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Under New FLSA Rules, Keeping Accurate Time Records Is Vital

November 22, 2016 / by Cheri Giglia posted in North Shore Long Island

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Important Update:

Days before the new FLSA policy was to be implemented, a U.S. District Court Judge issued a temporary injunction blocking implementation. It is not known at this point when the new overtime policy will go into effect.

However, it’s always good business practice to have a consistent and reliable procedure for time tracking. Tsheets is a great program for tracking time accurately so you can better understand your payroll costs and profitability. Read the blog below to learn more.

Cheri-Giglia-for-web.jpgUrgent memo to business owners: Unless you want to risk a lawsuit, make sure you're keeping precise employee time records when the new Fair Labor Standards Act (FLSA) overtime regulations take effect on Dec. 1, 2016.

In this article, I'll explain why it's so important to keep accurate timesheets in light of the new rules.

It's About Time
The new FLSA regulations are intended to modernize overtime pay rules for salaried employees — rules that haven't changed much in 40 years. But in the process, these regulations put the onus on employers not only to more accurately classify their employees as either salaried or hourly, but also to document their employees' hours. Because if you have salaried employees who make less than $47,476 a year, you're now required to pay them overtime if they exceed 40 hours in a week (or, in some states, eight hours in a day).

If you prefer to restrict your salaried employees who fall short of the new standard to 40 hours/week rather than pay overtime, you'd better establish strict guidelines for documenting their hours. That includes spelling out such details as whether checking company-related email or news items on weekends constitutes "work time."

So Who's Counting? It Could Be Your Employees
According to TSheets (developers of a cloud-based time-tracking app), 62% of small businesses with hourly employees use either paper timesheets or Excel to track their workers' time. That might be better than nothing, but not by much.

Besides being overly susceptible to human error, any system that depends on manual input is subject to abuse. It basically relies on the honor system — which works only until someone decides not to honor it.

In court, the burden falls on the employer to produce thorough documentation. If an employee can prove any inconsistency or inaccuracy in your timesheets, it calls the reliability of your recordkeeping into question. And that, in turn, could lead a court to rule in the employee's favor.

Easier Said Than Done
So how do you produce ironclad timesheets? There are several options, but the key element is accuracy. For example, if you're still using paper timesheets, you could review them with your employees each week and have them sign off.

However, that can add up to a lot of extra work and a huge stack of paper to keep track of. Some small businesses choose to outsource the job to a payroll company. Others prefer to have an independent, outside auditor review their records.

A growing number of employers are implementing automated time-tracking systems. TSheets, whose app provides automated time tracking and scheduling with QuickBooks integration, is one such option.

Really, it's up to you. "From a legal perspective," Maria O. Hart of Parsons, Behle & Latimer told TSheets, "all I look for is that a company has a consistent way to track hours."

So the choice is yours. But you just have to make it by Dec. 1.


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Fathom Software Helps You Be More Proactive with Financials

October 31, 2016 / by Cheri Giglia posted in North Shore Long Island

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Cheri-Giglia-for-web-1.jpgThere's a lot of look-back involved in accounting. We document the month-end close, or last quarter, or last year. But clients who look at financials only in this way — who see just the end number or the cash balance — never get a real picture of what their business is about.

At Supporting Strategies, our job as providers of bookkeeping and accounting services is to help clients not only look back, but also figure out how to go forward. And one of the best tools I've seen to assist with that critical mission comes from a company called Fathom.

Tracking Your KPIs in Real Time

So what does Fathom do? To quote from the company's website: "Whether you call it business intelligence, performance management, or analytics, the goal of Fathom is the same: to help you understand what's happening in your business, and how to take action when needed."

Basically, Fathom is a cloud-based resource that tracks key performance indicators (KPIs) in real time. Just sync it with QuickBooks Online or QuickBooks Desktop, and you can instantly assess your company's profitability, cash flow and growth.

I first learned about Fathom from Supporting Strategies Founder and CEO Leslie Jorgensen. She recommended it when I had to consolidate two companies. In addition to expediting the process, Fathom transformed me into an analyst who could advise the client on how to achieve their goals once the consolidation was complete. And Fathom isn’t strictly a tool for consolidations; the analytics help anyone who wants a better understanding of their business.

Fathom is particularly useful with companies that have a CEO who is not a financial person — which is fairly common. With Fathom, CEOs can look at the ratios that are important to them, in a form that's easy to understand. All they have to do is check their dashboard. Fathom can sort by different priorities, such as Perspective, Result or Importance. Ratios are broken down into clear categories, such as Customer (New Customer/Lost Customer), Efficiency (Return on Capital Employed/Return on Assets) and Activity (Accounts Payable Days/Accounts Receivable Days). Simple color-coding lets you know at a glance where your company stands at that moment (green is good, red is bad).

Never Let the Numbers Surprise You Again

Little things like real-time reporting can have a huge impact on a company's future. That's especially true with small businesses, where the owner is often so consumed with the day-to-day details of running the company that he or she doesn't recognize big-picture problems until it's too late.

With Fathom on your side, there's less chance of that happening to you. Along with real-time reporting, Fathom offers alerts. So if your business happens to miss a vital benchmark, you'll know about it right away — when there's still time to react.

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