Thank you to Trilogy Partners for this great article.  Go to www.gettrilogypartners.com for more info.

 

It’s a perennial question: why build a budget and forecast sales when you know they might be wrong? If we are completely honest, few sales forecasts, budgets or projections are totally accurate. So why invest the time and effort?

 

There are six strong reasons to create budgets, forecasts and projections despite a likelihood of error.

 

1. Understand Your Business Drivers

 

Budgeting forces you to analyze how your business makes money. In order to build a budget or calculate a forecast, you must understand your business. You must understand what drives your revenue, cost drivers and assumptions about how to be more cost efficient. Only by comparing the actual state of your business to a budget can you determine which of your assumptions worked and should continue and which assumptions did not work. Without this insight, you will not know how to fix the problems that derailed your assumptions.

 

2.Planning

 

Budgets and forecasts facilitate better planning. These plans help you manage and control production, costs and deployment of people. Our clients utilize budgeting with forecast to help eliminate bottlenecks to capacity by either redirecting their production or budgeting additional resources to match their demand. Depending on the predictability of your industry, budgets could be for a number of years or for 12 – 18 months. For rapidly changing companies that place a premium on fast reaction time, budgets must be flexible. Forecasts will enhance the predictability of your business. The more accurate the predictions, the more effectively and efficiently they can run the business.

 

3.Benchmarking and Measuring

 

Budgets and forecasts are a valuable way to measure how the company is doing. It is only when you know how you are doing that you are in a position to react quickly. You will be able to benchmark against your industry and know where you are not as efficient or where you have strengths. Without it, you have no way to determine if you are doing better or worse than your competitors. You can also utilize your own history to measure trends. Without the proper measurements, you will not know if your company is growing faster than you can afford or expected to grow or if your profits are not in alignment and that the company needs to rethink its products or services.

 

4. Manage Beyond Profits

 

Budgets and forecasts help you beyond operating from only a profit point of view. From our experience, you can reward your people on how well their business units, profit centers or teams perform relative to their forecast. Our clients also budget capital expenditures, asset management, inventory, debt requirements, cash flow and/or human resources needs.

 

5.Communicating and Motivating

 

By involving all departments of the company with an open exchange of goals, ideas and awareness of how their involvement contributes to the profit of their organization, we have found that this understanding has improved communications. In combination with realistic goals, budgets inspire and motivate employees to achieve their best.

 

6.Accountability and Compensation

 

Our clients employ budgets as a significant factor to assist in holding their managers and line employees accountable. Often compensation plans are designed from the budgets that are jointly developed with top management and their team members.

 

In light of the six reasons above, you should create budgets and forecasts, even if they are not 100% correct. You will have a better basis for planning, management and compensation. Our experience has proven effective budgeting has enabled our clients to design accountability structures and continuously look at their operations and systems from a more predictable future profit point of view.

 

IRS Provides Tax Relief to Victims of Hurricane Irene

Updated 9/7/11 with expanded federal disaster area. Updated 9/2/11 with expanded federal disaster area. IR-2011-87, Sept. 1, 2011 WASHINGTON –– The Internal Revenue Service is providing tax relief to individual and business taxpayers impacted by Hurricane Irene. The IRS announced today that certain taxpayers in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Puerto Rico and Vermont will receive tax relief, and other locations are expected to be added in coming days following additional damage assessments by the Federal Emergency Management Agency (FEMA). The tax relief postpones certain tax filing and payment deadlines to Oct. 31, 2011. It includes corporations and businesses that previously obtained an extension until Sept. 15, 2011, to file their 2010 returns and individuals and businesses that received a similar extension until Oct. 17. It also includes the estimated tax payment for the third quarter of 2011, which would normally be due Sept. 15. Full details, including the start date for the relief in various locations and information on how to claim a disaster loss by amending a prior-year tax return, can be found in tax relief announcements for individual states on this website. The tax relief is part of a coordinated federal response to the damage caused by the hurricane and is based on local damage assessments by FEMA. For information on disaster recovery, individuals should visit disasterassistance.gov. Tax Relief Available So Far Filing and payment relief is currently available to taxpayers in federal disaster areas declared in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Puerto Rico and Vermont. The IRS expects to announce tax relief for taxpayers in other areas as damage assessments continue. The IRS encourages taxpayers and tax practitioners to monitor Tax Relief in Disaster Situations on this website for updates. So far, IRS filing and payment relief applies to the following counties and municipalities: In Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham; In Massachusetts: Berkshire and Franklin; In New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union and Warren; In New York: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Otsego, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren and Westchester;  In North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Greene, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington and Wilson; In Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canovanas, Carolina, Cayey, Cidra, Coamo, Comerio, Humacao, Jayuya, Juncos, Loiza, Luquillo, Orocovis, Patillas, Ponce and San Juan. In Vermont: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington and Windsor;

NPR:

“When you are the nation’s largest owner of foreclosed homes, even little things can get expensive fast. Such is the case for mortgage giant Fannie Mae, which as of March 31 had a mind-boggling 153,000 foreclosed homes on its books.

One example — mowing the lawn. Two men swoop in on a foreclosed town house in Lanham, Md., quickly mowing and edging the small front yard. Fannie Mae owns this home, so it’s paying for the lawn crew to come every two weeks or so to keep up the curb appeal.

But it’s not just this lawn. There are tens of thousands more. Fannie Mae officials won’t say how many lawns it’s paying to maintain, so we’ve done some back-of-the-envelope calculations of our own:

Say only half of the homes have lawns, a conservative estimate, that’s still more than 75,000 lawns.

153,000/2

X 6 (a six-month grass-clipping season)

X 2 (mowing twice a month)

X $40 (a reasonable guess at how much it costs to mow a lawn)

= $36.7 million

>

Source:
The Cost Of Owning 150,000 Foreclosed Homes
Tamara Keith
NPR, July 7, 2011
http://www.npr.org/2011/07/07/137647997/the-cost-of-owning-150-000-foreclosed...

Small Firms, Big Lawyers: 20 Ways to Write Like a Tool

By Jay Shepherd

Ever see Fight Club? Yeah, me neither. The 1999 Brad Pitt movie was more of a cult film than a commercial success, although it did make back its costs. But the movie did have a line that became something of a meme, and was once recognized by Premiere magazine as the 27th greatest line in movie history (which seems dubious, but whatever):

The first rule of Fight Club is you do not talk about Fight Club.

If only lawyers had the same rule.

You see, being a lawyer is like being a member of an elite club. OK, maybe not as elite as we like to think; there are more than a million members in the US. But elite enough. And the problem is, too many of us are dying to show off to others that we’re members of law club. And one of the ways we do it is by trying to sound like a lawyer when we speak, and especially when we write. This is a problem because sounding like a lawyer is the same as sounding like a tool.

I’ve come up with 20 lawyerisms that do nothing to advance the message you’re trying to send, but instead show that you’re a member of law club. And that you sound like a tool.

How many of the 20 do you use?

 

1. Pursuant to. This is the granddaddy of them all. No real person would ever say “pursuant to” in conversation, unless what they really meant was “I’m a lawyer; punch me in the head.” Replace this legalese monstrosity with English words, like “under,” or “following,” or even “as required by.”

2. Numerals in parentheses. Lawyers love to write train wrecks like this: “Mr. Smith has two (2) children from his first marriage.” Really? You think the reader won’t know what you mean by the word “two”? You think adding the numeral helps? You’re wrong. Lawyers have no idea why they practice this fetish. The only reason is that they’ve seen other lawyers do it. It serves zero (0) purpose. Cut it out.

3. Doublets and triplets. It’s not enough for lawyers to say something once. They bizarrely need to repeat themselves. That’s why they send “cease-and-desist letters,” when “cease” and “desist” mean the same thing. They make “last-and-final offers,” because maybe the reader doesn’t really understand what “last” means. Other examples: due and payable; agree and covenant; null and void; give, devise, and bequeath. This is a practice you should cease. And desist. And stop. And so on.

4. Prior to. This is just a fancy way of saying a word that you learned in kindergarten: “before.” What’s wrong with “before”? Do you think that your fanciness impresses people? If so, why don’t you do it all the time? Ask the gate attendant at the airport what time the “jet-powered flying machine” leaves. She’ll probably signal TSA to give you a re-groping.

5. Due to. Lawyers love to use this phrase, but they use it incorrectly almost all the time. “Due to” is an adjectival phrase, not an adverbial phrase. It modifies a noun, not a verb or verb phrase. Easy way to remember this: Make sure it’s preceded by the verb “to be.” Incorrect: “The defendant was arrested due to his punching the lawyer in the head.” Use “because of” instead. Correct: “The defendant’s rage was due to his lawyer’s toolishness.”

6. In the event that. Seriously? WTF is wrong with the word “if”? Are you getting paid by the word?

7. Clearly. Judges hate this word more than any other. Either something is clear or it’s not. Telling me it’s clear doesn’t make it so. It’s like telling someone that the story you’re about to tell is funny. I’ll decide that, thanks. I don’t need your help. When judges see the word “clearly,” they know that what follows will be anything but clear.

8. However (at the start of a sentence). For some reason, lawyers seem to think that you can’t start a sentence with a conjunction. But they’re wrong. And I can prove it. Look in any respectable usage guide and you will find no such grammar rule. Good writers very often start sentences with conjunctions. And they should. Using “however” at the start of a sentence is just a ponderous way to avoid saying “but.”

9. Very unique. “Unique” means “one of a kind.” Something can’t be “very unique,” or “really unique,” or “quite unique”; nor can one thing be “more unique” than another. If it’s unique, then say just that.

10. Shall. Another favorite of lawyers, maybe because they like bossing people around. But “shall” is a terrible word, because people can’t agree on what it means. Sometimes it means “must”; sometimes it means “will”; sometimes it means “agrees to”; and sometimes it means “may.” Because of this wishy-washiness, many lawyers use the word in different ways within the same agreement. In fact, there have been more than 1,300 reported cases discussing the definition of “shall.” It’s not worth the trouble. Use “must,” “will,” or “agrees to” where appropriate, and ban “shall” from your vocabulary.

11. Disinterested. The word even sounds lawyerly, since lawyers are often talking about interests and interested parties. But most lawyers use it incorrectly. “Disinterested” means “impartial,” not “not interested.” If a baseball game bores you, it means you are “uninterested” in its outcome. You’re only “disinterested” if you mean that you don’t have any money riding on it.

12. Comprised of. Those two words never belong next to each other. You mean “composed of.” “Comprise” means “consist of.” The group comprises members, or the group is composed of the members. If you’re saying “comprised of,” you’re doing it wrong.

13. And/or. This is not English. This is what lawyers do to talk about law club. No one reading a sign that says “no talking or running in the halls” is going to think that talking is prohibited, running is prohibited, but if you talk while running, that’s cool. The “and” is contained in the “or.”

14. Using virgules. What’s a virgule? It’s a slash (/). Don’t use it. Lawyers like to sprinkle it into their prose to mean “or” (see number 13) or “and” (“attorneys/staff”) or “to” (“Boston/Washington shuttle”). (That last example merits an en dash.) And if you think that “he/she” is an appropriate way to avoid sexist language (which is an important goal), then you should add the neuter, too: “s/he/it” — because that’s what your writing will sound like.

15. Said (as an adjective). Said fetish is one of the worst examples of membership in law club. No human talks like that. Use “this,” “that,” or “the” instead.

16. Same (as a pronoun). It’s not a pronoun. It’s a silly thing that lawyers do. (“The parties agree to same.”) Try “it” instead.

17. Hereinafters and parentheticals. Many lawyers think their readers are idiots. They imagine that the judge reading their brief will forget the name of the plaintiff, which is contained in the caption, and then rewritten inches below: “The plaintiff, John Q. Smith (hereinafter referred to as ‘Mr. Smith’), brings this action ….” And yet those same readers somehow manage to get through the sports page without these parentheticals. Only a lawyer would write this: “Red Sox (‘Red Sox’ or ‘Sox’) pitcher Josh Beckett (hereinafter ‘Mr. Beckett’) gave up five (5) runs against the Phillies (‘Phillies’) ….” The only exception is when there might be confusion, such as when there are two Smiths in the story.

18. Overcapitalization. Some lawyers think that terms need to be capitalized up the wazoo. Otherwise, they fear, the client might think that “the agreement” could be some other agreement, instead of the “Agreement” that she’s reading right now. Really? If I asked you what you thought of this Post, would that capital P make it clearer for you? This isn’t German, people. Use capitals sparingly, in proper names and at the start of sentences.

19. ALL CAPS. Don’t do this. Some lawyers think it’s acceptable to use all caps as a form of emphasis. They are unreadable, and they show the reader that you don’t know what you’re doing.

20. Above-mentioned, aforementioned. Again, quit treating your reader like he’s an idiot. He’s going to remember that I mentioned Josh Beckett a few paragraphs ago without my saying “the above-mentioned Beckett.” And “above-referenced” is even worse, because “reference” is really a noun, not a verb.

There are other examples, but you get the idea. If you don’t want to sound like a tool, don’t do these things. It’s like talking about law club.

In fact, it’s a good idea to develop a firm style guide (something you really can’t do at a big firm). If you want an example, email me and I’ll send you the guide we used at Shepherd Law Group. In your email, feel free to tell me how many of the above-referenced twenty (20) lawyerisms you’ve used. I promise I won’t call you (“you”) a tool.

275,000 Nonprofits Have Lost Tax-Exempt Status

June 9, 2011

The Internal Revenue Service has announced that approximately 275,000 organizations under the law have automatically lost their tax-exempt status because they did not file legally required annual reports for three consecutive years. The IRS believes the vast majority of these organizations are defunct, but it also announced special steps to help any existing organizations to apply for reinstatement of their tax-exempt status.

Congress passed the Pension Protection Act (PPA) in 2006, requiring most tax-exempt organizations to file an annual information return or notice with the IRS. For small organizations, the law imposed a filing requirement for the first time in 2007. In addition, the law automatically revokes the tax-exempt status of any organization that does not file required returns or notices for three consecutive years.

For several years, the IRS has made an extensive effort to inform organizations of the changes in the law through multiple outreach and education avenues, including mailing more than 1 million notices to organizations that had not filed. In addition, last year the IRS published a list of at-risk groups and gave smaller organizations an additional five months to file required notices and come into compliance. About 50,000 organizations filed during this extension period. Overall, the IRS believes the vast majority of small tax-exempt organizations are now in compliance with the 2006 law.

“During the past several years, the IRS has gone the extra mile to help make tax-exempt groups aware of their legal filing requirement and allow them additional time to file,” IRS Commissioner Doug Shulman said. “Still, we realize there may be some legitimate organizations, especially very small ones, that were unaware of their new filing requirement. We are taking additional steps for these groups to maintain their tax-exempt status without jeopardizing their operations or harming their donors.”

As part of this, the IRS issued guidance today on how organizations can apply for reinstatement of their tax-exempt status, including retroactive reinstatement. In addition, the IRS announced transition relief for certain small tax-exempt organizations – those with annual gross receipts of $50,000 or less for 2010 – that were made subject to the new "postcard" filing under the PPA. The relief allows eligible small organizations to regain their tax-exempt status retroactive to the date of revocation and pay a reduced application fee of $100 rather than the typical $400 or $850 fee. Full details are available in Notice 2011-43, Notice 2011-44 and Revenue Procedure 2011-36, issued today.

If an organization appears on the list of organizations whose tax-exempt status has been automatically revoked, it is because IRS records indicate the organization had a filing requirement and did not file the required returns or notices for 2007, 2008 and 2009.

The list of organizations whose tax-exempt status has been revoked for failing to meet their filing requirement, available on the IRS website at www.IRS.gov, includes each organization’s name, Employer Identification Number (EIN) and last known address. It is searchable by state. It also includes the effective date of the automatic revocation and the date it was posted to the list. The IRS will update the list monthly to include additional organizations that lose their tax-exempt status.

The vast majority of tax-exempt groups file their required returns and are unaffected by the revocation listing. In addition, the IRS believes the vast majority of the newly revoked groups are no longer in existence and need to be removed from the tax-exempt listing as the 2006 law requires.

This listing should have little, if any, impact on donors who previously made deductible contributions to auto-revoked organizations because donations made prior to the publication of an organization’s name on the list remain tax-deductible. Going forward, however, organizations that are on the auto-revocation list that do not receive reinstatement are no longer eligible to receive tax-deductible contributions, and any income they receive may be taxable.

Publication on the list of organizations whose tax-exempt status has been revoked serves as notice to donors and others that they may no longer rely on a prior listing in IRS Publication 78, Cumulative List of Organizations, as an indication of an organization’s tax-exempt status or its eligibility to receive tax-deductible contributions. An updated version of Publication 78 with current listings will be published on the IRS website later this week. Nor can donors rely on an IRS determination letter issued to the organization prior to the date of automatic revocation.

Existing organizations that seek to have their tax-exempt status reinstated must complete an application and pay a user fee regardless of whether they were originally required to file such an application. More information on the reinstatement process, including retroactive reinstatement, can be found on IRS.gov.