In the spirit of Thanksgiving, thank the businesses that you support with a review!

Thanksgiving is a special holiday because it focuses on valuing and being grateful for the things we have. But something about that feels a little strange… why do we need a holiday to teach us to be thankful? Don’t we appreciate the things we have every day?

Sadly, the research says we don’t. Dr. Aaron Ben-Zeév observed that “negative emotions are more noticeable than positive ones since attending to negative events is more important for our survival than attending to positive events”. That is supported by a research study by Amrisha Vaish which determined that “adults display a negativity bias, or the propensity to attend to, learn from, and use negative information far more than positive information.” So there is a scientific basis for our negativity, so perhaps it’s good that we have reminders to be grateful, thankful, and appreciative. But wouldn’t it be better to adopt a more positive attitude beyond the holiday?

This is where it becomes important to be intentional about your actions and to create more intentionality to positive emotions as we do negative emotions. One way to do this is to just get into the habit of thanking people regularly, even for little things, to show your gratitude. This lets them know they’re doing something right and will hopefully reinforce what they’re already doing right. We should be doing this for our friends, family, and even people we may not know very well to let them know we’re appreciative. 

On that same note, another way to show appreciation is by writing a review for the services or products provided by businesses you frequent. Not only will this benefit their business, but it will also allow others to have positive experiences themselves. Different research has shown that people are between 2 and 10 times more likely to write a negative review than a positive review. But why? Is it because we’re afraid to address things directly to make things right? Is it because it’s easier to vent using an anonymous review? The National Strategic Group found that “about 20% of negative reviews come from a feeling of vengeance”. That sounds a little damning, but it also found that we are often inspired to write reviews because of a “heightened emotion response”, as a way “for consumers to stroke their ego”, and with “the intention of influencing others”. While those could result in negative reviews, they could just as easily lead to positive reviews.

The power of positive reviews is demonstrable, especially on platforms like Google, Facebook, or Yelp. These reviews make a difference where people choose to spend their money and time. In a digital age where online presence is vital, a positive review can be the deciding factor for someone looking for a reliable and exceptional service provider. On this Thanksgiving and through Christmas, consider expressing your gratitude for exceptional service and experiences you've had with companies you support. Let them know you appreciate their friendliness or the quality of their service. Tell others why you’ve trusted them in the past and what keeps you returning. If they’ve been consistently good, let people know. And if they went above and beyond what you expected, definitely share that story as well. Positive word-of-mouth is a powerful tool for businesses and they’ll appreciate that you’ve shared your experiences with others.

- John Thrush

How Is Your Business Choosing To Compete?

One of the hallmarks of a free market economy is that consumers have plenty of options and the freedom to choose from whom they’re going to buy. The challenge for businesses is to understand how and why consumers make their choices and then figuring out which consumers they want to have as their customers.

The number of factors that go into why a consumer will choose to buy from one business over another is immense. Trying to figure out all of the factors for your customers in your industry can be paralyzing, but the decisions can be simplified by understanding the three ways businesses typically compete in almost every industry. These three ways are quality, price, and service.

Competing using quality means your goal is to ensure that your products or services meet or exceed customer expectations. If you’re selling products, you’re selling among the best that are available to customers that are interested in peak performance or a fine attention to detail that sets those products apart from others on the market. If you’re selling a service, you’re providing quality results that other service providers aren’t willing or perhaps even capable of providing so that those results are obvious and hold up to detailed scrutiny. Ultimately, you’re providing results that will set you apart from others. Examples would include luxury car brands like Mercedes or BMW.

With price, your goal is to offer attractive pricing to appeal to cost-conscious consumers. You’re constantly looking at the market to see where others are pricing their products or services and doing what you can to keep prices down. Making sure your products or services are affordable even to people without much to spend is important. Wal-mart is a solid example of companies that focus on price.

When service is the focus, your business aims to provide exceptional customer care in order to build trust and loyalty. This can also mean offering quick response times, effective problem resolution, or more personalized customer experience to make them feel valued. Knowing people by name, offering special delivery options, or custom packaging are other ways that can set your business apart from others selling the exact same products. Southwest is well known for their level of service in the airline industry.

There is no rule that you must compete using only one of these. You can choose to add two together to set yourself apart even further. The ultimate combination is mixing quality and service - Nordstrom is well known for providing quality products and a staff dedicated to service. There are also examples of price and service being combined successfully, Chick-fil-A being one of them. Combining quality and price becomes a bit trickier, but has been done successfully by direct to consumer brands like Warby Parker.

It will be difficult if not impossible to combine all three and stay in business for very long. This is why it’s absolutely essential for your business to decide where they will best fit into the marketplace. It helps to look at the competition to see if they aren’t meeting the needs of certain consumers. Imagine a restaurant that has amazing food, but a staff that treats customers as if they’re doing them a favor by allowing them to eat there. Would a restaurant that had amazing food and a polite staff be able to draw business away?

Once the decision is made on which ways your business is trying to compete, other decisions such as marketing and advertising, staffing, product mix, etc. become much easier to prioritize and direct. This may not necessarily make them easy or quick to do, which is why bringing an expert in to help make those decisions is usually a good idea if you want to speed up the process and avoid costly mistakes. It’s also important to revisit these decisions over time as the market and industry change so your business can change as well. Remember… your customers have plenty of options and a major factor in keeping them as your customers is to make sure they choose the options you’re offering.

- John Thrush

Accounting Advisory Services and How They Help Managers Be Better Managers

Advisors are part of your long term success strategy

Something many business owners don’t like to share is how difficult it is to own and operate a business. When they worked for someone else, they could focus on just a few basic responsibilities. As owners, they do not have that luxury. All of the responsibilities ultimately come back to them. Being the boss can be stressful, overwhelming, and confusing.

Business owners and managers always have something to do and something new to learn, but never enough time to do it all. Many start off thinking they can just get by looking at their bank balance, but soon learn that it’s not enough. As the business grows, finances become more complex and confusing, taking more and more of the manager’s time and causing other areas to suffer. Brightleaf recognized this early on when we first started providing accounting services. This is why we’ve always partnered with our accounting clients and worked as a member of their team to help them achieve their goals.

Our role is to help business owners understand the story being told by their numbers and to assist them in using that information to guide their business decisions. This is the key to our Accounting Advisory Services.

As advisors, we provide professional knowledge and expertise to assist business owners and managers make better, more informed decisions to adjust and improve the company. Ways that advisors help are:

  • Help identify what’s going well and what could use improvement

  • Identify risks to the business before they become problems

  • Assist with tax planning and strategy

  • Streamline accounting processes to improve operational efficiency

  • Identify ways to decrease costs as well as improve cashflow and profitability

  • Share the big picture and, when needed, focus on the details

  • Suggest tactics and strategies for your business

  • Provide reports and details to be shared with employees or investors

Partnering with an advisor means managers don’t need to learn how to do the detailed work and can use that time to refocus their attention where it’s needed. More importantly, they’ll have the insights and expertise of accounting professionals to aid them in making decisions, directing employees, and leading the organization to greater success. Using our Advisory Service may not make your job easy, but they will make it easier to be better at your job.

- John Thrush

Are you ready to file your 2023 taxes? Of course not!

Which Form 1099 should be filed?

Tax time is still a long way off, but it’s never too early to start preparing. The best way to prepare is to start using several basic processes to save a great deal of time and later. We’ll share several of these in future posts, but today we’re going to talk about 1099s as they’re among the first tax related filings each year.

Businesses are required to complete and file a Form 1099 for various types of payments made during the tax year. Companies must issue a 1099 to any individual or unincorporated business (such as a sole proprietor or partnership) paid at least $600 for:

  • Services performed by non-employees for company work (e.g., independent contractors or freelancers.)

  • Services performed by other companies (e.g., law firms, accounting agencies, cleaning services, etc.)

  • Rent payments

  • Interest and dividend payments.

  • Other types of payments, like royalties or broker payments in lieu of dividends

A Form 1099 must be provided to the individual or company by January 31 of the following year that the service was performed. The IRS must also receive this information, so It’s generally a good practice to submit these at the same time; however, the actual deadlines for filing with the IRS are usually February 28 (if filing on paper) or March 31 (if filing electronically).

To complete a 1099 will require the following information from the recipient:

  • Name of individual or company

  • Address

  • Taxpayer Identification Number (TIN) for a company or Social Security Number (SSN) of an individual

  • Amount paid

There are also different versions of Form 1099 for different types of payments (e.g., 1099-NEC for non-employee compensation), so be sure to use the correct form for the type of income you're reporting.

One of the reasons to get started on this process early is because failing to provide 1099s to recipients or to the IRS on time can result in penalties. Those penalties depend on how late the forms are filed, if all the information is provided and correct, and whether the failure is intentional or not. This means it’s very important to keep accurate records and to have all of the required information before it needs to be filed.

So what are some basic processes to make filing 1099s easier?

  1. Collect recipient information before the first time you pay them

  2. Keep accurate financial records of all payments

  3. Keep a list of all recipients who’ve been paid $600 or more per year

  4. Schedule time on your calendar to file 1099s at the beginning of the year

The government makes it very easy to collect this information from your recipients with the Form W-9. You can share this link with recipients to have them complete and send the information to you. It’s also a good idea to, as one of those basic processes, request a W-9 before you issue any payments to new contractors or other potential 1099 recipients. You’ll be surprised how many of these individuals or companies are slow or resistant to respond when it’s time to file.

Keeping accurate records is made much easier by using accounting software like Xero or Quickbooks, but the software alone won’t help much if it’s not set up or used properly.

Brightleaf works with our clients where they are to help them get where they want to be. We provide full service bookkeeping, accounting, and advisory services for our more advanced clients; however, we realize that newer or smaller businesses don’t have the same needs as larger companies… or the same budget. This is why Brightleaf offers a reasonably priced package to set up your accounting software for your specific business along with training so you can do your own bookkeeping. Part of this training is working with the business owner or manager to understand how the software works with actual banking transactions for the company followed by a check-in several weeks later to check on additional transactions to make sure it’s being done correctly. We also answer questions for the business and provide additional tips based on what the business’s needs are.

Running a business is complicated and time consuming and there are always issues that come up that may not be easy to solve. Getting your 1099s filed properly and on time is just one of those issues. If you need help getting your accounting problems solved, have business questions you want answered, or even want to hand that work off to a team of professionals, reach out to the professionals at Brightleaf so you can focus on what you’re best at!

- John Thrush