The Value of Non Billable Hours

I have spent most of today on non-billable work. Now it could be viewed as wasted time since I didn't get paid for anything I did. However, focused non-billable work can reap future earnings. All small business owners must perform some administrative work, such as bookkeeping, making appointments, ordering materials. These tasks are more apt to save future time rather than earn future dollars, so it's important to complete them as efficiently as possible.

My time today was spent in marketing tasks. I created a Holiday Card to send to my current clients (I prefer to put my own touch on such contacts rather than purchasing stock cards); I created a Marketing letter to send to potential customers; I reviewed my Facebook advertising performance; I'm updating my blog; I answered an e-mail from an unknown contact that may turn into a potential referral source. This type of non-billable work is crucial. You must always keep in contact with current and potential customers, through varied sources.

My next focus for non-billable time is education. I will be taking the certification for the 2011 edition of QuickBooks and reading some networking materials. The certification will provide a direct result of allowing me to become an Advanced Certified QuickBooks ProAdvisor. Continual learning of industry specific and general business subjects can only make your business stronger.

And yes, I will also be putting in some billable hours. Gotta keep the money coming in!

Is it a vendor or an employee?

As you are reviewing your vendors for 1099 data, review each subcontractor closely to ensure you are classifying them correctly. There is much scrutiny from both the Federal and State level on the difference between a subcontractor and an employee.

Here is a good resource from the IRS: http://www.irs.gov/businesses/small/article/0,,id=99921,00.html

And from the State of Maine:
http://www.maine.gov/labor/misclass/employer_brochure_single.pdf

The biggest "tell" for an independent contractor is if this person does the same type of work for multiple businesses. I, as an accountant/bookkeeper, have multiple clients and am correctly classified as an independent contractor. However, if I had only one or two clients, I would have more difficulty proving this requirement.

If the situation looks gray, err on the side of employment. It may cost you more in employment taxes, but may cost you much less in the long run.

Year End is getting close!

Are you ready for the end of the year tasks? A quick checklist:

Reconcile all bank statements, including credit card statements. This will help ensure that all expense and revenue is recorded.

Review your vendors. Have you paid anyone for a service? Make sure you have their Tax ID for preparing the 1099.

Do you have employees? Even if you use a payroll service, it is important to review the W-2's and make sure they reconcile to the quarterly 941's.

Keep all tax related documents for your accountant. Start a file specifically for these items.