Business Tips

Building a Resilient Supply Chain in Your Business

Supply chain breakdowns continue to stymie small businesses, causing them to lose sales and profits. Whether your business has been affected or not by supply chain delays and shortages, it’s a good idea to take steps to make your supply chain as resilient as possible. 

Your supply chain starts with the acquisition of materials that go into what you sell. It includes the production of your products and services. And it doesn’t end until the customer receives the product or service you offer, as well as any help they need to consume your product. 

Here is a process to help you evaluate your supply chain and improve its resilience, to avoid future bumps in the road.     

Start with an Inventory of Your Suppliers

To evaluate your supply chain, a good place to start is to make a list of vendors. An easy way to get this vendor list is from your accounting system. Make lists from your list:

  • Primary vendors that are crucial to your business. This includes vendors from which you purchase goods for resale, and can also be vendors such as your online shopping cart because if it goes down, you lose sales. These are you, mission-critical vendors. 
  • Secondary vendors that provide support indirectly, such as maintenance to machines you use or vendors that provide human resource benefits. Your business won’t be terribly disrupted if something happened to these vendors.  

Once you’ve made your lists, let’s focus on your primary vendors first. If this list is large, you may want to further prioritize it by sorting the vendors you are most dependent on to the top of the list.  

Contingency Planning

For each vendor on your primary list, do some research to find alternatives. You want to develop a deep bench of suppliers who can support your business. If one supplier has trouble meeting your orders, you will be more prepared and can consider switching. You’ll need to develop relationships with these alternate vendors, and perhaps even use them a time or two to test the relationship.  

Many factors can go into selecting alternate vendors: price, quality, service, delivery time, shipping costs and methods, country of origin, location of warehouses, troubleshooting effectiveness, and much more. You know your industry best and what you need, so you can develop a table of criteria to evaluate potential new vendors. The ultimate goal is to have backup plans all along your supply chain. 

Once you’ve gone through your primary list, you can start on the secondary vendors.  

Purchasing Department

Large companies have entire purchasing departments to do this kind of work. If your business is small, you may be able to delegate portions of the list to trusted and well-trained employees. Know this type of work can take a long time. It will also be changing as new vendors spring up and older vendors retire or go out of business.  

Internal Operations Including Selling and Distribution  

Now that you’ve taken care of your suppliers, the next big step in supply chain efficiency is to standardize your operations. Take a look at your internal operational processes to ensure they are as efficient as possible. Create policies and procedures to ensure quality and customer satisfaction. 

This includes reviewing the production process as well as selling and distribution, all the way to customer service. You may have covered this while you assessed your vendor list, but if not, you can do it now.   

One example is how you get your product or service to your customers. Be sure there is an alternate method in case your primary distribution method breaks down. 

Again, this is a marathon, not a sprint. Take your time to do this project right, and it will benefit you for years to come. 

Risk versus Reward

In some cases, it may simply not be cost-effective to have a fully developed contingency solution. It may be more cost-effective to take the loss if it happens. You’ll want to evaluate the circumstances and come up with the right solution that works for your business.  

Take the time you need to improve your supply chain resilience, and your business will be more valuable and more profitable for it. 

Five Summertime Strategies for 2023

We’re six days away from the first day of summer, and a few weeks away from the midpoint of the year. It’s the perfect time for taking a strategy check in your business to see how you’re doing for the first half of 2023 as well as to plan something fun and productive for summertime.  

Here are five business strategies to help you regroup, reassess, and rejuvenate your business halfway through 2023.  

  • Celebrate Your Accomplishments

Take time to pat yourself on the back and congratulate the people around you for the goals you’ve reached and the efforts your team has made on your behalf. You might be shocked when you think about how far you’ve come. Maybe you’ve hired another team member and your team is the largest it’s ever been; perhaps you’ve reached record revenue goals; possibly you’ve solved a complex supply chain problem.

We all could use more praise and more celebrations in our lives.  Perhaps you can organize a party, or if you are not the partying type, a quiet word individually with your team can go a long way, maybe more than you know.

  • Take a Vacation

If you’re feeling quite burned out, the best thing you can do is stop and take a breather. There’s nothing better to rekindle your creative juices than to get away from the business for a while.  Summertime is when most people take a vacation, so if your business is not having its busy season, this might be a good time to go away, even if for a little while.

If you’re anxious about being away from your business, you’re not alone.  In your annual planning process, plan for and block out your vacation way ahead of time.  Book the reservations with no refunds several months in advance so that you won’t chicken out at the last minute.  There is life beyond your business, and you will be a better business owner when you take regular breaks away.  

  • Schedule a Mid-Year Review

How has your business fared for the first half of 2023 compared to the goals you set at the beginning of the year? Are you on track to reach your goals? Should you design a course correction or are you on track? Maybe you’re even ahead of plan!

You can make this process as informal or formal as you want. Some businesses hold retreats; you may simply need some quiet time on a weekend when all your family is busy doing something else.   

  • Be Selective About the Projects You Start    

Is your plate too full?  Entrepreneurs that wear many hats would probably say “yes” to that question, so the next question is do you have to do it all at once? Ask yourself what you can afford to stop doing that doesn’t make sense. Is there a project or two that can wait? If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now.

  • Play Big

Maybe you’re not playing big enough. You might be busy, but are you busy with the things that will take your business to the next level? Do the thing you’re afraid to say “yes” to; the thing that you know will transform your business and get you closer to your dreams.

If you’re putting off a project that you know will pay back handsomely, then shelve everything you’re working on and start on the one that will reap the most rewards. It could be a new product or service line, a new ad campaign, a new hire, a new joint venture, new financing, or even a new partner, which is very big indeed. You likely know what it is you need to do; your gut has been telling you for a while now. Just get it started, and it will then become easier.  

Summertime is a great time to regroup, re-energize, and refresh your business. Try one of these five tips to spice up your summer as well as your business success.    

Five Summertime Strategies for 2023

We’re six days away from the first day of summer, and a few weeks away from the midpoint of the year. It’s the perfect time for taking a strategy check in your business to see how you’re doing for the first half of 2023 as well as to plan something fun and productive for summertime.  

Here are five business strategies to help you regroup, reassess, and rejuvenate your business halfway through 2023.  

1. Celebrate Your Accomplishments

Take time to pat yourself on the back and congratulate the people around you for the goals you’ve reached and the efforts your team has made on your behalf. You might be shocked when you think about how far you’ve come. Maybe you’ve hired another team member and your team is the largest it’s ever been; perhaps you’ve reached record revenue goals; possibly you’ve solved a complex supply chain problem.

We all could use more praise and more celebrations in our lives.  Perhaps you can organize a party, or if you are not the partying type, a quiet word individually with your team can go a long way, maybe more than you know.

2. Take a Vacation

If you’re feeling quite burned out, the best thing you can do is stop and take a breather. There’s nothing better to rekindle your creative juices than to get away from the business for a while.  Summertime is when most people take a vacation, so if your business is not having its busy season, this might be a good time to go away, even if for a little while.

If you’re anxious about being away from your business, you’re not alone.  In your annual planning process, plan for and block out your vacation way ahead of time.  Book the reservations with no refunds several months in advance so that you won’t chicken out at the last minute.  There is life beyond your business, and you will be a better business owner when you take regular breaks away.  

3. Schedule a Mid-Year Review

How has your business fared for the first half of 2023 compared to the goals you set at the beginning of the year? Are you on track to reach your goals? Should you design a course correction or are you on track? Where do you need to go next? Maybe you’re even ahead of plan!

You can make this process as informal or formal as you want. Some businesses hold retreats; you may simply need some quiet time on a weekend when all your family is busy doing something else.   

4. Be Selective About the Projects You Start    

Is your plate too full?  Entrepreneurs that wear many hats would probably say “yes” to that question, so the next question is do you have to do it all at once? Ask yourself what you can afford to stop doing that doesn’t make sense. Is there a project or two that can wait? If so, decide to stop stressing about not getting it done and give yourself permission to put it on the back burner for now.

5. Play Big

Maybe you’re not playing big enough. You might be busy, but are you busy with the things that will take your business to the next level? Do the thing you’re afraid to say “yes” to; the thing that you know will transform your business and get you closer to your dreams.

If you’re putting off a project that you know will pay back handsomely, then shelve everything you’re working on and start on the one that will reap the most rewards. It could be a new product or service line, a new ad campaign, a new hire, a new joint venture, new financing, or even a new partner, which is very big indeed. You likely know what it is you need to do; your gut has been telling you for a while now. Just get it started, and it will then become easier.  

Summertime is a great time to regroup, re-energize, and refresh your business. Try one of these five tips to spice up your summer as well as your business success.    

Cool Tech Tools: ChatGPT

The topic of artificial intelligence (AI) has been in the news quite a bit recently, and one of the reasons is the launch of an AI chatbot called ChatGPT. The GPT in ChatGPT stands for generative pre-trained transformer, which is a program that can realistically write like a human and interact in a conversational way. Basically, you can type in a complicated question, and ChatGPT will give you an amazingly lifelike, most-of-the-time accurate answer. 

ChatGPT was launched in November 2022 and developed by OpenAI, an AI research lab tasked with developing a friendly AI. OpenAI has both a non-profit and for-profit component in its organizational structure. 

As of this writing, ChatGPT is offered at no cost, but you must open an account and verify both your email address and phone number to access it. Once you do, the prompt is simple; just ask it a question. You can get access here: https://chat.openai.com/chat

Here is a sample answer to the question, “What are debits and credits?”

ChatGPT: “Debits and credits are terms used in accounting to describe the money movement into or out of an account. In accounting, every transaction involves at least two accounts, and each account is either debited or credited.”

“A debit is an entry that increases assets or expenses or decreases liabilities or equity in an account. For example, if you buy office supplies for your business, you would debit the office supplies expense account and credit the cash account.”

“A credit is an entry that increases liabilities or equity or decreases assets or expenses in an account. For example, if you sell goods on credit to a customer, you would debit the accounts receivable account and credit the sales revenue account.” 

“Debits and credits are used to keep track of the financial transactions of a business or organization. They are important tools for recording and analyzing financial information, and are essential for preparing financial statements and tax returns.”

Yes, ChatGPT is a touch verbose at times.  

Here is a tax example:

Question: Qualified Business Income – earnings limitations if NOT a specified service business

ChatGPT: “Under the current tax law in the United States, if you are a qualified business owner who operates a non-specified service business, you may be eligible for a tax deduction of up to 20% on your qualified business income (QBI).”

“However, there are certain limitations on the deduction, including a cap on the amount you can deduct based on your total taxable income. For the tax year 2022, the threshold for the taxable income limit is $329,800 for married filing jointly and $164,925 for other taxpayers.”

“Additionally, there may be further limitations on the deduction if your business has a significant amount of W-2 wages and/or depreciable property.”

“It’s important to consult with a qualified tax professional or accountant to determine how the QBI deduction rules apply to your specific business and tax situation.”

It can also answer these questions/requests, along with literally millions of others:

  • The best recipe for lemon bars
  • Write an engagement letter for tax preparation
  • Comment on the elevation of the El Camino de Santiago de Compostela from Sarria to the end.
  • Write an ad for marketing services.

There is a disclaimer in place, as ChatGPT will occasionally generate wrong answers. It did generate a misleading answer when it was asked a very complex tax question about the Employee Retention Credit and greater than 50 percent owner wage eligibility.  

How can you use ChatGPT in business?  It might save you time with writing initial drafts of letters, ads, speeches, webpages, or other correspondence. It can also save time on research and data analysis, but be sure to verify its answers. It can help with coding if you’re into computer programming. You can also use it for fun or for a second opinion. 

Try ChatGPT to start seeing how it can benefit you and your business. 

Cool Tech Tools: ChatGPT

The topic of artificial intelligence (AI) has been in the news quite a bit recently, and one of the reasons is the launch of an AI chatbot called ChatGPT. The GPT in ChatGPT stands for generative pre-trained transformer, which is a program that can realistically write like a human and interact in a conversational way. Basically, you can type in a complicated question, and ChatGPT will give you an amazingly lifelike, most-of-the-time accurate answer. 

ChatGPT was launched in November 2022 and developed by OpenAI, an AI research lab tasked with developing a friendly AI. OpenAI has both a non-profit and for-profit component in its organizational structure. 

As of this writing, ChatGPT is offered at no cost, but you must open an account and verify both your email address and phone number to access it. Once you do, the prompt is simple; just ask it a question. You can get access here: https://chat.openai.com/chat

 

Here is a sample of the answer to the question, “What are debits and credits?”

ChatGPT: “Debits and credits are terms used in accounting to describe the movement of money into or out of an account. In accounting, every transaction involves at least two accounts, and each account is either debited or credited.”

“A debit is an entry that increases assets or expenses or decreases liabilities or equity in an account. For example, if you buy office supplies for your business, you would debit the office supplies expense account and credit the cash account.”

“A credit is an entry that increases liabilities or equity or decreases assets or expenses in an account. For example, if you sell goods on credit to a customer, you would debit the accounts receivable account and credit the sales revenue account.” 

“Debits and credits are used to keep track of the financial transactions of a business or organization. They are important tools for recording and analyzing financial information, and are essential for preparing financial statements and tax returns.”

 

Yes, ChatGPT is a touch verbose at times.  

Here is a tax example:

Question: Qualified Business Income – earnings limitations if NOT a specified service business

ChatGPT: “Under the current tax law in the United States, if you are a qualified business owner who operates a non-specified service business, you may be eligible for a tax deduction of up to 20% on your qualified business income (QBI).”

“However, there are certain limitations on the deduction, including a cap on the amount you can deduct based on your total taxable income. For tax year 2022, the threshold for the taxable income limit is $329,800 for married filing jointly and $164,925 for other taxpayers.”

“Additionally, there may be further limitations on the deduction if your business has a significant amount of W-2 wages and/or depreciable property.”

“It’s important to consult with a qualified tax professional or accountant to determine how the QBI deduction rules apply to your specific business and tax situation.”

 

It can also answer these questions/requests, along with literally millions of others:

  • The best recipe for lemon bars
  • Write an engagement letter for tax preparation
  • Comment on the elevation of the El Camino de Santiago de Compostela from Sarria to the end.
  • Write an ad for marketing services.

There is a disclaimer in place, as ChatGPT will occasionally generate wrong answers. It did generate a misleading answer when it was asked a very complex tax question about the Employee Retention Credit and greater than 50 percent owner wage eligibility.  

How can you use ChatGPT in business?  It might be able to save you time with writing initial drafts of letters, ads, speeches, webpages, or other correspondence. It can also save time on research and data analysis, but be sure to verify its answers. It can help with coding if you’re into computer programming. You can also use it for fun or for a second opinion. 

Try ChatGPT to start seeing how it can benefit you and your business. 

5 Ways to an Accountant’s Heart

In the last few years, the shortage of accounting professionals has grown tremendously, and many business owners are struggling to find reputable, quality accounting services. Prices for accounting services may have gone up due to this supply/demand imbalance, and they will keep going up for years to come– due to the shortage in accounting graduates and the overall pipeline. It makes sense to explore how to work better with your accountant as they become more and more scarce and in demand.  

A Successful Partnership

Intuit conducted a survey in October 2022 which found tremendous benefits to the accountant-business owner relationship:

  • Nine out of ten small businesses with an accountant or bookkeeper say they contribute to the business’s success. 
  • More than eight out of ten business owners say accounting professionals helped them reduce the impact of inflation on their business. 
  • More than 80 percent of business owners say their accountant helps them make better use of technology.
  • More than 98 percent of business owners say they are more confident in their business because of their accountants.  
  • Small business owners overwhelmingly say their accountants save them time and money. 

There’s no doubt that the relationship between a business owner and their accountant is of utmost importance to your business. Here are five ways to work even better with your accountant so that you can both benefit from this important business relationship. 

1. Reduce your accountant’s administrative time.

There is a lot of paperwork when it comes to accounting and tax work, and administrative work goes hand in hand with that paperwork. When you can reduce the administrative work, your accountant can focus more on planning and advisory work, which is more valuable to your business. Here are a couple of tips.

  • When sending paper information to your accountant, scan it in and convert it to PDF instead. Then upload it to your secure portal.
  • When sending digital information, convert images to PDF files when possible. Images can’t easily be converted to text as PDFs can.
  • Instead of sending multiple files, combine PDFs into one image when they are the same document.
  • Use a client portal instead of email if a client portal is provided. 

 

2. Spend time understanding your accounting and tax reports.

A little education can go a long way. Learning a bit about finances and accounting can help you become a much better business owner. Your accountant may have suggestions on the best source for this or they may have videos they have produced themselves.

3. Honesty is paramount.

It’s critical that there is trust and complete honesty on both sides of the relationship. Your accountant may have earned a CPA or Enrolled Agent or other certifications that took years to acquire. Their license is in peril if anything is not above board. You might be surprised to learn that there are potentially many penalties and jail time for the accountant as well as the client if fraud or other criminal acts are discovered.

One example of something you can do to ensure your accountant’s trust is in tax preparation: clients should complete the tax organizer in full when the tax preparer sends it, even though it is a pain to do so. If a piece of information is missing, or you decide it’s not important but the government feels it is, that omission can spell the beginning of trouble for both you and your tax preparer. 

4. Be mindful in communications. 

Good communication is an essential part of the accountant-client relationship. A great client will take the time to read any emails or correspondence and answer all the questions in the email (not just the first one!). 

Both you and your accountant may have preferred ways of communicating, among the choices of text, voice, and email. Keep in mind your accountant has a higher duty to protect your private information. Text and unencrypted email can be problematic for them, depending on the type of information to be conveyed. 

To save time and reduce interruptions, keep a notes file on your desktop, and add any non-urgent questions to your list. That way, you can cover a lot of ground when you meet periodically.  It’s a better use of both of your time. Of course, if you have urgent questions, feel free to contact your accountant at any time.  

5. Vet any advice you hear.

Be wary of unsolicited advice as well as tips you might see on social media. They can be uneducated and worst case, downright fraudulent. One of the biggest problems today is ERC mills: companies that have sprung up to help small businesses claim the Employee Retention Credit from 2020 and 2021. Most of these companies are not following IRS guidelines and do not have the proper credentials to evaluate the tax law properly.

Social media sources can be quite unreliable as well. TikTok has some outrageous financial claims regarding the choice of business entity, so please do not act on this advice until you speak with a qualified accounting or tax professional.  

Try these tips to build better rapport with your accountant, and your business will blossom as well. 

Don’t Shortchange Yourself: What an Entrepreneur’s Pay Should Cover

Being in business means taking a lot of risks, especially financially, and as an entrepreneur, you deserve to be rewarded for those risks. Your pay is just one of the many benefits of your self-employment. But it’s not like the pay you get as an employee; it needs to be more comprehensive than that.  

Getting Paid

The two major ways entrepreneurs can take money from their business is through draws or by receiving a paycheck.  If your business is incorporated, you’ll take a paycheck; if your business is a sole proprietorship or a partnership, you’ll take a draw.  

Here’s a list of five items to make sure you have covered in your pay:

1. Reasonable Compensation.  

If you were doing the same work for a company that hired you, what would your pay be?  Are you making at least market equivalent or better?  A lot of times, as entrepreneurs, we tend to focus only on this piece of our compensation when we set our pricing, and that’s a big mistake.    

There are also tax implications of paying yourself too little (to avoid payroll taxes if you take a paycheck) or too much. 

2. Retirement plan

When you work for yourself, no one is going to fund your retirement for you.  Although the Social Security program helps, it’s up to you to set additional money aside for a comfortable future when you can’t or don’t want to work anymore.  

3. Benefits

Employees get vacations, health insurance, and bonuses; and you should too.  This should be part of your compensation package as an entrepreneur, and there are many tax advantages as well.

4. Taxes

You need to cover taxes that will be incurred on your pay as well as your business profits. This includes:

  • Normal withholding for federal income taxes, state and local income taxes, Medicare, and social security. If you receive a paycheck, these will be taken out of your paycheck, but they may not be enough because they don’t consider taxes on your profits. If you take a draw, you may not have withholding, but you will need to factor in self-employment taxes.
  • Taxes on your profits. For sole proprietors, partnerships, LLCs, and S Corps, your taxes will be figured on the profits of your business when you complete your federal income taxes. They will “pass-through” from your business to your personal return. Don’t let this part surprise you!
  • State business taxes. If your business does business in multiple states, you must file a tax return for each state. Many of them collect taxes based on flat corporate fees, the revenue you earned in that state, state payrolls, and/or the value of property owned in that state.

Check with your tax advisor so that there are no surprises in your tax bill for your business or your personal returns.   

5. Profit

As an entrepreneur, you take extra risks when you own your own company, and you should be compensated accordingly.  Your capital is tied up in your business and should be earning a good return in addition to your regular salary or draw.  

 

Complete Compensation

Your compensation should include all of the above components.  If it doesn’t and you feel like you can’t afford to pay yourself that much, then your pricing might not be reflecting all of these items correctly, you might have a volume problem, or your business model may need some adjusting.  

It’s normal to take a smaller paycheck the first few years as the business is growing, but if you’re still doing it after several years or constantly have cash flow issues, then something may be wrong.  

If you’d like our help in this area of your business, please reach out and let us know.  

Make sure your future is bright and financially secure by considering all five items in your entrepreneur compensation.   

Cool Tech Tools: Drones

Drones were considered fun when they first came out, but they are far from toys. Drones have surprising benefits with extremely high return on investment to certain business owners.

A drone is a robot that can fly and that is controlled by a remote device. The technology includes GPS (global positioning system) and built-in sensors. There are many benefits to using drones:

  • They can go places where it might be dangerous for employees to access, improving employee safety.
  • They increase efficiency and productivity while decreasing workload and costs.
  • They can improve accuracy.

A drone can be used in the following ways:

  • To gather information for pricing estimates, such as roof repair
  • To inspect items, such as a tree’s disease progression
  • To monitor systems or the status of certain items, such as landfill fire risks
  • To photograph items from an aerial view

There are many industries that have begun to routinely use drones, such as:

  • Forestry
  • Agriculture
  • Construction
  • Waste Management
  • Environmental
  • Disaster Relief Services
  • Photographers
  • Real Estate
  • Advertising
  • Event Planning
  • Highways, Traffic, and Road Safety

Rules for Drones

Before you fly your new drone, there are rules you’ll need to follow. The FAA (Federal Aviation Administration) has put into place the rules for flying drones safely. There may also be rules passed at the state and local levels that you’ll need to check on.

When using drones for commercial purposes, you’ll need to register your drone, familiarize yourself with the operating rules for your type of drone, and pass a pilot’s test.  Find out more here: https://www.faa.gov/uas

Cost of Drones

Drones can cost anywhere from $50 to $25,000 and more. A beginner recreational drone can cost under $100, while a beginner commercial drone can range from $300 to $500. A commercial drone typical starts at a $1,000 price tag. Drone prices will vary depending on their size, features, and intended usage.

If your industry is one that is adopting drones, it might be a good time to start researching them for your business.

1099-K Reporting Changes

For taxpayers collecting payments through a third-party payment platform (such as PayPal), the American Rescue Plan Act (the “Act”) established a major change to tax reporting rules to prevent businesses and contractors from hiding income through the receipt of electronic payments. Form 1099-K is the tax form issued by credit card companies and third-party payment processors to report payments made via debit card, credit card, stored value cards (like gift cards), and payment apps (like Stripe, PayPal, or Venmo), and the reporting threshold for issuing the form was decreased significantly as part of the passing of the Act. Although this change was set to take effect starting with the 2022 tax year, the IRS has delayed implementation of the new rule – however, it is expected to be required for 2023. 

What Changed?

Existing rules (which are still currently in place for 2022 due to the IRS postponement) require credit card companies and payment processors to file Form 1099-K with IRS and issue to payees when: 

  • gross earnings are more than $20,000, and
  • the number of transactions exceeds 200 for the year

Many lawmakers argued that this “two-step” threshold created a situation where contractors/sellers could easily omit income from their tax returns. As a result, the single “$600 or more” threshold was created, meaning that any recipient with receipts of $600 or more for the year through a certain payment platform will be issued a 1099-K form, regardless of the number of transactions or other factors. Barring any additional action from Congress, this new reporting threshold will be enforced starting with 2023 forms, meaning that a substantially higher number of 1099-K forms will be sent out in early 2024 for the 2023 tax year.

Considerations and Concerns

Despite the fact that tax law has always required taxpayers to report ALL income earned/received, regardless of whether associated tax forms are received, this law change has raised concerns about several logistical challenges, including:

  • What about personal transactions? For those taxpayers who use platforms like Venmo to receive personal payments, such as a birthday gift from a relative or a rent deposit from a roommate, will they be taxed on those payments? According to IRS, 1099-K forms will only be issued for those accounts that are listed as business or merchant accounts or on personal accounts where transactions are tagged as “goods and services.” Despite these reassurances, there are still questions about how this will play out as the change is implemented, especially for those who use the same account for business and personal transactions, or casual sellers who are selling used goods for less than what they paid/are not in the business of selling such goods for a profit. 
  • What if the 1099-K and 1099-NEC forms report the same payment? Although this should not happen per IRS due to the fact that payment processors are responsible for issuing 1099-K forms and individual clients are responsible for sending 1099-NEC forms, it’s still possible, particularly if clients misunderstand the rules and don’t realize they shouldn’t be issuing 1099s for payments made through credit card or payment apps. This raises concerns about the double-reporting of income and how to account for such errors on a tax return so that the recipient isn’t taxed twice on the same income.
  • How will IRS handle the influx of paperwork they’ll have to sort through as a result? IRS has already been dealing with understaffing and, as a result, processing backlogs and inadequate phone support over the last few years. Many believe this compliance change will increase the burden on IRS and lead to widespread confusion in the tax system, and will also lead to a rise in IRS correspondence.

For freelancers, contractors, or anyone receiving payments through a third-party platform, make sure to save any 1099-K forms received, which you will need to refer to when you file your tax returns. Consult with your tax professional about any actions you may need to take as a result of these rule changes, and if/how your tax situation may be impacted.

6 Ideas to Put the Spring into Your Spring Revenue

While spring brings a change in the weather for most locations, it also brings a number of opportunities to refresh your products and services. Spring is a great time to boost your marketing campaigns so that you can boost your business revenues.

Adding the theme of spring to your marketing campaigns allows customers to see your products and services in a different light. Here are six ways to add a spring theme to your products and services.

1. Add a holiday twist.

With a plethora of spring holidays to choose from, you can build a sale around any of these.

  • Easter
  • May Day
  • Mother’s Day
  • Memorial Day
  • Flag Day
  • Father’s Day

Memorial Day is the big one; it ushers in warmer weather and signals the end of school for kids and teachers. Plus, customers are used to seeing sales during this long weekend. Mother’s Day can be a revenue booster for many businesses as well.

Which one of these holidays can you best connect your products and services? That’s your answer for an effective spring sale. If you are an egg farmer, the answer is obviously Easter. If you offer women’s products, Mother’s Day is a sure bet. The same goes for men’s items and Father’s Day. If your product is patriotic, Flag Day or Memorial Day should be your choice.

2. Temporarily switch to spring packaging.

If you sell products with packaging, put some color into your offerings to make them stand out. Common spring colors include green, yellow, pink, orange, baby blue, and pastels. Consider adding flowers to your artwork or to your actual offering.

3. Hold an open house.

If you offer services and no products, an open house works especially well. Invite your prospect list and current clients – ask them to bring a friend – and offer refreshments with a spring theme.  Plan an agenda with a speaker on a topic adjacent to your offerings and allow time for guests to mingle and network.

4. Free spring gift with purchase.

Providing a free gift is common in the cosmetics industry, but you may be able to apply the idea to your products and services. Make it spring-focused if possible.

An easy idea that works in any industry is a spring basket of goodies, which can be food, personal items, or just about anything that will fit in a basket. A spring basket in conjunction with any of the above holidays works great. For example, a basket with items women would love would work for Mother’s Day. With Memorial Day, you could create a picnic theme and add tiny flags to further tie it to the holiday. These baskets could be sold separately or included for free with a large purchase.

5. Spring cleaning.

Spring cleaning is a common theme you may be able to use in your offerings. Whether it’s actually cleaning, removing clutter, becoming more organized, or even crossing an item off the to-do list, this theme will help to connect the feeling of accomplishment to your products and services.

If you offer any kind of organizational services and products, such as closet design, junk removal, or house cleaning, this is a perfect theme. It also works with companies in the business of beautifying your home or office space, such as wardrobe designers, interior decorators, home furnishings businesses, florists, art galleries, landscape businesses, and plant nurseries.

6. Graduation

Spring is a time for graduation ceremonies. Tie your products and services to graduation, starting a new life, or progressing your career.

Mix and match these six ideas to produce an even more powerful spring theme in your business.

Whether you go with a small change like adding a flower to your offerings or a big change like an entirely new marketing campaign with a bonus gift, adding a spring theme to your products and services will be like a breath of fresh air to your sales.