Making Spreadsheets More Useable

Financial modeling can be a big part of our work with clients and it's always a challenge to present such incredibly complex information in an understandable package. If you use spreadsheets for internal ad hoc reporting, budgeting or modeling here are some tips for making sure your message doesn't get lost in the clutter.

1. Always use page headers. And try to standardize headers so reports are easily identifiable. In our office we use a simple 3 line header to identify all documents. The first line is the client or engagement, the second line is a short title for the report and the third line is the time period covered by the report. If you're working with a report that is a living document it's a good idea to put the revision date in the header. I favor this location because experience has taught me that people often update the report but forget to change the smaller, less noticed revision date in the bottom right hand corner.



2. Use special formatting to separate column headers and row titles. If everything is in the same font the eye has a hard time separating the data from it's context. Bolding and underlining column headers can make a big difference as can indenting row titles to separate groups of related information.



3. Standardize number formats. There is nothing more confusing than trying to review a column of numbers when some of them have 2 decimal places, some have 1 and others none at all. Additionally, reviewing numbers without a thousands separator can lead to mistakes. Use the same format all the way down the column and make sure your decimal points all line up in a straight row.



4. Use shadow boxes and color to separate different parts of a report or spreadsheet. I have won clients and very profitable engagements because I used this technique and my competitors did not. Our eyes and brains separate data much easier when it is visually distinguishable and there is nothing so simple as color to set one section apart from another. Even if printed in black and white users will still be able to tell a difference between reports that use color and those that do not.



5. Use cell protection on working models. If you are building something dynamic either keep all of your data input fields in one place or highlight the fields with special formatting. Then protect the worksheet so that values in these cells can be changed but the integrity of the rest of the worksheet cannot be compromised. I've sent out unprotected worksheets only to have clients send them back with formulas overwritten, key rows deleted or formats changed.

Microsoft excel is a powerful tool. However, most people don't take the time to give their reports an image and presentation befitting the importance of the information. In 2 or 3 hours you can learn a lot by playing around with formatting, experimenting with color and drawing shapes. Once you know what excel is capable of it's just a matter of spending 2 extra minutes polishing the appearance of your spreadsheets to make them look like they came from a pro. One of the best ways to learn new tricks is to ask questions about worksheets you see or to download some samples from the web and take a look at how the authors did their formatting. Two sites that get a lot of excel press are i4c which is geared toward education and Resources for MS Excel which is a little more technical in nature. Both can teach you a lot and provide sample worksheets you can study.

Joey Brannon is the founder of Axiom Professional Group, a tax, consulting and accounting firm in Bradenton, Florida. Mr. Brannon is both a CPA and an EA. You can find out more about Axiom by visiting www.axiomcpa.com.

Corporate Annual Report Deadline is May 1

Corporations, LLC's and limited partnerships are required to file an annual report with the Secretary of State to keep their corporate status active. This report is due May 1st and involves a $150 filing fee. If the report is filed after May 1st the filing fee increases to $550. Sometimes the attorney who handled the incorporation will file the annual reports, especially if that attorney is serving as the corporation's registered agent. But many times the responsibility falls on the owner.

A few years ago the Secretary of State stopped sending out paper annual reports and instead it now sends a postcard with instructions for filing the annual report on-line. This really is more convenient but we have fielded calls from clients this week who seem to be having problems on the site. For this reason we wouldn't advise anyone to wait until Monday evening to get their report filed.

To file the report on-line you need your document number. This is the sequential number that the state issues to corporations when they file their articles of incorporation. If you don't know your document number and you cannot find your postcard you can look it up in the state's database. Once you know the document number you can file your report here. Just look for a button like the one pictured at the top of this post.

We work with state agencies all over the country and Florida's Secretary of State leads the nation in terms of access to information and the ability to complete filings on-line. Occasionally we'll help clients navigate the site and make their own filings or look up information. Once they find out how much is available they tend to be very impressed.

Joey Brannon is the founder of Axiom Professional Group, a tax, consulting and accounting firm in Bradenton, Florida. Mr. Brannon is both a CPA and an EA. You can find out more about Axiom by visiting www.axiomcpa.com.

A Little Notebook Goes a Long Way

In a previous newsletter article I reviewed David Allen's book "The Art of Getting Things Done." Allen has somewhat of a cult following but that doesn't diminish the importance of his message. On the contrary, the fact that there are so many people scrambling for a workable system to increase productivity is evidence that most of us react to our surroundings rather than live proactively. In business these "reactionaries" scramble about from one crisis to the next and feel like they never get anything done. I know, I've been there (and have been known to go back and visit occasionally). For that reason I'm constantly on the lookout for tools to help me be more productive. One of the best I've found so far is the Moleskine notebook. They cost about ten bucks at Books-A-Million and after a couple of weeks you'll think they're worth their weight in gold. Here's how I use mine.

I basically have two tools that I use to keep track of projects and to-do items. The first is an excel spreadsheet on my laptop. It lists all of the things I have to do from client projects to home repairs to errands I need to run. Each to-do item is classified according to a specific context (home, desk, calls, emails, etc). For more on context sensitive lists read Allen's book or do a web search for GTD (short for Getting Things Done). The second tool is my little black Moleskine notebook.

If I am in the office my excel spreadsheet is always open so I can add items while I'm on the phone, going through mail, working on a related project or doing anything else where I might need to jot down a note to follow up on something in the future. If I am out of the office I have either my laptop or my notebook with me. There are some situations were lugging out the laptop isn't convenient
(although Michael Linenberger's book has helped me change that). At those times I have my unobtrusive notebook where I can jot notes and record to-do items. A to-do item in my notebook gets an empty check box placed next to it and when I have my laptop out again I add these items to my excel spreadsheet and cross them out.

The Moleskine works well for several reasons.

1. It's the right size. I can slip it in a jacket pocket or the back pocket of a pair of pants and take it with me anywhere. I'll often bring it to lunch where I can take notes much easier than if I had brought along a full size leather portfolio.



2. It's professional. At $10 these aren't cheap but I have no problem pulling one out in front of CEO's or other potential clients. In fact, I often get asked where they can purchase one for themselves.



3. It's durable. The hardbound cover, cloth marker and elastic strap take a lot of abuse without showing much wear.



4. It's easy to write in. Having a hard bound notebook makes all the difference when you're trying to scribble notes in your lap while having coffee at a table the size of a dinner plate.

As a general rule it's always good to have a pen and paper at hand. For me the Moleskine has been a good little tool for capturing important information in almost any setting. If you have your own tips or tricks for increased productivity do me a favor and share them in an email. I always enjoy hearing how other people cope with the frenetic pace around them.

Joey Brannon is the founder of Axiom Professional Group, a tax, consulting and accounting firm in Bradenton, Florida. Mr. Brannon is both a CPA and an EA. You can find out more about Axiom by visiting www.axiomcpa.com.

LLC’s - Hybrid’s for Business

Mention 'hybrids' these days and people will assume your are talking about cars that get great mileage. Business owner's have long had access to hybrids in another form when it comes to entity selection. LLC's or limited liability companies can be just about anything you want them to be and in business flexibility is generally a good thing. Here is how they work.

LLC's are corporations and must be chartered by the state just like regular corporations. In fact, from the local standpoint there is not so much difference between an LLC and a traditional corporation when it comes to registering to do business in the state. The big difference is in the eyes of IRS. Owners can choose to accept the 'default' IRS classification or they can make an election to be treated in a certain manner for tax purposes.

First the default classifications... an LLC with a single owner (commonly called a single member LLC) will be treated as a sole proprietorship by IRS. In effect the corporation is a "disregarded entity" for tax purposes and the business is treated as if it were unincorporated. This is a good thing for business owners who want the greater measure of personal liability protection provided by a corporation but who are less than thrilled with the increased administrative burden created by a separate taxpaying entity. The state and courts will treat them as a corporation and the IRS will treat them as a sole proprietor.

If the LLC has more than one owner the IRS will automatically treat it as a partnership. Again this provides greater liability protection than a general partnership, without creating the double taxation standard typical of regular corporations. The owners will need to file a partnership tax return and report their respective share of partnership profits on their individual income tax returns.

The above two scenarios explain what happens under the IRS 'default' rules. However, the owners can choose to be taxed differently. For instance a single or multi-member LLC can choose to be taxed as a corporation. Further, after choosing to be taxed as a corporation the LLC can elect S corporation status if it qualifies.

These are the most basic scenarios for LLC use. More advanced situations occur where subsidiaries are incorporated as LLC's that are wholly owned by the parent corporation. This is great from a tax standpoint because the LLC is disregarded as far as IRS is concerned meaning the parent does not have to incur the expense and administrative burden of filing separate tax returns. At the same time the subsidiary is legally distinguishable from the parent and it is much easier to sell or spin-off the subsidiary than if it were unincorporated. Additionally, while IRS may treat the LLC as disregarded the states may consider them separate entities allowing segregation for unemployment and sales tax purposes.

Another arena where LLC's are very popular is international corporate tax planning. Foreign corporations often setup U.S. domestic LLC's to transact business here. Since the LLC's are wholly owned by the foreign parent they are disregarded for US tax purposes allowing the foreign parent to file as a foreign corporation here in the US. At the same time vendors and suppliers are more comfortable dealing with a domestic US corporation and do not have the same withholding requirements that might apply when they do business with foreigners.

We have seen LLC's used in all of these scenarios and we continue to find situations where this unique form of hybrid entity suites business owners better than traditional corporations or partnerships. While LLC's have their advantages there are just as many situations where they are not the best choice. It takes an examination of all the facts as well as the owner's future plans to make the right decision.

Joey Brannon is the founder of Axiom Professional Group, a tax, consulting and accounting firm in Bradenton, Florida. Mr. Brannon is both a CPA and an EA. You can find out more about Axiom by visiting www.axiomcpa.com.

Reduce Errors and Save Time with Bar Codes

More and more of our clients are turning to bar code scanners in an effort to reduce key punch errors and save time entering data. While bar code scanning is nothing new it is being adopted for a wide range of applications from document management to traditional point-of-sale terminals. So how does a typical small business setup work. Here's the short story...

You will need a scanner. These come in two basic types: serial and keyboard wedge. A serial scanner plugs into the serial port on the back of your computer. A keyboard wedge scanner plugs into the keyboard jack and has a "Y" connector that you then plug your keyboard into. These are by far the most popular types of scanners. Serial scanners, while less popular, do have an advantage we will talk about later.

The thing to realize about scanners is that they don't perform any special magic. They just take the place of your fingers actually typing in the data. There are scores of bar code formats but they all come down to a graphical representation of alpha-numeric data. Instead of keying in a product number you can shoot the bar code with the scanner and the number will appear on the screen as if you had typed it in. If there is any application where you have to enter a product code, document number, or some type of reference identification a bar code and scanner may be able to increase your productivity.

Next comes software. Since a bar code scanner acts as nothing more than a really fast and accurate keyboard you can use the scanner anywhere you would use your keyboard. For instance, we've used scanners to help clients with inventory counts by opening an excel spreadsheet, shooting the item, then tabbing over one column to put in the amount, location, etc. Some clients even bar code the shelf locations so you shoot the product, tab, shoot the shelf location, tab and enter the quantity. You can then cross reference your count sheet with a product database and tabulate inventory extensions.

Another common application is Quickbooks. By bar coding product numbers you can create item receipts, purchase orders, invoices or sales receipts by shooting the bar code and tabbing to the appropriate quantity field. In a stock room bar code scanners are particularly nice when paired with a laptop. This allows clerks to instantly look up inventory levels and  verify quantities without having to hard key product numbers that can be 8 to 12 digits long.

Serial scanners have the advantage of directing their output to a separate port on your computer. This allows special software programs the ability to capture the scan and "translate" it before passing it on to the application you are working in. One such product is SmartScan from Baus Systems. Here's how it works. Say you have an item number in QuickBooks of "W2367" but the manufacturer of this item has a UPC bar code of 491320. Using SmartScan you can "translate" the UPC so that when you scan the product and the scanner sees 491320 it sends a value to Quickbooks of "W2367". This is powerful since it allows you to create your own product numbering system while using the universal UPC or other bar codes common on almost all packaged goods. Most manufacturers have proprietary codes they use for internal purposes that you can re-use with translation software to implement bar coding in Quickbooks. However, this type of system requires a serial scanner and they're usually more expensive than the common wedge interface scanners.

One final consideration is whether or not you want a wireless scanner. These are becoming more common. One model we have used with success is the Wasp WWS 880K (pictured at left). It uses Bluetooth technology and has a range of about 30 feet. It recognizes all of the widely used bar code formats and is easy to setup. It retails for between $450 and $500. The Wasp is a wedge interface scanner. Wireless serial or RS232 interface scanners usually require the purchase of the scanner and adapter cables or decoders separately. If you go this route contact a reputable dealer such as Barcodes Inc. and tell them what you are trying to accomplish. They can recommend the best solution.

At a retail counter you will rarely need a wireless scanner but our experience is that they are the only choice for stock rooms, loading docks and other "back office" venues.

Joey Brannon is the founder of Axiom Professional Group, a tax, consulting and accounting firm in Bradenton, Florida. Mr. Brannon is both a CPA and an EA. You can find out more about Axiom by visiting www.axiomcpa.com.