Monday, September 28, 2009

Recordkeeping

As we meet with clients just starting a business or existing business clients, a common question they have is: What kind of records should I keep?

The answer it that you have the ability to choose any recordkeeping system that suits you and your business as long as it clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes. Your records need to show your gross income, as well as your deductions and credits. For most small businesses, the business checkbook is the main source for entries in the business recordkeeping system. We advise that you keep a SEPARATE checking account from your personal account for business purposes.

What are supporting business documents?
Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents such as invoices and receipts. Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain the information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. You should keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense. For more detailed information refer to the IRS publications, specifically, Publication 583, Starting a Business and Keeping Records.

The following are some of the types of records you should keep:
Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following:
Cash register tapes
Bank deposit slips
Receipt books
Invoices
Credit card charge slips
Forms 1099-MISC


Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for purchases. Documents for purchases include the following:
Canceled checks
Cash register tape receipts
Credit card sales slips
Invoices



Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and that the amount was for a business expense. Documents for expenses include the following:
Canceled checks
Cash register tapes
Account statements
Credit card sales slips
Invoices
Petty cash slips for small cash payments


Travel, Transportation, Entertainment, and Gift Expenses. If you deduct travel, entertainment, gift or transportation expenses, you must be able to prove (substantiate) certain elements of expenses. For additional information on how to prove certain business expenses, refer to IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses.

Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need records to compute the annual depreciation and the gain or loss when you sell the assets. Documents for assets include the following:
When and how you acquired the assets.
Purchase price
Cost of any improvements.
Section 179 deduction taken.
Deductions taken for depreciation.
Deductions taken for casualty losses, such as losses resulting from fires or storms.
How you used the asset. When and how you disposed of the asset.
Selling price.
Expenses of sale.


The following documents may show this information.
Purchase and sales invoices.
Real estate closing statements.
Canceled checks.


Employment taxes. There are specific employment tax records you must keep. Keep all records of employment for at least four years. For additional information, refer to Recordkeeping for Employers and Publication 15, Circular E Employers Tax Guide.

Friday, September 25, 2009

H1N1 and Restaurant Concerns

Theresa Kaplan of the SBDC staff found a great link to some thoughts for restaurants entitled:

"Pandemic Cleaning, Disinfection and Hygiene Considerations" in light of H1N1 news. I'd suggest reading the checklist over, especially the second page which notes specific "touch points" that restaurant staff should be paying attention to in terms of sanitizing.

I've noticed alot of hand sanitizing stations being put up in colleges and universities, malls and other institutional establishments. Hand sanitizers are relatively cheap if bought in smaller bottles from any drug store or health/beauty store. It's a good idea to carry a small container on you and use it just before you eat, before and after you shake hands with someone, and in other situations where you feel you may be exposed to "crowd" bacteria.

Stay safe and healthy out there!

Marcellus Shale Seminars in Carbondale

MARCELLUS SHALE BUSINESS BREAKFAST SEMINARS IN CARBONDALE

As development of Marcellus shale natural gas grows in Pennsylvania, businesspeople statewide are being invited to a series of breakfast seminars to learn how it may create opportunities for their businesses. Energy firms are flocking to the Commonwealth to extract natural gas from Marcellus, and are creating significant business opportunities for local businesses and entrepreneurs.

The University of Scranton Small Business Development Center and Carbondale Technology Transfer Center (CTTC) are hosting a "Your Business & Marcellus Shale” educational program at CTTC in Carbondale to help entrepreneurs and established small- and medium sized businesses understand and respond to Marcellus shale-related business opportunities. The series will consist of five weekly early morning webinars, with sessions including how businesses can establish working relationships with natural gas and service companies, how other businesses already are responding, and business planning skills necessary to evaluate and implement possible new business ventures.

Session 1 - Wednesday, October 14: Economic Implications of the Marcellus Shale
Session 2 - Wednesday, October 21: Identifying Local Business Opportunities
Session 3 - Wednesday, October 28: Success Stories
Session 4 - Wednesday, November 4: Preparing Your Business for Success
Session 5 - Tuesday, November 10*: Your Business Working with Others

*In observance of Veteran’s Day, the final session will be held on Tuesday, Nov. 10.
Cost is $10 per session or $40 for all five. Space is extremely limited; pre-registration and pre-payment are required. Call the SBDC at 800-829-7232 to register.The series is co-sponsored by a consortium of universities, chambers of commerce, local planning commissions and regional economic development boards from across the commonwealth, with leadership from Penn State Cooperative Extension. Presenters and panelists will include successful local businesses, a natural gas industry representative, and experts from Penn State.

Thursday, September 3, 2009

Tips for Restaurants To Improve Operations



Jim Sullivan wrote an excellent article in Nation's Restaurant News on the steps restaurants need to take to improve their operations, especially in today's economy. We'd like to feature a few of them here.
  1. Today, commit to hiring noticeably better people. Don't just hire--assemble a cast.

  2. Don't train "in general", train "in specific". Ask yourself, "who (or what) is my training target today?"

  3. Prune underperformers, that you should have let go, from your staff.

  4. Re-evaluate how you interact with customers.

  5. Conduct a purchasing audit. Assess every vendor's service, quality and resources.

  6. Recharge your business plan, especially your holiday plan.

  7. Teach your team the basics of Food Costs 101.

  8. If quick service time has anything to do with what you do, work on improving it.

  9. Start a plan today to sell more gift certificates/cards before the holidays. Why wait?

  10. Assess your entire team of hourlies today. Assign a yellow light to the ones doing the job, a green light to the ones doing more than the job, and a red light to the ones doing less than the job.

  11. Using the above outcome, decide whether you will "groom 'em" or "broom 'em". Send a message to low performers.

  12. Walk in stupid today. What is your restaurant teaching you?

  13. Write thank you notes to three customers today.

  14. Improve one facet of service today. As author Chris Peck says, "If the only thing to purchase at a restaurant were food, it would be called a grocery store."

If you enjoyed this article, there are plenty more in Nation's Restaurant News magazine. This is one of the magazines we have on our list of "must haves" for anyone opening a restaurant or already in the business. To find out more, go to http://www.nrn.com/.


Tuesday, September 1, 2009

Seven Not to Start

If you've thought about leaving your present job to start your own business, it's important that you select a business that can be realistically turned into a profitable operation. Recently, some experts predicted that profitibility might be an issue if you chose one of the following types of establishments noted below....especially in today's economy.

  • Restaurants: Managers must wrestle with low profit margins and seasonal fluctuations
  • Direct Sales: High earners are often just sitting atop pyramid schemes
  • Online Retail: Good luck competing with eBay or Amazon
  • High-End Retail: The recession has thwarted conspicuous consumption
  • Independent Consulting: Many consultants spend so much time scouting work that it’s very difficult to earn steady income
  • Franchise Ownership: It’s a myth that franchises are far more successful than independent businesses
  • Traffic-Driven Web Sites: You’ll need a million page views a day before you can make a living off advertising

So what do you think? Do you agree with the experts? Do most entrepreneurs end up launching businesses that are the cheapest and easiest to start, not necessarily the ones best suited to thrive in the marketplace? Share your comments on this subject.