Take the Sting out of Tax Season 12 Apr 2010, 7:25 pm

Perhaps you’ve already filed your 2010 taxes and you are relaxing during “tax week”. Perhaps you are desperately trying to get your taxes out by the 15th. Perhaps you’ve already filed an extension and have put it out of your mind until October 14th.

Regardless, let’s talk about what to do to create a better tax season next year.

First of all, let’s simplify what it means to prepare for taxes:

In order to be ready to do your taxes you need to know:

1. How much money you made.
2. How much money you spent in each tax deductible category.

That’s all you need for the basics. In your situation you may have other specific needs, and we’ll address those in a minute.

So how do we do this?

Finding out how much money you made:

You’re going to need a tracking instrument.

If you’re using accounting software: QuickBooks, PeachTree etc., it will take care of that for you. Of course, you have to actually be USING the software. It turns out that installing it on your computer doesn’t actually help you with your taxes at all.

If you don’t want to use software, you can use a spreadsheet – that’s what I do.

It’s not about how sophisticated your software is. As usual, it’s about you using it consistently. That means that you have to must set aside time to do this on a regular basis.

How much money you spent in each tax deductible category

First, ask your CPA to give you your itemized deduction categories, and any other deductions that you need to track throughout the year.

Now, create a way to track them.

If you want to do this online you can create an excel spreadsheet with columns for each of your itemized deduction categories.  If you want something more robust, there is all kinds of software to do this. Get whatever you like, it doesn’t really matter. What’s important here is that you use the software consistently.

If you are going to track using receipts, then allow me to suggest that you store your receipts based on the itemized deduction category – NOT by month. I suggest this for a couple of reasons:

1. I always advocate filing things based on how you use them, and we use expenses based on the itemized deduction categories.
2. If you get audited (which is when you’re going to need to bust these receipts out again), they are going to ask you to prove a category or categories.  For example, they will ask you to prove your “meals and entertainment” expenses, they will not ask you to prove your February expenses, so it will do you no good to store your receipts by month.

I’ve taken a number of clients through audits.  I can’t help you if you tried to write off that week in Vegas as a business expense, but I can assure you that those who go in more organized have a MUCH better experience with a much more sympathetic auditor.

In the end, it’s about a start to finish system:

Decide what you are using for your base records:  Bank statements, credit card statements or receipts.  I recommend using your bank statements and credit card statements (and not paying for business expenses in cash) and then just throwing your receipts into envelopes by itemized deduction categories in case you get audited.

Choose a way to keep track of the numbers (Excel, specialized software, a handwritten ledger etc.)

Create time to do this and then keep those appointments.

Since we started by asking your accountant what they need, then tracked that information throughout the year, when it comes to tax time it will be really easy (not to mention fast) to give your accountant exactly what they need.

Guest Blog: Plan to Thrive 11 Apr 2010, 6:05 pm

A guest blog by Brad Closson of Paragon Business Group

Most people have the will to succeed, but very few have the will to plan to succeed.  Without a plan, most of our goals become wishes.  A powerful tool that can connect you to your goals is a personal business plan. (PBP)  Writing down your goals, putting a strategy in place, and developing an actionable plan allow you to map out your achievement instead of possibly stumbling upon it.  Creating a plan bestows a level of intention that dramatically increases your success rate.

Your personal business plan should include your networking strategy, your personal branding strategy, your roadblocks, your support team, your mentors, your personal vision statement and your education plan for the upcoming months.  It should map out your strategic partners as well as your key professional assets.  Since most of the information in a PBP is usually fuzzy and grey, the act of charting out these ideas can be extremely illuminating.

Another area the PBP should encompass is listing out the members of your accountability team.  Most of the time we are only answerable to ourselves, and we make it all too easy to justify missed goals or skip important milestones.  After you create your personal business plan, sign it and give it to five other people who are important to you.  Family, friends, mentors, and peers are good candidates for this personal board of directors.  Now that your plan in inked and you have signed and distributed it to your accountability team, your likelihood to stay on course has increased dramatically.

If you intend to thrive, then plan to thrive.

To get in touch with Brad (and trust me when I tell you you’ll be better for having done so)  check out his website at Paragon Business Group

Video Blog: Deadly Myths of Organization 12 Feb 2010, 5:59 am

In this short excerpt from my “Get Organized For Good” workshop, you’ll learn the second Myth of organization.  There are three Deadly Myths and they are so prevalent in our society that they are often thought of as truths – which means that we can buy into them without even knowing it.  The bad news is that if you’re operating under one of these myths, it’s unlikely that you’ll ever be successful at getting organized.   The good news is that they’re easy to spot once you know about them, and they shatter easily once you identify them.  Let’s get one out of the way now:

Stop! Resist the Urge! 18 Jan 2010, 2:46 am

I was in my car and heard a commercial for an organizing store.  The commercial said that they had bins on sale for $3.58.  They said that the bins came in three colors so you could put important stuff in one color, not important stuff in another color, …”and stuff you don’t know why you’re keeping’ in a third color.  Then ‘your whole house will be organized”.  In my complete rage I almost ran my car off the road.

It’s easy to think that de-cluttering and cleaning up will solve your organization issues.  Sorry, no dice.  If you want more efficiency, better time management,  consistent follow up with clients and prospects, organized receipts at tax time etc, you’re going to need more than some colored bins.  You’re going to need systems and processes that form the foundation upon which you can grow your business.

Start by making three lists:

1.  What problems are you having?
2.  What would make your work/life easier?
3.  If you were “perfectly organized”, as if that exists and by your own definition, what would be different than it is now?

Then create systems to solve each of the issues.

Quick Tips:

1.  The systems must be start to finish.  If you are creating a system to deal with business cards, the system needs to start when someone hands you the cards, not when the cards get to your office.  It doesn’t do any good to have the best contact management software in the world if your business cards are on the floorboard of your car or lost in your purse.

2.  Create one system at a time, tweak it until it’s right and implement it.  Once it becomes a habit then create another system.

3.  Make your new systems work into your existing paper management system, open shop/close shop, and admin hour.

4.  Base your systems on what you are likely to do.  You are the same person 10 minutes after you create the system who you were 10 minutes before you created the system.  Systems based on your personality and work-style have a much higher chance of success.

Top Five Organization Mistakes 1 Dec 2009, 2:35 pm

As the end of the year approaches, many people are preparing to make a resolution to be more organized.  Whether it’s your first or your fortieth such resolution, here are some things that can help it stick.

1.  No Plan – Way too many people’s “get organized plan” is to sit in the middle of their office floor with a box of file folders and a pen.  That trick never works.  In Renegade Organizing we follow three steps:  1. Think  2. Plan  3. Act.  You can’t skip the first two and hope to be successful.

2.  Confusing Clean and Organized – These are two separate things.  Being clean indicates a lack of clutter or dirt.  Being organized indicates the presence of systems and processes that allow you to find your stuff easily and use it effectively.  Those systems can be created to keep an office clutter free, but keeping the office clutter free will never substitute for having actual systems.

3.  One Size Fits All – The systems, processes, and procedures that you use should be tailored to you…you personality, work-style, and specific situation.  Avoid the temptation to try to use a book or system that acts as if one way to organize will work for everyone.

4.  The VOP Trap – Every disorganized person knows at least one VOP.  A VOP is a Very Organized Person, and more specifically, a Very Organized Person who can’t stop telling you how organized they are.  You can hear them say “Well, I’m VERY organized…if you would let me into your office, you would be VERY ORGANIZED as well”.  Don’t Do It!  If you are not naturally organized, do NOT try to copy the system of someone who is.  Not only will you end up being uncomfortable in an office that looks an awful lot like your mother’s/father’s/partner’s etc., it isn’t very likely to work and you’ll end up frustrated.

5.  No Time – Time is the fuel that runs a system.  Every single system that you create will require time.  There is no getting around it.  It would be like hiring an administrative assistant, telling them not to show up, then being surprised that no work got done.  Typically my clients spend 10 minutes in the morning, 10 at night and one hour per week on their admin work.  Your systems may require more or less time.

6. (I know I said five – what can I say, I’m a Renegade)  Being Unrealistic – During the process of creating systems, many people have an optimism bordering on delusion.  They forget who they are, how they work, and how little time they have, and create systems that are utterly unrealistic.  Here’s a hint:  If you tend to throw your paper on your kitchen counter, then once you have your paper intake system created, put it on the kitchen counter.  Now you’ll be much more likely to use it.  If that’s not its final destination then moving it gradually to where you want will increase the likelihood of success.  When it comes to organizing, you may be creating your systems today, but tomorrow you are the same person with the same schedule as you were and had yesterday.  Organize for the person you are and you’ll find that you are the organized person you want to be.

Conquer Your E-mail Inbox 4 Nov 2009, 8:47 pm

I’ve been hearing a LOT about “inbox zero” – the idea that at the end of the day you should have zero e-mails in your inbox.

There are a couple of things about this that made me suspicious right away:

1.  Any “one size fits all” approach to business organization and systems makes me nervous.

2.  The VOPs (“Very Organized People”) are using inbox zero as a way to say “Hey look, I’m better than you because I have zero e-mails in my inbox” .  Worse, I see people buying this and feeling bad about themselves.

First, let me just say it.  I have 3,636 items in my inbox right now.

Let me also say that I am absolutely on top of all of my e-mails, I know what e-mails require action, and which ones need to be done today.  Plus, I can find any e-mail that I need to find in seconds.

Which is to say that I can find my e-mail easily and use it effectively – and that, after all, is the Renegade Organizer’s definition of organization.  I could just as easily have zero e-mails in my inbox, but not have a handle on what I needed to do with my e-mails or when.  I could be bragging about my “inbox zero” status while rapidly falling behind on what I need to do to keep my business running.

That doesn’t mean that inbox zero is a bad thing necessarily, it just means that in the basic three step process of Renegade Organizing (1.  Think 2.  Plan 3.  Act) we can’t skip steps one and two and fall for some new cliche about the “right way to be organized”.

What could you do instead?

1.  Think

What do are you trying to accomplish with your e-mail.  What do you need to do?  How would you know if you were succesful?

2.  Plan

What are the options for doing that, which options make the most sense? (This step may also require you to learn about your e-mail system – take the time, it’s worth it)

3.  Act

Implement the system that makes the most sense to you and will help you be successful by your own definition in Step 1.

Need a little more help?

This is a perfect situation for The Golden System from Simple Systems for a Complicated World

You might also check out my earlier blog post “5 Steps to Ease in your E-mail”

Deathmatch: Efficiency vs. Effectiveness 9 Oct 2009, 9:47 pm

Ok, so it’s not really a death match, but you have to admit that would be really cool.  Two concepts enter, one concept leaves…

Seriously, I have noticed a lot of confusion about efficiency and effectiveness: what are they, what is the difference, which is more important. I see people getting caught up in being as efficient as possible and sacrificing results because of it.

Consider this quote by Peter Drucker:

“Nothing is less productive than to make more efficient what should not be done at all.”  Couldn’t have said it better myself!

Since this is Renegade Organizing we won’t be using the textbook ideas that I learned in school about efficiency and effectiveness, we’ll be using what I’ve learned about them in the real world.  While I’m at it since I’m not a college freshman writing a paper, I’ll spare you the sentence that starts “Webster’s Dictionary defines…” and get right to the meat of it.

The main difference between the two is that efficiency is a tool, effectiveness is an end result.

Measuring efficiency can be very tricky, and often takes us to the minimal possible measurement.  To riff off a previous blog for example, let’s say that I want to see how efficient I am dealing with my paper.  Since the amount of paper that comes into my office each day, week or month varies it’s difficult measure and compare by day, week or month.  I can measure how long it takes me to deal with each piece of paper, but the sheer volume of different types of paper and ways that they need to be dealt with makes that impractical.  I can group the types of paper, see how long it takes me to do each type of task and use that measurement, but since similar tasks can require more or less work on a case by case basis,  that’s not a very reliable measurement.  So I can make smaller groups of my original groups…ok you get the idea? This type of analysis can be complex and you often end up with measurements that are either imprecise or not very real-world applicable.

Effectiveness is typically much easier to determine.  Let’s say that I define effective paper management as dealing with every piece of paper on or before the deadline on which is has to be dealt.  That’s pretty easy to measure – by day, week, month, year, type of paper etc.  It’s a yes or no question. There are lots of tools to get me there, efficiency is only one option.

Efficiency is all about least.  Doing things in the least amount of time, with the least amount of effort, and the least amount of waste, often based upon the smallest possible measurable increment.

Effectiveness is about the most.  Doing the most possible, making the most of each activity, achieving the most goals – effectiveness is a big picture measurement.

I don’t know about you, but I’m generally a big fan of most over least.  That being said, there is definitely a place for each and it is not my intention to suggestion that efficiency is not important.  However, there are always times when efficiency and effectiveness are in conflict and one must choose between the two. For example, it’s not particularly efficient to lock the door as I leave my house in the morning (especially if I’m carrying my purse, briefcase, dance bag, gym bag, and talking on my cell phone).  However, I take the extra time to do it because I believe that it is effective at preventing a break-in and preventing a break-in is important to me.

The trick here is to keep your eye on the ball – the end result that you desire – and if either efficiency or effectiveness must be sacrificed, then I would suggest that it be efficiency.  Again using the paper management example:  Is it more efficient to only touch your paper once?  Perhaps – if your goal is to spend the least amount of time touching your paper.  Unfortunately, if you have to follow any piece of paper you pick up to completion, your inability to set your own priorities can really hurt your ability to be effective in doing the things that you need to do to reach your loftier goals – you know, goals like being able to afford food and housing.  Therefore, I say if it comes down to a choice let’s remember that efficiency is just one of many tools that can create effectiveness.  You wouldn’t feel bad for laying down your hammer if it wasn’t the right tool for the job, would you?   Sometimes efficiency is not the right tool for the job, so free yourself from the fear of being inefficient use whatever tools will make you effective.

What do you think?  Don’t be shy – just click on “leave comment” above (just under the blog title)  and tell us how you really feel.

Video Blog – The “Have It Or You Don’t” Myth 3 Sep 2009, 4:17 am

Hi Renegades,

Here is my very first video blog – it’s the first myth of organization “You Have it Or You Don’t”.  Learn how the myth came about, how to know if it’s keeping you from being organized, and what to do instead…

You Should Touch it Lots! 4 Aug 2009, 6:46 am

The way that I help clients deal with paper management requires them to touch a piece of paper several times.  Almost any time I bring this up in a workshop, somebody brings up the idea that you should “only touch paper once” – that as soon as you pick something up you should follow it through to completion.  There have been a number of books written about this and let me just say that, for my money, this is the WORST idea I have ever heard for small business organization.

I spent some time on the internet before writing this blog reading about people who espoused this theory. Everyone I found modified it in some way that actually required them to touch paper more than once.

This issue is priorities.  Tons of paper comes across our desks that requires us to take some action.  Some of it is important and some of it is not.  I cannot be in charge of my priorities if every time  I touch a piece of paper I have to follow it through to completion, even if the piece of paper I touch is low priority and will take me two hours to deal with.

One thing that often happens in traditional business organization/operations is that we confuse efficiency for effectiveness.  Those of you who have read my Paper Management book or taken the workshop know that I go through all of my “take action” papers every single day and make a decision about what is going to get done that day.  There are pieces of paper that I might touch 100 times .  You could argue with the efficiency of that system.  However, let’s focus on the steak here and not the peas (I’m working on my Texas metaphors – what do you think?).  It allows me to control my priorities, make decisions based on real deadlines, and I never forget about anything – but I don’t have to keep it all over my desk to avoid the “out of sight, out of mind” trap.  It’s hard to argue with the effectiveness of my system.

I’ve never met a busy business owner for whom “only touch it once” actually worked, but that doesn’t mean you aren’t out there.  As always, if what you are doing works, please ignore me and keep doing what you’re doing.

However, if you are beating yourself up because you are failing at the “only touch it once” philosophy, please feel free to permanently store that philosophy in the circular file and try something else immediately!

You Can’t Build a House, or a Business, Without a Foundation 6 Jul 2009, 9:49 pm

Disorganized business owners lose money.

As business owners it seems like we concentrate as much time, effort, and money as humanly possible on sales and marketing.  And that makes sense…that’s where the money comes from.  Let me be clear that I am not knocking sales and marketing – I’m currently working with Pete Monfre of Clarity Marketing (www.claritymarketingsupport.com) on my own strategy.  (By the way, Pete is a genius and is helping me with many things including creating a new logo, improving this website and designing book covers that are a lot more fabulous, so keep your eye out!)

Unfortunately, what many business owners end up learning the hard way is that administrative systems form the foundation of their business.   Just like a house, it’s pretty impossible to create a business without a foundation. It doesn’t matter how many people you meet networking if you can’t keep track of them.  It doesn’t matter how many referrals you get if you don’t follow up with them.  It doesn’t matter how many sales you make if you can’t fulfill the orders.  It doesn’t matter how many orders you fulfill if you don’t invoice.  It doesn’t matter how many invoices you send …ok, you get the picture.

Organizational systems do NOT stand over you with a big hammer and beat you up (“It’s not GOOD enough!”  “You have to FILE!” etc.).  Organizational systems sit underneath you and support you in everything that you do.  They are how you know that you won’t lose that business card, that you will remember to follow up with that prospect, that you have invoiced all of your clients,  that you can fax that document to someone as soon as you get back to the office (without having to launch a search party in your garage to find it).

Create and institute your systems one at a time, over time.  Rome was not built in a day and your organization systems won’t be either.  For many people summer is the slow time in their business.  Consider using this slowdown as a time to create the systems and processes that will support you when things pick up in the fall.  Brainstorm a list of all of the things that you do and start creating simple systems to make sure that you don’t miss steps or lose out on opportunities.

I have books (see the home page) and workshops (see the workshops page) coming up to help you do this in what I think is the fastest, easiest, most common sense way possible; but there are lots of options out there so find what works best for you and create a strong foundation so that your business can grow as big and as fast as you can imagine!