Posted on 30 August 2010.
In this economy, companies are trying harder to protect what they own, at minimal costs. Manufacturers do not want their confidential business information, their trade secrets, taken by desperate competitors or sold by disgruntled employees. Here are 10 physical steps businesses can take within their plants to protect trade secrets:
| 1. Identify potential trade-secret ‘leak points.’ Minimize exposure of trade secrets to them |
| 2. Password-protect confidential computer files and establish secure storage files for hard copies of confidential documents. |
| 3. Establish general and restricted zones within the plant. Confine all trade-secrecy development and utilization, where possible, to the restricted zones. |
| 4. Utilize warning signs on all entrances to the physical plant to advise non-employees to utilize only a secure, monitored ‘main entrance.’ |
| 5. Utilize color-coded identification badges for external use by all employees during work hours. Have specific colors of badges correlate with permission to be within restricted and general zones of the plant. |
| 6. Post ‘Authorized Employees Only’ signs at the entry to all restricted zones. |
| 7. Use locked doors for all restricted zones. Make them open only by scanning correctly colored ID badges or ID cards. Some companies scan fingerprints or eyeballs. |
| 8. Utilize painted, directional floor lines for visitors and tours to ensure they do not stray into restricted zones. |
| 9. Screen all visitors by having them sign a log book. Some companies make visitors produce a passport or birth certificate. |
| 10. Prohibit any photograph taking or recording by visitors.
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|  Donald S. Holland, Esq. is the senior partner at Holland & Bonzagni, P.C., an intellectual property law firm based in Longmeadow; www.hblaw.org.
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Posted in 10 Points, Departments
Posted on 16 August 2010.
By TERESA A. JUDYCKI, CPA
| 1. In addition to being ‘ordinary and necessary,’ entertainment expenses must pass another test to be deductible: they must be either directly related to or associated with your business. |
| 2. A ‘directly related’ meal or entertainment either takes place in a clear business setting, or the main purpose is business and there is an expectation of specific benefit, not just goodwill. Business must actually be conducted — meeting, discussion, etc. |
| 3. An expense is ‘associated with’ the conduct of business if the meal or entertainment precedes or follows a substantial business discussion and there is a clear business purpose which may be either to generate new business or to encourage continuation of a business relationship. |
| 4. Lavish or extravagant entertainment is not deductible. The expense must be reasonable in light of the facts and circumstances. |
| 5. The deduction for a skybox or a private luxury box rented for more than one event in the same sports arena is limited to the price of a non-luxury box seat for each seat in the skybox. |
| 6. You cannot deduct more than the face value of a ticket to an entertainment event. This limitation applies equally to amounts paid to scalpers and service fees paid to ticket agencies. |
| 7. Reciprocal meals or entertainment are not deductible (i.e. a group of business associates takes turns picking up the tab). |
| 8. Once the expenditure qualifies, it is only 50% deductible. There are exceptions that include employee summer outings or holiday parties. |
| 9. What about charity golf tournaments? If they qualify as entertainment expenses, charity sports events are not subject to the 50% disallowance as long as the primary purpose is to benefit a charity, the entire net proceeds go to the charity, and the event uses volunteers to perform substantially all the event’s work. |
| 10. Strict substantiation rules must be met. The evidence must support the amount, time and place, business purpose (including the nature and duration of business discussions), and your business relationship to the person entertained. |
|  Terri Judycki is a senior tax manager with the Holyoke-based public accounting firm
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Posted in 10 Points, Departments
Posted on 05 July 2010.
By JEAN M. DeLISO
| 1. Pay attention to customer details. Recessions test customer loyalty because businesses that are strapped may let attention to detail and overall customer service slip. But this is the time when details matter most. The key to loyalty is to let them know they matter to you. |
| 2. Appreciate your employees. The recession means sacrifices for everyone, but it is time to make sure valued workers know how much they are appreciated. Small gestures, like movie tickets, can keep morale steady. |
| 3. Increased unemployment results in a larger employee pool. For employers looking to hire, don’t shy away from those laid off, and consider hiring a commission-based employee. |
| 4. Supplement benefits, not costs: Consider a voluntary payroll deduction (VPD) program for your employees where they can contribute to an IRA or purchase additional personally owned life or disability insurance from payroll deduction. |
| 5. Protect yourself. You are the most important piece of the puzzle, so take care of yourself by exercising, eating right, and getting enough sleep. Also, it’s important to think about how the business would function without you. A key-person life insurance policy can provide a sense of security that the business will continue and your family will be protected. |
| 6. Build a team of professional advisors. Many independent business owners think, “what team of professionals?” Have on hand the four key players — attorney, accountant, banker, and insurance professional — who can advise and support you. |
| 7. Consider a buy-sell agreement. It’s important to put in writing a formal plan of action that will allow a smooth transition of ownership in the event of the premature death or disability of your partner. |
| 8. Determine how you can fund your buy-sell plan. There are many options available — you may pay cash, take a loan, sell assets, or consider a life-insurance policy. |
| 9. Keep your lines of credit open, and maintain a good cash buffer. |
| 10. Breathe, and enjoy your daily challenges.
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|  Jean M. Deliso is president of Deliso Financial and Insurance Services; (41Dennis G. Egan Jr. is an associate with the regional law firm Bacon Wilson, P.C, who specializes in business and corporate law; (413) 781-0560; degan@ baconwilson.com
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Posted in 10 Points, Departments
Posted on 21 June 2010.
1The International Accounting Standards Board (IASB) was created in 2001 to develop an international set of accounting standards known as the International Financial Reporting Standards (IFRS).
2In May 2008, the American Institute of CPAs Council approved the International Financial Reporting Standards (IFRS) as a recognized standard-setter for financial reporting. More than 100 other countries have adopted IFRS as the global standard.
3In July 2009, the IASB issued IFRS designed for use by small and medium-sized entities (SMEs). IFRS for SMEs are not intended to be used by not-for-profit organizations or governmental agencies.
4Small and medium-sized entities (SMEs) in the scope of the standard include entities that publish general-purpose financial statements for external users and do not have public accountability.
5One projected timeline estimates that IFRS could be mandatory in the U.S. with a staggered adoption period of 2015-18.
6Once fully adopted, International Financial Reporting Standards will replace U.S. Generally Accepted Accounting Principals (GAAP) as the basis for financial reporting.
7U.S. GAAP, IFRS, and IFRS for SMEs are similar, with basic accounting concepts such as comparability, going concern, and materiality.
8U.S. GAAP, IFRS, and IFRS for SMEs are different, with certain accounting and reporting treatments. A few of these differences are the treatment of LIFO inventory costing, goodwill carrying value, impairments and write-downs, research and development costs, and borrowing costs for self-constructed assets.
9IFRS reporting is considered simpler and more ‘principles-based’ than the ‘rules-based’ GAAP financial reporting, which may better meet the needs of financial-statement users. The change in reporting may have implications on an entity’s accounting, taxes, financing, as well as processes and controls.
10While full convergence from GAAP to IFRS reporting standards is years away, companies should speak with their accounting advisors to determine their requirements for adopting the new standards.
Tony Gabinetti, CPA is a senior audit manager at Meyers Brothers Kalicka, P.C. in Holyoke; (413) 536-8510.
Posted in 10 Points
Posted on 26 April 2010.
By Susan Bellows
| 1. Job Design: The job description needs to include the skill set of the ‘ideal candidate.’ Someone who’s great at cold calling might not excel at paperwork, which may be a key requirement at your company. |
| 2. Pre-qualifying Interview Questions: Thoroughly screen applicants before inviting them for an interview. Ask open-ended questions, such as “how would you rate your personal drive, and what specifics can you cite?” |
| 3. Behavioral Interviewing: During the interview, ask questions that uncover what’s not on the résumé. For example, “tell me about a time when it was necessary to admit to others that you had made a mistake. How did you handle it?” |
| 4. Motivators: Ask questions about what really motivates the individual. Your company may not provide the motivators that drive a particular candidate, such as the opportunity to continually learn or mentor others, which would not be a good fit for either of you. |
| 5. Candidate Assessment: Résumés don’t tell the whole story. Invest in candidate testing to reveal the real person. Imagine if you knew ahead of time that a sales person couldn’t deliver on résumé claims. |
| 6. References: Have the candidate line up phone appointments for you with their last five past managers. For details, read Avoid Costly Mis-Hires!, a free e-book at www.topgrading.com. |
| 7. Onboarding: Even perfect candidates will flounder with the ‘just follow Joe around’ orientation method. Instead, develop or borrow a formal process for integrating new hires. |
| 8. Expectations: Make your expectations of salespeople specific and explicit to them. Don’t assume their assumptions match yours. |
| 9. Ongoing Coaching: Salespeople, in particular, need constant encouragement and to be challenged regularly. You will be trusted and respected for it. |
| 10. Constant Feedback: Great sales leaders encourage ongoing and open communication. Make it safe for salespeople to tell you what is going on ‘out there’ and that there’s no limit to what you can achieve together.
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|  Susan Bellows is a sales strategist who helps businesses select and retain high-performing salespeople as well as determine whether and how underperformers can be turned around; (413) 566-3934; www.susanbellows.com
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Posted in 10 Points, Departments
Posted on 12 April 2010.
By DENNIS G. EGAN Jr., Esq.
| 1. File annual reports. In Massachusetts, annual reports must be filed on or before the anniversary of formation and are required to attain good standing to secure financing, enter into purchase-and-sale transactions, and transact other business. |
| 2. Keep business insurance current and complete. Unemployment insurance, Social Security, and workers’ compensation are all required by law. Make sure your insurance is up to date and your business is adequately covered. |
| 3. Create a succession plan. Then memorialize it through a cross-purchase or redemption agreement. These may be funded through whole, term-life, and/or disability insurance. |
| 4. Update your estate plan. As businesses succeed and property and assets are bought and/or sold, the composition of your estate may change. Make sure that your estate plan keeps pace. |
| 5. File and pay taxes in a timely fashion. One thing is certain: not filing and paying taxes in a timely fashion will lead to penalties and interest that far exceed the underlying tax obligation. |
| 6. Make sure your business is qualified to do business in every state in which you conduct business. Non-compliance can lead to significant penalties and interest on top of the filing fees. |
| 7. Review your employment contracts. Recent case law has changed what constitutes an employee versus an independent contractor, and failure to properly categorize workers can lead to significant legal costs, administrative expense, and tax obligations. |
| 8. Review or create a comprehensive employee handbook. This notifies employees of your business’ policies and procedures. It helps to prevent confusion, protects your business from possible litigation, and creates a better work environment. |
| 9. Revisit your business health-insurance coverage. This will help you to balance the health needs of your employees with containing costs. |
| 10. Service your company’s debt. Are you receiving the most favorable terms available? You may be able to refinance your company’s debt, resulting in a lower interest rate and more-favorable repayment terms.
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|  Dennis G. Egan Jr. is an associate with the regional law firm Bacon Wilson, P.C, who specializes in business and corporate law; (413) 781-0560; degan@ baconwilson.com
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Posted in 10 Points, Departments
