ABC Solutions

Your New Hire Checklist

Hiring a new employee is a big accomplishment in any small business, and there are a lot of steps involved, too. Here’s a handy checklist to help you stay organized when you bring that new hire on board. 

First things first, the legal and accounting items:

  • Signed employment agreement, typically an offer letter. There may also be a supplemental agreement outlining employee policies.
  • Payroll documents include:
    • IRS form W-4
    • Form I-9
    • Copy of employee’s government-issued ID
  • Most states require a new hire report to be filed; sometimes your payroll system vendor will automatically file this for you.
  • Notify your workers comp insurance carrier.

Next, it’s time for employee benefits enrollment:

  • Health insurance
  • 401K
  • Any other benefits you provide
  • Provide the employee with the holiday schedule
  • Explain their PTO and vacation if not already explained in the offer letter

Set your new employee up for success with the right equipment:

  • Desk, chair, lamp, other furniture
  • Uniform
  • Tools
  • Coffee mug, refrigerator shelf
  • Phone
  • Truck, keys
  • Computer, monitor, mouse, keyboard, power strip, floor mat
  • Office keys, card entry, gate remote, parking assignment
  • Filing cabinet, keys
  • Tablet
  • Forms
  • Office supplies
  • Cooler, other supplies

Your new employee may need access to your computer software systems:

  • Employee email address
  • Any new user IDs and password for all the systems they will need to access
  • Document access

How will your new employee learn the ropes?

  • Set up training
  • Assign a buddy

Hopefully, this list will give you a start toward making your employee onboarding process a little smoother.

Marketing by the Numbers

Do you know if your marketing efforts are paying off? More importantly, do you know which marketing campaigns and channels are profitable and which are losing money? 

Marketing is one of the toughest areas to calculate return on investment, and one of the reasons is because customers may have had contact with your company in multiple ways before they make a purchase. Other reasons such as a lack of systems are more easily solved and can give you valuable information that you can make smart decisions with.

One main goal of marketing is to acquire leads that will hopefully turn into buying customers and even repeat customers. To start measuring your marketing efforts, we need to find out where those leads are coming from and measure which ones became your customers. That means we need to develop a system that tracks a customer from lead source to sale.

The hard part is that some of this needs to be done outside the accounting system.  The good news is that there are many tools and analytics available to help in this process.

One of the first things to do if you don’t already have it set up is to record the lead when they enter your sales process. Enter basic information about them in your CRM (customer relationship management system), and be sure to ask them how they found out about you.  This will help you track the lead back to the campaign or channel that they came in on. Once they’ve made a purchase, you can connect the lead to the customer record and track revenue by marketing source. 

If your leads come in digitally, there are many automated tags you can set up to track where they originated, whether it was from the web site, a particular web page, a social media account or a link from an email you sent out.

An important statistic for businesses is cost per lead, how much it costs to generate one lead for your business. The cost will vary by channel or marketing source. For example, someone coming from your website will cost less than someone coming from social media in most cases.

Once you know how many leads to generate to make a sale, you can start calculating what your marketing budget should look like.  More importantly, you’ll be able to forecast your revenue more accurately, too.

While numbers are probably the last thing you think about when you’re doing your marketing, they can be very effective for your bottom line.  There are many metrics beyond cost per lead that would be valuable to measure as well.  Here are just a few of them:

  • Number of leads (in total or per channel)
  • Number of press mentions
  • Number of direct mail pieces sent out
  • Number of email subscribers
  • Number of social media connections per platform
  • Number of posts sent, number of shares, number of comments
  • Total web visitors, new and returning
  • Google rankings for keywords
  • Number of customer reviews per site, ratio of positive to negative reviews

You might not think of accountants when you are doing your marketing, but we encourage you to think about the “numbers” part of marketing, the financial side. And as always, if you want help developing these processes and metrics, please reach out.

The Concept of Internal Control

Internal control is a very special phrase in the accounting profession. Tactically, it’s the set of processes that help a company produce accurate data throughout the organization, follow reporting requirements and laws, and maintain consistency and accuracy in its operations. Strategically, it’s an entirely new way of thinking and doing business.

Internal control helps to reduce organizational risk. A blunt way of putting it is internal control is what you put in place to avoid mistakes, intentional or accidental, and to control accuracy and quality. It impacts every aspect of an organization.

As a small business, you’ll want to be familiar with the concept because it can help you reduce risks you might not realize you have. Here are some practical examples of good ideas that support internal control:

  • When data is private and secure, provide access only to employees who need to know the data and restrict access of others. 
  • Have someone check that your bank balance matches the reconciled amount in your books, and that someone should be different from the person who does the reconciliation.  This is an example of what’s called segregation of duties. 
  • Lock up paper checks and use the missing check number report to make sure none of the stock could be used for nefarious purposes.
  • Have employees sign in and out equipment that they take home.  This is part of asset management.
  • Write and enforce a hardware and software use policy that includes items like employees should make sure their anti-virus software is active at all times, they should not bring in disks or CDs, and they should not download games or other unauthorized programs.  This protects from computer viruses and helps to avoid catastrophic network failures.

There are literally hundreds of internal control procedures that should be implemented in small businesses as they grow into larger businesses. 

Internal control is typically a big part of an audit or an attest function in accounting; it determines how many additional procedures an auditor needs to do in order to provide assurances about the reliability of the financial reports.  But it’s also just good plain common business sense to implement as many internal control processes as are cost-effective for your business to protect it at the level of risk you’re comfortable with. 

If you’d like to discuss the idea of internal control further, please feel free to reach out any time. 

Should You Have a Financial Dashboard?

A quick glance is all you need to check your fuel gauge, speed limit, engine temperature, and RPM when you’re driving down the road. Your car’s dashboard is designed to focus you on what’s important and what you need to know to have a safe trip.

Your car’s dashboard items, if they applied to business, would be called key performance indicators or KPIs. Unlike a car’s, the KPIs of your business vary depending on your business goals and what’s important to you. Common ones might include your cash balance, how fast you get paid, how much revenue is coming in, and whether you’re making plan. There are literally hundreds of them to choose from, and many of them are not derivable from your financial statements, such as number of orders, client satisfaction levels, and employee turnover. 

Would it be useful to have a dashboard of KPIs for your business so you can know what’s working and get alerted to what needs focus? Here are the steps to creating a dashboard for your business:

  1. Decide on the KPIs you want to track.  Selecting 6-10 to create and track is a good place to start. 
  2. Select a tool that will provide you with the KPIs in the format you desire. There are many great add-ons to your accounting software that will instantly crunch the financial KPIs for you and present them in insightful formats, including charts, graphs, dashboards, and reports.
  3. Create any new processes to calculate the new KPIs and get them entered into the dashboard app.
  4. Hold a review meeting to go over the KPIs and determine any action based on the review. 

There are many great KPIs available right in your accounting system, which might be plenty to get started with. And there are some real gems outside your accounting system that will take a bit of work to calculate. In any case, we can help you through this process.  Feel free to reach out to us any time to discuss the possibilities of having a dashboard in your business.   

 

How to Survive a Worker’s Comp Audit

If you have employees, you have the distinct honor once per year of being part of a worker’s compensation audit.  You likely receive a form in the mail, an email request, or a phone call that will ask you about your payroll numbers and employees for the prior year. 

Worker’s compensation is an insurance program that covers employees in the case they get hurt on the job.  Each employee receives a classification code that describes the type of work they do, and a rate is figured based on the classification and its risk factors.  

If you’ve hired anyone throughout the year, you might need to get a new classification by contacting your provider. If you have employees working in different locations (especially different states), that matters too.

The audit form will typically ask for gross payroll numbers by employee or by category or location of employee. That’s easy enough, but seldom does the policy run along your fiscal year, so the payroll figure needs to be prorated to match the policy period. 

Your numbers need to tie back to the numbers reported on your quarterly payroll reports for both state and federal. The provider may also want copies of your 941s and your state payroll reports. 

Once you’ve submitted your numbers, the insurance provider will calculate whether they owe you or you owe them additional fees. 

The worker’s compensation audit happens every year (even if you pay worker’s comp premiums each pay period, some companies still request an annual audit).  It’s not difficult, but it is time-consuming. If this is something you’d like our help with, please feel free to reach out.