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Part 2 - Financial Control, Evaluating Worker Independence
Greetings from the desk of Nicky Franks, where we dive deeper into the critical realm of Financial Control—the linchpin in distinguishing between employees and independent contractors.
Financial Control scrutinizes the degree of financial autonomy a worker enjoys from their employer. Both the IRS and Montana Department of Labor & Industry scrutinize several vital aspects Key elements include:
Example: Consider a software developer who invests in their computer and software licenses, serving various clients—a clear indicator of an independent contractor. Conversely, a developer using company-provided equipment and receiving a steady paycheck leans towards employee status. Implication: Correctly assessing these financial control factors is vital for businesses to avoid misclassification, steering clear of financial penalties and legal entanglements. Understanding and evaluating financial independence is pivotal in navigating the complexities of worker classification. By grasping these nuances of financial control, businesses empower themselves to make informed decisions, ensuring compliance with regulatory standards. Stay tuned as we continue to unravel more insights in our ongoing exploration. Until next time! Warm regards, Nicky
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Part 1 of 4:Navigating the nuances of worker classification..I understand firsthand that correctly categorizing workers isn't just about compliance—it's a strategic lever that optimizes business operations. My expertise lies in developing tailored strategies that not only meet regulatory requirements but also enhance overall efficiency. At Elevated, I specialize in implementing robust documentation practices and establishing clear contractual frameworks. These measures empower businesses to confidently navigate the complexities of worker classification, mitigating legal risks and laying the groundwork for sustainable growth. It's my passion and talent to ensure that businesses not only comply with IRS guidelines and state regulations but also leverage these classifications to streamline operations and drive success. Part 1: Behavioral Control - Determining Worker Status Understanding the distinction between an employee and an independent contractor is not just about compliance—it's about navigating the intricate dance between IRS guidelines and Montana state regulations. As we embark on this series, we delve into Behavioral Control, a cornerstone in the classification of worker status. Behavioral Control Behavioral Control hinges on how much sway a company has over the details of how, when, and where tasks are carried out. Here's what counts:
Example: Imagine a graphic designer brought in by a company. If the company dictates the entire design process and provides extensive training on their tools and methods, the designer leans towards being classified as an employee. Conversely, if the designer brings their own toolkit and creative process to deliver the final masterpiece, they’re more likely an independent contractor. Implication: Misclassifying based on behavioral control can lead to serious consequences. To stay on the right side of the law, meticulous documentation and crystal-clear contracts are non-negotiable. Conclusion Behavioral Control isn't just a box to tick—it's the compass guiding worker classification. By grasping how instructions and training shape this criterion, businesses can confidently classify their workforce, sidestepping legal quagmires and ensuring compliance with finesse. Stay tuned for part 2Next we will take this a step further and outline Part 2: Financial Control - Evaluating Worker Independence.
In the second part of our series, we delve into how financial control, assessing aspects like investment, expense reimbursement, profit or loss potential, and market availability of services, determines whether a worker is an employee or independent contractor. Understanding these factors is crucial to avoid misclassification pitfalls, ensuring compliance and operational efficiency in worker classification. In the fast-paced world of entrepreneurship, we understand the stress and challenges you face daily. As a firm committed to your success, we recently had an enlightening conversation with Alex, a dynamic business leader. Our discussion with Alex shed light on a common struggle many businesses face—keeping their financials up-to-date and accurate.
Alex, an inspiring individual we recently connected with, shared insights into their business operations. They were working with a remote firm that provided fractional CFO services and handled their tax strategies. Alex's business had an internal accounting team, yet they were grappling with a significant issue: their current firm was consistently three months behind in presenting financial statements. It's a scenario we've seen more often than we'd like, and it raises a critical question—are inaccurate and delayed financials hindering your ability to make informed business decisions? Enter Fractional Controller Services. Understanding the Need: Accurate, Timely Financials Running a successful business requires more than just intuition—it requires accurate and up-to-date financial information. Our encounter with Alex highlighted the importance of having a clear picture of your financial health. Delayed financials can lead to missed opportunities, hinder strategic decision-making, and increase stress levels for entrepreneurs like yourself. This is where Fractional Controller Services come into play. Fractional Controller vs. Fractional CFO: Unveiling the Difference Before we delve deeper, let's clarify the distinction between Fractional Controller and Fractional CFO services.
Our approach to Fractional Controller Services is designed to alleviate the burden on your shoulders and empower you with the information you need to steer your business confidently.
In essence, our Fractional Controller Services aim to be the guiding light in your financial journey, ensuring that you have the right information at the right time. Conclusion: Empowering Entrepreneurs for Success At Elevated Advisory & Accounting, we recognize the challenges entrepreneurs face in managing their businesses. Our Fractional Controller Services go beyond crunching numbers—they are a commitment to your success. We are here to empower you with accurate, up-to-date financials and provide the support you need to make informed decisions confidently. Let's navigate the path to success together. Contact us today to explore how our Fractional Controller Services can transform your financial landscape. Let’s face it: we’re staring down a changing economy. While we’re all about a positive outlook, and we love to look on the bright side, the future is a little uncertain right now, and we’re hearing from lots of business owners who are wondering what comes next. Many of them are looking for ways to “future-proof” their operations - despite the economic downturn. Fortunately, you’re not alone in your efforts. And planning well makes everything a little less scary! When uncertain economic times hit, your accountant is your greatest asset. In this blog, we’ll discuss how an accountant can help you through an economic downturn. We’ll also discuss why now is a great time to hire an accounting team.  The Financial Future is Uncertain The financial broadcasts are a little bit of a bummer right now, right? Combine that with a bit of doom-scrolling, and it’s easy to see why the “R” word is on everyone’s mind. Economic growth is shaky, inflation continues to rise, and business owners are concerned that a recession is right around the corner. Despite those realities, though, spending remains high, and jobless claims are steady or improving, so economists are more than a little confused about what the heck is going on with this changing economy. While it’s impossible to predict the future (believe us - we WISH we had a crystal ball!) It's obvious the financial landscape is changing. Fortunately, you don’t have to just go along for the ride when it comes to your business. It’s time to hop into the driver’s seat, grab the wheel, and steer toward what matters most. Why Hire an Accountant to Help You Navigate the Changing Economy? So, the future is muddy, and you want to take a cautious approach to business spending. You know that every penny matters, and you want to be smart right now. Unless you have a planning method that allows you to track your expenses, though, it’s tough to tighten your belt for what lies ahead. It’s also hard to predict how you’ll perform tomorrow, even if things in your business or industry change. It’s a little bit like heading out on a road trip with no GPS and no map. Fortunately, an accountant can help you navigate the changing economy. Think of us as your trusty navigator, here to help you get where you want to go.   A qualified bookkeeping team will be able to do the following:
The bottom line is this: accountants are versatile, agile partners for businesses of all sizes. When a business hires a good accounting team, they gain access to critical information. Businesses without accounting teams, meanwhile, just have to keep wandering around without a map. Want to prepare as well as possible? The best time to hire an accountant is before a recession hits, so you can prepare for whatever the economic environment holds. 6 Quick Tips to Recession-Proof Your Business Want to prepare your business for an uncertain financial future? Here are a few tips we recommend: 1. Create a cash flow and management plan The last thing you want to do during a recession is run out of cash. To prevent this, start by understanding your current cash balances and developing a cash flow forecast that covers at least the next quarter of your business. This way, you’ll have some advance notice if things start to change over the next few months. If you ask us, knowledge is power, and getting granular about your business operations is the best way to combat uncertainty. 2. Stay within your budget Next, set a budget and stick to it. When you spend less than you make as a business, you’ll have an economic cushion that can help you navigate tough times. It’s a simple trick but oh so effective! 3. Build your business emergency fund One of the key tenets of personal finance is the creation and maintenance of an emergency fund. The same goes for your business, though. We recommend creating a cash cushion that can act as an emergency fund to cover up to six months of essential costs, like utilities, payroll, inventory, and more. This way, you’ll have enough of a cash cushion on hand that you’ll be able to ride out the hard times with less stress. 4. Pay down your commercial debt If you have outstanding loans, toss some extra cash toward them right now. If we are heading into a recession, entering it as debt-free as possible is the best way to save money on interest expenses and allocate those funds to cash reserves instead. 5. Find ways to cut back If you feel the need to tighten your belt a bit, start by decreasing your operating expenses as much as possible. The first step is to evaluate your biggest costs and identify places where you can reduce spending. Examples include leveraging early pay discounts from suppliers and looking for more affordable options for software and programs you rely on. 6. Diversify to keep cash flowing Diversification is the ultimate key to improving cash flow and making your business recession-proof. This is especially true for small companies, who will need cash on hand to survive an economic downturn. With this in mind, consider offering new products or services adjacent to your existing business. For example, if you run a brick-and-mortar retail store, consider expanding your reach by adding online shopping. If you run a service-based business, add new services that complement what you’re already doing. The more diversified your business is, the more ways customers have to interact with you - even during tough economic times. Get Help With Your Books in the Face of a Changing Economy Whether you’re pivoting, curtailing operations, shifting your approach, or expanding, the first step in any major transition is to get (and keep) your books in good order. Fortunately, an accountant can help you prepare for what’s happening now, and what’s likely to come next. We’ll be your hype team during tough times, and your trusted advisor in even the most confusing economic climates. Our team can help you create detailed planning scenarios that allow you to respond to transitional periods and adapt to industry or market changes, regardless of what the time horizon may be. We also provide business planning services to help you prepare for the future and make contingency plans for periods of economic downturn. Here at Elevated Advisory & Accounting, we work with small and medium-sized business owners to future-proof all your operations. No matter what the future brings, our team of accounting & bookkeeping professionals serves customers in and around the Kalispell and Whitefish, MT area. We'll work to provide accounting solutions that grow with You - regardless of whether we’re facing an economic boom or a downturn. Contact us today to learn more about our services and how we can help you.  The New Year has arrived, and 2023 could be the year your business will flourish. You’ve planted the seeds for success, watered them carefully, and now it’s time to watch them sprout into something beautiful! You know that setting goals are critical to your business growth and success. Whether it is your new year's resolution or you just need to get your business in order, there is no time like the present to get yourself started. Let’s face it - every business needs to set goals. Running a business without goals is a little bit like driving a car with your eyes closed. It’s dangerous, reckless, and bound to end badly! Today we'll share a few of our favorite practices for setting business growth goals in the new year. Why Setting Business Goals Matters There’s no way around it: goal setting is essential. Being a business owner involves many things you need to consider. It’s easy to find yourself caught up in the day-to-day process of working in your business rather than on it. Fortunately, having clearly defined business goals is a great way to avoid that pitfall. Good business goals guide you toward your larger vision and allow you to scale your company as efficiently as possible. Without having business goals, you can drift along aimlessly, not planning for the future or what's to come. Setting business goals also gives you something to focus on and allows you to measure your team’s progress and ensure you’re on track. Finally, good goals give you something to work toward, even when things are going well. Having defined business goals allows you to keep pushing forward and growing your business. 5 Tips for Setting Smart Business Growth Goals Want to make your business goals work for you in 2023 and beyond? Here are a few tips we recommend: 1. Write your goals down Want to increase your chances of reaching your business growth goals? Write them down! Research has shown that you’re 42% more likely to achieve the goals you write down. Even better, you’re 76% more likely to achieve goals for which you write action commitments and have regular progress meetings. The reason is simple: accountability is everything regarding good business goals. With this in mind, get your team involved and consider bringing in a professional, like an accountant, who can help you stay on track. We also love the idea of making your goals part of team meetings, discussing progress with your employees, and looking for feedback on ways to achieve your objectives more efficiently. When it comes to what kind of goals you set, don’t be afraid to get audacious. Dream big (for yourself and your business), then start hustling and make your vision a reality! 2. Set a Budget If you aim to reduce your expenses in 2023, focus on cutting costs and understanding your cash flow now. If you have extra money that needs to be invested into your business, set a budget to guide your allocation of funds for the year. When was the last time you got granular with your budget? If you don't have that answer, consider this your invitation! You will likely need help determining how to improve your company's financial health. As a business owner, you don't have extra time to invest in analyzing numbers, so bring in an accounting and bookkeeping team to get you started. In the world of finances, small changes can generate significant results. So pay attention to the power of a budget. It could be a game changer for your business. 3. Set SMART Goals If you want to get serious about business planning, setting SMART goals is vital. SMART stands for specific, measurable, achievable, relevant, and timely. This acronym is important because it helps ensure you’re setting yourself up for success. Here’s an example: If your goal is to “grow your business,” you’ll struggle to get anywhere. Does it count if you grow your business by 1% in the next year? How will you know when you’ve met your goal? That objective is difficult to meet because it’s just too vague. If you make it more specific and set a goal like, “I want to grow my revenue 50% in the next six months,” you’ve got something to work with. The more specific your goals are, the more measurable they become. 4. Revisit your KPIs Once you’ve established a few SMART business growth goals, you’ll want to evaluate (or revisit) the KPIs, or key performance indicators, associated with them. KPIs are the metrics you use to track your progress toward your goals. In the example above, revenue was the KPI. Depending on your goal, the KPI could be anything from expenses to website traffic. Regardless of what it is, be sure to get specific about it. If you need help determining KPIs (or setting SMART goals, for that matter), we recommend hiring a business advisory service that can help you laser-focus on your growth for 2023 and beyond. 5. Keep your long-term vision in mind Are you setting goals for 2023? Think about where you want to be in ten years as you do. Although short-term goals are essential to help you scale and improve your business, your long-term goals should also be part of your vision. Unless your short-term goals support your long-term goals, they waste time and energy. By knowing who you want to be as a business and what you want to achieve in the long term, you can focus on the most productive short-term goals. This helps you allocate resources and energy intelligently and scale efficiently. Elevated Advisory & Accounting: Ensuring Your Sustainability and Business Growth You’ve heard the saying: If you want to go fast, go alone. If you want to go far, go together. While that’s true in many aspects of business, it’s especially true if you run a business. As a business owner, you know you don’t set or achieve business goals alone. Instead, you need a team of dedicated employees, advisors, and supporters to help you get there. At Elevated Advisory & Accounting, we want to be part of that team. We know that planning for the future can be intimidating, and we’re here to use our skills and experience to ensure your business growth and sustainability. Think of us as your team of cheerleaders, motivational speakers, and business-savvy advisors - we’re here to build you up, help you dream big, and give you the tools, foundation, and support you need to crush your goals. Providing accounting, advisory, and bookkeeping services to business owners in Kalispell, Whitefish, and the surrounding area, we’ll be your go-to growth team for 2023 and beyond. Whether you’re setting short- or long-term goals, we’re here for you. Contact us today to learn more about our services and how we can help you.  |
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