What's up, tax savers?
My name is Tyler McBroom.
And we are in the middle of a series taking a deep dive
into the importance of payroll for small business owners.
And if you missed the first video,
we covered the high level components of what payroll is.
So go take a look and watch that
if you haven't had a chance to.
I'm Tyler McBroom.
I am the CEO and managing partner of Measured Results.
We're a CPA firm with a big focus
on helping small business owners
all around the country pay as little tax
as legally possible and have gathered some tips
to help you keep your payroll, your finances,
and your business as a whole organized and compliant.
So let's get into those.
First, know your budget.
50% of businesses that start in the United States fail
within the first five years.
And the number one reason that they go outta business is
because they couldn't get a hold of their numbers.
They couldn't.
They were spending too much.
They couldn't build up the muscle and the discipline
to have a budget, stick to it,
and actually become profitable.
So the very first thing you need to do is know your budget,
work it, implement it, plug it into your books,
and monitor that thing like your life depends on it.
So second, know your tax and reporting deadlines.
So there's two things for certain in life,
and that's death and taxes.
And while we don't know what the deadline is for our death,
and thank goodness, we do know what it is for taxes.
And we have no excuse for not knowing it
'cause we're just a quick search away
across the different types of tax deadlines that we have
from figuring out what those deadlines are.
So you've gotta know them so that you can adhere to them
and not rack up a bunch of penalties and interest
by missing them.
Third, know your federal, state, and local laws
related to those payroll and taxes.
Or if you don't wanna do all that homework,
partner with a payroll provider or expert who does.
Working with someone who knows those different entities
and different reporting authorities
that you have to file with
and the different laws is absolutely critical.
Fourth, know your exposure to liabilities
in other areas related to your employees
and managing your workers.
You wanna make sure that you've got HR laws in place
and policies, written policies.
You've got the proper workers' comp coverage.
Fifth, know how you spend your time
because what you measure you can manage.
And a lotta times when you're running a business
and getting a business off the ground especially,
it's 24 hours of chaos every day a week.
And all of the sudden, it's the end of the workday,
and you have no idea where your time went.
So you wanna make sure that you have the habits
and the muscle in place to know where your time is going.
And on that note, how much time are you actually spending
on your finances and your systems and your payroll?
Is it not enough?
Is it too much?
If you're not spending enough time on it,
maybe you need to really look at,
okay, I need to beef up the time.
I need to focus, get my systems in place,
make sure that I'm actually looking at my numbers
and building up that habit and that discipline.
If you're just spending all of your time on it,
that's not good either.
If that's the case and you're just constantly
logging into your bank and checking your bank account
and looking at your books and poring over reports,
you're probably spending too much time on your finances.
And so you need to look at automating it through technology
or hiring it out to get that help.
Number six, know how your employees are spending their time.
This is critical for a couple of reasons.
Number one, it helps you stay compliant.
When you get into overtime laws and proper compensation,
you wanna make sure
that you're having people track their time
properly and accurately.
Second, it helps you figure out where you're profitable
and where you're not in your business.
If you don't have some sort of software or technology
that's helping you track that,
there are some payroll softwares
that actually have it integrated
within the payroll software provider.
So make sure you're looking at that as a factor
when you're going through analyzing your technology
and your systems.
Seventh, know what records
and paperwork you need to collect,
both from your employees, from the taxing authorities.
What do you need to send into the IRS and your state?
And one thing I know about working with business owners is
they're not usually the types that love doing paperwork.
That's not why they wake up every day.
And unfortunately, this is that boring but essential part
of being a business owner, so either do it yourself
or pay an assistant or an admin
to make sure you've got your records
and your paperwork in line.
Number eight, know your books, the best thing you can do
to lower your taxes is actually having a good set of books
'cause it helps you pick up all the deductions
and the expenses that you might have missed
from not being accurate.
The other thing it does is we talked about at the very top,
number one was know your budget.
If you don't know your budget and have a budget
and have that in your books
that you're comparing the actual against the budget,
then you're just flying blind on your business.
So think of your books as a compass.
And then related as it relates to payroll,
is payroll reflected accurately in your books?
Are your records current?
When you cut a payroll run,
is that going into your books with the right wage expense?
Because there's a difference between actual payroll expense,
that gross pay, and what's actually,
what's coming out of the account
to go into your employee's bank account.
And so we wanna make sure
that your payroll expense is accurate as well.
Number nine, know the requirements for loan eligibility.
So one of the coolest things about tax planning is
that we can make you pay a whole lot less tax
than you would have if you didn't do tax planning.
But the downside of it is we can tax plan you
into the poor house on paper,
so that you literally can't even qualify for a car loan
if you handed the lender your tax return.
So you wanna know what you need for any loans out there,
if there's government assistance programs
or just getting a private loan through a hard money lender
or through the SBA.
Make sure that you know the requirements
for loan eligibility
so that you have the proper records in place.
'Cause it's not just about
having the right amount of income.
It's also having accurate, up-to-date, current records.
So that's essential.
And number 10, choose the right payroll option for you.
There are tons of choices out there.
And your decision is gonna be different
depending on how big or small a company you are.
Probably don't want that DIY option
if you're a massive Fortune 100 company.
That being said, you probably,
if you're just getting started, don't need the option
that the Fortune 100 company is gonna choose.
So you've gotta make sure
you're picking the right payroll option
that suits your specific needs.
Now, I know all of this might sound like a lot,
but there are service providers and softwares and people
that can help you through this.
And specifically on the payroll provider piece,
in this next video, we've got an entire video devoted
to how to make those decisions
and choose the right provider for you.
I'm looking forward to diving into that with you,
and we'll see ya next time.
(upbeat rock music)