Every company is created by its founders to achieve their visions. Although most leaders may know what they want to see the company achieve, it may not always be the easiest for these same leaders to convey that vision to the rest of their team. Professor Mark Lipton of Leader to Leader Institue says that the struggle is completely normal and to "hang in there."

Click here to see what he has to say about creating and articulating your vision story.

Well, hello there. It's nice to be back. :)

I noticed an interesting discussion on LinkedIn the other day discussing the top accounting issues facing small businesses today. Here's my two cents -

The biggest issue for accounting departments (large and small) is the lack of change in process and adaptation to new technology.

Times are different now. There are many business processes today that are very different from how things were done just 5 years ago. In fact, many of today's most successful businesses did not even exist only 3 years ago! So why is it, that the accounting department of a business still holds on to many of the "old ways" of doing things? If you are looking to increase the efficiency of your business, look into your accounting department - it's likely to be one of your most expensive and inefficient department in the company. General ledgers shouldn't be maintained by hand, accounting systems shouldn't be DOS based, and Excel (believe it or not) can process thousands of lines of data in seconds - give your staff the resource to learn how to use the software you've paid so much for.

It's a new year and it's time for new change. Make it a good change. I'll see all of you on the other side of this recession. :)

Pictured: Shanghai World Financial Center behind a traditional building in Shanghai, China. All rights reserved. The new economy is a global economy. If you don't adapt, you will be left behind.

The team at #s People wants to thank everyone for their support this year. Thanks to everyone's efforts, our little boutique firm had grown at a rate faster than any of us expected. So we are taking a little time off from our blog to wrap up our last few SOX consulting / accounting engagements for the year, then half of us is off for the holidays while some of us head out to Shanghai, China for our co-founder Michael's wedding (pictures to come!)

My client had this posted on his cube wall. Figure I'd share it with everyone that's working late out there. =D cheers!

The IRS has recently announced the 2010 optional standard mileage rates used to calculate the deductible expenses of operating an automobile for business, charitable, medical or moving purposes.

Beginning on January 1, 2010, the standard mileage rates for the use of an automobile will be:
    50 cents per mile for business miles driven (55 cents in 2009)
    16.5 cents per mile driven for medical or moving purposes (24 cents in 2009)
    14 cents per mile driven in service of charitable organizations (14 cents from 2009)

The new rates are slightly lower than last year’s as it reflect the generally lower transportation costs compared to a year ago.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle (In plain English, if you depreciate your vehicle then standard mileage rate does not apply to you. You can do one or the other but not both.) In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.

Happy Friday blogosphere. :)

A friend of mine has recently decided to hire on additional help for his company due to the growth his company is seeing. He came to me over Thanksgiving weekend seeking advice - he wanted to know the true costs of an employee and compare it to a consultant and a vendor.

He had already gotten a quote from a local vendor of $5,200/ month for the job. Another friend of ours suggested a consultant who is charging $75/hr and claim that he only needs approximately 80 hours a month to get the job done. Finally, my friend told me he was planning on hiring the full time employee for approximately $65,000 to be competitive in the marketplace. I did some quick scribble on my napkin and it looked something like this:

(ok, maybe not EXACTLY like that. At least not with the pretty 3D chart and all.) But one can see that both, the vendor and the consultants remained pretty competitive with the traditional option of hiring a full time employee despite the higher "hourly rate." (In the case of the consultant, it was approx. $34 vs $75 per hour. Hourly rate was irrelevant with the vendor because they promised to get the job done for a fixed fee.) So the next time you are weighing your options, remember that wages paid are not the only thing that's going to cost you. 

A friend of mine recently started his own venture up in the San Francisco Bay Area and has been blogging about his progress each week. This week, he talked about "echo chambers" - where founders of startups sit around and talk amongst themselves, persuading each other that what they are doing is absolutely right. See a snippet of the post below.

Week three of my startup company has been pretty exciting.  We met up with one of our board of advisors, who provided really good feedback and information.  It's always great to have people who really make the effort to share their knowledge and insight.  It's not like you rely on that for direction, but it's good to keep your head out of any echo chambers you might be in, and really listen to other experts out there to see how other people and groups think in the same industries.  That is one of the most important things to learn in a startup: how everyone else is thinking about the same problems.

The worst that could happen to a company is for all the founders to put their heads down, bury themselves in code and business details, talk amongst themselves, and in essence, persuade each other that what they are doing is exactly right.  Echo chamber.  Everything really comes down to the same way of thinking for startups: release fast, often.  This will get you the most feedback from real life people, and with what they say you can easily determine what to build next as a feature.  There's no need for you and your founders to be geniuses, knowing exactly how people will want the app to behave, knowing the perfect UI flows.  There's also no need for countless hours discussing how exactly the best way to present information is.  Just present it as best you see it, and let the people tell you.

Good advice for any entrepreneur. See here for the original post on his blog.

So I called IRS yesterday and told them that I'd be glad to accept the $123.5 million they are looking to give back on behalf of all the taxpayers out there. They said no. :(

On a serious note. The IRS really is looking for taxpayers who are due to received a combined $123.5 million in the form of 107,831 refund checks! These refund checks were returned to the IRS by USPS because of mailing address errors. IRS Commissioner Doug Shulman said that they are "eager to get this money into the hands of taxpayers…" So c'mon guys, if you think you are missing a refund, go ahead and give IRS a call or use the  Where’s My Refund? tool on the IRS website. Update your address information and they will send you any passed due refund. According to the IRS, undeliverable refund check average $1,148 this year and $990 last year. Some taxpayers are due more than one check!

I don't know about you, but I sure can use a $1,148 check in this recession. Happy Friday people.

Afterthought: To avoid missing checks in the future, try selecting direct deposit as the method of refunds next time you file your tax return (and DO NOT let your tax CPA charge you extra for that. It is as simple as checking a box and filling in your bank information on your tax return.) If they try to charge you, tell them you'd do it yourself and it's time to find a new CPA.

is that you lose control. I disagree. In fact, I'd go as far as to say that you might actually gain more control because if the vendor does a lousy job, you can just find another.

Outsourcing merely means sending part of your "non-core" tasks to 3rd party specialists that'd get it done offsite. It works because your vendor should be able to save you time, reduce costs and provide better quality service then an in-house employee could. Finally, outsourcing doesn't automatically mean you are sending work overseas either--there are plenty of great outsource solutions here in the US--look into it.

Outsourcing. It's been done with marketing for years! Why not everything else that's non-core to your business? 

If your company owns a building that cost you at least $750,000 (excluding the value of the land) to purchase, construct or renovate in the past 12 years and you plan on keeping it for several years to come, you can benefit from performing a cost segregation analysis to accelerate part of your building's depreciation.

Most accountants will depreciate the total value of a building, and what may be considered personal property inside, over a period of 39 years. It is what we're taught, and it is the easiest approach. What they don't realize is that as much as 40% of the "building" value being depreciated may really be personal property that qualifies for accelerated depreciation.

Doesn't sound like much of a difference? Imagine if I said that I will give you $1 million and you have a choice of receiving it over 39 years or 5 years. Which one will you pick and do you think it'll make a difference in your quality of life?

In fact, experience shows that companies can gain net present value of $200,000 of additional cash flow for every $1 million of 39-year property that can be reclassified as personal property. In plain English? You may be paying substantially more in taxes then you should because of the way you're depreciating your building.

Now this is perfectly legal but very complex stuff. Always, always make sure your tax firm has the expertise to perform this analysis or you may end up being in trouble with the IRS. If your existing tax firm can't do it, ask them to recommend a firm that can. Read on to learn an extremely simplied version of how this is done.

To obtain cost segregation claims that can stand up to IRS scrutiny, specialists will perform a cost segregation study. The approach typically involves having construction engineers trained in this area to identify property and building components that qualify for accelerated depreciation. They'll examine architectural drawings, conduct comprehensive site visits and review contractor payments, change orders and costs incurred by the owner. By doing so, the engineers, working with the tax specialist, will be able to identify the personal properties that qualify for accelerated depreciation. Then, it is up to the tax specialist to properly document these findings and help you realize the benefits in the prior, current and future tax years. 

Sounds like a lot of work? It is. Not to mention it takes an expert tax craftsman to properly conduct the study and provide a quality documentation. The IRS reviews claims carefully to ensure their legitimacy, so find someone that knows what they are doing to avoid future hassles. Quality documentation generally includes asset classification and description, spreadsheets supporting the costs allocation, as well as references to related tax citations and court rulings that support the claims. If done right, this might save you significant tax expenses and increase bottom-line benefits to your business.

Good luck!