Fortunately for me, one of my great bosses was a woman – JoAnn Doherty – she was and still is a great mentor.

May 3, 2013

I have had four really great bosses who, combined, cover over 20 years of my career. They all had slightly different styles, but all were positive mentors who let me make own mistakes – no micromanaging. Gave me a task & then left me to accomplish it. They were always open and available to answer questions and/or to give guidance. They truly wanted me to succeed, constantly giving constructive feedback, good and “bad”. When mistakes were made, they became teaching moments for my bosses – they would help me realize what I “could have done” rather than what I “should have done”.

In short, they have helped to make me what I am today, confident and, I like to think, a good boss – working on great. I mentor more than “boss”; we learn what we are taught. I love this quote:

There is a real difference between managing and leading. … Managing winds up being the allocation of resources against tasks. Leadership focuses on people. My definition of a leader is someone who helps people succeed.” Carol Bartz, Yahoo! CEO

Bartering Opens Your Business to New Possibilities

February 4, 2013

It conserves cash and puts idle resources to work – Just be aware of the Pitfalls

Let’s assume for a moment that you are working so hard and fast you have no time to analyze anything, but, no worries, everything is running smoothly and you have a fairly steady cash flow throughout the year so you just don’t worry about anything. Hey, you even saved some cash by bartering with several customers – good idea, right? Maybe yes… Maybe no…

Many people believe that as a cash basis taxpayer you do not have to pay taxes on income  never received; that is not true in the case of bartering because you did receive value in return, which means you were “paid” for your services.

When you barter you have to report that income you would have received and then you offset it by the expenses you would have incurred.

Where the rub comes is if you happen to barter your business services (income) for personal services (not a business expense) – you end up with income but no corresponding expense. And you did not get any cash money but you have to pay taxes on that income anyways because you received value for the service.

When bartering, make sure you barter business services for business services and personal services for personal services so you don’t have to pay taxes on “income” you never received cash payment for.

For instance, I personally would not barter my accounting services for home lawn care since the lawn care would be a personal service that I could not deduct, but I would have to report the income from the service I provided. I would barter for lawn services if I had office property that was in need of lawn services – that would be a legitimate business expense.

Family Operations – Letting go to Nonfamily Management Team

January 7, 2013

Family run operation had never shared information with employees other than the individual projects to be worked on. The owners had a hard time sharing what they considered personal financial information with managers & employees. The result – department managers did not have a clue of what it took to run the organization outside their small world and everyone was making their own purchases; there was no one looking at overall purchases and cost savings so expenses just kept going up and up. The owners realized that they could not grow any larger until they let go and allowed others to be involved in the management of the company.

I was hired mid-year to set up financial information on a departmental basis in order for managers to be held accountable. I analyzed all the information for the current year and reclassified expenses to their respective department. Next I prepared a current year budget for each department based on the current activity and the expected activity for the remainder of the current year. The owners and managers assisted int he finalizing of these budgets.

The next step was educating all the managers in how to utilize the reports and I sat down each month with each manager to go over their monthly P&L to show what actually happened versus what we thought would happen. Starting in October, together, we began the process of preparing each department’s budget for the next year. Each manager had a hand in creating the budget that they would ultimately be held accountable to. The first year they would still be learning so they would not be held accountable financially; but ultimately, they would get bonuses based on their performance.

The managers now get together monthly to review financial information, they know where the organization is going and they are helping to get there. They now feel as if they have some input into how the organization is run, the owners value their input and the company is on even more solid ground than it was before.

The company is now expanding internationally with the same management team in place all because they shared vital financial & operating information.

Moral: You can only do so much all by yourself. You need to trust others and educate them on the management of your company and then let them manage with you. When you get the right people in the right seat on the right bus… let them do what you hired them for!

Prepare for tax season… its never too late… or too early :-)

December 31, 2012

This bears repeating annually…

Utilize simple recordkeeping software – quicken or MS money come preloaded on new computers

Categorize major expenses –

Home: mortgage, utilities, auto, contributions, taxes

Small business: office supplies, phone, advertising/marketing, dues…

Utilize the “Reconcile” feature and actually balance your checkbook on a monthly basis – catch errors when they happen rather than 6 months later…

Run “canned” reports on spending & actually look at them to see WHERE your money is going, looking for anything out of place, odd or unusual

Use a filing system – expandable folders, hanging folders, manila folders: Use Labels…


– Tax related documents – 1099s, W-2, real estate taxes, auto taxes, sales tax on major purchases, contribution receipts, purchase agreements

– Capital expenses – home improvements, major appliance purchases

– Other personal receipts that you need to keep – in order to return items or get service done

– Shred – To be shredded – wait at least 90 days before you shred just in case you need it later

Small Business

– AR Invoices sent –

Numerical copy kept in monthly folder or 3 ring binder
Copy kept with job/project information
– AR Checks received – copies attached to deposit slips

– AP Invoices received – folder by due date

– AP Invoices paid – alphabetically by vendor

– Capital equipment purchases – copies of AP invoices for depreciation purposes

– Bank reconciliations – folder for each account

– Credit card statement reconciliations – folder for each CC

– Advanced Accounting Issues:

Payroll records – whole system of PR / HR issues
AR aging reports – past due reports
AP aging reports – unpaid liability reports
Inventory – monthly counts / reconciliations
Depreciation spreadsheets
Prepaid expenses
Accrued expenses

Budget Watch

December 12, 2012


Large privately run organization prepared extensive annual budgets by each revenue/expense center (departments). Their process was extremely cumbersome and took many months to complete. Unfortunately, no one ever really analyzed the budgets themselves other than to approve them – if they showed a profit they were good to go; even though the budgets (and actual data) showed declining profit margins year after year.

I was hired to analyze the budgets: I analyzed seven years of data (the five prior years, the current year ending and the following year budget). Both actual and budgeted data was analyzed and graphed. The trend showed that although they were still making money, their expenses were growing at a much faster pace than their revenue was. This clearly showed that at some point in the future, if they did not change something, they would start to lose money. The analysis also showed that those trending lines were not the same for budgeted and actual data; which indicated a disconnect in the budgeting process.

The project was extended to monitor the Budget versus Actual analysis internally prepared each month to help the owners understand the analysis and to ensure the controls were operating as designed. The Budget Watch project lasted about 13 months until the owners were confident in their new control processes.


Don’t wait until you start to lose money to look into your trending data. It is all right there, you just need to really look at it.

Accounting 101: Personal Budget: before you can determine how much money to take out of your small business, you must first understand how much money you need to cover your personal bills.

November 12, 2012

That statement may seem like a no-brainer, but a surprising number of entrepreneurs don’t stop to figure this out – they just take the money out. They do not consider that they should leave money in the business to make sure it continues and grows.

At the outset you must determine if the cash flow will be enough to continue the business, pay your personal bills and fund your retirement. Most businesses need to keep some money to keep going [inventory / supplies/ opportunities], and if you cannot live on the excess cash available to take out, you need a backup plan or you will be among the statistics of new business failures.

Accounting 101: What can you do to be sure that you can pay your bills on time?

October 17, 2012

Make sure that you collect your own invoices on time – don’t let customers turn you into a bank. Maintain strong cash flow practices – always know where you stand on a daily, weekly, monthly basis.

Accounting 201: Strategic decisions are characterized by considerable risk and uncertainty.

September 19, 2012

Unpredictable environmental changes can quickly transform even the most well-conceived plans into ineffectual strategies. You need to clearly recognize this danger and learn to live with it.

“The major reason for s…

August 20, 2012

“The major reason for setting a goal is for what it makes of you to accomplish it. What it makes of you will always be the far greater value than what you get.”
–Jim Rohn, American entrepreneur

Accounting 201: The purpose of forecasting is to plan for the future!

July 14, 2012

It is NOT to predict next year’s sales. The key word is planning – you attempt to reduce the uncertainty about the future

Forecasting is a process that lets managers plan what is necessary to be successful!

  • Sales growth requires planning!
  • Sales forecast is the starting point. Take the sales projection and show what the company must do to be successful!