How to Handle a Small Business Lawsuit

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StrategyDriven Risk Management Article |Small Business Lawsuit| How to Handle a Small Business LawsuitThere are advantages to owning a small business and endless opportunities for success and growth. Becoming a small business owner is something to be proud of, but there are some risks associated with owning any business. While ideally, it will never happen, a small business lawsuit can be an extremely stressful situation. It’s good practice to be prepared for the worst just in case you find yourself facing a legal situation.

Stats show that each year, 35-56% of small businesses may become involved in litigation. You may not have experience handling lawsuits, specifically business ones, but that’s no reason to fret. Here are a few key things know so you can handle a small business lawsuit.

A claim is not a lawsuit

The first important thing to note is the difference between a lawsuit and a claim. If someone makes a claim against your business, it will only involve your insurance company and does not necessitate you to go to court. If the insurance companies settle the dispute between each other than it doesn’t escalate further. If they cannot reach a mutual agreement, it could lead to a lawsuit. It is also possible for a lawsuit not to make it to court if both sides agree to an appropriate settlement. If it does go to court, make sure always to have a court reporter present to transcribe everything, to ensure that nothing is misinterpreted.

Protect yourself with comprehensive insurance

Your business may never face a lawsuit in all your years of operation. Still, you must prepare yourself should the scenario arise. Proper insurance is critical to make sure that your business is covered as much as possible. The most essential type of coverage you can have is general liability insurance. It will cover you from the most common situations that could arise, such as employee injuries or any other injuries on your business property. Depending on your business operations, you may want to look into more specialized packages based on risks your employees or clients may face.

Make sure your business insurance covers courtroom costs, attorney fees, and settlement fees as well.

Obtain a quality business lawyer

As a small business owner, it is a good idea to have a lawyer on retainer. That way, you know you will have a good quality lawyer you can trust on hand if you end up facing a lawsuit. The last thing that you want to do is scramble to find a good lawyer last minute and not have time to do your research.

The best course of action will usually be a settlement because it won’t require you to go to court. That said, always speak to your lawyer first before saying anything as they will be able to advise you on the best action to take and guide you through the whole process. Even once you speak to your lawyer, you should still avoid any direct contact with the plaintiff. Always make sure that any conversations you have with the person suing you go directly through your lawyer.

Lastly, the best thing you can do after a lawsuit is to learn from it. Use the experience to ensure it doesn’t happen again by making the necessary adjustments in your business.

4 Things You Should be Looking for When Picking a Contract Management Solution

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StrategyDriven Managing Your Finances Article | 4 Things You Should be Looking for When Picking a Contract Management SolutionBad contract management costs companies in many different ways, and it exposes them to unnecessary risks. This is why contract management is essential to the long-term success of your business. Fortunately, there are many contract management systems on the market to choose from. The challenge is finding the right one for your business’ needs. Here are four things you should be looking for when picking a contract management solution.

Ease of Use

Many firms are reluctant to adopt a contract management system because of the time, money, and effort involved. When picking an option, you aren’t just spending money on a software application and its support, you also have to train people how to use it. This is why ease of use is one of the top factors to consider when researching contract management systems.

Lifecycle Management

Before you start shopping for contract management software, it is important that you understand what contract lifecycle management is and how important it is. It isn’t enough to have a decent data repository. You need a system that manages contracts from initial negotiation to completion. This ensures that salespeople present contracts from approved templates, have any changes to the standard contract approved, and save the final version in an accessible database.

The ideal contract management system ties into your task management system and email servers. This allows your legal department to know what contracts need to be reviewed as soon as possible and how much work is in their queue. Salespeople can also look up the state of the contract, and the system may send a final version of the contract to the customer for approval or just their own records. The best contract management systems notify management when contracts are up for renewal or may no longer be legally valid.

The ideal contract management system is customisable, allowing you to integrate it with your finance, customer relationship management, and enterprise resource planning system. Then your customer support staff can view a customer contract when someone calls in with a complaint, and approved contracts automatically feed into your financial planning systems.

Collaboration and Sharing Capabilities

A good contract management system should allow you to create, assign, manage, collaborate, and execute in minutes instead of days. For example, a good tool would allow a salesperson to upload a draft contract to the repository and have it available for legal review within moments. Team members should be able to share relevant documents and discuss them in real-time, and approval should arrive within minutes of legal signing it off.

Risk Management

You should also make sure that the contract management tool you choose has risk management capabilities. For example, the tool may notify you when contracts expire so that you don’t continue to work without a valid legal agreement in place. Or it may warn you when there are risks associated with various contracts. Not all contract management systems have legal analytics built-in but knowing when contracts are now null and void due to changes in the law allows you to work on mitigating that risk or renegotiating the contracts.

Email and spreadsheets aren’t good enough for managing your contracts. Choose a contract management system that streamlines your administrative processes, manages risk, and provides the legal protection you expect from your contractual agreements.

How To Deal With Unpaid Invoices In Business

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StrategyDriven Customer Relationship Management Article |Unpaid Invoices|How To Deal With Unpaid Invoices In BusinessManaging cash flow is so important in business, which is why unpaid invoices are such a huge problem. If you have a lot of customers that are not paying up on time, that will soon lead to cash flow issues and it could mean the end of your business if you are not careful. All businesses deal with a few tricky clients at some point, but if it is becoming a regular occurrence, you need to do something about it. The good news is, there are some simple ways that you can get your customers to pay up on time. These are some of the best ways to avoid unpaid invoices and improve your cash flow.

Provide Clear Invoices

If a customer doesn’t want to pay up, they will try all sorts of tricks to avoid the invoice. They may say that they didn’t know that the invoice was due or they might challenge some of the items on the bill to delay payment and try to get a discount. You can avoid that by writing a detailed and clear invoice that breaks down exactly what they are paying for and when the invoice is due. It’s also important that you keep a clear paper trail when negotiating the price and sending them quotes so they cannot claim that the invoice is higher than agreed.

Consider Recurring Payments

If you have clients that use your services on a regular basis, consider asking them to set up a direct debit for recurring payments rather than issuing a new invoice every month. It makes life easier for you and for the customer and if you use recurring billing software, it’s simple to manage. You can make the prospect more attractive to customers if you offer them a small discount in exchange for making recurring payments every month. This gives you a good steady income, which makes managing your cash flow a lot easier.

Build Good Relationships With Customers

If your customers like you, they’ll be more willing to pay up on time, but if you don’t have a good relationship with you then they will be far more likely to leave invoices unpaid. It’s important that you build good relationships with your customers from the outset, and if you do, you will find that you don’t have an issue with unpaid invoices.

Don’t Be Afraid To Chase People Up

Sometimes, business owners are afraid to chase people up because they don’t want to damage their relationship with customers. However, if you allow people to get away with paying invoices late, they will take advantage of you and the problem will only get worse. It’s best to be clear from the beginning and if people have not paid, call them up and ask them where the money is. In most cases, people will pay up and if they decide that they don’t want to work with you again in the future, you just have to accept that and consider it a win because you don’t have to deal with a tricky customer anymore.

Follow these steps and you should be able to avoid any unpaid invoices in the future.

7 Things Tax-Savvy Business Owners Should Do Before Year-End

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StrategyDriven Managing Your Finances ArticleIt’s not too late for you to take steps to minimize your 2018 business taxes!

At the end of the year, many small business owners start looking for ways to lower their business taxes using a TFSA calculator. Although the best tax plans are usually implemented year-round, it’s not too late for you to save in 2018 while you begin to plan for next year.

Here are just a few of the many tax-saving strategies we recommend to our business clients at year-end:

1. Time your income and expenses

Although it is difficult to predict how your business will fare next year, we can review your books and business plan to see whether receipt of income and payment of expenses would benefit you more this year or next. If you have had a great year, you may wish to decrease your revenue by delaying some of your December billings until early January. If you have the cash available, you can also increase your deductions this year by (1) purchasing equipment that you were planning to buy in the near future; (2) stocking up on office supplies and other items that you utilize on a regular basis; and (3) pre-paying your business mortgage, rent, insurance and/or professional subscriptions.

2. Depreciate your new equipment

The Section 179 deduction has been expanded – business are now permitted to take a first year deduction of up to $1 million on purchases of qualified equipment. Above this amount, the deduction is reduced dollar for dollar until it completely phases out at $2.5 million. For equipment expenditures that either don’t qualify under or exceed the limits of Section 179, you can take an immediate first-year deduction of 100% of the adjusted basis of the property under the new bonus depreciation rules. The new law also allows you to take this depreciation allowance for equipment that you purchased second hand – just make sure to put it in service before the end of the year. (Well, if you want to estimate how fast the value of an asset decreases over time, then simple try this smart depreciation calculator that helps to calculate depreciation by using four different methods. This depreciation rate calculator allows you to determine simple, auto, and property depreciation instantly.)

3. Set up a 401(k) plan

You are entitled to a tax credit of up to $500 per year towards the setup and the first three years of administering a company 401(k) plan. You also receive a deduction for all amounts put into the plan, which are tax-deferred until you or your employees withdraw funds.

4. Give bonuses to your staff

You can lower your business taxes and make your employees happy with gifts or bonuses at year-end. Keep in mind that while S Corporations can deduct the full amount, C Corporations can only deduct bonuses to shareholders with a 50% or greater interest in the company. These deductions are not available at all to LCCs, partnerships and sole proprietors.

5. Take all available deductions and write-offs

Remember that pass-through entities such as S Corporations and Partnerships are now able to take a 20% off qualified purchases under Section 199A of the new tax code. Also, don’t forget to take a deduction for business loan interest and to write off bad debts and obsolete equipment!

6. Buy energy-efficient business property

Be good to the environment and yourself (through tax deductions and credits) by purchasing energy-efficient business property, vehicles and equipment.

7. Meet with your tax professional now!

“It is vital that you plan your taxes before the end of the year in order to utilize as many new benefits of the new tax law as you can,” says Moskowitz, “otherwise, you may regret missing a tremendous benefit because you only found out about it after December 31st.”

So before you go any further, check out Simplex Group and find all the tax permits and services that could benefit your business.

About the Author

StrategyDriven Managing Your Finances ArticleSteve Moskowitz founded the full-service tax law firm of Moskowitz, LLP with the firm belief that everyone with the drive and commitment to start and operate a profitable business should not be held back by fear or ignorance of the tax code. In fact, one of the core principles of our firm is that individuals and businesses should learn how to benefit from it.

About Moskwitz, LLP

The tax lawyers and other financial professionals at Moskowitz, LLP offer comprehensive assistance to businesses large and small, including year-end business tax planning services. Located in the heart of the financial district of San Francisco, Moskowitz LLP works with businesses of all sizes. To learn more about Moskowitz, LLP and how we can help you legally save taxes, visit our website at: https://moskowitzllp.com/ or call toll-free at: (888) 829-3325.

It’s Time To Tighten Our Belts : 4 Essential Money Saving Strategies For SMEs

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StrategyDriven Managing Your Finances Article |Money Management|It's Time To Tighten Our Belts : 4 Essential Money Saving Strategies For SMEsNo matter what your company’s vision and values, proper money management will play a significant role in its success and longevity. Unfortunately, there are so many ways that your business could be hemorrhaging money unnecessarily. The good news is that educating yourself on these issues and their solutions can help your company tighten its belt, and still work effectively and productively.

Check the efficiency of your IT

Few businesses operate without the extensive use of complex IT systems. What that means is if you want to keep outgoing costs low, your system’s performance and network efficiency need to be as refined as possible.

Of course, perfecting your company’s IT system to the point where there is no redundancy is usually a task that is beyond your in house IT support. Fortunately, there are specialist managed It services like
Navious Technologies out there that can help you do just this. Something that means the entire infrastructure of your business will run as efficiently as possible. Therefore thus preventing downtime and saving you valuable business resources.

Cut back on overheads

Another way that your business can significantly reduce its outgoing costs is to cut down the amount you pay for overheads. Of course, traditionally, this was done by using fewer material resources such as paper, office supplies, and even manufacturing supplies.

However, in our connected world, there is an even easier way to drastically reduce overhead costs and its setting to a remote working model. After all, if your employees work from home, a costly premises is no longer needed. Plus, many employees will see this as a benefit as they no longer have to count on money, time, and making a positive difference to the environment. It really is a win-win situation.

Review your purchasing policies

Next, if you want to tighten your company’s belt, be sure to take a long hard look at your purchasing policies. In fact, there are several things you can do here to slash outgoings.

The first is to make sure that instead of buying in dribs and drabs, you stock up on the most used resources in bulk, making sure you buy them when the price is low.

Additionally, making sure you have a good relationship with your suppliers is critical. Then you will be able to negotiate longer payment terms, and bulk discounts, which can make a massive difference to how much you end up paying out.

Automate

You can also make significant savings by choosing to automate many of the tasks your business needs to do in a day. Of course, automation isn’t just about investing in robots for the warehouse or production line. In fact, it can now be put to work in just about any type of business there is.

The reason being that many online tasks can be automated with the right software. Something that means your employees will be free of the mundane and reactive tasks that can damage morale, and that you get to make significant monetary savings as well.