Contractor accounts can be just as complicated as any other kind. There will be incoming money as well as outgoings, and there may even be subcontractors to pay. A tax return accountant will be able to organize all of this into a coherent tax return. You will know it is time to complete a return when you receive a form.
What Happens If You Make A Mistake?
Mistakes can easily be made on a self-assessment tax return if you are not used to completing one. Contractor accounts can be made up of many different elements, and it could be that something is missed out. Something that is easy to rectify – and notice – is if the address on your return is wrong. If you have moved, you should let the government know immediately so that they can update their records. If you don’t, you should let them know once you realize there is an error on the form.
Other mistakes may be harder to identify. If you do realize something is wrong, the government need to know straight away. Otherwise, you could be penalized and if the government believe you used the wrong figures on purpose, you can even get a criminal conviction.
Checking and re-checking your tax return before you send it off is essential. Or, if you are worried that you might make a mistake (and it does happen easily), engage an accountant to complete the return for you. Many people leave their tax returns until the last minute because filling it in is a hard task, and a laborious one too. But getting in touch with a contractor accountant will make the work much quicker and easier, and will prevent you from getting a fine or worse. It makes sense to hire an expert to get the job done, leaving you with much less worry. You would hire experts for other aspects of the business, so why not this one? This is especially important if you have gone through a year of change, for example, if you are in the process of acquiring a competitor or you have a second income coming from a different source.
Is It Possible To Avoid Penalties?
If you miss the deadline for sending in your self-assessment tax return, you will generally be fined. However, if you have a ‘reasonable excuse’ for being late, you may be exempt if it was entirely out of your control. Hiring an accountant should mean you never have to have this problem, but if you do your excuse must be made as soon as possible. Examples of reasonable excuses could include documents being lost due to a fire or a flood. Equally, if documents are stolen and you are unable to replace them, this may also count. If you suffered from a life-threatening illness and you had to stay in hospital and where therefore unable to complete your tax return, this will usually also count. So too does the death of a partner just before the filing date (although you may be asked to show that you had started preparations to complete the return before it happened).
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The virus pandemic of 2020 is severely disrupting the economy and the large and small businesses that drive it. Poor practices such as ignoring safe distancing, insufficient sanitation, and not mandating mask-wearing open the door to infection of customers and staff and threaten the viability of a business.
Similarly, poor practices that allow a business to incur technical debt open the door to cybersecurity exploits that can bankrupt a business financially or through loss of trust and reputation in the eyes of its customers. Leaders of small and medium size businesses (SMBs) often think their size lets them operate under the radar, as less attractive targets to bad guys. But, actually, their lack of robust security strategy and resources make them easier to penetrate. And, sadly, the National Cyber Security Alliance (NCSA) reports that 60 percent of small companies are unable to sustain their business more than six months following a cyberattack.
Years of experience working and advising businesses domestically and internationally has shown that business leaders find it difficult to recognize tech debt and how it exposes cyber vulnerability. As technology has evolved over time from main frame to client server to the Internet and now the cloud, the impact of a new Tech Debt 2.0 has grown stealthier and more sinister. This is especially true for SMBs that lack the resources to apply to cybersecurity. CEOs and CFOs managing technology may not recognize tech debt building up in their SMBs—because it is not revealed in monthly variance reports or other accounting controls. Someone in their organization, without explicit or implicit authority or oversight, may be making decisions adding to the Tech Debt 2.0 load and increasing exposure to cyberattacks. Let’s look at how that might happen and how to prevent it.
Old and Obsolete Infrastructure:
Azeotrope, an aerospace firm in the Southeast, realized they were compromised when a number of clients complained of receiving invoices from Azeotrope that contained confidential information about their client’s orders and projects. Months of investigation by a cyber consulting firm finally determined the source of the vulnerability to Azotrope’s network: a combination printer/fax machine in their testing and QA area that engineers regularly used to fax lunch orders to a local Chinese restaurant. Because the device was connected to the company’s network for printing purposes, it provided network access using out-of-date insecure facsimile protocols. This gave the bad actors access to the company’s customer accounts and valuable data.
“Fax is an ancient technology; the protocols we use today haven’t been changed for the past 30 years,” notes Yaniv Balmas of Check Point Software, a leading provider of cyber threat intelligence. “Fax data is sent with no cryptographic protections; anyone who can tap a phone line can instantly intercept all data transmitted across it. Fax is always sent unauthenticated. There are absolutely no protections over fax.” Balmas advises: “If you can’t stop using fax, segregate the printers, put them on a separate network.”
The Tech-away:Identify and remove obsolete components from your network. Not just equipment with obvious vulnerabilities like fax, but all equipment no longer supported and updated by the manufacturer for cybersecurity risk.
A Stitch in Time . . .
Patches are often created after a software or hardware company has experienced a data breach or recognized a vulnerability that might allow one. The patch is issued to ensure other businesses’ data remains safe. Applying a patch as quickly as possible lessens the risk of your business becoming affected. But it is each business’s responsibility to know a patch has been issued and to apply it promptly. That is patch management—a relatively straightforward process, 10 or 20 years ago. Today, however, the vast proliferation of software and hardware components in our business environment have made patch management a complex, time- and resource- consuming necessity, critical to the cybersecurity of a business’s network. Failure to effectively manage patching is a main cause of accumulating excessive Tech Debt 2.0 and security penetration.
NETGEAR, a highly respected manufacturer of network equipment in data centers, offices, and the homes of hundreds of thousands of people working from home now, and, possibly, far into the future, recently sent an email alert to its customers. An excerpt is below. How would your CFO or CIO handle this?
Hello.
We have become aware of vulnerabilities involving certain NETGEAR products and have issued a security advisory.
We have released hotfixes addressing some of the vulnerabilities for certain impacted models and continue to work on hotfixes for the remaining vulnerabilities and models, which we will release on a rolling basis as they become available. We strongly recommend that you download the latest firmware containing the hotfixes as instructed in the security advisory. We plan to release firmware updates that fix all vulnerabilities for all affected products that are within the security support period.
Until a hotfix or firmware fix is available for your product, we strongly recommend turning off Remote Management in your product. Please follow the steps below to turn off Remote Management immediately. . .
The Tech-away: Take steps to reduce the burden and complexity of patch management. Adopt software and hardware that automatically detect and apply patches. Look for opportunities to shed responsibility for patch management through outsourcing cybersecurity responsibility or utilizing cloud services that provide monitoring and patch management services. Tech Debt accrued through failure to manage patching effectively can fatally compromise your network and business.
People, Policies and Processes
Of greater consequence than obsolescence and patch management to Tech Debt 2.0 and cybersecurity are the people, policies, and processes that make up the culture and collective mindset of a business organization. Properly patched, up-to-date infrastructure is not going to stand in the way of the accounts payable clerk or chief marketing officer who clicks on the attachment to an email from some bad actor posing as a trusted vendor or prospective customer. Equally dangerous is the computer operator who props open the data center door to make it easier to allow the guy who says he’s the A/C maintenance engineer get in and out. Or the CEO who shares her password with her husband and children so they can access her mail and messaging accounts.
Establishing a data security mindset from the bottom to the very top of an organization is a basic essential to safeguarding a business from cyberattacks. Policies and processes must instill in all the company’s people an always-on awareness of their responsibility to protect the physical and digital assets of the enterprise. That mindset needs to be reinforced frequently and backed up by actions that demonstrate commitment and consequence behind company policies and processes.
The Tech-away: Formulate and clearly communicate policies and processes governing any actions that involve cybersecurity. Visibly demonstrate across the organization the commitment to security.
Make cybersecurity awareness a visible priority for every person in the organization.
About the Author
Michael C. Fillios is the founder and CEO of the IT Ally Institute, a nonprofit organization providing small and medium-sized businesses (SMBs) access to knowledge, research, and practical tools to improve their tech bottom line. A senior global business and technology executive with more than 25 years of experience in IT, finance, operations management, and change leadership, he lives in Mason, Ohio. His new book is Tech Debt 2.0™: How to Future Proof Your Small Business and Improve Your Tech Bottom Line. Learn more at www.itallyinstitute.org.
https://www.strategydriven.com/wp-content/uploads/pexels-pixabay-60504.jpg8001200Sharon Kastorianohttps://www.strategydriven.com/wp-content/uploads/SDELogo5-300x70-300x70.pngSharon Kastoriano2020-09-01 09:00:172020-09-01 07:44:09How Technical Debt Opens the Door to Cyber Attacks—and Steps to Protect Your Small Business
The COVID-19 crisis has put an exclamation point on the idea that we live in a world of perpetual whitewater. Whether caused by a pandemic, an economy in free fall, an unforeseen change in the competitive business environment or a problematic geopolitical issue, the world in which we operate is volatile and unpredictable. Success, even mere survival, hinges on being prepared and nimble enough to adapt to rapidly changing conditions.
Everyone wonders when we will get to the “new normal.” It may be preferable to call it the “next normal.” Whatever becomes normal as we progress through COVID-19 is just temporary — like after 9/11 or the financial crash of 2008, there will be another major disruption following in the not-too-distant future. We need to evolve amidst an on-going sequence of next normals without capsizing.
How do you survive, or even thrive, in a world of continuous turbulence and change? The organizations that have best weathered the COVID-19 storm entered it with strong balance sheets in three functions: Not only do they have a strong financial balance sheet, they also have strong balance sheets with their team members and strong balance sheets with their customers.
Regardless of what the future looks like, to be prepared and to weather the storm of perpetual change, you must prudently steward all three balance sheets. Navigating through the next normal requires that you:
1. Have a plan. The plan must include both your purpose and your strategy.
Purpose creates the True North for the organization — what you aspire to contribute. People want to contribute to something bigger than themselves. Your purpose defines what that something is. Purpose attracts talent and aligns and energizes effort. What is the organization’s higher calling? Why does your organization exist? Why does your organization matter?
Strategy defines how your organization positions itself in the marketplace to create unique value for your target customers. What do you provide or do differently that causes customers to buy from you versus anyone else?
2. Execute your plan. You can’t just have a plan; you have to execute your plan — and most organizations don’t do that well. Some 75 to 80 percent of organizations fail to achieve the results they expect from their strategies.
In a rapidly changing world, execution is critical to survival. It’s vital to maximizing your results and building your triple balance sheet. The ability to execute your organizational strategy smoothly and successfully is what provides the financial, human and reputational capital you need to navigate the next change and to be able to invest in adapting quickly to the next, next normal.
To execute effectively, you must align the actions of everyone in the organization to the purpose and strategy. This means:
Having the right people in the right roles with the right capabilities. Think through the performance in each current role, the potential for future roles and the capabilities that need to be developed for both current and future roles. Then, connect that assessment to development efforts that help people build the capabilities you’ll need for success in the future.
Aligning your systems, structures, processes and culture to the purpose and strategy. For example, how well do the compensation, rewards and recognition and promotions systems in your organization align with your strategy?
Keeping a scorecard that drives performance. Ensure scorecards with quantitative measures of performance, results and trends over time are visible and available to everyone in the organization. This allows them to make adjustments mid-course that can affect the outcome.
Following-up and following-through. To both generate learning and create rigorous accountability for performance and for living the values of the organization, schedule regular updates to analyze performance gaps and adjust the plan for moving forward.
3. Just lead, dammit! Leaders deliver results by fully engaging their teams in the effort. They build organizations of people passionate about and wanting to contribute their best to the company every day. In order to build a strong balance sheet with their teams, great leaders forge deep connections to their team members. They:
Communicate often and openly. With rapid changes in the environment, leaders need to communicate often and openly. Failure to do so creates a vacuum that people will fill, often by making stuff up. Leaders should convey a realistic picture of the dynamic environment of the market where conditions are likely to change rapidly.
Create dialogue, not diatribe: One-way, top down communication stifles the kind of multidirectional communications required to fully understand and adapt to rapidly changing circumstances. As a leader, you can’t possible have all the answers — too many unknowns and even the “knowns” can change. It’s critical to be clear about what you do and what you don’t know.
Empathize with their team’s point-of-view. Constant change can put people on edge. Show sensitivity to the emotional and real challenges individuals on the team face. Hear the question behind the question, or the key point behind what team members say.
Are authentic. People want their leaders to be real. They appreciate honesty, even if it’s painful or upsetting. Being authentic builds trust, which is vital for ensuring that your organization is strong and resilient. Most importantly, it sets the right example for others to emulate.
4. Build resilience. Mike Tyson famously said, “Everyone has a plan until they get punched in the mouth.”
Regardless of how good your plan is, or how effectively you execute, you’re going to get punched in the mouth! In a world of perpetual whitewater, you have to be prepared for the next punch, the next wave, the next rapid or the next life-threatening obstacle.
Thriving through an endless stream of “next normals” requires that organizations are tough enough to adapt regardless of how difficult the circumstances. Resilient organizations:
Have strong, consistent core values. Values like integrity, respect and trust provide stability amidst the upheaval and shape a culture that enables everyone to take action in an environment of uncertainty.
Generate trust. Leaders must believe and trust that everyone will act in the best interest of the organization, and team members must trust and believe in their leaders and the organization as a whole. This is critical to enabling the kind of dialogue necessary to lead through uncertain times. With trust, people closest to the challenges are given the responsibility and latitude to act without waiting for direction from above, where leaders often have less information about the conditions on the ground.
Constantly learn. Rapid change requires constant experimentation in how to adapt to that change. Instilling responsibility throughout the organization often results in mistakes and errors as people learn what works and what doesn’t. Resilient organizations have a “fail fast, learn fast” mentality that allows them to adapt to change faster than others.
Foster accountability. People perform their best in an environment in which results matter. Accountability reinforces whichever results matter. And, there must be accountability for playing within the core values of the organization, or people quickly learn that they don’t matter, which, in turn, erodes the fundamental trust necessary to create success.
Being prepared for the “next normal” requires building your balance sheet financially and with your team and your customers. To do so, you have to have a great plan for success, execute that plan effectively and constantly work to build a resilient organization. None of this is easy in a highly competitive, rapidly changing environment. But the reward for getting it close to right is earning the opportunity to adapt again when the next wave hits.
About the Author
Sean Ryan is a world-renowned business consultant, speaker, trainer and executive coach. As the founder of Whitewater International Consulting, he has worked internationally with companies such as Disney, Nucor Steel, FedEx and Nestle Waters of North America/Perrier Group of America. With more than two decades of industry experience, Sean is highly regarded for his ability to guide organizations through complex transformational change in what he describes as “a world of perpetual whitewater”. His new book is Get in Gear: Seven Gears that Drive Strategy to Results (Productivity Press, Aug. 20, 2020). Learn more at https://www.wwici.com/get-in-gear.
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Smart entrepreneurs invest business profits wisely to minimize loss. This ensures that even though the money is being spent, it is spent in ways that enable business growth, which, therefore, allows the value of the business to appreciate. Minimizing losses increases profit-making potential as scarce resources are being put to good use. A vast majority of entrepreneurs, 80% to be precise, fund their enterprises out of pocket, and managing cash flow is a major challenge as most have no prior business cash flow education. But you don’t have to be a part of this statistic. After you make your first turnover, making these smart financial decisions will help you make the most of your hard-earned money.
1.Investing in fixed assets
Investopedia defines an asset as an economically valuable resource owned, controlled, or acquired with the expectation that it will appreciate later. A fixed asset is an asset acquired to liquidate at a later period. It is expected to appreciate so that you can cash in on the benefits. A simpler explanation will be to save up money but not in cash, which can be affected by inflation. Important fixed assets an entrepreneur should invest in as a business, include furniture, and land. These assets appreciate over time, and when managed properly, can make you some great benefits. It will be much more beneficial to your business to own property that would be making you money in the long run and aiding business operations simultaneously.
Fixed assets require efficient maintenance to ensure that your investment is protected. In the case of concrete structures, you could have a periodic assessment done on your building by experts like K&E Flatwork so that any damage beyond normal wear and tear is remedied as soon as possible to prevent asset value from depreciating. Keep your sidewalks and parking lot in mint condition as well. A well-maintained building and environment is easier on the eyes and markets your business better to a potential customer.
2. Buying the right insurance
Insurance on your property, car, and health is an added layer of protection to your assets. Many state laws require all property owners to take out adequate insurance in the event of an unfortunate occurrence. Fire, earthquakes, or even accidents could cost property owners a lot of money in uninsured. Your business could take a hit as a result, and this would be a waste of money as well as an unnecessary business opportunity cost. Take time to research property insurance to understand how taking out one could work to protect property owners.
3. Investing in yourself
The importance of growing in your craft and building value through education cannot be over-emphasized because you are only as good as what you know. The entrepreneur, as the human resource, is the most valuable component in the profit-making process. So invest the money and time in bettering yourself so you can improve at building your business. You can take some courses in business analytics, economics, business communication, or even get an MBA. You can also acquire some marketing skills with a CIM so you can take advantage of the available marketplaces. Also, make it a point to frequently upgrade your qualifications when you get them. This is because there are always new ways of doing things. You’ll be able to keep up with the times, advance yourself and your business as well.
4. Investing in marketing
The notion that a good product by itself will drive traffic no longer holds. Many businesses struggle to retain their customers because they fail to invest in proper marketing structures early enough when they had the momentum. Strategically including ad expenditure on your budget saves you from being blindsided when you do need it. Diversify your marketing options by spreading your options so you can target different customer bases. Younger people are more likely to resonate better with social media, and older people are better reached with in-person marketing. Engage some extra help with in-person marketing campaigns so they can be even more productive. The business rewards will be worth the sacrifice.
5. Paying your debts
This may not seem so important on this list, but having debts is counter-productive to success. You cannot truly count your money as profit if you haven’t paid off your debtors. Owing people is also not a good identity to have. It could make it difficult for you to attract value investors as your credibility, which would be needed to build confidence in your enterprise, will be in question. So, come up with a debt repayment plan and pay off your debts at a convenient pace that would not leave you starving or homeless. Most entrepreneurs start up with loans from family and friends. Because of the personal relationship at stake, it is even more beneficial to you to pay your debts, so relations do not get strained. Some relations might even be willing to reduce your interest rate if you express interest in paying off your loan faster. This will imply increased business profits.
6. Getting the right help
Get help with administrative duties and any other roles that are not your strong suit because productivity will suffer in the end if you attempt to do it all. Do not also go overboard with hiring too many people. This will cost you needless expenditure as you’ll be overspending where you could be saving. First, hire an administrator or secretary to help you stay on top of paperwork so you can focus on making business decisions. Also, invest in a trustworthy accountant. An accountant role goes far beyond the boring task of securing the money. They’ll ensure that your taxes are paid on time, so your business is in the clear with the government. They’ll also keep track of cash inflows and outflows so that you know exactly how much profits you are making.
Additionally, outsource work that you do not need to hire full-time staff to do. A typical example is janitorial and maintenance work. Cleaning and maintenance work are duties that can easily be outsourced to an agency if it does not need to get done every day. Observe your workspace and plan on days the cleaning can get done. If it is something you can get done easily without your plate getting too full, then, in this case, it would be better to do it yourself. The result, either way, will be efficient financial management and increased productivity.
As an entrepreneur, you always need to have a plan and a back-up ready to run despite having limited funds at your disposal. Spending your money in ways that benefit your business will help you make the most out of your venture.
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As a business, providing customers with value for money. However, you mustn’t forget to ensure that your spending generates the best results too. Making your capital work harder will lift a great weight from your shoulders while also enabling you to pass some of the savings onto your clients.
So, how exactly can you ensure that all decisions are made in the best interests of your customers? Here’s all you need to know.
Assemble The Strongest Possible Team
The majority of business matters will be handled by your employees. Therefore, getting the recruitment process under control should be the first item on your agenda. This should be followed by an ongoing investment into their development both individually and as a team. The best ways to achieve this are through training and team building exercises. When they work harder, you’ll get more value for money on a daily basis. There is no stronger foundation for success.
Keep Assets In Good Health
Taking care of your business assets will unlock greater performance levels and prolong the lifespans. Keeping business vehicles in good health with the right gas oil is a significant step in the right direction. Meanwhile, computer system updates should bring telling results too. Even though the daily maintenance can have a very significant impact, you must learn to spot signs of faults. The sooner you act, the sooner you’ll restore their health. This should save a lot of money in the long run.
Research Your Purchases
You already know that customers want to get the best value for money when buying products or services. You should take a similar approach before completing your transactions. Simple ideas like using price comparison sites can work wonders. Likewise, you’ll want to check that any company you plan to do with business can be trusted. Falling victim of fraudulent activity or inadequate supplies will harm the venture and could be very hard to recover from. It’s best to be safe rather than sorry.
Know Your Demographic
Marketing is an area where only the best will do. Efficient marketing should be built around targeting a key audience. It’s impossible to impress everyone, but smarter research and insights will allow you to focus on the people that are likely to purchase. SEO, PPC, trade show stools, printed materials, and social media marketing can all be used to great effect. Remember to analyse the success of every campaign and make the necessary adjustments for ongoing success.
Avoid Bad Debts
While you obviously want to get as many sales as possible, you must not force thing when dealing with repayment plans. Good sales figures count for nothing if the money never arrives. Understanding bad debts and how to avoid falling victim to them is vital. While some people will default on payments, but you don’t want to let this become a major problem. Protect yourself in this manner, and your hopes of maintaining a positive cash flow will be greatly increased.
When the financial elements are under control, you can focus on actively driving the venture in the right direction.
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