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How Small Business Owners Can Save Money by Having Employees Work from Home

The way business is done has changed because of the coronavirus outbreak. Businesses are implementing new safety protocols to minimize the risk of virus exposure for both employees and customers. How have your business practices changed in recent months? One common trend is that companies are encouraging employees to work from home when possible.

The Shift to Work from Home Positions

While there has been a big shift to work from home employment opportunities in recent years, the COVID-19 situation has pushed employers to implement these practices unexpectedly. Some companies have been on the fence about employees working outside of the office. But we live in a digital world, which means that many of the projects can be completed off-site without a disruption to productivity.

One benefit of the COVID-19 outbreak is that many business owners are seeing that work from home positions are a smart business decision. This trend is turning into the “new normal” to reduce exposure in the office and maintain social distancing between employees.

Because of the current pandemic situation, there are no signs that telecommuting will slow. It is anticipated that these work from home arrangements will continue after the virus has been contained.

Both Physical and Online Businesses are Affected

If you own a physical location, then it is obvious that these in-person interactions can increase the risk of virus exposure. Since it is an airborne illness, the virus can be transmitted by spending time in close proximity with other people who are infected.

Even if a person isn’t displaying any symptoms of Coronavirus, it is possible that they are a carrier and spreading it to other people. There are reports of asymptomatic patients, as well as carriers who are contagious before they start displaying symptoms. Businesses with physical locations, such as grocery stores and pharmacies, are implementing new practices such as mask policies, social distancing, and other practices. Some employees have been sent to work from home, such as inventory managers and other employees who can complete their jobs remotely.

While it is obvious that physical businesses would be affected by the current pandemic, don’t underestimate the impact on online businesses as well. Customers are minimizing the time spent in local stores, which means that more people are turning to online shopping options. Even though there is no face-to-face interaction between employees and customers, employees still need to be in the workplace to fulfill orders and manage shipping. Not only can employees be at risk in the workplace, but reports have warned about the possibility of contamination on the shipping packages.

As you can see, this pandemic is having a far-reaching effect in many industries. As such, companies are looking for new ways to keep the business running while practicing safety protocols at the same time.

Financial Benefits of Employees Working from Home

Have you decided to shift to a work from home situation for some or all of your employees? As you have made these changes, notice the financial benefits that are available for your company. In fact, many businesses are deciding to change their policies going forward. When the pandemic is over, employees will continue working from home instead of bringing everyone back to the office again.

This shift in workspace reduces the need for desks in the office. Employers can save quite a bit of money on reduced expenses for:

  • Office space
  • Utilities
  • Desks and chairs
  • Breakroom maintenance
  • Cleaning and janitorial
  • Office supplies
  • Coffee and water
  • Transit subsidies

One report suggested that if employees work from home only half the time, the business would save $11,000 per year. Consider the financial impact on your company if the majority of employees start working from home full-time!

Working from Home: Part Time or Full Time?

Even if you don’t move to a full-time work from home situation, financial benefits can still be gained by having employees at home on a part-time basis. Spending a few days a week away from the office makes it easier to maintain social distancing, because employee schedules can be staggered throughout the week.

On the other hand, if there is no need to have employees in the office, then shifting to a full-time work from home status could be beneficial for everyone involved. As a business owner, you can save a significant amount on office space, while providing ongoing work opportunities for your employees.

Other Financial Benefits of Working from Home

It’s easy to add up the savings that come from cutting office space and decreasing utility expenses. At the same time, there are other financial benefits that are harder to quantify. For example, many employees report higher job satisfaction when working from home, which reduces employee turnover. Happy employees stay with the company for longer, helping you avoid the need to spend money on recruiting, hiring, and onboarding.

Employee turnover costs companies thousands of dollars in recruiting and onboarding. Additionally, you need to calculate the cost of lost productivity as well. These expenses can add up quickly, which cuts into your profits and makes it harder to keep your company viable in a slow economy.

If you want to help your business thrive through the current economic downturn, then you need to implement all of the ways that you can cut costs and boost sales at the same time. This current pandemic can be viewed as an opportunity to optimize your current business systems. Many companies are adjusting their business practices and finding ways to decrease inefficiencies.

Maintaining Productivity When Employees are Working from Home

You can tally up the savings of having employees work from home because of the reduced costs for office space and equipment. At the same time, it is important to ensure that productivity is maintained when the employees are out of the office. Good systems and communication can keep the employees in a proactive mindset with their work tasks, ensuring they are staying on-point throughout the workday.

Additionally, you should consider the type of work your employees are doing each day. If employees need focused time free of distractions, then some people experience an increase in productivity when they are working out of the office. While it is nice to have the social interactions in an office space, the wasted water cooler time can definitely add up. Stepping away from the office distractions can have a positive impact to boost productivity.

The key to maintaining productivity with work from home programs is to ensure that your employees have access to quality digital tools. Many companies are using high-quality video conferencing to keep team members connected from different locations. Additionally, messaging tools, email, and ongoing communication can keep everyone connected, even if they aren’t meeting in person.

Accessing the Talent Needed for Your Company

Not only can your business save money on overhead costs, but it is possible that work from home opportunities can also help your business grow. When you are no longer limited by geographic location, you can tap into a larger pool of talent for your company.

Hiring a range of skill sets can boost overall performance within the company, helping to bring innovative thinking and increased productivity to all departments. Dialing in the right team for business support can be a valuable way to move the company forward and help you reach higher levels of success in the future.

Financial Benefits for Both Employers and Employees

Overall, financial benefits are available for both employers and employees. As a business owner, you can save money on all of the things listed above. At the same time, your employees benefit because they can avoid the costs of transportation and commute. The average employee spends an hour each day commuting to and from the office. Eliminating this commute results in a smaller personal transportation budget, and frees up time to spend with family. This commuting time can also be spent on work-related projects if extra hours are needed during a busy season.

Optimizing Your Business

There are two important keys to optimize your business: reduce costs and increase revenue. The foundation of these changes needs to start in your financial management. It is important to monitor the money that is flowing in and out of your accounts so you can identify areas of opportunity. If you are looking for new solutions, then it might be time to bring on a financial expert for assistance.

At Easier Accounting, we offer tax strategy and financial support for small businesses. Whether you have a workforce in the office or a group of work from home employees, we can assist with everything from payroll management to tax strategy to annual filings. If you are interested in learning more about how your business can benefit from accounting services, then we invite you to contact us for support. We provide personalized solutions to support your business finances throughout the year.

Call us at Easier Accounting to talk to a financial expert who specializes in small business services: (888) 620-0770.

Accounting Tips for Work-From-Home Business Owners

Whether you are working on a tax filing or you are putting together an ongoing bookkeeping system, it is important that you consult with an accounting professional for help with your business financials. Staying ahead of the reports and tracking will set your company up for success.

Many business owners have great ideas for their company, but they don’t have the business or financial training to put together a solid system. So, hiring a qualified accounting team can be a valuable way for you to overcome the hurdles of good financial management.

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If you own a business and you work out of your home, there are even more considerations that need to be looked at. Here are a few things to think about when you are working on accounting and bookkeeping for your small, home-based business:

Stay Consistent with Ongoing Tracking

Bookkeeping often falls to the backburner because there are many other “front office” responsibilities that are demanding your time. Do you often find that you are falling behind on regular bookkeeping tasks? It might not seem like a high priority to update your financial reports or categorize recent spending. But, these things are critical if you want to optimize your tax return at the end of each year.

Instead of letting your bookkeeping efforts fall to the backburner, you might consider the advantages of hiring a bookkeeping service to help. Outsourcing the busy work will free up your time to focus on other responsibilities. Additionally, you will be able to cut back on your work hours so that you can focus on your family instead of working away all the hours of your life.

Separate Business and Personal

Most people know that they need to have a separate bank account for their business, but they don’t put in the effort to setup another account. As a work-from-home business owner, you should never let your business and personal finances mix! It is important that you keep a clean separation so that you can easily distinguish business transactions from personal spending.

The best solution is to set up a separate bank account as well as a checking account, credit card, PayPal account, and any other financial accounts that might be needed for your company. Then, you can cut yourself a paycheck or a make a monthly withdrawal that is transferred to your personal bank account when it is time to get paid.

Another important separation is to have a dedicated workspace. Even if you are moving from the desk to the couch with your laptop, you still need to make sure that you have an area that is a dedicated office. If you choose to use a portion of your rent or mortgage as a tax deduction, then you need to ensure that you have a dedicated space for business purposes.

KISSO: Keep it Simple Starting Out

If you are just getting your business off the ground, make it a point to keep everything simple and easy to understand. Some people jump in and complicate things with the formation of a corporation or other decisions that make it harder to keep up with the financial details of your company.

As your business is getting off the ground, you might consider keeping it as a sole proprietorship until you hit a certain level of growth. Your accountant can provide personalized advice to help you identify the best time to transfer from a sole proprietorship to a corporation or other legal entity.

By keeping it simple in the beginning, you will be able to avoid the headache of certain tax paperwork, multiple filings, and other legal requirements for small business owners.

Invest in High-Quality Software

In the beginning, it might be easy to track your business expenses on a spreadsheet. But, you will need a better financial system as your company grows.

Plan ahead for this growth by choosing a high-quality accounting and bookkeeping software. Even if it seems like overkill right now, you will be glad that you thought ahead when your business expands. It can be a hassle to transition from a spreadsheet system to an accounting program, so you can reduce your future stress by getting it done right in the first place.

One drawback to a spreadsheet system or another form of manual accounting is that you might easily miss transactions or lose important paperwork. Tracking everything is imperative, and you need to make sure that you can back up any tax claims in case you are ever audited in the future. Using a high-quality system will ensure that you are keeping up with the details, helping to protect yourself if any questions arise from the IRS.

Plan for the Future

Small business owners often get narrow-minded in their thinking. It is easy to be caught up in the current situations that you are working on, and forget how your decisions today will impact the success of your company in the future.

Each time you make a big business decision or you are working with your accountant, make sure that you have your future business goals in mind. Think about the things that you would like to do with your company in the future, and make sure that your decisions coincide with the goals that you are working to achieve.

An experienced accounting team can be a valuable asset to help you reach your goals. Since your accountant has worked with many other small business owners in similar situations, their experience can guide you through the process and help you avoid common roadblocks.

You need to be considering your long-term business plan for 5, 10, and 20 years in the future. At the same time, also look at the details to determine how your company will fare in the next 1, 3, and 6 months. If there are seasonal fluctuations in your industry, then you need to make sure that you are managing your cash flow so that you have the resources that will be needed during the slower season.

Anticipate Major Expenses

How often do you feel that you are just getting ahead of the cash flow problems when another major expense pops up? If you aren’t expecting these big expenses, you might be running into issues that could have been prevented.

What types of expenses are we talking about? It depends on your industry. But, examples of big expenses that might catch you off guard include tax payments, buying computers, payroll, major events, machinery upgrades, travel costs, and more.

Look ahead to see if you can identify any specific expenses that are on the horizon over the next few months. Then, talk to your accounting team to be sure that you are managing your cash flow in a way to support these expenses as needed. These major expenses are often unavoidable, but you can avoid the stress by preparing with appropriate budgeting and a back-up reserve of cash.

Track Your Deposits

Your business account might have a variety of deposits coming in, such as income, loans, or even a cash infusion from your personal savings account. Make sure that you track these expenses to avoid paying taxes on money that isn’t income.

At the end of the year, it is common to include all deposited funds in the income totals. If some of the transactions weren’t actual income deposits, then you can exclude those numbers from the tax calculations. But, the only way to know this information is to stay consistent with your tracking throughout the year. If you mistakenly count a non-income transaction as income, then you will be paying taxes on money that has already been taxed in the past.

Stay Ahead of Tax Deadlines

Everyone knows that their taxes need to be filed by April 15th each year, but many people have a hard time keeping up with other tax deadlines that are due throughout the year. Most small business owners need to send quarterly tax payments, and there might be other deposits for employee withholdings and more.

It can be a challenge to keep up with everything that you need to know. That’s why the simplest solution is to hire an experienced accounting team to handle these details for you. These outsourcing services will ensure that you never miss a deadline, helping you to avoid headaches, penalties, and fees.

Talk to the Experts at Easier Accounting

Are you ready for more information about how you can improve the financial outlook for your small business? It is essential to have an experienced accounting team available to help you.

Here at Easier Accounting, we specialize in small business financial services. We have many years of experience in this industry, and we would love to apply that experience to help your company. Instead of only offering basic tax filing once a year, we provide a fully-supportive accounting team that is available to you all year long.

Learn about how these services will help you prepare for future growth in your company! We will gladly customize our accounting services to meet your needs. You are welcome to contact us anytime to learn more about how our services can help your business: (888) 620-0770