Running a Business is HardLessTimeSpent Blog-o-Magichttp://blog.url.com/2015-01-12T00:00:00+00:00Allan BranchNew Hire Checklist - Things To Do When You Hire Someonehttps://LessTimeSpent.com/blog/new-hire-checklist/2015-01-12T00:00:00+00:002015-01-12T00:00:00+00:00Allan BranchWhat do you do as a business owner when you hire a new employee or contractor?<p>You’re running your small business. One day you drop into your chair to catch your breath, and you realize you need help. Maybe you have employees, but they’re working as hard as you are. You need a new hire.</p>
<p><strong>What’s the paperwork process when you hire someone?</strong></p>
<p>The first thing you need to sort out is this: Are you hiring an employee or an independent contractor. This will determine your tax situation and your paperwork because the IRS treats the two types differently.</p>
<p>A contractor does the work you want, but you don’t tell them how to do it. Often, the contractor works independently, and then brings or sends you the result/product. How they arrive at that result is up to them.</p>
<p>With an employee, you have a lot more direct control over their work, and the means they use to get the job done. An employee expects you to provide tools and materials, as well as benefits like insurance, vacation time, a pension plan and sick days.</p>
<p>The difference is important because a contractor is responsible for paying their own taxes and keeping their own records, whereas an employee has their taxes deducted. <a href='https://lessaccounting.com/blog/w2-vs-1099/'>Contractors receive a 1099 form, employees a W-2.</a> Whatever you decide, document it. If the IRS has questions later, at least you’ll be able to show them something that details your thought process.</p>
<p>Once you know what kind of hire you’re making, you can work up a new hire checklist of the paperwork you need. Below you’ll find a starter list for contractors, and a list for employees.</p>
<h2 id='independent_contractor_new_hire_checklist'>Independent Contractor New Hire Checklist</h2>
<ul>
<li><strong>Scope of work:</strong> You’re hiring this person for a project, not forever, so figure out the scope of the work you’re expecting them to do. Clear expectations on both sides will make the whole process smoother. You’ll know what you want, and they’ll know what you expect them to do.</li>
<li><strong>Duration:</strong> Is this a two-week project, a six-month project? Estimates can be tricky, but get a ballpark figure.</li>
<li><strong>Payment:</strong> How will you pay them? Via check, direct deposit or PayPal? How often? Again, sort these details out early. Don’t let money become a problem.</li>
<li><strong>Non-Disclosure Agreement:</strong> This is a sensible precaution to protect your business. Just be sure to define what you consider “confidential.”</li>
<li><strong>Non-Compete Clause:</strong> This simple addition means your contractor won’t go out and start their own business using your contacts and proprietary information.</li>
<li><strong>Insurance:</strong> Does your insurance cover independent contractors? Time to call your agent and find out.</li>
<li><strong>Indemnity:</strong> If a client sues you for mistakes your independent contractor made, are you liable? An indemnity clause will help you recover money lost to settlements and legal fees. Warranty: Does your contractor make a promise or guarantee regarding the work they do for you?</li>
</ul>
<h2 id='w2_employee_new_hire_checklist'>W-2 Employee New Hire Checklist</h2>
<ul>
<li>
<p><strong><a href='/blog/letter-of-employment'>Letter of Employment:</a></strong> You might want to request a Letter of Employment from their current job so you have an idea of their salary and the hours they are used to working.</p>
</li>
<li>
<p><strong><a href='https://lessaccounting.com/blog/employee-agreements/'>Employee Agreement:</a></strong> A document that defines the employee’s duties and your expectations. It’s also useful to list reasons why they could be fired. Establish clear ground rules of what is appropriate at your business. The agreement may include these sections:</p>
<ul>
<li><strong>Non-Disclosure Agreement</strong></li>
<li><strong>Non-Compete Clause</strong></li>
<li><strong>Work for Hire:</strong> Verbiage that defines who owns the work the employee produces. In most cases, the business owns the things an employee makes, but it needs to be clear.</li>
<li><strong>Compensation:</strong> How much are they paid, and how often? Are there bonuses?</li>
<li><strong>Benefits:</strong> The big one these days is health insurance, but your company may offer other benefits the employee needs to know about.</li>
<li><strong>Dispute Resolution:</strong> If there’s a problem, how is it resolved? What’s the process?</li>
</ul>
</li>
<li>
<p><strong>Digital Assets:</strong> What will your new employee have access to, and what do they have permission to change? Access to your company logo isn’t the same as access to your website, or your client database, or your financials. What do they need to do their job?</p>
</li>
<li>
<p><strong>Details:</strong> Do you add their picture and biography to the company website? Do they need an email address, business cards, or a company credit card?</p>
</li>
<li>
<p><strong>The Human Side:</strong> Have you introduced them to their co-workers? Have you established how you’d like them to communicate with you, whether by text, email, or telephone? You’re not just hiring an asset, you’re hiring a human being.</p>
</li>
</ul>
<p>Does hiring someone mean paperwork? Yes. Nevertheless, when you reach the point where you know you need help, the paperwork will be a whole lot easier than doing everything yourself. Use these checklists to get started, and then customize them for your individual business.</p>Writing A Letter Of Employmenthttps://LessTimeSpent.com/blog/letter-of-employment/2015-01-09T00:00:00+00:002015-01-09T00:00:00+00:00Allan BranchOften employees have an outside source that needs to verify employment and you'll need to write a letter of employment.<p>You’re busy running your small business, and one day an employee asks you for a letter of employment. What is a letter of employment and why do they need one?</p>
<p>A <strong>letter of employment</strong> is proof that someone works where they say they work, and sometimes proof they are paid what they say they’re paid.</p>
<h2 id='there_are_several_situations_where_your_employee_might_need_a_letter_of_employment_including'>There are several situations where your employee might need a letter of employment, including:</h2>
<ul>
<li>They applied for a loan, or a mortgage on a house, and the bank wants proof of their employment and income.</li>
<li>Before renting an apartment, the apartment manager may request a letter of employment.</li>
<li>They are <strong>borrowing money</strong> for a large purchase, like a car or a boat.</li>
<li>If they apply for a new job, the new employer may want to verify their current job and confirm their salary.</li>
<li>In some cases, when a person applies for insurance, they must prove their employment.</li>
</ul>
<p>If your company is big enough to have a <strong>Human Resources</strong> person or department, check with them first. HR sometimes avoids reference letters because a letter of employment is considered less risky–it only confirms employment, it doesn’t recommend or endorse someone. Be sure to ask your employee exactly what they need–a letter of employment or a letter of recommendation?</p>
<p>What you need to include on the letter varies. Again, communicate with your employee. If the bank or apartment needs their salary and the number of hours they work per week, include those. However, be careful not to put more information than they ask for, and save yourself the trouble of any privacy issues.</p>
<h2 id='key_tips_for_writing_a_letter_of_employment'>Key Tips For Writing A Letter Of Employment</h2>
<p>Short and simple is best. Mind the details. Hey, your employee is trying to get a mortgage on their first house, so print their letter of employment on company letterhead, include your contact information, and be sure to sign and date it!</p>
<h2 id='letter_of_employment_template'>Letter Of Employment Template</h2>
<div class='email'>
Your Name
<br />
Name of Your Business
<br />
Address
<br />
City, State Zip code
<br />
<br />
Date
<br />
<br />
(Name of the person you are sending the letter to.)<br />
Name of Bank Loan Officer<br />
Name of Bank<br />
Address<br />
City, State Zip code
<br /><br />
Subject: (In a very short letter like this, the Subject line is optional, but you could write, “Letter of Employment for Employee Name.”)
<br />
<br />
Mrs. Smith<br />
<br />
To whom it may concern:<br />
<br />
Employee Name has worked full time at Company X since 2008, and is paid $XX,000 each year.
<br /><br />
(Optional: “Please contact me if you have any questions.”)
<br /><br />
Sincerely,<br />
Your Name (Remember to sign it!)
</div>Possible Project Management Problemshttps://LessTimeSpent.com/blog/project-management-problems/2015-01-05T00:00:00+00:002015-01-05T00:00:00+00:00Allan BranchRunning a software project is really hard, here are some quick easy to spot issues you might have. Learn from our project managment issues.<h3 id='common_software_project_management_problems'>Common Software Project Management Problems</h3>
<p>Software development is hard. Whether you’re a team of two or two hundred, the same issues seem to pop up. What if you knew some of the problems to expect so you could plan for them, or avoid them altogether? It won’t make the job easy, but it might make success possible.</p>
<p>Before you rouse the troops, buy management software and start drawing on whiteboards, take a lesson from an odd source–board games. In the rules for most games, the very first paragraph is labeled “Victory Conditions.” That paragraph clearly states what you must do to win.</p>
<p><strong>So what do you need to do to make your project a success?</strong> Think hard about this, because you and your team need a clear goal. The details may change during the course of the project, but you need to work out with the client what you need to achieve for both parties to be satisfied.</p>
<h3 id='project_management_software_soup'>Project Management Software Soup</h3>
<p>Depending on the size of the project and the number of folks involved, you might use software project management software, software to track changes and bugs, plus the software you’re working on. That’s a lot. Is everyone on the team familiar with these tools, or do you need to factor in time for them to learn? Does the software match with your development style?</p>
<p>Maybe you’re using the <strong>Scrum Development</strong> model of <strong>Agile Development</strong>. In Scrum Development, there is no Project Manager. There’s a Scrum Master, but their role is far different from that of a traditional Project Manager. The model might be useful, but has your team used it before? Are they comfortable in their assigned roles?</p>
<p>Agile Development is very flexible because it uses evolutionary development and adaptive planning. This takes into account the idea that the client’s requirements may change during the process. Flexibility is good, but you want to bend, not break. If the client keeps changing things, it’s inevitable that you will miss both your timeline and your budget.</p>
<h3 id='client_communication'>Client Communication</h3>
<p>Communication comes in two flavors during a project, and they’re both critical. The flow between you and your client, and the flow within the development team.</p>
<p>From the start, try to get a clear understanding of what your client wants. Yes, it’s impossible to write perfect Requirements and Specifications documents because changes are inevitable, but at least give your team a decent starting point. If your client drags their feet when sending you important files, or is slow to respond to emails and calls, you must be direct with them. Oftentimes, they won’t realize they’re part of the problem until you explain it to them.</p>
<p>The second area of communication is within your team. Sometimes people with coding skills struggle with people skills. You need to guide your team, but not micromanage them. The Agile Development model calls for daily meetings, but you have to customize for your project until you have just enough face time to keep moving forward.</p>
<h3 id='planning__managing_a_project'>Planning & Managing a Project</h3>
<p>You want to please your client, but ask yourself if you are being realistic about your timeline for the project. Sprints and rapid development are great, but are you killing your programmers? Multitasking wrecks productivity. If you’ve given your best programmer three different projects to work on, can they really keep up with tracking changes, documentation and accurate billing?</p>
<p>Your employee is busy tracking bugs, but are they tracking their hours? For a business that bills hourly, this is hugely important. When employees don’t properly track their time worked, you’re losing out on revenue. <a href='http://lesstimespent.com/blog/employee-time-tracking-software'>How do you get employees to track their time?</a></p>
<p>When choosing your toolbox, consider the cloud-based software Basecamp to organize your project and help everyone keep in touch. <a href='http://trello.com'>Trello</a> and <a href='http://Asana.com'>Asana</a> assist with the critical area of communications. <a href='http://GatherContent.com'>GatherContent</a> aids you and your client in collaborating on website content. And <a href='http://Sifterapp.com'>Sifter</a> facilitates bug and issue tracking.</p>
<p>So make sure your team knows the “victory conditions,” and how to use their tools, and then step back and let them do their thing.</p>How To Get Employees To Use Time Tracking Softwarehttps://LessTimeSpent.com/blog/employee-time-tracking-software/2014-12-10T00:00:00+00:002014-12-10T00:00:00+00:00Allan BranchIf your employees are not properly tracking their time using software means you WILL find yourself without money soon. Your employees time is your inventory, would you give away products if you owned a storefront?<p>If you’re a service business who bills hourly than tracking time on client projects is hugely important to keeping your business alive.</p>
<h3 id='time_tracked__time_billed_to_clients__cash_flow'>Time tracked = time billed to clients = cash flow.</h3>
<p>The problem is people especially employees do not like to be held accountable. It’s human nature to avoid attempts at accountability. Companies like WeightWatchers have made businesses from just helping people stay accountable.</p>
<p>As manager or business owner you have two ways to get your employees to properly track their time. Incentivize or Punish… both paths start with a goal. Example: all designers must bill at least 31 hours per week.</p>
<p><strong>Negative repercussions</strong> means if they DO NOT bill 31 hours something negative happens to them.</p>
<p><strong>Positive repercussions</strong> or incentivizing means if they DO bill 31 hours something positive happens for them.</p>
<h2 id='negative_repercussions_for_not_tracking_time'>Negative Repercussions for NOT tracking time</h2>
<ul>
<li>Clean out the office refrigerator.</li>
<li>Clean the office bathrooms.</li>
<li>Missed free company lunch.</li>
<li>Don’t get the friday afternoon half day off.</li>
<li>Time tracking is a requirement, if you don’t do it, you get fired.</li>
</ul>
<h2 id='incentivizing_employees_for_tracking_time'>Incentivizing Employees for tracking time</h2>
<ul>
<li>Free lunch friday</li>
<li>Free monthly movie tickets</li>
<li>Half day off on a friday</li>
<li>T-Shirt gift-card to Threadless.com</li>
</ul>
<h2 id='time_tracking_software_options'>Time Tracking Software Options</h2>
<ul>
<li><strong>Microsoft Excel</strong> - You can use excel to track time, this is rather archaic and doesn’t streamline your billing process. But here’s a way you could use <a href='/blog/excel-time-tracking'>excel to track itme.</a></li>
<li><strong>Cashboard</strong> - this is a great app that allows you to handle time tracking plus other basic bookkeeping tasks like invoicing.</li>
<li><strong>LessTimeSpent</strong> - of course we’re going to recommend our own app, it’s really bad ass, <a href='/'>check it out.</a></li>
<li><strong>TSheets</strong> - tsheets seems to be the leader in the industry for time tracking on large entreprise teams.</li>
<li><strong>Freckle</strong> - Freckle is known as “Friendly Online Time Tracking Software”, funky colors and great design makes freckle a solid choice.</li>
</ul>How Many Billable Hours Are In A Year?https://LessTimeSpent.com/blog/billable-hours-in-year/2014-12-09T00:00:00+00:002014-12-09T00:00:00+00:00Allan BranchKnowing how many hours you should be billing in one year is easy. Let us show you the number of billable hours in one year.<p>Like all creatures on Earth, you have 365 days in a calendar year (except a leap year). These 365 days yield 260 weekdays and 52 weekends. In the United States we have zero days paid leave required by law. <a href='http://en.wikipedia.org/wiki/List_of_statutory_minimum_employment_leave_by_country'>Here’s a list</a> of what other countries require as mandatory days paid off for employees. A typical workday in the United States is 9:00am to 5:0pm, giving you eight hours to “work.”</p>
<h2 id='total_billable_hours_in_one_year'>Total Billable Hours in One Year</h2>
<p><strong>If you do the math, 260 days x 8 hours per day = 2080 billable hours in a year.</strong></p>
<h2 id='employer_expectations'>Employer Expectations</h2>
<p>But the reality is you’re probably not billing a full 8 hours per day. We surveyed 100 companies and found that most service-based companies that bill hourly require employees to bill at least 31 hours per week.</p>
<p><strong>52 weeks x 31 hours = 1612 required billable hours by most companies in one year.</strong></p>
<h2 id='minus_holidays_and_vacation'>Minus Holidays and Vacation</h2>
<p>But the reality is you’re probably not working on many holidays. You probably take off two weeks per year for vacation and you probably lose another week’s time with Thanksgiving, Fourth of July, Christmas, etc.</p>
<p><strong>49 weeks x 31 hours = 1519 hours you’re probably required to bill clients in a year.</strong></p>
<h2 id='making_money_for_your_company'>Making Money For Your Company?</h2>
<p>As someone who bills hours to clients your job is to make money for the company you work for. Do some simple math and figure out if you’re making enough revenue to cover your salary.</p>
<p><strong>1519 x (the hourly rate you bill at) = Is this less or more money than you cost your employer?</strong></p>Using Excel for Time Tracking is a Bad Ideahttps://LessTimeSpent.com/blog/excel-time-tracking/2014-12-08T00:00:00+00:002014-12-08T00:00:00+00:00Allan BranchHere are some tips on using Microsoft Excel for time tracking. Getting employees to track time is hard, it's even tougher when you're the freelancer trying to use excel for time tracking.<p>When you’re working on multiple projects at once, a timesheet is necessary. It will help you see how you’re spending your time and keep track of your billable hours.</p>
<h2 id='creating_a_timesheet_in_excel_or_google_docs'>Creating a timesheet in Excel or Google Docs:</h2>
<p>Creating a timesheet shouldn’t be a task in itself. It should be quick, accurate, and something you can keep up with. While there are time-tracking apps out there (like <a href='http://lesstimespent.com!'>LessTimeSpent.com</a> you may want to start with a simple <strong>Excel or Google Docs spreadsheet.</strong></p>
<h3 id='setting_up_your_template'>Setting up your template:</h3>
<p>Create a new spreadsheet and label it with your name and the dates that it covers. (Usually an entire month.) Feel free to add more information, such as a client’s name, if you are creating separate timesheets per client. Add a line for each week of that period. Within each line, create a column for “Project” and the date of each day of the week you plan to work (usually Monday-Friday, unless you are a work-a-holic.) Under the “Project” column, list out all of the projects you want to track for that week, using one line per project. On the line below your last project, add a line for “Totals” (for your time totals.)</p>
<p>When you’re done, you should have a bunch of blank cells under each date and on the “Total” line. This is where you will add your time.</p>
<h3 id='filling_out_your_spreadsheet_timesheet'>Filling out your spreadsheet timesheet:</h3>
<ul>
<li>Fill out your timesheet at the end of each day, or even throughout the day as you switch tasks.</li>
<li>Enter in your hours per project on each day you worked.</li>
</ul>
<h2 id='pro_tips'>Pro tips!</h2>
<ul>
<li>Use the time format HH:MM:SS to track your time down to the second, instead of just rounding up (or down) to the nearest hour. This will keep the most accurate count of your time and will ensure that you aren’t billing for less (or more) hours than you actually worked.</li>
<li>Use the “Sum” function on Excel or Google Docs to automatically total your hours on each line.</li>
<li>Use the “Conditional Formatting” function to highlight any totals that are more or less than what you want to work. + For example, use it to highlight project totals to make sure you’re not exceeding the agreed upon billable hours. Or maybe your goal is to work 40 hours a week, so you want to highlight any weekly totals that are less than 40:00:00.</li>
</ul>
<p>If you’re not a fan of spreadsheets, check out software built specifically for timetracking like <a href='http://lesstimespent.com'>LessTimeSpent.com.</a> LessTimeSpent lets you track multiple projects and convert those timesheets into invoices. It even has a built-in stopwatch to track when you start and stop on projects.</p>
<p>Here’s an <a href='http://lesstimespent.com/images/blog/excel-time-tracking-template.xlsx'>excel time tracking template.</a></p>