February 11, 2021
Job costing with Gusto: We’ve got it. Have you tried it? Get more granular control with two new features. Workforce costs are now based on employees’ hours tracked to a project, rather than an auto-allocation. Admins can also add tasks to each project to better understand team productivity and provide more detailed invoicing. Check out this and more by tapping on the Time Tracking tab in your client’s dashboard.
How are small businesses doing?
Last week I mentioned an article about an Institute of Management Accountants (IMA) survey of accounting and finance professionals where one-third of respondents “felt they were doing better than their competition.” Only 10% thought “they were lagging behind their competitors.”
Contrast that with the findings from businesses surveyed by the Federal Reserve:
Just under 90% of companies surveyed by [Federal Reserve’s 12 regional banks] said business had not returned to pre-pandemic levels almost a year after the crisis began. Of those that lost ground, 30% said that without more government aid, their companies might not survive, the report said.
The survey, an annual project that tallied nearly 10,000 respondents from firms with 500 or fewer employees, found that almost all small firms reported some negative impact from the pandemic, with 78% reporting a drop in income and just under half cutting their workforce in response to reduced demand. Just over half of the firms said revenue for last year is likely to have fallen by more than 25%.
Although these are somewhat contradictory findings, it isn’t impossible for them to co-exist. Just for the sake of argument: Yes, it’s possible that 90% of businesses out there haven’t seen results return to pre-pandemic levels and, of those, yes, one-third still feel like the competition is worse off than they are.
But neither of these surveys really give us a sense of how small businesses are feeling. Sure, the chances are greater than zero that many businesses would be struggling compared to a year ago and one-third could still feel confident as it relates to the competition. So overall, how are folks actually feeling?
Not great, Bob!
The NFIB Small Business Optimism Index declined in January to 95.0, down 0.9 from December and three points below the 47-year average of 98. Owners expecting better business conditions over the next six months declined seven points to a net negative 23%, the lowest level since November 2013. The net percent of owners expecting better business conditions has fallen 55 points over the past four months.
As I mentioned last week, accountants are uniquely positioned to help small businesses deal with the whiplash of emotion that is the current state of the world. Part of this means giving pep talks when they’re needed, but it also means leveling with people, not shying away from bad news, and telling them things they may not want to hear.
Don’t misunderstand: This is not an easy thing to do! “Shooting the messenger” is a metaphoric phrase for a reason. But! There’s been a fair amount of bad news lately, and if you haven’t been willing to deliver it, then you still have time to start.
Previously: Accountants as Armchair Therapists
Of course, all of the above goes out the window when the client believes they know more than you, which is one of the pet peeves shared by some tax professionals bracing for the annual onslaught. A couple of these read like someone dealing with their aging parents:
One CPA has clients who use only their smartphones and so can’t create PDFs if they don’t own a scanner. Thus preparers have to become PDF tutors to clients who also manage to chew up time trying to figure out how to download a file — or who downloaded it and have no idea where to find it on their phone or computer.
Dribs and drabs of info, another CPA lamented, arriving like castaways by fax, mail or dreaded JPG (can you say “rotate and resize”?). Do you really charge enough for all this?
I sympathize with you, my accountant friends. Still. You could always get rid of the fax machine.
What is even happening
“Elon Musk and Snoop Dogg Push Cryptocurrencies to Record Highs” is this New York Times headline and where do I even begin? Like, have fun, but… be careful?
Bitcoin hit a new high above $47,000 on Monday, shooting up more than 45 percent from the beginning of the year.
Other digital currencies — with names like Terra and Solana — also rose sharply in value.
Even Dogecoin, a cryptocurrency that began as a joke with a perpetually surprised Shiba Inu dog for its symbol, has soared almost 1,000 percent over the last week to set a record.
I know some of you out there work with crypto businesses, and no judgment, it sounds like it’s going well for you. People are into it, could be the future of… something? Yes, I know: Blockchain, blockchain, blockchain. I’m just saying, if Elon Musk, Snoop Doge, and Gene Simmons are all part of the same harebrained parade, maybe start backing away slowly?
Elsewhere: Michael Rapoport on the accounting risks for companies holding bitcoin.
Fresh from Gusto
Help your clients stay up to date with Gusto’s weekly SMB newsletter. It includes the latest news, legislation, and compliance updates small business owners need to know, with expert advice in their inbox every week.
- Josh Lance on How to Sell, Deliver, and Get Paid for People Advisory Services.
- Gusto’s Risk and Security Team has cybersecurity tips for all.
- Is Your Leadership an Asset or a Liability? with Amber Setter on February 15.
- R&D Tax Credits: Creating Value for Your Clients with Monika Diehl and Jeff Haskett of Clarus R+D, and featuring my colleague Jaclyn Anku on February 17.
- Fraud: Wirecard’s Missing $2 Billion & Airbus’ Massive Bribes with Greg Kyte and me on February 24.
- 401(k) or SEP IRA? That is the Question! A Comprehensive Guide for Accountants with Nicolle Wilson of Guideline on March 3.
Read with Gusto
- Free Stuff Is All Over Craigslist and Facebook, and It’s Getting Weirder
- Pig gamers.
- Scientists Are Pretty Sure They Found a Portal to the Fifth Dimension
- Pro Darts: “Imagine professional bowling but with pro-wrestling attitude.”
- “I’m here live. I’m not a cat.”
Read more On the Margins in the archive.