketing plan is an essential marketing tool for every small business. Start by answering these 10 questions:

  1. Marketing Strategy: How will your marketing plan support your business goals?
  2. Mission Statement: What are you trying to accomplish, and why?
  3. Target Market: Who are you trying to reach with your marketing activities?
  4. Competitive Analysis: Who are you up against, and where do you rank?
  5. Unique Selling Proposition: What makes your business unique?
  6. Pricing Strategy: What will you charge, and why?
  7. Promotional Plan: How will you reach your target market?
  8. Marketing Budget: How much money will you spend, and on what?
  9. Action List: What tasks do you need to complete to reach your marketing goals?
  10. Metrics: How are you implementing, and where can you improve?

Once you have completed each step, you will have a marketing plan that you are ready to use as a blueprint for your marketing activities in your small business."

If you don't have the juice to create and implement a full-on marketing plan, don't worry! Start small. There are many free or low-cost ways to boost your marketing program. Choose a few actions you can take to build connections and find clients or customers: examples include attending a mixer, writing an elevator pitch, or starting a client appreciation program. Here are more ideas:

6 Ways to Market Your Small Business for $100
10 Ways to Market Your Small Business on a Shoestring Budget
101 Marketing Ideas for Small Businesses

Either way, challenge yourself to write down the marketing tools you will use next year, and attach a time cost and a dollar cost to each activity. These numbers will help you create your budget for 2018.

 

Building Blocks for Success in 2018: Goal Setting

It's undeniably autumn, and therefore budget season--a time to reflect, refresh, and refocus, as we look ahead to 2018. Over the next few months, we'll share a few simple tools to help guide you through this process.

When planning, it's helpful to spend some time thinking about the big picture. Once you have a few high level goals for 2018, you can develop a marketing plan and annual work plan that will help you reach them, and a budget that will support your work. 

Goal Setting
Use the month of October to set goals using these four simple steps from Alyssa Gregory at The Balance:

1. Schedule a Few Minutes of Focused Time--away from work and other distractions. Take yourself out for coffee or a walk on the beach.
2. Pick a Theme for Your Goal--choose a dream, a niggling idea, or an area of work that needs attention. If time is short, stick with one. Write it down.
3. Make an Action List--brainstorm all the actions, large and small, that will be required to reach your goal. Break each action down into component actions. This list will probably change as you begin the work; it is enough for now to create an outline.
4. Make a Commitment--and write it down on paper! Make yourself accountable by sharing it with a partner, a colleague, a friend. 

You don't have to do all of your goal setting at once; try building three or four short sessions into your next couple of weeks.

Go forth and dream big!

Independence & Interdependence: Best Apps for Integration & Efficiency

With the celebration of Independence Day, the team at Clarity has been thinking about the paradox and tension between independence and interdependence, as it relates to our families, communities, nonprofits, and businesses. 

There are so many great apps out there to help you track your time, money, projects, inventory, and customer/donor relationships. What are people using and loving these days? We decided to pull together a sampling that can serve as a good place to start your inquiry.

Finances

Write checks, create and send invoices, file your bills, all in an easy to use interface configured for your business, and accessible from any computer, tablet, or mobile device that has an internet connection. Interested, but overwhelmed by the prospect of switching from QuickBooks Desktop to QuickBooks Online? Meet Liz!

FreshBooks: An accounting software alternative to QuickBooks if you have a simple, service-oriented business. It's not as robust or customizable, but may feel less intimidating to those who prefer a simple, intuitive tool for managing business or organizational books. Track finances, send invoices, track time, and capture expenses.

Digital Timesheets

TSheets: Eliminate paper time sheets and schedules! TSheets is a flexible, easy-to-use time tracker and scheduler filled with innovative tools to help you maximize your most valuable resource: time. It integrates seamlessly with Intuit's QuickBooks Online, Xero, Sage, Gusto & Square.

Project Management

Asana: Track projects, goals, workflows, and team collaboration; integrates with communications Apps like Slack, and document storage Apps like Dropbox and Box. The interface is flexible with customizable fields, and gives you a good visual dashboard.  

Basecamp: Well known and easy to use, Basecamp is streamlined and intuitive. It organizes your projects, internal communications, and client work in one place so you have a central source of truth. Pay per project, rather than per user. 

Other Apps for Productivity

Slack: Team Communications for the 21st Century. Organize team conversations in channels, chat one-one-one with team members, share documents, spreadsheets, photos, and more, and filter and find information quickly with powerful search of the indexed archive.

Wunderlist: Organize and share your to-do, work, grocery, movies and household lists. No matter what you’re planning, how big or small the task may be, Wunderlist makes it super easy to get stuff done.

With the right combination of integration tools, you can improve your business processes, streamline communications, boost efficiency, and save both time and money...giving you more independence through smart interdependence! 

Welcome, Liz! QuickBooks Online ProAdvisor

Liz Arp

Meet Liz, our newest Clarity team member, and QuickBooks Online ProAdvisor. Liz has worked in the finance field for the last ten years, handling bookkeeping for a wide variety of clients large and small.  She enjoys dealing with the nitty gritty details of financial transactions in order to provide business owners with tangible data to use in their decision making. 

Liz says, "I feel that the greatest advantage to QuickBooks Online is being able to collaborate with clients in real time. I am committed to supporting my clients with training and advice, because just having the technology is not enough--being able to implement and use it appropriately and effectively is imperative to making the most of the program. 

"QuickBooks Online can be set up to sync with other apps as well, reducing data entry and providing greater transaction detail in QBO.  In addition to being able to assist with setting up syncs to 3rd party apps, I can also help users set up processes to ensure accurate entry of financial information, which may include tasks such as invoicing, receiving deposits, and bill paying.  I can also assist in setting up and generating customized financial reports as well as providing basic navigation tips and advice."

Liz is excited about the opportunity to work with the businesses and nonprofits who engage Clarity’s services and is happy to embrace the holistic team approach that the staff at Clarity provide. We are thrilled to have her join our team!

10 Tips to Help You Stay on Top of Your Books

Whether you are outsourcing your bookkeeping or doing your own books in-house, as the leader in your organization you need to know your financial information is reliable.  Understanding "best practices" and incorporating them into your own business processes will help you get data you can trust, so you can make the decisions that are best for your business. 

Here are some tips to help you stay on top of the books:

1.     Get or stay involved!  Knowing what the system is and how it works helps keep you, the director of this show, in the know. A broad understanding of the way the books work will help you to make informed decisions regarding processes, and to understand the capabilities and limitations of the data. If you need education ask questions, do some research, or take a class.  Finances are not everyone’s favorite topic – but it is vital to the success of your organization!  And in particular, if you are a board member for a non-profit, it is part of your fiduciary responsibility to each donor.

2.     Make the most of the data.  The information that is being entered into your bookkeeping system is used fulfill state and federal requirements (taxes,) but what else are you using the data for?  Make the data work for you. Set up reports to help you zero in on areas that help you manage your organization.

3.     Have your processes documented.  Focus on the how as well as the what. We know that processes are often undergoing change as the way we do business changes, but it is important to document this as a protection for your organization. Updating this periodically is an opportunity to review and make adjustments as circumstances change.

4.     Never have your bookkeeper as a signer on your account.  Naturally, access to accounts is helpful, but there must be checks and balances and this is a big one. Have your bookkeeper manage the entry and classification of transactions, but allow for having another person to authorize the bill payments or payroll deposits. 

5.     Make sure you see the bank statement each month.  Are you familiar with all the activity you see?  All deposits, transfers and checks written?

6.     Check in with your tax professional mid-year or 3rd quarter in addition to tax time.  Your tax professional needs to know what is going on with your business so that if you need it, you have time to implement their recommendations to save tax dollars.

7.     Cross-train your staff. Plan for the unexpected! It is not unheard of to find yourself in a compromised position due to illness or sudden changes. Remember, this is a team – make sure you have some backup.

8.     Set a regular time to meet and review your financials.  Reviewing sales, projecting cash flow, estimating upcoming expenses and liability payments are some of the things you should be reviewing on a regular basis. This could be weekly, monthly, or something else, depending on your organization’s need. If it is a date with yourself, your in-house support or if you outsource the work, consistency creates a window of time where you know these items will be addressed and allows you to get on with your other tasks.

9.     Create systems to help your organization’s efficiency.  Something as simple as coding your transactions when they are approved relieves so much verbal communication – sometimes words can be misinterpreted, but a number is definitive.  Any effort made to streamline this work makes it more reliable and lets you get to other parts of business that need your attention.

10.  Provide your staff and yourself with support.  Invest in the time to explore how this part of your business can provide valuable information. Invest in documentation and processes to support and assist your mission. Invest in your staff to provide training to help them do the best job they can. 

It's budget time!

Plan for budgets now!

As this year comes to a close I remember that endings always make me think about beginnings. They give me an opportunity to re-evaluate and to re-assess. I usually take this time of year to re-commit or newly commit the use of two of my available resources: time and money. I think about balance, I think about what I love and what I am missing. Then, I plan.

The process of planning always opens up a whole new world to me.

piggy-bank

Everything is a possibility and there are endless paths to take. Where do I want to travel? How much time do I want to take off?   How much time will I devote to piano lessons? Will I be able to increase the charitable donations I make? Do my kids really need the latest/greatest tablet? (Year two on list to Santa...)

Sometimes taking that first step feels overwhelming... But, I do love the idea of spending the month of December in Mexico. (I could play piano there, seek out a children's center to support... )

Welcome to the world of budgeting! You have possibilities, you have priorities and you have resources to spend to get where you are going. While you may feel at a loss to figure out where to start or how to find joy and possibility in the process - it all begins with the first step and re-framing any past perceptions of the task.

Really taking on budgeting for your organization can be more than rinse and repeat. It's your opportunity to put your plans for the upcoming year into action. It is the time to take a good hard look at what is working and what isn't, whether there is balance and whether you are heading down the path you really want to go. Your data already tells that story (or it should, anyway). Building your budget is the process of creating the story you are planning to tell.

So, let's get started!

Step 1: Dedicate the time

  • Make an appointment (or several) with yourself on your calendar to work on creating budget
  • Give yourself a treat, a special blend of tea, conducive music (something to make you look forward to the time)

Step 2: Create or use a template

  • Your system may allow exporting of your data in the desired format
  • You can use paper or excel spreadsheets that can be edited for your business
  • Computer programs like Excel can give you the added benefit of tying variable amounts to assumptions to calculate 'what if' scenarios more easily
  • Your budget should cover 12 to 24 months of business operation

Step 3: Start where you are, with what you know (Income, expenses, loan payments)      

  • Pull together historical info about each category by month
  • Review the comparison of budget versus actual. Make changes in your new budget document as needed

Step 4: Add what you are planning (changes known or predicted)

  • Do you need new categories?
  • Are there uses of cash to consider (asset purchases, loan repayments, etc)

Step 5: Ask yourself some questions:

  • Are you in alignment with your organization goals?
  • Does this budget reflect what you value most?
  • Are there trends (industry or seasonal) you can learn from or incorporate?
  • Are your ratios in line with industry standards?

Step 6: Tweak it until your income and expenses balance (this is the tough one)

  • Revisit and scrutinize all categories (Income and Expenses)
  • Shop your fixed expenses annually to see if you can find a better deal (phone, insurance, leases, etc)
  • If you provide health benefits, consider HSA/HRA's Flexible Spending
  • Work to reduce or eliminate debt to lower interest expense
  • Try to keep enough cash on hand to take advantage of discounts or good deals
  • Build in some cushion

The power of your budget is immense. Your budget causes you to think through how your organization is planning to fulfill the work ahead. It puts those plans and changes into black and white, making them real, actionable. Having numbers attached to your plans helps us put those visions and plans into action by giving us something to measure against as we begin to make progress.

Are you feeling inspired to do it right now? Good for you - go get 'em! If you feel like you need a little more to get going, or some further technical assistance, contact us – clarityei.com.


tina

Tina Flores-McCleese is the owner of Clarity, a firm providing financial consulting, workshops, one on one training, and grant management for non-profits and small businesses. Clarity helps non-profits and small businesses through organizational transitions with an eye towards the future, so your organization can accomplish what you really want to.
You can reach Clarity at 360-385-9963 x1, or www.clarityei.com