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Types of Chargebacks You Should Know About

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StrategyDriven Managing Your Finances Article | Entrepreneurship | Risk Management | Types of Chargebacks You Should Know AboutChargebacks have become a menace for online businesses. You risk losing a lot of money and valuable resources when you don’t pay attention to fighting chargebacks. They are transaction reversals that a buyer issues after purchasing products that did not meet the description or for other reasons. It’s important to know how to fight chargebacks, and if you start with understanding how they occur, you can then put into place preventative measures. Here are some common chargeback types that your business might experience.

Chargeback Fraud

A fraud chargeback is a fraudulent request for a refund in the form of a chargeback. The cardholder disputes a transaction to regain the transactional amount and retain the services or products offered.  A chargeback fraud accounts for a significant percentage of all fraud losses. Chargeback fraud occurs when buyers try to take advantage of the chargeback process. They buy the product and try to get their money back by making false claims for the chargeback dispute. While it could be challenging to prevent chargeback frauds, winning such disputes can be equally hard. You can win the conflict by submitting a response with compelling evidence indicating that the buyer is trying to take advantage of you. Also, make sure that you collect all the necessary information from a buyer.

Merchant Error

Merchant error is among the most common chargeback types. While your employees may not intentionally commit a merchant error, its consequences can be dire. Merchant errors are caused by an array of things, including clerical mistakes and system errors. It could also be anything else that doesn’t satisfy your customer. For instance, goods not received or received in an unsatisfactory way and technical issues with your payment process, causing unauthorized errors or duplicate transactions.

Friendly Fraud

It’s an innocent act that could be costly to your business. Friendly fraud doesn’t involve malicious intentions by the cardholder. Professionals, such as Ethoca can help with the measures needed to fight friendly fraud. Some primary causes of friendly fraud include some friends or family members making unknown transactions or forgetfulness. Sometimes a simple action like an unclear product description can trigger a buyer to issue a chargeback for transactions made. An effective way of preventing friendly fraud or generally any chargeback is to tighten measures on your end.

These are some of the common causes of chargebacks. The bottom line is that you need measures to protect your business from any chargeback. Liaise with the professionals to save your reputation and money.

Best Practices To Optimize Your Self Employment Taxes

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StrategyDriven Managing Your Finances Article | Best Practices To Optimize Your Self Employment Taxes | EntrepreneurshipIt’s great to be your own boss and this is the reason that a large number of people are picking up freelancing. Even those in full-time jobs are embracing it as a side hustle. While you can make good money from a part-time or full-time freelance project, you are expected to pay your taxes as well. To start with, you need to be aware of the fact that freelance income is taxable just like any other income is. Also, it will definitely impact how you file the taxes and pay them up. So it is better to understand and plan on the A to Z of taxes on freelance income to ensure that you don’t get into trouble with the IRS. Here are the basics that you must know.

What are the taxes on self-employment income?

Freelancers pay the same income tax rates as employed persons do. Additionally, they are considered independent contractors and are taxed on the net self-employment income. This income is calculated by deducting the tax-deductible business expenses from the gross receipts. This is the tax that takes the extra bite out of the freelancers’ earnings. It includes both Medicare and Social Security taxes. If you were employed, your employer would pay half of these taxes. However, you have to pay both the halves yourself in the form of the self-employment tax as a freelancer.

What are the deductions you can claim?

While you calculate the taxable self-employment income, you will also want to know about the deductions that you can claim. These deductions matter a lot as they can reduce your tax burden to a considerable extent. According to the IRS, you can claim deductions on the entire expenses which are ordinary and necessary for the operation of your business, just like it is allowed for any other business owner. Specifically speaking, you can claim them for a home office, advertising and marketing, computer equipment and software, office supplies, utilities and travel, and business meals. However, you must maintain proper records and documentation for these expenses.

What is the minimum earning that makes you liable for paying taxes?

Obviously, you would want to know whether you actually need to pay taxes on your freelance earning. According to the federal laws, you will be liable to pay them if your earning from freelance work exceeds $ 400 in a given year. The tax attorneys from Travis W. Watkins Tax Resolution & Accounting Firm suggest that you should receive these earnings in a separate saving account for simplifying tax calculations. Further, expect a significant portion of your freelance check to cover the taxes because you have to pay income tax as well as self-employment tax.

How should you keep your taxes on schedule?

Since you are your own boss, the responsibility for keeping your taxes on schedule is yours as well. The IRS prefers a pay-as-you-go basis and this is also simplifying things for freelancers. Ideally, you should send in the tax payments throughout the year, which can be done by remitting estimated taxes. The good thing about doing so is that you will not face a cash crunch in April. You will have to pay up all final tax payments by the April 15 deadline. The better way is to pay the estimated taxes on the quarterly dates of April 15, June 15, September 15 and January 15 (of the subsequent year).

What are self-employment tax rates and thresholds?

Another fact that matters is the tax rate and threshold because you would obviously want to know them as well. The self-employment tax is just like a flat tax. It takes a one size fits all approach and everyone has to pay the same percentage to Social Security and Medicare. However, the Social Security tax only is applicable only to earnings up to $132,900 (as of the 2019 tax year). The threshold will increase to $137,700 in the next year. The Social Security tax is calculated at 12.4% of the net income up to the threshold value, while it is 2.9% of total net income for Medicare. The full values are to be paid by freelancers.

Now that you understand that freelance taxes are different from those for the employed professionals, you need to be careful while computing them. Filing the returns and paying your taxes on time is equally important to keep things on track. Having an expert tax professional to guide you and handle your tax returns is a good idea too.

Raising Money When You Want to Start a Small Business

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StrategyDriven Managing Your Finances Article | Raising Money When You Want to Start a Small Business | EntrepreneurshipStarting a business is a common dream, and while you may only need a small investment to get off the ground, it can lead to big things. However, getting that initial seed money can be difficult, especially when you’ve still got rent and bills to pay while you wait for your first profit to arrive. That’s why you need a plan to get your business going, so here are some ideas.

Find Cryptocurrency Investors

While there are a number of platforms where people can invest cash in startups, you’ll find that people are very cautious about giving cash to inexperienced business owners. However, in the world of cryptocurrency, people tend to be more open to taking risks. Putting together an Initial Coin Offering, or ICO, can be a good way to get the money you need to kick things off, and the more unique and exciting the service, the more likely you’ll get funding.

Invest and Raise More Cash

If you’ve saved a little money but need to raise more, you may want to consider investing in and trying to get a return on your cash. For example, you could use Genesis Mining to mine Bitcoins, which you can then sell on an exchange, potentially making a profit. As with any investment, you should do your homework first and ensure you aren’t taking any unnecessary risks.

Sell Things You No Longer Use

A lot of people have things hanging around their house that they no longer need, so why not sell your old items for cash? You may be surprised that you can make hundreds of dollars in just a few days when you list your items online, and as long as you use clear photos and write a decent description, you should get a buyer.

Get A Loan

Understandably, a lot of people are worried about accumulating debt before they even have their first customer, but if you’re starting a business that needs a lot of specialist equipment or supplies, then it is often necessary. Put together a business plan, outlining what you need to borrow and when you expect to turn a profit. This will help impress banks and potential lenders, so they can see that you’re serious.

Scrimp and Save

A lot of small business owners start their ventures by using their own savings. While it’s a big risk to use the money you’ve so carefully saved, at least you don’t owe anything to a bank if things go wrong. Look at what you earn versus what you spend and see where you can boost your income or cut your expenses. You could also start your business as a side hustle with very low expenses. If you do something creative, look out for ways to do it more cheaply, such as finding bulk supplies or buying different equipment. While you won’t be able to quit your day job right away, you can at least start to build a customer base, which in time could take you to the next level.

 

What Harms Your Business Budget The Most?

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Every single business out there has a budget. Every single business who wants to survive beyond the first five years is going to listen to and obey their budget! It might be hard going at times, but it’ll be worth any potential risks in the long run.

And because of that, you might want to work out what costs are currently the biggest sucks on your budget. You need to be sure you can provide for them, month in and month out, and always be sure to prioritise them until you feel secure enough to move on. It might just be an example of growth, at the end of the day!

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Advertising Costs

Advertising is a big part of the business process. If you have a company, and that company sells a product, everything from brand name to your finished logo is going to come off as an advertising expense. It’s been found that businesses can spend at least 20% of their total budget on marketing, and that’s a huge chunk of money for one department alone.

As a small business, you’re going to be placing emphasis on advertising, to ensure you get the word out – have you budgeted enough money?

Travel Costs

Ferrying yourself to and from work every day is going to get expensive. Of course, you should be able to claim at least most of these expenses back at the end of the fiscal year, but that doesn’t change how expensive they can be in the meantime. You’ll still have to fork out for the fuel, and the car costs, and the mileage covered under your insurance, and that’s hard on a small business or startup fund.

At the same time, if your business makes use of a company fleet for general employee use, these costs are going to be maximised tenfold. How do you cut back on these kinds of expenses, when every working day is filled with employees going from A to B and back again? You’ve got investors to meet and clients to satisfy, after all.

Well, mandating a policy of writing down time spent with a vehicle, and making sure it’s returned at a certain time at the end of the day can help you to gather control. And with something like a Fleet Fuel Card, you should be able to save on standard fuel costs, no matter how much you need to use each year.

Rent Costs

And finally, you’re going to have to fork out for rent costs month by month too. Even if you’re running a home business, and have a mortgage to pay, you’re still going to end up counting these living expenses as a business cost.

And seeing as lease agreements are usually dependent on the kind of business you’re running, you’re going to be using some very niche and specific calculations to try and factor rent into the budget.

Your business budget can be quite stretched, so make sure you’re aware of sinkholes.

A Guide: How to Stop Wasting Money in Business

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StrategyDriven Managing Your Business Article | A Guide: How to Stop Wasting Money in BusinessTurning over a profit isn’t the only important task that you face as a business owner. You also need to consolidate this money that you make, which is why you need to avoiding wasting it at all costs.

It’s going to mean making use of all resources afforded to you, it’s going to mean making smarter investment choices, and it’s going to mean honing in on your mistakes — it’ll all be worth it in the end, though, when you’ve got a heap of cash to invest into the growth of your business.

To unearth all the things you can do to stop wasting so much money in business, be sure to read on.

Minimize your tax bill

Nobody likes the tax man, but unfortunately, he’s never going to go away. There are, however, ways to minimize the bill slapped on your desk every year.

To minimize your tax bill, you should:

  • Keep a track of your business expenses (receipts, invoices, vehicle mileage, etc.) and then seek to claim for them
  • Tap into the Annual Investment Allowance (AIA)
  • Research and make use of tax reliefs (such as the creative industry relief)
  • Pay your tax bill as early as you can

Invest in good website design

Marketing, especially digital marketing, is essential in the world of business. By not running advertising campaigns, quite simply, you won’t spread your company’s message or attract new customers.

As important as marketing campaigns are, however, they need not cost you an awful lot. More to the point, they need not cost you as much as you are no doubt currently shelling out on them. When you choose to invest your money on good website design instead of advertising, you’ll be sure to find yourself saving thousands in the long run. This is because you’ll have a platform that can act as a constant source of important information; your website can spread your message at all times, meaning you won’t have to constantly spend your money on spreading it yourself.

To ensure that your website does everything a marketing campaign can do and more, you have to align yourself with a web design company like Plego Technologies. They will make sure that your website works well in both a practical and aesthetic sense.

Turn off and unplug your devices

Even when they’re not being used, if they’re still plugged in and turned on, the various devices that you use in your office could be costing you an arm and a leg. They will be using up what is known as ‘vampire energy,’ which means they will be draining your electricity bill for no reason whatsoever.

Before you leave your office of an evening, you and your employees have to go around and make sure everything is turned off and unplugged. Other important forms of action you should be taking in this instance include:

  • Tweaking your power settings so as to ensure your devices shut themselves down or go into hibernation mode whenever they’re not being used
  • Resolving to never leave your desktop computers and laptops on their screen savers — believe it or not, doing this is worse than leaving your monitors and screens to go black
  • Never forgetting the peripherals (your printer and speakers, for instance), as they can suck up a lot of ‘vampire energy’ too

Take the above advice, stop wasting so much money, and put the cash you save to good use!

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