Revenue Per Employee
Revenue per employee can be an interesting number. It is easy to compute: take total revenue for the year and divide by the number of employees you had during the year. (This applies even if you are a solo business owner.) You may need to average the number in case you had turnover or adjust it for part-time employees. Whether your number is good or bad depends on the industry you are in as well as a host of other factors. Compare it to prior years; is the number increasing (good) or decreasing (not so good)? If it is decreasing you might want to investigate why. It could be you have many new employees who need training so that your productivity has slipped. It could also be that revenue has declined. Customer Acquisition Cost If you have ever watched Shark Tank®, you know that CAC is one of the most important numbers for investors. This is how much it costs you in marketing and selling costs to acquire a new client. Factors such as annual revenue or the lifetime value of a client will affect how low or high you can allow this number to go. Cash Burn Rate How fast do you go through cash? The cash burn rate calculates this for you. Compute the difference between your starting and ending cash balances and divide that number by the number of months it covers. The result is a monthly value. This is especially important for startups that have not shown a profit yet so they can figure out how much cash they need to borrow or raise to fund their venture. Revenue Per Client Revenue per client is a good measure to compare from year to year. Are clients spending more or less with you, on average, than last year? Customer Retention If you are curious as to how many customers return year after year, you can compute your client retention percentage. Make a list of all the customers who paid you money last year. Then create a list of customers who have paid you this year. (You will need to two full years to be accurate.) Merge the two lists. Count how many customers you had in the first year. Then count the customers who paid you money in both years. The formula is: Number of customer who paid you in both years / Number of customers in the first or prior year * 100 = Customer retention rate as a percentage New customers do not count in this formula. You will be able to see what percentage of customers came back in a year. You can also modify this formula for any length of time you wish to measure. Try any of these five metrics to gain richer financial information about your business’s performance.
This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.
August 1, 2016, is the deadline for filing retirement or employee benefit returns (5500 series) for plans on a calendar year. (The usual due date of July 31, 2016, is a Sunday.)
You’ll also want to note two IRS updates regarding Form 5500. First, the compliance questions are optional. Form 5500 includes new compliance questions for 2015 tax years (returns with a due date of August 1, 2016, for calendar year filers). Because the questions were not approved by the Office of Management and Budget, the instructions for Form 5500 say plan sponsors should skip them when completing the form. Also, some Form 5500-EZ filers will need to file electronically. If you’re required to file at least 250 returns of any type with the IRS, including information returns (for example, Form W-2 and Form 1099), you may need to electronically file Form 5500-EZ for calendar year 2015.
This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.
In May, the Department of Labor updated the rules for paying overtime. The changes take effect December 1, 2016, and will affect 4.2 million workers across the country.
Under the new rules, salaried employees who earn less than $913 per week ($47,476 per year) will be eligible for overtime pay. That’s double the annual exempt amount of $455 per week ($23,660 per year) from previous rules. In addition, the total annual pay for an exempt highly compensated employee is $134,004 (up from $100,000 previously). This new threshold will increase every three years beginning in 2020. 
To avoid penalties and fines for noncompliance, begin reviewing your payroll now for adjustments needed. Important steps that you should take now include:
For employees who become eligible for overtime under these new rules, employers have a choice of three actions they can take:
In some cases, a business owner may find it cheaper to hire an additional part-time worker to handle work that now requires overtime hours. You can find more about the new overtime law here.
This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.
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