Analyze, Plan, Grow: 8 Tips for Scaling Your Business

Is your small business ready to size up? Here’s how to put yourself in a position to seize that growth opportunity when it comes along.

ANALYZE your Products

This is especially important if your expansion involves introducing new products and services. Perform market research to make sure you’re providing what customers want or need, as well as how to reach them with your marketing messages.

ANALYZE the Market

Growing your company may bring you into an arena with a new set of competitors. First, identify who they are. Then do a SWOT (strengths, weaknesses, opportunities, threats) analysis to guide you in out-competing them.

ANALYZE your Workflow

A larger business can only operate on established procedures — no more winging it or depending on one person’s knowledge. You may need to improve the efficiency of your daily activities and/or standardize the company policies.

ANALYZE your Cash Flow

Use your financial reports as a starting point to calculate how much money will be coming in and going out as the company grows. For example, payroll will go up when you hire additional employees, and rent/utilities will increase if you move to a larger space. In addition, figure out how much cash will be needed for capital investments such as additional equipment.

PLAN your Team

As you expand your business, you’ll probably need more employees. What skills must be brought in? How will you integrate them with the current crew? Given our current tight labor market, you should also think about rewards packages that will attract the best talent — and keep them on board long-term.

PLAN your Communications

The new look of your business should be reflected in every touchpoint with customers, suppliers, and partners. Review your marketing budget: is it enough, and is it allocated to the right channels to reach your target audience with maximum efficiency and effectiveness? Channels that may require updating include:

• Company website

• Social media pages

• Advertising media such as flyers, sales letters, and coupons

• Business documents such as invoices and purchase confirmation emails

• Invitations to try new products or visit new locations

PLAN for Setbacks

Minimize the risks of your new venture by setting aside the funds to survive a slow start or an economic downturn. Identify liquid assets or those which can easily be liquidated as a last resort.

PLAN External Support

There comes a point in your business growth when you just can’t do it all yourself anymore. If you want to open additional locations, maybe a franchise set-up or buying an existing business will let you do that without taking on a full load of new administrative work. Consider outsourcing some tasks you did yourself when the volume was smaller, such as bookkeeping, payroll processing, accounts receivable/payable, and sales/income/payroll tax filings.

Xendoo provides small businesses with a full array of accounting services, from daily bookkeeping to timely financial reports. It’s an affordable outsourcing option that may be just what you need while you take your business to the next level.

 

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.

 

Loan Options for the Woman-Owned Small Business

Did you know that before the Women’s Business Ownership Act of 1988, many states required a woman to have a male guarantor for her business loan? Times have certainly changed since then. In fact, 40% of U.S. businesses are now owned by women.

You’d think banks couldn’t afford to ignore such a large market for their lending products; and to give them credit, they have made efforts (in varying degrees) to give equal treatment to women and other minorities who apply for business loans.

However, it’s not too unlikely that you’ll still run into some male chauvinism at a traditional bank — especially if you don’t own a major asset, such as a house, to use as collateral to secure the debt. If that happens, you’ve got other options.

U.S. Small Business Administration

This federal government agency offers a variety of resources to everyone who owns or is considering launching a small business — including loans from $500 to $5.5 million. An SBA guarantee on your loan with one of their partner lenders may help you get financing with less collateral and/or a lower interest rate.

Community Development Financial Institutions Fund

An initiative of the U.S. Department of Treasury, the CDFI provides microloans of $500 to $50,000 to those individuals or communities that lack access to traditional financing.

Women’s Venture Fund

This nonprofit organization focuses on business development in urban communities. As one of the CDFI institutions mentioned above, it offers small loans as well as technical and advisory services.

Grameen America

Another nonprofit, Grameen America is dedicated to enabling women to rise above the poverty line through entrepreneur loans. Loan amounts range from $1,500 or $15,000 and can be used for building a business or getting financial education.

Association of Women’s Business Centers

Start here if you’re looking for local financial support. This national network connects more than 100 state and regional locations with a mission of securing economic justice, entrepreneurial opportunities, and financing.

Women’s Economic Ventures

If you’re low or moderate-income and/or an underserved minority, the WEV offers another discrimination-free option. For business start-ups, they lend between $250 and $25,000; for business expansions, they’ll go up to $50,000.

Opportunity Fund

Women and other minorities who live in the states of California, Florida, Georgia, Illinois, Michigan, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Texas, or Washington can apply to the Opportunity Fund for a small business loan.

Other Financing Sources

Most of the lenders above do serve very specific groups, such as those who have low income, lack any collateral assets, or live in defined regions. If you don’t fall into any of these groups, you may want to consider:
Peer-to-peer lending platforms, such as Lending Club, Prosper and Funding Circle
Crowdfunding through social media sites such as GoFundMe, Indiegogo , and Kickstarter
Angel investors (who put their own money into your business in return for equity in the company)
Venture capitalists (who invest other people’s money in your business)

Grants.gov

A grant is not actually a loan because you never have to pay it back. In other words, free money! We’ve given you a link to the federal grants page, but there are also state and local government grants to be had if you look.

You must have a very particular type of business in order to qualify for a grant, such as:
Economic/jobs development
Sustainability
Improved health
Diversity (ethnic minorities, veterans, women)
Rehabilitation

As you can see, the financial resources for women-owned businesses extend far beyond traditional banks. Go out and get your piece of the pie!

 

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 Not to Charge to Your Business Credit Card

You’ve probably read in some of our other blogs that you shouldn’t put personal expenses on your business credit card (and vice versa). But there are also some business-related expenses that shouldn’t really go on that card, either.

Why Have a Business Credit Card?

In the first place, it just makes life easier for bookkeeping and tax-paying to keep business and personal expenses separate. In addition, business cards offer lower interest rates, higher credit limits, and other perks that personal credit cards don’t.

On the other hand, they don’t offer the same levels of consumer protection as personal cards. For example:
Interest rates can be raised and credit lines lowered at any sign of financial problems
No cap on late fees
Over-limit fees can be applied
Late or defaulted payments on a business card could affect your personal credit rating

That’s why it’s better to find alternate methods of paying for the following expenses.

Capital Expenditures

When buying big-ticket equipment or other business-related supplies, it really pays to find the lowest possible interest rate to finance that venture. The rate on your business card is almost sure to be higher than that of a bank or personal loan.

A good rule of thumb is to only use the credit card for items you can pay off within a few months.

Payroll

Some online accounting apps and management tools offer the convenience of linking to a credit card for payroll, instead of issuing bank paychecks. But beware, you’ll pay a high price for that convenience — namely, a lot of interest.

If you need to resort to a credit card to pay employees, it’s a signal that your business is in financial trouble.

Cash Advances

This is another sign that you have cash flow problems — which could alert lenders and card issuers if you do it often enough. Plus, with a cash advance, there’s a fee. And interest is charged from the moment you take the money, not starting at the end of the month.

Rather than racking up fees and interest every time you run short, take a hard look at your profit and loss statement and business plan to see what must be changed to prevent recurring cash shortfalls.

High-Risk Investments

We’re not talking about investing in your business, but rather the investing you do to grow your capital. Investments labeled high risk carry a high probability that their value will go down instead of up. Bitcoin, for example, is so risky that many credit card issuers won’t even allow you to use their card to buy it.

Minimize your risk by using another source of money to buy the investment — one that won’t leave you with a mountain of high-interest debt if the investment should go south.

Non-Deductible Travel & Entertainment

The IRS does allow some travel and client entertainment expenses to be deducted from your income tax. But if you go over the top, you’re letting yourself in for an audit. For example, if you fly to Las Vegas for an industry convention, you can deduct airfare, hotel, and meals; but you can’t deduct the costs of bringing your family along and staying an extra couple of days to party.

Put allowable expenses on your business credit card and anything extra on your personal card.

Legal Settlements

Charging a legal settlement to your business credit card is simply broadcasting to the financial world that your business is in trouble. Questions will be asked about your ability to repay a loan or credit card debt.

A better solution is to negotiate a payment plan directly with the other party.

Best Practices for Your Business Credit Card

For small operating expenses, a business credit card offers great convenience — as long as you can pay off balances quickly and avoid high-interest charges. (If you can’t avoid paying interest on a regular basis, the debt should be reflected in your balance sheet so you know how much profit you’re actually making.)

Think of your business credit card as a record-keeping device to track expenditures for accounting and tax purposes — not as a source of working capital.

Business credit card records —items purchased as well as dollar amounts — can and will be looked at by potential lenders and investors. Will those records reflect your good money management, or will they raise a red flag?

Xendoo’s advanced accounting software integrates with your business credit card to automatically import and code transactions. It’s just one of the ways we save business owners like you time and labor on bookkeeping and tax preparation chores. Result: you have more brainpower to focus on the company’s core activities. Not to mention the peace of mind for a good night’s sleep!

 

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.

 

Hiring an Independent Contractor? You’ll Need These Forms

Whether you’re a small start-up with no employees or a larger company just dipping its toe into the “gig economy,” here’s what you need to know about contracting with a freelancer.

What Is an Independent Contractor?

Unlike a full-time, part-time or temporary employee, independent contractors are ultimately in charge of their own work. They:
Accept tasks on a case-by-case basis and can turn down offers of work
Have more than one client
Set their own schedule
Use their own personal method for doing the work
Supply their own tools

Taxpayer Identification — IRS Form W-9

This is the independent contractor equivalent of the Form W-4 that employees use. You should obtain a filled-out Form W-9 from the independent contractor before work begins.

Income Reporting — IRS Form 1099-Misc

Whenever you pay an independent contractor more than $600 total for the year, you must report that income to the IRS, just as you do on Form W-2 for regular employees. The due date for sending copies of it to the IRS and the contractor is January 31 (with some exceptions).

Purchase Order

If your company’s accounting system requires a purchase order to buy goods and services, you should also use it with your independent contractor. You may wish to specify that the P.O. # be included on the contractor’s invoice, for easy matching against the info in your system.

Contractor’s Invoice

Keep your Accounts Payable system running smoothly by requiring that independent contractors submit an invoice for work completed — whether their personal invoice or that of online freelancers or payment platform. You should not be billed for expenses such as equipment and mileage (those are part of the contractor’s business overhead, not yours). And check that the work listed on the invoice matches what you agreed to.

Contract for Work

You may also want to draw up a written contract specifying the scope, quality, and timeframe of work you are purchasing from the independent contractor. That way, you can avoid disputes over what each party’s obligations are. Plus, when you work consistently with a freelancer, it’s easy to fall into the habit of informally requesting little additional jobs — and forgetting that you’ll be billed for them. A contract will help limit that behavior.

As more and more of the workforce moves into non-traditional job roles such as independent contracting, it’s likely that you’ll utilize this type of labor at some point in the life of your business. Xendoo stands ready to help you navigate this unfamiliar territory with guidance on taxes, cost controls, and 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.

 

Why Should a Sole Proprietor Bother with Accounting Software?

You’re just a small business. Is it really necessary to go beyond an Excel spreadsheet to keep track of finances?

Well, it may not be absolutely necessary, but it sure would save you a lot of time and hassles. Here are 4 ways spreadsheets let you down — and accounting software does it better.

No Automatic Updating

Spreadsheets just give you a freeze-frame picture of one moment in time. With every new transaction, you have to manually enter that information. It’s hard to find time to do that; but if you don’t, you fall hopelessly behind.

Accounting software updates automatically, giving you a real-time look at your cash flow with zero effort. Data is backed up automatically, too. Plus, the software generates reports and graphs that help you see the trends, warnings, and opportunities your numbers are telling you.

No Growth Ability

As your business scales up, you may need features such as payroll processing, online invoicing, or direct payments to suppliers. Spreadsheets can’t do any of that.

Sole proprietors can choose accounting software that will stay with them for the long haul, handling new tasks as they arise. Today’s cloud-based programs also let you share data remotely with your outsourced financial consultants, such as an accountant or tax preparer, saving you the hassles of physical paperwork.

No Safeguards against Mistakes

A spreadsheet is only as accurate as of the numbers you put into it. Manually typing or copying and pasting allows a human error to creep in. How and when will you catch those mistakes?

Accounting software syncs with your sales system and bank, directly importing the numbers from the transactions into your books. Not only is it foolproof, but it also saves you a huge amount of time.

No Audit Tracking

Anyone who has access to your spreadsheet can enter information, and you have to record who did it or when. That may be OK if you as the sole proprietor are the only “keeper of the keys”; but it does leave you vulnerable to fraud.

Accounting software tracks every entry and who made it. This is called an audit trail. Hopefully, you’ll never need it; but isn’t it good to know it’s there?

What to Look for in Sole Proprietor Software

Right now you don’t need numerous capabilities and complexities. These are the functionalities that will change your life as a sole proprietor:

Easy to use — No complicated training or expertise necessary. Many software companies offer a free trial of their products.

Remote accessibility — Cloud-based accounting software that lets you (and selected other users) log in from any device, in any location, at any time.

Security — Cloud-based servers with multiple levels of protection and password requirements.

Scalability — Features you don’t need now but may in the future, such as payroll for employees. Can the software be upgraded as you grow?

Industry-specific functions — For example, if you’re an e-commerce company, look for software that integrates with the major selling platforms.

Subscription payments — Small businesses usually find it easier on the budget to make monthly payments rather than come up with a large sum to buy the product.

Another great option for sole proprietors is to partner with an accounting company that offers integration with its own accounting software. This gives you professional-level functionality far beyond what you could afford if you were buying it yourself.

Xendoo offers a variety of cloud-based accounting and bookkeeping packages at flat monthly fees that are less than half what a typical by-the-hour accountant charges. Say goodbye to spreadsheets and enjoy the difference accounting software makes in your life as a sole proprietor!

 

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.

 

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.

 

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.

 

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.

 

Optimizing Your Customer Service

Business moves at the speed of the internet, and those who don’t keep up will be left behind. This is especially true in the delivery of customer services, whether to other businesses or consumers.

In the olden days of the 20th century, good customer service consisted of doing what you promised to do and responding in a timely manner to queries from customers. Of course, you still need to do those things, but it’s now considered the norm, not an exception. Today, to satisfy and delight customers, you must take their experience to the next level.

That’s where digital capabilities come in. New technology which makes the customer’s journey more painless and pleasurable, is revolutionizing a wide range of industries, from retailing to passenger transportation.

Which grocery store would you rather patronize: the one that provides high-quality products, wide selection, and friendly staff or the one that provides all that PLUS shop online/home delivery, automatic coupon clipping, and self check-out?

The accounting services industry is another field that’s ripe for change. At Xendoo, we’re fortunate in having been built from the ground up for the 21st century, while many traditional accounting firms are struggling to adapt. Here’s how we crafted our customer experience, using principles that work for any business.

Identify Your Customer’s Pain Points.

Look not just at your own business, but your industry as a whole. What do people complain about most often? It could be a lack of communication/information, one-size-fits-all products that don’t fit their needs, or slow delivery.

Even if a pain point seems to be an unavoidable aspect of the industry, write it down. This is the first step to creative problem solving that may give you a huge competitive edge.

The typical customer experience with traditional accounting firms is littered with pain points. Slow delivery is often an issue, from waiting 60 days or more for monthly financial reports to not filing tax returns on time. Another problem is difficulty communicating with the CPA, who may not return calls for several days.

Identify All Customer Touchpoints.

These are where the problems actually arise. Examine the mechanics of each step in the customer journey, from the first contact to the final invoice. Which steps are causing delays, inconvenience, or frustration for your customers?

For example, you might have installed an IVR system to answer your phone. But if it doesn’t offer the right options for customers to get the information they wanted, they’ll be just as angry as if you didn’t answer the phone at all.

Xendoo found that the most painful touchpoints with traditional accounting related to interactions with the CPA. When CPAs do the books by hand, there’s no time to actually talk to clients. There’s also more hassle for the client in having to come to the office to process physical paperwork.

Implement Your Solutions.

How can those touchpoints be improved for a faster, more enjoyable customer experience? The answers for each business will be different. You may decide that you need to retrain or hire staff, revise workflows, or bring in new technology.

Xendoo solved the problems of traditional accounting by utilizing a cloud platform. This proactive approach prevents customer pain points before they happen:

• Mobile app or desktop computer access to financial reports anytime, anywhere

• Scan and send documents or ask questions through the app

• P&L statements delivered by the 5th day of the following month

• Bank transactions automatically entered in the books in real-time

• Eliminates the risk of human error

• Digitized receipts and automatic tax coding for easier return filing

• A team of 2 CPAs and a bookkeeper have time to talk with clients

• Easy integration with more than 500 business management applications

Both You and Your Customer Reap the Rewards.

The speed and efficiencies of Xendoo’s cloud accounting system do make our lives easier. But the ultimate benefit goes to our clients, who have more profitable ways to spend their time than on bookkeeping hassles. It’s a win-win!

 

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.

 

Free at Last! 5 Steps to Get Your Business Out of Debt

The vast majority of small businesses need a loan to get started or take advantage of a growth opportunity. That’s all perfectly normal. But what if the amount of debt — not to mention all that pesky interest you’re paying — is causing you sleepless nights?

Then you’ll want to pay down that debt as fast as possible. Here’s how to go about it.

1. Can You Afford to Pay More?

The simplest solution would be to increase your payments, without changing anything else about your operations.

Take a look at your current budget, or update your old budget it you haven’t done that in a while. Current cash flow may be sufficient that you could put some more of it toward debt repayment. (Your Xendoo accountant can help you decide this.)

You might be surprised at the result. Sometimes what seems like a crushing burden isn’t really so bad once you get the numbers organized.

2. Reduce Debt by Working with Creditors

Creditors don’t want to send your account to collections, which will cost them a lot of money. They’d rather work with you to get the money paid, so don’t be afraid to give them a call.

Here are some ideas. Just bear in mind that some of them will impact your credit rating, so they’re best used if you’re not planning to apply for another loan within the year.

• Renegotiate loan terms with a lower interest rate, reduced late fees, restructured payments, etc.

• Renegotiate supplier contracts with a bigger discount for early payments or bulk buys, extended payment terms, etc.

• Read the fine print in loan terms: Sometimes an extra payment can be deducted from the capital (reducing the amount of interest you owe), or credited to a future payment when you might be short on cash.

• Get a debt consolidation loan, which transfers all your high-interest debt (bank loans, credit cards, etc.) into one low-interest payment plan. Beware, though, you may have to provide collateral or a personal guarantee.

• Let a debt restructuring company do all this for you. If you don’t feel comfortable negotiating with creditors, you can hire someone — for a fee — to act on your behalf.

3. Reduce Expenses

Now it’s time to go over your costs with a fine-tooth comb and eliminate areas of waste. Look at everything from the cost of materials and labor to office overhead and marketing. The goal is to free up more money to put toward your debt.

• Eliminate low margin products or services. If they aren’t generating enough revenue, they’re not worth the money and effort you’re putting into them.

• Streamline inventory. In general, merchandise shouldn’t sit on the shelf for more than 30 days. Improve cash flow by adjusting your purchase amounts. Look for suppliers that offer rights of return for unsold goods.

• Control labor costs. Avoid paying overtime by fine-tuning scheduling or converting to part-time employees. Cross-train employees to fill more than one role.

• Downsize your office space. Do you really need so much, or are you storing too much inventory and/or equipment? Is there another space available for lower rent?

• Lease expensive equipment rather than buy it. There are many factors to consider — including shelf life, maintenance needs, product selection and taxes — so be sure to discuss with your Xendoo accountant whether this would be a cost-effective strategy for you.

• Weed out unprofitable customers. When you were first starting up, you may have offered hefty discounts just to get some money coming in; tell those oldies that the free ride is over. Also cut loose the customers who are constantly late paying you, or demand too much time and attention for the amount of business they bring.

4. Increase Revenues

This may seem obvious, but more money coming in is more money to pay down your debt. Here are some ideas.

• Raise prices. Small businesses often fear to do this, in case they lose customers. But you’re entitled to a cost of living increase like everyone else.

• Cross-sell and upsell. Promote additional, related products and services with each sale, or put together bundles that entice customers to buy more.

• Add products or services to your line. What else do your current customers need? Or what new niches could you tap into with something similar to what you already offer?

• Liquidate unused assets, so you can at least get some money back out of them. Outdated office equipment can go on eBay or Craigslist. Excess or obsolete inventory can be sold to an inventory liquidator. Lease unused office space to another business.

• Take a second job. This is probably the last resort for small business owners who are already slammed with work. But it might be worth it for a few months just to get that debt monkey off your back.

5. Create a Debt Reduction Strategy and Timetable

Now that you’ve figured out how much extra money you can put into paying off your business debt, you can plan a payment strategy.

One option is to commit that money entirely to debt repayment and swear off making any other purchases until the debt is gone.

Another approach is to decide that you will pay a set percent of your profit to creditors every month.

Use that amount to calculate how many months it will take you to get out of debt (don’t forget to include interest). Put a big, happy note on your calendar at the month when you’ll be debt-free, as motivation to stick to the plan. As financial planning expert Gail Vaz Oxlade says, “If you don’t write it down, it’s a dream, not a goal.”

There are many more ways to get the business debt paid off faster, but not all of them will work for every business. Be sure to consult with your Xendoo CPA, who will go over your financials and help you make the right decisions. Won’t it feel great when you can go to sleep at night knowing that your finances are under control?

 

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.