Simply Junior

Staff Retrenchment Isn’t The Answer
Retrenchments occur because they save money. In almost every business, wages and other staff costs are the biggest or second biggest expense. Retrenching 20% of 50,000 or 10,000 staff saves huge amounts of money. And you still have 40,000 or 4,000 employees remaining to reorganize to share the workload.

Retrenching 5 of 20 or 2 of 10 employees produces modest savings. And in a busy small business it’s more difficult for 20 staff to do the work of 25 or 8 to do the work of 10 than for 40,000 to be reorganized to do the work of 50,000.

Retain Your Staff: Reduce Your Profits
Are you prepared to work on reduced profit margins so that you can retain staff? Almost all your competitors will retrench staff, reduce prices and cut costs. But their service standards will drop. Their revenues will fall. They might maintain a 25% gross profit. But 25% of severely reduced recession revenues may be less than 20% of pre recession revenues. Your objective is to maintain a viable business for the next 2-3 years so that you can regain good gross profit as quickly as possible.

Be Ready For Intense Competition
Recessions create competition. Expect your competitors to use all sorts of tactics to frankly, put you out of business. They’ll reduce prices, extend credit lines, offer bulk discounts, target your best clients and staff and even spread misinformation about your financial viability. Don’t be surprised when this happens. Be ready for it.

It’s Bargain Time
Recession time is bargain time. I don’t advocate wanton spending merely to “snap up” bargains. But during a recession, you should also be able to negotiate lower prices from suppliers. You may even be able to renegotiate and extend current leases at favourable terms. Of course, you must have the cash flow to support such expenses. Don’t overextend just for a “good price”.

Recessions Create Winners As Well As Losers
During the Great Depression, employees who kept their jobs, even with reduced wages, improved their living standards. Wages may have reduces by 50%. But prices for commodities such as eggs, milk, meat, bread, sugar and similar staples fell by up to 80%. Many companies too, stayed in business with reduced revenues. But their expenses also fell. And they gained new clients from businesses which closed. It may be doom and gloom for many. But if you can survive you should also thrive. Make recession a positive self fulfilling prophecy for your business.

Conclusion
When your business survives the recession, it will be leaner and better focussed. You’ll have better systems, better expense control, higher performance standards, more dedicated customers and more committed staff. Put simply, you’ll have a far more effective business than you had prior to the recession. And that’s the biggest benefit of all.

Filing income tax returns could be a daunting task for a business owner. Sometimes accountants and accounting clerks need to render overtime just to make sure that the preparation for the said documents and files are organized and done efficiently. For some, because of the large workload would need to temporarily hire someone who could work with the accountants. This would entail a considerable amount of money in overhead and staff costs.

Fortunately, there is a growing trend to utilize online tax return preparation these days. With the use of it, you can now just sit and work on your computer right in the comforts of your home. You will be amazed, that everything can be finished in as short as one hour, depending on the bulk of your data. Say goodbye now to the old fashion technique of tax preparation. If you can make everything easy and quick, then why not. It does not only save you efforts, it can save you time and money as well. But for some, this could be something that they would be skeptic about. The concerns would be about confidentiality and privacy of documents.

Also, if a business belongs to small to medium enterprise, additional cost must be considered to set up an online system that makes tax return preparation easy. Plus, it would mean employing the latest software. Another possible worry is untested and unproven tax preparation methods that may jeopardize the whole system at the end. That instead of trying to conform to the tax law and trying to be as diligent in tax preparation as possible, online tax return preparation may be detrimental to the business as a whole. More worries would come for those who are not yet well versed or at least open to the idea about these modern tax return preparation systems.

But if you are sure of the company offering online tax return preparation, there is indeed nothing to worry about. The first step therefore that needs to be looked into with the use of this kind of tax return preparation is to know how the system works. You just have to know the methods that are employed by companies offering so that your skepticism or worries will be eliminated.

So before you open yourself to the idea of online tax return preparation, here are the things that you should check with companies offering you such services and get rid of your worries:

- How cost effective will it be if my business utilizes the service through outsourcing companies? In this question, you can ask for quotations for the cost of the service and compare it with your current overhead and staff costs in working with tax returns.

- Will the data that I give to outsourced companies be treated with utmost confidentiality? How will I know that they treat my data with such diligence? What are their policies with regards to this and how would I be assured that such policy is implemented?

- What are the methods they employ? Will their system hamper my business operation? Are the methods that they employ easy to understand and one that I’m familiar about?

- Are the companies who offer online services, well versed with the latest accounting systems and processes?

- Are the systems that they employ for outsourcing services reliable and secure?

When all of these questions are answered favorably by the outsourcing companies who offer the services on online tax return preparation, you can be assured that your shift from manual preparation to online methods will work for your own business benefit.