Lean Wednesday Tip: Objectives of a Process Improvement Project

“The validity of a well-planned process improvement project is identified through value-added process mapping, problem isolation, root cause analysis and problem solution. Ultimately, the key to refining processes is to concentrate on the process from the customer’s point of view and identify and eliminate non-value added activities.”

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E.O.W (End of the Week) Notable Tip: The 4 Struggles of an inexperienced Manager

Happy Friday!

I hope you had a great week. This week I’ve been discussing employee to manager transitions with clients and the problems they have encountered with the newly appointed yet inexperienced manager. You may have witnessed an employee that has been promoted to a managerial position lose their shine as they demonstrate that they don’t actually comprehend the position. Before they were task driven and now they have to think and act strategically. Below I have noted the top 4 struggles that inexperienced managers face:

  • Inability to empower others
  • Poor delegating: Lack of trust of staff to complete tasks
  • Little or no constructive feedback given to staff
  • Lack of focus and/or skills in strategic thinking

Early manager to employee support and coaching in the inexperienced manager’s early years in the company is the best course of action in molding effective managers. Employees do what they see their managers do so make sure you walk the talk!

 

 

Top 10 Business Tax Shelters You Should Know

As we all know, two things are certain in life, death and taxes. I personally enjoy doing my taxes but like everyone else I don’t enjoy paying them. In business, it is critical that you know all the deductions that are available to you when it comes to keeping your bottom line healthy and your tax payment as low as possible. See below for the top 10 business tax shelters you should know:

  • Real Estate
  • Pension Plans
  • 401K/Roth
  • Municipal Bonds
  • Health Insurance
  • Life Insurance
  • Tuition Assistance/Reimbursement
  • Charity
  • Leasing Vehicles (offers larger deductions than owning one)
  • Assets bought on credit (e.g.; computers, equipment, inventory, office furnishings, et cetera)

It is important that businesses keep a separate high yield savings account designated for taxes and automate quarterly deposits.

Notable Bookkeeping knows taxes. Let us help you with your tax planning and research needs. Contact us today

Lean Wednesday Tip

 

“To run an efficient accounting department opt for a chart of accounts with less than 180 accounts for improved productivity and financial planning.”

Continuous Budgeting & The What Ifs

It is always good to be prepared. In business being unprepared for the unexpected could lead to loss of clients, reduced profits, damaged reputation, et cetera. Small business are not exempt from this either. Budgets and Forecasts need to include a reserve for the What ifs, such as, what if the office gets flooded?, what if a machine breaks down and a replacement is required ASAP?!, What if our supplier’s plant gets flooded?

Many companies use historical budgets (utilizing and analyzing past expenses from 3-4 past fiscal periods) to see revenue and expenses trends and using this information to create the current budget. The problem with this budget method is that it does not consider the future, therefore, it is impaired by the unforeseen. To minimize this risk, companies should assess all business operation risks and add reserves for the accounts that have “high budget risks”.

For example, let’s say your business is growing and you just finalized a big contract deal, but this is now the 2nd quarter of the fiscal year. Now you have to analyze sales, hiring and purchasing forecasting data and update the budget accordingly. This is also true when you lose a big client, you have to be prepared to revise your budget despite efforts to replace the lost client to ensure profitability at the end of the year; meaning cutting costs. budget-clipart-587364-ze-budgeting-and-savings-in-your-p-Stock-Photo

Continuous budgeting ensures that your company is abreast of all risks, revenue and expenses trends that are and could affect the company. Companies that have a frugal mindset (e.g. Apple, Microsoft, Google) and hoard their cash are always prepared for the worst. Historical budgets essentially just demonstrate the past and provide a budget amount base for all your accounts but you have to ensure sales demand, hiring, purchasing and risk data is taken into account to finalize the budget properly and update accordingly per any changes in the business.

 

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