Practice Development News

Cash Crunch Economics

August 2008

In this issue

Paying As You Go
Data Security Is Not A Luxury
The Right Tool For The Job
CPAASP is Awesome
Challenges Facing Small Business
Reduce Costs and Streamline Workflow

Quick Links

CpaAsp Website

Solutions

Road Map

Financial Professionals

New Services at GrooveComputing

Fashion for the Virtual Workforce

Working virtually is a great way to save on fuel costs, and makes it easier for the business to expand without the associated costs of office infrastructure. Indeed, the virtual workplace has arrived. And while there are a number of rather dull technology issues to deal with, the cost-savings in office wear alone can't be ignored. According to Darian Morris, chairman of the Los Angeles-based Institute for the Advancement of Regressive Corporate Fashion (IARCF), "Frankly, your dog or cat doesn't give a darn about that gorgeous Armani suit. If your co-worker is prone to shedding and likes to hop onto your lap, black wool is the wrong way to go."

The IARCF and other international agencies have jointly produced a guide, Dressing for the Virtual World, aimed at addressing a number of issues relating to fashion and personal presentation.

According to Stephanie Brenan of New York-based Nothing Natural Clothing(tm), "Now that you don't really have to look good, we can focus on synthetic fabrics that don't require a lot of the overhead and expense, like laundering and tailoring... You can buff your car with this fabric, slip it on and then run off to a conference call. It works great even on dark finishes and doesn't leave swirl marks. I mean, so you smell like car wax for a while. It's a conference call. Who cares?"

Mr Morris described the plight of one executive, working at a home office with hardwood flooring. "This chief financial officer had finished his segment of a virtual presentation and walked across the room to grab his mug of cappuccino. No problem, except that Mr. CO's attire du jour included a pair of hard-soled pink bunny slippers of the slip-in variety. The clopping noise echoed through the room and when he had returned to the conference call he was finally forced to admit the nature of his footwear."

Don't make the mistake of selecting the wrong wardrobe for working virtually. www.cpaasp.com knows what all the best online accountants and virtual workers are wearing this season - soft, warm and cozy bunny slippers. Just keep your feet under the table until the presentation is over.

Virtual Desktops for a Virtual Workforce

Helping Businesses Save on Workers Compensation Insurance Premiums

To learn more about XactPAY Web Special Edition for QuickBooks Payroll, visit www.xactpayweb.com/PDN or reference "Practice Development News" when you contact Mark Resko at The Hartford 860-409-8421 mresko@thehartford.com

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View issues of the Practice Development News dating all the way back to 2002. As you can tell, we've been at this for a while.

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Tools to Help You Communicate with Clients and Peers

e-Accounting has developed a series of useful and informational fact sheets to help you educate clients and peers about the benefits of working in a managed IT environment. From online accounting solutions to Virtual Desktops, we have documents that you can use when discussing the different technologies.

Get the facts

How Does It Work?

As part of our sponsorship of the 2008 Accounting Software Consultants Conference, CPAASP e-Accounting presented a webinar where we discussed our solution and demonstrated how it works.

View the recorded webinar, and see for yourself exactly how e-Accounting hosted applications work, and how you can apply them to your business.

View the presentation here

Environmentally Responsible Computing

Good for the Planet, Good for your Customers, Good for your Business

With the price of gasoline at over $4 a gallon many workers are taking a hard look at the cost of a long commute to work every day. Since your employees are your most valuable asset it can make a lot of sense to offer some sort of remote working option.

According to EPA figures, if just 10 percent of North America's workforce worked for home just one day a week, it could conserve nearly 5 million gallons of fuel per month. Recent surveys of small businesses in the UK indicate that 65 percent of small businesses cite a 50 percent increase in staff motivation and productivity as a result of having instituted flexible work arrangements. And nearly 40 percent of employees surveyed indicated a willingness to forgo pay increases in favor of the ability to work from home a few days a week.

Working virtually can reduce the need for unnecessary corporate travel by keeping teams, processes, and the systems that support them connected. Companies can now recruit new workers outside their geographic area of operation. Part-time employees would no longer have to deal with the hassle and expense of a commute to work for just a few hours a day. With a virtual desktop, the employee's home office is literally "on" your network.

A virtual working model offers a variety benefits not only to your employees but also to your customers and your bottom line. It also gives you a way to show that your company is making a serious commitment to conserving our natural resources while improving the quality of life for your most important asset; your people.

How You Can Benefit

Paying As You Go

Workers compensation insurance allows businesses to provide benefits to injured or sick employees while protecting themselves from costly lawsuits. Unlike other types of business insurance, workers compensation is required by law in most states. In these states, you must provide coverage for all full- and part-time employees or face federal and state penalties. Interestingly, a few states still give employers the option not to purchase workers compensation insurance. However, these states, which are few in number, still hold the employer liable for injured workers. Not having workers compensation insurance, even if allowed by a particular state, does not relieve the employer of financial responsibility for injured workers. Workers compensation insurance is a no-fault policy, allowing employees to receive benefits for a workplace injury even if the employer wasn't directly responsible.

Workers compensation requirements in the US began back in 1911. Up to this point, workers injured or made ill on the job had to take legal action against their employers in order to obtain pay for medical benefits or lost wages. This resulted in a system that made it difficult for workers to obtain compensation for their injuries, and exposed employers to possibly devastating financial penalties under the tort system. In 1911, an historic compromise was devised by the states, enacting a "no fault" system intended to make sure workers received fair and prompt medial treatment and financial compensation for workplace injuries and illness. This system also established limits on the obligations of employers for these workplace exposures, rendering the associated costs more predictable and affordable.

Rules for workers compensation insurance vary from state to state. California, for example, is reported to have the most costly workers compensation requirements in the country. There has been recent legislation aimed at alleviating this problem which is continuing to negatively impact businesses in the state, but it is unclear how much it will help and how quickly. Last year, California businesses paid an average of $6.30 per $100 in payroll for insurance according to Scott Hauge, president of the San Francisco Small Business Advocates. Businesses in Florida, the state with the second highest rate, paid $4.50. The national average was around $2.68 last year. The closest thing there is to a uniform set of rules for premium computation are the rules established by the National Council on Compensation Insurance (NCCI). The National Council on Compensation Insurance is the largest provider of workers compensation insurance and employee injury data and statistics in the nation, and creates policy forms and writes the rules for premium computation in most states.

While most states mandate workers compensation insurance, most states also allow large employers to self-insure for workers compensation. Again, these rules for self-insurance options vary widely from state to state. The general rule is that if you have employees who aren't owners of the company, you probably need workers compensation insurance. And, with regards to employees, be very careful to avoid a potential workers compensation trap: under most state's workers compensation laws, the business might have employees they don't know about, because most states will treat an uninsured contractor or subcontractor as an employee if he or she is injured while doing work for the business. This is one of the biggest reasons why most larger companies will contractually require anyone doing work for them to provide proof of workers compensation insurance. Consider that an office cleaning service operating as a sole proprietor may not be required by the state to purchase workers compensation insurance, and that clients who hire that service may be putting themselves at risk if the cleaning service operator were to become injured while working on their site.

The biggest argument heard from most businesses about workers compensation insurance is the cost. The value to the business owner is, of course, that the employee who receives compensation can't sue the company for benefits or lost wages if they become injured or ill. Employers operating in higher risk industries are in an especially difficult position, as their premium rates are higher to meet with the risk of the work.

Every business can benefit from more closely managing their workers compensation insurance costs. For example, many carriers establish policies based on estimated payroll size, calculating and collecting the premiums at the beginning of the coverage period. If the real payroll activity is less than the estimated activity, then the premiums may have been overpaid, leaving the business short on cash that it could have used for other things. A way to avoid this situation is to use a carrier and a service which allows you to calculate workers compensation insurance premiums on a per-payroll basis, and to pay premiums for only the coverage actually used. By allowing the business to calculate and pay workers compensation insurance premiums with each payroll, the business is not only able to reserve cash for operations, but is able to save on premium costs by ensuring that the coverage paid for was what the business needed - no more and no less.

Last year, The Hartford launched a new product for QuickBooks Payroll named XactPAY. It's a patent-pending, payroll-based workers' compensation premium billing service that allows a business to pay their workers' comp premium on a pay-as-you-go basis. The benefit is that it calculates insurance premiums for a Hartford workers' compensation policy based on actual payrolls and withdraws that amount directly from the insured's bank account with every payroll run through QuickBooks. It is available as a workers' compensation billing service at no additional charge for Hartford policyholders.

XactPAY Web solves the premium prepayment problem by billing workers' compensation premiums as they are "earned". Rather than relying on the estimated payrolls, XactPAY Web calculates the workers' compensation premiums based on the actual payroll data and then automatically deducts this amount from the insured's checking account. In contrast to a standard billing method, XactPAY Web requires no down payment, with no processing charges, and splits the payments into as many payroll cycles as the business runs in the policy term.

Best of all, because the premiums are being calculated based on actual payrolls rather than estimates, the odds of a large audit adjustment are drastically reduced.

Help Your Clients Save on Workers Compensation Premiums Today

Data Security Is Not A Luxury

It seems like everywhere you look today, there is more bad financial news. Belts are tightening everywhere, and there are just not enough ways to save a nickel. When things get tight, there is a real temptation to cut back on seldom used but vital business practices that so often seem like they were inspired by fussy IT people just looking for a reason for more and better boxes with flashing lights and whirring drives.

The truth is, some things like controlling access to your data, and making certain that your data is actually there when you need it transcend the simple short term budgetary thinking that they sometimes are victim to. In many ways your data is your business, and losing control of who has it or whether or not it can be accessed can seriously impact not only your day-to-day operations, but your relationship with customers and vendors as well

Backing up your data and keeping it secure are not luxuries. It is a big, bad world out there, and right now somewhere out there is a bad guy who would just love to destroy or alter your information for profit or even just because he can. Don't let him have his way, solely in the interest of saving a few bucks. Your data is too important.

Perform regular backups, daily if needed. Make sure that only the people who need to have access to your files and software. Change the passwords that are obvious, like "password" or "mydata." Disable old user accounts, and take a few minutes to make certain that you haven't been overtaken by "privilege creep" where someone through longevity has accumulated access to departments and files they no longer need.

Of course, a good economical solution for many of these problems is online hosting. Here at InsynQ we can keep your data secure, while helping you to control who has access to what, for far less than you might think. No matter how tough times might get, you can never afford to take chances with your data.

Michael Ehart
CISSP, MCSA, Certified HIPAA Security
Specialist, CHA, CHP, A+, Net+, Security+
Systems Engineer
InsynQ Inc., Your Internet Utility Company.tm

The Right Tool For The Job

You can't build something if you don't have the right tools. This is true whether the discussion is about a house or a professional practice.

For the past five years, The Sleeter Group has hosted a conference where professional from all over the country can "tool up", and learn about the solutions and services available to help solve a variety of business problems for themselves and their clients. The conference also offers many learning opportunities, intended to help you increase your skills and scope of services.

It's been said that, if all you have is a hammer, every problem looks like a nail. The more tools you have to do the work, the more problems you can solve, and the better your results will be.

InsynQ e-Accounting Solutions (www.CpaAsp.com) help you work where and when it's right for you. We have been a proud sponsor of the Accounting Software Consulting Conference for the past several years, and it has presented us with a great opportunity to meet our clients and introduce our solutions to professionals from all over the country. Visit our booth at the conference and see for yourself how our online solutions can help you work closer with clients, reduce the headaches of technology management, and get more out of each and every client engagement. e-Accounting's philosophy is to work smarter, not harder. It's easier when you have the right tools.

Get Conference Information

CPAASP is Awesome

Read what The Sleeter Group has to say about CPAASP

Challenges Facing Small Business

The Road Map is a graphical way of demonstrating how companies can get on board with online solutions to succeed and why it is crucial in today's environment. It is geared toward the accounting professional, but applies to any enterprise that is serious about future success. You may already be at one of the stops along the way, or you may not. Either way, these solutions will get you to your goal of successfully adapting to today's changing economic landscape whether you engage gradually or quickly.

Follow The Road Map

Reduce Costs and Streamline Workflow

When a business feels the squeeze financially, there are really only two ways to address the problem: reduce costs or increase revenues. While reducing costs seems to be the path of least resistance, there are steps that the business can take which both reduce costs (and create predictability in costs) and at the same time put the business in a position of increasing its effectiveness and earning capability. These steps involve the implementation of hosted, managed application services and outsourced technology management.

There are several areas that offer potential savings for the business when upgrading services to a managed hosted application model. The elimination of large up-front costs for equipment acquisition and implementation, for example, allows startups to use their cash for other initial business expenses. Ongoing management and support of the systems becomes a fixed fee, eliminating the emergency cash requirements to cover repairs and system recovery. Instances of lost productivity are reduced when system administration and user support resources are readily available.

Companies can not only save money, but also operate more effectively through process and technology standardization when their systems are centrally located. Some of these benefits include:

Improved Workflow Management

Single workflow processes promote more efficient account handling
Centralized network management reduces staffing requirements
This leads to process standardization, which helps ensure that clients will receive a consistent delivery of services.

Shared applications among sites.

Shared applications lower the cost of hardware needed to support each site, as well as saving on application administration.
This allows IT managers to avoid the physical installation of machines and software at each site, as the system can be fully-managed from a central location.

Improved redundancy and emergency backup.

Redundancy eliminates the single points of failure in the system, providing a high level of system availability.
Centralized systems enables backup sites to quickly handle emergencies without added infrastructure costs.
This enables branch locations to be set up to take over primary location duties with a minimum of disruption to the business.

Leveraged expertise in branch offices.

Knowledge workers can be pooled remotely, requiring fewer experts at each location to handle complex issues and support revenue-producing activities.
This enables the business to offer all classes or levels of revenue-generating services from all business locations without concern over the specific location of the expert workers.

Promotion of intelligent routing.

Centralized, shared resources can provide an extended labor force to handle complex issues.
Specific skills can support various transaction types, and access to those capabilities can be extended throughout the organization virtually.

Extended hours of operation.

Businesses can extend hours of operation and handle peak periods without adding new workers simply by distributing the workforce and staggering shifts.
With employees located in different regions, time-differences are more easily accommodated and have less impact on employee scheduling, and work to the advantage of the business.
The result is that the business is better able to support the needs of customers from around the country and around the globe.

Reduced infrastructure costs.

With a virtualized workforce, companies can save the cost of the physical infrastructure needed to support workers.
In more expensive metro areas, this could save several thousands of dollars per year per worker.
This allows the business to not only support more workers with less infrastructure, but also provides a means by which the business can shrink or grow staff levels without the commensurate costs of equipment and office resources.

Custom Services for Your Business

practice development news | 2008