In an article in the Wall Street Journal (August 24, 2014) Amazon is preparing to challenge Google in the Advertising business. According to the article, Google Adwords brings in $50 billion and Google counts Amazon as one of their biggest customers. This raised a question to us when we read the article: What do you (your company) do when your biggest customer turns into your biggest competition?

We often hear the adage, “Don’t put your eggs in one basket” but what if it’s one large egg in one of several of your baskets? Will that make a big enough difference to your Gross Profit?

With all these questions spinning around, you need to take a long, hard look your sales reports and Accounts receivable report. We will break these down for you over the course of several blogs:

1)    Sales by Customer.

In Quickbooks, this report is by Summary or Detail. Select Summary. Select a period, preferably a 6 month or more period. Then add the percentage option to the report. In QB that would be Modify Report, % of column. Now sort by Amount with the highest customer on top. What do you see? The case we are looking at while writing this blog has 9 customer representing 17% of their income. For this business this is good. The sales are spread out evenly. No one customer is spiking, the work is slow but steadily growing.

Now look at the bottom of the list. Those are the small customers. Are they worth the time invested to keep those customers accounts open? Perhaps you should consider setting a minimum order policy to eliminate your company being nickled and dimed. We have one client who gets large orders from large clients, then really small orders from small clients. There are no in-between clients. This is not a healthy balance.

What is the balance of your Customer sales ratio and who are your biggest customers? We’ll talk more about this in our next blog.

We and many others are in receipt again of a form by Corporate Compliance Center about an Annual Minutes Compliance Notice. This is a bogus request for your money and information. As a business owner, before responding to any notifications in the mail (let alone emails), please do an internet search to see if the company is legitimate. Our clients have been receiving these notices for years. Although bogus, CCC has been allowed to continue as a business and not be shut down by the government because they do state at the bottom of their notices, “This product or service has not been approved or endorsed by any government agency…”

Here is the real truth: If you are a corporation, you are suppose to be having annual meetings (and sometimes more often), per your By-Laws. At the meetings you name the Officers and Directors, among other things you should discuss. This bogus form merely asks you to fill in the officers and directors and calls those “minutes.” That is not sufficient. But it does provide Corporate Compliance Center an easy $150 of your money to send you a nice form based on the information you filled out on the Notice they sent you. We estimate they are making about $600 an hour popping out these forms to ill-informed consumers. Please shred the notice when you get it or better yet, forward to your attorney or accounting consultant for review to ensure you don’t pay for something you don’t need.

We did a quick internet search and came up with many links to learn about this scam.

Here is a copy of the notice for your reference.

Corporate Compliance Center

Shred this paper

In the Mist by Igor Zenin. Used with permission

The Relation of Accounting is what your business is telling you. Are you close to your accounting, do you know it intimately? Or are you a stranger to your accounting? I realize a lot of our readers are afraid of accounting and the thought of being close to it, well… makes them cold and distant. Like any relationship, you need to spend a little time with it. Don’t go overboard and try to “learn” about the relationship in a long weekend. Instead, take some time each day to spend with your accounting. Think of the transactions you enter into your acounting software as “trees” and those trees create a “forest” of a story for you. Reflect on the bank balance. Look at your Accounts Receivable. Learn to relate to the reports found in the art of accounting.

This is the final installment, Part IV, of Bob Jones’ headaches with Paychex and handling his payroll for Bob Jones Company (BJC).

Refreshing the story from February, Business-keepers Consulting (BKC) was hired by Bob Jones Company (BJC) to handle bookkeeping needs. BKC discovered that Paychex was not handling BJC’s Florida payroll tax issues and BJC received a FL notice for $2400.

In March Paychex made some concessions with BJC to fix the problem with FL and get FL to reduce the penalties down to $750.00 from $2400.00. Paychex still expects client to pay the $750.00. It was our recommendation that Paychex provide free payroll service for a year to make up for this gross negligence.

Moral of story: Just because you hire a payroll service to do their job doesn’t mean they will do it. They will always expect you to know the facts and be liable for any mistakes they make.

Is there a better payroll service out there? Yes; usually the smaller companies are better because they treat their employees better. It’s all about how much the employees care.

Does your payroll service care?

Go Climb a Tree

This is part two of Bob Jones’ headaches with Paychex and handling his payroll for BJC.
Resuming our episode, Bob hired Paychex to handle the payroll for his company, Bob Jones Company (BJC) several years ago. BJC is a California corporation but has an employee in Florida (FL). When BJC added this FL employee to its existing payroll, no one at Paychex bothered to ask Bob to complete a form to apply for a Florida ID number (IDN). This IDN is typically requested from any state with which you have payroll. It ties your company name to a number so the state can keep track of your tax liability.

So now, the scene is set that BCJ thinks Paychex is handling the payroll tax return filing and payment for FL and Paychex is indifferent to whether or not it is being handled by the client. In walks Business-keepers Consulting (BKC) which was hired in May 2011 to get BJC accounting in order and maintain it on Quickbooks (QB). Upon reviewing the payroll, we discovered FL hasn’t been paid and now the tax notices are rolling in. Paychex states they cannot file a Florida IDN on behalf of the client and provides a Power of Attorney (POA) to give Paychex power to deal with Florida payroll issues. This suggestion of a POA for FL is two years after the Florida employee was hired and at no time is it mentioned that this POA could help them solve this FL ID issue. Paychex just realized they should have one on file.

What does this look like to an outsider peering in? Paychex calls our client every other week to run payroll. Every two weeks for two years (26 x 2), 52 times, the Paychex payroll representative, whom we will call George, called and asked for payroll but never once followed up and asked how the Florida IDN is coming along.

Have you had problems with Paychex’s indifference? How do you view customer service through the eyes of your customers?