Tuesday, July 27, 2010
Running a business is hard work. Some people don't like meetings because they feel they are unproductive. I would challenge you to look at how you structure the meetings and the process. With the right process meetings can be extremely productive. Here are a few hints.
ü Never attend or hold a meeting without an agenda.
ü Set specific time goals and stick to them ? manage the clock so that the meetings don't become a coffee klatch where you discuss what you did over the weekend or your next vacation.
ü During the meeting keep note of action items with timelines and decisions made.
ü Follow-up the meeting with brief notes
ü Before the next meeting, send an email reminding folks of their "To Do" items.
This process keeps the meetings on target and action plans moving forward.
Posted by cmc2 @ 10:13:04 AM in Business Management
Tuesday, June 29, 2010
Does Your Business Have a "Board of Advisors"?
Why does a small business need a board of advisors? Quite often you can't see the true problems in your own business because you are too close to the issues. A carefully organized board of advisors will be essential to taking your business to the next level ? whether it be to build the business, explore a new product or service or to sell your business. The insight they can provide will be invaluable to you as the owner and operator of your business. What characteristics should I look for in members of my board? Who in the world would want to take the time to be on my board? You will be surprised how honored people will feel when you ask for their help. It demonstrates your respect for their business acumen and if the time commitment is not too extensive, it's my bet they will be very happy to help you succeed. Some boards are paid and others are not ? there is no strict rule as to how you should approach it. My advice would be if you are asking someone to be on your board in their professional capacity they should be offered compensation. For instance if you ask your business attorney or CPA they should be compensated. Most corporate boards are compensated ? use your discretion. The compensation does not need to be outrageous but should demonstrate that the board members time is valuable as well. In addition when you are paying people to attend a board meeting you will probably make sure that meeting isn't wasted time for anyone. If you haven't done so already, I challenge you all to build or rebuild your board of advisors to take your business to the next level. It helps you remember why you went into business in the first place and brings the fun back in running your business!
Posted by cmc2 @ 2:26:58 PM in Business Management
Last updated on Tuesday, July 27, 2010 @ 10:09:18 AM
Monday, June 7, 2010
Independent Contractor vs. Employee - Part 2
As we see an increase in audits it is very important to get this question right. Does my worker look more like an employee than an independent contractor? Please see our previous post (Part 1) and below for some guidance on how to tell the difference. How is work performed? A business exhibits control over a worker if it requires him or her to perform services in a specific order or sequence. How do you keep track of what they are doing? A business's requirement that the worker submit regular or written reports indicates a degree of control over the worker. How does the worker get paid? Payment by the hour, week, or month generally points to an employer-employee relationship, if this method of payment isn't just a convenient way of paying a lump-sum agreed upon as the cost of a job. Payment by the job or on a straight commission basis generally indicates a worker is an independent contractor. Who supplies the tools of the trade? A business exhibits characteristics of an employer if it supplies a worker with significant tools, materials, and other equipment, or ordinarily pays the worker's business and/or traveling expenses. Where is the work done? A worker exhibits independent contractor status if he or she invests in facilities that aren't typically maintained by employees (e.g., renting his or her own office). By contrast, an employee usually relies on the employer to provide the facilities needed to do the job. Who's taking the risk? A worker who can realize a profit or suffer a loss as a result of his or her services generally is an independent contractor, but a worker who can't is an employee. The risk that a worker won't be paid isn't factored in. How many people/businesses does the worker perform services for? A worker who performs more than minimal services for a number of unrelated businesses at the same time generally is an independent contractor. However, a person who works for more than one business may be an employee of each business, especially where the businesses are part of the same service arrangement. The fact that a worker makes his or her services available to the general public on a regular and consistent basis indicates an independent contractor relationship. Can you fire the worker? The right to fire a worker is a factor indicating that he or she is an employee. An independent contractor on the other hand, can't be fired as long as he or she produces the work that was contracted-for. There is no litmus test for exactly how many of these factors must be satisfied, nor are these factors uniformly applied. This is really a "facts and circumstances" issue ? don't think that if you have a contract with a worker that they will automatically be accepted by the IRS as an independent contractor. Word on the street is that the Employment Development Department of California has hired 80 new auditors and this issue will be under scrutiny. Please call our offices if you would like to arrange for an appointment to see whether your workers are classified properly.
Posted by cmc2 @ 11:44:06 AM in Tax and Legislation
Last updated on Tuesday, June 29, 2010 @ 2:39:33 PM
Tuesday, June 1, 2010
Is My Worker an Independent Contractor or Employee? Part 1
Under the "common law" rules developed by the courts, a worker generally is an employee for federal tax purposes if the employer has the right to control and direct the worker regarding the job he is to do and how he is to do it. The employer doesn't have to actually direct or control how the services are performed; it's enough if the employer has the right to do so. Ask yourself the following questions to determine if your workers should be employees or independent contractors: Who has control in the relationship? Must the worker comply with instructions about when, where, and how he or she is to work is ordinarily an employee. This control factor is present if the business has the right to make the worker follow instructions. However, instructions regarding government standards are given little weight, as is the absence of instructions for professionals such as attorneys, who must follow the rules of their profession. How long has this been going on? A continuing relationship between the worker and the business indicates an employer-employee relationship exists. A continuing relationship may exist where the worker is called in at frequently recurring, although irregular, intervals. Where is the work performed? The fact that a business requires work to be performed on its premises suggests control over the worker (if the work could be done elsewhere). Work done off the premises, such as at the worker's office, indicates some freedom from control. The importance of this factor depends on the type of services involved and whether an employer generally would require employees to do similar work on its premises.
There is no litmus test for exactly how many of these factors must be satisfied, nor are these factors uniformly applied. This is really a "facts and circumstances" issue ? don?t think that if you have a contract with a worker that they will automatically be accepted by the IRS as an independent contractor. Word on the street is that the Employment Development Department of California has hired 80 new auditors and this issue will be under scrutiny. Please call our offices if you would like to arrange for an appointment to see whether your workers are classified properly. It's critical for an enterprise periodically to review the status of its workers and see if they are properly classified. An enterprise must withhold federal income tax, social security taxes, and federal unemployment taxes on wages it pays workers who are employees. It also may have to provide them with the same fringe benefits and retirement plan coverage available to its other employees. There are California tax obligations as well. By contrast, these responsibilities don't apply for workers who are independent contractors. The business simply cuts them a check for their services and sends them a Form 1099-MISC. This can be a very costly issue for an employer. If you incorrectly categorize a worker as an independent contractor instead of an employee you could be liable for both the employers and employees share of payroll taxes along with penalties.
How does the worker get training? Training a worker by teaming an experienced employee with the worker, by corresponding with the worker, by requiring him or her to attend meetings, or by using other methods, indicates the business wants the services performed in a particular method or manner. Ongoing training is a particularly strong sign of an employer-employee relationship, but orientation or information programs about company policies aren't.
How integral are the services to your business? Integration of the worker's services into the business operations generally shows the worker is subject to direction and control.
Must a specific person perform the services? If the services must be rendered personally, the business probably is interested in the methods used to accomplish the work as well as in the results.
Does the worker have an employee assistant? A business that hires, supervises, and pays assistants for a worker is exhibiting employer-like control over the worker on the job. Conversely, an independent contractor relationship is indicated if a worker is contractually obligated to hire, supervise, and pay assistants.
Posted by cmc2 @ 2:06:20 PM in Tax and Legislation
Last updated on Thursday, June 3, 2010 @ 11:45:23 AM
Thursday, May 20, 2010
What have the folks at CMC been up to?
Even though tax season is over, the folks at CMC have been anything but idle. We wanted to take a moment to share with you some of the milestones and accomplishments our team has reached recently:
Teresa Mason, CPA and Managing Partner, has completed her MBA in Taxation at Golden Gate University and received her degree. Congratulations for a lot of hard work to achieve this goal!
Sandy Collins, CPA is in the process of formalizing our list of referrals. She has been interviewing professionals that have the same approach to professionalism, quality work and client service as we do. If you are looking for a professional to help you ? start your search at CMC.
John Benson, CPA and Tax Director, continues his involvement with the California Society of CPA?s State Committee on Taxation and brings back to the firm all the latest news about what the IRS and FTB are considering and doing. It certainly helps keep all of us up to date and connected to best assist you.
Irene Fong, CPA and Tax Manager, continues her teaching at Golden Gate University?s Graduate and Undergraduate accounting program. She recently completed teaching her first on-line tax class to over 60 students. She is a dedicated teacher and many of her students choose a tax career after taking her class.
Otto Schmal, EA and Senior Accountant, just completed the California Society of CPAs Leadership Institute. He and 12 other CPAs or CPA candidates completed this intensive 5 day training which gave him the skills to further his career at CMC and play a leadership role in the profession. Otto has also successfully passed three parts of the CPA exam on the first try and is awaiting results on the final section.
Sheryl Ardosa, CPA and Accountant, has successfully completed all the requirements and is now a Certified Public Accountant ? congratulations to Sheryl for reaching this very important milestone. She has most recently began the journey toward her Masters in Science, Taxation from Golden Gate University
CMC is committed to life long learning for our team. This commitment enables us to provide the best advice to our clients. Please join us in congratulating our team on their accomplishments! To keep up to date as things happen please look for our team members on LinkedIn and Twitter.
Posted by cmc2 @ 1:23:02 PM in CMC News
Last updated on Thursday, May 27, 2010 @ 3:21:13 PM
