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This policy template provides a clear structure for health insurance premium reimbursement and ensures that both the employer and employees understand the process and requirements. Adjustments can be made according to specific needs or additional details your client might want to include. Health Insurance Premium Reimbursement Policy Purpose: The purpose of this policy is to provide guidelines for the reimbursement of health insurance premiums that employees have paid out of pocket. This benefit is intended to support our employees in maintaining their health insurance coverage. Eligibility: All full-time employees who have completed their probationary period are eligible to participate in the Health Insurance Premium Reimbursement Program. Reimbursement Process: Documentation Required: Employees seeking reimbursement must submit the following documents: A copy of the paid health insurance premium receipt. A copy of the insurance policy stating the employee as the policyholder. Any additional documentation that supports the payment of the health insurance premium. Submission Window: Employees have 60 days from the date of the premium payment to submit their receipts and required documentation for reimbursement. Submissions must be made through [specify the submission method - e.g., email, internal portal]. Approval Process: Once documentation is received, it will be reviewed for accuracy and completeness. The reimbursement will be processed and paid within 30 days of submission approval. Reimbursement Amount: The reimbursement will cover 100% of the out-of-pocket health insurance premium, subject to company budget limitations. Tax Implications: Reimbursements made under this policy are treated as taxable income to the employee and will be reflected as such on the employee’s W-2 form. Record Keeping: Employees are responsible for maintaining their own records of insurance payments and reimbursements as part of their personal tax records. The company will also keep detailed records of all submissions and reimbursements for compliance and auditing purposes. Amendments to the Policy: This policy may be amended, modified, or terminated at any time by the company. Employees will be notified of any changes in a timely manner. Contact Information: For any questions regarding this policy or the submission process, please contact [HR Department contact information or designated personnel].

As a nonprofit, if you're looking to reimburse employees for health insurance premiums they've paid out of pocket, the first step is to ensure that the reimbursement plan complies with IRS guidelines. If you are looking for a less expensive, less complicated way to reimburse your employees, then check out our other article, "How Non Profits Can Reimburse Employee Health Insurance Premiums Effectively (Taxable to Employees)" Here’s how you can set up a compliant reimbursement process: Establish a Formal Plan: You should create a formal written Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). This document will outline the terms of how reimbursements will be handled, including eligibility criteria, reimbursement limits, and the process for submitting claims. Determine the Funding of the Plan: Decide if the reimbursements will be provided on a pre-tax or post-tax basis. For nonprofits, certain pre-tax arrangements can offer tax benefits for both the organization and the employees. Communicate the Plan to Employees: Clearly communicate the details of the plan to all employees. Make sure they understand what is eligible for reimbursement, how to submit receipts for premiums paid, and the timeline for reimbursement. Documentation: Employees should submit proof of payment along with a claim form to request reimbursement. Acceptable documents may include a receipt or invoice from the insurance provider, along with proof of payment (like a credit card statement or bank statement showing the transaction). Set Up a Tracking System: Implement a system to track all reimbursements. This system should ensure that claims are processed in a timely manner and that all payments are accounted for in your financial systems. Ensure Tax Compliance: Depending on how the plan is set up, there may be implications for payroll taxes. Make sure to consult with a tax advisor to ensure that the reimbursements are reported correctly to the IRS. Regular Review and Audit of the Plan: Periodically review the reimbursement plan to ensure it remains compliant with federal and state laws and make adjustments as needed based on changes in legislation or insurance coverage. By following these steps, you can set up an effective and compliant process for reimbursing health insurance premiums. This not only benefits your employees but also helps ensure that your organization meets legal requirements and maintains good financial practices

Introduction: In today’s workforce, providing health benefits can significantly impact employee satisfaction and retention. Nonprofits, in particular, may find it challenging to offer comprehensive health benefits due to budget constraints. However, reimbursing employees for their health insurance premiums can be an effective solution. This article outlines a step-by-step process for nonprofits to reimburse employee health insurance premiums on a post-tax basis (Taxable to the employee). If you are looking for a solution that is tax free to your employees, check out "How Non Profits Can Reimburse Employee Health Insurance Premiums Effectively (Non-Taxable to Employees)" 1. Establishing a Clear Reimbursement Policy: Begin by developing a clear and consistent policy that outlines how reimbursements will be handled. This policy should include eligibility criteria, the amount or percentage of the premium that will be reimbursed, and the process for submitting claims. Ensuring that all employees are aware of the policy and its details is crucial for smooth implementation. Here is a sample of a reimbursement policy. 2. Documentation for Reimbursement: To facilitate reimbursements, employees should provide proof of payment for their health insurance premiums. This can be a receipt from the insurance provider or a bank statement showing the payment. Establishing a standard form or template for submission can help streamline the process and ensure that all necessary information is collected. 3. Handling Reimbursements on a Post-Tax Basis: It’s important to note that these reimbursements will be treated as taxable income. Therefore, they should be added to the employee's gross income and subjected to regular payroll taxes. This should be clearly stated in the policy to avoid any confusion. 4. Maintaining Records: Keep thorough records of all reimbursements and related documentation. This is vital for auditing purposes and to remain compliant with tax regulations. A systematic approach to record-keeping will aid in maintaining transparency and accountability. 5. Regular Policy Review and Communication: Regularly review the reimbursement policy to ensure it meets both the organization's and employees' needs and complies with any regulatory changes. Communicate any updates or changes to the policy promptly to all employees. Conclusion: Implementing a health insurance premium reimbursement program can be a valuable benefit for nonprofit employees, enhancing their overall compensation package and well-being. By following these guidelines, nonprofits can manage this process effectively, ensuring both compliance and employee satisfaction. Call to Action: If you’re looking to implement or refine your nonprofit's employee benefits strategy, consider consulting with a professional who can provide tailored advice and solutions.

As a business owner, you have a lot of important decisions to make. One such decision is how to handle the payroll function. You may think that handling it in-house is the best option but outsourcing your payroll tasks to a professional payroll provider could be the best choice for your business. Outsourcing provides many benefits - from improved efficiency and cost savings to access to experts and peace of mind - making this an attractive option for any organization. With the help of an experienced payroll outsourcing company, you can be sure that all your payroll processes are being done properly and with the utmost accuracy. In this article, we’ll explore seven reasons why outsourcing your payroll is the best decision for your business. 1. Save Time and Money: Outsourcing your payroll tasks to a professional payroll service can save you time and money. When you outsource, you don’t have to spend hours dealing with complicated payroll processing and filing paperwork. Instead, you’ll have more time available for other important tasks. Additionally, outsourcing reduces the cost of labor, eliminating the need for additional staff members and software licenses. 2. Improve Accuracy: Payroll errors are costly in terms of both money and reputation, so accuracy is of the utmost importance when it comes to payroll processing. Professional payroll providers employ experienced professionals who understand applicable tax regulations and compliance laws, which helps ensure that all your filings are correct and up-to-date. 3. Reduce Risk: One of the biggest advantages of outsourcing payroll is that it significantly reduces the risk associated with incorrect filings and payroll mistakes. When you outsource your payroll, all tax payments are made on time, so you don’t have to worry about penalties or audits. This peace of mind you receive with payroll management is priceless. 4. Confidentiality: Outsourcing payroll also ensures confidentiality when it comes to sensitive employee information like salaries and wages. Professional payroll providers are experienced in handling confidential payroll securely and discreetly, so you can be sure that all confidential data remains secure and confidential. They also can provide a better customer service experience for both you and the employees. Typically this also helps with Tax Filing. 5. Access To Experts: When you outsource your payroll tasks to a professional payroll provider, you’ll have access to experts who are highly knowledgeable in their field. These experts can provide valuable advice and insight into the most effective payroll processes, which can help you streamline your payroll operations and save time and money. Having access to payroll software doesn't give you the peace of mind that comes with having a payroll expert. Also, payroll professionals also save valuable time by getting in with the latest trends and minimizing risky business operations. 6. Human Resources Services: A professional payroll provider can also provide additional services such as human resources, including employee onboarding and offboarding, compliance with government regulations, time-consuming tasks such as tracking vacation and sick days, and more. This will reduce your workload significantly and free up more of your time for other important tasks. 7. Flexibility: Most payroll outsourcing companies offer a variety of services tailored to meet your specific needs. From basic payroll processing to comprehensive accounting software packages, they can provide a solution that meets your requirements – no matter how small or large your business is. This flexibility makes outsourcing payroll an attractive option for any organization. Outsourcing payroll to a professional provider such as My Accounting Crew is the best way to ensure accurate and secure payroll processing, reduce risk, save time and money, and access expert advice. With all these benefits on offer, it’s no wonder that more and more businesses are choosing to outsource their payroll functions.

As a business owner, you know that accounting is essential. Many businesses use spreadsheets to organize and manage their financial data. However, online accounting systems are becoming increasingly popular and offer advantages over spreadsheets. Here are some reasons to switch from spreadsheets to an online accounting system: Your business is growing. If you are sending more invoices to clients or your vendor bills are piling up, it's time to implement a workflow process. An online system can help you streamline these workflows by tracking open bills, posting bills, or automating the bill pay process. You can even send invoices and collect payments from the online accounting system. You need reports frequently. If you are planning to apply for a line of credit or need to have a grasp on your bottom line each month, consistent reporting in spreadsheets can be very manual and time-consuming. An online accounting system can generate reports quickly, providing access to accurate, up-to-date information about your business's financial health at any given moment. You spend too much time on data entry. If you are spending hours on tedious data entry tasks, an online accounting system can automatically reconcile your accounts and categorize your transactions, allowing you to focus on what matters most - running your business! An online system can sync directly with your bank accounts to feed your transactions into the platform automatically. Moving away from spreadsheets to an online accounting system could be a great way to free up your valuable time and energy for other functions like customer service or product development. You need to comply with regulations. If your business is subject to certain regulations, such as those governing financial reporting or payroll taxes, an online accounting system can help you stay compliant. Many online accounting systems offer features that automate tasks related to these regulations, such as tracking expenses and generating reports. Your business finances and bank statements also need to match up in case of an audit, so having reliable accounting software is crucial. The decision to switch from spreadsheet-based accounting to an online system depends on various factors, like the size of your business, the complexity of its operations, and how often you need access to financial information. A spreadsheet may suffice if you are a small business owner with simple cash accounting processes and don’t require frequent financial statements. However, if you’re recording transactions on an accrual basis and dealing with multiple departments, vendors, or clients, an online system may be necessary sooner rather than later. It's also worth considering any compliance requirements, as these may require more sophisticated tools than a regular Google Sheet can provide. Tracking expenses can also keep you inundated with business transactions and swamped around tax time. You want to make informed decisions based on accurate records and have proper expense management. The challenge is having the time to be able to look at it from the bigger picture because you're to caught up in the details while still dealing with your personal expenses too. Overall, online accounting systems offer a number of advantages over spreadsheets, including: Automated workflows. Online accounting systems can automate many of the time-consuming tasks associated with accounting, such as data entry, invoicing, and bill pay. This can free up your time so you can focus on other aspects of your business. Accuracy. Online accounting systems are designed to be accurate and reliable. This is important for businesses of all sizes because it helps to show the actual expenses, but it is especially critical for businesses that are subject to regulations or that need to generate accurate financial reports. Security. Online accounting systems are typically more secure than spreadsheets. This is because they are hosted on secure servers and are often backed up regularly. Flexibility. Online accounting systems are often more flexible than spreadsheets. This is because they allow you to customize your settings and reports to meet your specific needs. Cost-effectiveness. Online accounting systems can be a cost-effective solution for businesses of all sizes. This is because they typically offer a variety of pricing options, including monthly and annual plans. If you are considering switching from spreadsheets to an online accounting system, be sure to compare the features and pricing of different systems to find the one that best meets your needs. My Accounting Crew can help you to make this transition from self-powered accounting to helping you to free up much needed time, energy, and overall resources. We also provide better accounting reports that can track your expenses more accurately. We can keep you informed about the latest trends in technology and how they can mold into your business.

If you work for yourself or are a freelancer, self-employment (SE) tax is one of the most important accounting issues you are going to run into. As with all levels of tax compliance, getting your self-employment taxes right is very important, as there can be penalties associated with submitting an incorrect tax return. What is Self-Employment Tax? Self-employment tax is a combination of Medicare and Social Security taxes, like the ones you have withheld on your paycheck as a W2 employee When you receive your W2 from your employer, there are 3 boxes of taxes withheld: Federal Withholding, Social Security (6.2%), and Medicare taxes (1.45%). For Social Security and Medicare, your employer matches your amount and must pay both your share and their share to the IRS. When you are a self-employed individual you are the employer AND the employee. Therefore, you are now responsible for paying both shares of Social Security and Medicare taxes. Self-employment taxes are a combination of both Social Security (12.4%) and Medicare Taxes (2.9%) – 15.3%. Social Security (6.2% for employee) + Social Security (6.2% for employer) = 12.4% + Medicare taxes (1.45%for employee) + Medicare taxes (1.45% for employer) = 2.9% =15.3% Self-Employment Taxes Who Must Pay Self-Employment Tax? You are required to pay self-employment tax if: Your net earnings from self-employment were $400 or more; or You had a church employee income of $108.28 or more. The definition of self-employed is slightly different from your typical understanding of employment. Self-employment is any activity for which you receive income. This also includes unincorporated businesses such as babysitters, landscapers, hair stylists, freelancers, etc. Self-employment can include: working as a sole proprietor, such as a consultant or independent contractor; being a partner in a partnership or being paid as a household employee. Self-Employment Tax Rate Self-employment tax payment is based on your net earnings from self-employment, which is calculated as a percentage of the total income you received from all sources. Income taxes and business income are two completely different things, so it is important to distinguish the two. As always working with a Tax Expert is always encouraged. As discussed above, self-employment taxes are a combination of both Social Security (12.4%) and Medicare Taxes (2.9%) – 15.3%. If your self-employment earnings are less than $400, self-employment tax is $14 per quarter. Self-Employment Tax Deduction You are allowed a deduction for self-employment taxes. The deduction reduces your self-employment income by 50% of the self-employment taxes. This deduction is before applying the tax rate. Imagine for a moment your net income from self-employment is $100,000. The self-employment tax would be $15,300 ($100K * 15.3%). You Self-Employment Tax Deduction would be $7,650 ($15,300 * 50%). That could potentially be an $1836 tax savings based on your personal tax bracket of 24%. Self-Employment Health Insurance Tax Deduction One of the most rarely used deductions is the Self-Employment health insurance deduction. Self-employed taxpayers can write off health insurance premiums. That includes premiums for medical, dental, and long-term care. Family Caregivers and Self-Employment Tax A family caregiver is defined as someone who performs in-home services for elderly or disabled individuals. There are special taxation rules around Family Caregivers and a full breakdown of them can be found here. Some important aspects to consider as a caregiver include: Family caregivers do not owe self-employment tax on amounts received from an insurance company to provide care if they are not engaged in a trade or business of providing caregiving services. Family caregivers do not owe self-employment tax on amounts received from state agencies to provide care if they are not engaged in a trade or business of providing caregiving services. How to Pay Self-Employment Tax Once your self-employment taxes have been calculated it's important to know how to pay your self-employment tax. The simplest way is to estimate and pay the self-employment tax quarterly. The self-employed are required to pay self-employment tax on their earnings quarterly but they can estimate what that liability will be each year and withhold the appropriate amount from their earnings. Self-employment taxes are due April 15th on form 1040, personal tax return. Get the Help You Need If you are struggling with your self-employment taxes, contact MyAccountingCrew.com today to receive professional tax guidance from a market-leading virtual accounting firm.

When it comes to hiring help for your small business, one of the first decisions you'll need to make is whether to hire an employee or contractor. This can be a difficult decision, especially if you're not sure what the difference is between the two. In this article, we will discuss the key differences between employees and contractors, as well as when it might be best to use each type of worker. Understanding the differences between an employee and a contractor is important. Correctly determining whether the person you are hiring is an employee or contractor is important for a few reasons. First, the IRS has specific rules about when someone is considered an employee vs a contractor. If you incorrectly classify an employee as a contractor, you could be liable for back taxes, penalties, and interest. Second, employees are covered by certain laws and regulations, such as the Fair Labor Standards Act (FLSA) and the National Labor Relations Board (NLRB), while contractors are not. This means that employees have certain rights and protections that contractors do not, such as the right to unionize, minimum wage and overtime pay, and protection from discrimination. How to Determine If You Are Hiring a Contractor vs an Employee There are two metrics by which it is determined whether a person is a Traditional employee or an independent contractor: The IRS and the DOL The IRS has a three-part test: - Behavioral Control: This looks at who controls how the work is done, such as telling someone when and where to work. - Financial Control: This looks at who pays for what, including tools, supplies, training, etc. - Relationship of the Parties: This looks at how much the contractor and business interact, whether they have an employer-employee relationship or not. The DOL (Department of Labor) looks at six factors: - Behavioral Control: This looks at who controls how the work is done, such as telling someone when and where to work. - Financial Control: This looks at who pays for what, including tools, supplies, training, etc. - Relationship of the Parties: This looks at how much the contractor and business interact, whether they have an employer-employee relationship or not. - Type of Work Performed: This looks at what type of work is being done and how specialized it is. - Location of the Workplace: This looks at where the contractor does their work - on company premises or offsite. - Independent Contractor Status: Finally, this factor looks at other factors to determine if someone is a contractor or employee. These can be things like whether they advertise themselves as contractors if they have a business license, and so on. State Tests for IC status Depending on what state you are based in, you may have to comply with specific state-level tests in order to claim contractor status. Generally, these tests look at the level of control the business has over the contractor and whether they are providing services as part of an independent business. There are a few key things to keep in mind when determining contractor vs employee status. The most important one is that it's not always black and white - often, there can be a lot of overlap between the two classifications. The best way to determine which employment status is right for your workers is to look at the specific factors involved in their situation. Also, it is a good idea to review your employment relationship with those you work with since there are a lot of grey areas you want to develop the distinction between employees. If you do determine that they fit the role of employee then you will need to look at how you are paying for income tax, social security taxes, local state taxes, and workers' compensation insurance. Setting yourself up the right way can help you to avoid potential issues and legal protections. If you're still unsure after reading this, don't hesitate to reach out to an employment lawyer for more help. And be sure to check out our contractor vs employee calculator below to see which might be the best fit for your business. What is a 1099 Contractor? A 1099 contractor is a contractor who is paid via a Form-W-Series, which is used to report independent contractor income and expenses. The form is also known as the "Information Return for Miscellaneous Income." Contractors who are not paid via a Form-W are typically employees. If you're still unsure of whether someone is an employee or contractor, there are a few key things to look out for: Do they have their own business license? Are they advertising themselves as contractors? Are they providing services as part of an independent business? If the answer to any of these questions is yes, it's likely that the individual in question is considered a contractor. If not, they're most likely an employee. How to Get a Determination on IC Status? At the end of the day, the IRS has the final determination on whether or not a contractor is considered an employee. However, there are a few steps you can take to help make this determination yourself: Request an Independent Contractor Agreement from the contractor in question - if they are unwilling to provide this, it's a good indication that they view themselves as an employee. Review past work done by the contractor - do they seem to be operating independently, or are they closely following your company's protocols and procedures? Look at how the contractor is paid - if you're issuing them a W-­form (a document used for paying employees), it's likely that they're considered an employee. If payments are made via a check or other means outside of a W-­form, this is another sign of contractor status. Request a Form SS-8 from the IRS - This is a declaration of worker status, and can help to clear up any confusion. The IRS will review the form and make a determination of worker classification. The Bottom Line While there are some exceptions, in general, the key difference between an employee and a contractor is that employees are hired to do a specific job, and contractors are hired to provide services. If you're unsure of someone's status, it's best to err on the side of caution and treat them as an employee. This will help ensure that you're following all relevant tax laws and avoid any costly penalties down the road. There can be a lot of gray areas when it comes to determining whether or not someone is considered an independent contractor or an employee. In general, though, employees are hired to do a specific job while contractors are hired to provide services. If you're unsure about someone's status, it If you still can't determine the worker's status, it may be best to seek assistance from a professional. So When is it Best to Use an Employee vs Contractor? Generally, you should use an employee if you want the person to be covered by certain laws and regulations, and you should use a contractor if you do not need that level of compliance. For example, contractors are often used for short-term projects or when the work is temporary or seasonal. Many businesses prefer to use independent contractors because they are not responsible for withholding taxes, paying unemployment insurance, or providing benefits like health insurance. However, using contractors can also be risky because the contractor may not be covered by workers’ compensation if they are injured on the job. If you’re not sure whether someone is an employee or contractor, you can contact the IRS for guidance. What If My IC Has Been Designed as an Employee by Mistake? If you believe that your contractor has been misclassified, you can file a complaint with the IRS. This is commonly known as 530 relief. This allows you to recover the employment taxes that should have been withheld from the contractor’s pay. Filing for 530 relief can be a complicated process, so it’s best to speak with an accountant or employment lawyer to help you through the process. When to Ask for Expert Help As you can see, not only is deciding if your contractor is an employee or contractor complicated but there are also many benefits and risks associated with each classification. There are also multiple different metrics used to determine contractor or employee status, so it’s important to seek expert help if you have any questions. An accountant or employment lawyer can help you determine which classification is best for your business and how to properly file for 530 relief if needed. An accountant or employment lawyer can help you navigate the complexities of a contractor vs employee and ensure that you are making the best decisions for your business. MyAccountingcrew.com can provide contractor vs employee guidance for small businesses as well as expert tax services. Contact us today to find out more!

Small businesses are the backbone of the American economy. However, according to a study by the Kauffman Foundation, about two-thirds of them will fail within their first five years. So what are the most common reasons for small business failure? In this blog post, we will take a look at some of the most common reasons and offer advice on how to avoid them. A lack of a solid business plan One of the most common reasons for small business failure is a lack of planning and poor management. This includes not having a solid business plan or failing to update your plan as your business grows. A business plan should include information on your target market, your product or service, how you will make money, and your marketing strategy. Insufficient capital Another common reason for small business failure is a lack of capital. This includes not having enough money to cover expenses, not having the right funding in place, and not investing in your business. Without sufficient capital, your business will not be able to grow, which will eventually lead to its failure. Incorrect business model A third common reason for small business failure is an incorrect business model. This includes choosing the wrong pricing strategy, not targeting the right market, and offering a product or service that no one wants or needs. Finding your target audience is a key to finding potential customers. The best way to overcome this is to do proper market research before starting your business and to make sure that you are targeting a market that is willing to pay for your product or service. Unstable cash flow For most small businesses, cash flow is king. And if you cannot keep your cash flow stable, your business will not be able to grow, which will eventually lead to its failure. One of the main reasons for unstable cash flow is that small businesses often do not have a solid credit history. This makes it difficult to get financing from banks and other lending institutions. Another reason is that small businesses tend to have a lot of fixed expenses, such as rent, employee salaries, and marketing costs. When sales are low, it can be difficult to cover these costs. Lack of experience One of the main reasons small businesses fail is because the owners do not have enough experience in running a business. They may know how to make a product or provide a service, but they do not know how to manage the finances, hire and fire employees, and deal with legal issues. Poor marketing Small businesses often fail because they do not have a good marketing strategy. They may not have enough money to invest in marketing, or they may not know how to reach their target market. Without effective marketing, it is very difficult for a small business to succeed because they cannot connect with their target market. Poor R&D Failing to research your industry and competition is another common mistake made by small businesses. This includes not knowing what trends are happening in your industry, what your competitors are doing, and how to differentiate yourself from them. Insufficient accounting support Not hiring a CPA early on can also lead to small business failure. When it comes time to file taxes, you may not be aware of all the deductions available to you or you may not have the time to do it yourself. When it comes to when to hire a CPA, sooner is normally better. Not waiting until the last minute will help ensure your small business is on track for success. Having an effective CPA in place right from the beginning can help you to avoid costly mistakes and ensure your business is compliant with all tax regulations. Tax Planning Another key reason small businesses fail is a lack of effective tax planning. When you don't have a plan in place, it can be difficult to make informed decisions about where to allocate your resources. This can lead to missed opportunities and even penalties from the IRS. This is another situation where having a CPA onside can save you money in the long run by helping you to take advantage of tax breaks and deductions. Bookkeeping and Financial Reporting In order to make informed decisions, you also need accurate financial information. This can be difficult to achieve if your bookkeeping and financial reporting is not up to par. When finances are not properly tracked and organized, it can be very difficult to understand where your business stands financially. This can lead to cash flow problems and even bankruptcy. Hiring a CPA increases the chance of your business surviving Hiring a CPA can help to ensure that your financial reporting is accurate and up-to-date, allowing you to make sound business decisions. When it comes to small businesses, failure is often due to a lack of planning and organization. By ensuring that you have the proper tools in place, such as a CPA, you can increase your chances of success. MyAccountingCrew.com offers a wide range of services for small businesses, including bookkeeping, tax preparation, and more.1 Contact us today to learn how we can help your business succeed!

No one ever wants to think about something bad happening to their business, but the fact is that accidents can and do happen. That's why it's important to have the proper insurance in place to protect your business in case of an emergency or business risk. In this blog post, we will discuss the different types of business insurance that are available and what you need to know before purchasing coverage. This will help to protect your physical assets and business assets. Why choosing the right insurance is so important Choosing the right insurance for your business is critical, especially if you are a small business. The last thing you want is to be caught without the coverage you need in case of an emergency. When it comes to business insurance, there are a few things you need to keep in mind: Make sure you have the right coverage for your type of business Review your policy regularly and update it as needed Talk to an insurance agent to make sure you have the best coverage for your needs Types of Insurance Policies to Consider There are several different types of business insurance policies that you should consider, including: General liability insurance (GLI) Commercial Property Insurance Business Interruption Insurance Keyman insurance Buy-sell agreements Worker's compensation Professional liability Data Breach Insurance Employment Practices Liability Insurance (EPLI) Product Liability Insurance Each of these policies has its own unique set of benefits and drawbacks, so it's important to understand what they cover before making a decision. General liability insurance (GLI) General liability insurance is a basic type of coverage that can protect your business from a wide range of potential risks, such as accidents, injuries, and property damage. Having a GLI in place can help you avoid potentially costly lawsuits and protect your business's financial stability in the event of an accident. GLI policies usually provide broad protection against various types of claims and can help you avoid costly legal expenses if something goes wrong. A GLI policy usually covers the following: Bodily injury or property damage to a third party Personal and advertising injury Medical expenses Legal defense costs Commercial Property Insurance Commercial Property Insurance can help protect your business if its property is damaged or destroyed by a fire, theft, vandalism, or other covered events. This type of policy can also help you cover the costs of repairing or replacing any property that's been damaged, as well as paying for any necessary temporary housing or storage expenses. It should be worth noting that Commercial Property Insurance does not cover most natural disasters, such as earthquakes and floods, so you'll need to purchase a separate policy if you want coverage for those events. Business Interruption Insurance If your business is forced to temporarily close down due to a covered event, Business Interruption Insurance, also known as Business Income Insurance, can help you cover the costs of lost income. This type of policy can also help pay for any additional expenses that your business may incur as a result of the closure, such as increased rent or storage costs for your inventory. Since small businesses are the most vulnerable to changes and volatility in the markets, having this kind of insurance in place can be a real lifesaver. Keyman Insurance If you have key employees, it's important to have Keyman Insurance in place. This type of policy helps financially protect the business if that employee dies or becomes disabled. If something happens to the owner or CEO of your company, Keyman insurance can help protect the business. This type of insurance pays out a lump sum if someone with key knowledge or skills in the company passes away or becomes disabled. This is especially important if that employee holds a special role within the company and there is no one else who can fill their shoes. Buy-Sell Agreements If you're a business owner, it's important to have a Buy-Sell Agreement in place. This document helps protect your company if something happens to you or another owner. It spells out the terms of what will happen to the business if one of the owners dies or leaves the company and how the proceeds from the sale of the business will be divided among the owners. If you are in a partnership, you should also have a buy-sell agreement in place. Worker's Compensation If you have employees, it's important to have Worker's Compensation insurance in place. This policy helps protect your business if an employee is injured on the job. It can help cover medical expenses and lost wages, among other things, as well as legal expenses if the employee decides to sue your company. Make sure you are fully insured so that your business is protected in case of any accidents or injuries. Professional Liability Also known as errors and omissions (E&O) insurance, Professional Liability Insurance protects your business if someone files a lawsuit against you alleging that you made a mistake while providing professional services. This could include things like negligence, malpractice, or errors and omissions. It's important to have this type of insurance in case the unthinkable happens and you are sued for damages. Business Owner's Policy A Business Owner's Policy (BOP) is a package policy that combines property and liability insurance into one policy. This can be a great way to save money on your insurance premiums. Generally, a BOP will provide coverage for your business property, including furniture, equipment, and inventory. It will also provide liability insurance to protect you from any lawsuits that may be filed against you. Commercial Auto Insurance If you use a vehicle for business purposes, then you need commercial auto insurance. This type of policy covers accidents that occur while you are using the vehicle for business purposes. This includes things like driving to and from client meetings, delivering products or services, or traveling to company events. Data Breach Insurance Data breaches are becoming more and more common. If your business is hacked, you could be held liable for the damages that occur. Data breach insurance can help protect you from these costs. This is particularly important if you plan to store customer data or credit card information, as the associated costs for a data breach, particularly one where you are found to be a fault, can be huge. For example, the average cost of a data breach is now $148 per record and the average number of customer records kept per business is around 24,000. In the event of a full data breach, this could put you on the hook for just under $4 million. Additionally, there is now a raft of legislation in place that could see you held liable for the actions of your employees when they cause a data breach and adds fines of up to $250,000 per incident. Employment Practices Liability Insurance (EPLI) If you have employees, then you need employment practices liability insurance. This policy covers costs associated with employee lawsuits. This could include things like wrongful termination, sexual harassment, and discrimination claims. EPLI can also help you cover the cost of defending yourself against such claims as well as any damages that are awarded. Product Liability Insurance If you produce, distribute or sell a product, then you need product liability insurance. This covers you in the event that someone is injured by your product. If you do have a product you want to bring to market, make sure you have product liability insurance in place first. It can also help protect you if your product causes environmental damage. This type of policy is essential for any business that manufactures or sells a product. Commercial Umbrella Insurance If you want extra protection from catastrophic events, then you should consider commercial umbrella insurance. This type of policy kicks in after your other policies have been exhausted. For example, if you are sued for $100,000 and have a liability limit of $500,000 on your general liability policy, the umbrella policy will cover the remaining $400,000. This type of policy is also a good idea for businesses that have high-value assets. Finding the right policy for your company There are many different types of business insurance out there, so it's important to do your research and find the right policy for your company. If you are struggling to decide which policy is right for you, then talking to an accounting professional can be a good idea. MyAccountingCrew.com provides business insurance consultations to help business owners make the best decision for their company. For more information, please visit our website or book a call with us today

Are you thinking of starting your own business? If so, you're in for a lot of hard work - but it's definitely worth it! The first step is to gather all the information you need to set up your business. In this article, we'll give you a basic overview of what steps you need to take to start a successful business. Keep in mind that there are many types of business entities, so you may need to do additional research depending on your specific situation. There are also important legal structures to understand along with business licenses that you may need, so it is always good to consult for legal advice and local business registration office. But with these guidelines, you should be able to get started on the right foot. Choose a name for your business The first step is to choose a name for your business. This can be tricky, since you want to make sure the name is available and also meets all state and federal requirements. There is a chance that someone else may have already registered the name you want, so it's a good idea to do a trademark search. You can do a search of business names on the internet, or check with your state's Secretary of State office. Decide on a corporate entity structure There are a few different types of corporate entities you can choose from when starting your business. The most common type is a corporation, but there are also limited liability companies (LLCs) and partnerships. Which corporate entity you choose will depend on a few factors, such as the state you live in and the size of your business. You should talk to an attorney and CPA to help you decide which is the best option for your business. Pick a location If you are planning on having premises for your business, you will need to pick a location. You may want to consider factors such as taxes, the cost of doing business, and the availability of employees. Register your business with the state and federal government Once you've chosen a name, you may need to register your business with the state and federal governments. This will give you legitimacy and help protect your company from others using the same name. Your location and business structure will determine whether you need to register with the state or federal government. Generally, if you're doing business in more than one state, you'll need to register with the federal government; if you're not doing business in other states, then you'll need to register with the state. Registering your business is relatively easy. You can usually do it online, and the government will provide clear instructions on what you need to do. Register your business with local authorities In many cases, your city or county may require you to register and pay a small tax to operate your business within their limits. This is also true is you are a home-based business. Get an Employer Identification Number (EIN) If you plan to hire staff members, you'll also need to get an Employer Identification Number (EIN) from the IRS. This is basically like your business's Social Security number and is used to track company income and taxes. To apply for an EIN, go to irc.gov and click on "Apply for an EIN." The EIN application process is simple and can be completed online in minutes. You'll just need to provide some basic information about your business, such as its name and address. Having an EIN allows you to open a business bank account and hire employees. It's also required if you want to file taxes as a business. Set up a bank account for your business Next, set up a bank account for your business. Make sure the account is in the company's name and that you have checks and a debit card issued in that name. This will help you keep your business and personal finances separate. There are a couple of different kinds of business bank accounts: A sole proprietorship account is just for your business; any money deposited into this account is considered the company's income. A partnership account is shared by two or more business owners; any money deposited into this account is considered a joint venture. A corporation account is for businesses that are registered as corporations with the state government. Purchase liability insurance Liability insurance protects your business in the event of an accident or injury. It's important to have this coverage in place, especially if you're running a physical location. Getting liability insurance is easy. Just contact an insurance agent and they will help you find the right policy for your business. Set up your accounting system One of the most important aspects of running a business is keeping track of your finances. You'll need to set up a basic accounting system to do this. This can be as simple as creating Excel spreadsheets or using online tools like QuickBooks or FreshBooks. There are a number of different accounting platforms on the market, such as Xero, Wave Accounting, and Sage 50. You'll want to choose one that's suited to the size of your business and that you're comfortable using File for foreign qualification If you plan to trade across multiple states or even internationally, you may need to file for a foreign qualification in order to do so. This process can be complicated and time-consuming, so it's best to consult with an attorney or accountant who specializes in this area. Create a company culture A company culture is important for any business, but it's especially important for startups. A strong company culture can help employees feel like they're part of something larger than themselves, and it can also make them more productive. Creating a company culture can be difficult, but it's worth the effort. Here are a few tips: Encourage employees to socialize with each other outside of work Create team goals and reward employees when they're met Hold team building exercises Be transparent with employees about the company's goals and strategies Create a mission statement A mission statement defines your company's purpose and how it plans to achieve its goals. It should be short, concise, and easy to remember. Your mission statement doesn't need to be perfect, but it should be something you can always refer back to. Having your mission statement written down will also help you stay on track. When creating your mission statement, ask yourself the following questions: What is our company's purpose? What are our goals? How do we plan to achieve these goals? Start your marketing efforts Once you have all your paperwork in order, it's time to start your marketing efforts. You can create a website, set up social media profiles, and start advertising your business. Make sure you have a good logo and branding that represents your company well. Having a professional-looking website and marketing materials will help convince potential customers to do business with you. Get expert help These are just some of the steps you need to take to set up your business. For more information, consult an attorney or accountant who specializes in small businesses. MyAccountingCrew.com offers excellent consultation services, to help you get your businesses started, as well as continuing support along the way through CFO advisory, outsourced accounting, and tax solutions. With the right planning and preparation, you can make sure your business is off to a strong start!

Even the best, well-prepared business plans can unravel quickly without a process in place to evaluate performance. Creating a scorecard with quality metrics can give you the daily insight you need to successfully run a business without drowning in the details. Create a scorecard that works An effective scorecard gives you a holistic view of the state of your business in one report. The report consists of key financial and non-financial metrics to provide a daily look at the health of your business. To be useful, your measures should be concise, available on-demand, and include properly targeted data to help you quickly spot trends and react appropriately. Effective business metrics to consider right now Financial Metric – Quick Ratio. Add up your total cash, short-term investments and accounts receivable. Then divide that total by your current liabilities. This is your quick ratio. It’s a simple way to see if you have enough funds on hand to pay your immediate bills. A value of 1.0 or more means your liquid assets are sufficient to cover your short-term debts. A value less than 1.0 may mean you’re relying too heavily on debt to fund your operations or pay expenses. Customer Metric – Retention Percentage. First, create a list of customers who made purchases this year and a list of customers who made purchases last year. Then, remove all new customers gained in the current year. Divide the total number of customers from last year by the remaining number of customers for this year. This is your customer retention percentage. Measure this over time to see if your business is retaining or losing core customers. If you have a condensed sales cycle, you can shrink the period down further. For example, by looking at this calculation each month, you can see how it builds over the year. Internal Process Metric – Asset Turnover Ratio. Divide your total sales by average total assets from your company balance sheet. (beginning assets plus ending assets, divided by two) for the same time period. The end result tells you the amount of sales generated for each dollar committed to your assets. The number may not reveal much by itself, but when reviewed over time, you’ll have a better understanding of whether the assets used to run your business are becoming more or less effective. Growth Metric – Net Income Per Employee. Divide your net income by your total number of employees for a given time period. In theory, as your workforce develops, it should generate more income per employee. Remember to account for part-time employees prior to making your calculation (e.g., a part-time employee working 20 hours per week is 1/2 an employee for purposes of this calculation). If the income per employee is getting lower over time, figure out why. Perhaps you have high employee turnover, or there is an area of your company that can benefit from training. While each ratio may help you analyze different aspects of your business, they don’t tell you the whole story. Finding the right mix of metrics for your scorecard can take some time, but the end result is a valuable tool that can take your business to the next level.

Regardless of the type of business you’re running, actively monitoring a few key numbers is often what's needed to keep your company growing and prosperous. A company’s key financial indicators often fall into one or more of the following categories: Order volume. Find the metric of orders that makes sense for your business. Then measure the number of orders versus last month and last year. Then look at year to date numbers and compare them to last year. Are you selling more units over time? Tracking revenue alone may present a false picture. After all, revenue may be growing because prices have increased. If unit sales are declining, you might be losing market share. Breakeven point. If you need $100,000 per month to cover fixed and variable costs, you need to know if you're selling enough products or providing enough services to break even. If you’re dipping into reserves to cover revenue shortfalls, adjustments may be required. So calculate and know this number for your business. Liquidity. Knowing the availability of cash is vital to every business. That’s why reconciling the firm’s bank statements in a timely fashion shouldn’t be an afterthought. Every month ensure that your general ledger agrees with the bank’s records of deposits and withdrawals. If a company is losing cash, the bank statements should tell the story. Inventory Turnover. This number shows how many times your company sells and replaces inventory during a given period. The higher the number, the better. Assume your company's cost of goods sold for 2022 was $100,000, beginning inventory on January 1, 2022 was $10,000, and ending inventory on December 31, 2022 was $15,000 (for an average of $12,500). Your cost of goods sold of $100,000 divided by $12,500 equals a turnover ratio of 8.0. Banks and investors love to look at this number as the higher the turnover, the less likely you cannot change the inventory back into cash by selling it. Payroll (and Contractor) Percentage. Take your total payroll costs (including benefits) add contractor costs and divide it by net sales. This percent of sales is then compared to budget and prior years. Try to maintain or shrink this percent. Don't forget to add part-time and contract workers to this total, as many businesses are relying more on this source of workers in this tight labor market. Over time your business’s vital numbers may change. The key is to know your company, identify changing conditions and adapt.