Back Office Backlog? How to Choose an Outsource Partner

There comes a point in the life of every growing business when its administrative functions can no longer be handled by a multi-tasking manager without negatively impacting the core business. Those whose talents and expertise built the core business must be allowed to return to that role, and a decision must be made to either outsource some back-office functions or add full-time specialists to the staff.

For small and medium-sized enterprises (SMEs), the most cost-effective choice is usually to outsource. An array of business process services — including bookkeeping, accounts payable/accounts receivable, payroll processing, data management, and human resources activities — are available to supplement the SME’s resources.

Once you’ve decided to outsource, you’ll need a step-by-step plan to ensure that you choose the right provider and work effectively with it.

Research

1. Gather information from employees. They know better than anyone what’s really needed to support daily operations. They’ll also work better with the outsource partner when they feel they’ve been a part of the process.

2. Identify tasks to be outsourced. Top of the list should be those activities that take the most time and contribute least to value generation. As well, consider those specialties which current staff are least familiar with and most in need of improvement.

3. Think about how outsourcing will affect workflows. You wouldn’t want to jump into outsourcing as an immediate solution to work overload, only to find that costs or inefficiencies have actually increased in the long run.

4. Research providers. Ask industry colleagues for referrals, check testimonials, and meet with your shortlist to get a good feel for what each company offers. You’ll be looking at a range of services, quality of service, experience, track record, contract options, and service costs. If possible, sign up for a free trial or assign minor tasks before you commit to a full-on outsource partnership.

Implement

1. Make a transition plan. This should be a collaborative effort between you and your outsource provider, not just a piece of paper they hand you and you have to follow. Focus on a customized solution that meets the needs of your business.

2. Set up the governance process. You want to be sure that your standards and procedures are followed by the outsourcing company.

3. Prepare for threats. Outsourcing involves commercial, legal, and financial risks. You should know how you’re going to deal with a crisis before it happens, not when you’re in the middle of it.

Supervise

1. Maintain communication. Keep processes running smoothly by regular, two-way communications. The sooner problems are addressed, the less damage they’ll do.

2. Monitor performance. Don’t blindly trust that your outsource company is performing all the functions agreed on while maintaining your standards. Also, how is it integrating with your in-house functions?

Working with a back-office outsource provider is not only a great way for SMEs to cut costs and labor. It’s also a partnership that can help your business grow. Xendoo’s financial experts can offer insights and strategies for improving the bottom line, reducing taxes, and scaling your business. Of course, we also take all that bookkeeping busywork off your plate, and let you get back to doing what you do best!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

How to Do Estimated Tax Payments for Small Business

If you’re a sole proprietor, LLC owner or partner, you need to know about quarterly estimated tax payments. That’s because you pay both your business and personal income tax through one personal tax return, so you are subject to the rules governing anyone who is not an employee of someone else’s business.

Employees have payroll taxes withheld from their paychecks throughout the year, so the government always has money coming in. You’re not receiving a paycheck from another company, so the government gets nothing until you write them a check. Hence the estimated quarterly tax payment system.Under this system, you pay a portion of your taxes every quarter: in January, April, June and September. That amount must include self-employment tax (Social Security and Medicare taxes) as well as income tax.

IRS Form 1040-ES

This is the form used for filing an estimated income tax. You will send one along with each tax payment you mail.

Exception

You don’t need to pay estimated tax if you had no tax liability for the previous year, you were a U.S. citizen or resident for the whole year, and your prior tax year covered a 12-month period.

Decide on a Percentage

The IRS requires that the total of those four payments be “at least 90% of the tax for the current year, or 100% of the tax shown on the return for the previous year, whichever is smaller.”

Depending on your situation, it may be smarter to pay more than 90%, rather than risk underpayment penalties.
• Pay 90% if you expect your income this year to be less than last year
• Pay 100% if you expect your income this year to be the same or more than last year
• Pay 110% if last year’s adjusted gross income was more than $150,000 ($75,000 if you were married and filed a separate return)

Estimate Your Income

A good starting point is your income tax returns for the last two or three years.

If this is your first year in business, or you expect income to be significantly different from previous years, start with your year-to-date income and project it to a total for the year.

Remember, this estimate must also include other personal income such as interest, dividends, capital gains (i.e. from sale of stocks or other assets) and taxable alimony.

Calculate Your Tax

Form 1040-ES includes a worksheet for calculating the quarterly tax payment. You’ll fill in your estimated income as well as any credits and deductions you’re entitled to. It also offers help with figuring the differences between last year’s and this year’s income.

Plan a Payment Schedule

You’re required to complete the quarter’s payment by the IRS’s mandated dates. However, you don’t have to send it all in a lump sum. You may choose to make weekly, biweekly, or monthly payments if that works better with your cash flow.

You can also choose to pay your estimated tax for the entire year in one lump sum by April 15 of the current year. (You will still have to file a tax return next April with the actual figures for the year, and either make an additional payment or receive a refund depending on the difference between your estimated and actual tax.)

Also, there’s no rule that you have to divide the tax equally between the quarterly payments. If you typically do most of your business in the 4th quarter, it would be easier to determine a smaller amount for the first three payments, and a larger amount for the last one.

We hope you’ve found this overview helpful. However, it is not intended to be specific tax advice. Please work with your Xendoo tax professional to decide on the best tax strategy for you and your business.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

Choosing Inventory Management Software for eCommerce

To keep your business running profitably, you need to be like Goldilocks: not too much inventory and not too little. In the first case, you have too much cash tied up in stock and may have trouble meeting operating expenses. In the second, you might miss out on sales.

Here are some of the best systems for tracking and integrating stock, vendors, customers, selling channels, and more.

4PSite

• Cloud-based platform manages inventory, orders, shipping and finance

• Connects with eCommerce platforms such as Shopify, Magento, Bigcommerce and Volution

• Facilitates sales on marketplaces like Amazon, eBay, Newegg, Etsy and Rakuten

• One dashboard shows all platforms and marketplaces

• Flexible and scalable, it lets you easily expand your business

StitchLabs

• Centralized real-time inventory management

• Order management and logistics

• Inventory financial reports

• Multi-channel integration with Amazon, Shopify, Magento, Woo Commerce and more

• Allows team collaborations in daily operations

ChannelAdvisor

• Manages and predicts inventory for selling on multiple sites like eBay, Amazon, Walmart, and Sears

• Digital marketing channel reaches potential customers on Google, Facebook, Bing, and Yahoo

• Price manager keeps your prices competitive

• Provides insights on which products are bought online vs. offline

SellerCloud

• Inventory synced with multiple selling channels, warehouses, vendors, repricers, shopping carts, and payment gateways

• Scheduled listings

• Order processing and shipping

• Product catalog building

• Customer feedback management

nChannel

• Syncs online and in-store sales (buy online, pick up in-store)

• Integrates front end sales channels such as Shopify, Amazon, and Magento with back end fulfillment systems

• Updates inventory in real-time as orders are placed

Dear Systems

• Simple, user-friendly software ideal for small businesses

• Inventory management for one or multiple warehouses

• Manufacturing management

• POS system

• Accounting

• Integrates with many platforms such as eBay, Shopify and Woo Commerce

 

Most of these choices offer a free trial so you can see how easy the software is to use and whether it does what you want it to. Keeping both present and future needs in mind, choose the tools that will save time, keep customers happy, and ultimately help your business grow.

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Still Writing Paper Checks? Here’s How Much It Costs You

With online bill paying from your computer or mobile app now so convenient, we’re
always surprised by how many small business owners still make payments with paper
checks. It seems like a harmless habit, but is it really? Let’s see.
Here’s an example of the costs of writing 100 checks a month.

Employee Labor

Paper Checks $256 Paper Checks $256
Receive invoice Receive invoice electronically or scan paper invoice
Pass invoice to the manager to approval Send the invoice for approval through automated workflow
Print check Electronic payment sent
Record payment in accounting software Payment automatically synced with accounting software and bank
Address, stuff and stamp envelope
Mail envelope
Reconcile payments with bank

Bank Fees

Paper Checks $76 Online Payments $14

Materials

Paper Checks $30 Paper Checks $0
Checks Receive invoice electronically or scan paper invoice
Envelopes Send the invoice for approval through automated workflow
Printer paper
Printer ink

Postage

Paper Checks $47 Online Payments $0

Total Monthly Cost

Paper Checks $409 Online Payments $28

We didn’t even include potential costs such as late fees because the invoice approval,
check to sign, and the mailing process took so long. Or the fact that you’d have more free
time to creatively grow your business if your accounts payable system was automated.

When you use Xendoo, you’ll have a complete software solution that streamlines the
entire process from automatic syncing with the accounting system to direct deposit in
the vendor’s bank account. And you can access it from your mobile device (or desktop
computer) at any time. After all, you have better things to do with your time — and money!

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.

 

Choosing Inventory Management Software for eCommerce

To keep your business running profitably, you need to be like Goldilocks: not too much inventory and not too little. In the first case, you have too much cash tied up in stock and may have trouble meeting operating expenses. In the second, you might miss out on sales.
Here are some of the best systems for tracking and integrating stock, vendors, customers, selling channels, and more.

4PSite

  • Cloud-based platform manages inventory, orders, shipping and finance
  • Connects with eCommerce platforms such as Shopify, Magento, Bigcommerce and Volution
  • Facilitates sales on marketplaces like Amazon, eBay, Newegg, Etsy and Rakuten
  • One dashboard shows all platforms and marketplaces
  • Flexible and scalable, it lets you easily expand your business

StitchLabs

  • Centralized real-time inventory management
  • Order management and logistics
  • Inventory financial reports
  • Multi-channel integration with Amazon, Shopify, Magento, Woo Commerce and more
  • Allows team collaborations in daily operations

ChannelAdvisor

  • Manages and predicts inventory for selling on multiple sites like eBay, Amazon, Walmart, and Sears
  • Digital marketing channel reaches potential customers on Google, Facebook, Bing, and Yahoo
  • Price manager keeps your prices competitive
  • Provides insights on which products are bought online vs. offline

SellerCloud

  • Inventory synced with multiple selling channels, warehouses, vendors, repricers, shopping carts, and payment gateways
  • Scheduled listings
  • Order processing and shipping
  • Product catalog building
  • Customer feedback management

nChannel

  • Syncs online and in-store sales (buy online, pick up in-store)
  • Integrates front end sales channels such as Shopify, Amazon, and Magento with back end fulfillment systems
  • Updates inventory in real-time as orders are placed

Dear Systems

  • Simple, user-friendly software ideal for small businesses
  • Inventory management for one or multiple warehouses
  • Manufacturing management
  • POS system
  • Accounting
  • Integrates with many platforms such as eBay, Shopify and Woo Commerce

Most of these choices offer a free trial so you can see how easy the software is to use and whether it does what you want it to. Keeping both present and future needs in mind, choose the tools that will save time, keep customers happy, and ultimately help your business grow.

 

 

This post is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content. Xendoo assumes no liability for any actions taken in reliance upon the information contained herein.