2019 is upon us and every new year brings change. Those who run or own a business, big or small, will need to adjust accordingly. Among this year’s adjustments, is the Massachusetts minimum wage rate.
Effective 1/1/2019, the rate will increase to $12 per hour up from $11. The pay rate for service (tipped) employees will increase to $4.35 per hour with adjustments to the hourly rate as needed to reach the $12 per hour minimum.
Happy New Year! And with the new year’s arrival comes a quick tip – Massachusetts’ minimum wage has increased to $11.00 per hour as of 1/1/2017. With the holidays officially over and most businesses now running fully staffed and back into the swing of things, remember to adjust your employees’ wages accordingly.
See the link below for more information including wage rates for service and agricultural industries.
New small business owners who are gearing up to get organized and put their best foot forward in a new business venture encounter many daunting tasks in the first few months of business operations. Once settled in, most are ready to dive into an official method of accounting rather than a handwritten check register with an envelope full of receipts to serve as backup for future tax returns. However, some are unfamiliar with the basics of setting up their accounting system and common questions prior to taking on the task are, “What if I have two checking accounts? Do I need to split things up for my tax filings?”
Many business owners opt for two (or more) checking accounts and, perhaps, a savings or reserve account. Reasons for this vary and are the prerogative of the owner. But a common choice is utilizing a second checking account for payroll expenses only.
The business entity may have multiple bank accounts listed as assets on its balance sheet. And all cash transactions will run through one set of financial statements. These transactions will contribute to tax filings under one tax identification number. Therefore, there is no need to “split things up.” One entity is accruing all income and expenses regardless of the number of bank accounts holding funds.
Multiple bank accounts do not equate to a more complicated accounting process nor do they complicate your tax filings. What may seem superfluous for one, may simplify the process for another. The best choice is to fund your business in a way that works efficiently for you.
A small business may, on occasion, receive an official request from a state or federal agency to review the company’s books. But one agency that is often overlooked when it comes to audits is the insurance agency.
Your workers’ compensation provider will likely request a payroll audit upon each annual renewal or new premium application. In addition to the basics, such as the total gross payroll and number of employees, copies of quarterly payroll reports will need to be provided. The missing documents that often send the preparer of an audit scrambling are certificates of insurance from subcontractors.
To stay ahead of the game, request and receive certificates from subs prior to the start of a job. Track policy expiration dates of all subcontractors if their services are used repeatedly. Including certificates of insurance from outside service providers in your audit will save your company a considerable amount of money.
Preparing for a payroll audit doesn’t need to be a source of stress. Keeping a filing system throughout the year to document all labor disbursements, employee and non-employee alike, will help you sail through a smooth audit. And before you know it, you’ll complete the next one without a hitch!
When starting a new small business, much of your focus is on startup costs which will consume a large portion of your first year’s budget. To name but a few: new insurance premiums such as liability, workers’ compensation and, depending on the industry, auto insurance, possibly for multiple vehicles, may require large sums. There may be security deposits if renting a location, down payments on assets required for your business, or preparing to make payments on a newly acquired small business loan.
During this startup phase, be careful to keep your operational expenses at a minimum wherever and whenever possible. Payroll will likely be one of your bigger expenses. If you’re starting small and taking on the burden of responsibilities to run your company, your payroll expense is probably already at its lowest. However, if your industry requires a staff to be out in the field, there’s a good chance your payroll expense is on the high side as you strive to make ends meet.
Review your business operations to see where you can cut back and save. One common solution among small business owners is hiring an independent contractor to “pay as you go” when the task does not need to be completed by a permanent full-time employee. Savings in payroll expenses can be reinvested in your company as you get off the ground.
And as your customer base grows, any savings will contribute to a steady paycheck for yourself.
In our high-tech society, few business operations use a manual timekeeping procedure. A favorite of the entrepreneur who provides services at multiple locations for a multitude of clients is a call-in time tracking service.
This automated service has dual roles. Billable time is recorded in order to invoice the client at a later date and hourly time is tallied on a timecard for payroll processing. An employee will call a designated phone number from any location to “punch in.” Upon completion of a job, a second call allows the employee to “punch out” thereby closing out the assignment. However, this system isn’t without its drawbacks; one of which is its lack of employee supervision.
On the occasion that a timecard appears to have exceeded the allotted time for an assignment, a business is confronted with a dilemma. The actual cost to the client will show a discrepancy in the proposed cost and the payroll will be over budget. A solution to the problem may be to provide a more accurate estimate of time in future proposals. However, a common problem is an employee failing to follow the proper procedure in reporting time.
A disobedient employee may pad his/her time by calling in with a cell phone before reaching the destination and after leaving the location thus increasing his paycheck as well as the client’s billable time. A benefit to using an automated time tracking system is its ability to reveal the source of a call.
A thorough of review of timecards in addition to enforcing a policy to have all employees call in from a landline at the location where the work is taking place will ensure that company time is tracked properly and honestly.
Ultimately, clients will be satisfied and payroll expenses will be on budget.