Get your small business off to a big start in 2012
NEW YORK – The arrival of the new year gives small-business owners a chance to fix some of the problems that may have dogged them through 2011. Those whose accounting systems were haphazard, or who didn’t have a clear policy about vacations and sick time, should take advantage of the fresh start that 2012 offers.
A look at what needs to be done:
About those books
If you’re likely to show up at your accountant’s office during tax season with a pile of disorganized receipts, invoices and ledgers for 2011, get yourself some accounting software designed for small-business owners. And start using it right away. If you’re not sure which one would be best for you, talk to your accountant or to another business owner whose line of work is similar to yours.
Many small-business owners have poorly kept or nonexistent books because they don’t have time to keep track of what they spend and earn. Or they feel intimidated by accounting. The solution is to get some help. Your accountant or another owner can help you find a good bookkeeping service. Or hire an accounting student at a local college. Students are eager for the work.
If you need help learning to use the program, visit www.score.org. SCORE is an organization that offers free counseling to small-business owners. You can search for a counselor who’s savvy about accounting software.
Keeping good books is not just about being organized. It’s also about knowing what’s going on with your business. If you can’t easily look at your receivables and your expenses and know what your cash flow is, then your company can run into financial trouble.
Getting your books in shape for 2012 now won’t take long. And don’t wait till your accountant yells at you in March or April. By then the year will be a quarter or a third over and you’ll have to backtrack to get yourself organized. It will be a waste of your time.
What’s your policy?
If you spent time in 2011 trying to mediate disputes over which employee was going to take which holiday or week in the summer off, you need to create a written vacation policy. There are two reasons: It will help your company operate in a fair and orderly fashion, and employees will know what to expect.
Similarly, you might want to think about time off for illness, jury duty and other situations.
A policy should spell out how much time employees get, how many staffers can be off at one time and how conflicts will be resolved. You need to decide if employees get their time off by seniority, or on a first-come, first-served basis. And, how far in advance do they need to ask for time off? How will you handle emergency requests, especially when staffers have already used all their vacation time? And what happens if staffers don’t use all their time? Can they roll it over to the next year?
For sick time, you need to think about how much you want to give staffers. And how do you want to handle situations where someone is out for an extended time?
There are other time off issues. Staffers need to care for a sick child or other relative. And if they’re called for jury duty, are you going to pay them while they’re in court?
A big caveat: Some of these situations may be covered by federal or state laws, like the Family and Medical Leave Act or the Americans with Disabilities Act. You should probably speak with a human resources consultant or a SCORE counselor who has worked in HR to be sure you comply with the laws.
You can learn more about the FMLA at www.dol.gov/dol/topic/ benefits-leave/fmla.htm and the ADA at www.ada.gov Check your state’s websites to see if there are laws you must follow.
Something to think about is a growing trend in many companies toward what’s called paid time off, or PTO, that doesn’t differentiate among vacation, sick time or personal days. Staffers get a set number of days and all their absences count toward that number. That option will free you from figuring how much of each kind of time off you want to give. But you’ll still need to think about how time off is granted.