By Stephanie Taylor Christensen
The approach of a new year brings an opportunity to take stock of what worked well, and what’s in need of some fine-tuning in order to start the year with a strong strategy. Here’s a look at how you can optimize some of your businesses’ biggest expenses to work in your favor in 2015.
Manage the cost of professional service providers. Though legitimate business costs associated with the use of an accountant can be a tax deduction, they’re a “real” cost that eats into your bottom line. According to a survey conducted by the National Association of Accountants, the average costs for basic Federal tax preparation for business partnerships is about $600; $761 for an S Corporation, and more than $800 for a C corporation. Though those fees indeed pale compared to the potential risks and costs of not filing business taxes appropriately, you can strategically manage the expense. A certified public accountant for example, isn’t simply a tax prep resource, but a trusted business advisor who can guide you in understanding where your business stands financially, what that means, and how you can prepare for whatever business path you wish to take in the future. For the more basic reporting and bookkeeping needs, invest in a robust but simple to use cloud-based accounting system that allows you to collaborate with your financial providers and internal staff, while eliminating unnecessary redundancy associated with inputting and compiling data, and running reports. Xero, for example, is a cloud-based accounting software that is newer to the United States market, but has emerged an industry leader in Australia and New Zealand. For smaller businesses, it costs less than $10 a month, allows for multiple users at no additional cost and equips you with real-time expert email support so you don’t have to bother (and pay) your accountant with basic bookkeeping questions.
Manage your employee ROI. A survey by PEXCard revealed that staffing costs dominate the budgets of most small businesses. Take a cue from the world’s “start up stars” and adapt processes that make the most of your team—regardless of “why” they’re on your payroll. For example, Zappos has adopted a holacratic approach to its business model. Instead of titles and defined roles, the organizational structure is made of overlapping circles that empower employees to fluidly move in and out of projects and tasks, based on their skills, interests, and real-time business priorities. As a result, employees are more productive, accountable, efficient, and engaged. As the owner, you better the “ROI” from everyone on your payroll.
Eliminate unnecessary costs of your payment infrastructure. If your business currently uses a fixed-terminal point of sale system you can realize nearly instant cost-savings by processing customer credit and debit payments via a mobile payment provider, particularly beginning in late 2015, the timeline by which financial institutions are mandated to reissue magnetic “swipe” credit and debit cards with chip-based EMV SmartCards for enhanced data security. Though experts at Javelin Strategy & Research Research anticipate the transition will extend beyond 2015, it will be particularly cost prohibitive for small businesses. (Javelin’s experts estimate an EMV SmartCard terminal can cost upwards of $1,000). Not only does accepting mobile payments equip you to process EMV cards via keyed entry through the payment processor’s app if necessary, they can expedite customer checkout. Additionally, they equip anyone on your staff to collect payments as soon as work is complete (even if it’s done offsite), eliminating the waste associated with preparing, mailing and collecting on, paper invoices.
Stephanie Taylor Christensen is a former financial services marketer who writes about personal finance, career, and business news for the national media and corporate clients. Additionally, she is the founder and owner of Om for Mom prenatal yoga in Columbus, Ohio, and WellnessOnLess . Follow her @WellnessOnLess.