Business Best Practices

 

What is FFCRA?

The Families First Coronavirus Response Act (FFCRA) was passed in response to the spread of the novel coronavirus and the disease it causes, COVID-19. The Act became effective on April 1, 2020, encompassing two other acts, the Emergency Family and Medical Leave Expansion Act (EFMLEA) and the Emergency Paid Sick Leave Act (EPSLA).

The purpose of FFCRA was to:

• expand the Family and Medical Leave Act (FMLA) until December 31, 2020, for leave and income loss for employees who must stay home to care for children due to school or childcare closures in response to COVID-19
• create two weeks of paid sick leave for childcare and other coronavirus-related leave
• provide tax credits related to paid leave mandated by the act

THE IMMEDIATE QUESTION: What Happens Now that FFCRA has Ended?

When the Act was proposed, no one anticipated that coronavirus would be part of everyone’s daily life, nor that “pandemic” would become a household word. Now that this is the case – and now that there’s a new POTUS – questions buzz about the FFCRA’s fate. While the FFCRA no longer requires employers to provide COVID-related sick pay or paid leave, employers who choose to do so will receive a tax credit for those wages through March 31, 2021.

The IRS is expected to provide further guidance soon to businesses impacted by the FFCRA. Until then, employers are on their own in terms of deciding whether to provide leave. If they do, they must carefully navigate their decision to avoid potential discrimination issues.

GENERAL INFORMATION ABOUT FFCRA

Which Employers are Responsible?

Government agencies and private businesses with fewer than 500 employees must comply with the FFCRA. Businesses with fewer than 50 employees are exempt from the FFCRA if they can show that providing benefits would put them at risk of going out of business. Businesses with fewer than 25 employees do not have to reinstate employees that return from leave. All businesses with 25 or more employees must reinstate employees after returning from leave.

Which Employees are Eligible and What do They Receive?

Full-time employees who have been employed for at least 30 days and are unable to work (i.e., via remote) and who must care for children at home due to the coronavirus health emergency are eligible.

Part-time employees are eligible for the number of hours of leave they work on average over a two-week period.

Employers first offer unpaid leave (or accrued vacation time) for ten days (80 hours). After that time, paid leave begins at two-thirds of the employee’s regular pay rate. Compensation can continue up to 10 weeks as long as daily pay does not exceed $200 and total pay (for the ten weeks) does not exceed $10,000.

For employees unable to work because they are quarantined for COVID-19 exposure, illness, or symptoms, employers must pay them at their full pay rate for ten days (80 hours). A 10-week extension exists for full-time employees at two-thirds of their regular pay rate if needed for a total of 12 weeks for these employees.

Qualifying Reasons for Leave

An employee qualifies for paid leave if they are unable to work at their place of employment OR via remote (i.e., from home) due to:

• Federal, State, or local quarantine or isolation related to COVID-19
• A health care provider’s advice to self-quarantine due to COVID-19
• Symptoms of COVID-19 while in the progress of actively seeking a medical diagnosis (i.e., testing)
• The need to care for a quarantined individual or an individual who is having symptoms of COVID-19 (i.e., a child who cannot attend school or daycare or a child whose school or daycare is closed due to COVID-19 restrictions)

What Tax Credits are Businesses Entitled to under the FFCRA?

Private companies can seek reimbursement through fully refundable tax credits each quarter for paid sick leave and paid family leave (i.e., FMLA). The tax credits are applied against an employer’s already-owed Social Security taxes. If that is not enough to offset the payouts to employees, the Treasury Department helps cover the balance.

What’s Next?

Since Congress did not renew, the FFCRA employers are no longer required to offer paid sick time or paid leave to employees. However, employers who choose to do so voluntarily can still claim tax credits for doing so until March 31, 2021. In light of this federal ruling, employers should keep in mind that state and local laws in their areas may not be the same. Some states extended rulings that require employers to cover pay for COVID-related leave. Check with your state and local government to know the laws where you are.

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And as always, your tax professional should be up-to-date on all the latest guidelines and regulations about FFCRA, so check with them first so that your business is on track moving ahead in these still-uncertain times of the pandemic.

Get back to the job of running your business and leave the accounting to us! Call us at 407-281-7375 now and request a free consultation to find out how we can work together for your success.

To lease . . . or not to lease. This is an issue business owners often face. If you are weighing the pros and cons of leasing versus buying, here are some things to keep in mind.

Cost
Evaluating costs is more complicated than comparing the price of leasing a piece of equipment versus its purchase price. You will also want to consider these issues:

• How soon will the equipment need to be upgraded or replaced? Highly technical or specialized equipment becomes obsolete quickly and may be a good candidate for leasing.
• How will you arrange for service and repair? Leasing arrangements often include maintenance of the equipment. If you’re thinking of buying, research the equipment’s repair history as well as the cost and availability of reliable service.
• How long will you need the equipment? If your use will be short term, then leasing may be the better option.

Cash
If you’ve been leasing your equipment, then your costs have been predictable. Purchasing equipment can substantially alter your cash flow. Be sure you consider how purchasing your equipment might affect your business’ finances.

• Can you save money by buying or leasing equipment? If — and when — cash savings will be realized is an important factor for you to weigh.
• Do you have the cash available to purchase the equipment? If you use cash for a down payment, you may have less cash for operating and other business expenses.
• How will financing your equipment purchases affect your ability to get credit for other things? If you anticipate having future credit needs, you may want to avoid adding equipment loans to your current debt load.

If you’re weighing leasing versus buying, give us a call. We can help you look at how the various options will play out.

Contact us today at 407-281-7375 and ask for Denise May to discuss your business needs with an experienced Longwood, FL accountant or request your free consultation online now.

Your manager breaks her leg playing softball and will be out for a month. Or your receptionist’s husband lands his dream job, but it’s out of state so they’ll be moving. When you own a small business, learning to expect the unexpected comes with the territory. Yet, you don’t have to stand idly by and wait for something to disrupt your finances and send you down a path of trouble. Consider being proactive with these troubleshooting tips.

Watch Your Numbers

You can monitor your company’s financial health, spot developing problems, and improve performance by reviewing key ratios derived from the numbers on your financial statements. Taken together, these ratios help paint a picture of your company’s financial well-being.

At times, you might dwell on problems in one particular aspect of your business. But don’t ignore the rest. If you’re not seeing the big picture, you might not spot trouble in other areas. For example, if your profit margin is falling, you could become so focused on trying to find a solution that you fail to notice that several of your biggest customers haven’t sent a payment lately and a cash flow problem is brewing.

Watch Your Assets

Always try to make the most of your assets. If you carry inventory, keep your eye on turnover rates. Slow inventory turnover can strain your cash flow. Figure out how many days’ worth of product you’d ideally like to have on hand, and adapt your purchasing to meet that goal. Also, check your fixed assets. If you have equipment that’s not being fully utilized, you may be able to repurpose it. If not, it may be time to sell or donate it.

Watch Your Debt

It’s practically impossible to operate a business without taking on at least some debt. Debt itself isn’t a problem, as long as you keep it under control. A high level of debt can eat up your cash, cut into your profits, and reduce the return you’re getting on your investment in the company — and that’s definitely trouble.

Get back to the job of running your business and leave the accounting to us! Call us at 407-281-7375 now and request a free consultation to find out how we can work together for your success.

For businesses that haven’t traditionally embraced remote employees, it may be difficult to get up to full speed with the current turn of events.  To make the inevitable transition less overwhelming, we assembled a handy checklist of actions to consider while adjusting to the new workplace reality.

Organization

• Access your staff members and/or roles that are able to work remotely, those that can’t work remotely, and those where remote work may be possible with some modifications.
• Conduct an employee survey to determine the availability of computers that can be used for working remotely, as well as availability to high-speed internet access.
• Create company guidelines covering remote employees, including inappropriate use of company assets and security guidelines.
• Develop and conduct work-at-home- training for using remote access, remote tools, and best practices.
• Select a video-conferencing platform for services, such as Zoom, Cisco WebEx, or Go To Meeting.
• Develop a communications plan to involve remote employees in the daily activities of the organization.

 Security

• Create and implement a company security policy that applies to remote employees, including actions such as locking computers when not in use.
• Implement two-factor authentication for highly-sensitive portals.
• If needed, confirm all remote employees have access to and can use a business-grade VPN, and that you have enough licenses for all employees working remotely.

Staff

• Institute a transparency policy with your staff and communicate frequently.
• Check in on your staff, daily if possible, to confirm they are comfortable with working from home. Find and address any problems they may be experiencing.
• Make certain each staff member has reliable voice communications, even if this results in adding a business-quality voice over IP service.
• Don’t attempt to micro-manage your staff. Remember their working conditions at home won’t be ideal, and they will need to work out their own work patterns and schedules.
• Create a phone number and email address where staff members can communicate their concerns about the firm, working at home, or even the status of COVID-19.

Infrastructure

• Ensure that you have ample bandwidth coming in to your company to handle all of the new remote traffic.
• Make sure you have backups of your services so your staff is able to keep working in the event extra traffic causes your primary service to go down.

You may need to adjust or expand this list to match the specific needs of your firm and the conditions affecting your organization.  Use this list to get you started and to help guide you through the process.

Get back to the job of running your business and leave the accounting to us! Call us at 407-281-7375 now and request a free consultation to find out how we can work together for your success.

Susie wanders in half an hour late two or three times a week. James checks his personal e-mail and monitors Internet auction prices at work. They’re both good workers — but they’re giving the other employees the wrong message. If you have problems like these, it might be time to create an employee handbook.

Sound too “corporate”? The truth is, even very small businesses can benefit from having an employee handbook. Having things in writing puts your employees on equal footing, gives you rules to enforce, and helps new hires learn the rules quickly.

Mission statement. Start your handbook by painting the big picture: What is your company all about? What are your goals? A mission statement can help your employees feel more like part of the team.

General policies. This is where you spell out your dress code; your hours of operation, pay periods, and holidays; the company policy on telephone and Internet use; and other general information.

Leave. This section covers your policies on sick leave, vacation time, maternity leave, jury duty, personal and funeral leave, and military duty.

Benefits. Here’s where you provide information about any health, disability, or life insurance, or any other benefits you provide.

Discipline. This part can get tricky. Some courts have considered employee handbooks as legally binding contracts. Check with an employment attorney for help and advice.

For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.

Request a free consultation or call us today at 407-281-7375 to start working with an experienced Longwood, FL accounting firm with a reputation for integrity and quality service.

Increasing your profits requires selling more and/or spending less. While building up your sales may require an extended effort, business costs are often very ripe for a quick trimming. Here are some possibilities.

Supplies and Other Purchases

Usually, in any business, relatively few items represent a very large share of all outlays. The first step in cutting expenses is, therefore, to identify your highest costs. You may be able to trim many of these costs by making sure you always bid out significant purchases or by more actively seeking less expensive alternatives.

For many companies, inventory carrying costs are a very significant expense. Focusing on matching your inventory quantities more closely to your short-term needs could result in significant savings.

Telecommunications and Other Services

The ongoing services you buy may also offer the potential for cost savings. Revisit your choice of telecommunications vendor and your usage.

Look carefully at your costs for financial services. If you borrow or maintain a line of credit, always compare the rates from more than one financing source before you commit. Make sure you are not paying higher-than-necessary fees for your company’s checking and deposit services.

Cash Management

To control cash outlays, take advantage of discounts for early payment whenever possible. And look to delay payments for as long as you can without giving up discounts.

On the receiving side, deposit all receipts daily. And always actively pursue collection of any invoices that are past due. To help control your working capital needs and, therefore, your credit costs, try to match any new liabilities to your anticipated cash flow.

Fixed Expenses

One other category worth examining is fixed expenses that are long-term commitments. While you usually can’t change these quickly, be aware of when a window for change will open and prepare well in advance by considering lower cost alternatives.

To learn more ways to control your business costs give us a call today. Our trained staff of professionals is always available to answer any questions you may have.

Call us at 407-281-7375 now and request a free consultation to find out how we can work together for your success.