Year-End Preparation

I dread January of every year. I have to spend so much time preparing the year-end payroll reports prior to the January 31 deadline. Not only must your quarterly’s and monthly’s tie together, but it has to match the general ledger at year-end. If you do these steps now in early December, then you only have to tie December’s payroll information to the final quarter and then to the year-end information in January. It will save you a lot of time in January.

It’s important to get the payroll documents correct. There are several reasons why:

1. The Internal Revenue Service has steep penalties for failure to provide accurate (to the penny) information to both them and the Social Security Administration. Your quarterly payroll reports (Form 941) must tie to the annual report (W-3) and to the year-end employee reports (W-2). Furthermore, all this information should also tie to your state unemployment documents and the IRS annual Form 940 for Federal Unemployment Tax. So by making sure the first 11 months are correct, you will save yourself a lot of time in January.

2. Employees get really upset if their W-2 information is wrong. They will call you every day until you get it corrected. I personally like to send out year-end reports to each one asking them if there are any errors or missing information prior to printing the final forms. Furthermore, errors with an employee’s report means errors with the IRS and the Social Security Administration. This means you have to file correction statements. This can and usually generates a lot of heartache.

3. The Internal Revenue Service is getting serious about the Subcontractor Reports effective in 2012. Failure to document and report the information correctly will generate a lot of nasty letters and communication issues with the IRS. The penalties alone should give you notice of how serious this is. Intentional disregard is $250 per form. So if you are a contractor – LOOK OUT! So for now, focus on getting the following from your subs:

a. Their correct federal identification number (EIN or FEIN); this is the 9 digit number similar to a social security number.
b. Get the name correctly spelled, i.e. the legal name with the commas.
c. Get the correct address and post office box.
d. Get the trading name or T/A or DBA (Doing Business As) name.
e. Since you are on the phone with them, go ahead and get the Workman’s Compensation Insurance Certificate faxed over to you.

By taking these steps now, you will save yourself a lot of heartache come January and you will not have to deal with the sense of urgency. Review my resources page for more information: and look in the IRS section. Act on Knowledge.

Value Investing

Do you want to learn how to get returns like this?

Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

There are four key principles used with value investing. Each is required. They are:

  1. Risk Reduction – Buy only high quality stocks;
  2. Intrinsic Value – The underlying assets and operations are of good quality and performance;
  3. Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
  4. Patience – Allow time to work for the investor.

If you are interested in learning more, go to the Membership Program page under Value Investing section in the header above. 

Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each member goes through three distinct phases:

  1. Education – Introduction to value investing along with terminology used are explained. Key principles of value investing are covered via a series of lessons and tutorials.
  2. Development – Members are taught how pools of investments are developed by first learning about financial metrics and how to read financial statements. The member then uses existing models to grasp the core understanding of developing buy/sell triggers for high quality stocks.
  3. Sophistication – Most members reach this phase of understanding after about six months. Many members create their own pools of investments and share with others their knowledge. Members are introduced to more sophisticated types of investments and how to use them to reduce risk and improve, via leverage, overall returns for their value investment pools.

Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth. Joining entitles you to the following:

  • Lessons about value investing and the principles involved;
  • Free webinars from the author following up the lessons;
  • Charts, graphs, tutorials, templates and resources to use when you create your own pool;
  • Access to existing pools and their respective data models along with buy/sell triggers;
  • Follow along with the investment fund and its weekly updates;
  • White papers addressing financial principles and proper interpretation methods; AND
  • Some simple good advice.

Value Investment Club

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