Category: Content

Debt is the capital a businessman borrows from an outside source and agrees to return within a particular period, along with a specific proportion of interest. The debt has a very negative impact on the business, but as a matter of fact, most startup businesses have to borrow finances to begin operations. Even well-established business setups have taken up debts. Banks, other companies, friends, and family are the most common sources of debt. The term “Leverage” is also used for debt.

Companies must lend money while making massive purchases like equipment, heavy machinery, etc. Debt is the natural killer of a company. A tiger will eat your company one day if you are not getting rid of debts. Your company’s reputation is ruined, suppliers don’t supply you with credit, and you may not be able to offer salary increments, bonuses, and insurance. You can have an overall drastic effect on the business finances.

Here are a few strategies to get out of these debts.

 Free Cash by Cutting Down Unnecessary Costs

Identify the areas where you are spending unnecessarily and from where you are digging your company into debt. Know the cost of raw materials, labor, rent, etc, and how even a single penny can be saved. Cut down expenses by collecting credit from customers as soon as possible, renting an office at minimum cost, using simple office furniture and phones, etc. The company’s equipment not in use should be sold out. Similarly, scrap should also be sold out instead of dumping. Analyze whether hiring one individual on a salary is more beneficial than giving benefits to two employees.

Re-Examine Your Budgets

An increase in debt means that a company’s budget is ineffective. Reassess your budget and make adjustments accordingly. In the budget, revenue should be more than fixed costs, i.e., utility bills and rent, etc. After allocating money to variable costs like manufacturing, etc., allocate a fixed portion of the budget to pay debts to avoid piling up of loans. Have a detailed discussion on monthly transactions. Bookkeeping will help you to review loss, profit, purchases, and sales.

Manage and Monitor Your Inventory Effectively

Inventory is a major element Where a company spends too much. A few inventory tips should be adopted. Only necessary purchase items. Heavy equipment that can be borrowed on rent should never be purchased. Dead or excess inventory should be avoided. If possible, dead items should be sold out or returned to the supplier.

 Check Interest Rates on Credit Cards

Interest fees on credit cards are a significant expense for companies. It would help to talk to your credit card issuing authority about low interest rates. A credit card issuer may agree on lower rates if you are an old customer and pay on time.

Increase Revenue

Efforts should be made to increase the revenue of the company. Revenue can be increased by using strategies to enhance productivity. These strategies may include staff capacity building and skill development by training and knowledge, introducing new technologies, new marketing strategies to enhance sales, etc. Profits will be improved, which may be used to pay off debts.

 Consolidate Your Debt

This is one of the quickest ways to minimize interest rates. Instead of paying various loans with different interest rates, consolidate them into one with less interest. This will reduce the monthly expenses on loans without affecting credits.

Bring in an Investor

Usually, the investor is not a good option because you must sacrifice a portion of your future profits. But if you are sinking into debt, look for an investor to support your business financially.

Conclusion

It is impossible to get out of debt without adopting the abovementioned strategies. Debt is a threat to your company, and your company needs to work on getting rid of debt as soon as possible.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

A Guide to Maximizing Efficiency and Quality

I’m thrilled to share the fascinating world of architecture, an intricate and diverse field. It calls for many skills and expertise to craft exceptional structures that stand the test of time. Each process stage, from the brainstorming phase to the final construction, requires careful planning and execution. One of the most vital elements that contribute to the success of an architecture project is the allocation of labor. I’m delighted to share some of the best practices for optimizing labor allocation in architecture to ensure top-notch efficiency and quality in this article.

Define the Roles and Responsibilities

One of the most crucial factors contributing to this success is having a clear and well-defined understanding of the roles and responsibilities of each team member involved in the project. This includes the architects, engineers, contractors, and other professionals who are critical to the project’s progress. Everyone must be aware of their duties, responsibilities, and expectations related to their work. Doing so allows us to work seamlessly as a team, with every member contributing to achieving the project’s objectives. Let’s work together and make teamwork a seamless experience!

Identify the skills and Expertise

I’m thrilled to inform you that our project is making substantial progress, and we are now moving forward to the next phase, which is to identify the specific skills and expertise required for the project’s success. This involves carefully evaluating and matching the project’s requirements with each team member’s unique skills and experience. Such an approach ensures a seamless and efficient execution of the project. For instance, if we need specialized technical knowledge, we will assign a team member with the necessary experience in that domain. I am confident that this strategy will deliver exceptional results as a team!

Create a Detailed Schedule

Wow, we’re making significant progress! Now that we’ve defined everyone’s roles and skills, our next step is to create a detailed schedule. This schedule will outline all the tasks required to complete our project, including deadlines and which team members are responsible for each task. We must create a realistic schedule that includes room for unexpected delays. With our combined expertise and thoughtful planning, we’re sure to succeed in completing this project on time and with great success!

Establish Effective Communication

Effective communication is crucial for successful labor allocation. Team members should be encouraged to communicate openly and honestly about their progress, challenges, and concerns. Regular meetings should be scheduled to discuss the project’s status and make any necessary adjustments to the labor allocation.

Use Technology to Your Advantage

Technology can be a valuable tool for labor allocation in architecture. Many software programs and tools can help with project management, scheduling, and communication. These tools can help streamline labor allocation and improve efficiency and productivity.

Monitor and Evaluate Performance

Finally, it’s essential to monitor and evaluate the performance of each team member regularly. This involves tracking progress, identifying issues or challenges, and promptly addressing them. Regular evaluations will help ensure that the project is on track and that the labor allocation is effective.

Conclusion 

The precise allocation of labor in architecture projects is paramount for achieving success. Architects must undertake crucial steps to ensure the project runs smoothly and efficiently:

In managing a project, defining clear roles and responsibilities for each team member is essential, ensuring a shared understanding of individual contributions. Identifying the skills and expertise of team members is crucial to assembling a capable workforce capable of delivering desired outcomes. A detailed schedule outlining tasks and deadlines is necessary for effective project management. Establishing communication channels facilitates transparency and prompt resolution of issues. Leveraging technology optimizes processes and boosts efficiency. Monitoring and evaluating performance are ongoing tasks to pinpoint areas for improvement and ensure alignment with project objectives.

By undertaking these steps, architects can maximize efficiency and quality and complete any architecture project successfully.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

By: Jennifer Brazer

Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.

Fact Checked By: Brittany McMillen

Tax Return COGS Calculation: Maximize Your Deductions Now!

COGS (Cost of Goods Sold) calculation is essential for tax returns, helping businesses accurately track production costs and maximize legitimate deductions. The formula—Beginning Inventory + Purchases – Ending Inventory—provides the framework for reducing taxable income while maintaining IRS compliance.

During my 20+ years leading Complete Controller, I’ve guided thousands of businesses through strategic COGS optimization, unlocking substantial tax savings. The numbers speak volumes: companies making COGS errors face a 63% higher audit risk, while those implementing proper inventory systems save an average of 9% on annual taxes. In this article, I’ll share proven methods to calculate COGS correctly, identify commonly missed deductions, and implement systems that both satisfy IRS requirements and minimize your tax burden.

What is tax return COGS calculation and how can you maximize your deductions?

• COGS is the direct cost of producing goods sold by a business, calculated using Beginning Inventory + Purchases – Ending Inventory
• Proper COGS calculation directly reduces taxable income by accurately reflecting the true cost of production
• Strategic inventory management and valuation methods significantly impact deduction amounts
• Documentation of all eligible direct and indirect costs ensures audit protection while maximizing legitimate write-offs
• Different business types use specific IRS forms: Schedule C for sole proprietors and Form 1125-A for corporations

Understanding COGS and Its Tax Implications

Cost of Goods Sold represents all direct costs associated with producing goods that a company sells. For tax purposes, COGS is a critical deduction that directly reduces your gross income before calculating taxable profit.

The IRS scrutinizes COGS carefully because it significantly impacts tax liability. In manufacturing and retail businesses, COGS often represents the largest deduction available, making proper calculation essential for both compliance and optimization. Businesses across sectors show dramatically different COGS ratios—from Microsoft’s lean 18.7% to Costco’s substantial 86.1%—reflecting how business models fundamentally shape deduction strategies.

Why COGS matters for your bottom line

COGS deductions create a dollar-for-dollar reduction in taxable income. For businesses operating on tight margins, accurate COGS calculation can mean the difference between profitability and loss.

Consider these impacts:

• A $10,000 error in COGS calculation could cost $2,100+ in unnecessary taxes (at 21% corporate rate)
• Properly documented indirect costs can increase deductions by 15-20%
• Strategic inventory timing can legally shift income between tax years

How to Calculate COGS for Tax Returns – The Essential Formula

The basic COGS formula follows this structure: Beginning Inventory + Purchases – Ending Inventory = COGS. While simple in concept, accurate application requires diligent record-keeping and strategic decisions about inventory valuation.

For example, a quarter with $35,000 beginning inventory, $4,800 in purchases, and $7,400 ending inventory results in $32,400 COGS. This calculation directly reduces taxable income by that amount.

Mastering the components of COGS

Each element of the COGS formula requires specific documentation and valuation methods:

Beginning Inventory:

• Must match prior year’s ending inventory value
• Requires consistent valuation method year-over-year
• Needs physical count verification and reconciliation

Purchases:

• Includes raw materials, components, and finished goods
• Encompasses freight-in, duties, and import fees
• Covers direct labor for production in manufacturing

Ending Inventory:

• Requires physical counting or cycle counting systems
• Must use the same valuation method as beginning inventory
• Needs adjustment for damaged, obsolete or unsaleable items

A small retailer without item-level tracking successfully calculated $450 COGS using FIFO, maintaining full IRS compliance while simplifying their record-keeping requirements.

Tax Optimization Strategies to Boost COGS Deductions

Strategic inventory management directly impacts your tax position. The manufacturing sector demonstrated this by reducing COGS ratios from 68.9% to 66.8% through automation, creating both operational efficiency and tax advantages.

The inventory valuation method you select significantly affects COGS calculations:

Inventory Method	Tax Impact	Best For
FIFO (First In, First Out)	Lower COGS when costs decline	Growing businesses in stable markets
LIFO (Last In, First Out)	Higher COGS when costs increase	Businesses facing inflation
Weighted Average	Moderate COGS with minimal fluctuation	High-volume inventory businesses
Specific Identification	Precise COGS tied to exact items	Luxury goods and unique products

Once you select a method, consistency is mandatory. The IRS requires special permission to change methods, making your initial choice particularly important.

Identifying overlooked COGS components

Many businesses miss legitimate COGS components, particularly indirect costs that the IRS allows under uniform capitalization rules:

1. Storage costs for inventory and raw materials
2. Quality control and inspection expenses
3. Production facility utilities and maintenance
4. Purchasing department expenses
5. Material handling and internal transportation

Including these costs can substantially increase deductions while maintaining full compliance with tax regulations.

IRS Compliance Essentials: Forms, Rules, and Required Documentation

The IRS recovered a staggering $1.1 billion from businesses with COGS reporting inaccuracies, highlighting the critical importance of proper documentation and form selection.

Different business structures use specific forms for COGS reporting:

• Sole Proprietors: Report on Schedule C, Part III
• Partnerships/S Corps: Use Form 1125-A
• C Corporations: Report on Form 1125-A with Form 1120

Beyond form selection, businesses must comply with the IRS rotational movement of inventory verification and documentation. This requires maintaining records that support:

• Inventory counts and adjustments
• Cost allocation methodologies
• Uniform capitalization calculations
• Consistency in accounting methods

A mid-sized manufacturer implemented cogwheel mechanics in their accounting processes, reducing tax liability by 12% while strengthening their documentation for potential audits.

Uniform capitalization rules and section 263A

For manufacturers and larger retailers, Section 263A uniform capitalization rules require including indirect costs in inventory valuation. These rules affect:

• Which expenses qualify for COGS treatment
• How overhead gets allocated to production
• Documentation requirements for mixed-use facilities
• Treatment of administrative costs related to production

Businesses with over $26 million in gross receipts face stricter requirements, including potential application of the simplified production method or simplified resale method for allocating costs.

Common COGS Calculation Mistakes – And How to Avoid Them

COGS errors trigger IRS scrutiny, with 63% of small businesses making calculation mistakes facing audits. The most frequent errors include:

• Inconsistent inventory valuation methods
  • Switching between FIFO and LIFO without IRS approval
  • Using different methods for financial vs. tax reporting
• Missing indirect cost allocation
  • Failing to include eligible overhead in COGS
  • Improper allocation of mixed-use facility expenses
• Inventory count inaccuracies
  • Neglecting year-end physical inventory verification
  • Failing to adjust for damaged or obsolete items
• Timing errors in purchase recognition
  • Mismatching purchases with the periods they belong in
  • Incorrectly handling goods in transit at year-end
• Documentation deficiencies
  • Insufficient records to support inventory valuations
  • Missing supplier invoices and production cost documentation

Prevention requires systematic approaches including quarterly inventory reconciliations, consistent application of accounting methods, and thorough documentation of all COGS components.

How to Transition Your Business to COGS-Driven Tax Planning

Implementing strategic COGS management requires a systematic approach. The manufacturing industry proved this by improving COGS ratio by 2.1% through automation, demonstrating how operational changes drive tax advantages.

Implementing a 5-step optimization framework

• Audit Current Practices
  • Review existing inventory and COGS processes
  • Identify documentation gaps and compliance risks
  • Benchmark against industry standards
• Select Optimal Inventory Methods
  • Analyze which valuation method benefits your cost structure
  • Consider how how cogs work in your specific industry
  • Document methodology selection for IRS substantiation
• Implement Tracking Systems
  • Deploy inventory management software
  • Establish procedures for cost allocation
  • Create audit trails for all COGS components
• Train Staff on Requirements
  • Educate team on proper documentation
  • Define roles and responsibilities
  • Establish review procedures
• Schedule Regular Reviews
  • Conduct quarterly reconciliations
  • Perform year-end physical inventory counts
  • Update procedures as tax laws change

This framework helps businesses identify all eligible gear teeth in their COGS machinery, ensuring maximum legitimate deductions while maintaining audit readiness.

Leveraging technology for COGS optimization

Modern cloud accounting systems streamline COGS tracking with features that enhance both accuracy and optimization:

• Real-time inventory management
• Automated cost allocation
• Digital document storage for substantiation
• Integration with point-of-sale systems
• Customizable reporting for tax planning

Understanding various types of cogs in machinery of financial reporting helps businesses implement systems that maximize efficiency and tax benefits simultaneously.

The Strategic Value of Professional COGS Management

Beyond compliance, strategic COGS management creates substantial competitive advantages. Companies implementing professional systems routinely identify 15-20% in additional legitimate deductions.

Benefits extend beyond tax savings to include:

• Improved cash flow forecasting
• Enhanced pricing strategy
• Better production planning
• Reduced inventory carrying costs
• Strengthened audit defense

In my experience working with businesses across industries, the most successful companies view COGS not just as a tax requirement but as a strategic opportunity to improve overall financial performance.

Final Thoughts: Maximizing Your COGS Deductions

Proper COGS calculation represents one of your most powerful tax optimization tools. By following IRS guidelines while strategically managing inventory and production costs, you can simultaneously reduce tax liability and improve business operations.

The companies that thrive financially approach COGS as both a compliance requirement and a business optimization opportunity. They implement systems that capture all eligible costs, maintain proper documentation, and adapt to changing business conditions.

Ready to optimize your COGS calculations and maximize legitimate tax deductions? Contact the Complete Controller team for expert guidance on implementing tax-efficient inventory and production cost systems. Our experienced professionals will help you identify overlooked deductions while ensuring your business remains fully compliant with all IRS requirements.

FAQ

What items can be included in COGS for tax deductions?

COGS includes direct costs like raw materials, direct labor, machine parts, and production supplies. Many businesses can also include indirect costs like storage, purchasing department expenses, and factory overhead. Service businesses generally cannot claim COGS except for materials directly used in service delivery.

How do different inventory valuation methods affect my taxes?

FIFO typically results in lower COGS during inflation (higher taxes), while LIFO produces higher COGS (lower taxes) in the same conditions. Weighted average provides more stable COGS across periods. Your industry, inventory turnover, and price volatility should guide your selection, but once chosen, changing methods requires IRS approval.

What documentation do I need to support COGS deductions during an audit?

You need inventory counts (beginning and ending), purchase invoices, production cost records, allocation methodology documentation, and proof of physical inventory verification. For manufacturing, additional records should show labor costs, overhead allocation, and application of uniform capitalization rules.

Can service businesses claim COGS on tax returns?

Pure service businesses typically cannot claim COGS, but service businesses that provide materials as part of their service can include the cost of those materials. For example, a landscaper can include plants and materials, while a consultant generally cannot claim COGS unless they produce tangible products for clients.

How often should I review my COGS calculation method?

Review your COGS methodology annually before tax filing season, with quarterly inventory reconciliations to catch errors early. Major business changes (new product lines, manufacturing process changes, significant cost fluctuations) should trigger immediate reviews. However, remember that changing valuation methods requires IRS approval.

Sources

• Balboa Capital. (2023). “Cost of Goods Sold: A Complete Guide.” www.balboacapital.com/blog/cost-of-goods-sold/
• Bench Accounting. (Dec. 11, 2023). “How to Calculate Cost of Goods Sold.” www.bench.co/blog/accounting/cost-of-goods-sold
• Claimyr. (Apr. 11, 2025). “How to calculate COGS deduction for small business…” claimyr.com/government-services/irs/How-to-calculate-COGS-deduction-for-small-business-when-I-dont-know-which-specific-inventory-items-sold/2025-04-11
• Complete Controller. (Feb. 27, 2024). “Tax Return COGS Calculation.” www.completecontroller.com/tax-return-cogs-calculation/
• FasterCapital. (2023). “A Comparison Of The Average COGS Ratios Across Different Sectors.” fastercapital.com/topics/a-comparison-of-the-average-cogs-ratios-across-different-sectors.html
• FasterCapital. (2023). “Case Studies On Successful COGS Management.” fastercapital.com/topics/case-studies-on-successful-cogs-management.html
• Internal Revenue Service. (Sept. 11, 2024). “About Form 1125-A, Cost of Goods Sold.” www.irs.gov/forms-pubs/about-form-1125-a
• Irvine Bookkeeping. (Jan. 15, 2025). “Avoid These Common Tax Issues When Reporting Cost of Goods Sold.” www.irvinebookkeeping.com/post/avoid-these-common-tax-issues-when-reporting-cost-of-goods-sold
• NetSuite. (Nov. 3, 2024). “Cost of Goods Sold (COGS): What It Is & How to Calculate.” www.netsuite.com/portal/resource/articles/financial-management/cost-of-goods-sold-cogs.shtml
• QuickBooks. (Sept. 9, 2022). “How Do You Find Cost of Goods for Tax Purposes?” Intuit. quickbooks.intuit.com/learn-support/en-us/taxes/how-do-you-find-cost-of-goods-for-tax-purposes/00/1138448
• TaxSlayer Pro. (Apr. 4, 2023). “Form 1125-A – Cost of Goods Sold.” support.taxslayerpro.com
• TIGTA. (Oct. 15, 2024). “Major Management Challenges Facing the IRS in FY 2025.” www.tigta.gov/sites/default/files/reports/2024-10/managementfy2025.pdf

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Best Practices In Cloud Computing

Companies increasingly use the best practices in cloud computing to expand their services internationally. Cloud computing helps businesses tap into new markets. However, the economic aspect is only one of the factors of demand. Improving performance, including data speed, service uptime, and enhanced security, are equally essential elements.

Any business can be uniquely positioned in the cloud computing ecosystem to meet its goals. Cloud computing enables a company to reach its fundamental needs, and it helps manage the global network of any business.

For cloud services to be efficient, they need to provide consistent and reliable data networks. Speed is the essential element of cloud computing. Efficient cloud computing services require cohesive and fast data networks, especially for applications that handle large graphics and require low latency.

Benefits of Cloud Computing

Interconnected Business

The cloud is a platform that offers remote services. These services are used to store information and run applications. It enables online services and data on demand via simple internet access. The idea is to deport the processing on an outsourced infrastructure.

Installing the software locally on each user station or company server becomes redundant. A significant benefit of cloud computing is that all systems are online. When the systems of a business are online, they are well connected. This makes the business more productive as a whole. IT departments only need to implement these solutions and their administration.

Easy Accessibility and Mobility

The best practices in cloud computing allow easy access to data across an organization. Cloud computing services make it easier to improve the mobility of data. Gone are the days when data and information about clients and an entire business were stored locally. A cloud computing service allows online storage. This makes the data available even if a desktop computer or laptop is shut down. Cloud computing prevents data loss if servers fail, as the cloud server always has a backup. Some of the leading services that have been successful in cloud computing are:

• Email/calendar messaging
• Office 365
• Google Suite
• Zimbra ERP/CRM
• Salesforce
• Sage Oracle
• Infrastructure as a Service (IaaS) services

Flexibility

The best practices in cloud computing offer flexibility. The services have become very flexible and can be altered according to a company’s business needs. A cloud service helps businesses change their resource allocation in the production line. The best thing about a cloud service is that you are charged what you consume.

Another benefit of cloud computing is resource and file sharing in real-time, anywhere in the world. Your business becomes agile and gains flexibility, something that was impossible before. The implementation of cloud computing requires proper infrastructure for smooth operations.

Scalability and Update

A cloud computing service provides maintenance for all your company’s servers. It offers regular service updates, making your business information safe, secure, and free from cyber threats like ransomware. It gives a chance for you and your employees to focus more efficiently on your business. Cloud computing optimizes a company’s productivity. The updates are automatic, do not cause service interruption, and regularly bring new optimizations and features.

Optimized Security

A cloud computing service protects a company’s traditional and internal infrastructure. Keeping the cloud secure requires time, expertise, and an extensive budget. The best practices in cloud computing take care of the needed security measures. A cloud service provider provides regular updates related to essential security patches.

A wonderful benefit of cloud computing is that it ensures security because it has better safety features and service assets. Some of the security services are:

• Data replication
• Disaster Recovery Plan (DRP)
• Business Continuity Plan (BCP)
• Defense from cyber attacks
• Latest technologies in security
• The confidentiality of the data is guaranteed

The observed security standards for data are more rigorous and stringent in your cloud service provider’s environment. Security of your business data is the priority, as a fault or alteration of customer data would cause irreparable damage to a business. It is considered one of the best practices for cloud computing to ensure the cloud is safe.

Cost Control

Cloud Computing allows better control of the costs related to your IT infrastructure. Your company adjusts the resources allocated to its support according to its needs by increasing or decreasing available resources.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Despite the economy’s growth, hundreds of retail stores and shopping centers are closing. The last two years have been disastrous for the retail industry, and it touched everyone – from small shops to large shopping centers. Moreover, more than twice as many boutique retail shops have closed this year compared to last year.

The reality is that total retail spending continues to grow steadily despite a slight slowdown. However, several trends, including the growth of e-commerce, the excess of shopping centers, and the unexpected consequences of the revival of other businesses, have led to the fact that boutique retail shops are not doing well. Fashion and boutique retail shops face several challenges. Five of them will be discussed below.

More Interest in Online Shopping

The most common reason for the demise of retail stores is that online shopping eats retail. Between 2010 and 2016, the sales of online e-commerce companies rose from $16 billion to $80 billion. The total revenue last year was about $22 billion. So, you could say that e-commerce companies have grown double in these past six years.

But the problem of retail is much more profound. Simple return policies made online shopping cheap, light, and risk-free when selling clothes, which is currently the most prominent e-commerce category. The success of start-up e-commerce businesses forced retailers in physical stores to offer similar conditions and aims for the same convenience as found online.

Previously, people made several shopping trips before buying an expensive dress. On each trip, they probably made many other small purchases while they wandered around. But, today, many consumers can ask for and look at all the options, meaning there are fewer walks into shopping centers and fewer random shopping trips in neighboring stores.

The growth of e-commerce transfers some purchases to the online network and creates new behavioral habits. As a result, consumers gradually see the online network as a good substitute for their local shopping center.

A Shift in Spending: Retail Shops to Food

E-commerce and an overabundance of retail space are the main reasons for thousands of boutique retail stores closing. The number of clothing stores decreased as consumers spent more on travel and restaurants. Before the Great Recession, people bought many things, such as houses, furniture, cars, and clothes, and the retail trade grew dramatically in the 1990s, but much has changed. Clothing costs are declining – its share of total consumer spending in this century was reduced by 20%.

Secondly, while wage growth is significant for workers and the economy, it does not affect companies with low margins that rely on cheap retail stores. Cashiers and sellers are the country’s two largest categories of jobs, employing more than 8 million people, and the average income for both professions is less than $25,000 per year. But recently, new minimum wage laws and a tight labor market have pushed up the wages of the poorest, creating problems for retailers already under pressure from the e-commerce industry.

Consumerism

In the modern world, consumers hold great power. Fashion and boutique retailers are forced to be updated on the needs and wants of the customer. The boutique’s retailers are pressured to offer similar e-commerce services, and it isn’t easy to fulfill them with profit. The most common problem with fashion and boutique retail shops is that the customers demand a wide variety of new products, which is not always possible. 

Brand Name is Impacted

The brand’s name will be affected if the supply chain department fails to deliver or fulfill its services. Most retailers and fashion brands involve a long and sensitive supply chain. Many factors can impact the brand’s name and quality. For example, if the items are out of stock, people will go to another store.

Sustainability

Famous fashion brands display their sustainability and responsibility. These famous brands need to be seen implementing a sustainability strategy to improve their products’ quality. If the name of a brand is related to any negativity, it will be badly impacted. Customers know how fashion and boutique retail shops operate, and the brand should never compromise on these, which is a challenge.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

Filing for bankruptcy is the last resort people and businesses want to be reduced to. There are several reasons for this. On the other hand, some view this as a way out of a sticky situation. We will discuss the debate on whether bankruptcy is an instrument of liberty or not. The answer to this can vary widely based on your situation. So, let’s look at both sides before coming to any conclusions. However, first, let’s understand what bankruptcy is.

What is Bankruptcy?

In the eyes of the law, bankruptcy is a legal process in which the liabilities and assets of an individual or firm are weighed to decide whether the individual can still pay off their debt or if they should be legally exempt from this. However, an individual or business must file for bankruptcy before the court considers their plea. This can be done in two ways. A person can file for bankruptcy on their own, or they can hire an attorney to do it.

If the court does declare you bankrupt, they will take control of all or most of your assets to pay off your creditors. Not only will your creditors be unable to contact you to ask for what you owe them, but you will also be declared debt-free. The only dues not cleared on your behalf are the loans you co-signed with someone, student loans, alimony, child support, or money you owe to the government, such as unpaid taxes, penalties, and fines. You will further have to pay for the case of bankruptcy to be filed in court.

Pros of Filing for Bankruptcy

In some cases, it is a good idea to file for bankruptcy due to the following reasons:

• You will legally become debt-free
• Lenders will no longer pester you
• You will get a fresh start

Cons of Filing for Bankruptcy

Filing for bankruptcy has a lot of disadvantages as well that need to be taken into consideration, such as:

• Your property, bank accounts, and other assets might be sold off or seized to pay off your debts
• Your bankruptcy will become public domain that can be easily accessed through the court records
• It will become harder to secure a mortgage

Is Bankruptcy an Instrument for Liberty?

In our opinion, bankruptcy can sometimes be an instrument for liberty. If you are under a ton of debt, your assets aren’t sufficient to pay them off, and lenders filing for bankruptcy are constantly nagging you, it is the right option. However, even after declaring bankruptcy, your creditors are not guaranteed to stop bugging you. Secondly, you will have no assets to fall back on after filing for bankruptcy. You will have to rebuild your life from scratch unless it is in the case of huge multinationals that will just need some restructuring, cost-cutting, bookkeeping scrutiny, and a few tough decisions made in the ownership.

On top of this, your bankruptcy will become a matter of public record that can easily be accessed by potential lenders, landlords, and employers. You might have a more challenging time renting or getting a loan. Landlords and banks may assume you are a liability and will have difficulty paying your dues. Yet, are these issues a problem compared to your mounting debt? If you have nothing left to lose and no way out, the only option to free yourself may be declaring bankruptcy.

Will You Be Free after Filing for Bankruptcy?

Filing for bankruptcy is just the tip of the iceberg. Not only will you have to pay to file the case, but if you aren’t filing the case yourself, you will also have to hire and bear attorney’s fees, which will cost you a decent amount of money. Going to court and simply stating that you’re broke isn’t enough. As ironic as it sounds, you must pay to declare that you don’t have money.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

It’s on every entrepreneur’s mind. This question has them thinking hard. How exactly does one measure how much stock to have available and ready for delivery, and how much is too much? Having stock is essential in any business and depends on the activities necessary to run your business.

Any business will first have to cater to the demand for an item and then start selling to grow. Many companies need a specific stock level to keep up with that demand. Here are some examples of businesses that need to keep inventory available, supply without delay, and deliver to meet demands. 

These examples will better show what inventory levels must be kept. The whole concept of this question is what to have on hand to keep up with demand and not fall short of supply. By having enough, one is cost-effective and efficient.

Planning out budgets, finances, and expenditures would be rendered meaningless if the proper stock is not maintained. Without stock, deliveries cease, which translates to business cessation. This, however, is foreseen in all business plans, and precautions are taken well in advance. With hard work and planning, results are guaranteed.

Restaurants

If you sell edible products at a restaurant, then specific quantities of raw stock and semi-cooked items will be needed. Let’s say it’s a fast-food restaurant, and the burgers are trendy. Buns, sauces, raw veggies, patties, garnishes, etc., must be purchased on priority in a daily stock straight from vendors.

You must coordinate daily with the bakery, meat market, and vegetable vendor to ensure smooth functioning. If an order of ten burgers is received and you have only had the ingredients for six, the odds are that the customer will not come back due to disappointment. Whatever you are selling, it’s got to be enough to meet the expected demands! 

Retail Stores

With tight inventory control systems and proper handling of all artifacts, complete with model numbers, rows, and designated areas in stock, retail stores are hard work. For instance, a t-shirt would generally be kept in four regular sizes, ranging from small to extra-large, and different colors, which means different codes for each.

Shoes should be kept in sizes for men and women, ranging from 6.5 to 10. It is the same with the codes, as different colors are for different codes. A specific stock level is needed for what you sell to handle customers with grace to their satisfaction.

Pharmacies and Drug Stores

Drug stores have special POS software for their inventory and stock levels. This software helps them manage and monitor all inventory. When a drugstore is set up, this software is configured with a minimum-level warning system that tells the user what is in stock.

In addition, costly meds, like cancer treatment prescriptions, are in limited stock. But, commonly occurring meds, such as aspirin or flu-fighters, are stocked in high levels. If you sell medicine, you must have stock according to your location and area.

Considerations for Inventory Management

Trends or Seasons

A growing and thriving business must forecast each year’s sales season and prepare for upcoming influxes. To better prepare, stocks are essential to accommodate patrons and regular customers. 

This action can quickly determine the most active and slowest part of the year. Thus, you can prepare accordingly with planning. This will help you envision cost-effective methods of stocking whatever you are selling.

Weekends and Weather

Some businesses thrive during the weekend while they are slow on regular weekdays. This prediction can help business owners arm their stocks before the weekend hits. Not just restaurants but also bars, clubs, and many other weekend leisure venues party until the break of dawn on Fridays through Sundays.

Their demands are all met successfully, paving the way for them to become the most popular joint. However, if stocks are not leveled according to predictions, businesses will be negatively affected.

Conclusion

By understanding the kind of business you are, your need for available stock should be set accordingly. It is a super-fast and hectic day, while others are lazy and relaxed. You are selling by recognizing clientele’s needs and preparing to meet their demands, so a solid stock must be kept in hand.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

No matter how much one may argue about who is solely responsible for cloud data protection, experts from all across the globe are unanimous on the resolution that the ultimate responsibility of data compliance lies with the organization that owns the sensitive information, not the service provider.

What Is Cloud Data Protection?

Looking at the big picture, cloud data protection (CDP) is all about infrastructure security, storage management, and data integrity. Since it provides optimal data storage, safety, and network security, businesses around the globe trust it to be safer, more secure, and more stable than ever. It protects the cloud and prevents the leakage or theft of sensitive information from the cloud. Since the ultimate objective of CDP is to protect static and moving data in the cloud and ensure various services and processes, it is critically important for you and your cloud provider to ensure its optimal functioning at all levels.

Data integrity: Data remains the same as it is stored as strong encryption layers protect sensitive data from illegal editing or corruption. This indicates that your sensitive data is secured against all threats or illicit access.

Storage Management: The cloud infrastructure needs to ensure the safety and security of data and provide a continuously available interface as desired or required. Primarily, it depends on the capacity of your cloud service provider and how agile or responsive they are in managing the account. However, it would help if you also ensured the data was correctly maintained.

Infrastructure security: These are collective efforts, processes, measures, and policies that ensure cloud infrastructure and network security. However, most small businesses do not pay much heed to cloud data protection protocols, and that’s where most problems related to the safety and security of sensitive data commence.

Why Are Most Businesses Misguided?

It’s a human tendency to shift responsibilities or critical tasks entirely onto someone else’s shoulders. Most of us do not want to take complete ownership of complicated things that have intense and severe repercussions (if not executed properly). Then, there are those people who are misguided about their responsibilities and rely entirely on others. No matter how much money you can afford to spend on acquiring the services of any pro cloud provider, you have to make efforts to secure your data yourself and not solely rely on your service provider.

Although people have different perspectives about data safety and security and whether or not to trust the cloud entirely, cloud data protection is inevitably the most critical aspect of the cloud. Without this, you can never expect to secure sensitive data. According to a study, 80% of businesses wrongly believe that data protection and management is solely the responsibility of their cloud service provider. This indicates that cloud service providers are responsible for providing specific security protocols or encryption layers. However, sensitive information protection, safety, and security lies in businesses’ hands.

The study further revealed that businesses prefer to transfer their responsibilities of data protection, data privacy, or data compliance to third-party cloud vendors or service providers so that they focus more on the core side of the business and less on its security, storage, or management affairs. Moreover, the total spending on cloud technologies is predicted to increase at a massive 20% from 2018 to 2020, which bears testimony to the fact that most businesses intend to transfer their cloud data protection-related responsibilities to cloud service providers.

Core Reasons Why Most Businesses Choice To Hire Pro-Level Cloud Services

Businesses prefer to embrace a straightforward approach to protect their sensitive pieces of data because they lack in-house skills, knowledge, experience, and expertise in handling cloud data protection optimally. However, you need to ensure that the cloud service provider you are acquiring for utilization has relevant skills and provides 24/7 assistance in managing cloud-related discrepancies effectively.

Conclusion

In conclusion, the debate over cloud data protection responsibility often leads to one clear consensus: organizations hold the ultimate accountability. While cloud service providers offer security measures, the onus remains on businesses to safeguard sensitive data. Cloud data protection encompasses infrastructure security, storage management, and data integrity, crucial for ensuring safety and compliance.

Despite misconceptions, businesses must recognize their role in data protection, even as they leverage cloud services. With increasing reliance on third-party providers, companies must prioritize selecting competent partners and remain actively involved in managing their data security.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

An employer-employee relationship built on trust is one of the essential attributes of any successful business. Businesses strive to develop a solid connection and effective communication with their employees.

Businesses that successfully establish a point-of-contact with their workforce and communicate their company’s policies and procedures in an effective tone are more likely to avoid potential in-house conflicts and misunderstandings. An employee handbook serves as a blueprint that helps employees know what they can expect from the company.

What Is an Employee Handbook?

An employee handbook is essential to communicate the company’s rules and outline employees’ policies, procedures, and expectations. A well-written handbook is critical for promoting effective communication and creating a robust relationship with your employees.

In short, it helps employees know that what the company expects from them is necessary. On the contrary, an employee handbook helps companies know that their employees are on the same page. New hires are given a copy of an employee handbook on their first day and the necessary forms to sign, acknowledge, and agree to the terms.

A well-crafted employee manual highlights the critical aspects of the business that are primarily HR-concentrated. These help companies avoid potential conflicts and prevent costly errors and misunderstandings.

Why Have an Employee Handbook?

All your employees (new and old) must understand your company’s policies and procedures in depth. They may be hard to comprehend initially, but the employee must read them thoroughly. No matter what, employees need to abide by everything stated in the handbook if they want to be considered responsible.

An employee handbook shows that the company treats every employee equally, and the rules apply to everyone. Whatever the company intends to include in the handbook must be well-structured and promote the employees’ interests. This will eventually create a positive culture and safe work environment for every individual. Companies can protect themselves from lawsuits, wrongful termination, sexual harassment, gender biases, and much more.

Provisions Required by Law

Drafting an employee handbook is quite an undertaking. Before writing a handbook, business leaders must bring attorneys into the loop, so you must become familiar with local and federal employment laws. Some businesses have operations in multiple states, meaning they must abide by local and federal policies, providing legal grounds for drafting various handbooks for employees in each state.

Why? Because each state has unique employment laws, and companies must abide by them. The policies you must adhere to in an employee handbook by law include medical leave policies (for severe health conditions, childbirth, and more), equal employment opportunities, non-discrimination policies, staff compensation policies, etc.

General Clauses Every Handbook Should Include

• It is essential to understand that the handbook highlights crucial areas of the business that employees need to abide by. Agreeing to the form means that the employee will uphold the company’s rules and policies—it makes no promises on continued employment. This indicates that the handbook is not a contract, and this disclaimer must be included.
• The policies of the company are always subject to change. It must be mentioned that policies can change anytime with or without notice as the company deems appropriate and necessary.
• An employee acknowledgment page must be included, letting the company know its employees are aware of its policies, rules, and procedures.

What Else Does an Employee Handbook Cover?

Depending on the company’s size, nature, and location, you must include the company’s perspective on some issues. Since the employee manual has to communicate the company’s policies and procedures, it must be productive and communicative enough to impact the employees.

An employee handbook must also cover employee policies, employee benefits, bonuses policies, paid-time-off policies, company history, employee evaluation/discipline/termination policies, office procedures, employee behavior, abiding by SOPs (Standard Operating Procedures), and more.

Conclusion 

In conclusion, an employee handbook is crucial for fostering trust, communication, and compliance within a company. By clearly outlining policies, procedures, and expectations, businesses can promote a positive work culture, mitigate conflicts, and ensure legal compliance. A comprehensive handbook that reflects legal requirements and company values is essential for maintaining a harmonious employer-employee relationship and facilitating organizational success.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.

The financial systems of the yesteryear are gone. With financial technology becoming readily available and the technological revolution, plenty exists. Fintech is making pathways for professionals like accountants and bookkeepers with massive amounts of paperwork. Traditional financial systems are biting the dust with the web’s evolution and technology galore, not just due to the advancement of systems and technologies but also from obsolete physical systems that pose a danger to security and reliability as opposed to digital systems. These systems are heavily undermined as they cannot take advantage of innovations in the digital world. An accounting department filing cabinet is one of those systems.

For starters, an accountant is a professional who deals with taxation, which makes it legislatively important. They also help portray a business’s financial health and evaluate creditworthiness. Accounting is called measuring, processing, and coordinating financial information of economic entities. It is the summation of an organization’s activities related to economics and uses information related to users such as creditors, investors, management, and regulating authorities. The scope of this field is vast, and due to its broad usage, tax accounting and auditing are also a part of it. An accounting department filing cabinet is part of its processing and practices.

TheEvolution of Accounting

Accounting is centuries old, so it is not hard to understand the need for standards and regulations in this vast field. The 21st-century practices differ from the last century due to the formation of bodies and other authorities that govern accounting laws such as GAAP or IFRS. The accounting profession desperately needs an upgrade to better fit into the digital era. An accountant needs to record all particular asset details and information for classification needs.

Like the accounting department filing cabinet, all records and where they are stored are known to the accountant. Like skeuomorphism, where models are made to depict real-time objects that are imitated, using century-old methods like cabinet systems pulls down the potential of an organization, thus making a profound impact that generally allows competitors to move ahead. The physical attributes are such as the cabinet versus digital filing.

Depending on the requirements of an organization, the cabinet holds information vital for the business’s progress, leading to growth and development. In a physical system, such as an accounting department filing cabinet, it is crucial to know where the information lies, which folder has it, which section it underlies, etc. Anyone assigned that task will be grateful and appreciative of how the data is stored, retrieved, managed, and organized. There are many fields where data can be stored under categorization, like copying papers and placing them in various places for ready reference, but this practice is wild as workloads grow and paper management becomes a curse.

To allow more freedom and ease in life, accountants use a prescribed system of account classification such as billing, costs, expenditures, and physical goods that help them acquire information readily, unlike the accounting department filing cabinet.

The digital era of our modern world has various concerns. Let’s take hashtags, for instance. Anyone on social media knows it while hashtagging pics of friends or a tweet. This is because hashtags are unstructured data in the domain of big data. It’s incompatible with accounting as structured data is used for financial reporting or training. It must reinvent itself to use hashtags as an information organization. Still, upon realization of this problem, accounting has to think up new ways to develop and grow to accommodate the modern world’s needs.

About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.