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Making Customers Pay… You

If you grant credit to customers or take recurring credit card payments, the unexpected can happen: a customer fails to pay on time, the credit card expires, or the check bounces. What can a business owner do to spend as little time as possible on these items but get the cash collected?  Plenty.  Here are our ideas:

Re-examine your credit policy

Is there any way you can have credit customers pay up front? Perhaps you can collect a deposit to minimize your risk. Perhaps you can request final payment right before you deliver the final product.  Perhaps you can convert credit terms to a layaway situation, like they use in retail.

The best way to speed up collections is to change your payment terms if at all possible.

Be proactive 

If the client is late with a payment, respond quickly.  Send them proactive reminders. Give them a call just before the payment is due if you have this luxury.

If the customer pays by credit card, monitor credit card expiration dates, and send reminders to update the card before it expires.

Make it easy and clear on your website support section how a customer can update their credit card number on file at any time. Automating this process will save you a ton of time.

Payment failures and disputes

It’s inevitable that you will experience customers whose credit card payments, ACH withdrawals, and checks fail or bounce. As a business owner, you need to have solid procedures for you or your employees to process these exceptions.

When a credit card payment fails, make sure your shopping cart, merchant account, or gateway processor notifies you of the failure. Contact the customer right away to correct the situation. The same is true of bounced checks or failed ACH deposits. Assess any extra fees and flag the customer account if you want to place any future payment or credit restrictions on them.

You may also have customers that report disputes to their credit card company. Respond timely to these transactions as there is always a tight deadline, and make sure you have all of the documentation you need at the time of sale if this comes up.  

Develop solid collections processes

If the payment is late, start your collections routine.  Send out friendly reminders at first; then get progressively aggressive as the payment grows later and later.

Follow-up steps are very important. Make sure your customer is getting your notifications, and give them a call before you have to take legal steps with them.

Finally, if necessary, turn the payment over to a collections agency who can impact the customer’s credit report and possibly collect your money.

We hope you do not have too much of this activity in your business. But if you do, being proactive is a great way to reduce it. Check to see if you have all the processes described above in place to handle collections in your business so that your cash continues to flow.

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Short-Term Capital Gains vs. Long-Term Capital Gains – What’s the Difference?

Have you ever wondered why gains are separated between long-term and short-term when you receive your 1099 at tax time? There is a very good reason for that, and one you might want to consider more carefully when investing.

Short-term capital gains are derived if you hold an investment one year or less before disposing of it.  Short-term gains are taxed as “ordinary income,” the same rate you pay on wages or business profits.

Long-term capital gains, on the other hand, are generally taxed no higher than 20% and could be taxed at 0%, depending on your income. See the table below:

 

Tax Filing Status  Income range at

0% Rate

Income range at

15% Rate

Income range at

20% Rate

Single 0 – $40,400 $40,401 to $445,850 > $445,850
Married Filing Jointly 0 – $80,800 $80,801 to $501,600 > $501,600
Married Filing Separately 0 – $40,400 $40,401 to $250,800 > $250,800
Head of Household 0 – $54,100 $54,101 to $473,750 > $473,750

Exceptions to the long-term capital gains tax rate are collectibles such as art, jewelry, and precious metals.  These are taxed at 28% regardless of your income.  Bear in mind, though, that tax rates on ordinary income range from 10% to 37%.

Be sure to keep this information in mind when managing your investments. It could make a BIG difference come tax time!

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Help Wanted: You Have Options!

Many people have complained about the worker shortages this year. If you need additional workers in order to grow your business, here are some ideas for your consideration.

Where to Look for Workers

We may think of workers as only being employees, but there are a lot more options if you’re open-minded.  Here’s a list of places to find workers of all kinds:

  • Recruiters
  • Employment agencies
  • Online job portals, such as Indeed, SimplyHired, and ZipRecruiter.
  • Social media, including LinkedIn Jobs
  • Your own website, email list, or employee referrals
  • Temp agencies
  • Specialized online job portals that cater to your industry and business type
  • Virtual assistant organizations
  • Day labor online sites and pickup areas
  • Job matching sites such as Upwork, Fiverr, and Freelancer.
  • Colleges, when you need interns and entry-level workers
  • Your local unemployment office
  • Small business development centers
  • Virtual assistant agencies or businesses
  • Chambers of Commerce and other business organizations
  • Professional organization directories where a license is needed, such as hair stylists, dentists, or CPAs
  • Friends, colleagues, competitors, and neighbors; your own personal or business network
  • Craigslist and local classified ads
  • High school guidance counselors if you want to hire straight out of high school
  • Outsourcing to a company that provides the labor that does what you need
  • Volunteer matching sites

Options for Adding Workers/Labor 

There are many ways you can increase labor in your business. The obvious is hiring employees.  Beyond employees, there are many more options than you might first think:

  • Contractors, where you have a contract for a particular job and meet all of the IRS and other compliance requirements
  • Temp workers, where you “lease” an employee who stays on the temp agency payroll or hire them outright with a limited term of employment.
  • Part-time workers on your payroll
  • Companies that you outsource the work to and contract with as vendors to provide a particular service. They may outsource your labor needs or simply have labor as a component of the product or service you have contracted them to supply.
  • PEO, or professional employer organizations, act as a client’s employer and hire their employees as well as manage payroll and other HR compliance tasks.
  • Interns, which are unpaid positions. Check your state and local rules for laws regarding hiring interns.
  • Volunteers.  This is common if you have a nonprofit organization.

With all of these options available, it should be a bit easier to find ways to add labor and grow your business.

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The American Rescue Plan Act Creates ERTC Windfall for Startup Businesses

The American Rescue Plan Act extended the Employee Retention Tax Credit (ERTC) for the third and fourth quarters of 2021.  It has also expanded the pool of eligible employers who can take the credit to include businesses started during the pandemic.

A Recovery Startup Business (RSB) is a business that was started after February 15, 2020 and has average annual receipts of no more than $1,000,000.  While under the CARES Act, an employer had to experience a full or partial suspension of operations due to COVID-19-related governmental orders or a significant decline in gross receipts to take advantage of the ERTC, an RSB does not need to meet those requirements.

The time period to claim this credit for an RSB is from July 1, 2021 through December 31, 2021.  It can be claimed on an originally filed Form 941 or an amended 941.  As with other businesses, the credit continues to be capped at 70% of qualified wages limited to $10,000 per employee per quarter ($7,000 per quarter per employee), but an RSB is also limited to a maximum $50,000 in ERTC per quarter, regardless of the number of employees.

For new businesses, this is an incredible tax benefit and a great safety net to the normal struggles of any startup. The goal is to get employment back to pre-pandemic levels. The total benefit could be as high as a $100,000 cash infusion for 2021, so it’s definitely worthwhile for eligible employers to take advantage of this while available!

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How to Better Track Your Carbon Footprint

You may already be doing your part to help save the planet. From recycling to driving electric cars, to avoiding the use of plastic bottles and carrying reusable bags to the grocery store, there are myriad ways for all of us to make a difference—both big and small. However, it may be important to stop and ask ourselves: Are we currently doing enough?   

If you have considered pursuing an even more sustainable lifestyle, guess what? There’s an app for that! Actually, there are a few different apps to help you accomplish the goal of tracking your carbon footprint. In doing so, you can physically see your carbon environmental impact.

Below, we have detailed some of these apps and their benefits. Take a look! If you have any questions, please don’t hesitate to reach out.

 

Capture 

Capture is an app that calculates users’ monthly CO2 targets by asking a series of questions. These questions include things like, “How many flights a year do you take?” and “What kind of diet do you adhere to?” Capture also utilizes GPS tracking to predict emissions from transportation.

Specifically, the app was designed to not only make planet-friendly living possible, but also make the process easy—or, easier—for those interested. With the capture app, users can conveniently “track, reduce, and remove CO2 emissions from everyday life.”

Interestingly, the app can be used single-handedly or with colleagues. If you are a numbers person who likes measuring and tracking, Capture is for you.

 

Almond 

UK-based, Almond’s mission is simple: to help as many people reach Net Zero carbon emissions as possible, and in just four easy steps:

  1. Understand your carbon footprint
  2. Discover responsible brands
  3. Earn offset coins when you make a switch
  4. Offset your carbon footprint

Almond allows you to scan products to not only learn about that particular item’s story but also see what’s in the product (i.e., if it’s environmentally-friendly). Then, you can earn money with crypto rewards to plant and protect trees, which offset your carbon footprint. The more you earn, the faster you can grow your forest to achieve a carbon-balanced lifestyle and reach your personal CO2 Net Zero.

 

Pawprint 

Pawprint allows individuals to fight climate change in the palm of their hands. This online tool helps to measure, understand, and reduce your carbon footprint.

Known as the “Eco companion,” this app delivers the following:

  • Science-based data you can trust
  • Carbon-reducing tips and challenges that suit your particular lifestyle
  • Better insight into how your carbon footprint measures up to the rest of the UK (this app is also UK-based)

One factor that sets Pawprint apart from other carbon footprint tracking apps, is that all of its data is validated by Mike Berners-Lee’s Small World Consulting, an expert in the industry.

Of course, there are plenty of other smartphone apps and tools available to help you better track and reduce your carbon footprint, including The Extra Mile, My Planet, and Carbon Footprint. The trick is to find the app or tool that works best for you and your lifestyle.