We’re still waiting on Congress to reconcile the different tax reform plans passed by the House and the Senate, but we do know a couple things.
First, it looks pretty certain that you’re not going to be able to deduct your state and local income taxes in 2018. Both the House and Senate bills kill this deduction.
This means that if you can find a way to pay (or even overpay) your state and local income taxes NOW, before the end of 2017, you will be able to deduct them from this year’s taxes. But you almost certainly won’t be able to deduct them next year (even for tax payments that are “assigned” to previous years).
Secondly, we know that the taxation of many Long Island and Stamford businesses is going to CHANGE, and that there will be a lot of planning opportunities ahead for pass-through entities and other business structures. Stay tuned here, because we’re licking our chops at the possibilities for helping our Long Island and Stamford clients save in the months and years ahead.
And speaking of saving, I have some ideas today on how you can save on your staffing costs, and not just by chopping payroll…
Increase Profits For Your Long Island and Stamford Business With Effective Compensation Strategies
“There is no such thing as bad weather, only different kinds of good weather.” -Michael Ruskin
It’s a common temptation for the biz owner: As you make additional sales and revenue, you eventually let expenses (that were perhaps too high in leaner times) creep back in. Some even do this as a way of signaling to themselves that they’re doing better … a sign of prosperity, if you will.
Well, I hate to be the bearer of bad news — but as a Long Island and Stamford business owner, this is backwards thinking. Cutting overhead when things are better, is much healthier … and one of the easiest paths to profit.
And what’s often the highest piece of overhead? Payroll.
So, I’ll take some time this week and in a future Note to suggest some easy, painless ways to keep that major cost under control.
1) Re-work compensation to link to specific goals.
We’re used to seeing salespeople compensated on a performance basis, but the important thing to realize is that ALL of your employees could go on such a compensation system. What are the production goals for your non-revenue employees?
A simple idea would be to SET these production-related goals, and somehow have them reported back to your employees on a daily or weekly basis. By seeing and tracking their own results, they become invested in increasing their performance (if they’re at all competitive and have a drive).
Plus, just the simple fact that they know somebody’s watching will increase efficiency.
Yes, it may cost some money (and time) on the front-end to implement this kind of system (which is best when mostly automated) … but it will be WELL worth it in the long run.
2) Never stop training.
Usually poor employee performance is NOT deliberate sabotage — it’s simply not enough time spent in training.
Often Long Island and Stamford employers assume new employees know how to perform their job functions and, therefore, don’t do enough to continually orient them to their job.
Have you conducted a review of your employee performance … and asked THEM for feedback on how they could do better?
That’s a great training opportunity — and again, a nice way to keep them from seeing their job as a paycheck, but rather as directly contributing to the profitability of your enterprise.
A side-benefit: When you cross-train employees across each other’s responsibilities, it can also signal to them (positively) that they’re not as “essential” as they might think they are. They’ll work a little more productively to continually earn that regular paycheck, when they know that being replaced wouldn’t kill the business.
After the holidays, I’ll share with you a few more ideas for how you can reduce these and other costs during 2018 — and increase your profits.
Feel very free to forward this article to a Long Island and Stamford business associate or client you know who could benefit from our assistance — or simply send them our way? While these particular articles usually relate to business strategy, as you know, we also specialize in tax preparation and planning for Long Island and Stamford families and business owners. And we always make room for referrals from trusted sources like you.
Michael J. Kessler, CPA