Netsuite Accounting Module un-Reconciles

I’ve been helping a small company with their accounting and finance. They use Netsuite for CRM and accounting. While working with their bookkeeper to reconcile and close for the month of August we noticed that numerous entries that we had reconciled months ago are now showing up as un-reconciled! To imagine that a system that is costing thousands of dollars a year can’t accomplish the most basic tasks in accounting, keeping things reconciled, is mind-boggling.

Leading vs. Managing — They’re Two Different Animals

Are you a manager or a leader? Although you may hear these two terms thrown out interchangeably, they are in fact two very different animals complete with different personalities and world views. By learning whether you are more of a leader or more of a manager, you will gain the insight and self-confidence that comes with knowing more about yourself. The result is greater impact and effectiveness when dealing with others and running your business.

We are going to take a look at the different personality styles of managers versus leaders, the attitudes each have toward goals, their basic conceptions of what work entails, their relationships with others, and their sense of self (or self-identity) and how it develops. Last of all, we will examine leadership development and discover what criteria is necessary for leaders to reach their full potential. First of all, let’s take a look at the difference in personality styles between a manager and a leader.

Managers - emphasize rationality and control; are problem-solvers (focusing on goals, resources, organization structures, or people); often ask question, “What problems have to be solved, and what are the best ways to achieve results so that people will continue to contribute to this organization?”; are persistent, tough-minded, hard working, intelligent, analytical, tolerant and have goodwill toward others.

Leaders - are perceived as brilliant, but sometimes lonely; achieve control of themselves before they try to control others; can visualize a purpose and generate value in work; are imaginative, passionate, non-conforming risk-takers.

Managers and leaders have very different attitudes toward goals.

Managers - adopt impersonal, almost passive, attitudes toward goals; decide upon goals based on necessity instead of desire and are therefore deeply tied to their organization’s culture; tend to be reactive since they focus on current information.

Leaders - tend to be active since they envision and promote their ideas instead of reacting to current situations; shape ideas instead of responding to them; have a personal orientation toward goals; provide a vision that alters the way people think about what is desirable, possible, and necessary.

Now let’s look at managers’ and leaders’ conceptions of work.

Managers - view work as an enabling process; establish strategies and makes decisions by combining people and ideas; continually coordinate and balance opposing views; are good at reaching compromises and mediating conflicts between opposing values and perspectives; act to limit choice; tolerate practical, mundane work because of strong survival instinct which makes them risk-averse.

Leaders - develop new approaches to long-standing problems and open issues to new options; first, use their vision to excite people and only then develop choices which give those images substance; focus people on shared ideals and raise their expectations; work from high-risk positions because of strong dislike of mundane work.

Managers and leaders have very different relations with others.

Managers - prefer working with others; report that solitary activity makes them anxious; are collaborative; maintain a low level of emotional involvement in relationships; attempt to reconcile differences, seek compromises, and establish a balance of power; relate to people according to the role they play in a sequence of events or in a decision-making process; focus on how things get done; maintain controlled, rational, and equitable structures ; may be viewed by others as inscrutable, detached, and manipulative.

Leaders - maintain inner perceptiveness that they can use in their relationships with others; relate to people in intuitive, empathetic way; focus on what events and decisions mean to participants; attract strong feelings of identity and difference or of love and hate; create systems where human relations may be turbulent, intense, and at times even disorganized.

The Self-Identity of managers versus leaders is strongly influenced by their past.

Managers - report that their adjustments to life have been straightforward and that their lives have been more or less peaceful since birth; have a sense of self as a guide to conduct and attitude which is derived from a feeling of being at home and in harmony with their environment; see themselves as conservators and regulators of an existing order of affairs with which they personally identify and from which they gain rewards; report that their role harmonizes with their ideals of responsibility and duty; perpetuate and strengthen existing institutions; display a life development process which focuses on socialization…this socialization process prepares them to guide institutions and to maintain the existing balance of social relations.

Leaders - reportedly have not had an easy time of it; lives are marked by a continual struggle to find some sense of order; do not take things for granted and are not satisfied with the status quo; report that their “sense of self” is derived from a feeling of profound separateness; may work in organizations, but they never belong to them; report that their sense of self is independent of work roles, memberships, or other social indicators of social identity; seek opportunities for change (i.e. technological, political, or ideological); support change; find their purpose is to profoundly alter human, economic, and political relationships; display a life development process which focuses on personal mastery…this process impels them to struggle for psychological and social change.

Development of Leadership

As you can see, managers and leaders are very different animals. It is important to remember that there are definite strengths and weaknesses of both types of individuals. Managers are very good at maintaining the status quo and adding stability and order to our culture. However, they may not be as good at instigating change and envisioning the future. On the other hand, leaders are very good at stirring people’s emotions, raising their expectations, and taking them in new directions (both good and bad). However, like artists and other gifted people, leaders often suffer from neuroses and have a tendency toward self-absorption and preoccupation.

If you are planning on owning your own business, you must develop management skills, whether they come naturally or not. However, what do you do if you believe you are, in fact, a leader - a diamond in the rough? What can you do to develop as a leader? Throughout history, it has been shown again and again that leaders have needed strong one-to-one relationships with teachers whose strengths lie in cultivating talent in order to reach their full potential. If you think you are a leader at heart, find a teacher that you admire - someone who you can connect with and who can help you develop your natural talents and interests. Whether you reach “glory” status or not, you will grow in ways you never even imagined. And isn’t that what life is about anyway?

From the SBA

Where to get your 1099 Forms

Here’s a handy link to the IRS, get the 1099 forms.
http://www.irs.gov/businesses/page/0,,id=23108,00.html

Virtual Employees

I’ve posted several job postings for “virtual employees” and am now swamped going through the resumes I’ve received. What’s a virtual employee you ask? It’s someone who works regularly (as opposed to a contractor), but remotely located and working over the internet. I wanted to explore this concept for a few reasons.

First, it opens up the options for whom I can hire. If I were hiring someone locally, the person would have to already live here or be willing to move here. Second, it reduces expenses. For the price of renting office space alone I can hire several people. Plus, salaries in the Boston area are among the highest in the world. Good programmers are still wanting $6000 a month and more here. Third, it doesn’t tie me down to the Boston area. Should I decide to move (which I’m in the process of doing), it would be difficult to uproot an office of employees, and it would be pointless to start hiring now when I might just move in a few months anyway.

So, the hard part is who to hire. I have three job postings. I’ve gone through resumes for one posting so far. About 500 resumes. I’ve eliminated 90% off the top, just because the resumes don’t mention the desired skill sets. I’ve traded emails with a few of the appliants, but it’s difficult for me to evaluate beyond this. I’m considering hiring a company to do online screening test for me, but have no experience with that either. I think I’ll give SCORE a shout and see if anyone there can advise me.

Bootstrapping

Bootstrapping alludes to a German legend about a boy who was able to fly by pulling himself up by his bootstraps. In computers, this term refers to any process where a simple system activates a more complicated system. It is the problem of starting a certain system without the system already functioning. It seems just as impossible as “pulling oneself up by the bootstraps” which Baron M

Keeping it simple and automation

I don’t know how I ended up with four business bank accounts, several merchant processors, too many different systems are taking up too much of my time. I’ll be hiring a consultant to help me consolidate my business systems and make it more manageable. Well, I do know how I ended up with so many different accounts. There was a purpose to each one when I opened them. The problem is that I wasn’t looking at the big picture while making all these things happen. Not only do I have multiple bank accounts, but they’re all at different banks. Too many accounts to reconcile either equals too much time spent reconciling or you don’t do it at all.

I’m using Quickbooks for my accounting system, and am determined to stay with it. There are some things I’d like to see it have (such as opening up the online billing features, for example), but there are no other products that please me as much. Peachtree is a very close second. Now I’m looking at ways to make running my business easier by automating things using Quickbooks. I’ve been manually sending invoices by email, for example. I know I can automate it in Quickbooks, it’s just a matter of setting it up.

Drop by the forum and discuss this issue with me.

How Do I Go Into Business?

I get this question again and again, in an unending variety of formats. How do I decide what business to start? Where do I get ideas? How do I find products to sell? Start with the education. No, I don’t mean paying thousands to some quack for a seminar, you can educate yourself pretty well for a buck fifty in late fees at the library. Don’t worry about getting suggestions for what book to read, read all of them. Just go to the library, go to the stacks where the books about real estate are, and where the books about business are, and start reading. I’d recommend reading some accounting books too, knowing how to prepare and read a financial statement is a very valuable skill. Boring reading to be sure, but you need to understand money. Eventually, you’ll be able to evaluate the books you’re reading and know which ones make sense to you and which ones don’t. By then, you should be able to develop a business plan that will work for YOU. I believe that this method is better than trying to have someone else direct you, because you can’t live their lives. Having a mentor is great too, but you need to become educated enough to stand on your own two feet. Even with a mentor, you will need to be confident enough to be able to evaluate the mentor’s advice.

Are you running a business or are you self-employed?

One of the points that so many people get confused about is whether they’re running a business, or if they’re self-employed. I’m not talking about the IRS code here, but the actual realities of running a business. One of the points that so many people get confused about is whether they’re running a business, or if they’re self-employed. I’m not talking about the IRS code here, but the actual realities of running a business.

The first question you should ask if you want to know if what you have is a business is whether you could take a year off and come back and you’re business is still functioning. This is an important goal to set, if you’re not already there. Your business should be able to keep itself running without you being present.

Another measure is how much you could get if you were to sell your business. If nobody would be interested in buying, then what does that tell you? Talk to a business broker about it. You don’t have to sell, but you might find it interesting what you’d learn in talking to one.

Another mark of a successful business is when you’re able to hire people to work for you and maintain an acceptible profit-margin. When you get to the point where you value your time more than you can pay someone else to do the job for you, you know you’re on the right track. I’ve never heard of a successful business that didn’t have employees.

Do you run a business?

PS: MLM can never be a business, unless you’re the one who founded it.

Talk about it here

Jobs and Growth Tax Relief and Reconciliation Act of 2003

I was just reading how the Jobs and Growth Tax Relief and Reconciliation Act of 2003 increased the bonus depreciation rate from 30% to 50%, of hte adjusted basis of qualified property. Jobs and Growth Tax Relief and Reconciliation Act of 2003

I was just reading how the Jobs and Growth Tax Relief and Reconciliation Act of 2003 increased the bonus depreciation rate from 30% to 50%, of hte adjusted basis of qualified property. I thought people here might benefit from knowing a bit about it.

The bonus depreciation is determined without any pro-ration based on the date the property was placed in service. This means that if you put in service on 12/31, or whenever your tax year ends, you’re eligibel for hte full 50% bonus depreciation.

Information on getting a Small Business Loan

To determine if you qualify for SBA’s financial assistance, you should first understand some basic credit factors that apply to all loan requests. Every application needs positive credit merits to be approved. These are the same credit factors a lender will review and analyze before deciding whether to internally approve your loan application, seek a guaranty from SBA to support their loan to you, or decline your application all together. 1. EQUITY INVESTMENT

Business loan applicants must have a reasonable amount invested in their business. This ensures that, when combined with borrowed funds, the business can operate on a sound basis. There will be a careful examination of the debt-to- worth ratio of the applicant to understand how much money
the lender is being asked to lend (debt) in relation to how much the owner(s) have invested (worth). Owners invest either assets that are applicable to the operation of the business and/or cash which can be used to acquire such assets. The value of invested assets should be substantiated by invoices or appraisals for start-up businesses, or current financial statements for existing businesses.

Strong equity with a manageable debt level provide financial resiliency to help a firm weather periods of operational adversity. Minimal or non-existent equity makes a business susceptible to miscalculation and thereby increases the risk of default on — failing to repay — borrowed funds. Strong equity ensures the owner(s) remains committed to the business. Sufficient equity is particularly important for
new business. Weak equity makes a lender more hesitant to provide any financial assistance. However, low (not non- existent) equity in relation to existing and projected debt — the loan — can be overcome with a strong showing in all the other credit factors.

Determining whether a company’s level of debt is appropriate in relation to its equity requires analysis of the company’s expected earnings and the viability and variability of these earnings. The stronger the support for projected profits, the greater the likelihood the loan will be approved. Applications with high debt, low equity, and unsupported projections are prime candidates for loan denial.

2. EARNINGS REQUIREMENTS

Financial obligations are paid with cash, not profits. When cash outflow exceeds cash inflow for an extended period of time, a business cannot continue to operate. As a result, cash management is extremely important. In order to adequately support a company’s operation, cash must be at
the right place, at the right time and in the right amount.

A company must be able to meet all its debt payments, not just its loan payments, as they come due. Applicants are generally required to provide a report on when their income will become cash and when their expenses must be paid. This report is usually in the form of a cash flow projection,
broken down on a monthly basis, and covering the first annual period after the loan is received.

When the projections are for either a new business or an existing business with a significant (20% plus) difference in performance, the applicant should write down all assumptions which went into the estimations of both revenues and expenses and provide these assumptions as part of the application.

All SBA loans must be able to reasonably demonstrate the “ability to repay” the intended obligation from the business operation. For an existing business wanting to buy a building where the mortgage payment will not exceed historical rent, the process is relatively easy. In this case, the funds used to pay the rent can now be used to pay the mortgage. However, for a new or expanding business with
anticipated revenues and expenses exceeding past performance, the necessity for the lender to understand all the assumptions on how these revenues will be generated is paramount to loan approval.

3. WORKING CAPITAL

Working capital is defined as the excess of current assets over current liabilities.

Current assets are the most liquid and most easily convertible to cash, of all assets. Current liabilities are obligations due within one year. Therefore, working capital measures what is available to pay a company’s current debts. It also represents the cushion or margin of protection a company can give their short term creditors.

Working capital is essential for a company to meet its continuous operational needs. Its adequacy influences the firm’s ability to meet its trade and short-term debt obligations, as well as to remain financially viable.

4. COLLATERAL

To the extent that worthwhile assets are available, adequate collateral is required as security on all SBA loans. However, SBA will generally not decline a loan where inadequacy of collateral is the only unfavorable factor.

Collateral can consist of both assets which are usable in the business and personal assets which remain outside the business. Borrowers can assume that all assets financed with borrowed funds will collateralize the loan. Depending upon how much equity was contributed towards the acquisition of
these assets, the lender also is likely to require other business assets as collateral.

For all SBA loans, personal guarantees are required of every 20 percent or greater owner, plus others individuals who hold key management positions. Whether or not a guarantee will be secured by personal assets is based on the value of the assets already pledged and the value of the assets
personally owned compared to the amount borrowed. In the event real estate is to be used as collateral, borrowers should be aware that banks and other regulated lenders are now required by law to obtain third-party valuation on real estate related transactions of $50,000 or more.

Certified appraisals are required for loans of $100,000 or more. SBA may require professional appraisals of both business and personal assets, plus any necessary survey, and/or feasibility study.

Owner-occupied residences generally become collateral when:

1) The lender requires the residence as collateral;

2) The equity in the residence is substantial and other credit factors are weak;

3) Such collateral is necessary to assure that the principal(s) remain committed to the success of the
venture for which the loan is being made;

4) The applicant operates the business out of the residence or other buildings located on the same
parcel of land.

5. RESOURCE MANAGEMENT

The ability of individuals to manage the resources of their business, sometimes referred to as “character,” is a prime consideration when determining whether or not a loan will be made. Managerial capacity is an important factor involving education, experience and motivation. A proven positive
ability to manage resources is also a large consideration.

Mathematical calculations on the historical and projected financial statements form ratios which provide insight into how resources have been managed in the past. It is important to understand that no single ratio provides all this insight, but the use of several ratios in conjunction with one another can provides an overall picture of management performance. Some key ratios all lenders review are: debt
to worth, working capital, the rate at which income is received after it is earned, the rate at which debt is paid after becoming due, and the rate at which the service or product moves from the business to the customer.

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