As we get ready to flip the calendar to a new year, we sat down with a few WilliamsMcCarthy LLP attorneys to discuss end-of-year advice for their business clients. Here are three quick tips any business owner can leverage to enter 2020 on more solid legal footing.
Tip #1: Review Your Purchase Order (PO) Language
Purchase orders serve as the life blood for businesses, ensuring materials flow accurately and on time by coordinating exchanges between vendors, partners and clients. In some ways, the PO process has changed little from days of yore. It still initiates a process for communicating needs and expectations regarding requirements, pricing, delivery, payment terms and other expectations. Once accepted, the PO becomes a legally binding document.
However, new systems, automation, and electronic communications have dramatically impacted the practical ways in which POs operate between parties. All too often, the language in the PO is not been updated to reflect these new processes. As a result, the language in the PO outlining the recourse parties have, and the processes they have to follow, when payment terms are not met, deliveries are late or quality is questioned may not reflect modern best practices.
Daniel Huntley, an associate at WilliamsMcCarthy LLP shared, “I assisted a client that had a PO requiring notice via telegram. As a result, we had to locate a telegraph company to be prepared to meet the terms outlined in the PO language.”
The lesson here? Make sure your PO language aligns with your current processes and with current technological advances.
Tip #2: Update your Employment Handbook
We’re going to assume that most businesses already have an employee handbook outlining employment policies, expectations and procedures. (If you don’t, this is definitely step one!) However, employment law changes regularly. Not only is it important that you offer clarity to your employees, it can become a litigation issue if the policies outlined in your employee handbook do not reflect current state and federal laws. Obviously, updating the handbook also draws attention to new requirements, like those outlined in Illinois Senate Bill 75, the Workplace Transparency Act, which requires employers to provide annual sexual harassment training.
Regular review of the employment handbook keeps your stated policies current and your employees well-informed.
Tip #3: Review Your Taxes and Administrative Charges
As business owners, it’s critical to understand your local, state and federal tax requirements. Tax season is right around the corner, and calendar year-end is the perfect time to thoughtfully review your tax situation and plan to minimize the current year’s tax liability. Studies show that up to 85 percent of small business owners overpay federal taxes, simply by not proactively reviewing and addressing potential problem areas. Working with a tax professional and legal counsel before year end can reduce your business’s tax liability. Once the year ends, it is typically too late to make any effective impact on tax liability.
It’s not too early to consider other tax liabilities either. “Challenging a tax assessment, such as real estate assessments, requires timely preparation, and sometimes outside consultants – all of whom require time to professionally address your assessment request,” shared Tom Sandquist, partner at WilliamsMcCarthy LLP. “Developing a thoughtful strategy with professionals can save thousands of dollars, which is meaningful to most small businesses.”
All of us at WilliamsMcCarthy LLP look forward to working with our business clients to ensure a successful, and profitable, 2020. If you have questions about these tips or other legal matters, we’d be happy to connect with you. Call 815-987-8900 or visit wilmac.com for more information.