   |
Prepaid Cards and BusinessMonday, February 2, 2009The use of prepaid cards for business purposes has steadily increased and broadened throughout the last ten years. Prepaid cards are ideal for business, because they:
Benefit Cards You may be familiar with using prepaid cards connected to your benefit plan. For companies that offer benefits it is commonplace to also have a program called a "cafeteria plan" or "flex plan." These plans allow employees to subscribe a certain amount of pre-tax funds taken from their paycheck and placed into accounts designated for healthcare expenses, commutation costs and child care. The program is maintained by a benefits custodian, some of which offer a card used to pay for insurance co-pays, childcare fees, transit costs and other related expenses. Using a flex card reduces the amount of paperwork employees have to do, eliminating check reimbursements and maintaining compliance with IRS rules. As pre-tax funds are allocated into flex spend accounts, the amount of taxable income is reduced. The net benefit is that employees just pay for services and move on, while reducing their tax bill in the process. Payroll Cards Many companies use direct deposit to pay employees. Yet, for certain industries with a large number of unbanked (those that do not have a bank account) employees going electronic may be impossible. To leverage electronic efficiencies, and to move away from the expensive check process involved with payroll, certain industries have seen a strong uptake of prepaid payroll cards. Payroll cards work intuitively: the net pay is loaded onto the card, and the employee can access cash at ATMs or they can make purchases wherever debit cards are accepted. Most payroll cards use traditional card and ATM networks, like Visa® and STAR®. For employers prepaid payroll cards decrease paperwork, and for unbanked employees they provide decreased processing fees at check cashing stores, access to Visa® card and MasterCard® card spending, and the status associated with carrying a card. Incentives Cards Paperwork used to be the cornerstone of managing incentives, but no more. Companies have turned to prepaid cards to replace the cash and check processes that used to bog down the system. Additionally, many of the companies that offer incentive cards for business will customize the cards with company logos for added trophy value - transforming the incentive into a reminder item. Programs can run for the long term, requiring a reload component to cards, they are issued once and funds are added when triggered (similar to the way a payroll card works), or they can be single load cards that are issued with a predetermined value and expire when funds have been spent (like a gift card). Travel and T&E Cards Your employees feel the same credit squeeze as we all do, so asking them to front the company money for their business travel is turning into a thing of the past. Corporate prepaid cards allow companies to essentially give employees cash advances without the inherent risks of carrying cash. The PEX Visa Prepaid Card is ideal for business travelers, because the cards can be used wherever Visa debit cards are accepted, the online spending controls protect the company against misuse, and there is an audit trail for every transaction. Per Diem Cards Managing a per diem program can be wrought with issues: determining the rate for the location of the employee, gathering all receipts, and recouping any leftover funds. Controllable prepaid cards ease the burden of per diems plans by enabling administrators to set daily spending limits, automate balance restoration, and have easy access to all transaction data. And, with the PEX Visa Prepaid Card, there is no need to physically recoup unused funds, because administrators predetermine how much is available to the cardholder per day, which cannot be exceeded and there is no cash access. Purchasing Cards Purchasing cards, or p-cards, are typically used to streamline the purchasing process for low-value transactions in large corporations and government agencies. These systems are often expensive to implement, but can vastly decrease transactional costs, strengthen purchasing policies, and provide extensive spend information. Unfortunately, these p-card systems require more resources (human, computer, and financial) than the typical small to mid-sized business can dedicate to improving their purchasing process. The PEX Visa Prepaid Card enables small companies to realize some of the benefits of a p-card program by providing a centralized administrative interface, merchant category restrictions and spending limits, and detailed transactional data. Corporate Card Corporate cards are really a catch-all for many types of company expenditures - from small purchases to travel. Corporate cards are often credit cards or charge cards and are subject to interest rate changes as well as credit limits which card companies have been lowering as a result of the credit crunch. Most companies do not distribute corporate cards to all employees, because it is difficult to restrict how the cards are used. The PEX Visa Prepaid Card allows employers to tailor each card, taking into account the needs of the employee and company. And, because the PEX Visa Prepaid Card is prepaid, there are no interest rate changes and cards can have a balance from zero to $10,000. To find out more about the difference between credit, debit, and prepaid cards click here to read a previous post on the subject. Labels: Finance Tips Posted by Toffer Grant
0 comments Entertainment Series: Driving salesFriday, January 9, 2009When trying to meet your budget, keeping your expenses in check is only half the battle. You also need to focus on driving sales. Whether tickets or t-shirts, how can you meet your goals and quotas?
The web is your most important tool to increase revenue. You need to determine your online strategy and tactics. Depending on the artist or event you may be able to incorporate something interactive like a blog, ezine, or fan group on your website. This type of social marketing can help draw people to your site, and increased traffic means more sales. On your site you should have various media offerings - mp3, video, or even CDs - available for purchase or sampling, as well as artist or event memorabilia. Equally important is to use the site to inform your visitors about upcoming dates and give them a clear path to purchase tickets. You can't drive sales if people can't find you, so make sure that you are managing your SEO (search engine optimization). Search engines can't find you if you don't tell them what to look for. Be sure to leverage your meta tags, titles, and headers. Not sure if your site stacks up and need some concrete suggestions? Try the free Website Grader from HubSpot: http://website.grader.com/. If you need one-on-one advice the folks at HubSpot can help you out, or you can Google 'SEO agencies' to find more options. For more online marketing ideas go to Content Marketing Today: http://contentmarketingtoday.com/ Labels: Accounting, Budgeting, Finance Tips Posted by PEX Card
2 comments Entertainment Series: Tracking and controlling expensesThursday, January 8, 2009To stay on budget - and protect your margin - you need to track and control expenses. Unfortunately, it sounds easier than it often is.
There are lots of expenses that are easy to track - you probably have a stack of invoices to prove it. But, in entertainment, there are a lot of purchases and payments made in cash, which is much harder to track and verify. To deal with the cash problem you can do a few things. First, and most expensive, is to hire an account. This professional will be on location with you and will be in charge of all the financials, like petty cash and sales, and reconciliation. Second, you can use an accounting software package and track the expenses yourself (or designate someone you trust to be responsible for it). This can be time consuming and you need to stay on top of it, but you will have a thorough understanding of where every penny is going. Third, you can use a controllable corporate card. Whether you use credit or prepaid, like the PEX Visa Prepaid Card, it doesn't really matter. What you'll want to look for is a card that allows you to control how employees spend money - by merchant category and amount. The fastest way to implement changes is via an internet interface, so look for a company that is able to give you real-time capabilities - for making changes to an individual's spending rules or reporting. Once you know what you're spending and how that aligns with your budget, you'll know where you need to start controlling expenses. Maybe it's catering, maybe it's your PAs, or maybe something else. Each situation is different, so we can't spell it all out here, but think of a few ways you can try to rein-in these expenses. For catering maybe you can cut back on name brand sodas. For fuel, maybe you can get a lower grade. The most important thing is to make sure you recoup the excess funds from any petty cash purchase. You already know this, but that's where of lot of the slippage will be. If you like to see a demo of how PEX Card works, and how it might help your next production or tour, click here. Labels: Budgeting, expense management, Finance Tips, Petty Cash Posted by PEX Card
0 comments Entertainment Series: Start with a budgetWednesday, January 7, 2009The most important part of making a job profitable is the budget. Without a budget, you won't have a benchmark to measure your progress.
Budgeting is pretty straight forward, but you need to think through every step of what needs to happen and how much it may cost or how much it may earn. Everything from trailers to catering to tolls and tips need to be considered. Of course, there will be some 'miscellaneous' expenses, but do your best to group as many foreseen expenses and revenue streams as possible. Once you've mapped out your budget categories you can start entering information into your template (QuickBooks and Excel are decent low cost options). Enter all the known expenses and revenues first. You'll probably be impressed by how much you already identified. Now, you'll need to estimate the rest. For line items like PAs or crew, you have a pretty good idea how many you'll need and how much you'll pay them. If you're going to be on the road and need estimate gas expenses, I suggest you use www.mapquest.com. They have a nifty feature that estimates fuel cost when you get directions. And, if you're really on a budget, there's an added feature that lets you avoid toll roads. There's a wealth of information on the internet that will help you estimate - use it, don't just guess. Also - when making your budget, be sure not to lowball. Sure you want the gig, but underestimating is not appreciated by any client - no matter what industry. I'm a big fan of the worst case scenario budget - all your expenses are high and revenue is low. If you can still make a profit if the worst happens, you're sure to do well. Here's a good article on tour budgeting - with an example. http://www.halgalper.com/BIZ_TALK/touroutingpg2.htm Labels: Accounting, Budgeting, Finance Tips Posted by PEX Card
0 comments Controlling Spending on the RoadTuesday, January 6, 2009Our last few entries have given you pointers about controlling costs driven by your business travelers. Even if you are only able to get one of the ideas rolling, we know that it will impact your bottom line. So, give it a try.
Another way to help you manage expenses is to use a controlled corporate prepaid card, like PEX Card. What we mean by 'controlled' is that you control where, when, and how much your employees spend. You can limit the amount available on the card, the amount they can spend per day, or restrict the merchant categories where they can make purchases. Here's an example of how it works: You have an employee who is headed off on a 3 day business trip. They let you - or your PEX Card Administrator - know they will need $190 per day for lodging, $20 for personal meals, and $200 for client lunches and dinners. That comes to $410 per day or $1,230 for the three days. Now, you log onto the administrative website, load the card with $1,230 and set the daily limit to $410. You can now restrict their card usage to travel/transportation and restaurants. Everything happens in real-time. When they return from the business trip you can remove the excess funds from their card, and have a detailed account of all their transactions in one place. The PEX Card helps you keep your employee driven expenses in check by giving you the tools to predetermine when, where, and how company funds are spent. If you'd like to see PEX Card in action, click here to see our demo. Labels: Finance Tips, Travel Expenses Posted by PEX Card
0 comments Controlling Spending on the Road - EntertainmentMonday, January 5, 2009In our past two posts we've discussed expense policy and how to negotiate discounts for your business travelers. Here, we'll talk about client entertainment.
Often most outlandish expenses come from entertaining clients. We've all heard a story or two about somebody ordering a really expensive bottle of wine or dining at the fanciest restaurant in town (with the price tag to match). But, how do you decline to pay those expenses when they won over a new client, or kept an old client from leaving? I don't think there is an industry which has not been affected by our current financial turmoil. Companies everywhere are tightening their belts, and every department is pitching in to help. Your business travelers should be no different. Take this time of belt tightening as an opportunity to talk to all of your business travelers. Whether through a PowerPoint presentation, video, or just a chat on the phone - you need to convey that the business needs their help to stay competitive in these tough times. Explain to them that every dollar saved in expenses is like earning $10 more dollars in sales (this is just an example - your numbers may be very different). And, reiterate what's already in your expense policy. A great way to get your travelers on board is to give them the tools to make it work. The Michelin Guide is an excellent resource. Every restaurant listed has merit, and many are not only yummy and stylish, but inexpensive too. Other favorite places to find great restaurants are zagat.com and opentable.com (they have a new app for the iPhone, which is fantastic). Client entertainment isn't going away, so you will need to give your team the tools and encouragement to keep it in check. Labels: Budgeting, Finance Tips, Travel Expenses Posted by PEX Card
0 comments Controlling Spending on the Road - DiscountsTuesday, December 30, 2008In our last post we discussed establishing and enforcing an expense policy. Here we'll look at how to negotiate discounts for travelers.
Most hotel chains, rental car companies and airlines offer discounts negotiated on a company wide basis. This will take some leg work, but will pay off. Here's an example of how to negotiate to get the best deal at hotels.
Be sure all your business travelers sign up for the hotel's rewards program, and let them know that they can use those rewards points any way they like. This way your employees will be incentivized to use the preferred hotel. Of course, there will be occasions when the preferred hotel chain does not have a unit near where your business travel takes you. This is where your expense policy comes into play. Make sure that you have a clear policy that states what the procedure is when the preferred hotel is not available. Negotiating better rates is not only good for business, it's extremely gratifying. So, enjoy! Labels: Budgeting, Finance Tips, Travel Expenses Posted by PEX Card
0 comments Controlling Spending on the Road - Expense PolicyMonday, December 29, 2008They are your face to your customers. They're funny, and nice, and work their tails off to make your company a success. But, man-oh-man can they spend money!
Business travelers can wreak havoc on your budget and drive up your cost of goods sold. Over the next few entries we'll discuss a few easy steps to help you keep spending in check. If you don't have a written expense policy, write one. If you have an expense policy, and are finding that employees ignore it you need to review it and make changes. One of the easiest ways to make sure your expense policies are adhered to is to have employees sign a document stating that they have read and understand the policy, promise to adhere to it, and recognize if they don't they will face consequences (i.e. non-reimbursement, curtailed travel, reduction in bonus, or even termination). We have an expense policy template that can get you started or give you a few ideas to improve the one you already have. Click%20here%20to%20download%20the%20expense%20policy%20template. Labels: Budgeting, Finance Tips, Per Diems, Travel Expenses Posted by PEX Card
0 comments Financial Crisis Series: Staying CompetitiveMonday, December 22, 2008How do you stay competitive when your sales are stagnant or dropping?
Cutting costs decreases the cost of goods sold - giving you a bigger profit margin. Increase your marketing efforts. Most of your competitors are slashing the marketing budget and decreasing their exposure - this is your chance to outshine them and gain new clients and customers. Take a look at your website and make sure it's optimized for organic searches (SEO). Expand your PR campaign to including pitching stories to local newspapers about how your product can help people save money. If you're doing the PR yourself - this is free. Improve your product to make it more attractive to customers. Have the product development and marketing teams determine which improvements will make the most impact in the marketplace and to the bottom line. Don't shoot yourself in the foot.
We hope you've found this series to be helpful. If you'd like to share tips of your own, please send us a comment. Labels: Budgeting, Cash Flow, Finance Tips Posted by PEX Card
0 comments Financial Crisis Series: The Credit IssueFriday, December 19, 2008Remember when the two things that crowded your mail box were catalogs and credit card offers? Have you noticed how few card offers there are these days? I'm sure all those trees are happy, but for the rest of us it's proof of what we already knew - the credit crisis has affected us as well.
We've been hearing it from our customers and reading about it in the papers - businesses are moving to a cash model to pay for regular expenses. They want to conserve their credit line for important things like emergency repairs for equipment or an upgrade that will make them more competitive. The big question is - how do you make this happen? If you're a small company, with less than 100 employees, you are at the highest risk to fraud and abuse (http://www.acfe.com/resources/view.asp?ArticleID=9), and must take additional steps to protect yourself. So, moving to a cash (or same as cash) system may seem unwise, because these are inherently riskier forms of payment (http://www.afponline.org/pub/pdf/2008PaymentsFraudandContolSurvey.pdf). As someone who works for a prepaid business card company, I know that prepaid cards can help bridge the gap between controlling payments and a cash based system. Here's how it works: in advance of purchases you load the card with funds. In the PEX Card system, you can decide what merchant categories are allowed, how much is on the card, as well as a daily spending limit. You can also cancel or block card usage at any time. The PEX Visa Prepaid Card can be used wherever Visa debit cards are accepted, so making purchases is convenient. When purchases are made, you can see them posted in real time. Additional features to keep your company safe from fraud and abuse, include separation of company funds and card funds, ability to remove excess funds from cards, as well as no access to cash advances or ATMs. If you do use an actual cash or check model, you need to set up regular controls and audits to ensure that your system is the least susceptible to fraud as possible. We suggest hiring a certified fraud examiner to audit your current process and suggest places for improvement or additional control mechanisms. We also suggest that payment paths are separated, so that one person is not responsible for everything from request to payment. And lastly, when employees go on vacation, be sure to review their work - especially those in financial positions. If someone refuses to go on vacation - insist they do. It is often the people who seem to be the most dedicated that are your biggest threat. Click here if you'd like to see a demo of the PEX Card administrative interface. Labels: Budgeting, Expense Fraud, Finance Tips Posted by PEX Card
0 comments Financial Crisis Series: IntroductionMonday, December 15, 2008The financial crisis has many of us taking a long hard look at how we conduct business. We're looking for ways to cut costs, conserve cash and credit, and still run a profitable business.
Over the next few installments we'll discuss the financial crisis and ways you can strengthen your business. If you have comments, suggestions, or just want to add your two cents, please feel free to chime in. If you haven't already seen this article by Michael Lewis (author of Liar's Poker) on how we got here, it's definitely worth a read. http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?page=0 Labels: Budgeting, Cash Flow, Finance Tips Posted by PEX Card
0 comments Event Marketers - Staying on Budget and Tracking ExpensesFriday, December 12, 2008Though your business is driven by your out-of-the-box ideas and your top-notch execution, don't let the accounting fall by the wayside. Customers are under pressure to stay in (or under) budget - and this is where you can really set yourself and your company apart.
Make sure your team has a clear understanding of what the budget is, how it is allocated and how expenses are going to be tracked. If your non-invoiced payments are usually executed with petty cash, be sure to have a system in place for collecting receipts, recouping excess funds, and accounting for it all (Quicken or Excel are both easy to use options for this). Centralizing petty cash with one person in charge is a must. If it's an event with many distinct departments consider giving each a petty cash fund and an officer to manage it. If you prefer not to have all that cash roaming around, and want to save yourself some time, trouble, and paperwork try using a controllable corporate card, like PEX Card. PEX Card allows you to set specific spending profiles to each cardholder. For example, one employee may be authorized to spend $100 per day at only retail stores, while another is authorized to spend up to $2,000 in any merchant category. At the end of the event you will not only be on budget, but you'll have a complete record of all spending. If you are able to stay on or under budget your clients will remember you as that fantastic event marketer with a head for numbers, and you'll be working with them again sometime soon. Click here if you'd like to see a demonstration of how PEX Card can you help control employee spending. Labels: Budgeting, Finance Tips, Petty Cash Posted by PEX Card
0 comments Reminder - Bookkeeper Licenses Expire on December 31stWednesday, December 10, 2008If you are a Certified Public Bookkeeper (CPB) or have one working for you - here's a quick reminder that it is time to renew CPB licenses. According to the National Association of Certified Public Bookkeepers - all CPB licenses must be renewed by December 31st each year.
For license renewal common questions and answers, go to www.nacpb.org/licenserenewalquestions.cfm For additional questions, please email info@nacpb.org or call 1-866-444-9989 Labels: Accounting, Finance Tips Posted by PEX Card
0 comments Promote AccountabilityTuesday, December 9, 2008Accountability is a buzz word that gets thrown around a lot. It is especially important to have accountability in the finance team. With money at stake and the IRS looking over your shoulder, transactions need to be documented and employees need to own their role in the company and their actions.
In order to promote accountability in the workforce, it’s important to create an atmosphere that nurtures it. This means clearly stated policies spelling out employee roles, putting systems in place for documenting and tracking procedures and work, and specific times for review to make sure everything is in order. The focus should not be on monitoring, but rather empowering. Using technology to make accountability easy and efficient can make all the difference. How should you promote accountability? Here are some articles with tips and ideas: http://ezinearticles.com/?Promote-Employee-Self-Responsibility---10-Ways-to-Instill-Accountability&id=1213556 http://www.jobbankusa.com/news/business_human_resources/corporate_accountability.html Labels: Finance Tips Posted by PEX Card
0 comments Reduce Administrative OverheadMonday, December 8, 2008Particularly when discussing the finances of a nonprofit, administrative overhead comes into the conversation. Donors want to know exactly how much of every dollar is going to the cause and how much is going to manage the organization. Private sector companies also need to keep an eye on this aspect of business because while infrastructure is important, every business needs to maximize efficiency in order to affect the bottom line.
So how do you keep that administrative overhead low? There are a few things to keep in mind when evaluating and cutting some of these costs: Endorse Telecommuting While not every industry can have employees work from home, it is a good idea when possible. The same work can get done with fewer people in the office, enabling you to decrease office space and reduce utility (i.e. phone, bandwidth, electricity) consumption. This can do a lot to cut the overhead. Consider Job Options One of the largest pieces of the budget is paying for employee salary and benefits. Whenever you are hiring, take time to construct the position requirements carefully so that you can find the right person and get as much value as possible per employee. Also, consider temps or consultants as full-time employee alternatives without as much overhead. Time Tracking It's hard to minimize administrative overhead if you don't know where the black holes of time management exist. By setting up a convenient way for employees to track their time, you can see where in the process things need to be more streamlined. Labels: Budgeting, Finance Tips Posted by PEX Card
0 comments Electronic Payment SolutionsThursday, December 4, 2008Electronic payments have been the fundamental element that has enabled ecommerce, and in recent years this technology has grown by leaps and bounds. More and more transactions are being done without checks and without paper invoices. No matter what business you’re in, you can cash in on this trend to cut down on costs. What do you need to know about electronic payments?
One of the key points for a company based on sales is that electronic payments can cut down on “float”, or DSO (Days Sales Outstanding) If you charge for goods or services electronically, the time before you receive payment is cut down significantly, thereby improving your cash flow. http://www.cfo.com/article.cfm/3010979/1/c_3046602?f=search Many companies can offer electronic payment solutions. So if you haven’t built up the infrastructure to be able to accept e-payments on your own, you can start offering the option. These solutions range from PayPal to more complex payment transfer methods. However, expect to pay a small fee per transaction if you outsource your payment method. http://businessfinancemag.com/article/electronic-payments-gain-ground-0201 Encouraging vendors to also use electronic payments can also help your bottom line. This may involve offering an incentive, like earlier payments, in order to convince vendors to include an e-invoice option. However, the paperwork saved by being able to pay bills online will more than make up for any small incentive. http://www.accountspayable360.com/news/news/1617706-1.html Labels: Cash Flow, Finance Tips Posted by PEX Card
1 comments 5 Effective Cost Cutting TipsWednesday, December 3, 2008One of the biggest ways companies can improve cash flow as well as the bottom line is to cut costs. Yet cutting costs without impeding growth can be a delicate balancing act. In order to navigate the tight-rope here are our top 5 tips for effective cost cutting:
Engage employees - http://findarticles.com/p/articles/mi_m3495/is_11_48/ai_111170582 If you keep a dialog open, employees are on the front lines and can point to some of the best cost cutting measures. Focus on variable costs - http://www.morebusiness.com/running_your_business/profitability/Controlling-Costs.brc Make a list of which costs absolutely must stay so that you don't end up cutting something you need, which could cost you more in the long run. Don't cut valued perks - http://www.fastcompany.com/blog/heath-row/cost-cutting-gone-wrong While taking away those unnecessary perks may seem like good decision-making, it can adversely affect morale and decrease productivity. Utilize free ad mediums - http://www.atouchofbusiness.com/business-topics/cost-control/advertising-rates-00013.html Advertising is an important way to attract new business and it doesn't have to cost an arm and a leg. Look into opportunities for free advertising in order to complement your current ad campaigns, but make sure they don't compromise the integrity of your brand or appear in places you find questionable. Value Experience and Talent - http://startup.partnerup.com/2008/09/15/cost-cutting-mistakes/ Cutting out costly employees might seem like a quick way to fix the budget, but this often entails spending time on choosing and training new hires that don't have the same experience and talent. Labels: Budgeting, Cash Flow, expense management, Finance Tips Posted by PEX Card
0 comments Ask PEX Card: How can I cut down on paperwork in the office?Tuesday, December 2, 2008Actually, I hear this question a lot. For both the environment and your sanity, streamlining the finance process to minimize paperwork is a must. And yet, there is a definite need for documentation and accountability. The balance can be achieved by careful consideration, adjustment, and evaluation.
First, look at what you can do online. Google docs is a program that lets you access shared excel files that multiple users can contribute to. Online forms are available, which can be filled out, emailed, and stored as a file. This is usually an easier, more convenient option and still allows for accountability. In addition, look into programs that will help make documentation easier. Anything that automates the process or lets you enter data and generate reports can mean fewer headaches and less paperwork. Using corporate cards to pay for expenses can mean all costs are listed in the card statement, which lets you see exactly where and how much is being spent. Whatever you can move onto the computer into an efficient system will cut down on both actual paper and paperwork. Labels: Accounting, Finance Tips, Travel Expenses Posted by PEX Card
0 comments 1099 Forms: What You Should KnowMonday, November 17, 2008Every contractor you pay more than $600 to over the course of the year requires a 1099 form, if that contractor is an individual person and not a corporation. 1099-misc forms are also needed for royalty payments of at least $10 and consumer goods sales of over $5,000 to any particular person, not business, for the intent of resale. So what are some top line things you should keep in mind about a 1099 form?
1099 forms are for contractors. While this status can be beneficial due to fewer company paid taxes, it should only be used when it truly applies to avoid IRS penalties (http://www.cfo.com/article.cfm/9140439?f=search). Create a company policy that will let your managers know just when to fill out a 1099 versus a W2. Here are some of the qualifications the IRS uses to determine worker status (http://www.topechelon.com/recruiters/contracting/definiti.htm). If you uncover a case of fraud in the company, file a 1099. Criminal proceedings may not get your money back, but letting the IRS know about your employee’s undocumented earnings can get you a tax write-off and potentially a finder’s fee (http://www.cfo.com/blogs/index.cfm/detail/4100859?f=search). Hiring a contractor and filing a 1099 is a great way to get temporary help without the hassle of hiring a permanent employee. It can also be a valuable way to fight back against company fraud. Just be sure the 1099 forms are carefully filed in order to keep your company in the IRS’s good graces. Labels: Accounting, Finance Tips, IRS Posted by PEX Card
0 comments Petty Cash and SecurityMonday, November 10, 2008Typical problems regarding petty cash usually involve accurate documentation and security. If the records are incomplete or inaccurate, or the box is not properly secure, the petty cash is compromised and cannot be accounted for. This is when petty cash fails. However, with some safeguards in place, these issues can be minimized.
Tips for Accurate Documentation:
Tips for Security:
Labels: Accounting, Finance Tips, Petty Cash Posted by PEX Card
0 comments Small Business Financing Tips: BookkeepingThursday, November 6, 2008Bookkeeping is one of those tasks where there’s always room to tweak the process to make it more efficient. Fortunately, the National Bookkeeping Association keeps up on all the latest innovative bookkeeping ideas so you don’t have to. The NBA has offered some valuable tips and advice in their newsletters this past summer. Here’s a rundown of their finer points of bookkeeping:
Bookkeeping Skills Evaluation http://www.nationalba.org/bookkeepertips.cfm?id=0808 This article spells out two ways to ensure that you hire qualified bookkeepers who can help the business run efficiently. One is to actively check references. Not all companies follow through and call references, yet this practice can offer valuable insight that may not be apparent in an interview. The second is to do pre-employment testing, ensuring that employees have the technical skills necessary for the job. Depreciating and Amortizing Assets http://www.nationalba.org/bookkeepertips.cfm?id=0807 When a purchase, such as equipment or insurance, lasts for a limited amount of time, it needs to be considered an asset and then written off during the specified period. For tangible assets this is depreciation and for intangible, it’s amortization. This piece does a great job explaining different methods of calculating and allocating these expenditures. Adjusting Asset Valuations http://www.nationalba.org/bookkeepertips.cfm?id=0806 For accounts receivable and inventory, sometimes you will not fully recover the value of an asset, meaning that you need to make a valuation adjustment in the books. This will take into consideration debts not being paid, inventory not selling, or other instances where you simply are not able to recoup expenses. This article explains what should be done from an accounting perspective in order to deal with these variables. Labels: Accounting, Finance Tips Posted by PEX Card
0 comments Minimize Corporate PaperworkMonday, November 3, 2008If there’s anything that sucks up time and hinders productivity; it’s paperwork. Like most things, you need to strike a balance between the amount of paperwork required for control and the cost of that paperwork and the potential savings from the controls.. This promotes accountability without adding unnecessary work. By far, the best way to achieve this balance is through the use of technology. Information input is less time consuming and files can be stored and sorted with ease. Here are some ideas on how businesses, industries, and organizations have been able to use technology to fight the paperwork mountain:
Barcodes and Scanners - http://findarticles.com/p/articles/mi_qn4158/is_19950615/ai_n13988571 Handheld Computers - http://goliath.ecnext.com/coms2/gi_0199-1585761/Palm-Handhelds-Cut-Paperwork-Burdens.html eForms - http://www.informationweek.com/news/management/showArticle.jhtml?articleID=15600307 eFile Taxes - http://www.irs.gov/businesses/corporations/article/0,,id=146959,00.html So if you want a detailed paper trail, consider going paperless. Labels: Finance Tips Posted by PEX Card
0 comments What to look for in a bank relationship part 2: Bank RelationshipsFriday, October 31, 2008How do you go about nurturing a relationship with your business’ bank? And how can this effort result in better service for your business? Surprisingly, a close relationship with the bank and bank representatives can lead to a surprising amount of savings, both through better loan rates and discounted services. There are a few key points in creating this rapport.
The Importance of Bank Relationships Bank consolidation is leading to bigger chains and fewer choices, meaning that creating a relationship with a bank and being a face rather than a number is becoming more and more important. Why? Loan rates can be negotiated and services like a line of credit and payroll deposits can be added for free or for a small fee. Bank managers have some leeway to offer deals when working with valuable customers and you can benefit from that practice. How to Foster a Good Relationship Your bank contact is a valuable business advisor. Offer business plans or other information that would help convey what your business is all about. Let him or her know about your plans for the business' future and ask about the financial aspects of getting there. And don’t forget to treat your banker as a valuable employee, taking time to learn more about him or her. A little effort can go a long way. Additional Resources: Buddy Up: How to Develop a Friendly Relationship with Your Bank - http://www.entrepreneur.com/money/moneymanagement/article22796.html What’s New in Bank Relationship Management? - http://www.afponline.org/pub/res/news/ns_20040715_masson.html The Importance of Building a Good Relationship with Your Bank - http://www.articlesbase.com/finance-articles/the-importance-of-building-a-good-business-relationship-with-your-bank-487499.html Labels: Accounting, Budgeting, Finance Tips Posted by PEX Card
0 comments What to look for in a bank relationship part 1: Choosing a BankMonday, October 27, 2008Some of the most important elements in choosing a bank include institution stability, business services, and available guidance. Here’s a rundown of each of these factors and how each can affect the future of your business. Careful consideration before you choose a bank can save a lot of time and effort down the road.
Stability First, of course, is choosing a bank that has stability. You want a bank with a reputation of keeping your money safe. There is a lot of volatility in the banking industry now, so research any prospective banking partner, and only keep your money with an FDIC insured institution. Business Services A bank is a great place to store funds and get loans, but it can also become an ally, which makes doing business easier for your company. Look for business services that will make your life easier. Banks can help with things like recovering bad checks, getting workers compensation insurance, and providing a line of business credit, so keep an eye out for these options. Available Guidance Bank representatives do not have to only fill the roll of banker. They can suggest options you may not have considered and help you achieve business goals. Look for someone who really gets what the business is about and is willing to research and proactively put forward alternative financial strategies. Looking for a bank with the lowest fees may work in the short term, but if you have to spend more time trying to get in touch with the bank, setting up direct deposits, and solving finance issues on your own, it could actually be more in the long term. You’re better off considering other factors to make the right choice for your business. Labels: Finance Tips Posted by PEX Card
0 comments Internal Audit PreparationThursday, October 23, 2008Internal audits are a key part of keeping a business healthy by managing risks and rewards. They involve analyzing business practices and offering solutions for smoother processes. While this can be a vital part of running a profitable business, it can also be a burden to prepare for internal auditors. What can the accounts payable (AP) team do to prepare?
First, get an idea of the desired outcome of the audit (i.e. better business practices, like an online travel service implementation, or shorter purchase to pay cycles). Determine what will be required from your AP or accounting department and how much time will be needed for audit preparation. Most audits take 8 to 12 weeks (http://en.wikipedia.org/wiki/Internal_audit). Once you have a general idea of the time frame and project, set out a plan to go through the following steps: Have all necessary documents on hand. If your company uses a Quality Management System (QMS), include information stored there as well. Not all audits are the same, so ask your auditor for guidance on which documents would be helpful. Also, having general records available and organized will help immensely. The more time you spend organizing the data beforehand, the less time you have to spend explaining and searching when the auditors arrive. Consider potential questions. Take a look at the cash flow process so that you can answer any relevant questions. Note anywhere you have performed a self analysis or evaluation. Much of this may be in the QMS. Once you review your own process steps and requirements, you will be better able to answer questions quickly and correctly. Finally, prepare to be unavailable for work during some of the auditing process, since time will need to be spent with the auditor. To minimize distractions, treat this time as though you were out of the office. This will make the audit process more efficient and will take less of your time than repeated interruptions. Labels: Accounting, Cash Flow, Finance Tips, IRS Posted by PEX Card
0 comments PEX Card User Review: Cyber-NYWednesday, October 22, 2008Small business owner, Michael Brown was one of the first to participate in the PEX Card private beta program. Over the last few months he has integrated the card program into his New York office, and will soon be incorporating it into his San Francisco office.
His firm, Cyber-NY, is a full service web design agency, employing designers, developers, and account managers. The needs and budgets of his employees differ, but PEX Card is helping him control spending while keeping business moving. Recently he sent us an email outlining some of the ways that PEX Card is helping him move business forward:
If you have a story about how you've put PEX Card to work in your business - send us a comment. Labels: Finance Tips, Petty Cash, PEX Card News Posted by PEX Card
1 comments Our StoryThe inspiration behind our company came from personal experience. At other jobs we saw spending control problems which included theft and misuse, inconvenient expense management processes and inefficient processes for managing checks and payments. This was very disruptive for our employers to deal with and the owners were uneasy about trusting employees. I saw an employee purchase a vacation for his mother, another buy personal clothing and yet another order furniture for their apartment. All on their company credit card. A friend recently told a story of an employee who wrote himself a check from the company's checkbook and cashed it! These stories are common among people who have worked in offices.
When doing our market research, we spoke with many business owners who said they don't issue cards to employees. Many believe that cards are convenient and would issue them to employees if there was a way to limit the risks. To solve this problem, we started PEX Card. Employees of customer companies can now carry a reloadable prepaid Visa® card with no spending ability until the employer funds the employee's card for authorized purchases. Every employee in our office has a card. Because the service segregates funds between our business account and cards, I know there won't be any surprises. When our marketing director needed to post a press release on the wires, I funded her card with $200; when we need office supplies, I load up our admin's card. It takes less than thirty seconds for me to login, add funds and log out. Because the service summarizes balances for me online at both the card and business level, if anything seems off, I can investigate immediately. My colleagues and I are prepaid card veterans. We took what we learned from our prepaid card experience, past work experiences and market research and created a product that delivers controlled card spending for SMBs. Toffer Grant, Founder Do you have similar experiences or thoughts about this? Share them by posting a comment! Labels: Accounting, Expense Fraud, Finance Tips, Petty Cash Posted by PEX Card
0 comments 5 Ways to Save Your Business MoneyMonday, October 20, 2008Improving the bottom line is a major goal for every company. Taking just a few steps can save money and have a big impact. Figuring out which steps to take can be a daunting task. Fortunately, we’ve done some of the legwork already. Here are some surefire ideas:
Use Open Office – Why pay hundreds of dollars in licensing fees for Microsoft Office when there’s a free alternative? Creating documents, spreadsheets, and presentations is just as easy and are completely compatible with Microsoft, at a fraction of the price. http://www.openoffice.org/ Automated Payments – Monthly bills need to be paid every month, so plan for it. Set up automated payments if possible and decide on the best day to pay. You won’t accrue late fees, you’ll have fewer checks to cut, and you can streamline the billing process. Ask for a Deal – If you provide steady business, a vendor might be willing to offer a special price, a bundled package, or some other additional perk that offers value to your company. While you may not always get a break, always ask; you never know. Turn Off Electronics – Just by making it a policy to turn off (and perhaps unplug) electronics at the end of each day, you can shave a surprising amount of money off the electric bill. In addition to costing money, leaving computers on at night can be a security risk. Minimize use of cash and checks in your business - Using a purchasing or commercial card, can reduce the internal cost of processing transactions by 70%. The less time A/P staff and bookkeepers spend cutting, mailing and reconciling checks, the less it will cost your business. To better understand the difference between card products in the market, have a look at (link to our post about: Prepaid, Credit and Debit Cards). How many transactions do you do in a month? The savings would add up quickly. Labels: Budgeting, Cash Flow, Finance Tips Posted by PEX Card
0 comments Ask PEX Card: How to survive the credit crunch?Thursday, October 16, 2008There are some advantages to a credit crunch that can work for you if you capitalize on them. Take this as an opportunity to scrutinize every aspect of your business from expenses to employees to clients. Pairing down what weakens your business will strengthen it.
1) Cut costs - expenses that aren't necessary Which costs are necessary and which are optional? Candy on the receptionists desk - optional. Electricity - necessary. Color copies - optional. Supplier contract - necessary. And so on. From the necessary expenses, which costs can be reduced? Ask vendors for more favorable payments terms, whether extended terms or a discount for paying early - this can help your cash flow and bottom line. Decrease your electricity bill by conserving energy - turn off lights in unused rooms and when you leave for the evening and turn off computers when the user will be away for more than 30 minutes. A penny saved is a penny earned - you can do this. 2) Human resources - consider who is on board Every team has its weak link. Maybe your business has someone on the team who isn't adding to the bottom line or the strength of the company. This could be someone who just doesn't pull their weight, or someone who lowers the morale of those around them. In either case - now is the time to change. The downturn in the economy means that there are a lot of great people looking for work right now. Begin the recruiting process and find someone that will fit in with your corporate culture and add to the bottom line. 3) Costly clients - are they worth it You know who they are. They are the clients that take up more time and resources than they pay you. They can be difficult, not pay on time, and suck the energy right out of you and your team. If you don't see your relationship improving in the next 6-12 months - fire them. If something costs more than you sell it for you're losing money. You can't afford that right now. Stay focused on the goal - stay in business and make money. 4) Discounts - they don't always help Now is also the time to shore up your business to protect you from the worst of the crunch. It can be tempting to lower prices to attract more sales, but this can eat away at your profits quickly. Consider promotions on particular items while the rest of the inventory stays at full price. Put your business in a good position financially so that you can tough it out now and prosper later. In a previous post we discussed shoring up business finances to make it through a down-turn, to read it click here. Submit your questions to "Ask PEX Card" through the comments link below. Labels: Budgeting, Cash Flow, Finance Tips Posted by PEX Card
0 comments CEO Interview on StartupBizCast.comWednesday, October 15, 2008Our CEO Toffer Grant was interviewed for a podcast on StartupBizCast.com. The interview was posted today and is available here.
The interview is less than ten minutes long and covers expense management in small business. Toffer explains a little about what we do, offers tips for better expense tracking and suggests that cards are a great way to stay organized, because transactions are recorded online and on card statements if the receipt is lost . Many thanks to Steve Mullen for the interview! Labels: expense management, Finance Tips, interview, PEX Card News Posted by PEX Card
0 comments Prepaid, Credit and Debit CardsThursday, October 9, 2008There are many different kinds of business card programs out there - credit and debit for small business or large credit-based corporate P-card and travel card programs. Banks also offer debit cards linked to bank accounts. Now that PEX Card is available, there is prepaid for business as well. So what's the difference?
For the employee cardholder, they all function more or less the same way - cards have a network brand name (like Visa), are presented for payment and require a PIN or signature at the point of sale to complete a transaction. Overall, they are very convenient - no checks, no cash and information is electronic so its available online. For the business, determining which of these products to implement becomes a question about which features are going to help facilitate operations and how the program will integrate into a business, while maintaining control of spending. A small business credit card is most similar to a personal credit card. Though most small business cards require company authorization for purchases, employees still have access to their employer's line of credit, which may be problematic for some business owners and CFOs. While most of the workforce may have a need to spend corporate funds, only the most senior employees receive cards. All others are required to pay out-of-pocket and submit expense reports, requisition cash, or borrow an authorized cardholder's card to make purchases. In many cases, small business cards cannot be used by companies effectively. P-cards and travel cards are tailor-made card programs offered to larger organizations whose revenues are generally in excess of $10 million to $20 million per year. These cards have customizable profiles and have components integrated directly into HR and accounting systems which requires buy-in and support from IT groups and management. An alternative to credit-based products is a debit card linked to a bank account. Debit card (or check card) payments are akin to check payments in that money is accessed directly from a checking account - cards issued share one common balance. This can be problematic if one cardholder spends all funds in the account and may bypass any float available through a credit card payment, but debit cards still enable employee access to spending on the Visa network. The PEX Visa Prepaid Card is a blend of all of the above. It behaves similarly to a debit card in that funds must be added to an account prior to spending, yet with detailed controls, individual balances and reporting it also behaves like a P-card. Because PEX Card is prepaid, no credit check is required to open an account, giving companies easier access to Visa spending with less risk of putting credit in employees' hands. Prepaid is a form of debit but no checking account is opened for the customer, making the card the primary access point for funds. There is no ATM access with PEX Card. While there are similarities between them all, the tools companies need to streamline spend management have, until PEX Card, been out of reach for smaller organizations. The PEX Card Service is the most comprehensive expense management tool at this price point, offering access to individualized balances, features to control and pre-authorize spending, manage company money, and access real-time spend data for visibility into cash flow. Labels: Finance Tips Posted by PEX Card
1 comments Business Expenses: Keeping the BooksFriday, August 15, 2008How long does it take you to close the books at the end of the month? How about the quarter? For many companies, the process takes days, and it doesn’t have to. Advancements in accounting software have streamlined the process of keeping the books, making it easier to track expenses in real time. When costs are tracked in this way instead of being pulled into a spreadsheet at the end of each month, it is less time-consuming to report and easier to monitor expenses.
While this type of automated system for accounting has already been widely accepted at the largest corporations, small and medium sized businesses are often still doing the books by hand. Even relatively small businesses can benefit from software, as it cuts down on time personnel spend closing the books and their time can be spent evaluating expenditures instead. No matter how you keep your books, be sure to watch out for things like creating a miscellaneous category or putting one item under multiple categories. Spending a little time now to create clear designations for expenditures can save a lot of time later on. For more bookkeeping tips, both for accounting by hand and using software, visit the Basic Bookkeeping Tips at AllBusiness.com. Labels: Budgeting, Finance Tips Posted by PEX Card
0 comments Business Investment GuideWednesday, July 23, 2008How would your business fare if the industry drastically changed, the economy took a major tumble, or increased competition took away customers? Ideally, a company would revaluate, adjust, and find another way to increase market share and provide a profitable service or product. A restructuring process like this might take 3 months or longer. The question then becomes how a corporation can stay afloat during a transition period when business is light.
Many businesses, without adequate funds or debt capacity, would fail before they were able to adjust strategies. However, with some forethought and smart investing, a wise finance manager can ensure the company is prepared to whether a storm with a war chest. And if that storm doesn't appear on the horizon, well-invested funds can be a great asset to put toward acquisitions. The first step to any project of this nature is to assess the goal and what is needed to reach it. How much money would it take to run the business for a few months? And how much of that could be covered by a business loan? Keep in mind that the same factors that would affect your current business would also affect loan availability. Once an amount is decided upon, a plan of action must be put in place to raise this money and find an interest-earning place to keep it. Angie Mohr at Numbers 101 has an interesting article that discusses these next steps. It's well worth reading for anyone looking to put some profit away for future use. With a goal and a plan of action, business investment can be a definite asset. Is it time for your corporation to start a rainy day fund? Labels: Finance Tips Posted by PEX Card
0 comments |
Promotional offers, news, financial tips and more. Categories
» IRS
Subscribe
Technology evolution has made it really easy to keep track of a large number of your favorite Web sites or blogs, without having to remember to check each site manually. You can now streamline your online experience by subscribing to the PEX Card Corporate Finance Blog RSS feed so that you're always aware of new content and updates. |
