The CFO & Marketing

CFO Perspectives

By Reg Baker, CPA PFS

The first question that might be asked is; what does a CFO know about marketing? Well the answer is really quite simple; it depends.

Some CFO’s may know a lot about marketing while others may know very little or nothing at all. But one thing is certain; CFO’s know how to measurer results. And everything that happens within an entity needs to have results; hopefully positive results.

As the old cliché goes, “if you can’t measure it, you can’t manage it”.

Every marketing initiative needs to have a stated objective that can be measured. What do you want to accomplish? When do you want to accomplish it? And how will we measure success? These basic questions need to be answered in order to determine whether the resources being used are being used wisely.

Marketing cannot be a silo and operate independently from the other managers and areas of the company. To create an effective marketing campaign there must be a team effort. The Sales department needs to provide feedback on what the customers value most and where customer service improvements can be made; operations needs to be involved to ensure what is being promised can be delivered, IT may need to design specific reports for different purposes and finance needs to monitor budgets and tract results. This Team works together, supports each other and tweaks the process as necessary. The objective is to have an effective marketing campaign that is successful in achieving the stated goals and objective; not protecting personal turf with the company. An effective CFO can contribute much to this process.

Of course some folks might not like the “measurement” idea. Who does like to be held accountable and evaluated based on achieving stated goals if they can avoid it? Especially if it has never been done before? If this is the case in your company then the time for change has come. No one can afford to be potentially wasting valuable resources (labor or cash) on projects that cannot be effectively managed and evaluated.

Summary –

A successful CFO can contribute in many ways to ensure a company is successful. The more integrated the CFO is involved with all aspects of a company’s operations the more effective they can be. The ramp up time may be different depending on the background and experience of the CFO but is certainly worth the effort.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS
http://www.regbaker.com/

IRS Change-of-address Procedures

IRS Updates Change-of-address Notification Procedures

 If you have or are planning to move - whether it's a change of personal residence or a change of business address - you want the IRS to know about your change of address. The IRS has recently updated its procedures for taxpayers to follow when notifying the IRS of a change of address. The IRS uses a taxpayer's "address of record" for mailing certain notices and documents that the agency is required to send to a taxpayer's last known address.

The IRS's process for updating changes of address is important for both individual and business taxpayers because a notice or document sent to your (or your business') "last known address" is legally effective and binding, even if you never receive it because you have moved. This presumption of delivery includes such important correspondence as notices of deficiency, liens and levies.

Have you moved since April 15?

If you have already filed your federal income tax return (or any other respective business tax return, such as Form 1065, U.S. Return of Partnership Income), and have since moved from the address that you provided on your return, you need to inform the IRS. This is because the IRS automatically uses the address on your return as its "address of record." Thus, when a taxpayer files a tax return, such as a Form 1040, U.S. Individual Income Tax Return, the address on your return is automatically updated by the IRS after the return has been properly processed (tax returns are considered properly processed after a 45-day period that begins on the day after the return is received by the IRS.)

Therefore, if you move to a new address after filing your return, you need to ensure the IRS has your new address. This can generally be done in one of several ways. First, when a taxpayer provides the U.S. Postal Service (USPS) with a new address, the IRS automatically updates the taxpayer's address of record with the address maintained in the USPS's National Change of Address database. So, when you change your address with the USPS to have your mail forwarded to your new address, the IRS may also update you address of record based on the new address you provide the USPS. However, take caution. You should nonetheless notify the IRS directly of your change of address to ensure the IRS has your correct address. This can be done by filing Form 8822, Change of Address, with the IRS.

However, you can also provide the IRS with your change of address by giving the agency "clear and concise notification" of the change. This can be done electronically, written, or orally, and is discussed below. We recommend such follow-up notification just in case the IRS fails to follow one of its updating procedures.

Types of returns automatically updated when filed:

The IRS's updated procedure (Revenue Procedure 2010-16) not only lists the types of returns on which address provided thereon are automatically updated into its "address of record" database, it also makes clear that certain forms are not considered returns and therefore not automatically updated if a new address is listed. Specifically, a new address listed on (1) Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, or (2) Power of Attorney and Declaration of Representative, are not used by the IRS to automatically update a taxpayer's address. The IRS does not consider these to be returns. Therefore, if you file these forms providing a new address, you will need to use another method for informing the IRS of the address change, such as filing Form 8822.

The types of returns from which addresses are automatically updated by the IRS include, but are not limited to:

-- Individual income tax returns (e.g., Forms 1040, 1040A, Form 1040X, 1040-SS, 1040EZ, 1040NR, 1040NR-EZ); -- Gift, estate, and generation-skipping transfer tax returns (e.g. Forms 706 series, 709 series); and -- Returns filed under an employer identification number (e.g., Forms 720, 730, 940, 941 series, 943, 945, 940, 990 series, 1041, 1042, 1065 series, and 1120 series.

Comment. Because the IRS maintains address records for gift, estate, and generation-skipping transfer (GST) tax returns that are separate from records maintained for individual income tax returns, an individual's notification of a change of address should identify whether any gift, estate, or GST transfer tax returns are affected.

Documents and notices

The IRS uses the last known address for mailing a number of important documents and notices, as well as any refund you may be owed. Therefore, it is imperative for taxpayers to ensure that the IRS has your proper change of address information. Such notices and documents include, among others, deficiency notices, notices of intent to levy, notices and demand for tax, employment status determinations, notices of third party summonses, notices regarding interest abatements, and notices of final determinations regarding spousal support.

Clear and concise notification

Taxpayers that want to change their address of record can do so by providing the IRS with a "clear and concise notification" that is in accord with the agency's procedures. As previously mentioned, clear and concise notification may be made in writing, electronically, or orally. You must in any case, must provide the your full name, new address, old address, and Social Security number (SSN), individual taxpayer identification number (ITIN), or employer identification number (EIN) when providing the "clear and concise notification" procedures.

Written. The filing of Form 8822, Change of Address, is one way to meet the "clear and concise notification" requirement, for example. You can also provide the IRS with a written statement signed by you, informing the IRS you wish to change your address of record. You must include information such as your full name, new and old address, SSN, ITIN, or EIN as well. If you file a return with your spouse, you should both provide this information as well.

Electronic. You can also satisfy the "clear and concise" requirement by electronically notifying the IRS. You must use a secure application located on the IRS's website, www.irs.gov. A "secure application" is one that requires the taxpayer to verify the taxpayer's identity before accessing the application. However, other forms of electronic notice, such as emailing an IRS email address, do not constitute clear and concise notification.

Verbal. You can also provide the IRS with a change of address orally, by providing a statement - whether in person or directly via telephone -- to an IRS employee. Again, it is a good idea to follow up your telephone call with another call to verify that your address has in fact been inputted properly.

If you have any questions about change of address procedures, please call my office.

Reg Baker, CPA PFS
Cell: (702) 283-0784
Email: Reg@regbaker.com
Website: http://www.regbaker.com/

http://regbakercpa.blogspot.com/

www.linkedin.com/in/regbaker

Budgeting

CFO Perspectives

By Reg Baker, CPA PFS

How does a CFO create and manage a budget? And how does this help an entity be successful?

At this time of the year these are the types of questions being asked at all levels of an entity. There are many individuals involved with the budgeting process that, from my experience, do not fully appreciate their role or the importance of the process.

First and foremost, a budget is the road map of where an entity wants to go (please do not confuse a budget, which is a stretch target, with a cash projection, which is actual forecast; these are two entirely different reports). Some might say that the Business Plan is the map and they won’t be wrong. But it the budget that is the working document or tool that an entity and its leadership will use on a daily, weekly and monthly basis to reach the desired destination. The budgeting process has two primary (big picture) components. There first component is the Creation of the budget and then there is the Monitoring component.

Creation: The creation of a budget requires great coordination and teamwork. The CFO begins the process by designing the format that will be used by the entity, communicating specific assumptions (like sales growth, payroll increases, inflation rate, etc.) to the managers and educating the entities managers and staff on how to complete the budgeting forms. The CFO’s staff may even complete a large portion of the budget forms to assistant the line managers and ask for them to review, tweak, correct and submit for approval. The CFO will then review the results, determine whether the individual (departmental) budgets are consistent with the recommended assumptions, consolidate the various departmental totals into a combined entity wide budget and discuss with the “C” Suite Team the results. If necessary, the “C” suite will either refine the budgets and communicate the final results (top down approach) or ask the line managers to rework the budgets and resubmit for approval (bottom up approach). Regardless of the process, the ultimate goal is to have a final budget that all managers and have participated in creating and they “buy in” to the result. Some entities are m ore successful with this final “buy in” than others.

Monitoring: Once the final budget is approved and communicated to all managers the real work begins. Every month, as soon as possible after the month-end close so the month’s results are still fresh on everyone’s minds, a comparison of the actual results for the month are compared to the budgeted amounts. Significant variances are reviewed, analyzed and explained. Corrective action is taken as necessary. Most important are the trends and what is being done to keep the entity on track to meet or beat the budget! This analysis includes both revenues and expenses. Although the primary objective is the success and profitability of the entity, the budget can also be used to monitor the effectiveness of the entities managers.

An effective budgeting process can be a very effective tool in managing the entity and keeping the managers focused on a common goal.

Please contact me with your feedback at reg@regbaker.com.

I am looking forward to hearing from you or your staff with suggestions for future columns.

Reg Baker, CPS PFS

Internet Sales Increase 14%

Internet sales up over 14% this weekend!  Are you online and got your share?  If not, let me know.  I can help!

I have a technology client that is one of the best in Hawaii.  Well recognized and respected.  Been in the business for almost 20 years.  They can have you up and running on the internet for much less than you think.

Follow this link and check them out.  http://www.supergeeks.net/   Deal directly with Kim Kerr (the owner) and let Jim know that Reg sent you.  Let me kow if I can help.

Reg Baker
http://www.regbaker.com/ 

Small Businesses Need Help!

According to the SBA, "the cost of doing business is 36% higher at small companies compared with their larger counterparts, a representative of the Small Business Administration told the Senate. The added costs are the result of government regulations including tax-related costs and environmental requirements. The disparity makes it more difficult for small businesses to compete, said Winslow Sargeant, the agency's chief counsel for advocacy".

A couple of interesting facts; small businesses employ the majority of all workers and are usually the first to recover from a slow economy.  Contrary to popular thought, small business owners are not wealthy and struggle just like everyone else.  In most cases they struggle even more than their employees!

We need to reduce regulation, cut small business taxes and do everything we can to promote small business.  We need to help small businesses to survive so that they can begin hiring again and put America back to work!

Reg Baker, CPA

Getting Better?

Business is beginning to pick up. Getting real busy! Anyone else see this?

I have closed several new accounts in the past month. I am seeing signs that more business is coming. I haven't seen this type of activity for over a year or more. Is it possible that the end of the Great Recession is coming to an end?

Let's hope this trend continues for a long time........

Veterans Day

Today is Veterans Day! 

Proud to say I did my tour with the Navy in SE Asia (1974 to 1975). 

Where would America be without her Veterans?  Would there even be an USA?

If you see a Vet today, please thank them!

Reg Baker

What you need to know about putting your business online

Super Geeks - Guest Blogger

"If your business is not online, you're dead."

 

I recently overheard a colleague say that. Harsh words. But take a look around. Big companies are actually going out of business. Blockbuster underestimated Netflix.com and is now shuttering thousands of stores. Barnes & Noble was slow to leverage the internet and now the whole company is up for sale.

If well-funded companies like those are feeling the impact of the internet, you can imagine how serious it is for the little guy. But as my grandfather used to say: You never want to miss a good crisis.

 

Now's the time to retool your business around the internet.

If you do it right, you may be able to eat the big boys' lunches!

Read my Pacific Business News column on what we did for ProImageHawaii.com and how you can use the internet to build your company's bottom line.

Here are my 10 tips for getting going with e-commerce success.

We can help.

Want a custom website for your business? Does your existing site need to be modernized? Request a FREE quote on your project. http://www.supergeek.net/

Nearly two-thirds of retailers, or 64 percent, expect their companies' online revenue to increase by at least 15 percent compared with last year, according to a survey by the National Retail Federation's Shop.org online arm. Read more at http://www.staradvertiser.com/.

Always, always emulate best practices. These companies do e-commerce well:

 

http://www.amazon.com/ - the epitome of ecommerce

http://www.dell.com/ - customized shopping + concierge

http://www.iqvc.com/ - easy to find what you're looking for
http://www.clinique.com/ - site bonds well with shopper right away
http://www.fogdog.com/ - good, easy access to big inventory

Reg Baker comments:  James Kerr and Super Geeks have been clients of mine for over 15 years.  James and his Team are great to work with and gets results.  Please contact him via his website http://www.supergeeks.net/ or call (808) 531-GEEK (4335).

I'd be happy to work with you and Super Geeks to get you online and generating internet sales dollars! 

Reg Baker, CPA

(702) 283-0784

Email: reg@regbaker.com

Year End Tax Tips

Please check out my website for yearend tips on reducing your tax payments (posting on November 1). Only two months left! www.regbaker.com/newsletter.html


Although still a challenge due to possible year tax changes by the current administration, there are some steps you can take to reduce the bite of the tax man.

If no tax changes occur before year end then consider taking as much income this year (2010) and push deductions to next year (2011). If the Obama gang extends the current tax cuts then do the opposite.

If in doubt, then give me a call or email.

Reg Baker, CPA
Ph: (702) 283-0874
Email: Reg@regbaker.com

Non-Profit Tax Status Might Be Lost!

Non-profits must file their tax return by October 15 or run the risk of losing their non-profit status!

Please see the IRS notice below for more specifics. Contact me should you need help.

Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date

A crucial filing deadline of Oct. 15 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked. Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.

The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.

Here are 10 facts to help nonprofit organizations maintain their tax-exempt status.

1. Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010.

2. Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.

3. A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.

4. Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice and a voluntary compliance program for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.

5. Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N also known as the e-Postcard. To file the e-Postcard go to the IRS website and supply the eight information items called for on the form.

6. Under the voluntary compliance program, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.

7. The relief is not available to larger organizations required to file the Form 990 or to private foundations that file the Form 990-PF.

8. Organizations that have not filed the required information return by the extended Oct. 15 due date will have their tax-exempt status revoked.

9. If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status and any income received between the revocation date and renewed exemption may be taxable.

10. Donors who contribute to at-risk organizations are protected until the final revocation list is published by the IRS.


Reg Baker, CPA
http://www.regbaker.com/