August 2011 Newsletter

Better Brainstorming

Brainstorming can be an effective way to generate new ideas and resolve problems or issues. Brainstorming is most effective with groups of people settled into a relaxed, positive and fun environment where they can truly open their minds to produce more creative solutions. Make sure everyone understands the main objective of the session and avoid problems arising within the group by being pro-active. If the session becomes lengthy, make sure you take plenty of breaks so employees can refresh and continue to concentrate. Be respectful and encourage all ideas to ensure a productive meeting and meaningful outcome.

Ideally, the group of participants should be of diverse backgrounds and from different departments across the company. This guarantees varied levels of ideas and ‘out of the box’ thinking that will help you reach the main objective. If the employees are not already familiar with one another, have them socialize for a while before starting and consider a warm-up exercise. As within a typical work environment, you will have many personalities; some of which might clash. This ‘pre-collaboration’ time is well spent, making sure everyone knows the vital part they will play and making sure they are prepared for open discussion. You want to make sure their minds are relaxed and set to create fresh and evolving ideas.

Brainstorming sessions should always have a moderator to keep everyone on track and within the specific time limitations. Introduce the problem or issue to be resolved and encourage ALL ideas whether strange, exaggerated, simple or complex. At this point, you are looking for quantity and can weed out the less acceptable solutions upon completion of the meeting. Do not be negative, critical, or judgmental as this can halt the creative process. Some employees may find they build on another’s idea and this brings forth the team camaraderie that further leads to success.

Take breaks, if necessary, during the brainstorming and maybe have the employees sit in different seats upon returning to the meeting. Sometimes, another perspective, whatever that may be, contributes to a renewed thought process. However, make sure you don’t drag the session out without reason. Stop when finished.

Upon completion, your employees will feel a major accomplishment in knowing that they were included in forwarding the growth of their company by creating resolutions. And the company, in turn, now has several avenues to consider while resolving the original problem or issue. It really is a ‘group’ effort to run a successful company and using all available resources while making employees feel important is working smart.

The Importance of a “Checks & Balances” System

The concept of “checks and balances” was introduced when the founding fathers were creating the American governmental system. Each branch of the United States federal government performs separate functions to prevent power from becoming too concentrated in one person or group. This concept is the same for business. No one person should have all the financial power or responsibility in your company.

Creating checks and balances allows business to implement an accounting system that promotes separation of duties and help minimizes owner’s exposure to fraud and other misappropriations of funds. Here are some suggested tips to make sure your companies’ interests are protected.

  1. Establish clearly defined roles for employees:
    The most important thing to do is to separate duties as much as possible. The person in charge of handling the cash, or working the company’s point-of-sale device, should not be the same person counting and recording sales.
  1. Separate financial responsibility:Companies do not want the person in charge of receiving payment for invoices and services rendered to be the same person responsible for paying outgoing invoices and payroll.
  1. Purchase an accounting software system:Keeping accurate financial records is essential for small business success. Invoices and receipts can become hard to manage without a system to organize and manage the information. Try to purchase an accounting system that will expand as your business grows.
  1. Limit security access:Many companies control the areas to which employees have access. Keeping offices, storerooms, valuable goods, and even computer server rooms limited to key employees or managers helps safeguard assets.

In the end, checks and balances are about fiscal controls and preventing theft and embezzlement.

Emergency Exit Routes

The purpose of OSHA’s Emergency Evacuation Systems standard 29 CFR 1910.165 is to provide an early warning system for implementing emergency action and to give employees time to safely escape a building or area in the event of an emergency situation.

Exit route defined

An exit route is a continuous and unobstructed path of exit travel from any point within a workplace to a place of safety. An exit route consists of three parts:

  1. Exit access – portion of an exit route that leads to an exit.
  2. Exit – portion of an exit route that is generally separated from other areas to provide a protected way of travel to the exit discharge.
  3. Exit discharge – part of the exit route that leads directly outside or to a street, walkway, refuge area, public way, or open space with access to the outside.

Exit route maintenance

Exit routes must be kept unobstructed and free of explosive or highly flammable furnishings or other decorations. No materials or equipment should ever be placed within the exit route. Exit routes must be maintained during construction, repairs, or alterations.

Safeguards

Safeguards designed to protect employees during an emergency, such as sprinkler systems, alarm systems, fire doors, and exit lighting, must be functional at all times.

Alarm system

Employers must install and maintain an operable employee alarm system that has a distinctive signal to warn employees of fire or other emergencies. The employee alarm system must comply with OSHA’s alarm system rule (29 CFR 1910.165).

Signage, markings, and lighting

Each exit route must be adequately lighted so that an employee with normal vision can see along the exit route. Signs must be posted along all exit routes that indicate the direction of travel to the nearest exit. These signs will read “EXIT” and include an arrow indicating the direction to the exit. Each exit, or doorway leading outside, must be marked with a clearly visible and distinctive sign that reads “EXIT.” The exit sign must have distinctive colors that do not blend into the background. The exit signs cannot be obstructed or concealed in any way. Any no exit doorway or passage that might be mistaken for an exit must be marked with a sign that reads “NOT AN EXIT” or a sign that indicates the door’s actual use, such as “Basement,” or “Closet.”

Employer must post diagrams of the facility that indicate the proper exit routes from a particular location

Operational features

  1. Exit routes must be arranged so that employees will not have to travel toward a high-hazard area, unless the route is effectively shielded from the high-hazard area by suitable partitions or other physical barriers.
  2. The exit access must not go through a room that can be locked or leads into a dead-end corridor. Stairs or a ramp must be provided where the exit route is not substantially level.

Management Issues

  1. Management should check the routes themselves to ensure that exit routes from any spot within the facility meet the design and construction requirements specified in the standards.
  2. Ensuring that the routes are clean and unobstructed at all times.
  3. Establishing frequent inspection schedules of all exit routes.

Training Issues

  1. Know the sound of the emergency alarm system.
  2. Know at least two exit routes from their workstations.
  3. Expect that in case of a fire, it may be smoky and hard to see or breathe.
  4. Remember to move quickly—but not to run or panic.
  5. Know any emergency duties they should perform.
  6. Know where to meet outside.
  7. Go to the assigned meeting area immediately.
  8. Avoid interfering with emergency operations.

Open Up The Planning Process

Employees who aren’t involved in or consulted on their jobs, company growth and project assignments often feel they aren’t part of the overall vision of the company. Expectations set on their behalf can leave them feeling the goals are unreasonable and even far-fetched. Without the employee involvement, you take a chance that this will lead to too little work and too few responsibilities.

Holding a brainstorming session with your employees can get the creative juices flowing and motivate your team. Employee commitment is primary to the desired end result and you should not bypass them in any planning process that involves their participation. A coach understands that in order to expect employees to share in the sense of accomplishment, they must be more than pawns on a chessboard. Giving your employees advance notice of meetings and what is expected of them will allow the opportunity to come prepared and gives ownership in the process. After all, your employees are the ones closest to the day-to-day operations of your business.

Key factors to the success of this collaboration between the company and the employees include showing confidence in them by delegating responsibilities and challenging them to be self-sufficient. You still need to feel comfortable that your employees know their specific job responsibilities as well as any applicable deadlines. Leaving nothing to chance will result in a positive outcome.

This does not mean that important decisions are made by general consensus, but that opening the planning process involves the staff and allows the company to work as a team and to feel accomplished, successful, and motivated.

Tax Audit Survival Strategies

You have just received a notice from the IRS that you or your business is going to have to undergo a tax audit. Immediate panic might set in. Why me? What do I need to do? What documentation is required?

Let’s take some of the mystery out of the dreaded IRS audit and give some solutions to helping you survive a tax audit.

When the IRS comes calling to conduct an audit, they are looking to confirm and validate items that have been listed on your personal or corporate tax return.

There are three types of audits that the IRS typically conducts.

Correspondence Audit

The first audit type is a Correspondence Audit. All interaction between you and the IRS is done via mailed documentation. This type of audit usually happens when documentation from a 3rd party happens brings forth a discrepancy.

Office Audit

The second type of audit is an Office Audit. The IRS will set up a time and a place for you to bring the appropriate documentation to the auditor for examination. Most of the time, these audits are used to review items on the tax return that are significant in nature.

Field or Home Audit

The third type of audit is the Field or Home Audit and it requires that the auditor come to your place of business or to your home. These audits are usually extensive and require review of documents to prove the accuracy of line items on your tax return. It is always recommended to have a tax professional with you to help with all the requests from the auditor.

Now that we’ve reviewed the types of audits, let’s discuss how to survive the process.

Be sure to read the notice carefully. All IRS notices that you receive do not necessarily indicate that you are going to be subject to a full-blown audit. The IRS could be requesting further documentation concerning a line item on the tax return. In other cases, the IRS could be notifying you that they discovered a line error on your return and that an amended return is required.

Seek help from a professional if you are unsure about the IRS notification. Not everything in the IRS code is black and white and there are many shades of gray.

Only provide what the auditor has requested. Do not volunteer any additional information because that could possibly lead the auditor to look at other items and open up further examination of items. Answer the auditor’s questions with Yes and No’s, if possible. If you are unsure of your response, politely let the auditor know that you will have to look into that particular item.

Once you receive the proposed tax assessment, do not panic. The IRS is not always correct. Have a tax professional review the additional tax assessed. The tax professional can help you determine if the additional tax owed is correct, or if there is room to appeal the tax assessed.

If the audit found that you owe additional tax, but cannot pay the full amount, the IRS may set up a payment plan or schedule. Often, you may be better off securing a loan from your bank or pay for the assessment using your credit card.

And finally, the IRS may ask business owners to agree to extend the look back period and ask you to waive the statute of limitations. Do not agree to waive the statue of limitations with out consulting with you tax professional.

So, when you receive that notice from the IRS, use these steps to formulate a plan.

Payroll Corner

The Federal Unemployment tax was lowered .2% from .8% to .6%, effective July 1, 2011. The new tax rate has been applied and was in place for the July 1st effective date. It is expected to remain at the lower rate for the remainder of 2011 but is subject to change based on any action taken by Congress.

Four Point HR will be closed Monday, September 5th, in observance of Labor Day. Any client affected for payroll will be notified for an alternate submission day. We at Four Point HR wish you a safe and happy holiday.

Effective July 1, 2011 through December 31, 2011, the Internal Revenue Service has increased the Business Mileage Rate from 51 cents per mile to 55.50 cents per mile. According to IRS Commissioner, Doug Shulman, this year’s increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices.