With spring upon us and the weather warming, it’s the perfect time of year to do some good spring cleaning. However, it’s not just our homes that can benefit – our finances can benefit from intentional tidying up and decluttering as well. This can lead to increased efficiency, better cash flow, and improved overall financial health for our businesses if done right and done consistently. In this blog post, we’re sharing 5 essential steps to spring clean your finances each and every year.

5 Steps to Spring Clean Your Finances

When spring cleaning your business finances, it’s important to do this in a step-by-step approach so you know exactly where you’re at, what you can improve on, and what action steps you need to take. Follow these 5 steps to declutter and improve your business finances this spring.

STEP #1: ANALYZE EXPENSES

Start by going through your expenses with a fine-tooth comb to identify any unnecessary or redundant costs that could be cut down. This could be subscriptions to services, softwares, or programs you no longer use, excessive spending on office supplies, or high fees from vendors or suppliers. By identifying areas where you can reduce expenses, you can free up more funds to invest in more profitable areas of your business.

STEP #2: NEGOTIATE BETTER TERMS

After identifying areas for potential cost savings, don’t be afraid to reach out to vendors or suppliers for better terms. Negotiating lower prices, longer payment terms, or bulk discounts is a great way to cut back on expenses and ensure you’re getting the best possible deal. Building strong relationships with your vendors and suppliers can also lead to perks such as exclusive deals or priority service, so be sure to keep those relationships and communication strong.

STEP #3: UPDATE BUDGETS AND FORECASTS

After analyzing your expenses, you’ll have a clearer picture of your current financial status and areas in which you can cut back and improve. Now, it’s time to update your budgets and forecasts for the rest of the year. Review your revenue projections and compare them to your expenses to ensure they’re in alignment for a profitable year. Adjust your budget as needed to account for any changes in your business, the market, etc. It’s a good idea to revisit your budget and forecast regularly to stay on track and make informed decisions throughout the year. This can help prevent you from reaching the end of the year and falling short of your goals.

STEP #4: PREPARE FOR EMERGENCIES

No one likes to think about worst-case scenarios, but it’s so important to be prepared for emergencies as a business owner. Review your insurance coverage to ensure it covers your needs. Consider adding or updating policies as you see fit. Establish an emergency fund for your business to cover unexpected expenses or disruptions to your business operations. The last thing you want is to be unable to pay your bills or your employees should something go awry. Having a financial safety net in place gives you peace of mind knowing that you can weather any financial storms that come your way.

STEP #5: IMPROVE INVOICING AND COLLECTIONS PROCESSES

Lastly, having efficient invoicing and collections processes is essential for maintaining a healthy cash flow and keeping things running smoothly. Review your current invoicing and collections processes to identify any inefficiencies or areas holding you back. Consider implementing software solutions like Wave that streamline invoicing, automate reminders for overdue payments, and provide insights into customer payment behavior. Improving your invoicing and collections processes can reduce the time it takes to get paid and minimize the risk of late or unpaid invoices.

This is the perfect time of year to spring clean your finances and ensure your business is set up for success and efficiency in the months ahead. Take a good look at where you’re at income and expense-wise, update your budgets and forecasts accordingly, prioritize planning for emergencies, and look for ways to make invoicing and collections more streamlined. By following these steps, you’ll be in good financial health and ready to grow for the rest of the year.

Tax season is just around the corner, and for many, this time of year can be both daunting and overwhelming. However, with the proper planning and organization, you can take on tax season with confidence! This blog post will serve as your comprehensive guide to tax season preparation, outlining the key steps you need to take to ensure a smooth and stress-free tax season!
 

How To Prepare For Tax Season

Preparing for tax season seems like a year-long process at times. From tracking mileage to organizing receipts, there’s always something tax-related to do. However, when the calendar turns over to a new year, it’s time to really start thinking about tax season preparation and the steps you need to take to get ready for filing day. Read on for your complete guide to tax preparation and everything you need to know!
 

STAY INFORMED ABOUT TAX LAW CHANGES

Tax laws are ever-changing and it is your responsibility to stay informed on these changes, as they can make a significant difference. Familiarize yourself with any updates or changes to tax laws that may affect your filing status or eligibility for credits. You can also reach out to your tax preparer or accountant for more information on these changes and the potential impacts on your taxes.
 

GATHER AND ORGANIZE KEY DOCUMENTS

This is one of the most daunting parts of the tax season preparation process – gathering all of the key documents needed. This includes tax forms such as W-2’s, 1099s, and other forms. You’ll also want to gather and organize receipts, mileage records, social security documents, bank statements, income statements, expense records, payroll records, tax deduction records, profit and loss statements, balance sheets, financial statements, and any other relevant or requested paperwork.
 

Take some time to review all of your financial documents and categorize them by income and expenses to make it easier to identify potential deductions or tax credits. You can use an accounting software like Quickbooks Online to make this process simple.
 

Having all of the documents you need to properly file your taxes in one organized place will save you a lot of time and prevent last-minute searches.
 

EXPLORE DEDUCTIONS AND CREDITS

With all of your documents and records organized and in one place, you can explore and identify potential deductions and credits that are available to you.

Some common deductions and credits include:

• Mortgage interest.
• Student loan interest.
• Medical expenses.
• Startup costs.
• Business expenses.
• Depreciation.
• Child Tax Credit.
• Education Credits.

These deductions and credits can save you significant amounts of money, so do your due diligence and explore all of your options.
 

CONSIDER PROFESSIONAL HELP

While some individuals prefer to handle and file their taxes themselves, it is beneficial to seek out professional help. Tax professionals can provide advice and expertise, help ensure that you have everything you need, it’s all accurate, you are maximizing your savings, and overall, help you navigate tax season with a little more ease and peace of mind. 
 

PLAN FOR RETIREMENT CONTRIBUTIONS

If you’re looking for more ways to positively reduce your tax liability (while planning for the future!), you can contribute to retirement accounts, such as 401(k)s or IRAs. Evaluate your contributions and look for ways to maximize them in order to take advantage of potential tax benefits, thus, reducing your tax bill.
 

REVIEW BEFORE SUBMISSION

Just like when you were in school getting ready to turn in a big test, it’s key to thoroughly review your tax return before submitting it. Check to make sure that all information is entered correctly, you’ve chosen the correct filing status, and all deductions and credits are accounted for.
 

REFLECT AND PLAN FOR NEXT YEAR

While you may be begging for a break from taxes once you’ve filed, this is a great time to reflect and plan for next year. Consider ways to make your life easier when it comes to next year’s tax season preparation as well as ways that you can maximize your tax savings. You may look at adjusting your withholdings, organizing your financial documents throughout the year using Quickbooks Online, tracking mileage using a software like TripLog, or managing your receipts online using Hubdoc or Dext. It’s never too early to stay proactive with your tax planning.
 

By following these steps and guidelines for tax season preparation, you can stay on top of things, take advantage of resources and opportunities to save, and get through tax season with less stress and more confidence. 

Understanding and navigating the tax implications and responsibilities of business income is crucial for every business owner, especially those operating as an S-Corp. A very common question that often arises is whether or not S-Corp distributions and draws are taxable. In this blog post, we’ll answer this question and explore the key considerations of S-Corp taxation.

What Are the Benefits of an S-Corp?

First, it’s important to understand the benefits of operating a business as an S-Corp. S-Corps provide a unique level of flexibility with money, as there is a single-level of taxation on income generated by the corporation. This differs from C-Corps, in which profits are taxed at both the corporate and individual levels. 

In an S-Corp, income “passes through” to the shareholders, meaning it is subject to tax on the shareholder’s individual income tax return, not the business’s. 

Are S-Corp Distributions and Draws Taxable?

Now, let’s answer the burning question of, are you going to be taxed on distributions and draws from an S-Corp? The short answer is… no! 

Generally, you are not taxed on distributions and draws, which is one of the most significant benefits that an S-Corp offers. 

However, the key to all of this is to pay yourself a fair and reasonable wage as an S-Corp shareholder. The IRS requires you to compensate yourself adequately, and once you have paid yourself a fair and reasonable wage, you are free to distribute or take the remaining profits out in draws. 

Avoiding Payroll Tax Pitfalls

Keep in mind that as your profits increase, it’s not recommended to increase your payroll. Why? This leads to higher payroll taxes! However, S-Corp distributions are not subject to these payroll taxes, making this a better option for business owners looking to maximize their income without taking on additional tax burdens. 

Distinguishing Distributions from Profit

Distributions are essentially the sharing of profits among shareholders. The benefit is, you don’t pay taxes on the distribution itself, just on the profit that it represents. This is key to remember when understanding the tax implications of S-Corp income. 

Before taking out distributions as an S-Corp, you must have actual profits to distribute. Therefore, business owners must track and manage their profits effectively in order to benefit from distributions come tax time. 

Avoiding Tax Issues

When taking out S-Corp draws, ensure that you are taking out actual profits, not loan money, such as that from the SBA. This can have significant tax implications that can lead to complications and hassles down the road. 

Overall, S-Corp distributions and draws are not taxable. This makes S-Corps a great choice for small business owners looking to maximize their profits and save on taxes. Just make sure you stay up-to-date on the IRS guidelines, pay yourself a fair wage first, and ensure your distributions and draws are based on profits. This can help you make informed and smart financial decisions that benefits both you and your business long-term. 

With a new year upon us, this is a time for businesses to reflect on their financial strategies and make resolutions for the year ahead that contribute to the long-term success of their organization. By adopting sound financial practices, businesses can better navigate challenges, improve their efficiency and workflows, and pave a path towards sustained growth. In this blog post, we’ll explore 10 financial resolutions that are essential for every business to make in order to have a profitable, prosperous year ahead.

10 Essential Financial Resolutions For Businesses 

#1: REGULAR FINANCIAL REVIEW

Commit to regular (monthly or quarterly) reviews of financial statements. This includes income statements, balance sheets, and cash flow statements. Doing so will help you better understand the financial health of your business while providing you valuable insights into revenue trends, expenses, and overall financial stability. 

#2: INVEST IN TECHNOLOGY UPGRADES

Invest in modern technology such as automotive diagnostic software, customer relationship management (CRM) systems, or accounting software to streamline your operations, save time, and increase efficiency.

Consider tools like Tekmetric, Nifti CRM, and Quickbooks Online to enhance various aspects of your business. 

#3: SET ASIDE EMERGENCY FUNDS

Financial stability largely depends on your ability to prepare for unforeseen circumstances and challenges. Therefore, make it one of your financial resolutions this year to build an emergency fund to cover unexpected expenses or economic downturns. This financial safety net can help your business stay afloat during tough times. 

#4: BENCHMARKING AND GOAL SETTING

Regularly benchmark your business against industry standards and set realistic financial goals. Use these benchmarks and goals as a roadmap to guide you in making sound business decisions and tracking progress.

#5: FOCUS ON CUSTOMER LOYALTY AND RETENTION

Acquiring new customers is essential for business growth, but retaining existing customers is equally, if not more important to the longevity of your business. Plus, retaining existing customers is often more cost-effective. Develop strategies to enhance customer loyalty, such as implementing a rewards program, providing exceptional customer service, or offering regular maintenance packages.

#6: OPTIMIZE INVENTORY MANAGEMENT

Optimizing inventory is another key financial resolution for businesses. Aim to efficiently manage inventory to ensure that parts and supplies are available when needed, without tying up too much capital in stock. Consider implementing an inventory management system to track stock levels and optimize ordering.

#7: TAX PLANNING AND COMPLIANCE

Staying up-to-date on tax laws and regulations is key for your business’s financial health, especially come tax time. Work with a tax professional to develop efficient tax planning strategies and ensure compliance, thus, avoiding penalties and maximizing deductions.

#8: DEBT MANAGEMENT

Strategize to manage and reduce debt in the new year by prioritizing high-interest debts and looking for opportunities to refinance or consolidate loans for better terms. This can help cut down on loan payments and improve your cash flow and profitability. 

#9: REDUCE UNNECESSARY EXPENSES

Reducing unnecessary expenses is a smart financial resolution in both your personal life and your business. Identify and eliminate unnecessary expenditures by regularly auditing expenses and finding areas where costs can be reduced without impacting the quality of your work or customer service.

#10: EXPAND MARKETING EFFORTS

Invest in marketing efforts to attract new customers and retain existing ones. This can include digital marketing, social media presence, local advertising, or community engagement initiatives. Tailor the marketing strategy to target the local market effectively.

By making these 10 financial resolutions, your business will be well on its way to a prosperous, profitable, and streamlined future. 

With the new year quickly approaching, it can be tempting to start planning for your future goals and projects. However, it’s important to do a thorough year-end financial review before shifting your focus to the new year. This not only helps you understand the growth you’ve made and areas of learning that you can improve on, but it allows you to celebrate your accomplishments from the past year. In this blog post, we’re breaking down how to do a year-end financial review so you can plan strategically, identify opportunities for growth, and improve your financial management and health moving forward.

How to Do a Year-End Financial Review 

Follow these simple steps and answer these guiding questions to conduct a thorough year in review for your business finances.

SET THE STAGE: WHAT WERE THE FINANCIAL GOALS?

To begin this process, revisit the financial goals of the business that were set at the beginning of the year. It’s important to look at factors such as revenue targets, profit margins, and expense management. These goals serve as the benchmarks that you measure your financial performance against, so reflect on how specific, measurable, and attainable these goals were.

EVALUATE GOAL ACHIEVEMENT: DID WE MEET THOSE GOALS?

After reflecting on the financial goals from the past year, analyze how well you performed financially against those goals. Did your business and team meet or exceed the revenue targets? Were expense controls put in place and made effective? Were there any shortfalls? If so, what reasons can you identify for those shortfalls? Celebrate the successes and growth that contributed to meeting or exceeding any financial goals.

CELEBRATE SUCCESS: WHAT WENT WELL?

It’s important to celebrate the financial successes and wins of the year with your entire company. Point out successful product launches, increased sales, or cost-cutting measures that proved effective for your company. Recognize the key players that made these goals a reality and provide insights into the strengths of your team’s financial strategies and operations.

LEARN FROM CHALLENGES: WHAT COULD HAVE BEEN IMPROVED?

Just as it’s important to celebrate your successes, it’s also important to acknowledge the challenges and areas that could have been improved. This may be budget oversights, unexpected expenses, or inefficient financial processes. By accepting and evaluating these challenges, you can make sound decisions for the future based on experience and use this as information to eliminate potential issues in the future.

REFLECT ON YOUR HONEST FEELINGS

Finally, put the numbers aside and reflect on your honest feelings about the past year. 

• Where did you feel like you made the most growth? 
• What challenged you to grow in positive ways? 
• What caused you stress or overwhelm? 
• What brought you the most joy and pride? 
• How do you feel about your business currently and what are you excited for in the future? 
• What do you want to continue in the new year and what do you need to let go to allow for other focuses?

Answer these questions honestly as you wrap up your year-end financial review. It may also be beneficial to have each team member do this to learn how everyone is feeling in terms of the company and financial goals as a whole.

Overall, conducting a comprehensive year-end financial review is a powerful tool for reflecting on the past, celebrating successes, learning from challenges, and making sound financial decisions for the future based on experience and data. This is about both the numbers and the feelings of you and your team. With this year in review complete, you’ll feel more confident moving into the new year with clarity!

As the financial year draws to a close, it becomes important to have a well-organized and accurate year-end process. This ensures that you can close out the year and transition into the new fiscal year smoothly by giving attention to the key financial aspects that impact your bottom line and business as a whole. In this blog post, we’re breaking down the 7 essential steps to take to ensure a smooth financial year-end as well as sharing a Free Year-End Checklist that you can use in your own end of year review and planning.  

7 Steps to Ensure a Smooth Financial Year-End

STEP 1: RECONCILE ALL BANK AND CREDIT CARD ACCOUNTS

The first step is to reconcile all bank and credit card accounts, as this is the foundation of a smooth financial year-end. Make sure that your records match the statements provided by the financial institutions that you work with so there are no discrepancies. By reconciling all accounts first, you can uncover potential errors and fix them quickly, maintaining the accuracy of your financial records.

STEP 2: IDENTIFY AND RECTIFY DUPLICATE TRANSACTIONS

If you’ve ever had duplicate transactions, you know just how much havoc they can wreak on your financial statements. This can also paint an unclear picture of your overall financial health. Thoroughly review your records to identify any duplicate transactions and rectify them quickly if you find them. Utilizing accounting software features can help you do this quickly and effectively, ensuring your financial data is accurate and reliable.

STEP 3: GENERATE INCOME STATEMENT FOR THE YEAR

A business’s Income Statement, also known as the Profit and Loss (P&L) Statement, summarizes the revenue, expenses, and profits or losses that a business experiences over a specific period of time. Generating a comprehensive Income Statement for the entire fiscal year provides a clear overview of your financial performance, which is a valuable tool for making decisions for the future.

STEP 4: COMPILE BALANCE SHEET FOR THE YEAR

A Balance Sheet is a snapshot of your company’s financial position at a specific point in time which consists of 3 main sections: assets, liabilities, and equity. It’s important to compile and review a Balance Sheet at the financial year-end to help you get a clear understanding of the overall financial health and position of your business.

STEP 5: EVALUATE ASSETS

Once you’ve compiled your Balance Sheet, assess the value of your assets, including both tangible and intangible assets. Make sure they are accurately valued and organized into the proper categories. When evaluating assets, don’t forget to consider the depreciation of fixed assets and any changes in the market value of investments.

STEP 6: REVIEW LIABILITIES

At the financial year-end, it’s also key to review any liabilities you’re responsible for, including short-term and long-term obligations. This includes loans, outstanding bills, and accrued expenses. Ensure all liabilities are recorded accurately and present a true representation of your outstanding financial obligations.

STEP 7: EXAMINE EQUITY

The final step in ensuring a smooth financial year-end is to examine your equity in-depth. Equity represents the ownership interest in a business. By reviewing and analyzing equity accounts, you can take note of any changes in capital, dividends, or retained earnings. This is key for understanding the financial contributions of the business’s stakeholders. 

In order to have a smooth financial year-end and a solid start to the new fiscal year, it requires a systematic approach, careful consideration, and attention to detail on various elements of your overall financial picture. By following these steps, you’ll be able to get a clear picture of where you’re at, where you’ve been, and plan for where you’re going.

If you’d like more support as you close out the financial year, you can grab our Free Year-End Checklist to get your bookkeeping organized for 2023 and end the year with confidence and clarity.

Can you believe that another year is drawing close to the end? It really does seem like the older you get, the faster time goes! As we enter into the Thanksgiving season, we wanted to take some time to reflect on our achievements, the achievements of our clients, and express sincere gratitude for all of those who have made this year’s success possible. Read on for some of our thankful reflections as we celebrate financial wins from this year.

Celebrating A Year of Financial Growth

We’ve had the privilege of witnessing several auto shops see significant financial improvements over the course of this year. On average, clients who have been working with us for at least 1 year have seen an average revenue increase of 10.7%. That’s amazing! These financial wins are a testament to their hard work, dedication, and commitment to excellence. Our clients’ successes are our victories, so it is incredible to be able to celebrate these wins together. 

How Our Clients Are Seeing Success

So, what exactly have our successful clients been doing to see these improvements in their business finances? Let’s take a closer look at the strategies and systems that have helped drive their financial growth. 

PARTS MATRICES

Effective parts matrices are key for accurate pricing and inventory management. Our clients are taking advantage of this tool to optimize their pricing strategies, which directly impacts positive revenue growth. 

TRACKING LABOR EFFICIENCIES

An auto shop’s bottom line is greatly impacted by its labor department, which is why tracking labor efficiencies is helping our clients increase profitability and identify areas for improvement. 

IMPLEMENTING NEW PAY STRUCTURES

Our successful clients are also implementing new pay structures that work for the culture of their business, whether that is flat rate, hourly, salary, or a combo. 

INVESTING IN TRAINING PROGRAMS

Investing in training programs for both techs and service advisors is key to the growth and development of their teams. These training programs have helped them elevate their skills and knowledge of their staff while increasing customer satisfaction and repeat customers. 

HIRING BUSINESS COACHES

Many of our clients have also invested in industry-specific business coaches to help guide their companies towards success. Their guidance, insights, and external perspective has been a game-changer for their businesses. 

TRACKING KEY KPIS

Lastly, many of our clients who are celebrating financial wins this year attribute their success to the tracking of key KPIs. Tracking and analyzing these KPIs has helped them make data-driven decisions for their businesses and adjust as necessary in the areas that needed more attention. 

Thankful Reflections From Three Rivers Bookkeeping

To all the auto shops that we have the privilege of working with each and every day, we want to thank you and express our sincerest gratitude to you. Our primary goal is to see each of our clients grow and thrive. This year has been full of many financial wins, and we are honored to celebrate them alongside you. Your success is our success, and we are so thankful for the trust you have shown us. 

A key aspect of managing any business is keeping accurate financial records. One of the most important tools you can use to ensure your financial data is well-structured and organized is a Chart of Accounts. When implemented correctly, a Chart of Accounts can significantly reduce the risk of transaction classification errors, which can be detrimental to your financial reporting. This makes it easier to track income, expenses, and assets. In this blog post, we’re breaking down what a Chart of Accounts is, why it’s important, and providing a few practical tips on how to set up a Chart of Accounts in your business. 

What Is a Chart of Accounts?

Before we get into the nitty gritty of setting up a Chart of Accounts, it’s important that you understand what it is and what purpose it serves in your business’s financials. A Chart of Accounts is a comprehensive index of all the financial accounts used by a business to classify financial transactions. These accounts are categorized into different groups and subgroups, which makes recording, tracking, and reporting on financial activities much easier. 

WHAT IS THE PURPOSE OF A CHART OF ACCOUNTS?

A Chart of Accounts serves many purposes, including organizing finances into different categories to allow interested parties to get a clear view and understanding of a business’s financial health. 

It also allows stakeholders to quickly locate specific accounts in order to see which transactions are occurring in each account from the general ledger. 

A well-organized Chart of Accounts is also helpful for comparing financial data from year-to-year. 

How to Set Up a Chart of Accounts

When setting up a Chart of Accounts, there are a few things to keep in mind that will help you reduce transaction classification errors. A common mistake businesses make when setting up a Chart of Accounts is having too many categories and overcomplicating the entire system. 

CHOOSE SIMPLE CATEGORIES

We recommend that you choose simple categories that are easy to remember, such as labor income, parts income, truck fuel, insurance, etc. The more simplified and easy it is to remember these categories, the less likely it is that you or your team will make transaction misclassification errors. Plus, this also helps streamline your bookkeeping process. 

UTILIZE CHART OF ACCOUNTS TEMPLATES

Most accounting softwares come equipped with sample Chart of Accounts templates that you can use and customize to meet your specific needs depending on your industry. This gives you a solid starting point to build upon. By utilizing these templates, you can ensure the most key categories and data points are included, which will also help reduce the risk of misclassification errors or missing data altogether. 

Just  make sure that you review the template and tailor it to match your business’s specific needs. Remove any accounts that don’t apply to your business and add accounts that are unique to your industry or company. 

AUTO INDUSTRY CHART OF ACCOUNTS 

If you are operating in the auto industry, you’ll need a specialized Chart of Accounts designed to meet the unique accounting needs of your automotive business. 

This automotive-specific Chart of Accounts can help you save time, effort, and frustration, as it is tailored to the unique categories, transactions, and financial data you deal with on a daily basis. 

If you’re looking to improve your financial data and reporting processes, implementing a well-structured Chart of Accounts is one of the first steps we recommend that you take. It will help you streamline your accounting and bookkeeping processes and gain better control over your financial data. 

Follow the steps in this blog post to set your Chart of Accounts up in a way that minimizes transaction misclassification mistakes and streamlines your financial reporting.

Effectively managing your products and services list is essential for auto shops. Not only does this simplify and streamline your invoicing process, but it also ensures that your financial records are accurate and organized. In this blog post, we’re breaking down a simple and practical approach to setting up a products and services list for auto shops that maximizes your overall efficiency.

The Common Pitfall of Auto Shop Products and Services Lists

In our work with auto shops, we often see a common pitfall in their products and services lists. The mistake they make is creating an overly extensive and long products and services list. This happens when auto shop owners add a new product or service to their list each time they make a sale. This leads to a confusing list that’s a million miles long. However, you can avoid this pitfall by streamlining your products and services and using descriptions effectively. 

How to Streamline Your Products and Services List

Instead of creating a new product or service for each transaction in your auto shop, consider setting up a small handful of products and services and use the description to enter specific part numbers or details on the service provided. 

For example, set up a “Parts Service” item which is linked to the “Parts Income” on the chart of accounts. Then, each time a parts sale is made on an invoice, put the part number in the description with the correct price. 

Here are a few key categories that we recommend you include on your products and services list. 

LABOR

This category covers all labor charges for various types of automotive work, such as diagnostic labor, repair labor, or maintenance labor. 

PARTS

This is the category where it’s important to create a “Parts Service” item linked to the “Parts Income” account on your chart of accounts to avoid a long and confusing parts and services list. Whenever a part is sold, enter the part number and details in the description along with the current price. 

DISCOUNTS/REFUNDS

This category can be used to track any discounts or refunds that are offered to customers. This is important to track separately in order to make adjustments as needed. 

SUBLET

If your auto shop occasionally subcontracts out work to other service providers, this is the category you’ll use to record the costs of these sublet services. 

TIRE

Having a specific tire category for tire sales, installation, and other related services is a great way to keep these invoices separate. 

By having a streamlined products and services list, you can ensure your list is easy to navigate, which saves you time and reduces the risk of errors. You’ll also make financial reporting more accurate by using descriptions and properly documenting each transaction. Plus, it will make invoicing and filing receipts more efficient and give you financial clarity to help you make informed business decisions. 

As an auto shop owner, one of the most important aspects of managing your business and ensuring it is profitable is effectively organizing and analyzing financial statements in order to make sound decisions for your shop and employees. As an accountant for auto shop owners, I often see financial statement issues arise that cause frustration, overwhelm, and discrepancies in a shop’s finances. In this blog post, I’m breaking down 6 of the most common issues with auto shop financial statements and offering quick tips on how to fix them.

Financial Statement Issues In Auto Shops

Not Understanding Your Financials

The first issue I see with financial statements is auto shop owners simply not understanding their financial statements. They don’t know what they’re looking at, what the numbers mean, or how to navigate QuickBooks. This can make it really hard to make sound financial decisions if you don’t know how to use them to increase profits and make sound financial decisions. 

Solution: 

The solution to this issue is to set your financial statements up in a way that you can easily access, organize, and understand them. We recommend using QuickBooks for all of your financial statements, as this makes it easy to organize and analyze them. 

Shop Management Software Doesn’t Match QuickBooks

The next common financial statement issue is having discrepancies between your Shop Management System (SMS) and your accounting software, such as QuickBooks. This can lead to a lot of confusion and inaccurate financial reporting. Your SMS may offer one figure, but what QuickBooks shows is the most accurate financial recording. 

Solution: 

The solution to this issue is to make being consistent in your financial reporting a priority. Calculate and record your financial data in the same way each month, at the same time of the month. Err on the side of being conservative with your figures to ensure your shop remains profitable and your financial statements reflect the actual performance of your shop as accurately as possible. 

Parts and Labor Income Are Not Split Out

Failing to keep parts and labor income separate in your financial statements is another big issue, which makes it difficult to see where your actual revenue is coming from. With labor, there are so many factors to consider, such as employee wages, paid time off, benefits, etc, so it’s important to keep these aspects separate. 

Solution: 

The solution for this financial statement issue is to organize your income into separate categories for parts and labor. This will give you clarity in your finances and make it easier to analyze how profitable each aspect of your business is. This will help you make more informed decisions for your business. 

Parts and Labor Cost Of Goods Sold Are Not Split Out

Similar to the last problem, if you fail to split out parts and labor costs of goods sold, you can create discrepancies in your gross profit margin. This is a key indicator of the overall financial health of your business, so it’s important that it is as accurate as possible. It’s important to note that technician pay should be classified as a labor cost of goods sold for the most accurate financial reporting.

Solution: 

When setting up your accounting software, make sure to create a clear separation between parts and labor costs of goods sold. This will help you see the profitability of each side of your auto shop, allowing you to lean into the revenue streams that bring in the most money for your shop. Be sure to classify technician pay as a labor cost of goods sold. 

Not Tracking Warranty Work

Warranty work is where a lot of financial statement issues arise. When you are looking at your financial statements, you must account for warranty work, otherwise, your income will look skewed as well as your expenses. 

Solution: 

To ensure warranty work is classified and tracked properly, create a simple system to track this work and any transactions related to warranties. This will keep your financial statements accurate. 

Misclassifying Transactions

The last common financial statement issue in auto shops is misclassifying transactions. When you set up your QuickBooks, do so in a way that allows you to easily classify each transaction properly right away. This is an issue with a simple fix, but it can drastically skew your financial statements. 

Solution: 

After setting your QuickBooks up in a way that works for you to keep everything properly classified, make sure to regularly review your transactions to verify they’re accurately classified. This will help you catch any outliers or misrepresentations before it becomes a huge issue.

All in all, by knowing what financial statement issues to look out for in your auto shop business, you can ensure you are set up for success and have your QuickBooks laid out in a way that works for you, that makes it easy for you to manage and understand. 

Source: Feature in Ratchet and Wrench Magazine https://www.ratchetandwrench.com/magazine

Vehicle Delivery Process: The First Step to Your Next Sale

Every fall I have my chimney cleaned. For years, I would search for a reputable local company. Then, 10 years ago, I met Mike at AAA Chimney, and he became my go-to guy. Each year, Mike returns and earns my trust over and over. You may wonder if it's because he cleans my fireplace better than anyone else or if it's the price. While those are reasonable questions, the real reason why he gets my business year after year is simple: Before he leaves my home, Mike takes the time to review exactly what he did, gives me tips on how to best care for my fireplace and then he books the next appointment for the following year. In essence, he performs what we know as a vehicle delivery process, or in Mike’s case, a chimney cleaning delivery process.  

Performing a comprehensive vehicle delivery process and booking the next appointment in our industry is nothing new. Many shops have been doing it for decades. However, there are still many repair shops that have not adopted this goldmine strategy. The vehicle delivery process helps to create that memorable experience that gives the customer a compelling reason to return. When combined with scheduling the next appointment, your repair shop stays branded in your customers’ minds, improving customer retention and helping to ensure future sales.  

The auto repair business today is not like it was. Even 10 years ago we would measure customer retention with a factor of four, meaning that customers visited your repair shop about four times a year for routine services. Today, unless there’s a breakdown or a warning light, you’re lucky to see your typical customer once a year for routine service. Consumers these days don’t have the same sense of urgency regarding vehicle maintenance as they once did. Just think about all those customers who have traveled over 15,000 miles in their vehicles since their last oil change. This trend has been slowly creeping up for the past 15 years, if not longer.   

Unless you're fortunate enough to be in a heavily populated area with no competition, and car counts are never a problem, you will benefit from a well-defined vehicle delivery process; a customer touch point that brings the entire customer experience full circle. Vehicle delivery is never a transaction. It is an opportunity to keep building the relationship. It’s also essential that your service staff discusses and books the next appointment. Everyone reading this knows that booking the next appointment is a strategy being done by dentists, doctors, hairdressers, nail salons, eye doctors, pet groomers, and yes, even Mike at AAA Chimney.  

Booking the next appointment is not limited to oil change services either. Just consider all those recommendations you make on just about every car you service each day. Why not create a process that helps to fill up your calendar with profitable future services needed by your existing customers? Don’t rely solely on your CRM program either. The impact of an engaging vehicle delivery process is powerful.  

Every customer that leaves your shop today will need future services and repairs. The question is: Where will they go? Make your vehicle delivery process your first step to your next sale.  

As a business owner, hiring the right people to work for you and serve your customers is a critical aspect of running a successful company. As you look to grow your team, there are two different categories of workers to be aware of: employees and contractors. Both of these types of workers serve essential roles, but it's vital to understand the differences between employees and contractors, as there are different legal compliances, tax obligations, and nuances to both. In this blog post, we’re diving into the key differences between employees vs contractors so you can make the best, most informed hiring decisions for your business.  

Key Differences Between Employees and Contractors

Definition and Role Clarity

The most fundamental difference between employees and contractors is their relationship with your business. Employees are individuals who work under your direct control and management, performing tasks assigned by you that are integral to your daily operations. On the other hand, contractors are external workers or individuals who are hired to complete specific projects or provide specialized services, working independently and autonomously from the business.

Work Schedule and Degree of Control

The degree of control that a business has over its workers is another defining aspect between employees vs contractors. Employee-employer relationships typically involve a higher degree of control and direction from the employer. As an employer, you dictate an employee's work schedule, the tasks they perform, and how they accomplish them. Contractors differ because they generally have more independence and control over how they complete their assignments, when they work, and where they work.  

Ownership of Tools

The ownership of necessary tools needed to complete a job is another distinguishing factor between an employee vs contractor. An employee will be supplied with the necessary items, tools, and softwares necessary to complete their job. A contractor must supply their own tools and softwares, as they are likely used for more than one client. 

Tax Implications

There are vastly different tax implications when hiring employees vs contractors, and understanding these is crucial. When you hire an employee, you are responsible for withholding and remitting income taxes and Social Security from their wages. Hiring contractors is different in the tax sense because they are considered self-employed and are responsible for their own taxes. As the employer, you don’t withhold taxes for contractors, but instead, they summarize their earnings on a Form 1099 at the end of the year. 

Employment Benefits

As a business owner hiring employees, you may be required to provide employee benefits, such as health insurance, retirement plans, paid time off, and other benefits, depending on your company policies and legal requirements. Since contractors are self-employed, they do not receive these benefits from your business.

Long-Term Commitment and Dependence 

Hiring an employee for your business implies there is a more long-term commitment with the expectation of ongoing work. Employees are likely dependent upon the business for their income and benefits. With contractors, these commitments may be more short-term and have a defined scope and timeline. Of course, contractor contracts can be renewed or terminated depending on the business’s needs or the contractor’s desires. Contractors likely have a roster of clients, so they are less reliant on one single client or business for their income. 

Ensuring Legal Compliance

Classifying employees vs contractors correctly is critical for legal compliance. Misclassifying employees as contractors and vice versa can lead to an array of legal issues and expensive penalties. Stay up-to-date on the specific worker criteria set out by the IRS, Department of Labor, or other state authorities in order to ensure you are differentiating the two and classifying your workers properly. 

Knowing the differences between employees and contractors is vital for managing your team effectively and ensuring compliance with tax and labor laws. As you expand your business and hire new team members, take the time to assess the nature of the work and the relationship with the individual to make the appropriate classification. Understanding these differences is key for making informed financial decisions. 

Running an auto repair shop is a rewarding career and an integral part of a community. However, it also comes with its fair share of financial challenges. As an auto shop owner, you must understand the importance of implementing the necessary systems and processes to keep your business profitable and sustainable long-term. In this blog post, we’re uncovering a few of the most common auto repair shop financial mistakes to avoid so you can stay successful and improve your bottom line. 

Top Auto Repair Shop Financial Mistakes To Avoid 

Neglecting Proper Inventory Management

Inventory is one of the most significant expenses that an auto repair shop has. Failing to manage your inventory efficiently can lead to issues such as overstocking, which ties up valuable capital, or understocking, which leads to a loss in revenue and dissatisfied customers. In order to avoid this financial mistake, implement a robust inventory management system that tracks parts usage, orders, and replenishment schedules. This will help you find the right balance and optimize your cash flow. 

Ignoring Preventative Equipment Maintenance

Another common auto repair shop financial mistake to avoid is not putting the proper preventative equipment maintenance procedures in place. An auto repair shop relies heavily on specialized equipment to deliver quality services to its customers. Neglecting to maintain this equipment regularly can lead to expensive breakdowns, emergency repairs, and force you to cancel customer appointments (which also leads to a loss of revenue). To avoid this, create a maintenance schedule for all tools and machines, ensuring they remain in excellent working condition, reducing unexpected expenses, maintaining safety, and improving efficiency.

Overlooking Employee Training and Development

Skilled and well-trained auto repair shop technicians are the key to running a successful shop. They are the ones doing the daily manual labor, therefore, you should invest in continuous training and development for your staff to help them improve their skills, enhance customer service, and reduce the likelihood of errors or costly mistakes. Incentivize your team to seek certifications and stay up-to-date with the latest advancements in automotive technology. An auto shop that values innovation and constant growth will see the benefits both in customer satisfaction and in their bottom line. 

Inadequate Budgeting and Financial Planning

Many auto repair shop owners are great at the actual manual work and labor involved in running a repair business, but when it comes to creating a comprehensive budget and financial plan, they’re not as skilled or confident. Without a clear financial roadmap, it’s challenging to track expenses, identify areas where you can cut costs, or allocate resources effectively. To ensure your business is running like a well-oiled machine financially, develop a detailed budget that takes into account all overhead costs, labor expenses, marketing efforts, and savings for future investments.

Ignoring Marketing and Customer Relationship Management

While marketing is an ever-changing field, it's so important to embrace modern marketing technologies, such as digital advertising, social media, and targeted promotions in order to grow. Word-of-mouth marketing is great, but it should not be your sole reliance. Additionally, you must prioritize customer relationship management by collecting feedback, addressing concerns promptly, and offering loyalty programs to retain existing customers and attract new ones.

Not Complying with Tax Obligations

Finally, the last auto repair shop financial mistake to avoid is not complying with tax obligations. Tax regulations for businesses, including auto repair shops, can be complex and ever-changing. Failing to comply with tax obligations can lead to penalties, hefty fees, and legal issues. To avoid this mistake and ensure you are fulfilling your tax obligations properly, consider hiring an accountant or tax professional who understands the automotive industry to help you navigate tax requirements and maximize deductions. 

Featured in Ratchet and Wrench Magazine - June 2023 

Steve Jobs may have been best known as the co-founder of Apple Computer and a great entrepreneur, but his style of leadership and management was highly controversial. Jobs would schedule meetings with his team, then randomly point to someone and ask, “Tell me what’s not working at this company?” After that person gave their opinion, he would then turn to the group and ask for everyone’s feedback. Then he would point to another person, and say, “Tell me what is working?” While his technique may appear divisive, Jobs placed a high value on getting valuable feedback. Which meant that he had to know the truth, no matter how ugly it might be.  

For most people, it’s difficult to receive critical feedback. No one enjoys learning that we dropped the ball, or that something isn’t going right. And how often does an employee walk up to you, and pull you aside to inform you of bad news? Not very often, right? While receiving praise and recognition does motivate us, growth opportunities also exist when things go wrong. How we deal with adversity and bounce back from failure tells us a lot about our mental toughness. Great success is never dependent on everything going right all the time. That’s not reality.  

Look at it this way: getting only good news all the time is mostly useless. On the contrary, bad news can be good news. And we should accept and welcome it. If employees are reluctant to bring you bad news, it’s an indication that they may fear confronting you. As the shop owner, you need to do a little self-reflection to ensure that you are a leader that is approachable, and not on the defensive when an employee wants to sit down and discuss things. Be mindful of how you interact with others too. Your body language and the tone of your voice will either draw people to you or push them away.  

Make it known that you want to create a work environment where feedback, especially when things go wrong, is accepted and welcomed. Remember, if people fear bringing you bad news or only tell you the good things, you may not have an open environment where people feel they can discuss all issues, good and bad. It’s also important to realize that to give critical feedback to others, you must be open and willing to receive critical feedback. 

At the start of any team meeting, let your employees know that you will be asking for everyone’s opinions on ways to improve. Emphasize that you want to hear not only what’s going right, but also where the company is failing. People’s opinions may not be shared by everyone, but one’s perspective is their reality. We need to listen to all voices. Be transparent and let everyone know that you will listen to everyone and do your best to act on everyone’s feedback. Another thing to be aware of; don’t allow an atmosphere that encourages gossip or venting. This will promote negativity and bring down morale. You need honest, healthy feedback that everyone can accept and learn from.  

The bottom line? The next time someone brings you bad news, look them straight in the eye, smile, and say, “Thank you!” 

It’s been 3 years since the onset of the global Covid-19 pandemic, and we are still feeling the side effects when it comes to accounting, taxes, and tax refunds. In both 2020 and 2021, the IRS issued notices under the Tax Code, giving them the authority to postpone deadlines and due dates related to filing tax returns due to the federally declared disaster. However, these notices did not pertain to the IRS lookback period for refund claims filed after April 15th. Therefore, many taxpayers who file yearly after April 15th will not be able to claim a refund as it falls outside of the lookback period. 

Now, in 2023, a new notice has been issued by the IRS, extending the lookback period for refund claims. 

Here is a rundown of everything you need to know about this IRS extension. 

What is a Lookback Period

First off, it’s important to understand exactly what the IRS lookback period for refund claims is. 

In general, a taxpayer must claim a refund on their taxes within 3 years from the date the related tax return was filed or 2 years from the date that the tax regarding the claim was paid. This IRS lookback rule allows taxpayers to request a refund in amounts paid within the lookback period. 

The Extended IRS Lookback Period

Since the IRS failed to extend the lookback period in 2020 and 2021, many taxpayers who filed after April 15th have been left unhappy and without an option to request refund claims on those payments. 

In an effort to remedy this problem, the IRS has issued a new notice regarding the lookback period, Notice 2023-21. This notice disregards the time periods from April 15, 2020 to July 15, 2020 (2019 tax returns) as well as from April 15, 2021 to May 17, 2021 (2020 tax returns), when determining the start of the lookback period. 

This notice comes in an effort to realign the lookback periods with the formerly postponed due dates for filing tax returns due to the pandemic.  

What Does the Extended IRS Lookback Period Mean for Taxpayers?

While the IRS’s extended lookback period is a positive move for taxpayers, it does not fully fix the problem created 3 years ago. This should be taken as an opportunity to look deeper into tax law and how we can create a permanent solution and prevent this type of misalignment in the event that future disaster filing postponements are made. 

People are already weary of the IRS, filing taxes, and making refund claims, and this situation definitely does not help their confidence. It is our hope that necessary changes are made to ensure that all taxpayers have the opportunity to claim credits or refunds moving forward without being denied. 

All in all, taxes and dealing with the IRS and lookback periods can be stressful, but the best way to ensure your tax filing and refund claim experience is as positive as possible is to keep your bookkeeping and financials up to date and organized so you always have what you need and can file on time. 

If you need help getting your bookkeeping and finances organized and ready for tax season, I’m happy to help with our bookkeeping and financial services. Feel free to browse our services and book a free consultation call with us today!

Have you ever walked into a room and stopped because you couldn’t remember what you were trying to do?

Forgetting is easy. Especially when it’s something that we don’t actively engage with on a regular basis.

When it comes to the reasons for what we do and the decisions we make as a business, remembering the “why” behind our actions is important. 

How It Started

ThreeRivers Bookkeeping started because I wanted to help small automotive businesses overcome a challenge I observed while working with them. I started my career working with mechanics and automotive specialists in a related industry, but I realized that my passion was for helping those small businesses in a different way.

Managing Bookkeeping’s Challenges

Bookkeeping is boring and tedious. Keeping everything properly organized takes so much time, effort, and specialized knowledge that everyday business owners can’t easily handle it. And errors in bookkeeping, which are quite common, can financially ruin businesses. Errors can make it harder to budget correctly. But worse is the damage caused by errors that impact taxes. 

My goal in creating Three Rivers Bookkeeping was to help remove bookkeeping as an obstacle for small businesses. Even as I am coming up with new services (coming soon), my goal is to help businesses eliminate obstacles and run their businesses more efficiently and effectively. 

Build Wealth Through Business

How much money do you want to make? 

In other words, what do you want to do outside of business?

This is a question we ask our clients when we start working with them. What you want to do with your time, will require a specific amount of money. And in order to make the amount of money you want, your business will need to make a certain amount of money as well. 

While there are many people who work on books and do bookkeeping, the key difference between them and Three Rivers is our desire to help our clients build wealth through their businesses. 

Employees today will disengage if they don’t feel valued.

by Joe Marconi: Quiet Quitting: New Phrase, Old Problem - Featured in Ratchet and Wrench Magazine 

Some people go to work each day with great enthusiasm and believe they can change the world. But then, others anticipate each workday with feelings of despair. These employees do the bare minimum; just enough to keep their jobs and go unnoticed. They are called quiet quitters. 

While quiet quitting may be the latest catchphrase, it's not a new workplace disorder. We've called them disgruntled, disengaged and even toxic in the past. But who's responsible for this behavior? Is it the employee? Or is there a deeper problem brewing in the workplace?  

Work has Evolved 

As a young technician in the mid-1970s, the shop owner was typically at the top of the pinnacle. It was common back then for a boss to run his company with the mindset, "my way or the highway." Was it wrong? Perhaps. Thinking back, I don't think we clearly understood or appreciated the role we played in the workplace or how we fit into the company's structure. We accepted things the way they were, unlike employees today. I also believe we felt we couldn't change how things were.  

Employees Want Accountable Leaders 

Lack of trust in leadership is another factor in quiet quitting. Shop owners and managers must communicate what their employees can expect from management and not only what management expects from them. Consistency in the message and following through on promises contribute to workplace morale. After all, if you can't trust the message, you will not trust the messenger.  

Some people will excel in any work environment. However, they are the exception, not the rule. If you want a team of employees where everyone is pulling in the right direction, you should consider the needs and opinions of your employees.     

If you are concerned that understanding your employee's point of view and acting on it is giving up control of your company, don't be. Earlier, I referred to shop owners from years back. Most of them had a good business but not a great business. The reason was that they were the business. Growth was difficult because it was dependent mainly on their abilities and talents. This one fact alone causes a business to plateau. However, when a business combines different points of view and strategies from the team, greater growth is possible.  

Start Within 

Lastly, there will always be employees who won't be happy no matter what you do. If you are confident that you have done all you can to help a quiet quitter, the only hope at that point is for the employee to look within themselves, which may be difficult for most people. Instead, focus more on what you can do. Look within yourself to ensure you are doing everything possible to create an amazing employee experience. Your goal must be to create happy employees. We've all heard the expression, "happy employees create happy customers." Well, they create happy employers, too.  

Taxes are annoying. They cost your business a lot of money to pay. And then you have to spend a lot of time gathering all the proper documentation. And don’t forget to keep it organized. 

That’s where I have a couple of tricks that I recommend for my clients that I would like to share with you.

Use a Receipt Manager

A receipt management system will allow you to collect and organize your receipts digitally. You won’t have to worry about losing the receipts or not being able to access them when you need them.

There are two types of receipt management softwares that I recommend depending on your situation and business needs. While both of these apps have a recurring membership structure, with your financial security at stake, it’s better to get something good that you have to pay for.

Dext

Dext’s primary focus is the ability to snap pictures of your financial documents and receipts while allowing you to split and itemize those receipts. It also has more features that are available at higher tiers of memberships.

HubDoc

Hubdoc does most of the same things as Dext but can’t itemize receipts. It is less expensive and has a different approach to organization.

Whichever of these two you choose, I recommend starting with a free trial and seeing which one is the right fit for your business.

Track Mileage Digitally

Tracking and calculating mileage can be tricky. But you don’t have to do it manually. And with a good software you won’t have to stress about it at all. 

TripLog

TripLog has a few key features which make tracking mileage easier. The most important feature is their compliance with tax codes. After that, they offer tools that can track your trips automatically, and help you classify your trips easily. 

And they offer good packages for either large businesses or individuals.

In Conclusion

There are plenty of other softwares that can help you avoid wasting time with tracking and organizing your documents for tax season. And using them will not only help you feel less stressed when it comes time to visit your tax preparer. They will make your daily management of your business easier too.

Don’t miss out on using tech to set your business up for success.

I’m not going to sugarcoat things. Times are hard.

And they aren’t going to get any easier. 

One of the problems that makes hard times worse is fear. 

• Fear of the future 

• Fear of financial issues

• Fear of a collapsed economy

We could spend all day writing out lists of the things we are afraid of, but we don’t have time to be that thorough. There are however a few key fears when it comes to your business finances that I believe need to be faced and addressed.

Losing Savings

When your money reserves start to dip, it’s easy to feel the pressure.

Pressure turns into stress which turns into sleepless nights and uncomfortable discussions about money. 

Inflation is probably the biggest drain you will face in your finances. But that doesn’t mean your situation is hopeless. 

You can slow or stop the losses by eliminating redundant purchases and waste. Unused subscriptions for things such as streaming services are one of the largest sources of wasted money (and they’re easy to find and fix).

Losing Work

As business owners, spending money is less scary when you have enough work coming in to pay the bills.

When work slows down, what you need is a strategy to boost your sales.

Sometimes you need to start or increase your marketing. Other times you may need to seek help from a business coach to help you find where your business is not reaching its potential. Slow downs are unavoidable, but there are ways to handle them.

Losing Investments

The stock market is not fun to watch. 

Your money is riding a roller coaster, but you still feel your heart drop when the market turns down. The good news is that investing is a long-term game. 

If you miss the best days on the market, you will miss out on a lot of money. That’s not to say that every strategy works for every person. And you should seek out a financial advisor to help you make the best decisions. But just because the market is down today, doesn’t mean that the market will be down forever.

Living Boldly

Once you have recognized and faced your fears, you can start to address the solutions. Most companies that fail to grow or even survive, fail because they can’t or won’t face their fears. You can’t solve a problem you aren’t willing to look at. 

Sometimes you need help to get through the challenge of facing your fears, but in the end it will be worth it. If you don’t know how to address your financial fears in your business, I would be happy to speak with you and give you some direction.

I don’t have a crystal ball. And I can’t predict the future.

But there are some things I do know about what is coming in 2023 based on the current direction of our economy. And none of it looks pretty.

Continued Inflation

Inflation has been at an all time high for the past year and it’s not going to suddenly go down.

Thanks to government spending and the printing of money to pay for that spending, inflation has spiked. And normal inflation which comes from increasing costs of goods and services is still a factor. 

All that to say, inflation is going to continue to impact the economy and business finances well into 2023.

Less Disposable Income

With inflation and increased cost of living comes a decrease in disposable income. A factor we are beginning to see, even now, is the reduction of unnecessary spending in low income households.

While it starts by affecting low income households, it will begin to affect middle class households very soon. Many local businesses depend on people being willing and able to spend money on non-essential items.

More IRS Involvement

Last year saw the largest increase to the IRS in decades. The number of agents that have been added is a sign of increased focus on small businesses and increased audits.

Expect to pay more in taxes or to be stuck dealing with surprise audits as the government attempts to crack down on errors in filing and those who evade payment. 

Preparation is Essential

Local businesses fail first. 

When the economy suffers, the mom and pop style stores will bear the brunt of the problems as they don’t have the resources to spread out the losses. 

Survival requires preparation. You have to start making decisions now if you don’t want to get caught off guard by increased financial hardships.That’s where a review of your current financial situation can be extremely helpful. 

If you want to be prepared, I would be happy to sit down with you and discuss some solutions. Just set up a no-obligation appointment to get started!

Shrinking Repair Outlet Population

"Vehicle maintenance is becoming less convenient for Americans. There are fewer outlets repairing cars and light trucks, despite the increasing population and complexity of cars and light trucks on U.S. roads. The number of repair (DIFM) outlets fell by nearly 14,000 over the past five years (2016 to 2021), and future annual reductions are likely."

"Nevertheless, not all types of repair outlets suffered losses. Repair Specialists, Foreign Specialists, and Dealers have grown in number, while the four other major types of DIFM outlets have endured thinning ranks. See the all-new 2023 Lang Aftermarket Annual for a ten-year history of the changing number of all major types of auto repair outlets across the U.S."

Whether you only occasionally buy tires for your business or find yourself constantly needing to replace one, two or an entire set, there is a way to start saving money immediately.

Champtires has 30,000+ tires in stock at any given time - in nearly every brand, size and tread depth - at the lowest prices. Free shipping to the continental U.S. is included on every order. Auto businesses can join an exclusive program to save even more.

Why Buy Used Tires?

While Champtires does sell new tires, high quality used tires are our specialty. Buying used tires is:

• Safe. When bought from a reputable tire shop, like Champtires. We’ve been in business since 2009, and every tire that enters our warehouse is inspected and air tested.
• Environmentally friendly. Instead of the used tires ending up in a landfill, you will be reusing a premium, recycled product.
• Much more affordable. Even if you just need to replace one tire, the cost of rubber has increased dramatically and has caused the price of new tires to skyrocket. 

Why Trust Champtires?

Since 2009, Champtires has specialized in selling new and high-quality used tires to drivers across the U.S. Every tire that enters our warehouse is inspected and tested, and we offer a 14-day satisfaction guarantee.

How To Save Even More on Every Order

Auto businesses are invited to sign up as a Champtires business partner. This gives you a 10% discount on each order placed through Champtires.com and access to other promotions. 

Learn more about the B2B Program.

Shop our inventory.

When I look back at my 40-years as a shop owner, there is one thing that stands out among everything else: It’s the people we surround ourselves with that will have the biggest influence in determining our success. Think about it, even the greatest NFL coach will never win a Super Bowl without great players. 

I have worked with a lot of employees through the years, including technicians at all skill levels, bookkeepers, service advisors, managers, and support staff. I can tell you with 100 percent conviction that the years that were the most successful were the ones that I had assembled the best teams. Now, I am not just defining success by profit alone. These were also the years that were the most fun, with less stress and the years that we made the biggest positive impact with our customers and the community.  

Let’s talk about production first. Highly motivated, skilled technicians with the right attitude produce more.  They also get paid more, and they should. The right team of techs will average higher labor hours. I learned many years ago, it’s not the hourly rate you pay a tech that matters, as much as the hourly labor dollars produced by that tech. 

Next up are your service advisors. Here is where you can make or break your company. The service advisor is the face of the company. They represent you, your company and everything you do. The best brake job in the world means nothing if the service advisor doesn’t deliver a world-class experience that gives your customers a compelling reason to return.  

The long-term damage from an incompetent service advisor is hard to recover from. For the most part, you don’t run a transactional business. Your company relies on strong relationships and a strong culture.  There isn’t a big-box brand name over your bays. It’s your name. And that means service advisors need to go above and beyond to exceed your customer’s expectations. If not, you lose. 

For the success of any repair shop, I put great emphasis and responsibility on the owner when it comes to employee management. All too often, a poorly run, failing shop is the fault of bad leadership. The shop owner’s ability to lead and motivate is crucial with building a winning team and successful business.  However, I have also learned that sometimes we have the wrong people. And no matter what you do or how you try to motivate and lead, there are some people that just don’t “get it.” If it’s not in someone to begin with, nothing you do will change that person. 

In today’s business world, you need a team of great players.  You need to hire people that can produce quality jobs, with minimal comebacks, have the right attitude, self-motivated, willing to attend training and have the willingness to work in a united, team environment.  You need to hire people that “get it.” 

With regard to your customers, your business hinges more on the customer experience than it does on the equipment you have or the brand of parts you use. Of course, the parts you purchase matter. Of course, your alignment machine matters. But none of that is as important as what the customer sees.  The customer sees and judges you on her overall experience. Which is how she was greeted at the service counter, how she was spoken to during the sales process, the car delivery, and the experience driving away with a smudge-free steering wheel.  

Lastly, here’s something you need to accept as a business owner. There isn’t a process anyone can create that will make up for mishaps caused by employing the wrong people. You do need to have processes and policies in place. It’s how you build a smooth-running and efficient business. However, we don’t run a McDonalds or a Dunkin Donuts. We can’t make up for poor customer service with a process or with a point-of-sale computer terminal. The processes and policies you create will only work the way they were intended to when you have employees fully aligned with your culture and have the right attitude. You need to have the right people. 

There are many components of business. The financials, choosing the right vendors, training, equipment, and advertising are among them. The two most important components of your business are your employees and your customers. However, you have great control over who you hire. And we all know, great employees create great customers.  Assemble the right people around you and the rest will fall into place. 

This story was originally published by Joe Marconi in Ratchet+Wrench on August 5th, 2020

January 2020 started without a hitch. We hit our sales and profit goals in textbook fashion. However, by the end of February, it was obvious that something wasn’t right. Sales for the month dipped by more than 30 percent. It was devastating. What we didn’t realize was that this was just the beginning of even greater losses. By the time Governor Cuomo of New York issued the stay-at-home order on March 22, sales had dropped 75 percent. With most of the country in lock-down, I didn’t know what to fear more—the coronavirus or the impending financial disaster the world was about to endure.  

Before we go on, it’s important that we all remember those that have lost their lives due to COVID-19.  As in any crisis, there will be suffering. However, as a society, we must not dwell on it or let the crisis beat us. We must find a way to fight it and succeed.  

When the impact of the virus first hit, emotions filled my mind every waking moment, mostly due to the uncertainty of the situation. Then, reality set in and all I could think about was my obligation to others. As an essential part of the community and the nation, it was my obligation to keep the doors open and be there to make sure that those that needed to get to work, could. If we were to win, survive and thrive, we had to create a winning environment. That meant that I had to elevate my leadership to a new level, put the health and welfare of my staff before anything else and realign my goals. In the coming days and weeks, I would get a working man’s PhD on how to win in times of crisis. 

The first lesson learned in all this is to have the right mindset. We can’t look backward in time or wait around for a return to what we perceived was once normal. Looking forward and building a new future is all that matters. If you tell yourself, “the sky is falling.” It will.  Negativity spreads like a virus and infects everyone around you. Your mind shuts down in panic mode, clouding your judgment and mentally and physically paralyzing you. You must remain mentally strong and positive, even when you know the brutal facts of the situation. This is crucial. You, the leader of your shop, cannot lead others if you show fear and negativity. Be human, show emotions, but have the mental fortitude and show your team that we will get through this crisis. 

The next lesson is to make sure you have the right people around you. A strong team with the right culture is important in business. In times of crisis, it’s the difference between success and failure. As the weeks unfolded, it became clear to me who my leaders were. It would be those employees that I would turn to in order to maintain morale and lift everyone’s spirit. Leaders cannot succeed without having the right team around them. Take a look around you. Do you have the best employees with the right attitude? If not, begin the recruiting process today. 

Realigning my goals and understanding my new key performance numbers was next up. My 2020 business plan, created in December 2019, had little meaning by mid-March. I am not admitting defeat for the year by any means. Rather, we now have new objectives and a clean slate. From this point on, it is critical that we remain profitable: watching every expense, tracking production, keeping payroll within budget, and building for the future. The past is the past, it cannot be changed. What we have now is the opportunity to make each day better than the day before. 

Perhaps the biggest lesson learned was more of reminder than a lesson. It’s that above everything else, people come first.  All the planning, goal setting, marketing and number crunching mean nothing unless you understand that you, as a shop owner, have the power to achieve great things by your words and actions. Yes, it all goes back to leadership and understanding your obligation you have to others. All of us will have different lessons learned from crisis.  Which means, there is great opportunity on the horizon. Use those lesson to make your tomorrow better than yesterday. 

My hope is that by the time you read this article, COVID-19 will be well under control.  Human interaction is crucial to our overall well-being. We need not only, the emotional touch of another person, but also the physical touch of others.  While Facetime and Zoom will get us through, it will never replace a good old fashion handshake and a hug. 

This story was originally published by Joe Marconi in Ratchet+Wrench on June 5th, 2020

Nick is on the front lines of customer service each day. He is a talented service advisor, with a passion for helping others. Nick and I often debate what’s more important to the customer: price or value? He’ll often tell me, “I know you preach value, Joe, but people care about price, too. In the end, price is a major concern.” I always respond, “Nick, it’s not all about price, it’s really about value. Build a strong relationship, reach the customer emotionally, have them believe in you and they will trust you. And when that happens, price will not be the focus.”  

Here’s the reality. I would be lying to you if I told you that price has absolutely no bearing on a person’s decision to buy from you or not. However, are consumers only interested in price? I know that sometimes it may appear that way, but the bottom line is this: being competitive and profitable is a fine line we walk each day. When the perception of value diminishes, price then becomes the focal point.  Nick, who debates me on the philosophy of value, learned a valuable lesson recently, which made him a believer that there is most definitely a difference between value and price.  

About a month ago, a first-time customer called us to ask if we could take a look at her son’s tire, which was losing air pressure. Nick took the call and said, “Sure, we would be happy to help you.” He took down all the needed information and let her know that he would follow up with a phone call as soon as her son arrived.  

When the son arrived, Nick wrote up the car and dispatched it to a technician and then called the mother to let her know that her son had arrived. He also let her know that he would call her as soon as he knew something about the tire. 

About ten minutes later, the tech informed Nick that the tire was damaged from riding with too little air pressure and that the tire would have to be replaced. He also said that the other three tires looked new and that it would not be a problem replacing the one tire.         

Nick prepared an estimate for the tire and called the customer. Nick explained why the tire needed to be replaced and let her know that we could have the tire installed and have him on his way in about an hour or so. Nick then gave her the price for the job. The mother replied with, “Ok, give me five minutes and I will call you right back.” 

Fifteen minutes later the mother called, and said, “Nick, I found another shop that will install that same tire for $50.00 less than you can do it for.  So, can you put air in the tire so I can have my son drive it to the other shop?” Nick thought for a second and responded, “putting air in the tire and having your son drive his car to the other shop is not safe. Here’s what I will do. I will have my technician put the spare on the car. He’ll also check the tire pressure in the other three tires. Afterall, we want to make sure that your son is safe.” The mother thanked Nick and hung up the phone.  

A few minutes later, the mother called again, asked for Nick and said this, “You know Nick, you were so nice to me from the very beginning when I first spoke to you and right up to now, and you put my son’s safety first. You also didn’t try to force me into buying your tire. Please install the tire at your price.” Nick, now on cloud nine, hung up the phone and told the tech to finish up the job.  

Nick learned a valuable lesson that day. He learned that he didn’t sell a tire—he sold something much greater. He sold an emotional feeling. He reached the customer on an emotional level and the price of the job became less important. Does this work with everyone? Of course not. But, if you want to make more sales and build the right clientele, sell value, sell relationships and sell a positive emotional feeling. 

Later that day, Nick told me what happened. I could tell that he was proud of how he handled the situation. And he should be. I just listened as he told me the entire story and relived the moment. After he had finished, I calmly asked him, “So Nick, is it really all about price?” Nick just smiled. 

This story was originally published by Joe Marconi in Ratchet+Wrench on May 5th, 2020

We ended Part 3 of this blog series with “Second Draw PPP Loan Application and Documentation Requirements”. As this second draw is being distributed, the rules are changing. I encourage you to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

You may also contact me if you would prefer to have a conversation with someone outside the government. My contact information is at the bottom of this post.

Beginning Part 4, we start with expanding on this rule from the New PPP Regulations:

For Second Draw PPP Loans of $150,000 or Less, Revenue Reduction Documentation is Not Required to be Submitted at the Time the Borrow Submits an Application for a Loan:

This section is self-explanatory, but just a bit of clarification for you.

When you apply for a loan in an amount that is less than $150,000, you may disregard the required documentation mentioned in the previous blog. There is a three-letter word that causes a pause here “BUT” “Must be submitted on or before the date the borrower applies for loan forgiveness, as required under the Economic Aid Act.”

A second piece is that IF you as a borrower do not apply for loan forgiveness, you must provide this documentation to the SBA when they request it from you. So, be prepared.

How to Request an Increase for a PPP First Draw Loan if the Borrower Returned All or Part of a Loan, or Did Not Accept the Full Amount Previously Approved:

Here are the categories of borrowers that may reapply or request an increase in the amount of the PPP loan:

• If a borrower returned all of a PPP loan, the borrower may reapply for a PPP loan in an amount the borrower is eligible for under current PPP rules.
• If a borrower returned part of a PPP loan, the borrower may reapply for an amount equal to the difference between the amount retained and the amount previously approved.
• If a borrower did not accept the full amount of a PPP loan for which it was approved, the borrower may request an increase in the amount of the PPP loan up to the amount previously approved.

You may use the SBA’s E-Tran Servicing website to request an increase in the PPP loan amount electronically. After the request, you are required to provide the lender with supporting documents for the increase.

As of this writing, the SBA’s process for collecting information from borrowers was under development. This may be available when you apply for an increase in the loan amount as described above.

Clarification on Borrowers that are Ineligible to Receive a Second Draw PPP Loan:

Here is some language from the Economic Aid Act that describes borrowers who are NOT eligible to receive a Second Draw PPP loan. Read carefully please?

• A business concern or entity primarily engaged in political activities or lobbying activities, including any entity that is organized for research or for engaging in advocacy in areas such as public policy or political strategy, or that describes itself as a think tank in any public documents;
• Certain entities organized under the laws of the People’s Republic of China or the Special Administrative Region of Hong Kong, or with other specified ties to the People’s Republic of China or the Special Administrative Region of Hong Kong;
• Any person required to submit a registration statement under section 2 of the Foreign Agents Registration Act of 1938 (22 U.S.C. 612);
• A person or entity that receives a grant for shuttered venue operators under section 324 of the Economic Aid Act;
• A publicly traded company, defined as an issuer, the securities of which are listed on an exchange registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934
  (15 U.S.C. 78f).

Pay attention to the punctuation here. At the end of each bullet, there is a semicolon “;”. This means that if the first bullet does not apply to your situation, the next one or the next one, or the next one, OR the NEXT one may.

We’re getting close to the end, but this section has some additional clarification of borrowers that will not qualify for the second draw PPP loan. Check out these are examples:

• You are engaged in any activity that is illegal under Federal, state, or local law;
• You are a household employer (individuals who employ household employees such as nannies or housekeepers);

• An owner of 20 percent or more of the equity of the applicant is presently incarcerated or, for any felony, presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of, pleaded guilty or nolo contendere to, or commenced any form of parole or probation (including probation before judgment) for, a felony involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance within the last five years or any other felony within the last year;
• You, or any business owned or controlled by you or any of your owners, has ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted within the last seven years and caused a loss to the government;
• Your business or organization was not in operation on February 15, 2020; • You or your business received or will receive a grant under the Shuttered Venue Operator Grant program under section 324 of the Economic Aid Act;
• The President, the Vice President, the head of an Executive Department, or a Member of Congress, or the spouse of such person as determined under applicable common law, directly or indirectly holds a controlling interest in your business;
• Your business is an issuer, the securities of which are listed on an exchange registered as a national securities exchange under
  section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f);
• Your business has permanently closed.”

Again, same observation regarding the semicolons at the end of each bullet.

Thanks for sticking with me and welcome to the end of this blog series. Whew, that IS a TON of reading.

Again, I am keeping current of the changes as they happen, so if you want to talk, let’s schedule a time to meet soon.

Natalie Paris 

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

We ended Part 2 of this blog series with “Calculation of Average Monthly Payroll Costs for NAICS Code 72 Entities That Qualify as Seasonal Employers or as New Entities:” This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

Beginning Part 3, we start with expanding on this rule from the New PPP Regulations:

“Bankruptcy Prevents Borrowers from Receiving a Second Draw PPP Loan:”

The Interim Final Rules (IFR) state that if your business is in bankruptcy, you will not be approved for a PPP loan. Congress gave the SBA to defer that decision to bankruptcy judges but did not choose to exercise that option.

Again, don’t shoot the messenger please? I was shocked by this decision myself. I encourage you to look at the language from the IFR but will not insert them here.

Here’s a quote from the IFR to give you a taste.

“If the applicant or the owner of the applicant is the debtor in a bankruptcy proceeding, either at the time it submits the application or at any time before the loan is disbursed, the applicant is ineligible to receive a PPP loan.”

There is more that discusses the timing of when you file for bankruptcy and that’s where the hairs start getting split. If you find yourself in this possible gray area, check out the IFR.

There is a new way to account for a 25% reduction in revenue that will qualify you for a second PPP loan. Here’s the language:

“A borrower that was in operation in all four quarters of 2019 is deemed to have experienced the required revenue reduction if it experienced a reduction in annual receipts of 25 percent or greater in 2020 compared to 2019 and the borrower submits copies of its annual tax forms substantiating the revenue decline.”

Here’s the idea. If your shop had a reduction of annual receipts (when comparing 2019 to 2020) while in operation in 100% of 2019 and 2020, then you meet the criteria. Another wrinkle is that you must have already qualified before taking the revenue reduction into account. The IFR does make this simpler than it was before. If you want to find out the reasons the SBA created a variable method of figuring their reduction in revenue, check out the IFR or we can have a conversation. I’m here for you.

Lastly, you can still qualify for the second draw when you have a reduction of 25% in revenue by proving that you had the reduction in one quarter of 2020 when compared to the same quarter in 2019. For example, if you had the revenue reduction in the 1st quarter of 2020 when compared to the 1st quarter in 2019, you qualify.

Here’s the second and last topic for this blog. My eyes are starting to cross so hang in there. 

Second Draw PPP Loan Application and Documentation Requirements:

If you are wanting to make application, you should do that as soon as the application is available. It may be available now, so check it out.

The IFR did specify the documentation requirements, so here we go.

The documentation standard is essentially the same as the first draw PPP loan. If you meet these requirements, no additional proof of payroll costs is required. These requirements come straight from the IFR:

If the applicant:

• (i)used calendar year 2019 figures to determine its First Draw PPP Loan amount,

• (ii) used calendar year 2019 figures to determine its Second Draw PPP Loan amount (instead of calendar year 2020), and
• (iii) the lender for the applicant’s Second Draw PPP Loan is the same as the lender that made the applicant’s First Draw PPP Loan.

When you meet the standards from above “Additional documentation is not required because the lender already has the relevant documentation supporting the borrower’s payroll costs.”

Even if you do meet the standards from above, the IFR allows lenders that latitude to request additional documents if the lender “concludes that it would be useful in conducting the lender’s good-faith review of the borrower’s loan amount calculation.” Here some plain language. The bank can ask for more documents to review your calculation of the loan amount.

When you are asking for a second round PPP loan that is greater than $150,000 you have to submit documents that are “adequate to establish that the applicant experienced a revenue reduction of 25% or greater in 2020 relative to 2019.” An example of the documents is:

• Relevant tax forms, including annual tax forms, or
• Quarterly financial statements or bank statements if relevant tax forms are not available.

Hello Ms. Bookkeeper, do you have a handle on this stuff?

I’m confident I do, so if you want to talk, let’s schedule a time to meet soon.

In part 4 of the series, we’ll start with:

For Second Draw PPP Loans of $150,000 or Less, Revenue Reduction Documentation is Not Required to be Submitted at the Time the Borrow Submits an Application for a Loan:

See you back here for Part 4.

Natalie Paris 

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

Hi, Natalie here. 

We ended Part 1 of this blog with the SBA’s definition of gross receipts which is consistent with SBA’s size regulation 13C.F.R. 121.104. This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

Beginning Part 2, we start with expanding on this rule from the New PPP Regulations:

“Any Forgiveness Amount” of a First Draw PPP Loan is Excluded from a Borrower’s Gross Receipts.”

Simply stated, you can breathe a sigh of relief. Forgiveness amounts from your first draw PPP loan are not included a gross income when adding up what your gross receipts were. Think of this as a tax deduction taken right off the top of your gross receipts.

Yes, I went there, taxes. As I write this, I’m preparing my client’s books for the tax pros who will be busy from February through April 15th. But, I digress, back to the SBA interim rules

If you want to dive into the SBA rule on forgiveness amounts, check out section 7A(i) of the Small Business Act. The takeaway from this section is that PPP forgiveness amounts are expressly excluded (they don’t count) from being taxed as income. This also makes sure you are not disqualified from receiving the second draw PPP loan because of forgiveness during the first draw PPP loan. Restated, you have a better opportunity to qualify for the second round of PPP loans.

The next line in the interim rules reads:

“Borrowers May Use any 365 Day Period Beginning on January 1, 2019 to Calculate Their Average Monthly Payroll Costs:”

The following is general in nature and not related to your specific situation, so stick with me, please?

The maximum amount any individual borrower my receive from the second draw PPP loan is the smaller amount of two and one half (2.5) months of the borrower’s average monthly payroll costs during that 365-calendar day period not to exceed $2 million. You have two options for calculating the time period.

1. “The 1-year period before the date on which the loan is made.”
2. “Calendar year 2019.”

You have some flexibility here as you can choose any 365-day period starting on 1/1/19. It may be an exact calendar year or may be any period of 365 days between 1/1/19 and today. An example based on the federal government fiscal year is starting on 10/1/19 and ending 9/30/20.

Here’s quote from the Interim Financial Rules if you’d like to read the ‘official’ language:

“Subsection (f) of the IFR uses “calendar year 2020” to refer to “the twelve-month period prior to when the loan is made.” Calculating payroll costs based on calendar year 2020 rather than the twelve months preceding the date the loan is made will simplify the calculations and documentation requirements for borrowers because payroll records are more commonly created and retained on a calendar-year basis. Allowing borrowers to calculate payroll costs based on calendar year 2020 is also not expected to result in a significant difference in payroll costs compared to the twelve months preceding the date the loan is made because all Second Draw PPP Loans will be made in the first quarter of 2021.”

To wrap up this blog, we’re going to dive into another section of the Interim Financial Rules:

“Calculation of Average Monthly Payroll Costs for NAICS Code 72 Entities That Qualify as Seasonal Employers or as New Entities:”

If you are a seasonal employer or new entity that is not a NAICS Code 72 business this is for you, but wait. A NAICS Code 72 business is defined as “businesses in the accommodation and food services sector”. Here’s where it gets a bit deep and potentially confusing. A NAICS Code 72 business may also be considered as seasonal employer or a new entity. 

I know, what appears to be typical government legalese and double speak. Hang in there as I do my best to translate this for you.

The Interim Final Rules clarify this by stating that when your NAICS Code 72 business fits into one of these separate categories… Here’s where the seasonal employer/new entity and NAICS Code 72 business are joined. These businesses MAY calculate their payroll costs used to determine their loan amount… 

1. …based upon the formula that applies to the entity, OR 
2. the standard formula used to calculate payroll costs for every other type of borrower…

while still being allowed to use the 3.5 times multiplier that is applied to NAICS Code 72 entities under the new Act.

Wading through government regulations can be challenging and this blog series will continue with Part 3. We’ll start with: 

“Bankruptcy Prevents Borrowers from Receiving a Second Draw PPP Loan:”

I may be able to shed some additional light on these new rules, so contact me if you want to talk this over or do my best to answer specific questions about these new rules.

See you back here for Part 3.

Natalie Paris 

https://threeriversbookkeeping.com/

907-331-0208

natalie@threerivers-bookkeeping.com

Hi, Natalie here. There is wealth of information to clear up confusion about the new regulations regarding PPP loans. There will probably be changes, so this is summary is based on the best information currently available. Before you take action, I encourage you to check for updated rules and make sure you are fully informed before signing any paperwork.

As with any government program, there are a lot of details that need to be understood. So this may be spread out over two-to-three blogs, as my goal is to deliver this information in bite-sized chunks. For additional information, I suggest you contact your local Small Business Association (SBA).

Here’s a headline of the first section from an article in Forbes magazine:

“Second Draw PPP Loan Eligibility Requires that Borrower will have spent the “Full Amount” of the First Loan Before Receiving the Disbursement of the Second Loan”

The title for this Act is a mouthful of legalese, but the short title is the “Economic Aid Act”. This Act states that “a Second Draw PPP Loan may only be made to an eligible borrower that (1) has received a First Draw PPP Loan, and (2) has used, or will use, the full amount of the First Draw PPP Loan on or before the expected date on which the Second Draw PPP Loan is disbursed to the borrower.

Let’s break this down into simpler language.

1. You have to be eligible
2. You have received the first PPP loan
3. You will spend 100% of the first loan before collecting any of the funds from the second PPP loan

Here is some clarification from the Interim Final Rules:

• The borrower must have spent the full amount of its First Draw PPP Loan on eligible expenses under the PPP rules to be eligible for a Second Draw PPP Loan; and
• “The full amount” of the borrower’s First Draw PPP Loan includes the amount of any increase on such First Draw PPP Loan made pursuant to the Economic Aid Act.

This next topic is what the definition of “Gross Receipts” is. “Gross Receipts” Defined for Purposes of Determining Whether There Has Been a 25% Drop in Revenues to Qualify for Second Draw

Unfortunately, the Economic Aid Act does not include a general definition of “gross receipts” for purposes of determining a borrower’s revenue reduction.

Here is what is included in gross receipts: ““All revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.”

Here is what is not included in gross receipts:

• “Taxes collected for and remitted to a taxing authority if included in gross or total income (such as sales or other taxes collected from customers and excluding taxes levied on the concern or its employees);
• Proceeds from transactions between a concern and its domestic or foreign affiliates; and
• Amounts collected for another by a travel agent, real estate agent, advertising agent, conference management service provider, freight forwarder or customs broker.”

One additional statement regarding what may not be excluded from gross receipts has to do with contractor costs and other items under the category of “all other items”. These items include:

• reimbursements for purchases a contractor makes at a customer's request
• investment income
• employee-based costs such as payroll taxes

Lastly for part 1, this definition of gross receipts is consistent with SBA’s size regulation 13C.F.R. 121.104. This is another great reason to check out the SBA’s website www.sba.gov or go to your local SBA office for additional information.

I may be able to shed some additional light on these new rules, so contact me if you want to talk this over.

Hi, Natalie here. You have a great selection of tools on hand that will cover every job a customer will bring into your shop. Whether it’s Mac Tools, Snap-on, OTC, or Wright, the right tool for the job is priceless.

The tools we’re talking about in this post are for finances, but the same strategy holds true. If you’re planning to do your own bookkeeping, the right tool for your financial job is also priceless. They can take what may appear to be a daunting challenge and save you a ton of time. You’ll be back to running your shop before you know it.

Stick around until the end and I’ll outline what’s in my bookkeeping toolbox. Here is an overview with some suggestions on how to choose great financial tools

Here are the top 10 categories:

1. Accounting Software

QuickBooks has been the go-to software for accounting for decades. There are online tools that may be a better option for you. The most popular choice is Xero and the numbers of small business owners that are using Xero is increasing. Compare several and pick the one that is both robust and flexible.

According to the 2015 edition of the Business News Daily’s Buyer’s Guide here are the features you should look for:

 Invoicing
 Expense Tracking
 Client/Vendor Contact Management
 Billing and Recurring Payments Automation
 Quote and Estimate Creation
 Tax Preparation
 Multiple-User Access
 Payroll Processing
 Mobile Access
 Integration with Programs Such as Point-Of-Sale Software, Credit Card
Processing, and Google Apps

2. Budgeting Tools

Creating a budget is the cornerstone of your shop’s financial success. Staying on task within your budget is equally as important. If your accounting software has this feature, you may already have the proper tool to create that budget. If your preference is a tool dedicated to this task, a recommendation is PlanGuru.

3. Payroll Management System

Payroll management can occupy so much of your time and mistakes are easy to make. Look for tools that streamline the payroll process and cut costly errors. A tool that integrates with your other tools is another feature to look for. Some tools like SurePayroll can calculate and pay payroll taxes. Simple. A couple of other tool suggestions are ZenPayroll and ADP. These combine payroll and HR functions in one.

4. Agile Billing

Speed and flexibility in your billing process means quicker cash flow back to you. With a tools like FreshBooks or Bill.com the billing process will be quicker and give your customers an easy experience. Improving the billing process will serve you and your customers better and shorten delays in receiving payments.

5. Financial Dashboard

The dashboard gives you a quick look at your shop’s financial health. See at a glance if your shop is thriving or surviving. Tools such as LivePlan or InDinero give you clear visuals and show you if you’re starting to go off course. Then you can take the actions to keep moving towards your financial destination.

6. Cash Flow Analysis

Your accounting software should have cash flow statement capability. As with the budgeting tools there are specialty tools for cash flow tracking. A couple of suggestions are Float or a simple spreadsheet. These give you patterns from the past to offer a forecast of your shop’s financial future.

7. Inventory Management

This is all about efficiency and tracking. From the purchase of parts and consumables to generating sales reports and low inventory alerts, this is a very valuable tool. A couple of cloud-based options are SOS Inventory and Scout’s top Shelf.

8. Expense Tracking

Those tiny expenses can quickly add up and may be hard to track. Using an expense report tool such as Expensify or Xpenditure makes this much easier. Track those meals, gas, and incidental expenses by scanning receipts and typing in cash expenses. Some tools have the capability to link to mobile devices helping to track these instantly..

9. Business Credit Card

A business credit card, when used properly has several benefits

 Improve your shop’s credit history
 Earn higher credit limits
 Receive rewards and discounts
 Manage employee cards (ease of tracking expenses)
 Boosts employee morale due to convenience and trust

10. E-commerce Solutions

Imagine your customer paying for their oil change before the service is completed. They need a couple of quarts of oil to tie them over. It’s easy to buy them online from their trusted repair shop.

Many businesses have seen an increases in cash flow since the beginning of the pandemic by using E-commerce solutions. These are powerful and create revenue streams that you may not have thought of.

11. Three Rivers Bookkeeping

With my 5-years of experience, these are the tools I use:

 Accounting software – QuickBooks
 Payroll Management System – ADP
 Agile Billing – bill.com
 Financial Dashboard – LivePlan

I’m passionate about books and service to my clients. If you’d like to have a conversation about tools and why I selected the one’s above, contact me. I can also outline the services I provide and why adding me to your team may make perfect sense to you.

Saving you time and headaches is the value I bring to you, the Auto Repair Shop Owner.

For additional help building a more successful auto repair business, learn how you can team up with a superstar shop owner like Ed through Elite Top Shop 360: One on One Coaching

Although COVID-19 has brought our industry plenty of challenges, it has also taught us a valuable lesson. Many of us have seen a drop in our car counts, but have simultaneously witnessed an increase in our AROs and happier customers. These slower days give us the opportunity to spend more time with each and every individual and vehicle that enters our shop, yielding positive results for both our business and our customers.

From this point forward, in order to maximize every single opportunity at your shop, I recommend you implement the following three items.

First, I recommend you hold a meeting with your employees as soon as possible and make sure they know that each vehicle that comes in should be properly, professionally and ethically inspected. Make sure they also know that everything should be documented.

Next, it’s important that every single customer that enters your facility gets full disclosure on what is going on with their vehicle. This includes what needs to be done now, what should be done in the near future, and what may need to happen in the long run.

Lastly, make sure that everyone in your company believes in all of your products and services. When a tech or advisor is on the phone with a customer, they must truly believe in their recommendations in order to really get through to that customer. The customer will be far more likely to listen if they know the recommendations are coming from a place of honesty and care.

If you can implement the three items above, not only will you see sales go up, but you will have happier customers as well. I can assure you that the more time you spend on each vehicle and with each customer, the more successful you will be. 

For additional help making the most of your shop’s opportunities, visit the Elite website or call 800-204-3548.

Superstar shop owner and Elite Business Development Coach Greg Skolink shares a fun tip on how to keep your shop's customers engaged on Facebook.

For additional help building a more successful auto repair business, learn how you can team up with a superstar shop owner like Greg through Elite Top Shop 360: One on One Coaching

By Bob Cooper

Given the uncertainty many businesses around the world are currently experiencing, we must look for ways to save as much money for our shops as possible, while also making sure we are maintaining and building a more profitable business in the long haul. Here are 4 powerful tips to help you save on your shop’s expenses.

1. Review your profit and loss statement, and take a look at each and every line item. For each line item, you should ask yourself up to 3 questions: First, ask yourself if the line item is going to lead to an immediate profit. An example of this would be parts purchases or labor.  If the answer to this question is no, then ask yourself if the line item will lead to a potential profit in the near future. An example of this would be your advertising or marketing investments. If the answer to this question is no again, then ask yourself if the line item will lead to any foreseeable profit at all. Examples of these items would be insurance investments, utilities, and your water cooler payment. Once you have the answer to these questions, it will be much easier to see where you can scale back or even put certain items on hold for the time being.

2. This tip comes from Dean Kuhn, a successful transmission shop owner and one of Elite’s rockstar Business Development Coaches. He recommends taking a look at the top 2-3 most expensive items on your financial statements each month. When you look at these expenses, really dive deep into every single line item that goes along with it. This way, nothing will slip through the cracks and you can get a complete picture your business’s finances, which will help you determine areas where you can save.

3. Always remember that your vendors are your partners, and it’s important to treat them this way. I would highly recommend meeting with each of your vendors and having an honest conversation with them to make sure your partnership is as mutually beneficial as possible. During these discussions, set clear expectations for the vendor and make sure that you are meeting theirs. This will save you valuable time in the long run and will make both of your businesses more successful!

4. To save on what’s likely one of your biggest expenses, I recommend that you sit down with your landlord or mortgage owner and have a conversation with them to see what can be done to reduce this cost. You’d be surprised how often an agreement can be made to help in situations like the one we are currently facing.

Since 1990, Bob Cooper has been the president of Elite (www.EliteWorldwide.com), a company that strives to help shop owners reach their goals and live happier lives, while elevating the industry at the same time. The company offers the industry’s #1 peer group of 90 successful shop owners, training and coaching from top shop owners, service advisor training, along with online and in-class sales, marketing and shop management courses. You can contact Elite at contact@eliteworldwide.com, or by calling 800-204-3548.

By Bob Cooper

We all know that these incredibly challenging times are impacting businesses and people all around the world. To help maximize your shop's sales and profits in the face of these difficulties, here are 3 simple and cost-free tips that you and your service advisors can start implementing today. 

1. Pick up the phone and call your customers. However, this is not a sales call and shouldn't involve discussion about the customer's vehicle. Rather, this is a chance for you to check in on your customers and their families, let them know you are thinking about them, and offer to help in any way you can. By giving them a call and speaking from your heart, you are showing your customer that you not only care about their well-being, but that your company truly values people over profit. 

2. Set up call forwarding during your commute to and from work. By having incoming calls forwarded to your cell phone rather than to the shop's voicemail during your drive to and from the shop, you are essentially extending your hours and allowing more customers to reach you if they are in need. There may only be a couple of calls that come in during these times, but it can make a world of difference for those calling customers. 

3.  Adjust your 2020 sales and car count goals so that they are broken down to daily targets, and track these daily goals in a descending manner. Instead of feeling discouraged if your shop is far from reaching a monthly or weekly goal, having daily sales and car count goals will allow you and your advisors to look at each morning as a brand new opportunity to accomplish the goals for the day. 

Tracking these daily goals using a descending method helps your team focus on what they still have left to accomplish, and motivates them to reach the targeted numbers. For example, if your daily car count goal is 10 cars, and 7 cars have come in, a descending method of tracking will have your advisors saying, "We only have 3 cars left to meet our goal!" rather than, "We've had 7 cars come in so far." When I first began coaching, my average client saw a 15% increase in sales just by making this simple switch from an ascending to a descending method of tracking goals, so this tip is sure to help! 

For additional help increasing your shop’s sales, learn more about Elite’s Online Masters Service Advisor Sales Training, or give us a call at 800-204-3548. 

Hello shop owners, there is a lot of money there to get you through COVID-19.

Trump signed it.

Here's what you get:

●     SBA Forgivable Loans Up to $10,000,000*

●     SBA Emergency Grant Up To $10,000*

●     Withdraw Retirement Penalty Free Up to $100,000*

●     SBA Disaster Loans Up To $2,000,000

●     Defer Payroll Taxes Sec 2201 To 2021/2022*

●     Recovery Rebates $2,400 MFJ/$1,200 Single*

●     Get Cash For NOLs In '18, '19, '20*

●     Employee Retention Credit Up To $10,000/employee*

●     Sick Employee Payroll Tax Credit Up To $2,000/employee/qtr

And there is SO MUCH to consider. 

From CNN: Trump signs historic $2 trillion stimulus after Congress passes it Friday

Washington (CNN) - President Donald Trump signed into law Friday afternoon a historic $2 trillion stimulus package as the American public and the US economy fight the devastating spread of Covid-19.

The far-reaching legislation stands as the largest emergency aid package in US history. It represents a massive financial injection into a struggling economy with provisions aimed at helping American workers, small businesses and industries grappling with the economic disruption.

From Fox News: Trump signs $2T stimulus bill after House approves historic coronavirus response

President Trump on Friday signed a more than $2 trillion legislative package to combat the coronavirus pandemic and send economic relief to workers and businesses squeezed by restrictions meant to stop the outbreak’s spread after the House of Representatives overwhelmingly approved the legislation earlier in the day.

"I want to thank Democrats and Republicans for coming together and putting America first," Trump said during an afternoon Oval Office signing ceremony.

For more info please call us at 1-954-324-0803 or book an appointment at https://calendly.com/markjohnsontaxplanner/45min

Shop owners did you hear? If you have been affected by COVID-19 you are eligible for a SBA disaster loan of up to $2M. This loan is from the Federal Government with interest an rate of 3.75% and up 30yrs payment term. It is not available in private financial institutions (banks).

ALL STATES CAN NOW APPLY!   

So what information do you need?

A LOT!

●    Most recent Federal income tax returns

●    Personal Financial Statement

●    Schedule of Liabilities listing all fixed debts

●    You Fill out All SBA Paperwork

●    Year-end profit-and-loss statement and balance sheet for that tax year

●    A current year-to-date profit-and-loss statement

●    Monthly sales figures for increases in the amount of economic injury.

And there may be even more!

We are currently helping shop owners navigate through the applications process.

For more info call us at 1954-324-0803 or book an appointment at https://calendly.com/markjohnsontaxplanner/45min

The Accountable Plan is one of our most successful strategies and gives up to $10K in tax savings per year.

An Accountable Plan allows employees and in your case, owner-employees to be reimbursed for business expenses paid out of pocket.

The expenses become deductions to the business and the employee or employee-owner can be reimbursed creating non-taxable cash flow to them. 

In order for the plan to be a “Qualified Accountable Plan” it must have the following connection points:
·         Business Connection
·         Substantiation (Expense Reports - with receipts)
·         No Excess Payments
·         Timeliness (30 - Day Rule)

If not disbursed under an accountable plan, the payments could be considered additional wages by the IRS. For this reason, you need an accountant familiar with the accountable plan for the initial setup.

Examples of expenses that qualify are mileage, auto, home office, travel, meals & entertainment expenses. 


Learn more about this and other LEGAL tax saving strategies by contacting us at 1954-324-0803 or booking an appointment at https://calendly.com/markjohnsontaxplanner/45min.

 

This informative article discusses digital vehicle inspections and the importance of using it to attract new customers.  With contributions from Chris Cloutier from Autotext.me & Tony Mercury from AutoShop Solutions, there is a lot of great info here. 

If your shop is considering, or has already invested in Digital Vehicle Inspection (DVI) technology, you clearly understand the tremendous value and benefits that DVI provides. However, the vast majority of the general public does not understand what it is or how it benefits them. After speaking to several shop owners who conveyed to me that their customers have no idea what DVI is when they come into their shops, we decided to ask a random sampling of 104 consumers ages 18+ who all own and have had vehicle repairs within the past 12 months:

Question:

“Do you know what a Digital Vehicle Inspection is in relation to getting your vehicle serviced or repaired?”

Answer:

I’m sure that doesn’t come as much of a surprise. Like many technologies, consumer education simply just takes time. This lack of consumer awareness is a problem for shop owners who are currently utilizing DVI technology and want to use this powerful technology to capitalize on its ability to differentiate their shop from competitors.

How Can DVI Differentiate Your Shop?

Implementation of DVI technology, from a marketing perspective, can help position your shop as professional and highly educated by using the most advanced technology to service and repair your customers’ vehicles. It just may be the most powerful tool at your disposal to create and position your shop as TRUSTWORTHY.

How DVI Creates Trust & Why It’s So Important?

The primary benefit of DVI technology, from a customer prospective, is that it provides them with full transparency to their repairs/services needed. Whenever you bring transparency to what is generally a non-transparent process, it adds a tremendous amount of TRUST.

Being able to convey that potential customers can TRUST your shop is arguably the most critical component to attract them to your shop and, of course, to maintain current customer relationships.

Two out of three U.S. drivers simply don’t trust auto repair shops based on the findings from AAA, with the top reason for the lack of trust being “Recommending Unnecessary Services.”

Top Reasons Why U.S. Drivers Distrust Repair Shops:

According to AAA

This is further echoed by some of the latest consumer research from the Mintel 2019 AUTO SERVICE, MAINTENANCE, AND REPAIR market research report. When asked why they chose their auto service/ repair location over the previous 12 months, beyond shop location and being a returning customer, the top reason reported by respondents was TRUST. The TRUST factor came in above both quality and cost.

Just think about that for a second. We know that the primary reason consumers don’t trust auto repair shops is due to the feeling that they have been recommended unnecessary repairs. We also know that trustworthiness is one of the top factors in determining which auto repair shop they have chosen. Therefore, If these same prospective customers understand that your use of DVI can eliminate these concerns, it would undoubtedly give you a major advantage over your competition. For some thoughtful industry insight, we reached out to Chris Cloutier; DVI guru, successful multi-shop owner and founder of autotext.me, a leading auto repair shop technology software provider that offers DVI technology and many more digital features.

What Does Chris Have to Say?

“As a multi-shop owner, I can attest that many customers are indeed very wary about being charged for unnecessary repairs and have a need for trust to be established, which the DVI greatly helps to solve. For example, the Digital Vehicle Inspection service offered by autotext.me can include multiple pictures and short videos, which serve to educate customers on overall vehicle health and repair needs and recommendations.

Chris Cloutier Autotext.me

By pulling back the curtain and enabling customers to understand the “why” behind recommended repairs, repair shops are able to boost customer confidence as well as increase their Average Repair Order (ARO) if the DVI is properly executed.

A new feature we recently launched, Customer Insights, drills down even further to provide shops with helpful analytics on DVI customer engagement. Shops will be able to see if and when a picture or video was viewed along with whether a video was viewed in its entirety. autotext.me clients can leverage this data to determine how to communicate better with customers and establish best practices for DVI documentation by technicians.

Think about the power a service advisor will now have before talking to a customer. “Mrs Jones, I see you didn’t look at the pictures of your brake pads that are metal to metal. Could you please open those up for me?”

Vehicle inspections are not just a tool to increase your ARO. The ARO increase that shops might anticipate is from one thing only, and that is an informed client.  If your client is not being fully informed by your inspection, wouldn’t you like to know?”

Now, the question becomes “what can you do to capitalize on your use of DVI technology to attract new customers?” The answer is, to deploy a strategic and aggressive multi-channel marketing approach.

Direct Mail + A Multi-Channel Marketing Approach is the Answer

First, let’s take a look at why Direct Mail is one of the most powerful tools you can use to promote DVI, followed up with some additional insight from Tony Mercury, Digital Marketing Expert from Auto Shop Solutions, for his perspective, thoughts, and suggestions to help you jump-start your shop’s digital marketing efforts in order to promote your DVI as part of your multi-channel marketing approach.

Why Should You Be Using Direct Mail to Promote DVI?

Direct Mail Is a Trusted Marketing Method

For starters, choosing to utilize direct mail as a marketing platform will ensure your message gets delivered in a method that is also trusted by consumers.

MarketingSherpa, a research and training institute and division of MECLABS, the largest independent research facility, asked 1,200 consumers: “In general, which type of advertising channels do you trust more when you want to make a purchase decision? Please sort the options into ‘Ads I trust’ and ‘Ads I don’t trust that much’ categories.” Below are the results for the “Ads I trust” category.

The results speak for themselves; 76% of the consumers involved in the survey trust direct mail when it comes to making a purchasing decision.

Now, let’s take a look at some important considerations when developing your Direct Mail Marketing strategy.

Consistency is Key

Being consistent with your message is going to be critical in order to educate your prospective customers on the benefits of DVI. We already know there is a lack of consumer awareness, which is why consistency is of utmost importance here. Ensure your message is delivered consistently and across all channels you are using to market your shop.

Don’t Just Say You Offer DVI, Explain the Features & Benefits

One of the biggest mistakes you can make is to merely mention that you offer Digital Vehicle Inspections. It’s critical that the ad copy to support your DVI marketing Campaign gives customers a clear & concise explanation of what a DVI is and, most importantly, conveys how they will benefit from it. Just saying you offer Digital Video Inspections alone without additional context will mean nothing to a consumer and be a wasted effort.

Strategic Ad Copy

In addition to promoting DVI to create trust, you should also be thinking about what else you can include on your direct mail, plus all of your other marketing to support your initiative and on all of your other marketing for that matter, that will support your initiative to position your shop as Trustworthy.

One easy way to do this is by simply telling your targeted prospective customers that they can trust you. According to Roger Dooley, author and expert on the subject of Neuromarketing, “Researchers found that placing the following statement at the end of an ad for an auto service firm caused their trust scores to jump as much as 33%:

“You can trust us to do the job for you.”

This one simple phrase caused consumers to rate the auto service firm in this ad higher in all categories:

Tie It Together With a Strategic Testimonial

Ask one of your Happy Customers for a testimonial that includes their experience with your shop’s DVI process and how they trust your shop because of this process. This will add credibility and give your prospects feedback from a point of view they can relate to.

Choose The Correct Direct Mail Piece(s)

Choosing the right direct mail piece to convey your message is important. You may want to consider using a larger Jumbo 8.5″ × 10.5″ Postcard or even a 10.5″ × 17″ Tri-Fold Brochure to your direct mail program. These larger pieces will give you more space for strategic ad copy to promote DVI as well as other services that a smaller card may not allow for due to size constraints.

That said, you can still use a standard 5.5″ × 10.5″ or comparable size postcard to do the job for you as well. Just make sure that you have the right ad copy. You don’t want your card to be too cluttered with content that it makes the piece illegible or too busy that it becomes confusing.

A Multi-Channel Marketing Approach

Tony Mercury Autoshop Solutions

As we mentioned above, due to the lack of consumer awareness of DVI, the use of a multi-channel marketing approach is critical with this type of consumer education marketing campaign. To add some additional insight from a digital marketing perspective, we asked Tony Mercury from Autoshop Solutions, a premier digital marketing agency for auto repair shops, for his thoughts.

For an effective educational campaign, Tony suggests that you create a short but concise video to show the DVI in action to demonstrate its benefits and the value it provides to prospective clients.

Once you have that video, he recommends using that content on your website, Facebook page and, if you’re using it, Instagram. In addition to the video, Tony suggests accompanying it with a few paragraphs of strategic content to not only support your message, but also benefit from an SEO perspective, and you’ll be on your way to a successful campaign.

Using direct mail is one of the most powerful ways to drive prospects online to watch your informative DVI video, according to Tony. He suggests using a QR Code on your direct mail piece/s that, when scanned, immediately opens up your DVI video and allows prospective customers to view it on demand. Just make sure to instruct your prospects with a clear Call to Action if you want to ensure they scan the QR code or go to your website/social platforms to learn more.

Digital Vehicle Inspections Your Auto Repair Shops Marketing Secret Weapon.pdf

Your lead tech is not performing up to expectations. Shop production is slipping and you’re not sure why. You hear through the grapevine that some of your employees are wondering when they will get their next pay raise. After a few agonizing weeks of pouring through reports, you make the decision to give across-the-board pay raises. Almost immediately, you see a boost in production. The shop is more upbeat and all is well. Your decision appears to be correct. Three months later, your shop is once again struggling to meet its sales and production goals—and morale has slipped, too. 

I have seen this scenario all too often. And, while there are times that we need to give pay raises, if your shop is struggling to meet its sales and production goals, increasing pay to improve business is not the answer. The reality is you have deeper issues.  

Let’s address employee compensation first. You must pay people a competitive wage with the opportunity to earn more. There should be incentives in place to reward your employees for reaching their personal and team goals. And, there needs to be a process in place where your employees understand how and when they will get a pay raise. 

However, in terms of long-term company growth, a focus on pay alone will never be the formula for success. In other words, throwing money at a problem is a short-term fix. It’s putting a Ban-Aid on a more serious injury that requires much more care and attention.  

About 10 years ago, Mercedes-Benz was struggling with its customer experience at many of its dealerships. In response to this, Mercedes decided to increase pay incentives, implement new policies and training programs. No improvements were realized. Mercedes top executives could not understand why customer service was not up to company expectations. After all, this is Mercedes, a car company that represents quality and sophistication. Why were their dealer employees so indifferent? 

A senior leader at Mercedes recognized the problem and stated, “Pride in the brand was not quite as strong as we thought, the level of engagement with work was not as deep as we thought.” Mercedes finally realized that until the employees at Mercedes genuinely cared more, no amount of money, policies or training would make a difference. 

Understanding the need to get front-line people more engaged and take pride in their work, Mercedes began to invite its dealer employees to spend 48 hours with the model of their choice. To experience not only the amazing performance and mechanical attributes of the vehicle, but also that they can turn heads as they drive through their neighborhoods or when they drive into the little league parking lot. 

Mercedes also built its Brand Immersion Center in Tuscaloosa, Ala., in 2014, where hundreds of employees go each year to spend time getting to know how the cars are built, gain a deeper understanding of the brand, the history of Mercedes and experience the legacy of the company.  According to Philippa Green, brand immersion trainer for Mercedes-Benz, “The ultimate goal is to engage their hearts and minds around the brand. We’re teaching them about our legacy.”  

As business owners, we track KPIs, set goals, work on marketing and refine our business plans. We also ensure that we provide our employees with adequate training and a well-equipped environment. These are the essentials of our business.  However, we must never overlook the importance of your employees taking pride in their work. And, pride comes from employees knowing who you are, what you stand for, what you do for your community and for the industry.  

Giving people pay raises can motivate them. But the bounce you get from that is short-lived. Once people have gotten over the excitement of the raise and made the financial adjustments to their lifestyles, the raise is long forgotten. If there are no other intrinsic motivators, then shop morale, production and employee engagement will fall right back to where it was before the raise. 

Anyone who knows me and has read my articles, knows how much I preach about leadership. The theme of this article also has its roots in effective leadership. You, the leader of your company, have the power to transform the people around you. Focus on the person, not the position. Recognize when your employees do things that are from the heart. Promote your company’s brand, vision and legacy. These are the keys to a long-lasting company. This is what will improve morale, not a pay raise. 

This story was originally published by Joe Marconi in Ratchet+Wrench on March 1st, 2020

The year was 1980 - the year I founded my company. And, like many new business owners, I didn’t have a clear understanding of what was needed to grow a successful business.  I thought that success would be determined by my technical skills and my willingness to wear the many hats of the typical shop owner. It wasn’t until I began to let go of trying to do everything that I realized that success is not just dependent on what I do, but by the collective work accomplished by the team. I eventually discovered that I was not the center of my universe.  After a few years in business, I began the transition from simply owning a job to becoming a businessman. And, while technology has reshaped our industry throughout the years—and will continue to do so—there is one constant that will never change: success in business rests largely on the people you have assembled around you.

By the late '80s it was obvious that I was doing way too much. I looked at each role I had my hands on: shop foreman, service advisor, shuttle driver, bookkeeper to lot attendant. And, as long as I’m confessing all this to you, I need to disclose that I was also the shop’s maintenance person; making repairs to the bay doors, the slop sink and equipment. You name it, I did it. I was literally too busy to be successful.

In order to lead my company, I had to first clearly define my responsibilities. These are working on the business, recruiting and hiring the best employees, becoming a leader of people and making sure that my business was successful. I also needed to fulfill the obligation I had to my employees. I realized that this required a deep understanding that putting people first is the best strategy for success. This was difficult at first because it requires working on things that have no immediate impact on the business. Unlike working in the trenches and having your hands on everything, working as a businessperson means that you need to spend time building for the future. The things that are most important to your success in business are the things that have a payoff down the road.  

I also clearly defined the duties I should not be doing and assigned those tasks to others. This is a critical step for any shop owner.  Warren Buffett says that in order to be successful in whatever you do, it’s crucial to focus on the things that generates the greatest return and that you can’t do it all, and that means sometimes you have to say, “no.”  

By the late '90s it became clear that the most valuable role I played in my business was that of coach. All the best marketing plans and the best business strategies mean nothing without a team of great people around you all pushing in the right direction. And that takes a strong leader. Not just a boss, but a leader.  Leaders inspire people. Leaders get others to reach down deep inside themselves and perform at their best because they are aligned with the leader’s vision. 

Leaders inspire others through praise and recognition for the work they do. When people feel their work matters, they have a purpose. People are motivated by the heart, not the wallet. That’s not to say earning a decent wage isn’t important. But a focus on money alone is not a strategy for success. Focus on people first and profit will follow.  

Spend time with your employees. Get to know them as people, not just the role they have in your company.  Find out what their dreams and goals are. And then find a way for others to achieve what they want out of life.  People cannot be motivated until they realize that what they do every day helps them to achieve what they want in their personal life.  

There are other people in our business world that we must never forget. And that’s our customers.  If you were to ask me, who is more important, my employees or my customers? I would answer, “They are equally important.”  You cannot have a successful business without the right employees and the right customers.  

One last bit of advice I can give you is to focus on your success, no one else’s.  Be very clear about the pathways you take and never forget about the obligation you have to others. Build a company culture of teamwork, quality and integrity.  Focus on what’s in the best interest of the customer and the people around you. Put people first, and everything else will fall into place.  

This story was originally published by Joe Marconi in Ratchet+Wrench on February 4th, 2020

Do you ever worry that if the credit card you’re using to make business purchases isn’t in your business name that you won’t be allowed to take the deductions?

The good news is, that’s not the case—even if you have a separate entity!

This doesn’t mean you should mix personal and business expenses.

When you take a personal credit card and use it entirely for business expenses, you are essentially contributing this debt to your business.

You can use the card the same as if it was in the company’s name and deduct every business expense you purchase on it.

This can be a great strategy, just like with auto loans, when the company is new because it’s harder for new companies to get lines of credit without an established credit history.

So if you’ve got a personal credit card available for business expenses, feel free to use that card and benefit from all of the rewards!

To learn more please call 1954-324-0803 or book an appointment at https://calendly.com/markjohnsontaxplanner/45min

To refresh, a business meal includes: meals in your area of business WITH a business colleague, or meals by yourself when you travel out of town for business.

The key to making sure any deduction holds up in an audit is DOCUMENTATION.

For meals specifically, there are five items you need on a receipt:
1. The name of the restaurant
2. The date of the meal
3. The amount you paid
4. Who you met with and their business relationship
5. What business items you discussed

The first three items are already on the receipt so you’re covered there.

The last two, a best practice is to jot them down on the receipt right when you make a purchase and then snap a picture of that receipt so you have it!

Remember, you want to pay as little tax as possible and also have those deductions HOLD UP if you get audited!

Please take the proper steps to document your meals guys.

To learn more about this and other tax saving strategies please call 1954-324-0803 or book an appointment at 
https://calendly.com/markjohnsontaxplanner/45min

“Why are we discussing these issues when the people who need it the most are not here? We’re not reinventing the wheel. We get it. But the ones who don’t get it need to be here, too!” 

Those were the words spoken by one of my service advisors during a recent meeting. We were discussing quality issues and ways to improve overall production, which, we determined, would improve sales and profit. I listened as Tommy (not his real name) continued for a few minutes. I could hear the frustration in his voice, so I let him speak until I felt he expressed all his feelings to the group. 

I am a firm believer in holding regular meetings. And, while there are times when the group gives me feedback, rarely does anyone voice their opinion with such passion and intensity the way Tommy did that day. Drawing on experience, I thanked him for his openness and honesty. I also asked him if we could continue this discussion in the morning in private. He agreed. 

The next morning, I paged Tommy and asked him to come to my office. I thanked him again for his openness and asked him to elaborate more on what he said the night before. Tommy hesitated at first, but slowly began to tell me his frustrations. It really boiled down to the level of commitment from a few techs. Tommy spoke in length about what he would like to change in the shop, and again repeated that we’re not reinventing the wheel. His words were clear and on point, “Joe, we all know what to do. We all know our goals. And we all know when we perform to the level we are supposed to. So, I just don’t understand why all of us can meet those expectations.” 

Tommy’s insight into the work environment and the dynamics of people’s behavior was perhaps deeper than he even realized. When people within an organization feel that some of their coworkers are not pulling their weight, animosity begins to set in. Essentially, your top employees want to make sure that everyone is committed to the company’s success and doing their very best for the greater good of the team.

We also need to remember that people look at things from their own perspective. And their perspective becomes their reality. The key thing is to keep the lines of communication open, learn from each other and try to view different situations from the viewpoint of others.  

After nearly 30 minutes of discussion, it was time to give Tommy my input on how I viewed the situation. I let him know that, while not everyone will be in total agreement with how he views these concerns, he has made a giant step forward at letting me know the issues we have in the shop. I then asked Tommy, “Out of our 16 employees, how many people in your opinion, without giving me any names, do not live up to the expectations of the company?” Tommy thought for a moment and replied, “Well, when I think about it, just a few. Two, maybe three.” Here was my opportunity to bring logic into a very emotional discussion. “So, what you are telling me is that the majority of your coworkers do live up to the company’s expectations and do a quality job?” Tommy replied, “Yes, I didn’t see it that way.” I let Tommy know that I would take his ideas and implement them into my strategy to improve the work environment. He appreciated the fact that I listened to his concerns.  

Here’s the bottom line. When a person speaks up like Tommy did—listen to them. Don’t shut them down. They are expressing more than their frustrations over a few of their coworkers. They are giving you real-life, from the trenches information. And although it may be from their perspective, their viewpoint can give you valuable information that will help you and your company improve. Even a few people not pulling their weight can be enough to affect morale. And others may be feeling the same way. 

What you don’t want are “yes” people who merely agree with you because you’re the boss. No matter how uncomfortable it may be, welcome feedback and criticism from your key people.  We also need to listen more and speak less. And most of all, we need to understand that the solutions to our problems don’t always have to come from us. Sometimes, an employee’s outburst is just what we need to put things in the right perspective. 

This story was originally published by Joe Marconi in Ratchet+Wrench on January 1st, 2020

What’s wrong with my employees? Why don’t they do what I ask of them? It’s the same thing every day.  I say one thing, they do another. It seems as if I am the only person who knows what to do around here.  

Does any of this sound familiar? Have you said these words, or a variation of these words, from time to time? If so, you’re not alone. Getting people to follow policy or a new marketing strategy sometimes feels as if you are trying to move the earth off its axis.  

People in high levels of authority are well-aware of the need to get things done. Each member of their team plays an integral part in the success or failure of the organization. In your shop, you are the authority: you are the shop owner. You know that the responsibility of attaining success directly rests on your shoulders. This is a weight you carry around with you each day. 

Eventually, if your efforts don't attain the results you need to run a successful business, you begin to look around to find out what’s causing the problem. And the tendency is to assign blame. All too often, you find that your employees are not all pulling in the same direction. And you determine that this is the cause of your problems. The following may not sit well with you, but if most of your employees are not engaged and not performing up to your expectations, it’s probably not their fault. You need to take a long hard look in the mirror. The fault may lie with management, and that means you. 

Assigning blame is destructive. It keeps our focus directed in the wrong areas. This is not to say we can never have a bad employee. But, if we focus on seeking blame, we are directing our attention from where our focus should be; and that’s accepting the responsibility to correct what’s happening and make the necessary changes. 

In order to really get things done and achieve personal success and the personal success of your employees, it takes the cooperation of each team member. Getting people to work as a unified team involves commitment, not compliance. Compliance is demanding people to do something. And they will—but only up to a certain point and only for a certain period of time. What you need from your employees is not compliance; you need commitment. 

Surveys have shown that the majority of employees in most businesses are not engaged at work and the primary reason is that most employees don’t know the overall goals and vision of the company. And they also don’t know what’s expected of them. Employees are largely left to react to their situations during the day; never really having a clear understanding of how their role contributes to their success and the success of the company. 

A business team is no different than a sports team. Every member needs to know the objective and goals. Imagine the coach of a football team who does not let the quarterback—or the other players— know what the play is? He simply tells the players to get out on the field and perform. After all, the players are well-trained, highly capable and all professionals. Shouldn’t they know what to do to win?  And when they fail to win, the coach ends up blaming the players. Is this a ridiculous analogy? It may be, but this is what happens every day in shops across the country.  

Your best employees don’t want to fail. They don’t intentionally ignore what you want from them. It’s more likely that they really may not know what you expect from them. Employees need to know exactly what is expected of them and they need to be motivated and inspired to perform their best. However, the only way your employees can perform at their best is for each of them to know what the company goals are. In other words, what is our overall objective and how we, as a team, are going to achieve it.  

Each employee also needs to know that when the business wins, they do, too. When employees realize that achieving the company goals is also aligned with achieving their personal goals, you have commitment. And commitment equates to success. 

Communicate the goals of the company often. Communicate what success looks like and how we are going to attain it. Create a workplace where the goals of the individual are aligned with the goals of the company. If things get off track, just look in the mirror. If you want to blame someone, you might want to start with yourself.  

This story was originally published by Joe Marconi in Ratchet+Wrench on December 3rd, 2019