by Daniel Kittell | Accounting News, Industry - Construction, News
Payroll is often one of the most complex administrative tasks for a construction firm. At any given time, you may have employees at differing pay rates working across a range of job sites. By streamlining your payroll process, you will save time and ensure that employees are getting paid accurately and on time.
Implement Digital Time Tracking
Payroll processes done by hand, such as moving data from timecards to payroll software, are time consuming and allow for error. Try implementing digital time tracking in place of handwritten timecards and spreadsheets. This will help to slash time, cut down on manual error, and eliminate the task of interpreting handwriting. Catching and fixing errors, like missing hours or break time, is also easier with digital time tracking.
Many time systems have progressed in modern offerings such as geofencing, which improves labor cost data and employee accountability. Construction firms that do government work can log work classifications, verify wage decisions, and manage reporting more efficiently.
Establish a Reliable Payroll Checklist
Make a step-by-step checklist that includes each task in the payroll process. These tasks typically cover:
- compiling hours
- double-checking data
- pay and withholdings
- distributing funds.
Firms that do prevailing wage work must also manage:
- verifying wage agreements
- work classifications
- handling fringe benefits.
Cross off each task as it is completed and make a note of any problems that cropped up, then you can review your process and make changes for improvement.
Streamline Technology
If your company uses multiple platforms for various administrative tasks, you are likely creating more work and more room for error. For instance, be sure you are using a digital time and attendance system that exports out to a payroll and reporting system. This eliminates the extra work it takes to transfer the data. There are also platforms designed to handle the specific tasks associated with prevailing wage work.
Limit Preventable Mistakes
With a lot of variables to keep track of in the payroll process, your goal should be to focus on limiting preventable mistakes. Try making a list of the most common payroll mistakes you’ve noticed, and double check those areas before finalizing payroll.
The payroll process is easy to overlook until something goes wrong and you waste valuable time and resources trying to correct errors. An efficient and accurate process can promote compliance, reduce risk, and lay a foundation for growth.
by Stephen Reed | Accounting News, Industry - Veterinary Medicine, News
Clients consistently turn to veterinarians for advice and assurance on products, pet food, and pharmaceuticals for their pets, so a retail business that can add to your clinic’s bottom line is a natural step for many. Below are some tips to help implement a retail business for your practice.
Be Selective with Products
Evaluate your product offerings and determine which ones move quickly. Focus on items that are backed by your medical team, turn over quickly (less than six months but ideally in a month or two), and are favored by clients. If you routinely recommend over-the-counter products during appointments, have them accessible for your clients to take home that day. Limiting choices to what your team specifically and commonly recommends helps to manage inventory and develop trust with clients. Even in the case of products that clients can buy at a pet store or grocery store, like Nylabone chews or nail trimmers, if they are readily available at their vet’s office, clients are typically happy to check that item off their list and support a small business in the process.
Implement a Loyalty Program
Consider implementing a loyalty program where clients receive a “freebie” when they reach a certain dollar amount. These freebies could be an account credit, a service such as a free nail trim, or a product that retails for under a certain threshold. This is a simple strategy to boost sales in a way that will help staff guide clients to products that they would likely buy anyway while helping them reach their dollar goal for the loyalty program.
Keep It Focused
Keep it small in the beginning by viewing your retail offerings as an expansion to the services you’re already providing. Focus on stocking products that are important to your clients and esteemed by doctors and staff. This approach will help garner more repeat clients, more foot traffic, and a better-established relationship with clients.
In addition to over-the-counter healthcare products and general pet merchandise, be sure not to discount in-clinic pharmacy sales. Veterinarians do the work of attending conferences, communicating with drug manufacturers, and determining which products are best for their clients and pets. Instead of directing clients to drugstore pharmacies or, worse, online sites where they could unknowingly purchase less-than-ideal products to save some money, why not stock the products you’re recommending? This isn’t to say you should stock every product ever mentioned in every appointment, but it should be fairly easy to run some reports through your software to determine which products have the highest turnover. This will tell you which products are important to have on hand for customers.
The Bottom Line
Though you may not be able to increase your cost more than 35% of wholesale value in order to be in range with competitors, a positive cash flow on product sales is worth it in the end for your bottom line. Perhaps most importantly, clients and their pets are getting exactly what they need from the veterinarian they trust.
by Pete McAllister | Accounting News, COVID-19, News, Relief Bill, Stimulus, Stimulus Package
The Paycheck Protection Program (PPP) was created in 2020 by the CARES Act to help small businesses withstand the economic fallout from the COVID-19 pandemic. The recently passed PPP Extension Act of 2021 extends the deadline for PPP applications from March 31 to May 31. This move also grants the Small Business Administration an additional 30 days beyond May 31 to process loans. Here’s what small businesses need to know.
New Deadline Provides Breathing Room
According to the National Federation of Independent Business (NFIB), nearly one in every six small business owners reported the likelihood of needing to close their doors forever if current economic conditions did not improve within six months. The extension to May 31 will benefit these businesses, as well as lenders and businesses that have experienced errors and delays from technical difficulties in the application process. The SBA has also increased security in order to detect fraud, which has delayed processing in some cases. It’s important to note that May 31 is Memorial Day, so borrowers should have their applications in by May 28, before the start of the long weekend.
Opportunities for New First Draw PPP Loan Borrowers
The additional time may also benefit small businesses that received their first PPP loan this year. Because typically eight weeks must pass between the loans in order to spend money on payroll, this may give businesses enough time to use up those funds and apply to a Second Draw PPP Loan. Keep in mind that in order for a small business to qualify for a second draw loan, additional criterion must be met, according to the SBA:
- no more than 300 employees
- must be able to show at least a 24% reduction in gross receipts between comparable quarters in 2019 and 2020
The PPP Extension Act does not provide for further funding of the PPP. At the time of signing, however, the SBA said there was about $80 billion in funding that had yet to be disbursed to small businesses.
by Stephen Reed | COVID-19, Industry - Retail & Distribution, News, Retail & Distribution
The COVID-19 pandemic altered the way Americans shop. It also affected the way retail businesses reach customers and position their businesses for growth and prosperity. Looking forward, some of these changes are likely to stick around. Here are the trends small businesses in the retail industry can likely count on for the foreseeable future.
Online Shopping
Online shopping was certainly not a new concept when the pandemic hit, but nationwide lockdowns forced more consumers to shop online, and accelerated the rate at which business owners opened e-commerce sites. The shift to more digital business is likely here to stay, even as the world economy begins to recover. A recent study conducted by the United Nations Conference on Trade and Development (UNCTAD) and the NetComm Suisse e-Commerce Association found that online sales have increased across the majority of product categories. This suggests that consumers are increasingly content to shop online, and retail companies with dedicated e-commerce presences will be able to thrive in a post-pandemic era.
The Effect of e-Commerce on Brick-And-Mortar Stores
Retail strategist and experiential designer, Melissa Gonzalez, believes brands and retailers will be taking a close look at the role of physical stores.
“Capital allocation will have a tiered process where flagship destinations will exist in locales where there is evidence that a physical presence is justified or critical 12 months a year,” Gonzalez said. “Flagship locations will be complemented with smaller-format, specialty locations anchored around a specific purpose or localized effort. Partnering with department stores will also continue to be reimagined as they restructure and reposition as collaborative marketplaces, and there will be a deeper dedication to pop-in-shop retail.”
Tech Upgrades
The pandemic ushered in new safety requirements, changing regulations, and unpredictable staff availability. These changes are leading companies to think about tech-driven solutions that can support growing requirements and evolve with their business. Some of these tools include mobile payments, online shopping, and mobile scheduling. While the pandemic demanded the urgency of customer-driven solutions, like convenience and touchless transactions, they are proving to increase efficiencies as well as customer and employee experiences, and they are likely here to stay.
Personal Shopping Services
The role of a personal shopper, where a store employee shops for a customer, isn’t a new concept, but more retailers implemented this service to compensate for the loss of foot traffic during pandemic lockdowns. While this method is being embraced across the board, personalized experiences are especially well-suited to local and small retailers, who have an opportunity to lead the industry in this area.
Pricing Automation
A number of factors go into determining an item’s price, but more retailers are depending on automated technology to establish proper pricing. Expect to see more and more automation solutions implemented for small businesses, such as online pricing automation and inventory management systems.
Social Media’s Role
The pandemic accelerated the need for retailers to reach consumers through online and mobile-friendly methods. Social media is a major stimulator of online sales, and consumers want to interact with brands through these platforms. Experts even suggest that hashtags and memes could be just as effective as traditional advertising avenues. Small businesses should think about creative social programming to boost online shopping through avenues like shoppable TikTok and Instagram. This is especially important to reach and maintain younger consumers.
by Stephen Reed | Accounting News, Construction, COVID-19, Industry - Construction, News, Tax Planning
Last year construction contractors saw projects suspended indefinitely (or scrapped altogether) and escalated competition in the bidding process, both of which effectively stifled profit margins. It’s safe to say that the construction industry was not spared the upheaval of 2020. After such a tumultuous year, tax planning for 2021 might seem like a daunting challenge, but it’s a critical step for construction contractors in preparation of the year ahead.
Essential Tax Provisions for 2021 Preparation
With the uncertainty of the Covid-19 pandemic and a transfer of administrations in the White House this year, new legislation affecting tax provisions is a possibility, but there are several provisions under the current tax law, including those put in place under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, that you want to be sure not to pass over.
Bonus Depreciation
Are you eligible to use the bonus depreciation this year? Changes have been made to qualifying property under both the Tax Cuts and Jobs Act (TCJA) and the CARES Act as follows:
- TCJA: expanded the bonus depreciation deduction to 100% for specified property obtained and placed in service after Sept. 27, 2017, and before Jan. 1, 2023.
- CARES Act: authorized the qualified improvement property (QIP)—typically interior improvements to nonresidential property—to be depreciable over 15 years and eligible for 100% bonus depreciation.
Tax Credits and Deductions
These tax credits and deductions could aid in reducing tax liability for contractors:
- Research and development credits: contractors who test new techniques or processes on construction jobs could be eligible.
- Deduction for energy-efficient government buildings: contractors may be eligible for a deduction of up to $1.80 per square foot for building energy-efficient commercial buildings intended for federal, state or local governments.
- Credit for energy-efficient residential properties: Contractors can take advantage of tax credits for certain energy-efficient residential properties.
Note that the deduction and credit for energy-efficient buildings expire at the end of 2021.
Qualified Business Income Deduction
The TCJA replaced the 9% “domestic production activities deduction” under IRC Section 199 with a 20% Qualified Business Income deduction under IRC Section 199A. It also increased eligibility to encompass more businesses. Contractors might want to start the conversation with their tax advisor on how to maximize this deduction as well as receive guidance on how to maneuver through the calculation’s somewhat complicated rules and limits.
Flexibility with Accounting Methods
Smaller construction firms (meaning those with average gross receipts of less than $26 million from the prior three years) generally enjoy more flexibility with tax accounting methods. Such firms could be eligible to use cash, accrual, completed contract or “accrual less retainage” accounting methods, all of which usually aid in managing the timing of revenue recognition. This allows companies to stimulate revenue to counterbalance current losses and recognize revenue now in expectation of higher future tax rates.
Additional Tax Planning Considerations Amid the Pandemic
To help minimize the risks of ongoing economic uncertainty, contractors should consider keeping apprised of tax changes. Given the seemingly ever-changing legislation amid the pandemic, construction firms should keep in regular contact with their tax advisors in order to avoid any tax reform surprises. However, contractors should also aim to operate without presumption of further legislation. While the economic effects of the pandemic are ongoing, don’t assume further stimulus legislation like the Paycheck Protection Program will be passed by Congress.
In light of a turbulent 2020, the construction industry has experienced a return to the business practices that have proven successful in the past: more attention to jobsite monitoring, legal contracts, and insurance costs. Contractors can contact an MKR advisor to incorporate 2021 tax planning into this process.
