Terry Eve, B2B CFO®
Providing B2B CFO® services in Jupiter, FL and surrounding areas

A recent article on Fox Business News titled “Upcoming Changes to W-2 and 1099 for Small Businesses” by Kate Rogers highlighted a number of useful points regarding W-2 and 1099 compliance for the 2011 tax year. (Read Article)

A quick summary from the article based on a webinar held by Kyle Janssens, brand manager at Greatland:

Changes to W-2s

“No. 1: Social Security tax withholding: The withholding amount is dropping from 6.2% to 4.2% for wage payments, Janssens said.”

“No. 2: Advanced income credit: This credit has been eliminated from the W-2 form and no longer has to be reported. There is also information related to wages and tips that is now obsolete, he said.”

“No. 3: Employee-sponsored health care: There is a new code for the cost of employee-sponsored healthcare, Janssens said, which changes what employers must report on their W-2 form this year.”

Changes to 1099s

“No. 1: The repeal: On April 14, part of the Patient Protection and Affordable Care Act was repealed, so small businesses no longer have to report goods purchased. This was a big area of concern for small business owners, Janssens said.”

“No. 2: Truncating numbers. A pilot program which truncates an individual’s Social Security or tax ID number has been extended, which replaces the first five digits with and X or asterisk, in order to prevent identity theft, Janssens said. This has been extended for the rest of 2011 and 2012 on 1099 and 1098 forms.”

Janssens also had the following recommendations for general preparations of both forms:

• “Do: Use black ink only. “
• “Do: Include decimal points for monetary values”.
• “Don’t: Fold forms or staple them together. “
• “Do: Provide your employees with instructions for both W-2 and 1099 forms.”
• “Don’t: Throw out forms.” (keep for at least 3 years)

The article indicates the changes may be confusing to some. Make sure you get the forms early when they become available and make sure you have obtained the software instructions on prepartion from your software vendor. You may need to capture information differently as well, so allow time for that exercise as well.

Planning will help alleviate the stress associated with the changes. If you need advice or assistance, give me a call.

In A Fox Small Business Center article on March 4, “Should Businesses Hire Based on Personality?” author Toddi Gutner looks into the use of personality profiles as a means of screening candidates for employment. (Read Article)

Her article shows both champions and naysayers of these tools. The “naysayers” look at alternatives and the “champions” sing the praises. Both make good points.

I am a big fan of profiling tools. I have used both DISC and the Predictive Index. There is also Myers Briggs that I have taken, but not actually used as a tool.

This is but one touch point in the hiring process, but an important one. Some personalities are better suited for a role than others. Sales personnel may have either a “Hunter” personality or that of a “Farmer”. The type of sales position dictates which sales personality type best suits the specific situation.

Accountants generally have a different personality yet again. That’s why they are not typically sales people!

However, stay away from inexpensive online tools. Rather invest not only in testing but the consulting and training necessary to properly administer and interpret the results.

Ms Gutner goes on to talk about why testing is effective and quotes “Scott Erker, a senior vice president of Development Dimensions International, a global human resources consultancy.”

“Erker argues that personality testing makes it more likely that a company will find a
candidate who fits the position. “These tests enhance the predictive nature of
placing people in jobs, and that’s good for the company,” he says. If employees
feel they’ve found the right job, the turnover rate is likely to go down — and
that saves companies money.”

And this in the end is what testing is all about, increasing the probability of a candidates success in the position they are hired for. But it is only one of several touch points. It is not a substitution for good interview techniques (though use of profiles may may change the questions you ask in an interview). Nor is it a substitution for other HR hiring best practices.

But personality profile testing is a valuable tool in the hiring process and can yield significant improvements in the successful hiring of candidates. Need contacts for these tools. Contact me and I will forward experts in the use of these tools.

A March 4th Fox Small Business center article, “For Many Entrepreneurs, Life Begins at 50” by Rieva Lesonsky)(READ ARTICLE) reminded me of why I joined B2B CFO^® 5 years ago to Provide Part-Time CFO services to South Florida businesses in Jupiter, Florida.

For the over 50 Entrepreneur Ms. Lesonsky listed 5 potential avenues :

“Partner up”

“Buy a business”

“Become a consultant”

“Buy a franchise”

I have considered (and/or tried in some cases) all of these avenues. So when I decided to leave my last employer, I decided to look into consulting. I had spent a good portion of my career with a consulting firm but worked internally in finance and administration.

I believed that CFO consulting in particular was a good use of my skill set developed in over 35 years in business (Yes I started young).

I then began a search for a company in that industry. Here is what I quickly learned:

1)    Not all CFO firms are equal;

2)    Not all CFO firms serve a market that best uses my skill set;

3)    Not all CFO firms have my core values of Honesty, Integrity and Objectivity:

4)    Not all CFO firms have a proven marketing and selling system; and

5)    Not all CFO firms provide the flexibility to pursue your market space aggressively.

I believed then as I know now that B2B CFO^® offered these things and more! I really liked the B2B CFO^® model, the no cost or obligation analysis was consistent with my prior consulting experience, long term client relationships was the same model we used in public accounting, and providing part-time CFO services rather than interim CFO services makes huge sense for the market we serve. In particular, I enjoy the flexibility to be an entrepreneur. However, that does not mean that interim CFO opportunities don’t present themselves from time to time as well!

Ms. Lesonsky makes a couple of other points including “assessing risk”. I felt the risk was worth the return and believed I was more than qualified to be successful in this industry. But knowing your risk tolerance is key in any entrepreneurial venture. She also mentions  “two final caveats”

1)    “Don’t think you know it all”

2)    “Make sure you are current on new ways of doing business””

With over 5,000 years of cumulative experience within B2B CFO^®, I was confident I did not need to know it all and that I could contribute from time to time as well. That means our clients have access to significant amounts of experience and that there are few if any issues or problems that someone in our firm has not previously encountered and solved!

Finally, Ms. Lesonsky closes with this statement that I loved: “As the old saying goes, “Knowledge in youth is wisdom in age.”

I enjoy what I do and I enjoy the challenges presented by many different clients, providing solutions and interactions.

For more information about me joining B2B CFO^®, check out my video. [Click Here]

A CNNMoney article by By Jennifer Liberto, March 3, 2011 titled “House and Senate ping-pong hated small biz tax rule” talks about the difference in approach by the US Senate and House to solving this problem, i.e. expansion of the requirements for filing form 1099. (Read Article)

The house passed a bill the first of the month eliminating this provision from the Healthcare bill. However the Senate disagrees with the approach to keep it “revenue neutral”.

The House, the Senate and the President have all said they want this fixed. But in typical Washington fashion, they cannot get it done because of….POLITICS!

Really? Let me give you my thoughts:

1)    The idea that this will improve revenues from increased compliance is bogus at best. Do you really think that Office Depot or Staples don’t report all of their income? Also it only applies to amounts paid by check, not credit cards. My guess is that the “real” amount of found income is close to zero meaning the tax revenues created are also close to zero.

2)    The amounts are not reconcilable. The revenues reported by business include revenues from all payment types, Cash. Check, Credit and Debit Cards, yet 1099s are required only for certain transactions. So this helps assure all revenue is properly reported, how?

3)    The cost of compliance by small business outweighs the benefit. Remember, the cost of compliance is tax deductable…..This will reduce tax receipts!

What I am saying is simply this, In my opinion, they are arguing how to pay for something that isn’t real in the first place and not supportable in reality. This law is worse than a bad idea. It lacks practicality and the point of trying to keep something revenue neutral lacks credibility.

Come on Washington, GIVE US A BREAK. Do away with this crazy law, forget about the fiction of revenue neutrality and quit playing political ping pong with small business.