2009 November Edition

Message From Doris: Is the recession really over?

In bad times, whether perceived or real, accounting in your business becomes a catch 22 situation. Logic tells you that when business is slower, it’s a good time to invest in infrastructure, improve business efficiencies, etc., right? But often, you become fearful listening to news reports that say: you’re hopelessly in debt, worried where the next job is coming from and how much will the health insurance premiums increase in 2010? Indecision and holding tight is a costly strategy. I think it’s a time to locate opportunities as prices are low and buyers can get the most for the best quality in years.

Like you, I don't have all the answers, nor do I pretend too. I can only share what is going on now in our business or what we see in our client’s firms. And we do see a lot. What we have seen in 2009 is a trimming of the workforces, or a "buzz" cut to be frank. A scary and fair statement, job loss is tough. Those losses also extended to cuts in pay, cuts or loss of benefits, reduced hours or even worse, increased work hours for same pay and outsourcing. We are seeing for the most part higher skilled people in lower skilled jobs and pay stagnation. In that light, the upside is that it’s hard to say that job cuts could possibly continue. Some firms have narrowed staff or are now operating at a nub if you were to ask me. Professionals want to get back to better times; they are ready and have learned some lessons. Holding tight is not helping this cause.

Despite all that, we saw strong isolated pockets of growth in a few industries. And with the credit crunch better, profit at many firms have shown an increase in 2009. The 2008 fiscal losses were deep and sudden, forcing immediate cut backs that were coupled with lines of credit being shut down and frozen. So my gut feeling is there should be money to spend from real profit and real cash.

In respect to pockets of growth, firms in the environmental engineering field are luckier than most of us and keep being busy. A combination of stimulus money, good relationships and consistent marketing have tapped into what demand is available. If you picked up a pawn broker license and are in the jewelry business, this year cash for gold is booming and I mean booming. Light manufacturing seems to be on the uptick as new organic offerings and affordable solar energy have placed bids for integrated accounting systems. Another growth area is the repair market or urgent break fix arena. DMC is busy keeping older systems running as firms have cut back on routine maintenance.

There are positive signs and opportunities out there. With multiple years of recession waves since 2001, northeast companies have not capitalized due to uncertainty, lack of money and fear. Positioning your offerings to support old technologies, materials, parts or service skills is not practical; there are growing markets out there and you should be focusing towards and maximizing.

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The Value of Accounting Software Training. By John K. Pidgeon

Each time I write on this topic it becomes clearer that many firms simply do not want to spend the time or money on software training for their employees. In my opinion, training is important for three main reasons: getting the most functionality out of the software; allowing users to become more proficient; empowering employees to help grow the company.

Even lower priced accounting software requires detailed training. The object of using an accounting package is to generate information that is useful for the company. Of course, it must be timely and relevant. Therefore, if the employees know what functionality is necessary for their type of business, it will allow them to use the software efficiently.

Professional training will enable the employees to become proficient in the software and their jobs, in general. With all software, there is a learning curve. Proficiency comes from learning good habits, practice, learning from mistakes, and time.

Empowerment, in this sense, is to give the employees the authority, or power, to operate the software in the best way for the company’s needs. This is a proactive approach - enabling the users to stay ahead of the vast amount of monthly data entry and reporting needs.

In summary, there is no substitute for professional software training. A skilled trainer can pass along knowledge, prepare the user for unexpected situations, and can act as a valuable resource in the future.

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H1N1 - aka “Swine Flu.” By Cathy Chubbuck

What does it mean to a business owner?

We have all been hearing about this robust new strain of the influenza virus for some time now, and as flu season approaches, we are steadily reminded to take precautions and to get our flu shots. But what does this mean you as to a business owner? What are your responsibilities?

The most important thing anyone can do is to become aware of the signs of the disease, and encourage each and every employee to take proper precautions. Many larger firms and especially colleges and hospitals have put policies in place that prohibit infected individuals from returning to work for a set period of time, anywhere from 4 days to 10 days. However, this is probably not practical for many firms. While business must go on, your employees should be encouraged to stay home if showing visible signs or running a high temperature. All workplaces should have an ample supply of health aids such as Kleenex or hand sanitizers.

The Massachusetts Office of Health and Human Services has prepared some articles for better understanding of this strain of the flu. These include basic information about the H1N1 Virus, how to protect oneself and others, information for specific groups (such as elderly, parents, employers, schools and health care professionals), and up to date information about know cases in our region.

All of this information and more can be accessed at the Commonwealth of Massachusetts Website: www.mass.gov/flu.

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Important Massachusetts Wage and Unemployment Tax Reporting Changes. By Cathy Chubbuck

The upcoming change to the Wage and Unemployment Tax Reporting applies to all businesses with employees in the Commonwealth of Massachusetts. Recently, information has been released to Payroll Services, and some of you may have already been contacted by your service regarding certain changes in your payroll reporting, and new authorization forms required. The most significant one is that you have been asked by your payroll service to provide HOURS for all payroll checks that you are calling in. In the past, this has been overlooked for many salaried employees.

What I found out was the reason for these changes are due to the new “QUEST” system that will be in place beginning in December 2009. What is QUEST? It is a completely re-engineered website that will provide employers and employees with a fast interactive way to transact business with the DUA.

What it means initially for employers is that all wage reporting will be done in one place. Through the QUEST program, employers will report wages paid, hours worked, and be able to process their tax filings and tax payments all in one place.

Once this is in place, employers will no longer be using the “Webfile for Business”; you will be automatically re-directed to the new website. These changes will be in place starting with the 4th Quarter of 2009.

According to the Massachusetts Department of Revenue’s website, this is the first phase of many new improvements, and others will be rolled out in 2010. In the coming weeks, communications regarding any transition activities related to the new UI System will be generated by the DUA. For more information regarding this new reporting system, go to the DOR website: www.mass.gov/dua/quest.

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