Lanes News

HOW CAN BUSINESSES REDUCE EXPENSES?

As an entrepreneur or business owner, you are probably aware of the economy’s current state of uncertainty. While some businesses are thriving, others are struggling to keep their doors open and their employees employed. The good news is that there are things you can do to make sure that your own company is weathering these rough economic times as best it can.

One of the biggest expenses for any business is the salary of its employees. When the economy takes a downturn and there are fewer jobs available, businesses will often have to offer less pay to attract talent – and that’s something that comes out of your pocket as an employer. Fortunately, there are things you can do as an employer to help reduce those expenses – and keep your business afloat even when times get tough.
 

BE CAREFUL ABOUT MAKING NEW HIRES

This may seem obvious, but it’s important to be careful about hiring new employees when unemployment is high. If there are a lot of people out of work – or even just a few people in every office who are struggling to find work – hiring new employees may not be the best decision. Not only will you have to pay these employees’ salaries, but you’ll also have to help them find new jobs when yours ends.

And that’s not all. If the economy continues to struggle, the unemployment rate is likely to remain high for some time. As a result, you might not have any employees to promote to new positions – and you’ll have to maintain the salaries of your existing employees even if you don’t have a new hire who can step in.
 

TIGHTEN THE BELT, BUT DON’T CUT BACK ON BENEFITS

You might be tempted to slash employee benefits when times get tough in order to slash employee salaries. This is a mistake. While it may be tempting to reduce benefits like health insurance or retirement plans, doing so in reaction to a tough economy is a bad idea. First of all, many employees rely on these benefits as part of their overall compensation package. When those benefits are cut, they’re less likely to stay with your company.

In addition, reducing benefits may actually make it more difficult for you to hire new employees – especially in the case of health insurance. Not only do most health insurance plans require you to cover your full-time employees, but they also set a minimum level of benefits. When you slash benefits, you may not be able to meet this minimum level, which means you won’t be able to hire as many new employees.
 

BE CAREFUL ABOUT PROVIDING HEALTH BENEFITS

This goes hand-in-hand with the advice above. If you’re cutting back on benefits, you may not be able to offer some of the same kinds of benefits that you’re currently providing. For example, if you’re offering a very generous health insurance plan, you might find that it’s too expensive to continue doing so. In this case, you may want to consider reducing the amount of money you’re spending on health insurance while still being able to provide some health benefits. This could mean offering a smaller amount of coverage – or even nothing at all.
 

ASK FOR MORE CONCESSIONS – AND ASK POLITELY

Some benefits are negotiated as part of a union contract or other employment agreement. In this case, you may have to sit down and negotiate with the union (or whoever has agreed to these concessions).In a non-union situation, you can still ask your employees to take a pay cut in exchange for concessions. This may sound difficult, but it’s actually fairly easy. You could ask them to forego a raise, or even pay a little more out of their own pockets.

In most cases, these concessions will be voluntary. You could also threaten to cut benefits or even lay off some employees if your employees don’t agree to concessions. Again, though, this is the last resort.

The bottom line is that you can’t avoid making some sacrifices during tough economic times. You’ll have to tighten your belt, cut back on expenses, and find new ways to save money. If your employees are ready to do their part, you can help them do more with less – and still get by.

If you’re currently in a position to help your employees manage the financial strain of these sacrifices, you’re ahead of the game. And if you’re not – if you’re struggling to make ends meet and can’t spare a single dollar for concessions – then you’ll have to wait until better times come around.
 

HOW CAN BUSINESSES SAVE MONEY ON THEIR TAXES?

When it comes to paying taxes, businesses have a lot more to think about than individuals do. They have to report everything from their profit to their salary to the number of employees in their workforce. It’s easy to see why some businesses feel overwhelmed by the reporting process. In fact, according to a recent survey by accounting software provider QuickBooks, almost half of small businesses (49%) said they’re worried about paying the government what they owe every year.

The cost of taxes is even higher for businesses operating internationally. Companies have to file several different kinds of tax returns, as well as pay tax on assets that are held outside of the country. In many cases, the process can be complicated and require a lot more time and effort than individuals encounter. And it can be even more tricky when multiple countries are involved. Luckily, there are ways to cut the costs of taxes for businesses. Here are some ideas for how you can save yourself some money on your taxes without sacrificing quality or effectiveness:
 

MAKE SURE YOU’RE REPORTING EVERYTHING

One of the quickest ways to save money on taxes is to make sure you’re reporting everything. Some businesses skip reporting certain items or fail to submit them on time, but that can lead to hefty fines or even jail time. Make sure you understand the rules for reporting on your business and how they apply to you. You can find information on the IRS website and in the handbooks provided by most accounting software providers.
 

NEGOTIATE WITH YOUR ACCOUNTANT

When it comes to how much you owe in taxes, you can always ask your CPA to negotiate your tax bill. In fact, many accountants will let you know if there’s a way to reduce your tax bill without reducing your profit. If you’re paying someone else to file your tax return, you can also ask them to negotiate with the IRS on your behalf.You can also try to negotiate with your employer or the government directly. If you’re worried that your company is taking too much of a cut, you can always negotiate a lower rate. And if you still owe money for taxes but don’t have the money to pay them, you can always negotiate a payment plan.
 

DON’T FORGET ABOUT THE WRITE-OFF!

One of the easiest ways to save money on taxes is to take advantage of the write-off. For example, if your company makes a large investment like a new machine or a piece of real estate, you can write the expenses off on your taxes. This will lower your tax bill, but it will also reduce your income, which means you’ll pay less in taxes.Write-offs are commonly used for large-scale purchases or investments. If you don’t take advantage of these, you could end up paying too much in taxes. You can find the write-off rules for your state and the federal government in the handbooks provided by most accounting software providers.

DON’T FORGET ABOUT THE TAX INCENTIVE!

Some large corporations offer tax incentives to attract businesses. For example, if your company is located in New York and you invest in the state, you can receive a tax break. This can reduce your tax burden, but it won’t lower your profit.

The same thing applies to business loans. You can take out a loan from a bank and use it to fund your business, but you might not have to pay as much in taxes as you would if you used the money to invest in your company.
 

BE SMART ABOUT REAL ESTATE

When you buy a property for your business, you might be tempted to take the cash from the sale and invest it in something else. But if you can get the IRS to agree that this is a legitimate use of the money, you can lower your tax bill. If you have a large investment, like a building or office space, you can make that a tax-deductible expense. You can deduct the amount of the investment from your taxes, which will reduce your overall bill.
 

BOTTOM LINE FOR BUSINESSES 

The bottom line is that every business owner faces the challenge of paying taxes. Fortunately, there are ways to cut costs, and many of them don’t involve sacrificing quality. Making sure you’re reporting everything, negotiating with your accountant, and taking advantage of tax incentives can all help you reduce your tax bill. In some cases, you might even be able to write off the cost of your taxes.