Downsizing: Legal, Ethical Insights

Posted on February 10, 2020February 20, 2024 by Jennifer Brazer

A business may be forced to downsize to save on labor costs and resources. Sometimes, the downsizing is done by simply terminating employees or giving them early retirement. Downsizing is done with a good purpose for a business, but a company that has decided to downsize should consider if they could face legal challenges or liabilities.

Always do the right thing from the angle of your business, law, and human standpoint. Downsizing can reduce or eliminate business operations, but this term is mainly used to reduce the number of employees working in the business.

Downsizing, reducing a company’s labor force, lessens the number of employees on the operating payroll. This is supposed to ease tough economic times and improve performance and efficiency. Although downsizing is common, it is also a dreaded situation involving the employees and the employers.

Often, companies downsize, believing a few people can run the business better, but they don’t get the anticipated outcome. A company intending to downsize needs to reflect on different angles before deciding to move forward and should also consider the possibility of failing. Such failures leave a long-term mark on a business, requiring planning to avoid such risks.

Therefore, a company must consider all the obligations needed to help the business succeed. On the other hand, they should never forget the human perspective.

Making the Decision to Downsize

The first step is to analyze the situation and decide if downsizing is necessary and yield positive results. In addition, other temporary options should be evaluated before making the decision. For example, an employer can temporarily downsize and wait for time to pass before rehiring their employees.

Furthermore, this decision will change the company’s structure, and evaluating all possible outcomes becomes necessary. Aside from downsizing, companies can consider employee retraining, reduced hours, shorter workdays, or hiring freezes. Companies can also work with their bookkeeper to see if they can cut costs instead of letting go of employees.

These methods are not as drastic, and employees will understand that they must adjust to facing challenges ahead of them. However, the company should evaluate each possibility before choosing an alternative.

Once the organization has finalized the decision, it should consider legal practice and moral obligations towards employees and the organization itself. Proper planning and necessary fulfillment of obligations can eliminate risks and failures at a later stage. First, a company should evaluate its employees in the transition and final period.

Legal and Ethical Considerations

The transition stage is challenging as people have low morale and uncertainty. They remain under stress and psychologically disturbed throughout this transition time. Many knowledgeable people start exploring other options and leave. This ultimately affects those left behind with less expertise.

During this process, organizations must be aware of the legalities and liabilities. They should avoid activities that can bring charges upon them. One example of this is downsizing as an opportunity to eliminate every person they do not like or firing employees with an adverse history with the administration.

Usually, the cookie-cutter approach is safest legally, but it leaves heavy psychological marks on employees. Therefore, a scheme should be developed to keep the employees’ morale intact and safe legally. However, this approach requires organizations to have an up-to-date, indisputable record. This way, unwanted charges can be effectively avoided and handled.

Managing Employee Departures

The next step is to handle the employees who need to go. Usually, there is a form that departing employees sign. These release forms are designed to protect the company against liabilities. Consequently, companies must know what to put in such forms and how to handle this procedure.

For example, such a waiver must be in writing, understood by the employee, and voluntarily signed. In addition, employees must understand the company’s intent and what rights they are waiving. The company should know that when its procedure is straightforward, it will avoid litigation risk.

Companies should be aware of any acts or laws requiring them to notify all interested parties, including employees, unions, and local governments, about their downsizing. Communication should be the key at every possible level, which can help isolate situations that can lead to legal complications.

Some teams help managers and employees in the process. They assist specifically with the needs of the company. Such teams help in communicating with employees and offer them counseling. They also help employees in finding new jobs. These teams provide interview skills workshops, resume preparation, and information about education and job training opportunities.

Supportive Strategies for Companies

Companies can get help from such teams or have some internal arrangements to ease downsizing. They can offer outplacement services to employees who are leaving. This approach can help two-fold—one by avoiding litigation and second by assisting the employees leaving.

Ultimately, companies should ensure they are ready to face the employees who are still on their team. The remaining employees will have many questions that need satisfactory answers to keep their morale intact. As Barbara H. Patterson, the attorney with Advanced Healthcare, said at a recent National Employment Law Institute conference in Washington, “companies need to keep in mind the law and sound business principles, then communicate, communicate, communicate.”

Conclusion

Downsizing, reducing a company’s labor force, lessens the number of employees on the operating payroll. Before implementing the ‘downsizing’ decision in your company, give it thoughtful consideration. Seek legal advice as well. Sound business principles must be adapted when downsizing.

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.

Marijuana Business Procedures Guide

Posted on February 10, 2020January 2, 2026 by Jennifer Brazer

Mastering Marijuana Business Procedures for Success

Marijuana business procedures are the documented operational systems, compliance protocols, and workflow standards that enable cannabis businesses to operate legally, maintain regulatory approval, and scale sustainably across cultivation, manufacturing, distribution, and retail operations. Without proper procedures, cannabis businesses face licensing denials, compliance violations reaching six-figure penalties, and operational chaos that prevents growth—especially as state regulators increase enforcement in 2025.

I’ve spent over twenty years as CEO of Complete Controller working with businesses across all sectors, and cannabis operations present unique procedural challenges that other industries simply don’t face. Between federal-state banking conflicts, Section 280E tax restrictions, and seed-to-sale tracking requirements, cannabis businesses need procedures that go beyond standard retail or agricultural operations. This article breaks down the exact procedures you need, implementation strategies that actually work, and the compliance systems that separate thriving cannabis businesses from the 32% that fail to turn a profit despite operating in a $40 billion market.

What are marijuana business procedures?

Marijuana business procedures are written operational systems covering every activity from seed to sale, including cultivation, manufacturing, distribution, retail, and administrative functions
Cultivation procedures include plant tracking, pest management, nutrient schedules, and harvest protocols
Manufacturing procedures cover extraction processes, quality testing, and product formulation standards
Distribution procedures ensure chain of custody, transport security, and inventory reconciliation
Administrative procedures encompass employee training, financial controls, and regulatory compliance monitoring

Building Your Seed-to-Sale SOP Library: Cultivation to Retail

Cannabis operations span multiple departments, each requiring specific, state-compliant procedures that regulators scrutinize during inspections. Your standard operating procedures (SOPs) become the operational backbone your team references daily to maintain consistency and avoid costly mistakes.

Cultivation procedures that meet regulatory standards

Your cultivation SOPs establish how plants are grown, tracked, and documented from propagation through harvest. These procedures directly impact product quality, yield consistency, and regulatory compliance.

Essential Cultivation SOPs:

Facility sanitation and integrated pest management (IPM) – Document cleaning schedules, pest control protocols, and pesticide application logs that prevent contamination
Propagation and cloning procedures – Step-by-step processes for cutting, labeling, and tracking plant clones through vegetative stages
Nutrient and irrigation management – Mix ratios, dosing schedules, and water usage tracking (critical in water-restricted states)
Environmental monitoring – Daily temperature, humidity, and light cycle logs that protect crop quality

One Colorado cultivation facility I advised reduced cloning failure rates from 18% to 3% simply by laminating SOPs and posting them at each workstation. When state inspectors arrived unannounced, workers could explain procedures confidently because the documentation was visible and practiced daily.

Manufacturing and extraction SOPs

Manufacturing procedures transform raw cannabis into consumable products while maintaining safety and compliance standards.

Key Manufacturing SOPs:

Receiving and weighing raw materials – Verification protocols for incoming flower quality and accurate inventory tracking
Extraction process documentation – Equipment safety checks, temperature controls, and solvent handling for hydrocarbon, CO2, or ethanol extraction
Post-processing procedures – Winterization, filtration, decarboxylation, and distillation processes
Quality assurance and testing – In-house testing logs and third-party lab coordination

Missouri’s 2023 recall of 60,000 cannabis products stemmed from inadequate testing procedures—a stark reminder that manufacturing SOPs protect both consumers and business licenses.

Distribution and retail procedures

Distribution procedures prevent inventory discrepancies that trigger compliance violations, while retail SOPs ensure customer-facing operations meet regulatory standards.

Critical Distribution Procedures:

Inventory verification – Weight checks and barcode scanning integrated with seed-to-sale systems
Storage protocols – Temperature control, batch segregation, and vault access logs
Transportation SOPs – GPS tracking, manifest generation, and chain of custody documentation

Essential Retail SOPs:

Customer verification – ID scanning protocols and purchase limit enforcement
Daily inventory management – Receiving, counting, and reconciling products with system records
Cash handling – Secure transport procedures and banking documentation

Cannabis retailers lose 2-5% of inventory annually to theft (versus 1.3% for traditional retail), with 90% attributed to employee theft. Detailed inventory procedures directly protect profit margins.

Protect your license. Strengthen your systems. Start with Complete Controller.

Administrative Procedures: The Foundation Most Businesses Skip

Beyond department-specific SOPs, cannabis businesses need overarching procedures creating consistency across operations.

Essential Administrative Procedures:

Recordkeeping and document control – Organizing licenses, inspection reports, and training records for required retention periods
Employee onboarding – Background checks, compliance training, and equipment issuance procedures
Health and safety policies – OSHA-compliant procedures including incident reporting and emergency response
Vendor management – Evaluating and managing relationships with suppliers and service providers
Internal audits – Scheduled reviews identifying gaps before regulators discover issues

With 70% of cannabis companies reporting skilled labor shortages and turnover rates reaching 55%, documented training procedures become competitive advantages for attracting and retaining quality employees.

Technology Integration for Procedure Execution

Procedures only work when supported by appropriate technology systems that automate compliance rather than creating additional work.

Seed-to-sale system integration

State-mandated tracking systems like Metrc or BioTrack require real-time data entry, not end-of-day updates. Your procedures must align with these government systems, making compliance data entry a natural workflow component.

Cannabis-specific point-of-sale systems

Generic retail POS cannot handle cannabis compliance—you need platforms like Dutchie, Flowhub, or Treez that provide:

Real-time purchase limit enforcement
Automated inventory deductions
Cannabis-specific tax calculations
Compliance reporting generation

Winning License Approval Through Procedure Documentation

Licensing authorities evaluate thousands of applications for limited licenses. Your procedures demonstrate operational readiness and separate serious operators from hopeful amateurs.

What Regulators Want:

Compliance tracking procedures – How you’ll monitor and adapt to regulatory changes
Staff training procedures – Verification methods for compliance knowledge
Security procedures – Specific responses to theft or breaches
Quality assurance procedures – Testing and product failure handling
Record retention procedures – Document categories and storage duration

Submit procedures you’ve actually tested—regulators recognize the difference between theoretical SOPs and battle-tested systems.

Compliance Auditing: Your Early Warning System

Having procedures means nothing without consistent execution and monitoring.

Monthly compliance checklists

Build oversight procedures verifying departments follow established SOPs:

Compare physical inventory to system records (investigate discrepancies over 0.5%)
Verify employee training completion and test scores
Review security footage retention and access logs
Reconcile financial records for 280E compliance
Document regulatory updates and procedure adjustments

Quarterly deep-dive audits

Simulate regulatory inspections quarterly:

Random transaction samples verifying procedure compliance
Security system effectiveness testing
Staff knowledge assessments
Documentation completeness reviews

Annual mock inspections identify weaknesses before state auditors—the cost of internal audits pales against regulatory fines.

Financial Procedures: Managing Cash Flow and 280E Compliance

Cannabis businesses face unique financial challenges with federal banking restrictions and Section 280E limiting tax deductions.

Cash management procedures

Limited banking access creates cash management complexity:

Daily cash reconciliation with immediate discrepancy identification
Vault storage and transport chain of custody
Detailed deposit records with transaction lists

280E tax compliance

Section 280E prohibits most business expense deductions for cannabis operations. Los Angeles’s $400 million in unpaid cannabis taxes demonstrates what happens when businesses lack proper financial procedures—even licensed operators can collapse from tax debt despite operational success.

Proper COGS allocation and quarterly tax procedures prevent joining the one-third of cannabis businesses failing to profit in this growing market.

Final Thoughts

Marijuana business procedures aren’t bureaucratic paperwork—they’re the difference between scaling successfully and joining the 32% of licensed cannabis businesses that fail financially. From cultivation SOPs that reduce crop loss to financial procedures preventing tax disasters, every documented system protects your investment and enables growth.

The cannabis industry generated $40 billion in 2024 with projections reaching $45 billion in 2025. Success in this market requires more than a license and good intentions. It demands systematic execution of proven procedures that maintain compliance, reduce losses, and create scalable operations.

Ready to implement procedures that protect and scale your cannabis business? The experts at Complete Controller specialize in financial systems and compliance procedures for regulated industries. Contact us at Complete Controller to discover how proper procedures transform cannabis operations from compliance nightmares into profitable, scalable enterprises.

Frequently Asked Questions About Marijuana Business Procedures

What are the most critical marijuana business procedures for a new dispensary?

The most critical procedures for new dispensaries include customer ID verification protocols, daily inventory reconciliation systems, cash handling and vault procedures, employee training documentation, and purchase limit enforcement SOPs. These five procedure categories prevent the most common compliance violations and protect against the 2-5% inventory shrinkage cannabis retailers typically experience.

How detailed should cannabis cultivation SOPs be for state compliance?

Cultivation SOPs should include step-by-step instructions detailed enough that a new employee can follow them without supervision. Each procedure needs specific measurements (nutrient PPM levels, temperature ranges), timing requirements (spray intervals, harvest windows), documentation requirements (who logs what data when), and clear photos or diagrams for complex processes.

Do I need different procedures for medical versus recreational cannabis operations?

Yes, medical and recreational operations require distinct procedures, particularly for customer verification, purchase limits, tax calculations, and product restrictions. Medical procedures must include patient registry verification, physician recommendation validation, and caregiver documentation, while recreational procedures focus on age verification and state-specific purchase limits.

How often should cannabis business procedures be updated?

Review procedures quarterly at minimum, with immediate updates following any regulatory changes, compliance violations, operational incidents, or technology system changes. Establish a formal change management process where department heads review proposed updates and all staff receive training on modified procedures within 30 days of implementation.

What happens if state inspectors find we’re not following our written procedures?

Failure to follow written procedures typically results in more severe penalties than not having procedures at all, as it demonstrates willful non-compliance. Consequences range from warning letters and mandatory corrective action plans to license suspension, monetary fines up to $100,000 per violation, and potential license revocation for repeated failures.

Sources

California Department of Cannabis Control. “Cannabis Regulations.” cannabis.ca.gov
CJBS Accounting Firm. “Missouri Cannabis Market Overview: Insights for Cannabis Businesses in 2024.” cjbs.com
Cornell Law School. “26 U.S. Code § 280E – Expenditures in Connection with the Illegal Sale of Drugs.” law.cornell.edu
Deep Sentinel. “Strategies to Prevent Cannabis Theft and Loss.” deepsentinel.com
Enjoy Wurk. “From Prohibition to $40 Billion: Cannabis Industry Statistics & Analysis.” enjoywurk.com
Flowhub. “Loss Prevention Tips: How to Reduce Shrinkage at Your Dispensary.” flowhub.com
Flowhub. “2025 Marijuana Industry Statistics.” flowhub.com
Metrc. “Navigating Product Recalls in Cannabis.” metrc.com
Outlaw Report. “Southern California’s Cannabis Industry Confronts Numerous Challenges.” outlawreport.com

Jennifer Brazer Founder/CEO

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.

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Securing Assets in Uncertainty

Posted on February 10, 2020February 19, 2024 by Jennifer Brazer

When the financial crisis took hold on world markets, inflation and the significant increase in new mainstream politics increased. In these times, two major companies plan to open massive vaults in Europe. These locations can safely hold more than 100 million euros (112 million USD) in pure gold. Their customers are offered lower costs and protection from price hikes than exchange-traded products.

Inflation & Political Instability are a Major Risk for Customers

The price hike, technically known as inflation, forces many people to protect their valuable non-cash assets like gold. The thing about having a haven asset is not just the purchase. These assets require specialized storage facilities.

Conditions that could lead to political instability and unrest cause people to keep their assets even safer. Recently, the biggest conditions have been the UK’s decision to leave the European Union and the election of Donald Trump as President of the United States of America. The two incidents, in particular, have greatly influenced the global financial markets.

On the other hand, negative interest rates have been observed across Europe. The negative interest rate has persisted across countries in Europe. Inflation has continued to increase, causing major threats to bond coupon payments. These incidents have significantly led to storing wealth in vaults made of tempered steel.

New Secure Vaults in Construction

Currently, looking at the lucrative market for secured storage facilities, CoinInvest, a major Europe-based gold trader, is negotiating the construction of a massive 100-square-meter vault. The vault will be able to hold more than 100 million euros worth of gold. The weight of the safe is an estimated 82 metric tons. The door alone will weigh about 1.5 tons.

Hike in Gold Storage

BullionVault is one of the largest online portals that deal with physical gold trading. According to the information provided by BullionVault, the company successfully added 3 tons of gold in the past year.

This brings their combined gold holdings to about 38 tons, worth 1.5 billion USD at the current market rate. The company has different secure locations housing high-security storage facilities for gold. The vaults are in New York, Zurich, Switzerland, Singapore, London, and Toronto.

Gold reserves at the Bank of England, the corporation that operates one of the largest commercial vaults in the world, significantly increased. The Bank of England witnessed a 6% increase in its gold reserves in 2016, taking it to about 5,067 tons. The central bank holds gold for the UK Treasury, private banks, and other companies.

Despite the fluctuation in gold prices, companies and banks understand the value and importance of gold. The value of gold will never be zero; this is the main reason for a significant increase in demand for secure vaults for storing gold.

Major companies that provide vaults are reaching their total capacity at a breakneck speed. The demand for secure vaults for gold is causing another gold rush that will likely end soon. Gold worth millions is being traded back and forth as a secured monetary payment. Experts believe that more and more people and companies are willing to save their gold, as the financial future seems volatile.

Mastering Customer Retention

Posted on February 10, 2020February 19, 2024 by Jennifer Brazer

Small business proprietors tend to be customer retention experts. It’s an excellent way for businesses with a small marketing and bookkeeping budget to maximize ROI, increase profitability, and improve cash flow. Retaining customers is the ultimate goal for any business.

Whether online or offline, they ensure that customers are satisfied, which is critical for long-term success. Hundreds of thousands of similar companies target the customers you’ve worked so hard to earn.

What is Customer Retention?

The customer retention rate is how well a business can maintain an existing customer’s lifespan over time. Companies often fail to understand that it is much easier and more cost-effective to focus on retaining existing customers’ content than attaining new ones.

Set customer expectations

The first step to building better customer retention is to set client expectations early. You can eliminate uncertainty by setting expectations early and at a lower capacity than you can provide. Figure out the level of service you need to offer to ensure your clients are happy.

This clear vision enables your company to build KPIs around specific expectations and ensure you always deliver. Clients always tend to remember negative experiences rather than positive ones.

Be the expert

Small and medium-sized businesses increasingly rely on amenities to run their operation. No matter what business you occupy, you will likely retain more customers if you can be the expert in your field.

Becoming your clients’ trusted adviser will build customer loyalty and reduce customer churn. Becoming a reliable source of all technology, you build a relationship that leads to dependence. Your customers will trust you, rely on you to give the best advice and identify you as an essential part of their corporate success.

Build trust through relationships

Trust is essential in business; building relationships with clientele will harvest that trust. Simply providing a service is no longer sufficient– as opponents enter your market, you must start building shared values with clients.

Implement anticipatory service

An anticipatory service is a preemptive approach to customer service. Instead of waiting for problems, an enterprise implementing anticipatory service can eradicate problems before they happen. It would help if you were looking at ways to prevent glitches by being practical.

Make use of automation

Automation tools allow time-consuming chores requiring manual intervention to be standardized into repeatable processes. Businesses that leverage automation can minimize interruption and keep customers’ networks performing at their best. Companies are typically assured by contracts that pledge their services and make them answerable to clients.

Companies can better meet their commitments by leveraging automation tools and streamlining repeatable processes. You can increase customer loyalty by standardizing your processes and setting expectations for service levels, improving customer retention rates.

Build KPIs around customer service

A great way to improve customer retention is to improve customer service. Customer service is the number one reason a customer will become a repeat customer or never use your business again. Customer service should be your primary focus when building your KPIs.

Build relationships online

Your clients are online, so let’s start constructing relationships with them while glued to their computer screens. With the rise of social media, linking with your clients through these mediums makes sense. Focus your efforts on building LinkedIn, Twitter, and Facebook social profiles. Most of your clients will have active profiles on at least one of these websites.

Go above and beyond

Often, businesses overlook how important this is. Going the extra mile for your customers is an easy way to build strong relations. As a service business, you have countless prospects to woo your clients and exceed the minimum. By doing this, you can build some long-term faithfulness. If your customers know you are prepared to go above and beyond, they will stick with you when contenders start bashing on their door.

Implement customer feedback surveys

Customer churn can be avoided by simply listening to your customers. Customer feedback surveys are priceless for learning how your service performs concerning your consumers’ expectations. Understanding client feedback allows you to act before it’s too late and make business decisions based on an accurate data-driven response.

Cloud Accountability Concerns

Posted on February 9, 2020February 19, 2024 by Jennifer Brazer

Cloud computing services for resource accounting establish, host, and manage services rented out to a remote consumer (individual or business). The scope of services ranges from offering basic computational assets like bandwidth, storage, and computational power to sophisticated enterprise applications such as SaaS.

The commonly used business model to charge for these services is a pay-per-use base, where the consumers use resources according to their needs and are then billed for the used resources at the end of a defined period. Idyllically, the consumers should be offered an explicit resource accounting model that can identify all factors considered for calculating the consumption charges.

Giving the consumer access to their resource usage data can help them in IT budget planning, making them aware of billing applications and automating the assortment of services according to their specific needs. Also, it is to the benefit of the cloud service provider to make this data available for consumers as it would help them develop specifically designed user-centric services. Most of the providers already offer their clients their usage data. However, there are concerns regarding accountability.

Accountability Concerns

An issue that concerns the resource accounting model for such services is the accountability of the resource usage data. The provider, the consumer, or other trusted third party can measure this data. A combination of these players to measure accountability is also an option; however, just like other traditional utility services such as gas and electricity, provider-side accountability is also the norm in the cloud services industry. But unlike the consumer-trusted metering for conventional utilities, there is no such metric for consumers to measure data usage. Therefore, they have no choice but to accept what the provider offers them.

Consumer Side Proposition

Continuing the above discussion, we propose a customer-centric resource accounting model to resolve the concerns of all parties. A customer-centric accounting model will allow the customer to query for calculating billing charges from the service provider programmatically. They will be obliged to respond to the request. Subsequently, a robust customer-centric accounting model will allow the customer or a trusted third party to independently measure the billing charges of cloud services. This will enable consumers to measure their billing charges, which is only fair. It is proposed that the providers should at least adopt the customer-centric models to perform regular checks and raise alarms when there are apparent contradictions in the consumption data.

Inspecting Consumer Centricity of Resource Accounting Model

Many service providers provide or publish details of their billing information. However, it must be examined if the detailed information is based on a customer-centric notion. We will start with a fundamental example and see if there is room for improvement.

S3 Amazon

We use a simple S3 cloud storage service from Amazon to investigate this notion. It is a fundamental pay-per-use base service. It is marketed as a fast, reliable, and low-cost service. However, upon examination, researchers found a few ambiguities in the model, which cannot be programmatically queried from Amazon. This suggests that even the simplest resource accounting models cannot match the standards of a robust consumer-centric model but are loosely coherent with the weak model.

However, specifically for S3, the uncertainties can be easily fixed internally by paying little attention. However, it is recommended that a cloud service provider assemble the third party as a measurement service so that customers can easily access and measure their data usage.

Time Zone

One of the ambiguities was the lack of reference to the time zone upon listing the price concerning geographical location. The start and end days of the billing cycle cannot be determined for sure. However, it can be inferred from the provided Amazon developer’s guide that S3 servers are synchronized to GMT.

Data and Metadata

Another concern of S3 is regarding the measurement of user data. In addition to its data, the S3 resource accounting model has system and user metadata. System metadata is only used by S3, while user metadata is only used by the consumer and has a maximum size of 2KB. However, Amazon fails to clarify the storage space acquired by data and metadata.

Checkpoints

Amazon states that they check the user’s storage space at least twice daily. However, they fail to mention the exact time these checkpoints take place. Upon further investigation, it has been observed that they do not check the cloud storage usage twice daily, and the event randomly takes place anytime in a Zulu time zone.

Therefore, it is concluded that the resource accounting model for the cloud still needs to define specific operation parameters before they become trusted consumer utilities.

Tax Audit Tips: Be Prepared

Posted on February 9, 2020February 19, 2024 by Jennifer Brazer

What You Should Know about Business Tax Audits Conducted by the IRS

Most of these audits are conducted in person by the IRS.
These audits are comprehensive and cover income tax, employment tax, and payroll tax. Proper preparation is crucial for the audit.
The determination of the IRS agent is not final. You have the right to appeal against their determination.

The audit of your business tax return is conducted to verify the authenticity of the information you have filed. Questions such as whether you included all of your income and filed only for deductions permitted by the law are looking into. These audits aren’t conducted at random. Returns are likely to have the IRS select some errors through intricate criteria. The audits begin within a year of filling and are completed mostly within that year.

The Returns of Audits are Conducted in 3 Ways

By mail: This type of audit is known as a correspondence audit.
At an IRS Office: This type of audit is a desk or office audit.
In-person: This audit is conducted at the site of your business or home and is known as a field audit.

As mentioned above, most business audits are conducted in person, i.e., they are mostly field audits. Field auditing is an extensive task and is considered a physical inspection of all aspects regarding owners and their businesses. The IRS looks closely at the accounting system and business records, while physical inspections are carried out to determine the authenticity of those records. A business audit can take up to a year to complete (in most cases). However, the audit time can be reduced if a business properly prepares for the audit with prompt responses to the requests and questions the audit team raises.

While the audit is being conducted, the IRS requires you to submit all necessary documents (such as bookkeeping records) that are used to determine your financial position. It would help if you were accurate and precise when providing the information the IRS requests. It is recommended to have a licensed tax professional to handle your audit-related tasks. You must provide your tax professional with the facts needed to handle the audit.

Understanding the Scope of an Audit

The scope varies according to the type of audit being conducted. Here’s what you should keep in mind:

Mail audits are very limited. They include a check on a few items mentioned in the audit letter that the IRS mails you.
Office audits go into more detail. They are generally less complex than field audits, but in certain situations, they may have a scope similar to that of a field audit.
Field audits are the most time-consuming. They include questions that probe into the activities of your business and your business’s financial position. It is a wise decision to hire the services of a tax professional to represent your business in front of the IRS.

Preparing Responses to Questions Asked by the IRS

Mail Audit: Preparing for a mail audit is a relatively easy task. You will only have to prepare complete responses to the questions in the audit letter you received via mail.

Field and Office Audits: These can be more complex. In this, you will need to:

Prepare for the meeting session you will have with the IRS agent or officer who will be conducting the audit.
Prepare and compile the information that the IRS has already requested.
Prepare for any sort of questions that the IRS and the IRS agent or officer might ask.

In simpler words, you must be prepared to answer any question related to your financial activity during the year for which you are being audited. You will also need to recreate documentation for anything that isn’t documented (or if relevant documents have been misplaced). Third-party records or other records must be used to reconstruct such documents.

Respond to any request for documents and information promptly and on time.

The IRS will increase the number of questions if they think you must change your returns. Suppose you get an IDR (Information Document Request) asking for more financial information. In that case, it is important to respond by the deadline to avoid any suspicion on the IRS side.
The IRS may tell you that income and deductions have been misreported. If you disagree with their conclusion, you must present your interpretation to the IRS.
Finally, the audit is closed, with the IRS either recommending adjustments to your returns or accepting them as they are. You would, however, be given a 30-day window to appeal their decision.

QuickBooks: Small Business Accounting

Posted on February 8, 2020February 19, 2024 by Jennifer Brazer

QuickBooks has proven useful in accounting and bookkeeping, especially for incumbents and small businesses. Despite the market being flooded by similar accounting software, such as Xero, Wave, FreshBooks, etc., QuickBooks has taken the lead by transcending the competition. It has been the most favorable among small business owners. Several versions cater to multiple business needs that other competing software currently lacks. Its transcendence in the market for serving small businesses is attributed to the following reasons.

Diversity & Flexibility

QuickBooks is available in different versions, allowing for greater diversity in serving small businesses. Small business owners can choose from various versions depending on their unique business needs and specifications. For instance, QuickBooks offers various versions like QuickBooks Pro, QuickBooks Online Plus, QuickBooks Mac, QuickBooks Hosting, QuickBooks Premier Hosting, and more. Each one comes with unique features to enable businesses to choose the one that fits best with their business needs. The various versions may also be purchased according to one’s budget, allowing for even more flexibility. Hence, QuickBooks leads the competition through flexibility in pricing and features.

User Friendly

Another reason for this market transcendence is the user-friendly interface that it comes with, allowing for easy access and use within the business. Employees working on a legacy system are generally more resistant to change. Traditional bookkeeping has been popularly replaced by accounting software, which may be a source of intimidation for employees at work. However, QuickBooks helps with the initial phase of using the software step-by-step and extends the option to seek professional help.

Compatibility

QuickBooks offers a compatible interface that can be integrated with multiple vertical market applications quickly and easily. This superior compatibility helps align and streamline every single process within the organization and allows for cost, time, and effort savings. Automation sounds like a brilliant idea when it comes to accounting, but automation, to this extent, is no less than a miracle for small businesses.

Customization

In addition to the above reasons, QuickBooks has successfully outperformed the competition due to its ability to customize almost everything related to accounting and bookkeeping. One can customize a chart of accounts to their specific business needs and customize invoices, sale receipts, and estimates. You name it, and QuickBooks has it covered! It sure is a one-stop solution for all your tedious accounting hustles.

Simplification of Tasks

QuickBooks has been an innovation in the market to help serve small business needs related to complicated and enervating accounting procedures and activities. It has provided a complete and sorted package for A to Z accounting and helped simplify complex spreadsheets, returns filling, reconciling, invoicing, and financial reporting tasks throughout organizations, especially for small businesses.

Unlimited Features

QuickBooks has also taken over full responsibility for performing all accounting tasks while providing various features. It manages cash flows, invoicing, billing, receivables and payables, employee performance, bank transactions, check printing, online banking, emails, payroll, and financial reporting. Other features include access to its online version from any internet-enabled device. This is particularly useful for small businesses that are operated remotely.

Business Tracking

Another one of the many reasons why QuickBooks has led the market competition is the streamlining and automation that it has facilitated for small businesses. With its use, business owners have been empowered to track every business transaction and workflow hassle-free and seamlessly. This has enabled a transparent work environment for small business owners.

Conclusion

Therefore, based on the numerous reasons identified above, QuickBooks has remained victorious in establishing a position for itself in the market that transcends any competitor serving small businesses.

Understanding Profit Margin Analysis

Posted on February 8, 2020February 19, 2024 by Jennifer Brazer

Undoubtedly, an organization is most interested in how much it can generate gross profits. The profit margin is the total amount a business generates when its revenues generated from the overall sales exceed the total cost. Profit is important for a company for multiple reasons. It is common knowledge that the purpose of every small or big business is to make profits. Without profits, a company does not survive because the employers cannot pay its employees, suppliers, and investors. Even if companies can pay them, they cannot invest in attractive projects because they would not have enough money. Interpreting profit margin is incredibly important for any company because most financial and non-financial decisions depend on its financial prosperity.

Similarly, profit margin measures how successful a firm will profit from each sales dollar.

Understanding Profit Margin Analysis and Bookkeeping in Business

Regardless of their size and operations, most companies rely on sales to track their revenues but knowing the sales revenue alone does not indicate how a company is performing financially. On the other hand, organizations also use bookkeeping to analyze how the company is performing regarding its finances. Generally, companies keep track of their spending and revenue through bookkeeping. The primary benefit of bookkeeping is that it allows you to make a meaningful financial comparison. A well-designed and comprehensive bookkeeping system enables organizations to analyze their overall business spending and revenue. Data can be grouped by years, quarters, months, and weeks for a detailed analysis.

Profit margin is sometimes called “net profit margin,” which displays the big picture of organizational profitability.

The formula to calculate profit margin is dividing the net income by revenues or the net profits by sales. For instance, a company with $400,000 in sales and $10,000 in monthly net income has a net profit margin of 25% = $10,000 / $400,000 = 0.025. This means a company has 25% of net income for every sales dollar. Standalone and comparison analysis are two of the most widely used methods for interpreting profit margins.

Standalone Analysis

Managers and accountants analyze all the profits generated by a single firm, usually their firm, when determining standalone profits. In other words, only those values are generated from organizational operations. The major benefit of analyzing profit margins from the standalone method is that it allows finance managers to evaluate the independent value of the organization. The analysis provides an explicit image of the earning power of a business entity by incorporating its costs and revenues linked with the business. The standalone method of interpreting profit margins enables organizations to observe their complete financial health as if it constitutes a chain of totally independent organizational activities.

Comparison Analysis

Several companies use percentages more frequently than raw facts and figures when discussing profitability from a broader perspective. In the hyper-competitive business environment, you cannot rely only on a standalone analysis because you must know about the external business environment and its performance. Organizations frequently use percentages to gain a better understanding because it enables you to compare several companies.

While it is beneficial to use profit margins to compare the financial performance of different companies, all the companies being compared must operate in a common industry and incorporate similar business models. The simple reason behind this logic is that organizations operating in diverse industries have implemented different business models with unique revenue streams. Therefore, companies may have considerable differences in profit margins, which will be meaningless.

The analysis will allow you to interpret the business’s current financial health in both cases. When an organization can get an accurate idea of its profitability, it will be able to discover ways to cut back on expenditures and enhance profitability. Additionally, when an organization can improve its profit margin, there will be less pressure and a better environment.

Efficient Time Tracking Solutions

Posted on February 8, 2020February 19, 2024 by Jennifer Brazer

Time is money. This fact is simple and very accurate. We have heard that phrase over and over. However, this phrase reaches a much more detailed and specific level for professionals, such as HR executives and business owners. Some companies cater to such needs. They provide software that tracks time and gives more than an auxiliary attendance sheet. An employee’s punctuality is essential. Nonetheless, the organization is a completely integrated system of methods that must be more than a single dimension think-tank. The good news is that software analytics and processes help track time and details differently.

Technology and Time Tracking

There are many ways to track time and all relevant task details for billing purposes. Solutions vary according to needs and markets that are immensely diverse. Due to technological breakthroughs, every solution is customized, and no two may be alike. Starting with paper is a great way to track details for a start. However, there is now software that can speed up the process by using spreadsheets with filters. Usually, trust is not a reliable asset, nor is hope a reliable plan. Using technology to create an accurate environment and enhance the authenticity of data received has vastly increased.

Using timekeeping tools can be instrumental but not always completely reliable. This software tracks time by start and stop points and is almost entirely automated. It records the moment it is embedded into an iOS or Android phone. Every minute on the device can be tracked. But the problem is, it is not accurate enough. Slugging at a task or wasting minutes away cannot be differentiated, as more details are needed. Twitter, for example, can contribute to promoting a blog or post or maybe just wasting time. There is no way to record that with single-standing apps such as Rescue Time or Chromate.

Streamlining Time Tracking for Business Success

For advanced features that project management professionals often require, apps and other essential software can help with seamlessly tracking time on each task, especially client billing. It can be a great way to ascertain precise details of hours spent that are straightforward. If working in a team, many factors of the apps are beneficial as coordination is improved, and there is a more focused and productive use of time.

One of the main contributors to the expansion and development of any business is the happy and satisfied clientele. Culprits that can hurt the business are overstaffing, rent, ineffective work methods or flows, non-quantification of marketing efforts, and late client payments. Other things may be servicing the business does not need but still has. It is imperative to use smart and goal-oriented methods that do not burden the business to track time.

As it is commonly known, human beings have no receptors for time perception and rely on signs or tools. Tasks and assignments under key tracking systems are much more productive and efficient, leading to a business’s general uprising. The best methods, including timely notification and alerts, prompt staff to execute or expedite orders that help process billing. The business needs to thrive. The biggest failure that weakens a business is the failure to track time and the loss of billing information. With a loyal clientele, your business has a steady stream of success and income. This is the goal!

Conclusion

You will need to track time for multiple reasons. With the current technology offered to us, we have the resources to stay informed in the areas we need most. With the information given above, you are now ready to begin tracking time.

Navigating Accounting Information

Posted on February 7, 2020February 19, 2024 by Jennifer Brazer

Accounting information is the collected and stored particulars of a business’s financial and accounting data. It is used and processed by the internal users. An accounting system generally uses computer-based data. Accounting data comprises much more than financial statements, balance sheets, and cash flow charts. It contains data on revenue, expenses, bookkeeping, customer information, data related to tax paid and due, and employee information. It also includes sales orders, purchase receipts, requisitions, invoices, ledgers, and financial statements.

Inventory is up to date in an accounting information system. Check registers previously made on old-fashioned paper registers are now maintained in computerized systems by installing special accounting data using specific software. Using this software makes data interpretation much easier to access and report.

This accounting data is for company use only and consists of customer and employee information and other sensitive data, so they are highly secured. Security checks are maintained in the accounting information system, and hackers and other external sources are prevented from accessing the data.

The accounting information data is very important and must be interpreted correctly. In the case of wrong interpretation, the company can suffer losses. Because of this, entrepreneurs must know the basics of accounting data and its elements. They must fully understand their financial statements. While they can segregate the job to accountants and other personnel, entrepreneurs must still understand the accounting information on their own. They should be able to access, interpret, and account for the information in both internal meetings and with outside sources.

Financial mistakes pose an adverse risk to business growth, and they can damage the reputation of the customers and suppliers.

Common Mistakes Made in Interpretation of Accounting Information and How to Avoid Them

Business owners often mix their finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated, knowing what was intended for business and what was used personally is impossible. The amount of profit generated from invested capital cannot be correctly estimated if the two are intertwined.
Entries are not done in time. Getting behind in bookkeeping and submitting entries of expenses or sales will not yield an up-to-date picture of the business and will not allow you to make timely decisions. It can lead to a negative balance if the expenses are entered but the income statement is not updated. Invoices to be paid by the company may go unnoticed and can lead to a bad reputation. It can even end terms with suppliers. Business growth is halted or significantly reduced when you do not enter data in a proper amount of time.
Not setting up the proper software the company needs leads to faulty decision-making. Furthermore, installing the wrong software (more complicated than required or lacking crucial functions) can lead to inappropriate data entry. Sound decisions are hard to make when your company lacks the proper accounting software that it needs.
Failure to double-check the reports and statements and, instead, just relying on checking the amount of net profit may lead to many errors or malfunctions in business. Accounting information software is just a tool to use. Decisions must be made after completely checking the reports and interpreting the data. Data is interpreted by comparing financial statements with the cash flow statements and the balance sheets.
Keeping all receipts until all taxes are paid and an audit is conducted is necessary. Even after that period, receipts are very important for matching data entries in registers or software.
After a long day of work, mathematical or data entry mistakes are more likely. Stay focused. One mistake can lead to big errors.
Entrepreneurs and business owners must focus on the long-term consequences of their decisions after getting a full picture of their accounting information. Short-term decisions after interpreting account data do not set the business up for long-term benefits. Always focus on the future and the bigger picture.

Conclusion

Correct interpretation of accounting information is the backbone of any business. Specifically, focus on accurate bookkeeping practices and pay attention to every little detail so that you can take that information and make wise decisions for your company.