From Good To Great: 5 Ways You Can Improve Your Manufacturing Business

Kyle Stemple | October 3rd, 2014

Today, millions of hard-working men and women will celebrate Manufacturing Day across our nation. United in their mission to address common misperceptions about the industry, manufacturers will rally together to take charge of the industry’s public image, address the industry’s skilled labor shortage and promote the ongoing prosperity of manufacturing throughout the U.S.

Manufacturing has always been the backbone of Ohio – and Rea has been proud to support many companies throughout the state. In recognition of Manufacturing Day, here are five ways you, as a manufacturer, can overcome challenges facing your industry.

Be The Leader You Want to Be. 

As a seasoned manufacturer, you know your business inside and out – when there is a problem, you provide a solution; when a ball drops, you pick it up. If this sounds like you, then it’s time to get out of your comfort zone. If you always find yourself in the middle of daily business operations, you’re unlikely to get out in front of opportunities that could maximize your company’s long-term value. Be the leader your company needs. Stop putting out fires. Instead, make waves.

Tell Your Story, Invest In People. 

The manufacturing industry has had its share of problems when it comes to attracting and retaining a talented workforce, but you can alter how people think about a career in manufacturing by simply sharing your own stories and experiences. Unless you take the time to personally promote the manufacturing industry, your would-be employees may incorrectly associate the industry with unprofessional, dead-end jobs in dirty factories. Get out and connect with local vocational schools and other educational entities and community groups to tell your story.

Embrace A Strategy; Minimize Risk. 

Every company should have a strategic plan. From financial objectives to operational goals, your strategic plan should provide your workforce with an overview of the company’s operational and growth initiatives. Formal plans should also address the company’s budget and financial forecast. Proper utilization of these plans will help you reap optimal results by providing you with the information needed to make better decisions. Below are initiatives you can include in your strategy to gain greater insight into the industry and to learn how you can better manage your current financial and operational objectives.

  • Benchmarking is a proactive way to stay in line with, or ahead of, the competition. It’s important for you to understand how your company stacks up against the competition, as well as gain insight into current trends, future opportunities and potential risks.
  • Key performance indicators (KPIs) are critical to the management of your daily operations. In order for you to deliver results, you and your management team must understand the resources you are working with and how you are affected. Key indicators also provide management with insight into production and can alert leaders to potential areas of risk.
  • Get to know your ERP system. Many companies have implemented some type of enterprise resource planning (ERP) system in the hopes of streamlining their accounting, production, benchmarking and KPI efforts. Unfortunately, many are unable to actually use the system in the way they would like. You must take control of your ERP system and insist the vendor meet with your team to set up the ERP system in a way that makes sense to your company. An ERP system that is set up properly will provide your company with the data you need to manage your business more effectively.
  • Understand your cost structure. For example, understanding what it costs to make, distribute and/or sell each unit of each product line, will give you a better grasp of how much you’re spending on material, labor and overhead, which will better equip you to allocate your efforts and resources. Unfortunately, many managers don’t understand the company’s cost structure, which puts the company at risk of losing money in the long run.

Back-Up For Safety. 

Many companies in the manufacturing industry have taken steps to embrace technology and have added hardware and software to help collect data and streamline workflow; however, with the introduction of new programs and equipment comes the introduction of additional risks. Some companies have chosen to back-up their information as a way to avoid losing important data, but if the back-up isn’t tested, there is no guarantee that it will actually work. Unfortunately, some companies lose critical data simply because they fail to test the back-up.

Consider Going Lean. 

The manufacturing industry underwent a significant transformation in the 90s with the wide-spread practice of Lean Six Sigma, which helps companies become more efficient and effective by introducing better processes throughout the organization. Many companies, however, have yet to incorporate Lean Six Sigma into their operations. Much has changed over the course of two decades and new uses for Lean Six Sigma have been discovered and applied to additional departments outside of just the manufacturing floor, the service and transactional functions of businesses have really benefited. You should consider Lean Six Sigma as a way to become more efficient and effective in every aspect of their business. Especially while the industry struggles to attract new talent, Lean Six Sigma may be just your company needs when you need to do more with less.

These are just a few examples of challenges facing the manufacturing industry where a trusted advisor can help you navigate through possible solutions. If you own a company in the manufacturing industry or if you want to explore ways to improve your business’s efficiency, effectiveness, profitability and risk management systems, email Rea & Associates. Our team is passionate about helping manufacturers reach new heights, mitigate risks and attract and retain employees.

Author: Kyle Stemple, CPA, Director of Manufacturing Services (New Philadelphia office)

 

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Ohio Prepares For Year Three Of Its Workforce Training Voucher Program

Josh Carlisle | September 23rd, 2014

The State of Ohio announced that it will launch its third round of the Incumbent Workforce Training Voucher Program. As in previous years, the state has upped the ante.

This time around businesses will have a chance to claim a piece of $29.4 million, which will allow Ohio’s employers to enhance the skills of their workforce. That’s the good news. The bad news however, is that you have to be quick if your business has a desire to claim any portion of these funds. We expect all of the training dollars to be claimed within hours of the application going live at 10 a.m. on Sept. 30.

According to the state, the funds are to be made available on a first-come, first-served basis. Employers can apply for a credit that will reimburse them up to 50 percent of eligible training costs – which could mean the business could be reimbursed up to $4,000 per employee. Training performed between Aug. 1, 2014, and Dec. 31, 2015, qualifies for the third round of the Incumbent Workforce Training Voucher Program – meaning that employers have the option to apply vouchers to training that has already taken place.

Similar to round two of the program, a pre-application process is available. The period to complete this process began Sept. 15, and will continue until the application officially goes live on Sept. 30. Pre-application allows employers to enter as much information and specific details as possible. Then, the minute the application goes live; all you need to do is log on to your account and submit it. Because we expect all funds to be accounted for within the first few hours of the application going live, we urge businesses to take time to complete the pre-application process as soon as possible.

What Is Considered Eligible Training?

  • Classes at an accredited education institution
  • Training that leads to an industry recognized certificate
  • Training provided in conjunction with the purchase of a new piece of equipment
  • Upgrading computer skills (e.g. Excel, Access)
  • Training for the ICD-10-CM/PCS diagnostics classification system
  • Training from national, regional or state trade associations that offers certified training
  • Training for improved process efficiency (e.g. ISO-9000, Six Sigma, or Lean Manufacturing)
  • HR Certification – limited to HR staff only

What Companies Can Apply?

For-profit entities located in Ohio and that operate in one of the following industries are eligible to apply for the Incumbent Workforce Training Voucher Program.

  • Advanced Manufacturing
  • Aerospace and Aviation
  • Automotive
  • Bio Health
  • Energy
  • Financial Services
  • Food Processing
  • Information Technology and Services
  • Polymers and Chemical
  • Research and Development
  • Companies with a Corporate Headquarters in Ohio (with limited availability of funds)

The Importance Of Pre-Application:

If your business wants to have a chance at claiming any of these dollars, it is imperative that you complete the pre-application. Your objective should be to simply log on to the page on Sept. 30 to formally submit your application. It is so important to carefully and completely fill out the pre-application form with as many specific details about the proposed training as possible. If you will apply, or think you may qualify and would like to apply, do your homework now.

If you would like help determining if your business is eligible for the program or if you want more information, email Rea & Associates.

Author: Josh Carlisle (New Philadelphia office)

 

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IRS Says You Owe More? Don’t Write That Check Yet!

Clay Rose | September 23rd, 2014

Tax season can be rough for any business. Just about the time you allow yourself to move on to something else and breathe a sigh of relief … it happens. You sift through your mail and find yourself staring face-to-face with a letter from the Internal Revenue Service (IRS). In a matter of seconds your adrenaline levels are through the roof. You know that what’s inside the envelope isn’t a simple thank-you note for filing your taxes on time. You carefully tear it open.

Nobody likes to hear that they have to pay more to the IRS than they originally thought. But, before you jump to conclusions and quickly write out a check for the amount the letter says you owe:

  • Stop
  • Take a deep breath
  • Call your financial advisor

4 Tips For Resolving Your Tax Dispute

Believe it or not, the IRS does make mistakes. Agents can accidentally input incorrect information, computers can misread data and tax codes can be inadvertently overlooked or misinterpreted. It happens. If you believe that the IRS was wrong in a decision it made about your business’s tax returns, follow these four steps to reach a resolution.

  1. Follow Instructions. Sometimes the easiest way to resolve the issue is to follow the instructions. Sounds easy enough, but not everybody gets this part right. If the IRS sent you a notice, look for the section that explains what to do if you disagree with their decision and follow directions. Additionally, be sure to attach any supporting documentation and mail it back to the address given by the deadline requested. After the IRS has made its decision, you will be notified via U.S. Mail. When in doubt, opt to send inquiries to the IRS via certified mail and request a receipt.
  2. Make The Call. If your initial challenge was rejected, your next step is to follow up with a phone call. The rejection notice you received should have included another important piece of information: the contact name and number of the IRS employee who rejected your challenge. When you call, in a polite and professional manner, ask to speak to the employee’s manager. Even though you are passing over the employee on the chain of command, take care not to say anything about why you are asking to speak with their supervisor. The last thing you need is to create animosity. When you finally have the opportunity to speak with a supervisor, your case should be laid out in much the same way as your original challenge. You should be clear and concise in your explanation while taking care to address any concerns that were noted by the original employee in their rejection letter. If your letter didn’t include an employee’s name and phone number, send another certified letter to a general supervisor with the agency and request that they reconsider your case.
  3. Appealing To A Higher Office. If you still haven’t convinced the IRS to change its mind, don’t give up – even if you have already mailed several letters and racked up a lot of call time with the agency. Further up the chain of command is the Office of Appeals, an independent office within the IRS. This is just one more step you have to take on your journey to find an IRS employee who agrees with your. To get your case to the Office of Appeals, follow the instructions that were found in the earlier notices. If you are unable to locate these instructions, you can find them on the IRS website.
  4. Welcome to U.S. Tax Court. Sometimes a resolution can’t be achieved in the first three steps of the appeal process. If you find yourself in this situation your final option is to take the case to the U.S. Tax Court. At this point you may be discouraged and may even question whether you should continue on with the fight, but if you still believe that the IRS is wrong it is probably in your best interest to see it out to the end.

If your dispute is less than $50,000 you will have the option to represent yourself. Similar to how a small-claims court operates, there is no jury and the judge will not hold your inexperience against you. Once court is in session you will state your case again, provide evidence and answer any questions a judge may ask about the claim. Be advised, however, that once a decision is made at this phase it is final and cannot be appealed.

Sometimes, even though you have decided that you want to move forward, an IRS attorney may offer to settle out of court for a figure less than what the IRS says you owe. If this happens, you need to decide whether you will accept the settlement or if you will move forward with presenting your case to the judge. The choice is yours.

If you find yourself at odds with the IRS over a tax issue and are not sure how to proceed, email Rea & Associates for more information.

Author: Clayton W. Rose, III, CPA

 

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Getting Back To Business: How Outsourcing May Provide Relief To Your Business

Clay Rose | September 19th, 2014

As a business owner, you have a lot to think about. Your investors, managers, employees and clients depend on you to deliver top notch products and services while keeping overhead costs low in favor of increased revenue. In fact, your business’s success can probably be attributed to your leadership skills and your knack for being able to see the big picture while bringing together all the other elements to reach a profitable conclusion. So why are you still in charge of handling your business’s accounting and bookkeeping needs when you could be so much more effective guiding your business toward further growth? Outsourcing may provide you and your business with the relief you need to get back on track.

Maybe you think your business is just too small to hire an accountant or bookkeeper or that you’re saving money by doing these jobs yourself. Perhaps you just aren’t aware of what options are available to you and your business. When you consider that the most effective solution is the one that effectively addresses your unique needs and budget, it should be no surprise that an outside accounting firm may be the answer you’ve been looking for.

Know Your Strengths And Weaknesses

The cost of hiring a full-time accountant or bookkeeper is a huge concern for many small business owners. To avoid a large expense, many owners or managers will purchase a copy of QuickBooks and try to work through their accounts themselves. Unfortunately, even if they have basic accounting skills, they may not have the patience, expertise and experience to handle the work. If done incorrectly, accounting flaws can be very costly, and could result in catastrophic consequences for your business.

Proper accounting and bookkeeping is essential to the short- and long-term success of your business. Outsourcing your accounting and bookkeeping work can help ensure accuracy and will free you up to focus on future growth, higher efficiency and increased sales. Below are a few examples of how outsourcing can solve your small business challenges.

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Issue: Your business is relatively small (with a similar budget), and you can’t justify bringing on a full-time accountant.

Solution: Hiring an in-house accountant could turn out to be a hefty expense, especially if the quantity of work is relatively minimal throughout most of the year. Not only do you have to pay the new employee a living wage and benefits, you must be prepared to invest in the software and/or training a new accountant needs. By filtering work to an outsourced controller, you will have access to affordable, ongoing or as needed reporting. As a result, your management team will become more flexible and will have more data – and thus more authority – when making decisions that directly affect the business.

***

Issue: You’ve already invested in QuickBooks to manage your business’s finances. It seems to be working well so far, but you haven’t been formally trained on the software.

Solution: While QuickBooks is easy to use, sufficient supervision by someone who is proficient with accounting skills is essential. Without a QuickBooks expert on hand, you will have no clue as to what is going on “behind the numbers.” A trained and certified accountant can tap into the various capabilities of the software, which include the reconciliation process, accounts receivable tracking and accounts payable, etc. When your bottom line is at stake, you owe it to yourself and to your business to minimize problems that may occur. You can avoid any hiccups with the help of a CPA.

***

Issue: You don’t need all the capabilities an accounting firm offers and you don’t want to pay for a service you may never use.

Solution: Your CPA will work with you to make sure all of your accounting needs are met and that the services that are provided only address the needs of your business. Services that can be outsourced include full accounting services, oversight work and everything in between. You also have the option of expanding services if and when you need them. Outsourcing options available to you include:

  • Working with an accountant several times throughout the year to clean up your accounting and ensure a smoother year-end tax process.
  • Tasking an accountant with filing certain commercial activities and taxes on time to insure accuracy and to avoid overpaying.
  • Hiring an accountant to provide periodic financial statements to banks.
  • Utilizing an accountant as an extra set of eyes on all manner of documents. This provides you with a great system of control when ensuring the accuracy of your books.

Speak to a Rea & Associates CPA to find out how an accounting firm can address your unique accounting and bookkeeping challenges while allowing you to make the best use of your time. Learn more about the services our business accounting professionals offers.

Article: Clayton W. Rose III, CPA (Dublin office)

 

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How Prepared Is Your Business For A Potential IT Disaster?

Joe Welker | September 9th, 2014

Natural disasters. Hardware meltdowns. New variants of viruses and malware. Unfortunately, we live in a day and age where anything can happen. It’s critical that your business is on its toes, ready to tackle any potential disaster or crisis that may come your way. But is it? If your business’s computer systems crashed tomorrow, how easy (or even possible) would it be for your business to recover? Has your business ever given thought to a disaster recovery (DR) plan? Do you have one of these plans?

It’s National Preparedness Month. A month where government agencies and businesses alike work to educate companies and organizations about the importance of being prepared whatever may come your business’s way. In honor of this month, below are five reasons why your business should create (if you don’t have one) a disaster recovery plan

Top 5 Reasons For A IT Disaster Recovery Plan

A Gartner report estimates that only 35 percent of small- to medium-sized businesses (SMBs) actually have a working and comprehensive DR plan. And from its research, Gartner also found that 40 percent of SMBs that manage their networks and Internet usage in-house will have their networks hacked, and more than 50 percent won’t know they were hacked. Pretty sobering statistics, right? There are many reasons why having a DR plan is a wise business move. In fact, here are the top five reasons why a DR plan is imperative to the success of your business:

  1. You can’t control when a disaster happens – it can happen at any time. Disasters can be natural or man-made – either way, you don’t have control over when it could happen. A DR plan will help you be prepared for anything at any time.
  2. A DR plan can help you save thousands, possibly even millions, of dollars in the event of a disaster. When a disaster strikes, it’s usually not a cheap fix. Depending on its severity, many businesses’ budgets are hit quite hard. And if this is an unexpected expense, it’s that much harder to make a complete recovery.
  3. You can mitigate your losses with a DR plan. Money isn’t the only thing at stake during a disaster. Don’t forget about the trust and confidence of your customers, employees, investors, vendors – the list goes on. A DR plan can help you retain your critical audiences during a disaster.
  4. A DR plan can help you reduce confusion among your staff and audiences. When a disaster hits, imagine the confusion and uncertainty that comes with it. In some cases, it may seem like you have no control over the situation. A DR plan can help you have an organized approach to resolving the disaster.
  5. The government may require businesses within your industry to develop and utilize a DR plan. If your business handles sensitive customer information or other information that could be critical if lost, the government may require you to have a formal DR plan, which should include yearly testing of offsite back-up recovery data.

Does your business have a DR plan? If not, you need to create one. Email Rea & Associates for more information about what to include in your plan. If you already have one in place, first pat yourself on the back, and then review it to ensure that it reflects your business’s current environment. Detailed and tested plans are imperative to the successful recovery and even for the longevity of your business.

Author: Joe Welker, CISA (New Philadelphia office)

 

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