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How To Choose An Accountant by Gaebler.com

Filed under: GET RICH, LIFE LESSONS — admin September 5, 2008 @ 9:16 pm

EDUCATION:
http://www.goodmagazine.com/

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I made the decision a few days ago to figure out how to find an amazing small business accountant.  While researching I found this article on www.gaebler.com and it gave me some great things to think about…

Choosing an Accountant for your Small Business

Choosing the right accountant for your small business can mean the difference between success and failure. After all, it’s your financial numbers that make or break your business.

Unfortunately, once you’ve selected an accountant, it’s a pain to switch. Your accountant gains detailed knowledge of you, your business and your data —it makes it very tough to transition to a new accountant. The end result is that many businesses that work with mediocre accountants don’t make the change to a better accountant simply because the switching costs are too high.

Given the inertia that settles in after you’ve selected an accountant, it’s important to make a good choice the first go-around. Makes sense, right?

Surprisingly, most business owners don’t thoroughly consider their needs when selecting an accountant. That’s because many of us who don’t have a strong accounting background view all accountants as being equal.

But the reality is that all small business accountants are not created equal.

This article explains how accountants can assist your business and provides useful questions you should use to choose an accountant that truly can help your business grow, not somebody who just crunches the numbers.

What Do Small Business Accountants Do Anyway?

The increasing role of small business in the American business landscape and more powerful and accessible information technology has changed the role and importance of the small business accountant.

Why do you need an accountant? Some small businesses make due with a bookkeeper – someone to perform the tedious task of recording financial information and cranking that data into the necessary formats, like P&L statements and tax forms.

But a good small business accountant does much more than just record transactions and passively generate documents—they actively analyze, interpret and convert that data into actionable business intelligence.

Based on where you want to go with your business, they should be able to tell you how to get there. If your accountant is just showing you the financial tracks of where you have been, you’ve made a bad choice and you’re missing out on a great opportunity to receive good business advice.

To be sure, today’s small business accountant offers more than crunched numbers. They can be your primary resource for:

Tax Planning. Beyond simply preparing tax forms, an accountant should be involved in business planning throughout the year. They should be able to regularly advise the business so it functions with peak tax efficiency.

Business Consulting. A good accountant should be able to help your business grow. Talented small business accountants function as a trusted general business consultant, assessing business problems and offering specific solutions. They offer advice on internal controls, risk management, lease versus buy decisions, inventory strategy, pricing, and even marketing. In short, an accounting professional who really understands your business from the inside out should be a trusted business advisor who is highly motivated to see you succeed.

Personal Finance Advice. A good small business accountant understands that your personal finances are integrally linked to your business finances. They view the two holistically and offer advice on both fronts. For example, while serving as your small business accountant, they might offer retirement planning advice and estate planning advice that is ancillary to your small business activities but that will ultimately leave you in a stronger financial position.

Technology Know-How. Computing technology has dramatically improved small business capabilities as powerful business software is no longer only for corporations and the Internet provides a level of access to knowledge, customers and suppliers hardly dreamed of even ten years ago. A good accountant must — must! — absolutely be proficient in applying the fantastic and inexpensive information technology that turns business data into strategic intelligence. They need to be very familiar with leading small business management software packages from leading vendors like MYOB, Intuit and Peachtree.

Networking. While the strength of an accountant is still what they know, a mark of a successful pro is also who they know. Your accountant should be a good source of referrals as they should now precisely each of their clients’ strengths and needs. Need to get a loan for your small business? Your accountant ought to be able to introduce you to the right banker.

Questions to Ask Your Prospective Accountant

The bottomline is that you should expect today’s accountant to be much more than a bookkeeper. Most do add considerable value. The trick is to separate the wheat from the chaff.

So, with your raised expectations, how do you choose the right accountant for your small business? Like any relationship, it boils down to a compatibility of interests, experience and outlooks. Seek recommendations from your peers and ask prospective accountants the following questions:

Do you have a CPA? Business owners are often confused as to the certified public accountant (CPA) designation. A CPA has a surpassed accepted financial education levels, passed state-administered tests to prove competency and periodic re-certification exams. Certain situations, such as audits and many loan applications, require CPA involvement. Not surprisingly, CPAs can charge higher fees than a non-CPAs. But there are a great many non-CPAs who excel at small business accounting and financial and technology consulting. Again, getting to know them and your needs is the necessary first step.

What kind of creative business advice will you offer me? A good accountant can deftly handle data and numbers but should also be able to demonstrate quick and creative business acumen. Ask the candidate to offer three quick ideas on how your firm might be able to save money right now. Ask them for three examples in which they offered useful business advice to other clients that went beyond just tracking the numbers. While “creative accounting” is usually a negative, having a creative business mind can be a huge asset towards helping your company to grow.

Do you consider yourself to be tech-savvy? Small business accounting software has made powerful accounting tools available to everyone. But these accounting packages, most notably MYOB and QuickBooks, are only as useful as the person who installs them and runs the applications. Even if you are not a “tecchie,” do your homework to be able to determine whether the candidate understands the role computer technology plays in turning business information into business intelligence. For example, ask them how they will integrate your computer files with the technology in their office. What role will the Internet play in keeping in touch and interchanging financial information?

Who are your other clients? Imagine this scenario. You hire an accountant based on the assumption that he understands the basics of your business. Then, you find out that he’s never had a client like you before. Instead, he’s only prepared tax forms for wealthy individuals that don’t own businesses. Avoid that possible disaster by asking who the accountant works with. If they are businesses that are similar to yours, that’s a good sign. In asking about their clients, you will also want to understand how busy they are and whether they have the time and resources to support you adequately.

How do you calculate your fees? Ask the accountant what you can expect fees to be and will he guarantee that you will not exceed certain amounts that you agree upon up front. In a time-based fee structure, make sure to find out the hourly rate, as well as all fees for expense reimbursement. Find out now whether a simple two-minute phone call or a one page fax means an hour of billable time. If that’s the case, run for the door.

Are you active in the local business community? Who do you know that can help me? Find out whether your prospective accountant can introduce you to people who might be useful to you, including prospective customers, suppliers, bankers, and investors. Since talk is cheap, take it one step further. Ask the accountant for examples of introductions they’ve made in the past for other clients and how those introductions played out.

Why should I use you? As a final question, it’s always good to let the accountant make the case for why you should engage them. Find out whether your prospective accountant can introduce you to people who might be useful to you, including prospective customers, suppliers, bankers, and investors. Since talk is cheap, take it one step further. Ask the accountant for examples of introductions they’ve made in the past for other clients and how those introductions played out.

Mom-and-Pop Multinationals-Improved software and services allow the smallest businesses to outsource work around the globe

Filed under: GET RICH — admin July 9, 2008 @ 6:01 pm

CHANGE THE WORLD:
Compassionate Capitalism

Business Week Magazine

By Pete Engardio

From the outside, the gray Victorian with the stained-glass windows on a gentrified block in Dorchester, Mass., is a typical middle-class dream house. But it also is the headquarters of what you might call a micro-multinational. Randy and Nicola Wilburn run real estate, consulting, design, and baby food companies out of their home. They do it by taking outsourcing to the extreme.

Professionals from around the globe are at their service. For $300, an Indian artist designed the cute logo of an infant peering over the words “Baby Fresh Organic Baby Foods” and Nicola’s letterhead. A London freelancer wrote promotional materials. Randy has hired “virtual assistants” in Jerusalem to transcribe voice mail, update his Web site, and design PowerPoint graphics. Retired brokers in Virginia and Michigan handle real estate paperwork.

Global outsourcing is no longer just for big corporations. Increasingly, Main Street businesses from car dealers to advertising agencies are finding it easier to farm out software development, accounting, support services, and design work to distant lands. Elance, the Mountain View (Calif.) online-services marketplace that is the Wilburns’ main connection to the cyber-workforce, boasts 48,500 small businesses as clients—up 70% in the past year—posting 18,000 new projects a month. Sites such as Guru.com, Brickwork India, DoMyStuff.com, and RentACoder also report fast growth.

Forecasts that the Web would revolutionize work by creating a vast global market for professionals have been around since the early ’90s. Venture capital legend John Doerr thought so much of the idea in ‘99 that his firm, Kleiner Perkins Caufield & Byers, bet nearly as much on Elance as it did on Google (GOOG) and Amazon (AMZN). Kleiner managing partner Raymond J. Lane is chairman.

But while other forms of e-commerce caught fire quickly, Web sites for freelancers have only recently begun to generate much momentum. Market researcher Evalueserve estimates that revenues for online service marketplaces will grow 20% in 2008, to $190 million, far from the initial hype.

Why has it taken buyers and sellers of services longer to get comfortable trading online than companies dealing in physical goods? An eBay (EBAY) for services, says Elance CEO Fabio Rosati, “was a brilliant idea that started too soon.” But improved software, search engines, and new features are boosting the industry. Several sites now allow buyers to view detailed work samples and customer ratings for thousands of service vendors. Guru launched a payment system to mediate disputes and lets buyers put funds in escrow until work is received. Elance developed software to track work in progress and handle billing, pay, and tax records.

MOVING WITH THE MARKET

Those upgrades are starting to make a difference. Elance, which makes money by charging subscription fees and a 4% to 6% cut of each project, expects total billings to rise 50%, to $60 million, this year. Guru predicts similar growth, to $26 million.

Small entrepreneurs are the biggest source of growth. Queens (N.Y.) Lincoln Mercury dealer Ariel Tehrani hired Brazilians to develop a multimedia Web site to sell cars online. San Francisco real estate agent Jonathan Fleming uses graphic designers in Portugal, database managers in India, and writers in Hungary for his blog.

The Wilburns began buying graphic designs through Elance in 2000. They say they shifted to radical outsourcing after reading the 2007 Timothy Ferriss best-seller, The 4-Hour Workweek: Escape 9-5, Live Anywhere and Join the New Rich, which extols the merits of freeing up time by hiring cheap offshore “virtual assistants” to handle scheduling and other routine tasks.

Remote help has allowed 38-year-old Randy Wilburn to shift gears with the economy. His real estate business has slowed, so he spends more time advising nonprofits across the U.S. on how to help homeowners avoid foreclosure. Virtual assistants have handled routine correspondence and put together business materials while he’s on the road, all for less than $10,000 a year. He figures a full-time secretary would run $45,000. Nicola, a 35-year-old designer, decided to work from home after she had their second child. Nicola now farms out design work to freelancers and is starting to sell organic baby food she cooks herself. She is setting up a Web site for that business and offered $500 for the design work. Of the 20 bidders who responded via Elance, 18 are from outside the U.S.

The couple uses two main offshore vendors. One is GlobeTask, a Jerusalem outsourcing firm that employs dozens of graphic artists, Web designers, writers, and virtual assistants in Israel, India, and the U.S. It generally charges $8 an hour. The other is Kolkata’s Webgrity, which has a staff of 45 and charges $1 to $1.20 an hour. Five years ago, says founder Amit Keshan, 32, his company designed Web sites for Indian clients. Now he does all his business through Elance, handling up to 300 jobs each month for U.S., British, and Australian clients. For $125, Webgrity designed a logo for Wilburn’s real estate business that Wilburn says would have cost as much as $1,000 in the U.S.

A worldwide market where even mom-and-pop businesses outsource could still be years from attaining wide appeal. But micro-multinational entrepreneurs like the Wilburns may not be rarities for much longer. “People will do it the old way until it becomes a no-brainer to do it the new way,” predicts Elance’s Rosati.

Stephen Martile On T. Harv Ecker’s Millionaire Mind Intensive Jar Accounting System

Filed under: GET RICH — admin July 4, 2008 @ 10:13 pm

GET RICH:
Losing my Virginity

The jars system is an easy and simple way to manage your money. In the beginning I resisted this system. Eventually I gave in and began to see the financial rewards first hand. In my last post I shared some of the benefits of using the JARS to manage money. In this post I’ll cover my experience on how the jars work.

Why Physical JARS?

I’ve had a few people ask me why I have the physical jars sitting on my desk. Some have asked, “Steve, do you actually put money in those jars?” The answer is, ‘it depends’. Let’s explore the question in more detail.

Currently, I have setup the jars electronically so that all transactions are completed automatically on a monthly basis. Most of the work is done online. From this stand point you might think that there is no need for the jars. One of the reasons I have the jars on my desk is because they help me build the habit of managing extra money. Keep in mind that visual is memorable. The jars are a physical reminder of where my money is going.

Sometimes I run into extra cash or happen to find change in my pocket when I get home from work. When this happens I place the cash into one of the jars. Most times I’ll place the money into the FFA jar -the jar used to build our nest egg.

The physical action of placing the money into the jar is important. Once I place the money into the jar it gets me thinking about ways to use that money. For instance, when I place money into my FFA jar it triggers my sub-conscious to find ways to invest. The action of putting the money in the jar is like planting a seed. Once the seed is planted my mind works on creative ways to invest.

Sometimes I’ll place my extra money into the PLAY jar. Similarily, this will trigger my thought process to find ways to spend money on play. It’s like a game. Every time I put money into one of the jars my mind starts working to find ways to spend that money. This process is a great way to build your money managing habit.

Unfortunately, most people don’t use a system like this and they tend to always be in debt. One of the reasons they’re always in debt is because they use their extra money to pay their debt. If you’re consistently using extra money to pay your debt then you’re teaching yourself that habit - to pay debt.

The more you do it, the better you get at it. Eventually this habit becomes ingrained in you and it happens unconsciously. This habit can also lead to a poverty consciousness. The more times you pay your debt, the more you think about it. The more you think about it, the more you feel it. This will attract more debt. The way to move away from debt and into prosperity is to setup an automatic debt payment program and read my article, Focus On Prosperity.

The JARS

As a recap, here are the jars and a short description of each one.

> Necessity Account (NEC - 55%): This account is for managing your everyday expenses and bills. This would include things like your rent, mortgage, utilities, bills, taxes, food, clothes, etc. Basically it includes anything that you need to live, the necessities.

> Financial Freedom Account (FFA - 10%): This is your golden goose. This jar is your ticket to financial freedom. The money that you put into this jar is used for investments and building your passive income streams. You never spend this money. The only time you would spend this money is once you become financially free. Even then you would only spend the returns on your investment. Never spend the principal or else you’ll go broke!

> Education Account (EDU - 10%): Money in this jar is meant to further your education and personal growth. An investment in yourself is a great way to use your money. You are your most valuable asset. Never forget this. I have used education money to purchase books, CD’s, courses or anything else that has educational value.

> Long Term Saving for Spending Account (LTSS - 10%): The money in this jar is for the bigger nice to have purchases. As I said in my last post, Trisha and I are going to Whistler, BC in January 2008. The only reason we’ve been able to make this happen is because we’ve accumulated a nice sum in our LTSS. A small monthly contribution goes a long way.

> Play Account (PLAY - 10%): This is my favorite account. PLAY money is spent every month on purchases you wouldn’t normally make. The purpose of this jar is to nurture yourself. You could purchase an expensive bottle of wine at dinner, get a massage or go on a weekend getaway. Play can be anything your heart desires. I’ve spent my play money on a night of sake and sushi at a Japanese restaurant; hockey equipment that I didn’t really NEED but wanted; a night out on the town with a limo, champagne, etc.

> Give Account (GIVE - 5%): The money in this account is for giving away. Trisha and I give money every month to the Sick Kids Hospital Foundation. We also use the money in this jar to give to family and friends on birthdays, special occasions and holidays. You can also give away your time as opposed to giving away money. You could house sit for a neighbor, take a friends dog for a walk or volunteer in your community. When you give your money or time you’re sending a sign of abundance to the Universe. You’re telling the Universe that you have plenty of everything, you’re abundant. Giving signals abundance. This will magnetically attract more abundance to you.

How the JARS Work

Here is a sketch of how we use the jars. Trisha and I deposit all of our personal income into a necessity account. In our case it’s our checking account. The money in our necessity account pays for all of our expenses. The remaining money is distributed into 5 other accounts. See the sketch below.

jars-sketch.JPG

I learned very early in the process that the jar percentages are not critical. To guarantee your financial success just start using the jars and build the habit. This is key. It doesn’t have to be perfect when you start. You could even start by splitting $10 every month into the jars. There is an inspiring story in ‘The Secrets of the Millionaire Mind’ about a woman who started splitting $1 into the jars every month. In her first month she put 10 cents into her play account, 10 cents into her FFA, 10 cents into her LTSS and so on. Later that month she used her play money to buy a piece of bumble gum. She received a mini comic with the bubble gum package that she bought with her play. She read the comic and got a laugh. Two years later she deposited a $10,000 dollar check into her FFA account. Now who’s laughing?

If she can do it then so can you.

I highly recommend the JARS system to anyone who wants to make the most out of their money. If you’re looking for a simple way to make more on what you already have then use this system.

Want to learn more? Check out T. Harv Eker’s Millionaire Mind Intensive. For a limited time you can purchase Harv’s, ‘The Secret’s of the Millionaire Mind’, and receive two free tickets to this seminar.