Take Advantage of Tax Breaks with IRS Section 179

2017 Deduction Limit is $510,000

It’s great that states are giving out potentially billions of dollars in breaks to corporations moving their headquarters (who definitely needs it, right?), but what about everybody else?  IRS Section 179 allows businesses to deduct the full amount of equipment (and certain software) purchases, up to a certain amount.  This even applies to certain finance options and lease options!  That means, whether you’re considering cash purchase or lease options of your equipment, there may be significant tax benefits for your business.

What does this apply to, for example?

  • Phone systems and related software applications (i.e. call center, unified messaging, or video collaboration tools)
  • Video surveillance systems and related software
  • Equipment (machines, etc.) purchased for business use
  • Tangible personal property used in business
  • Business Vehicles with a gross vehicle weight in excess of 6,000 lbs.
  • Computers
  • Computer “Off-the-Shelf” Software
  • Office Furniture
  • Office Equipment
  • Property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
  • Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes).

What does this all mean?

Depending on your purchases over this past year, you may have remaining dollars left under the $510,000 threshold.  Don’t leave that money on the table!  Make your purchases now so you can take your deductions when you file your 2017 taxes.

We can help fast track your equipment purchases and finalize everything necessary for you to take those tax breaks!

Click here for more information

Country Club Cuts Costs for Health Insurance and Food

Challenge: Maintain high standards as cost and member retention pressures intensify.

Like many country clubs operating in the current economy, costs for this Mid Atlantic client are increasing even as membership is decreasing. Efforts to cut costs while maintaining high-quality member services is a tough balancing act.

On one hand, members may leave if dues, fees and prices increase to offset financial pressures in other areas. On the other hand, if costs are not addressed, quality and service can suffer, putting services and member retention at further risk.

The country club’s General Manager and Executive Chef turned to Expense To Profit (ETP) to help find ways to cut costs without sacrificing service or quality ─ a hallmark of ETP’s consulting expertise.

The many amenities of the high-end country club include golf, tennis, swimming and fitness as well as casual and formal dining and catering for private events.

How ETP analyzes, evaluates information

The first expense ETP evaluated was Health Insurance. While negotiating with the existing provider a 7% reduction was negotiated.  ETP then turned to the market to find competitive alternatives to the existing health insurance offering.  A competitive offering was brought to the client without increasing deductibles or employee co-pays for a 22% reduction in premium. The result was a switch to a better offering costing the Club less.

The second expense category reviewed was food services. Using ETP methodology and a proprietary suite of RFP tools, our Consultants created a market basket with the top 80% of the clients spend. The market basket contained dry groceries; dairy products; refrigerated goods; frozen goods; beverages, meats and seafood; non-food items; and produce.

ETP evaluated suppliers on more than price. Also used were criteria important to the client, including product and service quality, delivery windows, payment terms, incentives and online ordering.

Bottom line: The incumbent Produce supplier cut costs nearly 10% and a new provider reduced expenses for all other goods by more than 28% for overall savings of close to 19%.

In response to the competitive environment ETP created, incumbents “sharpened their pencils” and provided savings beyond what was previously offered. Some existing vendors were retained and others replaced.

What is The DIfference Between an Accountant, CFO & Expense Reduction Consultant

What is The Difference Between an Accountant, CFO and Expense Reduction Consultant
Certified Financial Officer
Expense Reduction Consultant

Compiles your companies financial statements from client-provided data.

Works mostly in the past– using the historical data from your business
Delivers updated financials weeks or months after the close of an accounting period(month, quarter, or year)
Compiles financial statements in accordance with tax  and regulatory requirements and practices consistent with the type of business operated.
The financial statements compiled can be relied upon by third parties,such as banks, creditors and investors.
Assumes you (the owner or CEO) are going to read and understand the financial statements as delivered.
Does what they are hired to do – generally Bookkeeping,Taxes and Audits – which could also including mid-year tax planning, quarterly estimates, and appropriate posting of expenses.
Is compensated regardless of success or failure of your business.

Plans,considers and decides how financial transactions will be booked, consistent with the objectives and strategies of the business.

Plans,forecasts, budgets and projects the future financial performance of the company conforming to the company’s objectives, strategies and capacity to perform.
Focuses on a clean, quick, and complete closing of the books within days of the end of the period.   Generally monitors on a daily or weekly real-time basis key indicators of performance.
Analyzes results in the context of the company’s objectives, strategies, and owners’ intent for the business. Establishes key indicators that provides early warning for management based on the above criteria.
Works to maximize the value of the business for the owners while remaining within loan covenants, creditor requirements and other financial restrictions.
Makes certain you (the owner or CEO) understand the financials, the trends and the issues they identify. Reviews them line by line with you, if necessary.
Does what he’s hired to do – help you strategize, plan and operate your business to your maximum financial advantage.
Is compensated regardless of success or failure of your business.

Compiles individual spend category analysis reviewing each item purchased by vendor from client and vendor provided data.

Works totally in the past from historical data.  Using this data a baseline report is created to establish a level to measure from.
Delivers comparative savings reports illustrating an implementation strategy on how to effect savings.
Compiles monthly savings performance reports after the close of the accounting period detailing each item purchased, savings achieved as well as any items that might be problematic.
Maintains good communication with your vendors so that the value received and service levels promised are maintained.
Has, at a minimum, a quarterly meeting with you (the owner,CEO or management team) to review the results and to address any concerns.
Does what he’s hired to do – recover overpaid expenses and reduce the chosen spend categories going forward.
Is compensated solely on sharing in the success of finding your company savings.  If they cannot find overpayments or save you money, you pay no fees.
created in Publicate

Hire a Results-Driven Expert

Although expense reduction benefits can be achieved without outside assistance, our experience suggests that better results can be realized by using a specialized consultant. The operative word here is “specialized.” In our view you will be better served if you engage a firm that is:

  • Singularly focused on expense reduction
  • Experienced at the specific spend category level, with specialized resources
  • Independent and unbiased, with category specific benchmark data
  • Mindful of your commitment to quality
  • Confident enough to operate on a contingent basis they don’t get paid unless cost savings are realized

And, determine whether the company you hire is willing to stay on the job to ensure that the expected savings are indeed realized. You need results! Ideas and suggestions are fine, but you should not be left alone to generate, implement, sustain and monitor the savings projected.

How To Conduct A Spend Analysis in 7 Steps


Want to Reduce Your Cost & Time to Hire Employees

By Michael Matalone

As you may be aware, it is of utmost importance to grow your business at a healthy rate which means that you need to keep costs under control. One of the primary problems with reducing the cost of hiring is the difficulty in capturing all of the associated costs that are not obvious. These include the cost of running ads and/or gaining access to the database of various job boards so you can do proactive searches, or the cost of paying a recruiting firm which are all easy to identify.

What is not easily identifiable is the time and costs associated with identifying (searching for resumes) potential candidates, properly screening them, time spent interviewing them, conducting various “tests” on them, on-boarding/training them, and all the other costs associated with ramp up time, as well as lost opportunities during the ramp up time. And finally, when it doesn’t work out with the person you hire, and you have to repeat all of the above to find someone else.

The following are some tips that will help you to reduce your time and cost to hire while simultaneously, hire better people who can help you achieve your growth objectives.

Implement a structured hiring process. When you attempt to hire without a defined process that you and all of your hiring managers are committed too, your time to fill a role may increase which results in costing you more money. These delays can also mean an increase in costly vacant position days (especially in revenue-generating roles). Additionally, being slow to close on candidates who are in high demand may cause you to lose the very best ones which equates to just throwing your money out the window. Stop “winging” it, and/or using the “gut” feel approach. Define a structured hiring process and ensure that all of your hiring managers stick to it. This also applies to applicants. I don’t care if they were referred by your most trusted advisor, every applicant must go through the same process to ensure you minimize your risk in hiring and increase your chances of success.

Ensure a great candidate experience: The talent you want to hire (“A” players) want to work with other “A” players. They are also typically happily employed elsewhere and not looking for a job. You have to motivate them to want to explore your opportunity. Therefore, communicating the opportunity properly is of utmost importance. The lack of a structured hiring process will also negatively impact the candidate experience and may scare away the top talent you want to hire. This leads to low offer acceptance rates as well as tarnish’s your employer brand as they tell others about the bad experience they had. A well-structured and implemented hiring process is critical to hiring top talent!

Clearly define the search criteria: Not doing this properly is like entering a race but not knowing where the finish line is or driving across country without using your GPS or even a map. You’ll eventually get to your destination, but it’s going to take you twice as long and cost you twice as much. The more precise you are about the search criteria for the role, the easier it becomes to find qualified candidates. The mistake almost all companies make with this is spending a lot of time on creating a job description to help accomplish this task. Unfortunately, most job descriptions describe a bunch of tasks and desired behaviors which are pretty useless in finding/sourcing applicants. This also delays the start of your search and extends the time and cost to hire. Defining the search criteria is all about identifying the key words that can be found in a resume or LinkedIn profile. These are based on specific knowledge and skills – not behaviors! There’s a time and place to identify those, but the initial search is not the place!

Don’t waste time interviewing unqualified applicants: Take steps to narrow your applicant pipeline to ensure you and your hiring managers are only spending time with pre-qualified people worthy of your time. Utilize pre-screening questionnaires, personality and skills test to accomplish this. These will help you determine if the candidate possess the required Knowledge, skills and behaviors to be successful in the role.

The HR Director of a community bank in Sonoma Valley CA said that prior to using these pre-screening methods and tools; she would schedule two days at one of their branch locations to interview about 15 teller candidates only to find out that 12 of them weren’t even remotely qualified. Now she only needs to schedule a half day interviewing those 3 that were pre-qualified using these methods.

Structured interview questions: The quality of the question dictates the quality of the response. Realize that candidates want to answer your questions as best they can. However, if you ask a vague question, you will most likely get a vague response. Also, the only way to truly compare candidates is if you ask at least 3 or 4 of the same exact questions to every candidate. Take time to write out well-structured, meaningful interview questions that identify if the candidate possesses the required knowledge and skills to be successful in the role.

Make objective hiring decisions: I don’t care how much you like the candidate, how highly recommended they were, if they have the perfect behaviors, and are a great fit with your company culture – if they can’t do the job, does any of that really matter unless you are able and willing to spend a lot of time training them and can afford the ramp up time. And while you can learn things quickly, it takes about 3 to 5 years to develop the skills on how to apply that knowledge efficiently and effectively to create consistent end results! 

Following the above guidelines will help you make an objective hiring decisions and result in making better hires at a reduced cost and time to fill the role. But even with doing all this you must realize that all hires (and promotions) are a risk. To paraphrase Forest Gump’s momma; people are like a box of chocolate – you never know what you’re gonna get!  Therefore you must do everything possible to minimize your risk and increase your chances of success.

To learn more about the details on this: Download a free e-book:

The Talent Gap: How To Get The Right People in The Right Roles and Sign Up for a Demo of The XP3 Talent System  http://xp3talent.com/

8 Expenses You Can Stop Paying Today

New technologies can save you money in ways you may not have thought possible.  Everyone knows there are two ways to beef up the bottom line. You can make more money—and let’s assume you are trying to do that every day—or you can cut expenses.

Small business owners may think they’re already running a lean machine. They watch expenses every day. But there are always place to trim, always some other way to hold expenses down. In fact, here are eight items that you can easily toss out the window without compromising on quality.

  1. Credit card machine.

Still paying monthly fees on your credit card machine? Heave it out the door. For many businesses, online payment services like PayPal will get the job done just as well, and for those with the need to process physical cards, a mobile credit card processing unit is more flexible and far less costly. If, for security or other reasons, you still require a machine, talk with your vendor to see what else you can automate to trim your costs.

  1. Telephone service.

In an era when many people no longer even have a home phone, some businesses still are amassing major charges for calls. That’s avoidable. You can get a free Google Voice number and set up the calls to be forwarded to an app on a smartphone, tablet or computer which is connected to an Internet service that you pay for anyway. The great thing about this is that you can receive text messages from customers and see my call history/voicemail/text messages all online. Members of your team can also check messages online, respond to messages—make calls directly from their computer—and write notes about messages they’ve replied to. If you are away from the office, you can have the calls forwarded to my mobile phone so you don’t ever have to miss a call. Bonus: No more landline phone bills.

  1. Coffee

Employers consider it a “perk” to supply gourmet coffee in the break room. It used to be Starbucks, now it’s those nifty little Keurig cups. Most businesses still want their employees java-happy, but have ditched retail grind in favor of a bulk delivery service, saving “a tremendous amount of money each month on this employee perk.”

  1. Office space.

Why do we have all these fancy offices, after all? Telecommuting by staying home, or working from a coffee shop or anyplace else for that matter. Maybe as a business owner you won’t get rid of cubicles completely, but you might rent less floor space if employees telecommute, an easy proposition in today’s connected world for many industries.

  1. Everything, anything.

One-way to save money: Just stop paying for stuff. Anyone can barter: Find what you need, see what you have to share. “If you can, trade, trade! What are your skills? What skills do you need? Don’t be ashamed to ask for help.

  1. Fax line.

No brainer. You can fax directly from your computer if needed, but mostly, you can just scan documents and email them—for those not already in digital format. And many VOIP systems offer fax services.

  1. Custom web design.

This one sounds like a steep hill to climb, but you can do it. The most popular option here is WordPress, a consumer-grade management platform that lets you manage your own web presence with minimal fuss. Easy to get started and expandable over time. It even has ready-made themes. Fill in the blanks, there’s your web page.

  1. Expensive software.

Microsoft Office is not inevitable. You can stop paying for the ubiquitous software and switch to the free product Open Office. It does everything Microsoft does and it’s (did we mention?) free. Google Drive/Docs is an option, too.

Cost Reduction A Tough Job For CEOs & CFOs

Cost is a phenomenon that needs to be controlled throughout the life of a company. Cost decisions hold a major significance and are usually handled by senior management executives. The financial stance of an organization, whether small or large, has to be managed by keeping in mind the businesses long-term achievable goals. The CEO or CFO is usually responsible for cost controls with the assistance of other high level staff in each department. Businesses should understand that constant investment doesn’t always guarantee you success. You have to budget, plan and analyze the appropriate monetary needs and then invest accordingly.

When competition increases, you have to make sure of your company’s survival by having a competitive edge. Sometimes companies start losing their profits because they are spending profusely throughout and therefore fail to get the desired results. A CEO, who has an unreasonable view of the demands of consumers and his business needs, is the only person who is able to identify the problem standing in their way.  Bloated spending and improper monitoring of expenses can lead to an immediate downfall of the business.  This is why a cost reduction strategy has to be implemented to counter against the drawbacks that are in your path to success.

Here are some reasons why a cost reduction program should be adopted:

  • To increase your profits
  • To be leaner in your production costs
  • To decrease asset waste
  • To increase productivity
  • To reduce costs on company resources
  • To improve your competitiveness in the market

This is sometimes a difficult task to commit to and there are a lot of complexities and a number of staff members that are resistant to this method. In almost all cases, it is more productive if a CEO adopts a Cost Reduction Strategy first. While we do not get involved in labor reductions it maybe one of the first areas to review for job redundancy. That said, an employee reduction can ultimately lead to a feeling of job in-security in the remaining workforce so tread carefully. We have seen where executives have made flawed staff reduction decisions and cut costs in the wrong areas which could also lead to delaying other critical investments and causing an ultimately slow down in revenue generation. Keep in mind that personnel cost reductions are short lived so there is not usually an actual long-term benefit attached to them.

Implementing cost reduction strategies and plans should not be done hastily and you have to set a reasonable time frame for the process. The CEO or CFO need to identify the categories that will provide a dramatic impact when it comes to cost reduction or else it might not produce the desired output. Inventories can often be reduced but if a JIT (Just in Time) approach is engaged as a solution then the company needs to confirm it has reliable relationships with suppliers or your production could be at risk or come to a complete halt.

If your business is failing, not competitive or you would like to be more profitable then cost reduction is a solution that should to be considered. It is helpful to partner with and expert as doing this internally presents a risk which is not always a sensible option!

Subsequently, we understand that each business has different priorities and risks. Our team examines your requirements and ensures your competencies are satisfied before deciding on recommending a solution. We will manage this process for you and 87 percent of the time we can maintain the existing vendor relationship. Contact us to determine if we can be helpful for you to realize the real potential of your company!

What does it cost to hire an Expense Consultant?

Most consultants that provide expense reduction and recovery services do so on a no cost, no risk contingency fee model.   This means, if they do not find savings nor recover an overpayment, you do not owe them anything for their services. If an Expense Reduction Consultant is successful finding savings for your business or that you over paid for a product or service resulting in a refund, they will be compensated by sharing in that savings or recovery. A shared risk model as described above can be in your best interest as a business owner.

Be aware that this consulting business segment has very few standards. That said, we have found that on recoveries and cost reduction services, it is typical that the sharing percentage is almost always fifty percent (50%). As in all industries there are discounters that will charge less. In the research we have done, we found that the more successful consultants will not provide their services at a discount.

Recently, we were able to recover an overpayment of taxes for a company’s commercial real estate lease.  The landlord simply did not calculate the taxes correctly resulting in a return of $16,548.00 in overpaid taxes to our client, their Tenant.  After receiving the reimbursement from the landlord, we then shared in the success of that recovery with our client.   Our client was elated and never thought we would be able to get the paid money reimbursed and was happy to send us a check for our share (50%) of the successful recovery or $8,274.00.

There are also times when reviews, audits and analyses of opportunities appear there may be savings opportunities or recoveries for clients.  But in fact, it is later determined that the client is actually getting best pricing or has not over paid for products or services.  Again, this is why it is best to hire an outside consultant that works on a contingent basis.  If they find nothing, you pay nothing, thereby avoiding an unexpectedly large financial expenses.

10 Tips to Cut Office Print Costs

Multifunction printerIt might well surprise you to learn that drop for drop printer ink is actually more expensive than Dom Perignon champagne.  If your business deals with a lot of paperwork then it is likely you are spending a small fortune on printer ink.

How should you be looking to save money on your printing costs at every opportunity? Here are our 10 tips to help reduce your printing costs:

  1. Save Money By Avoiding Brand Cartridges.  Don’t be fooled to think you can only use the same brand cartridges in your printer.  This is what the manufacturers want you to think, but in fact you can use any compatible cartridge with your printer.  An excellent way to save money on your printing costs is to switch to non-brand cartridges.
  2. Use your printer less.  This will sound like a really obvious one, but it is the simplest and quickest way to save money on your printing costs.  Get in the habit of only printing what is absolutely necessary.
  3. Tinker with your fonts.  This may not be one you have already thought of but certain fonts use less ink than others.  For example Times New Roman uses less ink that Arial and will save you money on your printing costs. Try reducing your font size to 11 or 10 from the standard 12 and only use bold type face if really required as this will again use more ink.
  4. Print on both sides.  This might not work for everyone but printing on both sides of paper is again a quick and easy way to save money on printing costs for documents, which need to be printed.
  5. Don’t forget to use print preview.  Why not check your document first to see how many pages you are actually going to print?  By using this you can even just print the pages you actually need saving on paper and ink, which is a great way to save money on your printing costs.  Make sure you do this when printing from the web as normally you get a page with the URL of the web page and time of print, which is just an additional waste.
  6. Print using draft mode.  Make sure to set your printer to pint in draft or rough settings so you use less ink and toner.  This is good way to save money on your printing costs as you can always adjust the settings when you need photo quality but there is no point in printing standard documents or web pages in this setting.
  7. Print in black and white.  It is simple to set your printer to only print in black and white.  Doing this be default means you won’t use your color ink or toner, which will save you money on your printing costs.  Additionally, black ink or toner is cheaper to replace than color.  You can then switch to color when it is needed.
  8. Consider getting a new printer.  This may seem a bit mad, but actually it may be worth considering as way to save money on your printing costs.  Technology is advancing and more efficient printers are available.  Old printers use more ink and the cost of their cartridges increase as demand declines. Consider the actual cost per page as the cheaper your unit, the higher the cost per page will usually be. Most ink jet printers are very inexpensive because of the higher cost of liquid ink over laser ink. Think of the razor blade model – a razor company sends you a free razor in the mail knowing you will need to buy replacement blades forever.
  9. Consider a managed print services provider.  If you have multiple devices and print a lot, you should consider hiring a company that provides managed print services. This solution is not something to run from and depending on your volume can be an excellent way to save money on your printing costs.  This is a bit like a phone contract in that you get a certain number of prints per month at a fixed cost.  If you run over the allotted prints allowed, there is an additional charge per copy for exceeding your normal and customary usage. Additionally, you get a service contract for your printer so if anything goes wrong and technician comes and fixes the issue at no additional cost.
  10. Consider buying your ink in bulk.  A lot of online printer retailers offer discounts for bulk purchases. So you are getting your ink cartridges at a lower cost per unit than buying individually. That said, do not purchase more than you can use as you may just end up not saving anything if cartridges go unused and expire only to be discarded.