Job Costing and Estimating

Small business owners are an underserved group. Tax planning and tax preparation should not be the only skills offered by the business’ advisors. And to small business owners, don’t be so stubborn. Read carefully to understand this discussion. This just might save your life long dream from collapsing.

Construction, roofing, and custom manufacturing are all business types that will benefit from a discussion of direct and indirect expenses. Most already know that direct expenses for a given job or project have to be considered in the cost. Direct expenses include the labor and materials used. It is the indirect expense that is most often forgotten or mistakenly allocated to job cost. The indirect expense is a cost that relates to all jobs or projects and not to one job specifically.

Examples of indirect expenses include: depreciation on machinery and equipment in the production process, depreciation on plant facilities if owned by the small business, rent on the plant facilities, shop supplies, vehicle expenses, utilities, insurance, and the compensation of supervisors, plant managers, and owners of the business. And of course, don’t forget about payroll taxes. There could be other indirect expenses in a given business, but the aforementioned will serve to demonstrate my point. It is also important to mention here the compensation of the business owner or owners. If the owner participates in the production process, a portion of compensation (or all) should be treated as an indirect expense to be allocated to the job cost.

Now that there is a list of indirect expenses, how should they get allocated to the job cost? Typically, indirect expenses are allocated based on direct labor dollars, direct labor hours, or direct materials. My personal favorite method of allocation is based on direct labor hours. If there are 20 direct laborers in a given business, and each is projected to work 1,900 hours annually, there will be 38,000 hours of total direct labor in a given year. If the summation of indirect costs is $1,500,000, this business will have an indirect cost per direct labor hour of $39.47. If my average hourly wage for direct laborers is $25.00, then total cost per direct labor hour is $64.47. If this particular business desires an industry average gross margin of say, 36%, it will need to charge $100.73 per labor hour. This billing rate is determined by using the full absorption method of accounting. Full absorption accounting is a required “generally accepted accounting principle” and must be used in all external financial statements unless otherwise disclosed.

Now, I can hear the naysayers from the cheap seats, “what if the market won’t bear this”? Well then, the business will have to accept a smaller margin, shop around for lower direct and indirect costs, or understand the behavior of fixed costs and “economies of scale”(a discussion for another article). The point of this article is to ensure that a business covers all of its production costs. I hope that I never hear again a small business owner say: “I am busier than ever, but I don’t have any money”! As always, the small business owner is free to do as he or she pleases. However, it is important to remember that my way is better.

Hiring a Bankruptcy Attorney Can Be Like Building a Football Team

Every fall football season comes into full swing and many armchair quarterbacks sit home and talk about what changes they would make to their favorite team to have a successful season. Dealing with serious financial matters can be very similar. When putting together a football team every member is of utmost importance. Most of the focus is usually on the quarterback who is the center of the team. When it comes to filing bankruptcy one could use the analogy of drafting a football team on how to proceed. Knowing this, just like the quarterback on a football team, one of the most important members would be the bankruptcy attorney. Everyone knows filing for bankruptcy can be one of the most stressful times in anyone’s life. That’s why it’s important to accumulate the proper legal team to have the most successful bankruptcy filing.

Hiring a bankruptcy attorney should be looked at as acquiring an invaluable team member no different than what a sports team would do. Considering that, there is a very stressful dynamic that goes on when people are filing bankruptcy one should be very careful on making their selection. Not having someone you trust or can count on will make the process more complicated ending up in undue stress. You have to consider that you will be sharing the deepest secrets about your financial past and failures. If you’re not comfortable with the person there might be details that you fail to include.

Finding a bankruptcy attorney that you can trust with your family’s financial future is invaluable. When you spend the money to hire someone to protect you and your bankruptcy filing, you will want to make sure that your family’s best interest is at heart. Some people search for the best deal and don’t consider any kind of personality conflict that might go on. Although during this time where money is tight, it is better to spend a little bit more and have the confidence that everything is being done properly letting you sleep better at night. The individual filing bankruptcy should have someone that they are comfortable opening up to and are not embarrassed to call when problems arise. An individual should feel at ease sharing their failures as well as their past successes.

People need to remember that this is not a person that you are trying to impress but is there to help them. Filing for bankruptcy is stressful enough and there’s no reason to pile stress on top of it by having a bankruptcy attorney that you are fighting with. Once the trust is broken, all confidence will be out the window and the added worry of the outcome will ensue. A person should take the time to interview a few different attorneys and see which one they are most comfortable with and think they could trust.

Should Christians File Bankruptcy?

For many people financial woes have them stressed out, while they barely survive living paycheck to paycheck. They may have medical bills, student loans, credit card debt, car loans, payday loans and more piling up on their desk. For many it seems like an insurmountable task to get debt free and stay that way. So many turn to Bankruptcy as a quick fix to their problems… but is that the right answer for Christians?

When we look at bankruptcy we have to understand what it means to most people. Chapter 7 bankruptcy eliminates all of your debt, wipes the slate clean, and leaves you with a damaged credit score for a very long time. There are other forms of bankruptcy that allow you to restructure your debt, and pay it off over a longer period of time, with a much lower monthly payment.

Biblically speaking it is very clear that as Christians we are to pay our debts (Ecclesiastes 5:4-5) and that the wicked “borrows and does not repay” (Psalm 37:21). It may seem very tempting to start over with Bankruptcy but unless you learn to be obedient to what God wants for you and to be a good steward of your money, this will only address the symptom and not the problem. Needless to say, many people who file bankruptcy find themselves in financial turmoil again and again.

One obvious way you can avoid this going forward is to educate yourself on financial matters. Let’s face it, we live in a country where our public education system fails to educate its children on basic financial management. Sure you probably took a history class in high school, a social studies class and maybe even home economics… but how much of that knowledge did you apply to your life?

The internet offers a wealth of knowledge on financial planning, budgeting, and strategies you can use to get your financial life on track. Personally I am a big fan of Dave Ramsey, author of Total Money Makeover and Financial Peace University. He has a YouTube channel with tons of free advice and a radio talk show where he answers calls from listeners and gives them financial strategies.

You can also Google financial planning and budgeting and find a ton of other great resources. Use them! They are available to you, free at your fingertips. Stop sailing the troubled waters of financial insecurity and find calmer seas. Do you want to know the very best way to find those calm seas? Remember this: As a Christian (and of course non-Christian as well) everything you own from money, to cars, houses, jewelry and even electronics… EVERYTHING belongs to GOD. You OWN NOTHING, you are simply a steward of what God has placed in your care.

While you are here on Earth it is your duty to do what is right and Godly with HIS things. If you are not sure what to do, learn. If you have already made the choice to file bankruptcy and won’t be swayed then at least re-structure your debt and pay if off over time.

Turning your back on debt that you vowed to pay is NOT an option.

At Stand Tall For Christ [] our Mission is to support Christians all over the world in their beliefs in Jesus Christ as their God and savior. Through the use of well researched and reasoned articles, videos and other resources we want to help equip Christians with the knowledge they need to face the daily challenges and temptations they will encounter along their walk with Christ.

Bankruptcy Is Not the End of Your Financial Life – Here’s Why

Filing bankruptcy does not eternally ruin your financial stand point or lower your reputation. It does not make you any less of a person when you decide to liquidate as much of your debt as possible.

As a matter of fact, when you file bankruptcy, you become a better person. You become more admirable for being honest with yourself about your negative financial situation. You make yourself eligible for a fresh start, and the discharged debt collectors remove your phone number.

New Car

Your dreams of getting a new car after filing bankruptcy do not have to be washed away. There are a lot of car dealerships who still want your business. On that note, they are willing to sell you a car.

Personally, since filing bankruptcy, I have purchased (financed) three cars. Two of them were brand new as dealerships are more eager to sell the newer inventory.

All the car sales personnel were concerned with mostly was if I had a full-time job and how much money I made. Yes, they were concerned with my low credit score and bankruptcy filing. However, that did not stop them from helping me as their goal was to sell a car and make their commission.

On a higher note; I purchased my first new car in less than six months after my bankruptcy discharge. The second new car was purchased in less than four months after purchasing the first new car after the bankruptcy discharge.

New House

Wise realtors and landlords (people who sell homes) will not judge you for filing bankruptcy. They understand that life can have its lessons, and that you need a place to live. They also understand that they need a paycheck.

However, in the United States, if you file bankruptcy, most banks will require you to wait for two years after it is discharged to get a home loan. This is obviously if you do not already have an active home loan.

Though most banks will want you to wait at least two years after the discharge, it is better to wait longer. This gives you time to reestablish your credit reputation and build your credit score. Also, during those three years, you can save up money for a large down payment on your prospective home.

Credit Card

Do not let people tell you that filing bankruptcy will keep you from getting a credit card. Since my discharge, I have honestly lost track of how many credit cards I have applied for and received.

All of the credit cards I received were unsecured credit cards. This meaning that I did not have to front (put up) any money to receive them as is required for a secured credit card.

A Job

Last but not the least; your bankruptcy will not come up to employers when you apply for a job. You can still get interviews and be considered as a top candidate for many employers.

On the other hand, if the company decides to do a credit check on you, your bankruptcy discharge will show up on the report. However, never panic. Just be prepared to tell them the truth about why you chose to file. Who knows; your honest answer may actually increase your likability between you and your prospective employer and show you to be a responsible person.

Does Debt and Loan Consolidation Really Work?

Debt and loan consolidation is the process of taking all or some of your debts and putting them all together. Many people use consolidation for a number of reasons and there are different ways to do it. During the home refinance boom in the mid 2000’s, many people refinanced all of their debt into their home loans. The thought was that they could take their high interest debt and put it into a loan with a much lower interest rate. However, the flaw many failed to realize was that they would be paying on this newly consolidated debt for 30 years, no reduction in interest rate was going to save them money over that 30 year period. Others have used specific consolidation loans to lump all of their debt into one easily trackable payment. Regardless of the form and nature, the basic premise behind consolidation is that by lumping all your debt into one loan, you should be able reduce your interest rate and make it more “affordable” or “payable”.

In theory, consolidating debt appears like an attractive and viable solution to dealing with debt. However, research and history has shown consolidation rarely works out, and my experience as a bankruptcy attorney tells me that in the long run, people don’t save money but in fact it ends up costing them more. You can learn more about why consolidation seldom works by reading 4 Consolidation Traps to Avoid published by U.S. News and World Report in April of 2013.

Even finance guru’s like Dave Ramsey admit that consolidation services don’t work and are nothing more than a “con”. Read, The Truth About Consolidating Debt by Dave Ramsey.

There do exist few somewhat reputable consolidation services, but many consolidation companies are nothing more than scams taking advantage of people with serious debt problems by preying on the fear which comes from the stress of debt. Many of our former bankruptcy clients have tried consolidation companies and they all reported the same thing, it cost them a lot of money for the service but the balance of their debt did not change or did not change significantly.

Rather than waste your time, money and sanity on consolidation, Congress has provided another option to get yourself out of debt. If you are in debt, and you have no foreseeable means of being able to pay it off, you still can qualify for help.

By filing for relief under the Bankruptcy Code, people have a variety of options to get their financial lives back on track. Chapter 7 is a complete fresh start, by filing Bankruptcy under Chapter 7 you are able to wipe out almost every kind of debt you may owe and start for your financial life over with a clean slate. It’s life hitting the restart button.

Chapter 13 works as a structured payment plan, allowing you to pay back some debt in a time frame and in an amount you can afford. Chapter 13, has many advantages that Chapter 7 does not, such as; stopping the interest and penalties on tax debt, saving a home that is about to foreclosed, and in some cases Chapter 13 allows you to strip off negative equity in the car you own. This means you pay what the car is worth and not what the loan balance is.

Also, many have reported that the time frame for getting your financial life back through bankruptcy is much quicker than using unproven debt & loan consolidation.

Speak to a licensed practicing bankruptcy attorney where ever you live to learn the benefits for dealing with your debt through bankruptcy.