Wendy Velarde, VP of Human Resources at U.S. Water Services, noticed one day that somebody was walking around the office handing out pay stubs to employees. She thought it seemed inefficient and wanted to see if there was a better way. They were using CenterPoint Payroll by Red Wing Software at the time, so she contacted Red Wing Software to learn more about streamlining that process. Shortly after, they began using the electronic publish pay advice feature offered within CenterPoint Payroll. “Employees have been extremely happy with the online access to their pay information,” said Wendy, “Now they can access their pay data anytime.” Wendy also mentioned several situations during which the electronic access to pay advices could have come in handy. “Once during a snow storm, an employee needed access to his pay information, but only a very few employees had made it to the office. Having the pay advice function back then would have given him immediate access to that data, as long as he had access to the internet,” said Wendy. Also, employees all around the U.S. had to wait for their paper pay stub from the corporate office via mail. The employees are now much happier, having immediate access to their pay information instead of waiting for their stub to arrive in the mail. Providing immediate access to their payroll information allowed one family with a son going to college, to access the financial information they needed for their son’s college easily by using the online pay advice system. Wendy added, “Adding the publish pay advice function has been a huge win from an employee perspective, and it has also saved our company time and money.”

CFO Daily News has taken the subject of Obamacare and laid our some next step items for employers. The article mentions the upcoming need to report the cost of healthcare expenses on employee W-2s, and the need to cap flex spending limits. Both of these (and more) can be handled within CenterPoint Payroll Software.

http://www.cfodailynews.com/obamacare-stands-your-first-moves-now/?pulb=1

I thought instead of telling you what I think in this blog post, I would just ask some questions to provoke some thought. I think you’ll likely know what I think by reading the questions I ask. Are you running your business, or is your business running you?

Do you control the expenses in your business by operating from a budget, or do you operate “seat of the pants”?

Do you have processes in place (and documented) for internal job functions, or do you assume everyone knows what they are supposed to be doing?

You know that everyone in your organization has certain responsibilities. Have they been clearly communicated, and do the people in your organization know they have these responsibilities?

Do you know the true cost of items that you produce or buy for resale, including indirect costs?

Do you know your most profitable items and those items that are not so profitable and maybe should be discontinued?

Do you know your businesses key financial ratios, what they mean, and where the danger levels are?

Do you analyze the return on new asset purchases before the purchase has been made?

If you think you have good answers to all of these questions, good for you. I challenge you to continually ask these questions throughout the year, and improve operations through better management.

At Red Wing Software, we evaluate our position and try to answer these questions regularly. We feel that once we think we know all the answers, we stop improving.

(Continued from the previous post) Using business ratios can help you analyze the financial health of your business. You can use ratios to help compare your business against other businesses similar to yours, and to see how yours compares to the industry averages. By comparing your business, you can identify trends and make changes accordingly. Here is Part 2 of the components of ratio tracking, what they mean, and how they can help your business.

• Inventory Turnover: This ratio measures how quickly inventory sold. A higher number generally indicates efficiency. However, companies must be careful of stock-outs in situations where too little inventory is kept on hand.
• Net Profit Margin: Measures the profitability in terms of return per dollar of net profit.
• Quick Ratio: This ratio is often used to evaluate a company’s immediate liquidity position. A quick ratio that is too low indicates greater risk for creditors and investors.
• Return on Assets: This is often used as an overall index of profitability. The higher the value, the more profitable your business.
• Return on Equity: This ratio measures the rate of return on money invested in the company by the owners. The higher the value, the more profitable your business.
• Working Capital: Because it is a dollar amount, this measurement is difficult to compare with other similar businesses, since you must also take into consideration the size of the business. However, it is a measure of the amount of funds available to purchase inputs and inventory items after the sale of current assets and payment of all current liabilities.

Use business ratio analysis to reveal trends and understand where improvement is needed in your business. Use ratios to make comparisons, understand your business, and stay ahead of your competitors.

Using business ratios can help you analyze the financial health of your business. You can use ratios to help compare your business against other businesses similar to yours, and to see how yours compares to the industry averages. By comparing your business, you can identify trends and make changes accordingly. Here are some of the components of ratio tracking, what they mean, and how they can help your business.

• Accounts Receivable Turnover: This ratio measures the promptness of customer payments. Higher numbers indicate the effectiveness of collection policies and procedures.
• Current Ratio: This ratio gives an indication of a company’s short-term debt paying ability. The higher the ratio, the greater the liquidity.
• Equity to Asset: A measure of financial position, this ratio measures the proportion of total assets financed by the owner’s equity. A higher ratio indicates better protection to company creditors, since more capital has been supplied by the owners and less by the creditors.
• Debt to Equity: Measures the extent the company is financed with money borrowed from non-owners. The higher the value of the ratio, the more total capital has been supplied by the creditors and less by the owners.
• Gross Profit Margin: This percentage measures profitability in terms of return per dollar of gross profit.

Stay tuned for the next post, which covers more ratios terms and what they mean!