Resources, Timeline, Scope, and Budget

While you may not have been trained in project management, and you may not have long-standing projects that need rigorous attending, every small business owner can benefit from a basic understanding of project management. You have certain tasks that must be completed every month in order for your clients to get the information they need. And to do that you must juggle a handful of priorities and know what needs to accomplished and in what order. Project management can help you better tackle those tasks in a more timely and efficient way.

There are four elements you must consider when managing projects: resources, time, scope, and budget. In this article we will describe each in detail.

Resources
These are the things you can use to help you accomplish the project. Your resources can come in the form of employees, equipment and materials. If you’re a one-person show, this aspect may be fairly easy to manage. If not, you need to attend to your employees’ schedules to ensure they understand which projects they should be working on and when. This requires a fair amount of training and communication. Your employees should know their deadlines and report to you (or an appointed manager) when then they have completed their tasks. Otherwise, you may have expectations that your employees are unable to fulfill simply because they are unaware of them.

Scope
To determine the scope of a project you must look at all that is required to complete it. Underestimating the scope is one of the biggest deterrents to completing a project on time and on budget. It’s important to break a project down into critical tasks. Once you look at all those crucial tasks you can determine scope, and more adequately map out a timeline.

Time
In order to complete projects in a timely manner you must assign each critical task a timeline. Often this is where project managers experience the most difficulty. People are often too optimistic when determining how long it will take them to complete tasks. Often this is because they misunderstand the project’s scope and don’t allow enough time to account the critical tasks. It’s important to be realistic as you determine a timeline for your project. Provide yourself and your employees with a time buffer when completing especially difficult or complicated tasks. When dealing with time you must remember the following:

Tasks. We already talked about the importance of breaking a project down into individual tasks. Ask yourself how long it will take to complete them, who will be responsible for them, and what needs to happen before you or an employee can even begin a particular task.

Schedule. In order to create a timeline you must associate tasks with individual deadlines. As you do so you must determine how to order all these tasks chronologically.

Critical Path. As you order your tasks you’ll recognize those that are critical to the completion of a project, also called critical tasks. When creating a critical path you must determine how long each of these critical tasks will take; this can help you determine how quickly you can actually complete the overall project. Any extra time you include will prolong your timeline.

Budget
Obviously the budget determines how much it will cost to complete the project. As you account for the time employees will spend on individual tasks and any other resources that will be used (including your billable hours), you can determine how much it will cost you to complete the project. In this respect you can estimate how much you should charge your client for these services.

While it may sound as if project management will require a lot of time and energy on your part, you can determine how rigorously you want to manage your projects. Whatever you decide, taking the time to analyze each of these elements as they apply to your workload will help you better manage your day-to-day activities, and may, in the end, make you more productive. Come back next week when we will discuss important project management tips.

The mark of a true professional is giving more than you get. -Anonymous

As a working professional you recognize the importance of power-dressing in order to make a positive impression on clients, colleagues, and/or superiors. Consider the importance of creating a power-office-one that emits a powerful impression that both impresses visitors and inspires staff.

James Ball, president and CEO of The Goals Institute, wrote an article entitled “How to Nurture a Professional Work Environment” published on SmartPros website. In it he said, “When we tolerate unacceptable behavior and do not say or do anything to correct it, we inadvertently establish a new, lower standard of acceptability. . . . It extends to every aspect of our work and lives. When we accept mediocre or sub-standard work or results and do not require that they be brought up to acceptable levels, we inadvertently lower our standards of acceptable quality and performance. Because we took no action, it must be acceptable, right?” In other words, he explains, you get what you expect.

There are ways you can establish high expectations and communicate them effectively to your staff. Last week we discussed three ways this can be accomplished:

1. Establish rules
2. Practice professionalism and provide teaching moments
3. Model respect

This week we will cover three final tips on fostering a professional work environment.

4. Provide positive reinforcement and subtle reminders
Now that you’ve established some rules it should be your priority to enforce them. The best way to do so is to give positive reinforcement and subtle reminders. If you tolerate noncompliance what you’re really communicating to your employees is that these rules aren’t that important to you. The best way to encourage professionalism is to compliment specific instances exhibited by employees. Positive reinforcement, especially when offered publically, can be very effective. And taking the opportunity to remind employees of your expectations is another good way to enforce those rules of professionalism. Using the terms professional and professionalism are subtle reminders as is sharing examples of office professionalism when you see them.

5. Invest in a comfortable and professional work environment
If your office decor consists of neon shag carpet and overstuffed beanbags, you’re certain to get a reaction from your clients; it just won’t be a good one. The furniture you invest in can enhance the level of professionalism in your work environment. When your employees recognize your dedication to providing them and clients with a comfortable and professional space they will be more likely to act accordingly. And when you go to lengths to provide a pleasant work environment for employees they will better appreciate your concern and respect for them.

6. Create opportunities for growth and advancement
A professional business offers employees opportunities for growth and advancement. Whether that comes through offering personal development opportunities, employee benefits or other incentives, you employees will be more inclined to act professionally when they realize they will be rewarded for it.

A professional work environment can go a long way in elevating your reputation. The more polished your office the better it reflects on your services. And the higher your expectations for your employees the more likely they will be to meet and exceed them. And everyone benefits from that.

References
Ball, James R. “How to Nurture a Professional Culture in Your Organization in Three Steps.” July 2007 Accounting.SmartPros.com

You have to perform at a consistently higher level than others. That’s the mark of a true professional.-Joe Peterno

A professional is someone who can do his best work when he doesn’t feel like it.-Alistair Cooke

Your business depends on your reputation which can be greatly enhanced by fostering a professional work environment. Regardless of the number of staff you employ, the environment in which they work and to which clients visit should reflect your professionalism and the quality of your services. Unfortunately, some small business employees believe that a smaller work environment entitles them to a more casual approach to their jobs and the way in which they conduct themselves.

In an article published by SmartPros, James Ball discussed the importance of nurturing a professional culture in an organization. He said, “The concept of professionalism goes beyond ethics; it encompasses image, manners, respect, appearance, excellence, quality, expertise and other factors. Unfortunately, many of the principles of professionalism are not being fanned into a blazing bonfire in many organizations. Sometimes there is barely a flicker.” That’s where you step in. As the owner and operator of your business it is your responsibility to set high expectations for your employees and insist that they act in a professional manner.

Here are 3 of 6 tips that will help you promote a professional work environment:

1. Establish rules
In his poignant article Ball went on to explain, “�unprofessional behavior exists when leaders inadvertently allow it to exist by failing to proactively establish, communicate and enforce a code of conduct and standards of excellence.”

As the resident rule-maker it is your responsibility to make professionalism a priority. If you want your employees to act professionally you need to communicate what, exactly, that means. Establish rules regarding dress, customer service, office-interactions, etc. Once you have established a clear set of rules you must clearly communicate these rules and your expectation that they be honored. It helps to make these rules assessable in written form so that employees can refer to them often. In order to inspire conformity from your employees it is important that you not include silly or fussy rules that limit their creativity and unique contribution to your business.

2. Practice professionalism and provide teaching moments
As the boss your employees look to you to model professionalism. What good does it do to set clear rules for your employees and then break them yourself? If the rules are good enough for your employees, they should be good enough for you.

And while you may not have gone into business to coach employees on professionalism, you are, in fact, initiating many of them into the business world. Take the opportunity to teach them how to exhibit professionalism, even if it’s just 5 minutes at the beginning of every staff meeting. You’ll not only improve the quality of your office, but you will aid in the professional development of your employees.

3. Model respect
A true professional is respectful not only to clients but to everyone with which he/she interacts. And that includes employees. Often the best way to teach respect is to model it. Treat your employees how you expect them to treat you and your clients. As John W. Gardner once said, “If you have some respect for people as they are, you can be more effective in helping them to become better than they are.”

You can achieve a professional work environment, but it starts with you. Once you determine that professionalism is a priority you can take the necessary steps to foster and promote it in your office.

Come back next week when we discuss the final 3 tips on fostering a professional work environment:

4. Provide positive reinforcement and clear reminders
5. Invest in a comfortable and professional work environment
6. Create opportunities for growth and advancement

References
Ball, James R. “How to Nurture a Professional Culture in Your Organization in Three Steps.” July 2007 Accounting.SmartPros.com
Kingston, David. “Creating a Positive, Productive and Successful Work Environment.” the-success-factor.com
Solinsky, Keith. “Creating a Positive Work Environment.” 10 Oct. 2003. MomMD.com

New Perspectives = New Possibilities

Looking at a problem from a new perspective often produces novel possibilities. The next time a client is facing a common problem (low sales, high turn-over, inadequate cash, etc.), ask…

* an associate
* an athlete
* an executive
* a religious leader
* an artist
* a child

…how he or she would solve this problem. Synthesize their replies into a new approach to the problem.

Learn Creativity

In business, you can only differentiate yourself in a few ways. You can lower your price point (making you less profitable). This may get a few customers that might not have been able to afford your service before, but you will do so at the cost of making a good living for yourself.

Let the low-end Accountants and Bookkeepers compete on price. You want to get paid what you deserve, so compete on quality of service. Creativity is one way to truly differentiate yourself. When you learn to let your mind wander out of the realm of possibilities that you have already gone over, you will find new solutions for your clients that make them truly more effective, and make you invaluable to their organization.

“Out of the Box” Thinking

While “thinking outside the box” has become a trite phrase, its message is valuable nonetheless. An example of this is the invention of Velcro© hook and loop connectors. The idea came from a brainstorming session in which the participants were asked “what things stick to others”. One suggestion that must have seemed very off the wall was that cockleburs stick to things. Looking into why cockleburs stick to clothing, hair, and so on led to a very profitable product. What kind of solutions are you missing, as well as your competitors, because they are just too far off the beaten path.

The Brainstorming Process

When you want to come up with new ways to do things, it is helpful to go through a brainstorming session. You can do this by yourself or with the help of others (preferable those that won’t steal your ideas and compete with you with them). Start by posing the question that you want to solve, such as, “How can I manage more clients?” Then jot down every idea that comes to you. The use of a tape recorder to get everything that flows from the session may be of use, as you do not want anything like taking notes to slow down the energy of the brainstorming process. At this stage, do not try to qualify any ideas on their feasibility, practicality, or desirability. Just capture the thoughts for now.

Expanding Upon and Refining the Collected Data

Once you have collected the ideas generated during brainstorming, then, and only then, should you try to quantify which suggestions are ones that are practical and can be implemented. Elaborate on each idea, rating them for how well they would accomplish the desired result as well as how difficult or costly they will be to implement. Now, focus on the ideas that can be accomplished that you feel will accomplish the desired result the best and put into action a plan to implement them. Keep the ideas that may seem less desirable for later analysis. You may find that they are better than you thought if the top ranked items don’t work out.

Re-Evaluate and Alter Course

Once you have put one or more of your ideas into practice, periodically review the ideas that you have put into practice. Do some serious analysis of whether they are working as an effective solution to the issue that they were intended to address. Those ideas that are working well you may want to expand on, further refining them or rolling out the idea to other clients or applying the solution to other problems.

Ideas that “seemed like good ideas at the time” that don’t accomplish the desired results should either be altered and re-tested or abandoned altogether. This is when you may want to have a new brainstorming session to get new ideas. At this point, do not review the notes from the previous session, as you want to get entirely new perspectives. It has been said that you can not cross the same bridge twice because each time you cross the bridge, YOU are different. Each time you approach a problem, you will come up with new perspectives.

When you have captured the new ideas, then look at the ideas from your previous brainstorming session and copy them onto the end of this session’s list, but do not copy the rankings that you gave them before. With new data, you may have new ways to implement the ideas that make them more feasible or you may have found that they were more desirable than you first thought. Now rank the old and new ideas together and repeat the process.

Don’t Pass Up Your Cockleburs

Looking for new solutions to old problems is key to working more effectively and making your business more profitable. If the lowly cocklebur had been thrown out as a silly solution for making things stick, a valuable opportunity would have been missed. You are the expert at what you do. Let your customers know it by offering them solutions to problems that they have never thought of and they will never think of anyone else when it comes to Accounting and Bookkeeping. As we all know, keeping existing clients is easier than getting new ones and when you differentiate yourself from the competition, your clients will tell their friends and colleagues about your service in enthusiastic terms. And wouldn’t you rather have your clients find new business for you than to have to spend the time and money to do it yourself?

Learn to Market and Sell Your Service

“Viral” or word of mouth marketing is just one way to promote your business. Because the demand for this kind of insight is so great, we have devoted an entire section of the Accounting and Bookkeeping Tips site to it. From how to market a brand-new Accounting and Bookkeeping service to techniques of selling, this will be a valuable resource to your profitability.

Learn Secrets of Marketing Your Accounting and Bookkeeping Business

How to Achieve a Win-Win Situation

As a self-employed accountant/bookkeeper you’ll encounter many situations where you must negotiate a favorable outcome for your small business. These may be large or small deals and could occur with suppliers, vendors, clients, and other businesses. In order to be a successful negotiator you must know how to gain a resolution that both parties can benefit from. Achieving a win-win situation. Selling yourself short or taking too much from the negotiating party can be damaging long-term. Here are a few things to remember the next time you find yourself planning a negotiation.

Know what you want
First you must know what you want. The majority of contract disputes and falling out of business relationships is because of one party not clearly defining what they want from the situation. Many negotiations fail in the first place because one or both parties did not determine beforehand what their objectives where. It’s difficult to hit the mark when you’re not even sure what your own target is. Don’t be too vague (“a favorable outcome”) and don’t be too rigid (“X amount or nothing”). Negotiation is all about modifying terms so that both parties can feel satisfied with the deal.

Come to the negotiation with different options
Negotiation requires flexibility. Come to the negotiation with different options in order to illustrate your willingness to achieve a favorable outcome for both of you. Perhaps you’ll be asked to lower your fee in order to get a larger company as a client. Don’t lock yourself into a situation where you’re not getting paid what you’re worth, but recognize that you can agree to a lower fee in the beginning which will increase at a predetermined time. Remember, build within your monthly fees a way you can give a “discount” without you having to work for free.

Leave room to bargain
Be sure that you’ve determined a bottom line, or what you must see happen in order to accomplish your purposes, and then aim high. Seasoned negotiators recognize that they must aim high in order to get what they want. Determine your bottom line and pad it. If your initial offer is your bottom line you’ve left no bargaining room. Ask for more than what you expect to get and realize that the party you’re negotiating with is doing the same thing. But there’s a fine line between insulting the party by asking too much and low-balling yourself by asking too little.

Pick a good time to negotiate
Often timing is everything. Be sure you’ve scheduled your meeting at a favorable time. If the party you’re negotiating with has a crucial meeting just one hour after yours, ask if you can reschedule a time where you won’t be pressured to end the meeting too quickly. Avoid times that are stressful or emotionally-charged. For example, you don’t want to negotiate a deal if you know the company is experiencing crunch-time and will be unable to truly focus on what you’re proposing.

Get to know the party you’re negotiating with
It’s important to not only know what you want but why you want it. You’ll probably be asked to express your objectives and why they are important to you. It’s equally important that you get the same information from the negotiating party. You should know them and understand their motives and objectives. When you know these things, you’ll be able to work a deal that’s favorable for them while being profitable for you. Don’t be afraid of getting into the details of the deal and numbering for the other party all that they would receive in contracting with you for their accounting services.

Don’t be intimidated
Small business owners are often intimidated when they first begin negotiating, especially if it’s with a larger business. You must recognize what you bring to the table. If you can’t articulate how you can benefit the party you’re negotiating with, you won’t be able to stand a firm negotiating ground, and chances are you’ll give in too soon. Stand firm and be willing to walk away if the deal promises to impair your business in the end.

Keep emotions in check
Negotiations are by nature emotionally charged. Often there’s a lot to gain or loose in a negotiation, and meetings can become heated. While that’s not necessarily a bad thing, you must keep emotions in check so you don’t loose control. You also don’t want your emotions to hinder your ability to secure a favorable outcome. Keep in mind to take nothing personal. By asking for a lower monthly fee, the company is not saying you aren’t worth it, but perhaps that is what they hope you will do.

Be patient
Good negotiations can require a series of meetings, phone calls, and email exchanges, so don’t feel pressured to reach an agreement after just one appointment. And sometimes it’s necessary to take a break and evaluate what has already been presented. Don’t feel pressured to end a negotiation too soon; often that means you’re getting the short end of the stick. Holding firm and allowing the negotiation to carry out a bit will demonstrate just how serious you are.

Don’t give away the house to get the welcoming rug. You came into the negotiation process with no deal… the worst that can happen is that you come out of it with no deal. Keep the perspective that is needed to build your business long term and don’t shortchange yourself if what is currently on the table is unacceptable to your profitability.

Negotiations are sometimes a frightening but necessary part of business. Don’t let the fear paralyze you. As long as you take these steps and follow your instincts, you’ll find yourself securing more and more favorable negotiations. Practice makes perfect and you have to start somewhere. Happy Negotiating!

Ready to take the next step in the process you’ve started in the Accounting Profession? Take this opportunity to learn more about the accounting training that will make the difference in your and your loved ones lives. You can make what you have pictured yourself achieving in accounting a reality with the proper training. Take a moment and familiarize how Universal Accounting can help you to achieve your goals!

The Pros and Cons of Partnerships

Whether you’re considering starting a business with a partner or whether you’re thinking of adding a partner to your current business, it’s good to weigh all the pros and cons before making a final decision.

Cons

Sometimes you can get so excited about a new business venture that you forget to look at the risks. Obviously, you must choose a partner you know well, who shares your values, goals, and business philosophy. Here are some risks to consider when deciding whether or not to enter a partnership.

Your partner’s poor judgment becomes your poor judgment
You and the business suffer if your partner exercises poor judgment.

Friendship-fallout
As John D. Rockefeller once said, “A friendship founded on business is a good deal better than a business founded on friendship.” A falling-out could make it difficult for partners to work together and maintain business profitability.

Shared liability
If your business incurs a significant amount of debt and your partner becomes insolvent or skips town, that debt becomes your responsibility.

Shared profits
Likewise, all the money that comes into the business needs to be divvied out between the partners.

Difficult to disintegrate
Unless you have a buy-sell agreement before taking on a partner, it can be difficult to dissolve a partnership agreeably in the case of a falling out or a partner’s death or incapacitation.

Loss of autonomy
With a business partner to consult on all major decisions and with whom you must share recognition, you may feel a loss of autonomy and independence.

Pros

If you’re considering a partnership, you are probably already familiar with the following benefit:

Increased earning potential
With two accountants bringing in clients there’s the potential to increase the visibility of your business as well as its bottom line.

Shared financial responsibility
Often the financial barriers in starting a business can be enough to discourage the single accountant. But with a partner that financial burden can be shared.

Shared responsibility
When you have a partner you’re no longer bound to operate the office by yourself. Potentially this could give you the opportunity to enjoy a more flexible work schedule.

Potential to diversify services and skills
You can increase the appeal of your business by adding a partner with diverse skills or a special focus.

Melding of two or more minds
You know what they say, two heads are better than one. When in a partnership you have someone with whom you can brainstorm, make decisions, and approach difficulties.

Highly motivated coworker
In a partnership you suddenly have a coworker who is highly motivated to succeed. This coworker can share the workload and help you better manage the business.

Obviously there are significant pros and cons to consider when entering a partnership. Once you’ve studied them all you can make an informed choice that will help you move forward in a powerful business venture.

Getting Started

Last week we discussed how to determine whether or not you and your spouse would make good business partners. If you’re reading this article now, we’re assuming you’ve decided it’s worth further investigation. Before launching your partnership you must take a few steps to turn your one-accountant show into a family affair. The following five points will help you get started:

1. Define your partnership in a business plan.
Hopefully you have already created a business plan for your accounting practice and can just revise those portions that are impacted by the partnership. Consider what might change as you and your spouse begin this partnership? Note your revisions and refer to them when necessary.

If you don’t have a business plan, now is a good time to determine the direction you’d like your practice to go by creating this detailed document that you can refer to often as you move forward. A complete business plan usually includes the following: Executive Summary, Company Description, Descriptions of Products and/or Services, Market Analysis, Marketing Plan, Operating Plan, Management Summary, 3 to 5-Year Financial Plan, and Exit Strategy. While that may sound long and ominous, it will help you and your spouse develop a strategy that will guide you as you further develop your accounting practice.

2. Clearly delineate your responsibilities.
If this partnership is going to increase productivity and efficiency you must determine who is responsible for what. Last week we asked if your skills were complimentary. That should make the delineation a bit easier. What do you do best? What does your spouse do best? Start there and then divide remaining tasks, determining which tasks should be shared and how.

3. Determine where and when you will work.
Now that you have increased your work force by one, will you have enough room to work in your house? Will you both be working in the same office? When will you be expected to work and for how long? It’s important to discuss and then document these expectations so that you know how your schedules will coordinate.

4. Decide now how you will work through disagreements.
You’re married so you’re accustomed to working through disagreements, but when you are business partners it doesn’t always work to ignore each other for a couple days in order to cool off. You must determine how you will handle professional disagreements so they don’t hinder your productivity, even if that means calling a truce until you can meet with Client A or finish payroll for Client B. Deciding beforehand how you will manage these disagreements will save you both headache (and money) in the end.

5. Create an exit strategy.
No one wants to anticipate the failure of their partnership, but without an exit strategy, you could experience more financial loss and marital stress than necessary. Expect the best and plan for the worst. And while an exit strategy should be covered in a business plan, we recognize that many don’t actually complete one. If you don’t have a business plan it’s important that you at least create an exit strategy that determines when you’ll know it’s time to throw in the towel. And this is especially important when spouses become business partners. You don’t want to sacrifice your marriage for the business. Included in your exit strategy should be those indicators, financial and otherwise, that your partnership is not working and should be discontinued.

Partnering with your spouse can be a lucrative venture. To prepare for success you must first define your partnership and the expectations you both have for the business. Once you do you may discover that through your business partnership both your practice and your marriage grow beyond your wildest dreams.

How Do You Get Started?

Last week we discussed the benefits of going paperless. Not only could it save you time and money, but it can be a much more convenient way of doing business.

Rest assured it’s not too difficult to start a paperless trail. But you should approach the process thoughtfully in order to avoid the trouble spots many have stumbled in to. Here are a few steps you can take to get started.

Choose your document management software
Research and pick the document management software that will work best for your business. There are many valuable packages out there, including Acct1st, Cabinet NG, CCH, Doc.It, Easy Access Data, GoFileRoom, Intuit Lacerte, Intuit ProSeries, and Thomson Tax & Accounting. Some document management companies offer training with their software, a service that may cost more upfront, but save more money in the end. Consider all your options before committing to one package.

Buy a quality scanner
It’s important that you get a quality scanner before you begin converting all those paper documents into electronic files. And because a scanner is a significant investment, you should do your homework to ensure that the one you purchase matches your needs. An article entitled “Paperless Payoffs,” published in this year’s June issue of Accounting Technology, advices paperless hopefuls on things to look for when purchasing a scanner. They include:

• Paper feed: How many sheets can it handle at a time and does it accommodate multiple paper sizes?
• Speed: How many sheets does it scan per minute? DeFelice recommends 30 to 50 per minute for smaller firms.
• Smart scanning: This feature enables scanners to recognize certain forms (like tax forms) and populate the forms with corresponding data.
• Resolution: How important is it for your business to scan quality images? In some instances it may be beneficial (presentations, etc.) but in others it may slow down your scanner and use too much memory.
• Service: Is the scanner packaged with a service agreement? Maintenance costs can be excessive, but if your scanner comes with a good service agreement you can expect timely service when necessary.

Develop a document scanning process
To ensure that you get all your documents scanned in the order in which you want them to be, you should develop a process beforehand and follow it. Feel free to revise the process as you learn more.

Revisit your business processes
Once you’ve scanned all your documents and it’s business as usual, you should take the time to evaluate your businesses processes. Now that you’re working in an electronic environment there are changes that need to be made; some steps need to be eliminated and some steps need to be added. But in order for you to reap the benefits of a paperless office you must be willing to assess your procedures and make the necessary changes.

Back it up
Once your files are managed and stored electronically, you need to take the proper measures to protect those files by backing them up. You have lots of options, including flash drives, web-based storage, and external drives. Pick your method and back up your files frequently.

Going paperless can be a worthwhile endeavor as long as you don’t approach it haphazardly. Do your homework and evaluate each step you take to ensure that you are indeed creating a more convenient, time-saving, and money-saving process.

References
DeFelice, Alexandra. “Paperless Payoffs: Rewards from Document Management Systems.” Accounting Technology. June, 2007: 19-26.

Is It A Good Idea?

It can be a great strategy. Two heads are better than one, right? And when you have an extra pair of hands to manage some of the work you can increase your ability to manage client accounts while increasing your profitability. But while your marital relationship may be strong and kicking, that doesn’t necessarily mean you’d make good business partners. It’s important to do a little self-assessment before you make such a significant change. Here are five questions you can answer together in order to determine whether or not partnering with your spouse is a good idea:

1. Do you work well together?
This doesn’t just mean in regards to your marriage. When you have a home-improvement project are you able to work efficiently together without letting emotions get in the way? Can you put differences aside in order to get work done? When you’re able to focus on what needs to be accomplished without letting disagreements or differences of opinion become obstacles then your spouse may make a good partner for your accounting practice.

2. Are your skills complimentary?
While your spouse doesn’t have to be an accountant or bookkeeper in order to be a good partner, he/she should have some abilities and skills that would contribute to your business’s profitability. What will he/she be expected to do and how do you anticipate that to enhance and improve your business?

3. Are you ready to spend that much time with your spouse?
Often couples struggle after retirement because they have difficulty spending that much time together. Perhaps you and your spouse get along fine now, with both of you working separately, but how might that change when you begin sharing an office and your entire workday? You need to know the answer to this question before you commit to an arrangement that may hinder your practice and your relationship.

4. Can you set and keep healthy boundaries?
One important element of a healthy working relationship is the ability to set and maintain healthy boundaries. Will you both agree on what those boundaries are and be able to respect them? And setting specific and detailed boundaries will enable you to avoid any confusion and frustration later.

5. Is partnership financially feasible?
In order to pursue partnership do you expect your spouse to quit his/her job in order to contribute to the business full-time? Before taking such drastic measures you should determine whether or not that’s financially feasible. While the partnership will eventually enable you to secure more clients and make more money, that may take some time. Until that happens, will your current income sustain your business and your family? It’s important to determine the financial feasibility of your partnership; nothing puts more strain on a business and a marriage than financial difficulty.

Making your business a family affair can be a great strategic move. A partnership with your spouse could enable you to work more efficiently and increase your work capacity which increases your clientele and ultimately your bottom line. But before you make such a drastic decision it’s important to assess the situation and determine whether or not that partnership would be successful. And if nothing else, at least it know the obstacles you’ll likely encounter.

Return next week when we’ll discuss what’s required in turning your sole proprietorship into a partnership in part two of this two-part series.

Why Would My Clients Want Me to Charge Them More?

Business Owners Want to Reduce their Expenses… That’s Why

Save your clients money. They’ll gladly pay you for doing so. When most successful business owners look at their income statement every month, they are searching for ways to reduce their expenses and increase their profitability. As a tax preparer you are in a unique position to not only help your clients with decisions that reduce their tax burden every year, but you provide services that will be of value to them all year long.

Traditionally, a company’s bookkeeper was responsible for providing all of the accounting functions in a small business. Unfortunately for the small business owner, the monthly bookkeeping, tax filing and even payroll accounting services have one-by-one been handed over to specialists.

Why Do You Say Unfortunate… It Sounds Like a Good Idea to Me?

In the past, a small business bookkeeper provided a complete picture of a businesses financial health. Because he/she worked on the books each month, did the payroll and filed all the taxes, the advice he gave the business owner was based upon the day-to-day financial picture and the yearly tax consequences. It was a complete picture.

Small business is not corporate America. Specialists providing services like payroll accounting, bookkeeping and tax services make sense for large corporations. In fact, the bookkeeping services in larger corporations are often specialized. The Accounts Payable clerk doesn’t know what the Accounts Receivable clerk is doing and the Payroll clerk or service has nothing to do with the other accounting functions.

Is Small Business Accounting Really that Different?

In many ways… yes. Picture a large battleship. Once you get going, it’s not stopping or turning without a lot of effort. It might take a mile or more for it to turn around. On the other hand, a small speedboat can stop and start on a dime. It can turn around in a few feet and can accelerate quickly and react to hazards by going around them rather than plowing through them.

Large corporations are a lot like the battleship and the speedboat is like the small business. Small businesses can react to changes in the market quicker but aren’t big enough to plow through the bumps (or hazards) of the market. A qualified tax professional/bookkeeper is one of the most important people in every small business. His or her experience allows the small business owner to safely navigate the complicated waters that his little speedboat is in.

Okay… I Understand, But You Said it Would Make My Tax Practice More Profitable

Tax preparation is the first part of your complete business service. During tax season, you are the person they trust with one of the biggest concerns every small business owner faces every year. Their taxes.

Why Do You Want to Provide a Year-Round Service to Your Clients? That’s Easy…

As you might expect, for most tax professionals, the busiest time of the year is during tax season. They spend the entire year either building up to, or winding down from the tax filing deadline. By adding bookkeeping services to your business you can make your monthly income statement much more predictable and consistent.

Tax Accounting and Bookkeeping… the Perfect Combination

Bookkeeping and accounting provide one of the most predictable and consistent income sources there is. Every business must account for income, expenses and losses for tax purposes. This is mandated by law.

As you consider what we’re discussing, consider how working with the financial records every month will make year-end tax preparation even easier for you.

By combining bookkeeping serves with your tax preparation business, you’ll become a “one-stop-shop” for financial services. By becoming a “one-stop-shop” you just increased your earning potential while offering a greater level of service to your clients.

While your income as a tax preparer may be cyclical in nature, the earnings potential for an accountant/bookkeeper is very different. As you add clients to your tax preparation business, with a profitable bookkeeping service, you can expect your income to grow similar to the graph below.

You will bill a typical small business accounting client around $300 per month. As you can see, it doesn’t take many clients before your bookkeeping clients have added a substantial boost to your year-end income statement.

There is beauty to this windfall. By providing a better and more complete financial service to your clients, you are saving them money and making them more profitable too.

Besides, they don’t want to give a detailed explaination of their business each year to their tax preparer. You, on the other hand, know their books inside-and-out, because you prepared them yourself.

Additional Education Will Put More Money Into Your Bank Account

Universal Accounting has taught Accounting and Bookkeeping since 1979. With the most complete program for small business accounting found anywhere, you purchase with confidence, knowing you will get the very same quality education in bookkeeping and accounting that you have come to appreciate in tax preparation.