7 Common Mistakes to Avoid When Doing Payroll for a Business

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StrategyDriven Managing Your Finances Article |Payroll for a Business|7 Common Mistakes to Avoid When Doing Payroll for a BusinessDo you have employees? That’s great! All you have to do is cut them a check to pay them, right?

Unfortunately, it’s not that easy. That’s what has led the payroll industry to grow to a size of $81.5 billion.
If you’re handling payroll for a business yourself then you need to know what to look out for, so you don’t make any mistakes. Keep reading to learn seven common payroll mistakes that can cause problems for your business.

1. Missing Deadlines

When you deal with payroll, your employee paychecks aren’t the only money that you’ll be paying out. You also have to deal with government taxes.

You need to make a note of when your federal and state tax deadlines are for payroll. If you want to avoid missing your deadline, then either set reminders or automated payments for your tax obligations.

2. Not Keeping up With New Laws

Laws for payroll don’t stay the same. In fact, they change all the time. If you don’t stay up to date with what’s happening with the current laws, then you’re asking for trouble.

By staying up to date, you can make sure that you’re always following the law. You won’t have to worry about your next audit finding something that you missed.

3. Not Sending Tax Forms

Every penny you pay your team gets reported to the government. Shouldn’t they be the ones who send out your employee’s earnings for the year?

Wrong. That’s up to you to do. Make sure that all your employees receive their 1099 forms by the due date.

4. Bad Records

It’s required by law to keep all your records up to date, accurate, and available for several years. If you don’t, then you can face fines from the government.

This is why it’s necessary to invest in a record-keeping system that will keep things up to date. But keeping records in order isn’t easy. Contact a payroll service to get help getting your data in order.

5. Ignoring Garnishes

It doesn’t feel good to take payment from your team’s checks. But if you get a request from the government, you need to take action immediately.

Any mistake here can lead to a time-consuming process to correct.

6. Miscalculating Overtime

Overtime pay isn’t optional when you have hourly employees. You’re required to pay them for any extra time they work for your company. If you don’t keep accurate records of overtime hours, then you’re going to have problems paying people for their time.

7. Not Keeping Backups

If you’re using cloud software to handle payroll, then you don’t have to worry much about data loss. But if you manage everything locally on your office computers, then you run the risk of losing data.
Make sure to put a backup plan in place to save your data in case this happens. A backup service costs money but will save you time and money in the long run.

Payroll for a Business Isn’t Easy

If cutting a check to your team was all it took to do payroll, then the payroll industry would be doomed. But payroll for a business isn’t that simple. Make sure you avoid the mistakes above so you can prevent costly mistakes.

Are you looking for more business advice? Keep browsing our blog to read through our latest tips.

What are the Best Working Capital Loan Options in 2019?

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StrategyDriven Managing Your Finances Article |Capital Loans|What are the Best Working Capital Loan Options in 2019If you are operating a start-up, you may face problems with managing the cash flow of your business efficiently and may have to rely on working capital loans. Working capital loans are not utilized for long periods or the purchase of noncurrent assets due to their short repayment period. Instead, they pay for the operational costs of a business and is a good indicator of the short-term health of the business. Every industry goes through a period where the revenues plummet and affect the amount of working capital available.

In an ideal scenario, you might be able to increase your working capital by generating more revenue, but this is not possible at all times. Instead, businesses operating on a small scale rely on loans to satisfy their capital deficiency. The following working capital loans mentioned below are being used by small businesses in 2019 to stabilize their cashflows.

1. OnDeck:

OnDeck offers working capital loans to borrowers with a minimum credit score of 680 with rates around 9%. The repayment period is relatively long around 36 months, and customers can borrow up to $100,000. It also offers a line of credit which has a repayment period from 6 months till one year. You can apply for OnDeck online with the application taking less than ten minutes to be completed. To qualify for OnDeck, you must have a credit score of at least 600 and must have a business history of one year. Although the requirement of $100,000 is not ideal for start-ups, most small businesses can meet this requirement.
While OnDeck generally has positive revenues on the website due to the easy financial process and excellent customer relations, it does charge an origination fee of up to 5%. Along with that, even if you repay your loan early, the interest rate will remain the same for the entire term of the loan.

2. LoanBuilder:

LoanBuilder is another working capital loan for small businesses that have been in operation for at least nine months. The repayment terms are from 13 weeks to 52 weeks, and you can borrow up to $500,000. This provides flexibility to the borrowers since they do not need to worry about immediate payment. LoanBuilder offers single fixed free loan pricing on working capital loans. However, you do not benefit from paying the loan early since the interest rate remains the same. You have the option to choose the repayment term, although long term options come with additional fees. In order to qualify for LoanBuilder, you must have a credit score of at least 550 and above with gross revenue of at least $42,000. Apart from that, your business must be located within the United States and does not have a history of filing for bankruptcy. The perception about LoanBuilder is generally positive and is praised for its quick process and efficient response. Customers who left negative reviews said the pricing was too expensive.

3. BlueVine:

A BlueVine loan is suitable for businesses that have unpaid invoices within 90 days. BlueVine offers a loan of up to $5 million with weekly rates of 0.25%. There are no origination fees attached to BlueVine, and you do not have to apply for it again. This differs from other types of loans as it does not have any termination fees either. To qualify for a BlueVine, you must have a credit score of at least 550 and a gross revenue of $100,000. You can apply for it online with the application requiring less than 10 minutes to be filled. Although BlueVine offers the highest funding amount, your business must invoice other government businesses to qualify. If you do not invoice B2B customers, then the working capital loan would not work for your business. BlueVine generally has good reviews from customers who were impressed by its services and customer support team. Critical reviews usually came from those customers who were denied financing.

4. Funding Circle:

Funding Circle is an outstanding working capital loan for businesses needing medium-term loans with low rates and monthly payments. Although it does not have a minimum credit requirement, you need a score of at least 620 to qualify. You can borrow up to $500,000 for rates as low as 5%. The interest rates are determined during the underwriting process and generally depend on the repayment terms. The qualification terms are more stringent compared to other loans because your business is funded by a variety of investors. Some of the requirements consist of a credit score of at least 620 and an annual gross income of $120,000. Your business also should have been active for at least two years. You can apply for Funding Circle loans online, and the application gets processed in ten days. The reviews of Funding Circle are generally positive since people appreciate an easy process and transparent fees. People who criticize it do it due to its documentation process.

5. National Funding:

National Funding is suitable for those customers who have a poor credit rating. This is because you can borrow up to $250,000 with no credit score requirement. Although you can borrow a large amount, the interest rates are high compared to other available loans. The best option is to contact National Funding for a customized quote. The qualification requirements are almost negligible with no credit requirement, and you must be doing business for at least one year. Your monthly credit card transactions should be over $3000. The reviews for National Funding are mixed with customers praising its quick process but criticizing its high-interest rates.

Conclusion

For a growing business, having enough working loans is critical for its daily operations. According to online reviews, the following are the top loans available in 2019 for small businesses to capitalize on. Based on the analysis, OnDeck is generally suitable for small businesses since its terms are customer friendly. However, those customers with poor credit ratings can utilize national funding to get working capital for their business.

The most common financial mistakes graduate entrepreneurs make

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StrategyDriven Managing Your Finances Article |Graduate Entrepreneurs|The most common financial mistakes graduate entrepreneurs makeAmongst the world’s ambitious graduates are some of the next generation’s entrepreneurs and innovators. Some will have a carefully defined business plan. Others will have little more than a dream and bundles of enthusiasm.

Starting out in business straight after Uni isn’t easy. For the bright-eyed grad, a lack of life experience and industry expertise, along with a mountain of student debt can make the business journey a particularly tricky one. A recent report by CNBC warns that with graduate debt at around $30,000 for many students, starting a business is a huge challenge. It really is no wonder graduate entrepreneurship is declining.

As well as student debt, there is also the issue of financial know-how. Let’s take a look at some of the most common financial blunders graduate entrepreneurs make.

1. Not having a business plan

Accounting firm, OS Accounting, say “One of the mistakes a lot of entrepreneurs make when launching a start-up, including graduates, is to forge ahead with an idea without proper planning. Starting a business without a business plan is risky. It’s the fundamental starting point for testing whether or not a business idea is feasible.”

A business plan sets out the financial and operational objectives. With a well-developed business plan, entrepreneurs are also much more likely to attract angel investors or secure funding from venture capitalists.

2. Overestimating revenue

Brimming with optimism, entrepreneurs are renowned for overestimating revenue. In fact, for many eager graduates launching a start-up, revenue expectations are unrealistic. David Cummings, an Atlanta-based tech entrepreneur who has founded 10 companies, understands all too well the pitfalls of overestimating revenue.

3. Overspending on set up

A whopping 29 per cent of start-ups fail because they run out of cash. Early-stage entrepreneurs face specific challenges as they often lack business skills. Many entrepreneurs overspend on office space and tech tools.
With remote working becoming the norm, the virtual office, where possible, can save a lot during set up. Taking time to properly research tech tools can also save money. Various pieces of tech often overlap – as they are charged per user, spend can easily go up if this isn’t given attention.

4. Misunderstanding the difference between profit and cashflow

Things can look good on paper, but if a business runs out of cash it is in trouble. Poor cashflow planning and running out of cash is, according to Forbes, in the top 10 reasons why entrepreneurs fail.

Not all entrepreneurs have savvy accounting skills when they set out in business. Some basic accounting knowledge can prove invaluable. Most businesses record revenue and expenditure when it is incurred (rather than when invoices are paid). This means it is possible for a business to be profitable on paper, but not have any cash in the bank.
Business coach, Stever Robbins says the difference between profit and cashflow is often the difference between success and bankruptcy. Being able to read the accounts and understand the cash position in a business is vital.

5. Mixing personal and business accounts

Running a business through a personal bank account is never a good idea. Business banking should be kept separate and the importance of this is all too often ignored by eager graduates who want to avoid the expense of a business bank account.

Mixing personal and business bank accounts can also turn out to be a nightmare when it comes to tax reporting. It makes it easier to miss expenses and could be an issue if the business is investigated by the Inland Revenue.
In an article for Inc., Levi King, entrepreneur, CEO and Co-Founder of Nav, advises never to mix personal and business finances for the following reasons:

• Separating business and personal finances helps you look legit
• It helps to achieve a stronger business credit score
• It helps with tax reporting

6. Not budgeting or planning for tax

All businesses have tax obligations to the state and locally, and tax bills can hit fast and hard. Ignoring taxes is one of the top business budgeting mistakes. Seeking tax advice prior to starting a business is also something many entrepreneurs fail to do, but with the right tax strategy, tax liability could be considerably lower.

7. Not having an emergency fund

Cashflow is king when it comes to business. Many graduates finish their education in debt, not with an emergency fund they can fall back on during hard times. The U.S. Bureau of Labor Statistics reports that approximately one-third of all businesses fail within the first two years because of cashflow issues.

Summary

In spite of the pitfalls, there are many advantages of launching a start-up as a new graduate. New grads actually make great entrepreneurs. Many graduates are both innovative and more financially-savvy than they get credit for. The student mentality of surviving on a pittance can also bring business benefits.

There are lots of financial considerations for graduates, including how to repay student loans and finding a deposit for somewhere to live. That doesn’t mean graduates can’t start their own business. Here are 8 reasons why as a graduate you might want to give entrepreneurship a go. Remember, business planning is key!

How to Boost Your Personal Finances

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StrategyDriven Managing Your Finances Article |Personal Finances|How to Boost Your Personal FinancesThere are many things in life that rely heavily on your personal finances. The nature of your accommodation is determined by your income, while your ability to get loans and credit opportunities is hampered by a poor credit rating. In short, your personal finances, if healthy, can promote your overall wellbeing – and if poorly managed, your personal finances can cause you a great deal of discomfort. This article is all about making your bank balances and financial health that bit better, helping you achieve more in your day to day life.

Budgeting

It goes without saying that you should be careful, if you wish to be responsible with your cash, to spend within your means. The best way to ensure you’re doing this responsibly is to draw up a budget which allows you to keep track of your monthly, weekly and even daily spending.

This used to be a drag – involving the laborious filling in of spreadsheets on your computer – but nowadays it’s a simple task of downloading one of the world’s leading budgeting apps and allowing your spending data to fill in from your banks automatically. Some of the new, digital-era banks also provide this service, breaking down your spending to show you which spending habits are costing you cash.

Understand Your Options

Now, it’s never worth getting a loan unless you actually need one. Of course, a loan can help you get a business off the ground, or can help you meet your bills if you have a particularly costly month that means you’re out of cash before your wage comes through. But they’re something you should be careful not to over-indulge in, as debt can completely scupper your great plans when it comes to your personal finances.

All that said, there are some terrific short-term loan options to keep you out of trouble when it suits you most – like when the landlord’s knocking and asking for your rent. Check out providers like MaxLend, who can provide modest but much-needed same-day loans to keep you ticking over when you feel most concerned that you’re not quite going to keep your financial boat above water for the month. Just make sure that you’re able to keep up with your loan repayments before borrowing any funds.

Income Streams

Most people rely on a job to make their money, while others have two and sometimes even three jobs. This is usually enough – just – to keep you in decent financial health. But to boost that health, you should consider some different methods that might make you money.

The options available here will likely reflect your experience, skillset and expertise. For instance, a bid writer at a construction firm might well be able to write freelance for extra cash. A graphic designer can do personal project work on the side, selling designs on the internet, while others can make handicrafts and sell them on their own personal website. Some individuals even choose to start a small e-Commerce business online, letting it tick over while they’re at work to the point at which their personal finances are much improved.

These three tips are perhaps the most crucial to help you make the most of your personal financial situation as you move through life.

What Do You Need to Get a Payday Loan: A List of the Requirements

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StrategyDriven Managing Your Finances Article | What Do You Need to Get a Payday Loan: A List of the RequirementsIf you’re in a financial bind and need a little cash before your next paycheck, a payday loan may be just what you need.

Payday loans, also known as a cash advance, are gaining in popularity as a fast way to get quick cash for an emergency situation. Even so, many people don’t understand how this type of loan works and what you need to get a payday loan.

So if you are thinking about getting a payday loan and are unsure of what you need to get one, keep reading to learn about what do you need to get a payday loan and how much money you can borrow now.

What Are Payday Loans?

Let’s start by explaining what payday loans are and how to utilize them best.

Simply put, a payday loan is a short-term loan that is intended to be repaid in full with your next paycheck. These loans are usually for a small amount between $300 and $1,000. They are a popular loan option for those with no credit or a bad credit score.

Note that the cost of a payday loan can be very high, which is why it is so important to pay them off with your next paycheck. The costs can rise exponentially with each pay period that passes without paying the balance in full.

It’s good to know all the benefits and risks of payday loans so you can make an educated choice that’s in your best interest.

What Do You Need to Get a Payday Loan

Many states regulate payday loans differently resulting in different qualification requirements depending on where you live. But typically, you only need to meet a handful of criteria.

You must be at least 18 years old and you will need a valid government identification, your Social Security number, proof of income (pay stub) and an active checking account. If you are applying in a payday loan store, you will need a personal check. If you are filling out an application online, you must enter your email address.

When you get a payday loan, you must submit a personal check for the entire balance to be paid on the date of your next payday.

Even if you meet the above requirements, you can be denied a loan for a number of reasons. For example, you may not earn enough to borrow money. Most lenders want you to earn at least $500 per month.

The lender also considers are the length of time you have been at your job and how recently you opened your checking account.

They may also reject your applications if you have a recent bankruptcy or bounced checks. And most companies will not issue you a loan if you already have an outstanding loan.

How Much Money Can I Borrow?

The amount of money you can borrow also varies state by state and in how each state regulates loans. Most states limit how much can be borrowed, which usually falls between $300 and $1,000.

Lenders determine the amount you can borrow the same as other lending institutions assess risk for other loan products. Payday lenders take into account your income and expenses along with your lending history to determine an amount they know you can reasonably expect to pay back.

The Bottom Line

So what do you need to get a payday loan? Not much, really. You must be at least 18 and meet the handful of requirements listed above.

Before you get a payday loan, make sure you will make enough on your next check to repay the full balance while also meeting your other obligations. If you are unable to repay the loan for a few more pay periods, the resulting interest gains could result in a debt trap for you.

Payday loans are best used when you need emergency funds, and you have more than enough to repay the loan with your next paycheck.

Keep browsing our site for more valuable and helpful articles.