2018 Business Supplement by Association of Water Technologies

Issue 7

9707 Key West Avenue, Suite 100 â&#x20AC;¢ Rockville, MD 20850

Spring 2018

Business Supplement

How Senior Executives Stay Passionate About Their Work 2018 Tax Reform Law Has Benefits for Some Small Businesses How to Build Trust With Colleagues You Rarely See Creating a Safe Workplace in the Wake of the #MeToo Wave Is CRM Essential for Your Small Business? Probably How to Better Manage Your Cash Flow 6 Ways to Improve Your Hiring Process Five Steps to Painless Inventory Management

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Table of Contents

Business Supplement to the Spring 2018 Analyst

Features

Departments

8 How Senior Executives Stay Passionate About Their Work By Jacob Morgan, Harvard Business Review

10 2018 Tax Reform Law Has Benefits for Some Small Businesses

Calendar of Events

President’s Message

30 Advertisement Index

By Ken Berry, CPA, Practice Advisor Tax Correspondent

The monumental new tax law signed late in 2017—the Tax Cuts and Jobs Act (TCJA)—has been hailed as a boon for big business. But the TCJA also benefits many small businesses while presenting new obstacles. In general, the revised rules for businesses take effect in 2018 and are permanent, unlike most changes for individuals.

13 How to Build Trust With Colleagues You Rarely See By Tsedal Neeley, Harvard Business Review

Face-to-face meetings, office parties, and opportunities to socialize together after working hours can all contribute to the feeling that your fellow employees will be reliable in what they say and do and that they will act for the good of the team and the organization. So how do you trust a co-worker you barely see in person? This is a particular challenge for global teams, where employees may only be in contact with one another over email at different times of the day and night.

18 Creating a Safe Workplace in the Wake of the #MeToo Wave By Dena H. Sokolow, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

The number of prominent men accused of sexual harassment in recent months is staggering. While politicians, entertainers, media moguls, and professional athletes make headlines when such allegations are made, the truth is that sexual harassment in the workplace is nothing new. As the deluge of sexual harassment allegations continues to dominate the news, employers need to take a hard look at whether their culture, policies, and practices are identifying, preventing, and remedying sexual harassment in their workplaces.

20 Is CRM Essential For Your Small Business? Probably By Natalie Gagliordi, CNet

Choosing the right technology arsenal for your growing small business is a critical process, even if it's hard to imagine how certain systems will fit into your operations both now and in the future.

24 How to Better Manage Your Cash Flow By Entrepreneur Magazine

Cash is king when it comes to the financial management of a growing company. The lag between the time you have to pay your suppliers and employees and the time you collect from your customers is the problem, and the solution is cash flow management. At its simplest, cash flow management means delaying outlays of cash as long as possible while encouraging anyone who owes you money to pay it as rapidly as possible.

26 6 Ways to Improve Your Hiring Process By Sammi Caramela, Business News Daily

Hiring new talent is an inevitable and critical part of being a business leader, and it's more complicated than just reviewing applications and interviewing candidates. If your hiring process does not run smoothly, it could deter possible candidates. Here are six tips for building and improving your hiring process.

28 Five Steps to Painless Inventory Management By Lisa Girard, Entrepreneur Magazine

Properly managing your inventory involves more than making good hires and getting blue dots next to your best sellers—although those are excellent first steps. Here are some common mistakes entrepreneurs make in managing their inventory, and how to fix them.

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Calendar of Events 9707 Key West Avenue, Suite 100 Rockville, MD 20850 (301) 740-1421 • (301) 990-9771 (fax) www.awt.org

2018 AWT Board of Directors

President Marc Vermeulen, CWT President-Elect David Wagenfuhr, LEED OPM Secretary Thomas Branvold, CWT Treasurer Michael Bourgeois, CWT Immediate Past President Bruce T. Ketrick Jr., CWT Directors Matt Jensen, CWT Andy Kruck, CWT Bonnee Randall Andrew Weas, CWT Ex-Officio Supplier Representative Kevin Cope Past Presidents Brian Jutzi, CWT Jack Altschuler Bruce T. Ketrick Sr., CWT John Baum, CWT R. Trace Blackmore, CWT, LEED AP Ron Knestaut Robert D. Lee, CWT D.C. “Chuck” Brandvold, CWT Mark T. Lewis, CWT Brent W. Chettle, CWT Steven MacCarthy, CWT Dennis Clayton Anthony J. McNamara, CWT Bernadette Combs, CWT, LEED AP James Mulloy Matt Copthorne, CWT Alfred Nickels James R. Datesh Scott W. Olson, CWT John E. Davies, CWT William E. Pearson II, CWT Jay Farmerie, CWT William C. Smith Gary Glenna Casey Walton, B.Ch.E, CWT Charles D. Hamrick Jr., CWT Joseph M. Hannigan Jr., CWT Larry A. Webb Mark R. Juhl

Staff

Executive Director Heidi J. Zimmerman, CAE Deputy Executive Director Sara L. Wood, CAE Senior Member Services Manager Angela Pike Vice President, Meetings Grace L. Jan, CMP, CAE Meeting Planner Morgan Prior Meeting Planner Kristen Jones, CMP Exhibits and Sponsorship Manager Barbara Bienkowski, CMP Exhibits and Sponsorship Coordinator Brandon Lawrence Marketing Director Julie Hill Marketing Specialist Jeyin Lee Director of Editorial Services Lynne Agoston Accountant Dawn Rosenfeld

The Analyst Staff

Publisher Heidi J. Zimmerman, CAE Managing Editor Lynne Agoston Advertising Sales Heather Prichard, advertising@awt.org

Association Events The Analyst is published quarterly as the official publication of the Association of Water Technologies. Copyright 2018 by the Association of Water Technologies. Materials may not be reproduced without written permission. Contents of the articles are the sole opinions of the author and do not necessarily express the policies and opinions of the publisher, editor or AWT. Authors are responsible for assuring that the articles are properly released for classification and proprietary information. All advertising will be subject to publisher’s approval, and advertisers will agree to indemnify and relieve publisher of loss or claims resulting from advertising contents. Editorial material in The Analyst may be reproduced in whole or part with prior written permission. Request permission by writing to: Editor, The Analyst, 9707 Key West Avenue, Suite 100, Rockville, MD 20850, USA. Annual subscription rate is $100 per year in the U.S. (4 issues). Please add $25 for Canada and Mexico. International subscriptions are $200 in U.S. funds.

2018 Annual Convention and Exposition September 26–29, 2018 Omni Orlando Resort at ChampionsGate Orlando, Florida

2019 Annual Convention and Exposition

September 11–14, 2019 Palm Springs Convention Center and Renaissance Hotel Palm Springs, California

2020 Annual Convention and Exposition

September 30–October 3, 2020 Louisville Convention Center and Omni Hotel Louisville, Kentucky

2021 Annual Convention and Exposition

September 22–25, 2021 Providence Convention Center and Omni Hotel Providence, Rhode Island

2022 Annual Convention and Exposition September 21–24, 2022 Vancouver Convention Centre Vancouver, Canada

2023 Annual Convention and Exposition

October 4–7, 2023 Amway Grand Hotel and Grand Rapids Convention Center Grand Rapids, Michigan Also, please note that the following AWT committees meet on a monthly basis. All times shown are Eastern Time. To become active in one of these committees, please contact us at (301) 740-1421. Second Tuesday of each month, 11:00 am – Legislative/Regulatory Committee  Second Tuesday of each month, 2:30 pm – Convention Committee Second Wednesday of each month, 11:00 am – Business Resources Committee Second Friday of each month, 9:00 am – Pretreatment Subcommittee  Second Friday of each month, 10:00 am – Special Projects Subcommittee  Second Friday of each month, 11:00 am – Cooling Subcommittee  Third Monday of each month, 9:00 am – Certification Committee  Third Monday of each month, 3:30 pm – Young Professionals Task Force Third Monday of each month, 4:30 pm – Standards Task Force  Third Tuesday of each month, 3:00 pm – Education Subcommittee  Third Friday of each month, 9:00 am – Boiler Subcommittee  Third Friday of each month, 10:00 am – Technical Committee Quarterly (call for meeting dates), 11:00 am – Wastewater Subcommittee

Other Industry Events

NACE, Corrosion Risk Management Conference, June 11–13, 2018, Houston, TX AWWA, Annual Conference, June 11–14, 2018, Las Vegas, NV BOMA, Annual Meeting, June 23–26, 2018, San Antonio, TX ASHRAE, Annual Meeting, June 23–27, 2018, Houston, TX A&WMA, Annual Convention & Expo, June 25–28, 2018, Hartford, CT ASHE, Annual Convention & Expo, July 15–18, 2018, Seattle, WA NACE, Corrosion Technology Week, August 16–20, 2018, Houston TX ACS, Fall National Meeting & Expo, August 19–23, 2018, Boston, MA

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President’s Message

By Marc Vermeulen, M.Sc., CWT

A key item in AWT’s strategic plan is to provide more business resources to our members. As a trade association, part of our mission is to help our member companies grow. We do this in part through the great work of our Business Resources Committee. This year alone the committee added to the discount programs available to AWT members; developed a partnership to help members better manage third-party compliance sites, such as Aveeta; and begun programming a very exciting business owner’s meeting at the convention. The half-day business owner’s meeting will take place on Tuesday, September 25, in Orlando, Florida. This meeting will feature some outstanding speakers and give you time to network and collaborate with other leaders in the industry. Be sure to sign up for this event, and stay tuned for the 2019 business owner’s meeting, which we hope to be a multiday, stand-alone meeting not tied to the convention. In the meantime, please enjoy this Business Supplement. You’ll find articles in this issue about staying passionate in your work, understanding the new 2018 tax reform law, and building trust with remote colleagues. In addition, there are articles on selecting a CRM, effectively managing cash flow, managing inventories, and improving the hiring process. We hope you find the articles in the Supplement helpful. As always, I welcome your feedback and can be reached at president@awt.org.

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How Senior Executives Stay Passionate About Their Work By Jacob Morgan, Harvard Business Review

they’re making, and in some ways, because of their vantage point, that’s easier for them than it is for folks closer to the ground. Senior executives are closely involved in crafting the “story” of the organization—the message that goes out to the world—and they spend a good portion of their time outside the company, talking with stakeholders and observing the organization’s impact firsthand.

When we talk about “learning to love your job” or “managing yourself,” it’s often in the context of junior or midlevel roles. But these things don’t stop mattering for senior executives. What aspects of their jobs are most important to them? What do they find rewarding? How do they sustain their passion for the work they do— without burning out? Over the past few years, I’ve had in-depth one-on-one conversations with hundreds of top business leaders, and questions like these frequently come up. I’ve identified several common themes in our talks, which I’ll share here. Impact on society. As I was doing research and analysis for my recent book, I found that one of the best ways organizations can create a sense of purpose for their employees is to help connect their day-to-day work with the impact it has in their community and globally. People at the top also need to see the larger difference

When I spoke with John Hass, the CEO of Rosetta Stone, about what his company does, his focus wasn’t just on learning languages. It was much broader than that. Hass talked about understanding culture, resolving conflict, improving literacy rates, and empowering people to confidently communicate with others around the world. He has the perspective to see Rosetta Stone’s reach in these areas because he travels the world meeting customers and spending time with educational 8

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Senior Executives continued

roles as positions of service, not power. This is about believing that your job as a leader is to help employees do their best work. When analyzing 252 global organizations for my book, I found that this “coach and mentor” mentality is one of the things employees want the most—but it’s also something senior managers struggle with because it runs counter to the traditional commandand-control management style that got many of them where they are today. Those who clear that obstacle realize that a key part of their jobs as leaders is transferring their knowledge and skills to others. And once they carve out the time for it, they find it immensely gratifying.

institutions and the students and teachers in them. Hass says: “It’s amazing to watch kids beaming with confidence and achieving success in the classroom, or seeing someone who is trying to assimilate into a new country or understand a new culture, to be able to bridge that gap. It’s these things that we do for our learners that make me proud of my company and the work we do.” Connection versus constant availability. Senior executives struggle with burnout just like everyone else, and technology has made this issue more prevalent than ever. Although they recognize how important it is to always be connected to what’s going on inside and outside the organization, connectivity doesn’t imply constant availability. Leaders like Ellyn Shook, the chief leadership and human resources officer at Accenture, actually carry around “dumb phones,” which don’t have any apps and can’t send or receive email. These phones are the corporate equivalent of the “Batphone” (from the 1960s Batman television show)—only a few people have the number, and it’s used only in extreme circumstances. This allows executives to calmly disconnect while knowing that if an emergency arises, they will be made aware of it.

Fairhurst does this by imposing a lot of structure on his regular team meetings: The agendas are agreed on in advance, and he often requires one-page summaries for items to be discussed. He says: “The greater efficiency this creates means that I’m able to make the time for less formal, one-on-one sessions with members of the team, where I can get a better understanding of their career needs and ambitions, share with them some of the insights and experience I have gained over the years, and offer them coaching and guidance on how to further develop their skills and capabilities. These one-on-one sessions are some of the most enjoyable and rewarding parts of my job.”

The importance of peripheral vision. When we’re ridiculously busy, it’s easy to focus only on what’s ahead of us, a bit like a horse with blinders. But senior executives who prosper say it’s critical to have excellent “peripheral vision” so they can pick up on things that fall beyond their expected line of sight. This makes their jobs more exciting and engaging and enhances their performance—all of which reinforces their love for the work they do. Jim Fowler and Jeff Smith talked about peripheral vision in relation to the chief information officer role (Fowler is currently CIO at General Electric, and Smith was formerly CIO at IBM). Both said that, while information technology remains a priority for them, they’ve also learned to pay attention to geopolitical issues, global economics, changing workforce demographics, and talent practices. By doing so, they can more readily adapt not just to technology trends, but also to organizational and societal trends. They’re much less likely to get blindsided by the changes around them.

Wong looks at this sort of support as paying it forward. “I’ve been the beneficiary of a lot of great leaders taking a personal interest in my professional development,” he says. “They cared about how I was developing and growing in my career but also as a manager, leader, and communicator.” He tries to invest in his employees the same way, and that’s where he finds the greatest meaning in his own work: “While achieving goals and milestones is certainly an important part of any career, my personal satisfaction and measurement of ‘accomplishment’ comes from helping others achieve their full potential.” Jacob Morgan is the author of The Employee Experience Advantage (Wiley, 2017), The Future of Work (Wiley, 2014), and The Collaborative Organization (McGraw Hill, 2012). You can access his latest research and content at TheFutureOrganization.com.

Leadership as service. Executives ranging from David Fairhurst, the chief people officer at McDonald’s, to Jeff Wong, the chief innovation officer at EY, describe their

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2018 Tax Reform Law Has Benefits for Some Small Businesses By Ken Berry, CPA, Practice Advisor Tax Correspondent

The monumental new tax law signed late in 2017â&#x20AC;&#x201D;the Tax Cuts and Jobs Act (TCJA)â&#x20AC;&#x201D;has been hailed as a boon for big business. But the TCJA also benefits many small businesses while presenting new obstacles. In general, the revised rules for businesses take effect in 2018 and are permanent, unlike most changes for individuals. Following are the key provisions likely to affect small businesses. Corporate taxation: The graduated tax rate structure for corporations, featuring a top tax rate of 35%, is being replaced by a flat rate of 21%. As a result, the overall tax liability of many C corporations will be reduced. Furthermore, cash accounting was generally not available 10

to corporations with average gross receipts for the three prior years of $5 million or more. This rule has been replaced by a $25 million gross receipts test. Section 179 deductions: Under Section 179 of the Internal Revenue Code, a business could expense up to $500,000 of the cost of qualified business property, subject to a dollar-for-dollar phaseout above $2 million. These figures were indexed for inflation. The new law doubles the maximum allowance to $1 million and increases the phaseout threshold to $2.5 million. Caveat: The maximum allowance is still limited to the amount of income from business activity.

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2018 Tax Reform Law continued

• The deduction for transportation fringe benefits— including mass transit passes, commuter vehicles, and parking privileges–are repealed. If employers still provide these benefits, they remain tax-free to employees.

Bonus depreciation: In recent years, the percentage for first-year “bonus depreciation” deductions has fluctuated, complicating tax planning. Now, the new law hikes the bonus depreciation deduction from 50% to 100% for five years and then gradually phases out the deduction over the next five years. Added bonus: The deduction has been expanded to include “used” property that otherwise qualifies under this provision. Luxury car deductions: The annual depreciation limits for “luxury cars” kick in at surprisingly modest levels. Now, the new law hikes the limits for business drivers for cars placed in service in 2018 and thereafter. For instance, not even counting bonus depreciation, the first-year deduction jumps from $3,160 to $10,000. Of course, actual deductions must be based on percentage of business use.

• The new law reduces the deduction for onsite eating facilities like cafeterias from 100% to 50% before it disappears completely after 2025. But this fringe benefit remains tax-free to employees. • The deduction for business interest expenses is generally capped at 30% of adjusted taxable income, among other requirements. However, a small business with annual average gross receipts of $25 million or less for the past three years is exempt from this rule.

Pass-through entities: The net income of pass-through entities like partnerships, S corporations, limited liability companies (LLCs) and sole proprietors is effectively taxed at individual tax rates. Now, for the first time ever, the new law creates a 20% deduction on income for pass-through entities, subject to certain limitations. Notably, the deduction only applies to “qualified business income” and can’t be claimed by taxpayers in service businesses (excluding architecture and engineering) for single filers with taxable income above $157,500 and joint filers above $315,000.

• The TCJA creates a new tax credit of employer-paid wages paid for family or medical leave. The credit can range from 12.5% to 25%, depending on the amount paid. But this credit disappears after 2019.

Other deductions and credits: Finally, the new law includes a slew of other changes affecting deductions and credits commonly claimed by businesses. For instance:

In particular, planning may focus on the new deduction for pass-through entities. These rules are so complex that even tax experts are having trouble sorting through them, but some clients may be tempted to shift the form of business ownership or transfer ownership shares to other family members to cash in on this tax break.

• The Section 199 deduction for qualified domestic property activities is repealed. This deduction was most often claimed by manufacturing firms.

• Finally, the new law completely revamps the international tax system, including a repatriation tax on profits earned overseas. In the wake of these changes, small business clients may seek your assistance in 2018.

Expect the IRS to issue guidance on the new deduction for pass-through entities and other aspects of the new tax law affecting small businesses. We will continue to update you on significant new developments.

• The new law revamps the rules for net operating losses (NOLs). Essentially, NOLs can no longer be carried back for two years, but can now be carried forward indefinitely (instead of for 20 years), subject to a limit of 80% of taxable income.

2018 © This article first appeared on CPA Practice Advisor

• The deduction for entertainment expenses that are directly related to or associated with the conduct of business are repealed.

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How to Build Trust With Colleagues You Rarely See By Tsedal Neeley, Harvard Business Review

When you exchange pleasantries with a co-worker in the elevator, the two of you are building trust. When you stop by a colleague’s office and see his or her family photographs on a desk, you learn about that person’s life outside the office and, as a result, usually feel closer. Face-to-face meetings, office parties, and opportunities to socialize together after working hours can all contribute to the feeling that your fellow employees will be reliable in what they say and do, and that they will act for the good of the team and the organization. You believe they are trustworthy because you’ve developed this feeling over time. So how do you trust a co-worker you barely see in person? This is a particular challenge for global teams, where employees may only be in contact with one another over email at different times of the day and night. With this in mind, there are two types of trust—swift trust and passable trust—that are useful to understand for people who work in global organizations. In addition, there are two types of knowledge —direct knowledge and reflected knowledge—that employees must possess to make up for inevitable cultural and language differences that can hinder trust. Here’s how these categories break down, and how they work together. Swift Trust. Swift trust is the notion that team members or co-workers can learn to swiftly trust one another from their very first interaction. People decide to trust one another immediately until proven otherwise—often because they have no other choice. Swift trust was first identified in flight teams and law enforcement teams who were brought together in crisis situations and expected to be working together for a limited amount of 12

time. To effectively handle the nose-diving airplane or the threatening person wielding a gun, the team needed to trust one another immediately. In addition to crisis situations, swift trust can be crucial for global teams, whose members are likely to originate from diverse cultures and countries, and who must immediately begin collaborating and coordinating. Swift trust can develop early when managers endorse virtual team members during introductions by highlighting relevant or important experiences, or when team leaders explicitly set rules requiring frequent communication to reduce uncertainty and foster trust. Passable Trust. Passable trust is a category that my colleague Paul Leonardi and I identified by looking at how employees behave online, especially on social media at work. Take, for example, a biologist named Marie. She sent a chat message to her colleague Harry about a new movie release, and then scrolling down his social media page, found that Harry had sent a message to Bruno about a new clinical trial. This piqued Marie’s interest. When she asked Harry about Bruno, Harry said that Bruno was an expert on the subject. Next, Marie examined Bruno’s wall and spent time reading the messages that Bruno had exchanged with other company employees. From these conversations she deduced that Bruno was helpful and polite and most of all, trustworthy enough to contact with her questions. In other words, she had developed passable trust and felt comfortable reaching out to him. Passable trust does not have to be complete or perfect. In contrast to swift trust, which is quickly established and may just as quickly evaporate when the job is done, passable trust can exist as a permanent state without the Analyst Business Supplement 2018

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How to Build Trust continued

anyone expecting that it must deepen or develop. The transparency of interactions on social media (workrelated and non-work-related) and the time spent messaging about personal information is enough. For global teams who communicate largely via electronic technology, passable trust is especially useful. Both types of trust have their limits, however. For global teams, there are other factors besides geographical distance that complicate establishing and building trust with co-workers. Can you trust someone who, in addition to living in a far-away continent, speaks a language you can’t understand and sometimes behaves in ways that feel, to you, awkward or inappropriate? It’s easy to develop cultural stereotypes about your colleagues who originate in a different culture. Yet stereotyping handicaps trust-building and instead leads to misunderstanding, resentment, and an unproductive “us versus them” dynamic. To counter those tendencies, two additional means for building trust—direct knowledge and reflected knowledge—are especially relevant for global teams. Direct knowledge enhances your understanding of distant co-workers, be they geographically distant, culturally distant, or both, while reflected knowledge leads to feeling understood by distant co-workers. Direct Knowledge. Direct knowledge is defined as learning about the personal characteristics and behavioral norms of distant colleagues. Learning that your teammate in France prefers to work uninterrupted when under pressure, or that your teammates in India use their tea breaks to actively collaborate, are two examples of direct knowledge. One way to uncover this information is by allowing for unstructured time at the beginning or end of conference calls to encourage casual conversation. Another is to encourage your employees to travel to a distant collaborators’ site for a period of time. Reflected Knowledge. Less obvious, but equally important for building trust among global teams is reflected knowledge, which is achieved by seeing the norms and behaviors of one’s own site through the lens of distant collaborators. My colleague Mark Mortenson and I identified reflected knowledge as a means for building understanding and trust. Here’s how this could play out:

Leah, a marketing manager from Tel Aviv, had always felt what she perceived as coldness from her colleagues who worked in the Danish office. At times, her direct questions over the phone were met with silence, which Leah found frustrating. In the Tel Aviv office, communication norms included a rough-and-tumble banter. If she said, “my four-year old daughter could do a better job than this!” to express dissatisfaction with a colleague’s subpar work, she knew her colleague would not be insulted. However, Leah’s perceptions about communication norms changed after she spent time with her colleagues in the Danish office. There, she noticed that people spoke to each other quietly and politely. Interacting formally, to show respect for others, seemed to take priority. She saw an employee perform a shallow bow upon entering a supervisor’s office. In comparison, Leah felt loud and argumentative. She was able to see how her direct questions must have seemed aggressive or inappropriate to her Danish counterparts. She began to reflect on the norms of her home site: maybe they were too harsh with one another. Maybe they could treat each other with a little more respect. In any case, by the end of her visit, Leah felt closer and more able to trust her Danish colleagues—and had new ideas about how to run her own office to boot. Trust is paramount for global teams, but it’s something you can’t force on people. It’s a feeling that develops in various ways over time. That’s why it’s necessary to understand how different types of trust and knowledge can serve as the essential glue for global teams. This not only can improve teamwork and morale, but can also deliver better results for organizations. Tsedal Neeley is an associate professor in the Organizational Behavior unit at the Harvard Business School and the founder of the consulting firm Global Matters. She is the author of The Language of Global Success. Twitter: @tsedal Copyright © 2018 Harvard Business School Publishing Corporation. All Rights Reserved.

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Creating a Safe Workplace in the Wake of the #MeToo Wave By Dena H. Sokolow, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

The number of prominent men accused of sexual harassment in recent months is staggering: Mario Batali. Matt Lauer. Roy Moore. Roger Ailes. Al Franken. Harvey Weinstein. Kevin Spacey. While politicians, entertainers, media moguls, and professional athletes make headlines when such allegations are made, the truth is that sexual harassment in the workplace is nothing new. What seems to have changed, however, is the court of public opinion regarding such allegations. The recent accusations by equally prominent women (particularly those who first spoke out against Harvey Weinstein) have created such a loud roar that more women are feeling safe to step forward and report past harassment, claiming #MeToo. As the deluge of sexual harassment allegations continues to dominate the news, employers need to take a hard look at whether their culture, policies, and practices are identifying, preventing, and remedying sexual harassment in their workplaces. 1. Don't Just Have Policies, Have "Live" Policies. "We do not tolerate harassment or inappropriate conduct." Every company says that, and catchall anti-harassment policies are the norm. The question, however, is whether the company lives by those policies. Are those policies known by employees and enforced by management? When policies are merely distributed upon hire and 18

stuck in a drawer somewhere, they do little to help prevent sexual harassment. A "live" policy is not just definitions in a handbook; it is integrated into the culture of the workplace so that behavior that is violative of the policy is regarded as intolerable and reported. Frequent trainings and refreshers on the company's sexual harassment policies are critical to maintaining a safe and positive way to reduce corporate exposure. 2. Define What Is Unacceptable. Employers need to be specific in their policies about what conduct is considered improper harassment. Sexual harassment is not easily defined because it encompasses a wide range of behaviorâ&#x20AC;&#x201D;from the boorish comment to the suggestive proposition to the criminal conduct of sexual assault. Harassing conduct (unless egregious) must be pervasive to be considered illegal sexual harassment under federal law. However, company anti-harassment policies can (and often do) define harassing behavior much broader than the law does. Therefore, some harassing conduct may be a violation of company policy, even if it does not meet the legal definition of harassment. If a policy, culture, and practice against sexual harassment is to be successful, there must be clear lines about what type of interaction and conduct is forbidden.

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Creating a Safe Workplace continued

3. Establish a "See Something, Say Something" Environment. It is not uncommon when investigating a harassment complaint to discover many people who knew about the behavior and did not report it or do anything about it. The question employers must ask is why? Did employees merely laugh it off or just attribute it to the harasser's personality? Did the employees not know that the company policy protects them if they complain? Were the employees merely tolerating the behavior out of fear of repercussions? Do employees think their complaints are dismissed or that the company takes little action upon receiving complaints? It is a given that companies need to have solid, publicized, clear complaint procedures. A successful complaint process provides multiple reporting sources and assures the complainant that there will be no retaliation for reporting. But beyond the policy and procedures, companies need to educate and encourage employees to come forward to identify risky behavior in the workplace. 4. Don't Just Train, Educate. It is easy to stick employees in front of a computer and have them sign off that they completed sexual harassment training. But this type of training does little to prevent sexual harassment in the workplace or encourage victims to come forward. While most training educates employees on the definition of harassment and the company policies against it, in order for the training to help prevent the harassment (the number one goal), employers should look for education programs that allow employees to interact and discuss what is not tolerated in the workplace and ways to create a culture of respect. Training should be the beginning of a discussion. The training for management should address how to identify risky behavior, to sensitively address issues with employees, and to create an environment that makes employees feel safe to talk about such conduct and report it. 5. Finally, Investigate and Take Action. Sexual harassment breeds when a culture of complacency exists. Every complaint, whether formal or informal, should be investigated. Investigations should be prompt, thorough, and effective to protect the accuser, the accused, and the company. The Society of Human Resource Managers says to look for an investigator who has:

• An ability to investigate objectively without bias. • No stake in the outcome. The investigator should not have a personal relationship with the involved parties. The outcome should not directly affect the investigator's position within the organization. • Skills that include prior investigative knowledge and working knowledge of employment laws. • Strong interpersonal skills to build a rapport with the parties involved and to be perceived as neutral and fair. • Attention to detail. • The right temperament to conduct interviews. Investigations should be conducted with no presumptions. Both the complainant and the accused should be heard. Regardless of the results of the investigation, action is always required. If the investigation determines that there was no policy violation, it is still imperative that the company stay in contact with the complainant and communicate that his/her complaints were taken seriously and investigated. If sexual harassment in any form is found, companies must then determine what steps are necessary to make the workplace safe for the complainant. Author Dena H. Sokolow has more than 20 years of experience counseling and defending employers and management on a wide range of labor and employment matters. She can be reached at (850) 425-7550 or dsokolow@bakerdonelson.com. Adam Green serves as the liaison between Baker Donelson and AWT. He is the chair of the firm's Water Technology and Water Treatment Team, which advises on a wide range of legal matters relating to water treatment, waterborne pathogens, and water handling systems throughout the United States and in international venues. He can be reached at (713) 286-7188 or agreen@bakerdonelson.com.

the Analyst Business Supplement 2018

Is CRM Essential for Your Small Business? Probably By Natalie Gagliordi, CNet

Amid the frenzy and excitement of starting your own small business, the need to evaluate and procure technology systems is probably the least interesting task on your to-do list. But choosing the right technology arsenal for your growing small business is a critical process, even if it's hard to imagine how certain systems will fit into your operations, both now and in the future. For small businesses, customer relationship management (CRM) software is one of those potential headscratchers. CRM is technically nonessential, but it's designed to help you build and maintain better relationships with your customers and drive higher customer satisfaction and loyalty. At its simplest, CRM software is a database of customer interactions that businesses use to help their sales teams and service reps increase sales and improve customer 20

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Is CRM Essential continued

service. Depending on a company's needs, CRM could merely help facilitate the transfer of customer data to the cloud, or include more sophisticated features to help teams collaborate with colleagues, communicate with customers, send personalized emails and gather insights from social media interactions. Without a CRM system, most businesses handle customer connections and information using the oldfashioned staples: Excel spreadsheets, Google documents, email, or even note cards and Rolodex. These things work fine for some small businesses, but they offer little in terms of scalability and customer insight. "The roofing industry, in general, isn't known as early adopters of new business technology," said Mason Tuttle, business systems analyst for Malarkey Roofing Products in Portland, Oregon. "Before CRM, we relied on Excel sheets officially, but a lot of customer interaction was also in employees' email inboxes." Post-CRM, Tuttle said Malarkey Roofing was able to tie together all of the customer data that was living in Excel, Microsoft Access data, and data from the company's accounting systems into one centralized location. "It has made us more organized and efficient," he said. Before you begin comparing CRM software vendors, you must first determine whether a CRM system is right for your business. Some companies start using CRM because they want to track sales right from the start; others do it for the insights into customer interactions or to automate certain processes as they grow. Try to factor in not just where you are today, but where you want to be a year from now, once the pace of sales and customer acquisition has gained speed. "As soon as you have something to sell, and as soon as you have customers who you want to build and maintain strong relationships with, CRM becomes necessary," said Clint Oram, co-founder and CMO of SugarCRM. "If utilized correctly, CRM is the tool that helps a small business offer a superior experience to their customers." In the case of Malarkey Roofing, the decision was based on need. The company wanted to implement a 21

centralized data model and a system that would improve and streamline business processes. Combined with a desire to evaluate things like sales growth strategies, CRM became the logical next step. For some businesses, a simple contact manager is probably more than capable of handling customer relationships. If you're running a one or two-person operation and get little or no repeat business, for instance, a full-blown CRM system will be overkill. Same goes if you have only a few large customersâ&#x20AC;&#x201D;it really depends on where you are as a business and what your goals are for the long term.

Choosing a vendor

First and foremost, you want to pick a CRM system that you can afford. When it comes to cost, however, the sticker price is only part of the equation. "Some CRM providers have gotten away with publishing one price, and then locking customers into their cloud and charging them for API calls, usage upcharges and storage fees," said Oram. "I strongly believe simple and straightforward pricing should be the rule of the day so businesses can make their CRM initiative a strategic differentiator at a cost that works for them." You also want to pick a CRM system that will make your business life easier. For the technically challenged, that means choosing a system that is low-code or no-code and easy to operate without a designated IT department. Beyond usability, consider the level of automation the system offers and how mobile-friendly the system is, as well as options for third-party integrations, reporting and analytics, and security. Also, look for a company that ranks high in customer support and offers straightforward contact information to help you resolve issues. Salesforce's head of SMB, Jamie Domenici, recommends factoring in the use of artificial intelligence (AI) when weighing the perks of various platforms. "A lot of small businesses don't think about AI or they think it's not for them. In reality, AI is just something that makes life easier without knowing it's there," she said. the Analyst Business Supplement 2018

Is CRM Essential continued

"For instance, think of the small business owner that goes to a trade show. They could meet upwards of 400 people on that trip, but then go home and not know what to do with those leads," Domenici continued. "What's helpful is if you have a system where you can enter all those names and have AI prioritize which ones are most useful for you. It's like having another person on payroll." On the other hand, be on the lookout for CRM systems that may overstuff their offerings. Oram's take is that SMBs are best served by core CRM functionality, and should avoid vendors that push feature after feature that's not really necessary or useful. "I call this concept 'CRM bloatware,'" Oram said. "I'd advise SMBs to carefully evaluate vendors and find a company that is focused solely on CRM. If CRM is only a fraction of what they do, you're unlikely to find the company that is willing to be a true partner."

A look at the options

Insightly is one of the more affordable CRM options on the market. One of its key features is integrated project management functionality that lets users tie together customer relationship and project supervision in one place. It also offers features for contact management, opportunity management, and detailed sales reports. Insightly offers a free plan for the smallest of businesses, and paid plans start at $12 per month. Pipedrive is touted for its ease of use and features tools for sales automation, reporting, and productivity. The system also integrates with a bevy of third-party productivity tools, including Google apps and MailChimp. Pipedrive starts at $10 per user, per month. Zoho CRM has features such as sales tracking, social profiles and multichannel support. The platform is deeply integrated with Google's G Suite and its recently redesigned user interface has boosted its usability. Zoho CRM offers a free edition and paid plans start at $12 per user, per month.

Salesforce is the undisputed giant among CRM vendors, and it's known primarily for its enterprise deployments. However, it does have an option designed specifically for small businesses, and features include contact management, lead generation, sales forecasting, workflow automation, and collaboration. The company recently added artificial intelligence into the mix with the Einstein platform, which aims to offer additional automation and analytics capabilities. Salesforce starts at $25 per user, per month. SugarCRM's software is highly customizable and offers tools for marketing, employee tracking, and sales integration, as well as sales automation and forecasting, lead management, call-center automation, and reporting. SugarCRM pricing starts at $40 per user, per month. Microsoft offers a robust small business CRM system called Dynamics 365, but the tech giant also offers an even lighter-weight CRM option called Outlook Customer Manager. The service covers the CRM basics, such as tracking customer interactions and history, but it also works to organize customer information, including emails, meetings, calls, tasks, and deadlines. The service is free for businesses using the Office 365 Business Premium Plan, which starts at $12.50 per user, per month. There are dozens of CRM systems available for small businesses, and this list is by no means exhaustive. As always, you'll need to put in some legwork researching your options if you decide to make the move to CRM.

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How to Better Manage Your Cash Flow

Measuring Cash Flow

Prepare cash flow projections for next year, next quarter and, if you're on shaky ground, next week. An accurate cash flow projection can alert you to trouble well before it strikes. Understand that cash flow plans are not glimpses into the future. They're educated guesses that balance a number of factors, including your customers' payment histories, your own thoroughness at identifying upcoming expenditures, and your vendors' patience. Watch out for assuming without justification that receivables will continue coming in at the same rate they have recently; that payables can be extended as far as they have in the past; that you have included expenses such as capital improvements, loan interest, and principal payments; and that you have accounted for seasonal sales fluctuations. Start your cash flow projection by adding cash on hand at the beginning of the period with other cash to be received from various sources. In the process, you will wind up gathering information from salespeople, service representatives, collections, credit workers, and your finance department. In all cases, you'll be asking the same question: How much cash in the form of customer payments, interest earnings, service fees, partial collections of bad debts, and other sources are we going to get in, and when? The second part of making accurate cash flow projections is detailed knowledge of amounts and dates of upcoming cash outlays. That means not only knowing when each penny will be spent, but on what. Have a line item on your 24

projection for every significant outlay, including rent, inventory (when purchased for cash), salaries and wages, sales and other taxes withheld or payable, benefits paid, equipment purchased for cash, professional fees, utilities, office supplies, debt payments, advertising, vehicle and equipment maintenance and fuel, and cash dividends. "As difficult as it is for a business owner to prepare projections, it's one of the most important things one can do," says accountant Steve Mayer. "Projections rank next to business plans and mission statements among things a business must do to plan for the future."

Improving Receivables

If you got paid for sales the instant you made them, you would never have a cash flow problem. Unfortunately, that doesn't happen, but you can still improve your cash flow by managing your receivables. The basic idea is to improve the speed with which you turn materials and supplies into products, inventory into receivables, and receivables into cash. Here are specific techniques for doing this: • Offer discounts to customers who pay their bills rapidly. • Ask customers to make deposit payments at the time orders are taken. • Require credit checks on all new noncash customers. • Get rid of old, outdated inventory for whatever you can get. • Issue invoices promptly and follow up immediately if payments are slow in coming. • Track accounts receivable to identify and avoid slow-paying customers. Instituting a policy of cash the Analyst Business Supplement 2018

Better Manage Cash Flow continued

on delivery (c.o.d.) is an alternative to refusing to do business with slow-paying customers.

Managing Payables

Top-line sales growth can conceal a lot of problems— sometimes too well. When you are managing a growing company, you have to watch expenses carefully. Don't be lulled into complacency by simply expanding sales. Any time and any place you see expenses growing faster than sales, examine costs carefully to find places to cut or control them. Here are some more tips for using cash wisely: • Take full advantage of creditor payment terms. If a payment is due in 30 days, don't pay it in 15 days. • Use electronic funds transfer to make payments on the last day they are due. You will remain current with suppliers while retaining use of your funds as long as possible. • Communicate with your suppliers so they know your financial situation. If you ever need to delay a payment, you'll need their trust and understanding. • Carefully consider vendors' offers of discounts for earlier payments. These can amount to expensive loans to your suppliers, or they may provide you with a change to reduce overall costs. The devil is in the details. • Don't always focus on the lowest price when choosing suppliers. Sometimes more flexible payment terms can improve your cash flow more than a bargainbasement price.

Surviving Shortfalls

Sooner or later, you will foresee or find yourself in a situation where you lack the cash to pay your bills. This doesn't mean you're a failure as a businessperson—you're a normal entrepreneur who can't perfectly predict the future. And there are normal everyday business practices that can help you manage the shortfall. The key to managing cash shortfalls is to become aware of the problem as early and as accurately as possible. Banks are wary of borrowers who have to have money today. They'd much prefer lending to you before you need it, preferably months before. When the reason you are caught

short is that you failed to plan, a banker is not going to be very interested in helping you out. If you assume from the beginning that you will someday be short on cash, you can arrange for a line of credit at your bank. This allows you to borrow money up to a preset limit any time you need it. Since it's far easier to borrow when you don't need it, arranging a credit line before you are short is vital. If bankers won't help, turn next to your suppliers. These people are more interested in keeping you going than a banker, and they probably know more about your business. You can often get extended terms from suppliers that amount to a hefty, low-cost loan just by asking. That's especially true if you've been a good customer in the past and kept them informed about your financial situation. Consider using factors. These are financial service businesses that can pay you today for receivables you may not otherwise be able to collect on for weeks or months. You'll receive as much as 15 percent less than you would otherwise, since factors demand a discount, but you'll eliminate the hassle of collecting and be able to fund current operations without borrowing. Ask your best customers to accelerate payments. Explain the situation and, if necessary, offer a discount of a percentage point or two off the bill. You should also go after your worst customers—those whose invoices are more than 90 days past due. Offer them a steeper discount if they pay today. You may be able to raise cash by selling and leasing back assets such as machinery, equipment, computers, phone systems, and even office furniture. Leasing companies may be willing to perform the transactions. It's not cheap, however, and you could lose your assets if you miss lease payments. Choose the bills you'll pay carefully. Don't just pay the smallest ones and let the rest slide. Make payroll first— unpaid employees will soon be ex-employees. Pay crucial suppliers next. Ask the rest if you can skip a payment or make a partial payment. Copyright © 2018 Entrepreneur Magazine. All Rights Reserved.

the Analyst Business Supplement 2018

6 Ways to Improve Your Hiring Process By Sammi Caramela, Business News Daily

Hiring new talent is an inevitable and critical part of being a business leader, and it's more complicated than just reviewing applications and interviewing candidates.

Focus on what your company can do for potential employees, and you'll attract candidates who better fit your needs.

If your hiring process does not run smoothly, it could deter possible candidates. Here are six tips for building and improving your hiring process.

3. Embrace digital trends and social media.

1. Follow up with job candidates.

In an Accountemps survey of over 300 hiring managers, most agreed that candidates should follow up after submitting their applications. Eager applicants are more likely to be passionate and driven, which are qualities to highlight while reviewing submissions. "Employers should be looking for employees who want the job, and candidates who follow up demonstrate their enthusiasm for the opportunity," said Mike Steinitz, executive director for Accountemps. If you receive follow-up emails, make sure you respond to them with information regarding the hiring process. Communicate a timeline and keep them updated on any changes, said Steinitz.

2. Write better job descriptions.

If you're not careful, the way your job posting is written can deter candidates. Many companies write descriptions with lists of responsibilities and requirements, but a study by researchers in the United States and Canada found that this can alienate qualified employees, The Wall Street Journal reported. In the study, researchers rewrote 56 job ads to emphasize two different approaches: the Needs-Supplies approach, which focuses on what the company can do for the candidate, and the Demands-Abilities approach, which focuses on what the company expects from the candidate. Of the 991 responses, applicants who responded to Needs-Supplies job listings were rated higher than those who responded to the Demands-Abilities ads.

Most people want to work for companies that keep up with the latest tech trends. A survey by MIT and Deloitte found that the vast majority of respondents want to work for digitally enabled organizations, which means businesses will have to stay ahead of the curve in order to retain employees and attract new ones. Make sure your career site is mobile-friendly too. According to a 2015 Pew Research survey, nearly 30 percent of American adults have used their smartphones in some way for their job searches, including browsing job listings (94 percent of smartphone job seekers), filling out online job applications (50 percent), and creating a resume or cover letter (23 percent). Part of embracing the digital age means using public social media profiles for candidate research. Like most employers, you'll probably do a standard background check on applicants, but the candidate's social media profiles can offer more details about the individual as a person and an employee, for better or for worse. While it's legally risky to allow a candidate's social media activity to factor into your hiring decisions, it can give you a better picture of someone you're interested in hiring. In another Business News Daily article, Aliah Wright, a manager with the Society for Human Resource Management, said that social media can be used as a skills assessment, especially if a candidate has professional blog posts or portfolio work. [See Related Story: The Pros and Cons of Social Media Background Checks]

4. Fit the personality to the job.

Although the right skill set might seem like the most

Improve Hiring Process continued

important factor in whether a candidate is a good fit, the truth is that skills can be acquired, but personalities cannot. "Don't become pigeonholed into thinking the person with the exact necessary experience is the right person for the role," said Tom Gimbel, CEO and founder of staffing and recruiting firm LaSalle Network. "Consider soft skills—like interpersonal skills, communication skills, thought processes, and emotional intelligence—because they matter." You should also consider how a candidate's personality traits align with the daily job tasks. For instance, a trait such as empathy would likely be much more important for a nurse or a social worker than it would be for a tax attorney or a computer programmer. "What kind of person you hire depends on [the] culture of organization and the kind of job," said Maynard Brusman, a San Francisco-based psychologist and founding principal of consulting firm Working Resources. "A great person with all kinds of skills may be [a] good fit for one and [a] poor fit for another, simply based on their personality type."

5. Improve your interviews.

A study by Leadership IQ found that failures exhibited by new employees may result from flawed interview processes. Eighty-two percent of the 5,000 managers surveyed reported that the interviewers were too focused on other issues, too pressed for time, or lacked the confidence in their interviewing abilities to pay attention to red flags. According to Leadership IQ CEO Mark Murphy, this is because the job interview process focuses on making sure new hires are technically competent, whereas other factors that are just as important to employee success— like coachability, emotional intelligence, temperament, and motivation—are often overlooked. To ensure you touch base with these factors, ask the right questions. John Schwarz, CEO and founder of workforce analytics company Visier, said answers to questions such as "who are you going to be 10 years from today?" and "what 27

makes you get up in the morning and do what you do?" can tell you a lot about a candidate's drive and ambition. It's important to allow prospective employees to interview you too. Letting candidates ask questions will give you a chance to see what's important to them, Brusman said. It also gives them a chance to determine that they want to keep pursuing a job at your company, or to decide that it's not the right fit for them. "Be open and honest about what it's going to be like to work for your company," Brusman said. "You want to give a realistic preview of the work environment."

6. Keep an eye on your reviews.

Potential employees often seek insider information about companies they want to work for, and this includes salary estimates, interview tips, and reviews from current and former employees from sites such as Glassdoor. According to Glassdoor, 46 percent of its members read company reviews before they even speak to a recruiter or hiring manager. Top candidates may not even apply in the first place if they don't like what they see: 69 percent of job seekers said they would not take a job with a company that had a bad reputation, even if they were currently unemployed. However, another 69 percent of respondents said they're likely to apply for a job if the employer actively manages the employer brand by responding to reviews, updating the company's profile, and sharing updates on the company's culture and work environment. Based on Glassdoor's data, two actions that draw in candidates include being active on review websites and posting accurate information. If you have a lot of negative reviews from former employees, it may be time to work on your company culture before you try to fill any open positions. Doing so can improve employee retention and lead to more positive reviews that will attract quality employees. Sammi Caramela is a recent graduate of Rowan University, where she majored in writing arts and minored in journalism. She currently is employed as a Purch B2B staff writer while working on her first novel in her free time. Check out her blog at sammisays.org. Copyright © 2018 Business News Daily. All Rights Reserved. the Analyst Business Supplement 2018

Five Steps to Painless Inventory Management By Lisa Girard, Entrepreneur Magazine

Inventory management is not the sort of thing that gets most entrepreneurs' blood flowingâ&#x20AC;&#x201D;until their inventory manager leaves. That's exactly what happened in 2008 to Marc Isaacson, the CEO of online integrative pharmacy Village Green Apothecary. Isaacson filled the position by promoting a purchasing assistant. Before long, the company was running out of its most popular items. "At the very least, we lost those particular sales and in some cases, we lost the customers," Isaacson says. He estimates the total loss at 2% to 3% of sales. Isaacson's first fix was to start using a "blue dot" system: putting a blue dot next to each of his approximately 1,000 best-selling items, making them easier to identify, and requiring three to four weeks of stock for each. About 2% of Village Green's inventory used to be out of stock at any given time; after using blue dot, that number came down to just 0.5%. "Not only does this mean we don't have to disappoint our customers, but this has raised morale among the staff as well," says Isaacson, whose Bethesda, Maryland-based company has about 50 employees. "They don't have to deal with the frustration of not being able to fulfill an order."

move. Your options aren't great, says Paul Huppertz, a logistics expert with The Progress Group, a supply chain consulting company based in Atlanta. "You may end up marking it down, selling to discounters, or shipping it to overseas liquidators." To fix it: Start with some decent projections of how much supply you'll need and when you'll need it. The best gauge is what you've sold in the past. If you've sold 100 items per month for the past 12 months, chances are that you'll need 100 this month. Then there's seasonality: Do you usually see a fourth-quarter spike with holiday sales? Or, if you're in the home and garden business, do you see more activity in the spring selling season? "You can also identify and quantify less obvious patterns such as month-end spikes," says Huppertz.

2. Inaccurate Inventory Tracking

Once you know how much you need, you have to make sure you actually have it on hand. Opportunities for miscounts are everywhere: during receiving, order fulfillment, and the all-too-common pilferage. In manufacturing, says Huppertz, you've also got to account for yield or scrap during production.

Properly managing your inventory involves more than making good hires and getting blue dots next to your best sellersâ&#x20AC;&#x201D;although those are excellent first steps. Here are some common mistakes entrepreneurs make in managing their inventory, and how to fix them.

To fix it: Using electronic data interchange (EDI) and bar code scanning can help eliminate data entry errors. Huppertz suggests implementing a system of so-called "cycle counting." Choose a few items a day and compare the inventory record to the actual count. Best sellers should get counted more often.

1. Too Much Inventory

3. Lack of Priorities

Afraid of being caught short, it's easy to spend too much on inventory, which can eat up working capital and erode profits. Warehousing isn't free, of course, and inventory that sits on a shelf is subject to damage, depreciation, and even obsolescence. Old inventory can be very hard to 28

It can take an outsized amount of time and resources to keep track of all the details for each inventory item. Some triage is in order.

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Five Steps continued

To fix it: Focus on the items that matter most. Generally, 80% of demand will be generated by 20% of your items. Spend most of your effort on those "A" items, forecasting, reviewing in-stock position, and reordering more frequently. The next highest-selling 30% of items, the "B" items, will typically generate about 10% of sales. The slowest selling "C" items account for half the items you stock, but only generate 10% of your sales.

4. Using Spreadsheets

It may seem natural to use spreadsheets such as Microsoft Excel or Lotus 123 to track your inventory. But Sid Helms, director of IT at Martinsville, Virginia-based Diversified Distribution, which provides third-party logistics services, says you're asking for trouble if you use spreadsheets that way. He says it's easy for spreadsheets to be accidentally deleted or for changes to be lost. And he says there's no foolproof way for multiple people working on inventory to synchronize their spreadsheets.

5. No Backup Plan

Congratulations! You're happily bar-coding away, and you've got your inventory in Quickbooks or Peachtree. Now what happens if there's a fire or your computer is badly damaged or stolen? To fix it: First, take a deep breath and consider the worst-case scenario, such as fire or theft. Your backup plan can be as simple as saving critical data to a removable thumb drive. (Just don't leave it at the office.) Software such as Norton Ghost or Symantec Backup Exec can get the job done, too. And it's not a bad idea to send a backup copy of your inventory data to your accountant every month, says Helms. After all, why should the fun of inventory be limited to your employees? Copyright ÂŠ 2018 Entrepreneur Magazine. All Rights Reserved..

To fix it: Use software such as Quickbooks or Peachtree. Yes, these are better-known as accounting packages, but they include inventory features and will make it easy to get a dollar value for your inventory. They can also provide you with a central database.

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