NEW YORK – Small company owners often go into the new year full of ideas about bringing in new business or building relationships with current clients.
Instead, they should also be thinking about some housekeeping – taking care of employee and financial issues, and making their companies easier to run. Handling issues such as vacation policy or setting up new ledger books in January will help owners avoid distracting problems later on.
Any business that has gone through the holidays too thinly staffed or with employees grumbling about working Christmas Eve should think about creating a vacation and time-off policy before workers start putting in their requests. A policy should spell out how much time off workers get, when they may take it and how multiple requests for the same day or week will be handled.
Human resources consultants say it’s important for employees to know what to expect.
“Set the framework for the entire year,” said Mary Massad, director of human resources product development for Administaff, a Houston-based human resources firm. That way, you’ll “avoid a situation where you have no plan and individuals are left feeling very bad.”
Massad said that in addition to formulating rules for time off, owners should ask themselves what kind of coverage or backup they’ll need when staffers go on vacation. Will fellow staffers be called on to pitch in, or do you plan to bring in help? Again, eliminating any unpleasant surprises by spelling out your plans now will make life easier for everyone.
While you’re thinking about these policies, you might want to be sure that other human resources issues are covered as well. Massad said the beginning of the year is a good time to put together an employee handbook that spells out policies on hiring, firing, Internet use, lateness and discipline procedures.
There are many financial aspects of your business that should be looked at early in the year. One of the most basic has to do with your bookkeeping and ledger system. If you’re not computerized, this is the time to do it, and if you’re already keeping electronic books but want to change your software, now is also the time.
Doug Stives, a certified public accountant and partner with the Curchin Group in Red Bank, N.J., noted that business owners don’t need to invest in a lot of expensive software to computerize their bookkeeping. “If your business is relatively simple, an Excel spreadsheet works just fine,” he said.
But you should have an accountant look over your first entries to be sure you’ve got your books set up right, said Mark Toolan, a CPA with Toolan &Co. Exton, Pa.
“It’s far easier to correct one month’s worth of data rather than 11 months of data,” he said.
A related issue is putting together a budget. Accountants warn that business owners who don’t plan ahead or who don’t know where they stand in terms of cash flow are courting disaster.
“Some people are growing willy-nilly,” Toolan said. “They need to be doing some budgeting. You don’t want things to be getting out of hand.”
Toolan also suggested business owners take steps now to get a line of credit for capital spending, even if they don’t plan to use it for a while. “Don’t wait until you actually need it,” he said.
You also might want to think about making your life easier by doing tax filings and other transactions online. Stives said of handling payroll taxes electronically, “It’s easy. I have yet to have a problem with it.”
Accountants also suggest that owners take the time now to look at their benefits, particularly health care and retirement plans. You might want to consider switching your health care plan to one that’s less draining.
It’s not mandatory to set up a retirement plan early in the year, but doing so means you and your employees are likely to have better returns. Toolan noted that you don’t have to assume the expense and complexities of a 401(k). You can provide for yourself and your employees with a Simplified Employee Pension, or SEP, or a Savings Incentive Match Plan for Employees, or SIMPLE.
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