Welcome to our Monthly Newsletter, we hope you find it helpful. If we have a name or email that is incorrect or missed this first time through, please email Kim@-bas-pc.com with the correction or update.
Don’t forget, our office will be closed next week on Thursday and Friday, November 28th and 29th, for the Thanksgiving Holiday. We wish you and your family a pleasant holiday.
Tips to Attract the Best Employees
Small businesses often face heavy competition to hire quality talent. There are several strategies you can use, however, to out-maneuver larger companies to attract the best employees.
- Promote company culture. Your business can create a strong sense of purpose and community. So highlight the values, mission, and vision of your company to attract employees who align with your goals. Also promote other ways your culture may be different from larger businesses, such as having a close-knit, collaborative environment where employees can feel they make a difference.
- Offer flexible work arrangements. Providing flexible work arrangements or flexible hours can be a huge draw, especially post-pandemic, as many employees prioritize work-life balance over salary alone. Also consider giving employees autonomy in their roles. This can help attract self-starters and entrepreneurial-minded talent who seek more control over their work.
- Provide personalized benefits. If you are not able to offer expensive benefits, focus instead on personalized and creative perks like gym memberships, wellness programs, or mental health days. Emphasize professional development through mentoring, skill training, or cross-department exposure as another personalized benefit. Talented professionals often value opportunities for learning and advancement.
- Highlight career growth potential. Let your candidates know that there are real opportunities for growth and leadership within your company. Explain that employees may get to wear many hats, if appropriate. This can be appealing to candidates who want to get experience in a diverse set of skills.
- Use your network and referrals. Employees hired through referrals often have a better understanding of a company’s culture and as a result, fit in more quickly. So encourage current employees to refer candidates in return for referral bonuses. Also consider engaging in the community to help raise awareness about your company to prospective employees.
- Streamline your hiring process. Since small businesses typically have fewer layers of management, the hiring process can be more personalized and efficient. Candidates will better appreciate your streamlined, human-centered recruitment process.
- Use social media and branding. Showcase your company’s culture, projects, and employee stories on social media platforms. Candidates are often attracted to brands that share authentic insights into the day-to-day work life at your business. Also encourage current employees to share their positive experiences on platforms to help build a personal connection with potential talent.
While your business might not have the financial power of a large corporation, you have the advantage of offering a more personal, flexible, and purpose-driven work environment. By leveraging these things, you can attract top talent looking for meaningful work experiences and growth opportunities.
Year-End Payroll Checklist for Your Business
A year-end payroll checklist helps ensure you comply with payroll regulations, avoid penalties, and prepare for the upcoming year. Here are several items to consider putting on your checklist:
- Review employee information. Ensure all employee information, such as names, addresses, Social Security numbers (SSNs), and tax filing statuses, is up-to-date. Incorrect information can lead to errors in W-2 filings. Also encourage employees to review their W-4 forms to reflect any changes in their personal situation, like having kids or getting married.
- Review benefits and deductions. Verify that all employee deductions for health insurance, retirement contributions, and other benefits are accurate and that employer contributions match records. Consider reminding employees with flexible spending accounts to use any remaining funds before the year ends, as most FSAs operate under a use-it-or-lose-it rule.
- Prepare year-end tax forms. W-2 forms must be distributed to employees by January 31, 2025. For independent contractors or freelancers who earned $600 or more, you must issue a 1099-NEC form by January 31st.
- Verify payroll tax deposits. Reconcile your federal tax payments (withheld federal income tax, Social Security, Medicare, and FUTA taxes) with the amounts reported on your quarterly Form 941s and annual Form 940. Also ensure that all state and local payroll taxes are calculated correctly, deposited, and reported.
- Review unemployment insurance payments. Verify that federal unemployment tax payments (FUTA) are correct and that they’ve been deposited. Also confirm that state unemployment insurance payments (SUTA) have been made.
- Review employee benefits and retirement contributions. Review to ensure that all employee and employer retirement contributions are accurate and are made within the allowed limits for 2024.
- Audit for compliance. Conduct an internal audit to ensure all payroll processes are compliant with federal, state, and local labor laws, including wage and hour regulations. Verify that all employees are paid correctly, including overtime and minimum wage requirements. Also double-check the classification of all workers (employees versus independent contractors).
- Prepare for employee raises and other changes. Plan for any salary increases or employee promotions that take effect in January. Reflect any changes in your payroll system for your first payroll run of 2025. Also ensure that payroll records for any new hires or terminations are processed correctly, including final paychecks for employees who left during 2024.
- Plan for next year’s payroll budget. Review your payroll costs for 2024, including wages, taxes, and benefits. Then use this information to create a payroll budget for 2025, taking into account expected growth, pay raises, and any new hires. Also calculate your anticipated payroll tax liability for the upcoming year, including federal, state, and local taxes, to ensure that you have sufficient cash flow to meet these obligations.
Following this year-end payroll checklist will ensure you start the new year with an accurate and organized payroll system.
Three Strategies to Strengthen Your Cash Position
Here are three practical strategies to enhance your business’s cash position.
- Speed up customer payments. The longer your customers go without paying you, the longer you go without the cash you need to pay your bills and grow your business. Actively manage your accounts receivable by encouraging timely payments from your customers.
Action Steps: Stay on top of your accounts receivable activity by creating an aging report of your invoices at least once a month. Consider offering incentives for early payment and closely monitor slow payers. Identify problematic accounts and take proactive measures to prevent future issues. - Quickly turn your inventory. Inventory that sits on your balance sheet isn’t making you any money. Try to sell your inventory as quickly as you can and deploy that money back into your business. Also review other assets on your balance sheet, such as equipment and other fixed assets, to identify items you aren’t using anymore. Consider selling these items as another way to increase your cash position.
Action Steps: Calculate average inventory turnover (cost of goods sold divided by average inventory) for your business once a month. Then develop a plan to try and improve this key performance indicator over the next 12 months. One idea to consider is improving your forecast of what your customers want to buy and when. Then use this forecast make inventory purchases just-in-time to sell it to your customers. - Improve profit margins. Boost your business’s cash position by building better profit margins. With higher margins, more revenue can be reinvested back into the business or set aside to build an emergency fund.
Action Steps: Conduct customer research to determine how much you can raise your prices. Also consider if there are new higher-margin products and services you can start promoting. Also regularly review your expenses to identify unnecessary expenses that can be cut. Take a look at areas of your business that can be automated so you can optimize labor and other overhead costs.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
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