Need More Profit? Reduce Your Overhead

When your balance sheet isn’t showing a healthy profit margin, there are two routes you can take: raise your prices or cut operating expenses. Which is the riskiest? Most business owners would say it’s raising prices, for a variety of reasons ranging from competitive pressures to possible loss of customers.

So, if your best option is to trim expenses, how do you go about it? Here are seven areas of the business to look at for overhead cost reduction strategies.

Rent/Mortgage

Ways to reduce your monthly payments include:

• Negotiate a new deal with your landlord or mortgage lender

• Reduce the amount of space you rent

• Move to a less expensive space

• Convert to a home-based business

Utilities

This includes electricity, gas, water/sewer, telephone, and internet providers. You may be spending more than necessary.

• Review phone/internet usage over the past year to see if you could switch to a lower level of service

• Bundle services to get a discount

• Get rid of your landline; use cell phones, VoIP or virtual phone lines instead

• Reduce water waste by fixing plumbing leaks, converting from landscape sprinklers to drip irrigation, installing faucet aerators and using pressure washers instead of a hose

• Trim the electricity bill with Energy Star appliances, upgraded insulation, gap seals around doors and windows, and energy-blocking window coverings (curtains or window film)

Equipment

Depending on your type of business, equipment purchasing, maintenance, and repair could be your biggest overhead expense.

• Renegotiate service contracts

• Switch to cloud computing, eliminating the need to update and repair your own servers

• Use fuel-efficient vehicles

• Buy refurbished furniture and equipment offered by manufacturers, for the same quality at lower prices

Administrative

Is your office still stuck in the 20th century?

• Reduce the use of printers and copiers (why are you printing everything out, anyway?); you’ll also save on ink, paper, etc.

• Switch to a digital invoice/payment system and save on mailing supplies, paper costs, and filing cabinet storage space

Payroll

Sometimes it’s a sad necessity that you need to cut staff. Rather than losing good employees altogether, ask if they will accept an alternative work option such as:

• Job sharing

• Flexible scheduling

• Switching to part-time

• Taking unpaid leave

It may be more cost-effective to eliminate some full-time positions completely and bring in outside providers. This not only saves you a full-time salary, but it also saves on benefits, payroll taxes, worker’s compensation premiums, etc. — which can add up to an additional 30% of the employee’s salary.

• Hire independent contractors on an as-needed basis

• Outsource administrative departments such as accounting

Insurance

There’s no question that your business needs protection, possibly including general liability, professional liability, business interruption (due to natural disaster), overhead, vehicle, and bad debt insurance. Keep the premium payments as low as possible by:

• Shopping around for the best deal

• Choosing the highest deductible

• Buying a package policy rather than individual plans for every type of insurance

• Getting premium reductions for using the insurer’s loss prevention strategies

Sales/Marketing

This category includes advertising, promotional materials, trade shows, and incentives/bonuses for sales staff. Take a close look at whether the expensive strategies are delivering a good return on your investment. If they aren’t, consider cheaper options such as:

• Press releases for free media coverage

• Social media posts, videos, podcasts

• Chatting and article writing for professional online groups

• Cross-promoting with businesses near you (for example, a wedding venue and a florist each display the other’s brochures in their stores)

• Giving out your business card or wearing the company T-shirt at leisure events

• Sharing your expertise at seminars, local radio/TV talk shows

Xendoo knows the challenges small businesses face in staying profitable. We’ll keep you up to speed with your financials, help you spot the danger signs, eliminate the need for on-staff bookkeeping — and do it all for a flat monthly fee that’s easy to afford (and budget for). It could be the best cost-saving move you ever made!

 

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.

 

Do a Balance Sheet Health Check for Fast Answers

If someone asked you, “How’s Business?” — what would you say? You’d be surprised how many small business owners don’t know. Or they think they know, but are forgetting some costs or not recognizing early warning signs.

What’s on the Balance Sheet?

Basically, you’ll see three lists: assets, liabilities, and equity. The total assets will be the same, or balanced with, total liabilities plus equity — hence the name “balance sheet.”

  • Assets include cash/cash equivalents, accounts receivable, property, equipment, and some types of intangible assets. Assets are usually reported at their original cost or lower to allow for depreciation and other factors.
  • Liabilities are any money owed, such as business loans, taxes, accounts payable, and accrued expenses.
  • Equity is the money invested by the owners plus any company earnings that you chose not to withdraw as dividends or distributions.

Health Check #1: Assets to Liabilities Ratio

Current Liabilities ÷ Current Assets = Debt to Equity Ratio

This number shows you whether the company is able to pay its bills — it has more current assets (cash or convert to cash within one year) than current debts (payable within one year).

  • If the ratio is more than 1, congratulations, your business is healthy.
  • If it’s 1, you’re breaking even.
  • If it’s less than 1, you’re in trouble.

Health Check #2: Debt to Equity Ratio

Current Liabilities ÷ Total Equity = Debt to Equity Ratio

This reveals whether you’re too deeply in debt; in other words, you have too much financing from loans as compared to investments from owners or stockholders. A high ratio number might be a sign that there will be problems with debt repayment. It also tells prospective lenders or investors that the business is a higher risk.

  • For most small and medium-sized businesses the maximum acceptable debt to equity ratio is 1.5 to 2 (15% to 20%).

Health Check #3: Asset Turnover Ratio

Net Sales ÷ Average Total Assets = Asset Turnover Ratio

(Net Sales: see your income statement)

(Average Total Assets: from the last 2 years’ beginning and ending balance sheets)

This tells you how efficiently your business generates sales from its assets. The higher the ratio, the better. On the other hand, a low ratio may point to management or production issues.

  • What’s considered a “good” asset turnover ratio varies widely by industry. Therefore, it’s best to compare your ratio with similar companies in your field.

The balance sheet is just one of the essential documents Xendoo provides our clients, giving them the information they need to avoid the pitfalls and seize the opportunities for growth and success. Contact us to learn more about our affordable, real-time financial services for small businesses.

 

 

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.

 

The Choice Is Yours: 3 Ways for LLCs to File Federal Income Tax

Setting up or transitioning your small business as a Limited Liability Company (LLC) is a great way to protect your personal assets from business-related debts and lawsuits. But how will it affect your income tax?

The IRS doesn’t recognize LLC as a business classification — unlike sole proprietorships, partnerships, and corporations. That means you can choose to identify yourself as one of those classifications when you file your income tax.

Note: If you don’t declare your choice, the IRS will default you to either a sole proprietor (one owner) or a partnership (more than one owner).

Here’s how to do it.

Sole Proprietorship

This is considered a “pass-through” business. Any business income or losses are passed through to your personal ownership and are reported on your personal tax return. You have to do it this way whether the profits from the business go into your personal bank account or stay in the company’s account for paying business expenses.
Since the LLC registration is done at the state level, the business itself doesn’t pay any federal income tax. However, some states require an annual franchise tax for LLCs.

  • Report LLC income on Schedule C of your individual tax return (usually Form 1040).

Use this election if your LLC has multiple owners but you don’t want to pay taxes as a corporation.

As with a sole proprietorship, the IRS considers the multi-member LLC a pass-through entity — business profits and losses are reported on each member’s personal tax return.

The profits or losses are divided up among the members according to the percentages stated in your operating agreement. For example, if you have one co-owner, each of you could be responsible for 50% of the profits or losses.

  • The partnership must file Form 1065, which is an informational statement of the LLC’s income, gains, losses, deductions, credits, etc.
  • In addition, the LLC must provide each partner with a Schedule K-1 which reports that member’s share of the profit or loss and will be filed with their personal tax return.

Corporation

LLCs may choose to be taxed as a corporation that is responsible for filing its own business tax return. With this choice, you will avoid being personally liable for fines and penalties if you are late filing the company’s tax return.

Filing as a corporation is also smart if you plan to keep most of the profits in the business instead of transferring them to your personal use.

You (and your partners, if any) can elect to be taxed as a C-corporation or an S-corporation. A C-corporation is a stand-alone entity that pays corporate taxes, meaning that you could be taxed on both the corporate and personal levels. An S-corporation is a pass-through entity and does not pay corporate income tax. All revenues are either distributed as wages or passed through to the owner(s) as dividends.

The tax advantage of an S-corporation over a sole proprietorship or partnership is that you are considered an employee of the company. Therefore, you will only pay FICA (Social Security and Medicare) tax on the wage the company pays you. Any other profits you take out of the business are taxed as dividends, not subject to FICA tax.

  • To inform the IRS that you are electing for your LLC to be treated as a corporation for tax purposes, file Form 8832.
  • To be treated as an S-corporation, first, establish your eligibility by filing Form 8832, then file Form 2553.
  • File your tax return on Form 1120 (for C-corporations) or Form 1120-S (for S-corporations).

Meeting the requirements to file as a C-corporation can be tricky — and even more so as an S-corporation. We recommend that you consult your accountant to make sure there are no mistakes that could cause you to lose your money-saving tax status.

Your Xendoo team of accounting experts can help you find the right solutions for your small business, and take the hassles of tax prep and filing off your shoulders. We’ll do what we do best — and let you get back to doing what you do best to make your business a success.

 

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.

 

Accounting Software for eCommerce

The first step in starting up an eCommerce business is building your online store. Now you’re ready to start taking orders, processing payments, and shipping out your products.

The second step is equally important: choosing software that will keep your books up to date. You’ll need records of invoices you sent and received, capital and overhead expenditures, wages paid to employees, tax returns, and more.

The right software will make it easy for you to track profit margins, cash flow, and other vital metrics that can make the difference between business success and failure.

We’ve listed here some popular choices for you to consider.

Quickbooks

Probably the most well-known software for small businesses, QuickBooks offers you a choice of accounting in the cloud or your internal network. It integrates with most of the top eCommerce platforms, such as Amazon, eBay, Shopify, and Etsy. You pay a monthly subscription fee (after the free trial month), which varies according to the package of capabilities you choose for your business.

Wave

A great option for new businesses on a tight budget, Wave offers free basic services such as accounting and invoicing. Additional capabilities such as payments and payroll are available for modest fees. Data from PayPal, Excel, and many other sources can be automatically imported into the Wave books.

Kashoo

Exceptionally user-friendly for the non-accountant, Kashoo takes just one day to set up and learn. In addition to basic bookkeeping tasks and bank syncing, it provides one-click financial reports, so you can make smart business decisions and breeze through tax time. If you do have any questions, there’s free unlimited support plus a video tutorial library.

Xero

An international leader in cloud accounting, Xero gives business owners unprecedented access, speed, and reliability. Its superior functionality and security have made it popular with accounting and bookkeeping firms — including us here at Xendoo. Solutions include invoicing, payments, payroll, tax coding, and bank reconciliations. Best of all, you can get a real-time view of your cash flow from any mobile device or desktop computer at any time.

Bring in the Pros

Programs like these make it as easy as possible for financial rookies to keep their business on track. But if you still don’t feel comfortable or don’t have the time to do the bookkeeping yourself, consider hiring a professional accounting firm. If possible, choose one that specializes in eCommerce — like Xendoo.

From bookkeeping to income and sales tax filings to financial reports, we take accounting hassles off your shoulders, leaving you with the time and peace of mind to grow your business. And because we know you’re on a budget, our flat monthly fee is less than half what you’d pay a bookkeeper who charges by the hour. Please give us a call if you’d like to know more.

 

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.

 

What International eCommerce Sellers Need to Know and Do About U.S. Sales Taxes

Until recently, eCommerce sellers located in other countries didn’t have to worry about registering, collecting, reporting, and remitting sales taxes to U.S. states. However, the rules have changed.

In June 2018, the U.S. Supreme Court made a landmark ruling that any online seller with “economic nexus” in a state is required to follow that state’s sales tax laws.

Each state has its own set of definitions as to what constitutes economic nexus, so dealing with the paperwork can get complicated. Here are some of the most common qualifications.

Specific Number of Transactions or Dollar Amount

Most states require sales tax processing from any seller who exceeds a specified amount in annual sales or number of transactions with customers in the state.

In Florida, for example, the minimums are 200 separate retail transactions or $100,000 of retail sales of personal property or taxable services that are delivered within the state.

Any Physical Presence, Including Amazon FBA Warehouses

Even if your main office is located outside the U.S., you may have a branch office, employee, sales rep, or warehouse in one or more U.S. states. That’s enough to establish tax nexus in the state(s).

In the case of states where Amazon FBA handles tax collection — such as Washington and Pennsylvania — you may still be required to file the sales tax returns.

Non-U.S. Citizen Living in the U.S.

The legal residence status of the business owner has nothing to do with the company’s state tax nexus. No matter what your nationality, if you are running your business from (or storing inventory in) a U.S. state, you must comply with the state’s tax regulations.

 

 

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.

 

Meet Your New Business Partner: AI

In today’s workplaces, a revolution is underway that’s as big as the Industrial Revolution of the 19th century. It will transform the way we do business, no matter what industry we’re in. 

It’s called Artificial Intelligence — the integration of machine learning and automation with every aspect of your company. Are you ready?

Here’s a rundown of some of the ways AI is already improving efficiencies and cutting costs. You’re probably using some of them now; others may give you food for thought and future planning.

Cloud Services

In the not-too-distant past, every company-owned its own computer servers and other hardware. This created a new cost center of rapidly obsolescing equipment as well as specialist employees needed to maintain and repair it. This fixed asset also had the potential for over- or under-supply situations, leading to further costs.

Nowadays, most businesses rent their computing infrastructure from cloud providers. The advantages are obvious. Hardware is updated and maintained by the provider. Plus, it’s a dynamic rather than a fixed cost: companies pay only for how much capacity they use.

Business software can also now be rented in the cloud. By giving employees on-demand access, a company maximizes its cost efficiencies and allows workers to be more productive. At Xendoo, we use cloud accounting software (Xero) to provide our clients with real-time connectivity from any device at any time. 

Automated Tasks

Very few people like the necessity for doing a routine, repetitive tasks. Employees are bored and dissatisfied; their employers hate the waste of brainpower that could be put to better use in judgment, creative, decision-making, and interpersonal activities. Wouldn’t it be great if machines could do boring stuff?

To a great extent, they can now do just that. In our own niche of accounting, bank transactions are automatically imported into the books, instead of having a person do it manually. This eliminates the possibility of human error and frees up our human experts for higher-level thought production.

Other possibilities include:

  • Chatbots that interact with your customers, e.g. answering FAQs
  • Software that pulls data from your CRM spreadsheet to automatically send marketing promotions or invoices

Flexible Work Scheduling

Nothing is more frustrating than to have employees sitting idle, or to have urgent work on hand and nobody to do it. With a scheduling application, it’s much easier to assign tasks to the right people at the right time. 

In industries from tech support to advertising to shipping, many employers have pretty much eliminated traditional 9-to-5 positions, instead of drawing on a pool of labor as they need it. This sits well with younger generations of employees, who demand more work-life balance and appreciate the ability to work as much or little as they like.

Shared Projects and Workflows

It’s no longer necessary for members of a team or task force to be in the same space at the same time in order to work on a joint project. There are many apps available that allow project materials to be stored in the cloud and worked on by multiple users.

Workflows also can and should be shared. Traditionally, the method for doing a task is passed on from supervisor or senior employee to the new employee, who in turn adds their own “improvements” to it. The result is inconsistent performance, as well as the possibility for individuals or departments to create knowledge silos that nobody else can access. 

Instead, best practices, key knowledge, and validation steps for each workflow should be made available to all workers, either in the cloud or in the company’s internal network.

Predictive Analytics

Machine learning automates the process of looking at past data to determine what will happen in the future. For example, it could analyze the results from previous marketing campaigns to show what advertising messages and media will be most effective in your next campaign.

Hiring and managing workers also benefit from predictive analytics. Programmed with your metrics such as production performance, attrition, employee life cycle, and engagement surveys, the software will identify your ideal employee. Use this information to screen job candidates and modify behaviors of current employees.

Performance Measurement

The key to the success of the human-machine partnership is quantification. We expect that the future workplace will measure on-the-job behaviors and processes in many new ways, from task time to customer satisfaction. This data will empower the task scheduling, workflow improvement, information sharing, and machine learning discussed above.

Xendoo is proud to provide accounting services enabled by the cloud and proprietary software. With speed, accuracy, and affordability that was never before possible, we relieve you of bookkeeping chores that kept you from putting 100% effort into your area of expertise. Welcome to the future of business success!

 

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.

 

One-Participant 401(k): A Tax-Exempt Option for the Self-Employed

If you’re an independent contractor or the owner of a small business with no full-time employees, there’s a retirement savings plan just for you. The IRS calls it a one-participant retirement plan; you may also hear it referred to as an Individual 401(k) or a Solo 401(k).

Benefit # 1: Lower Your Income Tax

It offers you the same opportunity to make tax-exempt contributions that regular employees get from their employer-administered 401(k) plans. That means you’ll be paying less income tax since you’ll subtract from your income however much money you contributed to the plan. 

Of course, you’ll have to pay tax on the distributions you take from the plan after you retire. If you’d rather have tax-free income in retirement when your earning power is reduced, we suggest you consider a Roth IRA in addition to or instead of the One-Participant 401(k).

Benefit # 2: Build Your Nest Egg Faster

Another benefit of the One-Participant 401(k) is that the maximum annual contribution is much higher than for IRAs. 

If you’re a business owner who functions as both an employee and an employer, you can contribute to the plan in both capacities.

As an employee, elective deferral up to 100% of earned income, for a maximum of:

  • $19,000 if under age 50
  • $25,000 if age 50 or older

As an employer, nonelective contributions up to 25% of compensation

For self-employed individuals, the contribution limit is computed based on your earned income after deducting 50% of your self-employment tax and contributions for yourself. See the IRS instructions for calculating your contribution.

Benefit # 3: Reduce Tax Hassles

Tax filing for a One-Participant 401(k) is super easy, too — you don’t even have to include a separate IRS form reporting the plan contributions or balance, with certain exceptions.

Those exceptions are: 

  • The total of the plan’s assets plus all your other one-participant plans exceeds $250,000 by December 31.
  • The plan was terminated during the tax year.

If your plan falls into one of those exceptions, you must file IRS Form 5500-EZ, which is just an information sheet that provides basic financial data. You still don’t owe any taxes.

Even if you’re not required to file Form 5500-EZ, there’s a good reason to do so anyway. You see, if you don’t file, the statute of limitations won’t be activated. Who knows what could happen in the future? That’s why we think it’s smart for everyone — exempt or not — to file the form and start that statute clock ticking down.

How to File Form 5500-EZ

The filing deadline is July 31.

Fill out and mail the paper Form 5500-EZ to
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0020

If you are filing more than 250 returns of any type, you must file electronically through the EFAST2 Filing System, using Form 5500-SF instead of 5500-EZ.

At Xendoo, our mission is not only to give you financial peace of mind today while you run your business but also to help you rest easy that your future is in good shape. If you have any questions about the tax implications of your retirement plans, please give your Xendoo advisors a call.

 

 

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.

 

Do Retailers Have to Collect Sales Tax on Drop Shipped Merchandise?

The short answer is probably yes. However, the regulations are complicated and different for every state.

What Is Drop Shipping?

This arrangement allows you to avoid the costs of warehousing and labor of shipping your inventory to customers. Here’s how it works:

1. The customer orders an item from you.

2. You order the item from the manufacturer or wholesaler.

3. The manufacturer or wholesaler ships the item directly to your customer.

How Does Drop Shipping Change Your Tax Obligations?

As you know, whether or not you have to collect sales tax on items sold to customers residing in a particular state depends on whether you have nexus in that state. 

Each state has its own definition as to what constitutes nexus, including the possession of a brick and mortar facility, the presence of sales reps in the state, or even advertising in media viewed in the state. If you have nexus, then you’re obligated to register with the state, collect sales tax, and remit it to the state’s tax authority.

Bear in mind that last year’s Supreme Court decision in the case of South Dakota v. Wayfair means that a retailer’s physical presence in a state is no longer required as part of the tax nexus. So you can pretty much assume that you’ll be dealing with sales tax in every state where you have customers.

Drop shippers are likely to have their own sales tax nexus, depending on where they’re located. So if you don’t have nexus and the shipper does, who’s responsible for collecting the tax?

It should be the retailer; after all, it’s a retail sale transaction between the retailer and the final customer. However, a few states will require the drop shipper to collect the tax. This can turn into a big mess if the drop-shipper is located in another country, such as China. 

Furthermore, if neither the retailer nor the drop shipper has nexus, the customer is still responsible for paying use tax. For those cases, you’ll have to submit documentation to both the state and the customer.

What About Resale Certificates?

If you want to avoid paying sales tax on the goods you purchase from manufacturers or wholesalers, you must apply to every state where you sell the goods for a resale certificate. Then you simply provide this document to your suppliers.

This is also true of merchandise that is drop shipped. So what do you do if you aren’t registered to sell in a state where you don’t have tax nexus?

Most states will still issue a resale certificate. Some will accept the retailer’s home state certificate, or add that certificate’s registration number to their own certificate. Others will accept a comprehensive certificate such as the Multistate Tax Commission (MTC) Exemption Certificate or the Streamlined Sales Tax Exemption Certificate.

However, about 10 states require you to qualify for their own resale certificate. Plus, there’s always the question of whether your supplier will accept any document other than a state resale certificate.

You can see why we recommend that retailers register in every state where they have customers, nexus or not. It might seem like a hassle upfront, but it will save you even more hassle in the long run.

At Xendoo, we specialize in helping small businesses navigate the complex tax regulations that can be so frustrating, preventing you from putting your best efforts into growth and profit-making activities. When you sleep well at night, we’ve done our job right.

 

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 (and Why) to Go Paperless

Does your office still contain piles and filing cabinets full of paperwork? Do you automatically print out everything “for your records?” Are you afraid that if you go completely digital, some documents might be lost?

You’re not alone. Many business owners still feel that it’s safer and more cost-effective to keep paper records. But here are a few facts that might change your mind.

Finding what you want in paper records takes longer.

Digital documents can be indexed, searched, and retrieved much faster.

Paperwork costs more.

Digital records eliminate the need to buy printers, toner, maintenance service contracts, and document storage space.

When a paper is lost in a fire, flood, or another disaster, it’s gone for good.

Digital records can be backed up and stored in a secure server location.

Paper clutter looks messy and takes up more space.

Your company’s entire records can be stored on a laptop. It’s easy to transport if you move to a new office. And you won’t need such a big office, saving on rent.

Paper communication is slower.

Emailed documents are there in seconds, not days. Plus, you’ll save on postage.

Paper manufacturing is bad for the environment.

Going digital saves forests reduces air/water pollution and greenhouse gas emissions, and saves energy consumed by pulp and paper production.

Are you ready to save time, money, effort, and trees by going paperless? Here are some practical things you can do to make the transition.

Analyze what your office prints out.

You may be surprised to learn how much paper your printer is spewing out day after day, most of it is unnecessary. Print audit software is available to track who is using the printer.

Move to online software.

Cloud-based applications make it easy to share data with customers and suppliers. And they eliminate the problems with file format compatibility and technical support that you might run into if you maintain your own servers.

Some of the most popular applications are:
• Google Docs lets multiple people view and edit documents
• Dropbox lets you share files that are too big too email
• Basecamp enables project management and team interactions
• PayPal lets you receive or send payments

There are also applications for business processes such as banking, accounting, and payroll. Xendoo uses one of these to seamlessly integrate with your business management software, thus eliminating many hours of data entry for you and your staff.

Scan existing paperwork.

Once it’s digitized in PDF format, you can get rid of the paper original. Any office supply store offers a variety of scanners, or your office printer may already offer that function. If you have years’ worth of paperwork to scan, hire a secure scanning company to do it.

Phase-out old technology.

• If you still send and receive faxes, install software that converts them to electronic documents and emails them.
• Use digital signatures on contracts and other legal documents. In most countries, digitally signed documents are just as valid and binding as those signed with a pen.

Train your staff.

There may be a learning curve for employees who will be processing electronic documents, such as invoices and work schedules. But once they’re used to the new system, you can look forward to terrific time savings and improved productivity.

How fast you can go paperless — or whether it’s entirely possible —depends on your business and your team. Some types of business, such as real estate offices, will still require paperwork. And some employees may find a drastic change too stressful.

Even baby steps can have significant results. Print a multi-page document on both sides of the paper. Go paperless one department at a time, so that the entire company isn’t having transition pains at the same time.

The digital world is here to stay. With the growth of cloud-based and security technology, it’s more convenient and safer than ever. Businesses who wish to grow and thrive in the future will do well to take advantage of their flexibility, efficiency, and cost savings as soon as they possibly can.

 

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.