Got Customers? Then you've got credit card processing fees.

I have learned a lot about the complexities of credit card processing, and I would like to share with small business owners how it all really works. Because there is so much to cover, I will probably break this up into two or more posts.

If you accept credit cards for your business, then you know that when you sell a widget for $10, you only get about $9.75 after credit card processing fees. If you’re lucky. There is no way to get around processing fees if you want to accept credit cards as payment. You cannot process directly with Mastercard or Visa – they will not handle your transactions. This is where the processors come in – and they are NOT all the same.

Obviously, the processor does not handle transactions for free. Mastercard and Visa are not banks, and neither are most processors. Banks are not free. So from the moment your customer swipes their card, to the moment you receive the cash, the information about that transaction is passed around amongst the banks, the credit card companies, and the processors.

Visa and Mastercard disclose their fees publicly, and adjust their fees twice per year. Visa’s fees are published in an easily digestible chart format, while Mastercard’s fees are contained in a 115 page document! Fees vary by industry, and whether a card is swiped, keyed in, or used over the internet. The kind of card your customer uses may be a consumer card or a business card, a credit or a debit card, and include a rewards program or not. All told, there are about 500 different descriptors amongst Visa, Mastercard and Discover. All of this variance is before the processors weigh in.

The only real way to determine the rates you are paying for credit card processing is the statement from your processor. This is where things can get really tricky. I have seen many statements from many processors, and in my experience, they are rarely straightforward. Even if everything looks very clear, beware the fine print! Statements often do not include all of the numbers needed to show you the real rates you are paying. Sometimes the timing of the transactions and their appearance on your statement may be spread across 2 or more months. Maybe you are paying a “low” rate of “just” 2.1%. Is that in addition to what Visa and Mastercard charge? What about statement fees, authorization fees, assessments-you get the picture.

If your head is spinning, you’re not alone. This is a good place to close, but I’ll post more information in the next few weeks.

I’ve been exploring the features of Google Docs, and I can highly recommend it for any small business looking for a simple way to collaborate on documents, spreadsheets, presentations and even calendars. And you can’t beat the price – its FREE.

If you are not already using Gmail to handle your domain’s email (I highly recommend this as well – see earlier post), then you will need to setup a Google account in order to use Google Docs. All of this is listed under the heading, Google Apps.

The Administrator(s) and/or document authors decide with whom to share each document. There are several ways to organize the documents, including folders. Alas, you can’t share folders. Go ahead and organize all of the documents you have access to, but they will not be located in the same folders for other users. This does allow for individual flexibility on how to organize and find your docs.

Google Docs provides a way to create new documents in addition to uploading documents. Microsoft Office document types are supported, as well as PDF uploading. There is a limit to the size of the files, the total storage space, and the number of users – but you can easily upgrade to a paid, enhanced version if you outgrow the free version.

The real power in Google Apps is in Forms and Sites, IMO. Forms are a powerful way to collect information, including automatically including user names and timestamps. Sites is a way to put your Forms, as well as an impressive array of Gadgets and page types, together to form a multi-page company Intranet. Sweet.

If you’re on track with your year-end accounting tasks, then you’ve already mailed your Forms 1099 to your vendors. If you’re running late, you can find the form and this year’s instructions at the IRS’ website.

There is an impressive new website geared toward helping small business owners, and people thinking about starting their own small business. The site is sponsored by the IRS, so you know you can trust the tax topics. This site, IRS Small Business Resource Guide 2009, in addition to SBTV.com, are great ways to get your business started or organized.

If you would like some help getting started, help with your bookkeeping, or help with organizing your business data, please consider contacting me. With the technologies available today, location is often a non-issue! So, even if you are not in the Dallas-Fort Worth, Texas area, I may be able to help you get where you want to be with your business.

Even though 2008 is officially over, the work to wrap up your books, records, and taxes is hardly over.

If you make quarterly tax payments, as many self-employed, small business owners do, the deadline to make your final quarterly tax payment for 2008 is Thursday, January 15, 2009.

The best way to ensure that you are paying your taxes properly is to keep good records throughout the year. Not surprisingly, year-end is also a good time to re-evaluate your current business processes, and make plans for improvements that will aid you in the coming year.

I am a huge fan of the do-it-yourself tax software, TurboTax®. Some business owners may opt to hire a tax professional to handle their taxes. The IRS has just published a “Tax Tips” bulletin, with some great advice about finding a tax preparer. You can read the entire bulletin by clicking here. I have provided an excerpt from the IRS bulletin below.

• Find out what the service fees are before the return is prepared. Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers.
• Only use a tax professional that signs your tax return and provides you with a copy for your records.
• Avoid tax preparers that ask you to sign a blank tax form.
• Choose a tax preparer that will be around to answer questions after the return has been filed.
• Ask questions. Do you know anyone who has used the tax professional? Were they satisfied with the service they received?
• Check to see if the preparer has any questionable history with the Better Business Bureau, the state’s board of accountancy for CPAs or the state’s bar association for attorneys. Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.
• Determine if the preparer’s credentials meet your needs.  Does your state have licensing or registration requirements for paid preparers?  Is he or she an Enrolled Agent, Certified Public Accountant, or Attorney?  If so, the preparer can represent taxpayers before the IRS on all matters – including audits, collections, and appeals.   Other return preparers can represent taxpayers only in audits regarding a return signed as a preparer.
• Before you sign your tax return, review it and ask questions.

If you know that you need to make some changes for 2009, but need help with knowing where to start, I may be able to help. You can reach me by email at: info@coakleysbs.com

Happy New Year!

Did you know that there is an internet-based resource for small businesses that combines video content like a television channel, plus cutting-edge web content? I’ve known about sbtv.com for awhile, but never visited. BIG mistake. If you own a small business, or are thinking about starting one, I strongly recommend that you visit sbtv.com. Sbtv.com is powered by our very own federal government.

This is the time of year when many small businesses are scrambling to to meet budget and revenue goals, as well as prepare for taxes. Business owners can do themselves a huge favor by keeping accurate and current records of all business and financial transactions. If you wear many hats, including Accountant, be sure that you utilize your accounting software to the fullest extent. This will help you get through year-end close and taxes smoothly, so that you can focus more of your time on your business!

The IRS has announced the new mileage rates for 2009. Beginning January 1, 2009, the rate is 0.55/business mile driven, down 3.5 cents from the current 0.585/business mile driven. You can also find a wealth of information about taxes for your small business or self-employment at the Internal Revenue Service’s Small Business and Self-Employed Tax Center.

If you have questions or need help with your small business accounting, data systems, or reporting, please contact me at info@coakleysbs.com.

Happy Holidays!

As this year draws to a close, many of you may be starting to think about your year-end bottom line. And taxes. The IRS has issued its Revenue Procedure 2008-66, which “provides the tax items adjusted for inflation for tax year 2009, such as itemized deductions, the tax rate tables, the earned income tax credit limits and many others.”

These changes are effective for taxable income in 2009 – so they won’t be used for your 2008 returns. Still, I thought many of you may like to know what to expect, as you begin to plan for next year.

As I write this, Congress is hearing testimony and asking questions about the proposed “700 Billion Bailout.”

Wow.

What does this mean to the small business owner? If your business relies on financing to operate, you may have some worries. If your business generates cash in amounts sufficient to operate your business without need of financing, you are decidedly better off – no matter what the financial climate.

Since many small businesses work with other businesses…it is hard to find a business NOT affected by this financial “meltdown.”

If ever there has been a time for small business owners to take a close look at their financial footing, their business processes, and their efficiency – it is now. And I can help.

I can also help if, up until now, you have been trying to run your business AND handle your accounting functions. Since I am an independant contractor, I can help you get your business finances in order and set you on your way to operating “lean and clean,” without the long-term comittment or overhead of hiring an employee. I can also help your existing staff by augmenting their ability to streamline and address those back-burner items that are now on fire.

I have been test-driving Google’s email (”Gmail”), routed so that it uses my own domain. So far, it has worked great, though I let my hosting service do the heavy lifting as far as changing the settings where needed to get the routing done properly. My hosting service made this easy – so it required hardly any time on  my part.

I love that I am able to use my own domain, which means that I do NOT change my email address or lose the reference to my business website.

The reason I decided to give this a try is that I became frustrated with accessing my email from multiple locations – IMAP service was not a perfect fit. I also really liked Google’s approach to handling email in “conversations,” and it does a good job of linking separate emails appropriately.

If you have an exchange server, and it is working smoothly – I think you should stick with your investment. If your email is always “going down” or not working properly, you may want to experiment with Gmail. I recommend setting up a personal account and just using it for awhile. This will give you an idea of how it looks and feels. If you decide to make the change, Google even offers an easy conversion tool to move all of your existing email and contacts from Outlook and other software – to Google.

Next up, I will be experimenting with Google Docs!

I have been working with MS Office 2007 for about a year or so, and it really is slick. If you have older, slower computers, MS Office probably won’t perform acceptably, unless you beef-up your machine. If you have or are about to purchase new machines, the MS Office suite is great. If you want the power and flexibility of a database, go for the Professional version. Access database is powerful yet easy to use. It is sporting some new field types, including Attachment, which allows you to store documents of all kinds directly in your database for easy reference. Sweet!

The new look and feel of the MS Office suite is very intuitive and a vast improvement over older versions. I found the transition to be well worth the week or two it took me to get used to the changes.

Microsoft continues and even enhances its interoperability between Excel, Word, and Access. With these three programs, you can do just about anything a typical company needs. MS Office Professional includes Outlook, Publisher, and PowerPoint to round out any other needs your company may have.