Green Accounting-Should Your Business Be Doing That?

If your company is like most, you define profit as the difference between revenues and expenses. In recent years, however, there has been a growing trend to look beyond the traditional definition of profit and include the social and environmental impacts of operating a business. The term “triple bottom line” was coined in the mid-1990s and is a way of accounting for the effect a business has on people and the planet. Triple bottom line accounting, sometimes abbreviated as TBL or 3BL, is a way for organizations to attempt to go beyond measuring traditional profit and account for their impact on society and the environment.

The 3 P’s:
People: considering staffing needs as well as contributions to society
Planet: minimizing your negative impacts on the environment including those of your vendors and suppliers
Profit: the economic benefit a business creates for society as a whole, not only for its owners

The benefits of TBL seem to be strong; however, there are many points to consider when deciding if it is right for your business. Some experts believe that adopting a TBL will increase traditional profits in the long run. Others argue that TBL can hinder a company in the market when competitors are only looking at traditional measures of profit. Another potential drawback is that a TBL adds another layer to their accounting system.

Companies that are socially responsible can adopt environmentally sustainable and community friendly practices without using a TBL. But these businesses will not be able to measure and track their progress over time. As the TBL grows in popularity, more companies will need to choose whether to follow it. It can deliver many benefits, but you need to plan carefully and seek advice from your accounting business advisor before implementing a TBL in your business.

Driving Down Vehicle Expenses-Part Two

Last week we began looking at ways to reduce vehicle expenditures during this tough economy. Today, we'll conclude this series with a few more helpful tips that can be implemented easily and efficiently.
Look for fuel bargains:
Some Chambers of Commerce offer fuel cost savings as benefits to their members and numerous supermarkets have fuel discount-for-purchase deals going with various gas stations.Check out the range of alternative fuels available – maybe a conversion to propane or a low ethanol mix gasoline suitable for standard engines is in order. Find the least expensive station using one of the internet sites that track fuel prices.
Lease your vehicles:
There are advantages in leasing over outright purchase, such as no large down payment, fixed monthly payments, and potential reduced maintenance and service costs. There may be tax benefits as well. There are, however, some potential disadvantages to leasing over purchase, the most obvious one being that the vehicle is never owned by you. The maintenance agreement can run against your interests as well, making you responsible for too many of the costs. Leasing vs. owning is one of those situations where you need to do the math carefully and get a number of quotes before making the decision.
Minimize insurance coverage costs:
Your commercial car insurance should be a business tax deduction. Additionally, a portion of your personal car insurance should come off your business taxes also if you are using your vehicle for business related purposes. Different companies can charge very different premiums for the same coverage – do some price comparison checking on your vehicle insurance needs.
Change vehicles:
Use the most efficient vehicles for the purposes you are putting it to. Doing the bank run in the company truck is not efficient. With the government's stance on the environment, eco-friendly vehicles that improve fuel economy and reduce road tax are becoming more appealing. Lower emission vehicles are now available in most types from small runarounds to commercial light duty up to heavyweights weighing 18,000 - 33,000 lbs gross vehicle weight.

As always, please contact a Simons Bitzer team member with questions or comments.

Driving Down Vehicle Expenses-Part One

The current economic downturn may have pushed fuel and vehicle costs lower for the time being but that is not going to outlast the first signs of economic improvement. If you want to avoid being held hostage by increasing fuel and vehicle costs in the future, now is a good time to look at how you can manage your vehicle related business costs.

Limit the use of company vehicles to company work:
Allowing employees to use company vehicles for private jobs or to take home for the weekend is opening you up to large scale abuse, not to mention the added fuel expense and wear on the vehicle.

Claim all mileage allowances and vehicle related expenses:
People using their private vehicle for business journeys can claim tax free expenses for that journey. Most small businesses could legally increase their tax deductions simply by keeping better records of their business related travels. Log each day’s trips and any vehicle related expenses incurred during that day. Put the information in a spreadsheet for your accountant to use at the end of the year so you do not lose track of the real amount expended.

Keep your vehicles properly maintained:
Poorly maintained vehicles can boost fuel consumption by up to 15%; a clogged air filter by 10%; just one 8 psi (56 kPa) under-inflated tire can reduce its life by 10,000 miles and increase fuel consumption by 4%. Keeping your vehicle in top operating condition saves fuel and money, keeps it reliable, preserves resale value and reduces long term maintenance costs.

Consolidate your trips:
Plan errands and deliveries so that you do them together rather than as separate trips. Schedule deliveries in particular areas for particular days. Invest in a GPS and plan the daily run to take the shortest overall distance or most efficient route.

Strategies for Getting Paid on Time-Part 3

Three weeks ago Simons Bitzer & Associates launched a weekly blog dedicated to providing advice to today's business owners. We wanted to begin by discussing a topic that we felt would be of great interest and provide an immediate impact. Over the last two weeks, we have discussed some easy to implement strategies that allow you to collect your receivables on time. Today will be our final feature in this three-part series.


Empower Your Invoice: Instead of a monthly run, consider sending invoices as soon as a service has been carried out or when a product is supplied. Print the actual due date on the invoice rather than a “within 30 days” instruction.

Calculate Average Debt Age: You run regular reports to check debt age, but how do you use the results? To measure average payments against your target terms, divide your accounts receivable by annual sales on credit (not cash sales) and multiply by 365. This shows how efficiently you are managing debts compared to your goal of say a 30 day payment cycle. A result of “55” for example shows that you are averaging 25 days over your 30 day target.

Collect Information: Securing thorough information about a new account avoids obstacles to debt recovery. Collect as many telephone numbers and email addresses as you can to make contact with the client more likely.

You will almost always have some customers who fall behind; however, these simple changes will assist in speeding payment, improving cash flow, and identifying problem accounts more quickly.


For more guidance on cash flow management, accounts receivable and other areas where your business can be improved, please contact Simons Bitzer & Associates by visiting http://www.simonsbitzer.com/ or calling 782-3070 for a FREE one hour consultation with one of our team members.