In 2015, the
Brand Protection - A new area of concern and focus will be brand protection. Not the brand protection associated with intellectual property. While that concern does exist with the growth of on-line market places, the brand protection in this context relates to avoiding blemishes to your brand associated with vendor mis-
In the normal course of business, companies purchase inputs for their products or services from external vendors. Interacting with vendors is critical for all businesses. However, third party vendors create a certain level of
Consider the following - Defective air bags from a vendor are causing recalls to be issued for Honda, Toyota, Nissan and General Motors Co.; faulty ignition-switches are central to General Motors recalls and a lawsuit. One year after the announcement of a strategic partnership, an Apple vendor filed for bankruptcy. Hackers breached the systems of both Target and Home Depot by going through vendors of the respective companies.
Vendor Management should be a part of your Business Continuity Plan.
Regulation and Taxation
The adoption of increased regulation is associated with increased costs. With every change an organization is required to analyze the new regulation, develop a plan to implement the regulation, develop
Protection and Affordable Care Act
Healthcare is now moving into the next phase as penalties for not covering employees are set to take effect. With respect to ensuring compliance with the law, employers must comply with certain IRS reporting and disclosure requirements, which are important for the administration of the individual and employer mandates. This reporting will be required beginning in 2016 for coverage provided during the 2015 calendar year, i.e. due dates February 29, 2016 (paper filing) or March 31, 2016 (electronic filing).
To alleviate the burden in 2016, it is recommended that the following steps be adopted – Review IRS Reporting requirements under Sections 6055 and 6056; determine what applies to your organization; determine the information that must be gathered; develop an approach; and establish a procedure to collect and maintain the data. It will be far easier to collect data going forward then to scramble in January 2016 to complete a form.
Taxation
In 2013, 55
It may make sense to review the 61 provisions, as Congress can extend them retroactively for 2014.
Debt Collection
The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against a firm for its debt collection tactics . As stated in the law suit – “…the Firm operates less like a law firm than a factory. It relies on an automated system and non-attorney support staff to determine which consumers to sue. The non-attorney support staff produce the lawsuits and place them into mail buckets, which are then delivered to attorneys essentially waiting at the end of an assembly line. The Firm’s attorneys are expected to spend less than a minute reviewing and approving each suit.”
You cannot help but see the parallels between this situation and the robo-signing scandal relating to foreclosures which took off in 2010. As a result of that scandal, in February 2013, a settlement deal was entered into with 13 banks over foreclosure abuses. The cost of the settlement - $9.3 billion.
If you extend credit to your customers, which is required for almost all businesses, a certain amount of bad debt will result. Now with the potential of legal action, it is more important to develop a strategy to efficiently and legally assert your rights of collection.
Optimizing the Business
When business is good, it is very easy to overlook inefficiency. But if sales decline or stay static and costs continue to rise, profits must decline. To thrive, a business must evolve and stay focused on optimizing business processes by removing inefficiencies and waste, to contain costs.
- Focus on Cash Flow. Poor cash flow management will impact a business by constraining its ability to fill orders timely if inputs and/or inventory purchases are delayed; replacing outdated equipment; and, implementing process improvement which historically has upfront costs, prior to the savings.
- Review product lines and services, to understand the profitability generated. The natural result will be an emphasis on the most profitable activities; while de-emphasizing the less profitable or money loosing activities.
- Review customer/client relationships,to understand the relationship value. Obtaining a customer that becomes unprofitable is a common situation. It only becomes an error of management if you do not review the economics of each client periodically, or ignore the results after the review. If you discover that a client is unprofitable, try to correct the situation or walk away from the client.
- Review and Improve Business Management and Production Processes. Process improvement is undertaken for a multitude of reasons which include - improve customer satisfaction, improve employee satisfaction, eliminate/contain non-value added costs. Several back-office tasks should be consistently managed closely. More than likely these areas represent straight expense, but are critical to the successful management of any business, i.e.
Accounting , Finance, Administration.
No doubt 2015 will be a challenging year.