The Optical Vision Site

Deducting Optical Business Bad Debts

If debt collection is a problem for your optical business, deducting uncollectible (bad) debts from your tax bill may somewhat lessen the sting of simply writing them off. Here is some basic information on deducting business bad debts.

First, the debt must be legitimate. A bona fide debt arises from a debtor-creditor relationship and is based on a valid and enforceable obligation to pay a fixed or determinable amount of money. For debt creation, the business must be able to show that it was the intent of the parties at the time of the transfer to create a debtor-creditor relationship. In other words, the optical business must be able to show that at the time of the transaction, there was a real expectation of repayment, and there was intent to enforce the indebtedness.

For most businesses, it is common to incur uncollectible or worthless debts. Two types of bad debt deductions are allowed by the IRS: business bad debts and non-business bad debts. Business bad debts give rise to ordinary losses that can generally offset table income on a dollar-for-dollar basis. Non-business (personal) bad debts are considered to be short-term capital losses. Because there is a limitation on deducting capital losses, distinguishing business and non-business bad debts is critical.

Optical business bad debts generally originate as credit sales to customers for eyecare goods delivered or eyecare services provided. If a business sells goods or services on credit and the account receivable subsequently becomes worthless, a business bad debt deduction is permitted, but only if the revenue arising from the receivable was previously included in income.

Optical business bad debts can also take the form of loans to suppliers, clients, employees and distributors. Additionally, a business bad debt deduction is allowed for any payments made in the capacity as guarantor if the reason for guaranteeing the debt was business related. Here, the guarantor’s payment results in a loan to the debtor, and the taxpayer is generally allowed a bad debt deduction once the loan becomes partially or totally worthless. Worthlessness can be established when the optical business sues the debtor, and then shows the judgment is uncollectible. However, when the surrounding circumstances indicate a debt is worthless and uncollectible, and that legal action to collect the debt would in all probability not result in collection, proof of these facts is generally sufficient to justify the deduction.

Source: Tax and Business Alert – July 2010

Top 15 Reasons To Fire Someone

One of the worst things I hate to do is fire someone. I have a timeline as it takes me 3 days to do it, because it is so hard. Day 1, get written documentation in order. Day 2- Gear self up and make notes as to why I am firing and Day 3- Just Do It.

The reality is firing someone is not always bad. In some cases it can be a relief to both parties. Of course no one wants to get fired, but that is only the ego talking. I have actually been thanked for firing a person, as they went on to bigger and better things. If you have a bad apple in the bunch and you are not doing any thing about it, you lose respect from your employees.

On the reverse side, if you are an employee this is how not to get fired!

Of course the best thing is to Fire them up not Fire them, but sometimes you gotta do what you gotta do.

The single most important thing to do in business is to ask yourself “Is this an asset or a liability?” So go ahead and ask yourself “Is this employee helping us or costing us more money?” When you think that way making the decision to fire someone becomes easier

So when should you fire someone?

1. Stealing
2. Habitually Late
3. Absenteeism
4. Racism
5. Poor Morale and effecting the morale of other personnel, trouble making, poor attitude
6. Losing good workers due to one poor worker.
7. Not doing their work and not getting results
8. Directly disobeying orders and responsibilities
9. Sexual harassment and wanton sexuality, dressing inappropriately
10. Drug and Alcohol on the job
11. Inability to do the job, making the same mistake over and over, refusal to learn
12. Losing patients, being rude and not customer service oriented.
13. Lying
14. Violation of Protected Material
15. Doing personal projects at work, i.e cell phones, texting, Facebook …

Before firing an employee, a manager should know the state’s rules and regulations and that they can’t fire someone because of race, gender or sexual orientation. Fire an employee legally with tips from an administrative trainer in this free video on business management and leadership skills.

How to Fire an Employee Legally — powered by eHow.com

eyeRead – The Way We’re Working Isn’t Working

I recently did a post about the need to take vacation planning for optical businesses. This book, The Way We’re Working Isn’t Working, by Tony Schwartz was reviewed on Channel 6 this morning and one of the Top 10 tips included the need to take vacation. Another eyeRead recommendation from The Optical Visionsite.com. Another good tip is “Take back your lunch”. How may of you eyecare professionals are eating at your desk?

Thank you to for Soderberg and Walman Optical Labs for sponsoring this eyeRead post today.

Optical Employers Staying Compliant with Health-care Reform

We are following as best we can, the new health-care reform so we can help our readers who have optical employees with staying compliant. Key changes affecting section 125 FSAs (Flexible Spending Accounts) include:

• The costs for over-the-counter drugs not prescribed by a doctor will be excluded from being reimbursable through an HRA or health FSA and from being reimbursed on a tax-free basis through an HSA (Health Savings Account), effective January 1, 2011.
• Employers will be required to report the aggregate value of the benefits they provide for all health coverage, excluding medical FSAs, on employees’ W2s.
• Medical FSA contributions will be capped at the lesser of the company’s plan maximum of $2,500, starting in 2013 (not 2011, as passed in the original Senate bill).

MONEY SAVING TIP FOR OPTICAL EMPLOYERS: FSA – Flexible Spending Account

A flexible spending account (FSA) helps decrease payroll taxes by letting your optical employees set aside a portion their salary for out-of-pocket medical, dental, vision and dependent care expenses. Josh Mesirow, Chief Financial Officer for Vision West says “We are very happy that we can provide our employees with Flexible Saving Accounts as they provide considerable tax savings for the optical employee as well as decreasing Vision West’s payroll taxes”.

Source: Paychex

Vacation Planning for Optical Businesses

Thank you to the OWA and Amy Spiezio,  Managing Editor for Eyecare Business magazine for  allowing us to post this article from OWA’s One Minute Mentor. We think it will be helpful for our optical readers planning vacation this summer – I particularly like the part about staying away from your optical business email!

Yes, I wish I was here too!

Going to the beach, the mountains, or even just the back yard this summer? Good! It will help you work better in the long run.

PricewaterhouseCoopers’ Jay Henderson suggests in a Business Week article “”How to Take a Vacation” that vacations are a critical part of doing business. In the story Henderson says, “Vacations can improve the quality of lives and the quality of the professional services we offer if you come back focused and recharged. When I plan my vacations effectively, I’m able to return to work with a strong focus and energy level.”

Think it’s impossible for you to go away and relax? Consider these how-to tips from PricewaterhouseCoopers:

1. INFORM: Let your clients know your vacation schedule, especially when you’ll return and who your backup is. Also let them know that you will not be available during your vacation. In the office, have a policy in place that clearly states the acceptable reasons for contacting individuals who are on vacation. Finally, change your voicemail and email to reflect your out-of-office status and provide a name and number for immediate assistance to your callers.

2. PREPARE: Communicate with your manager and your subordinates about your departure plans and what is in the works that may pop up while you are away. Clean up your workspace and clearly mark any items that may be needed by others while you are away.

3. BEING THERE: While on vacation, fight the temptation to call in or sign in to your email. You are entitled to your time off and your coworkers deserve your trust that they can keep the roof from falling in while you are away. Let your vacation time refresh your spirit and boost your imagination—it will enhance your work in the long run!

4. GETTING BACK: Ease into your return. Avoid setting meetings for your first day back in the office. Instead, take the time to dig out, respond to voice mail and email, and share the stories of your adventures with your coworkers.

In a world that seems to get smaller and smaller and more connected for constant communications, vacations from it all are more important than ever. Take the time to ensure that you play as hard as you work.

Henderson notes: “Vacation is about fun, recharging batteries, creating and enhancing relationships, and trying new experiences. Our people work hard and do a great job in serving our clients in a quality manner. We want them to take the same approach and focus on their vacation experiences, because when this happens, everyone benefits.”

What’s Hot For Summer – Optical Summer Interns

The Great Recession is slowly recovering but unemployment numbers are still at the worst since 1948. It is hard for people without experience to jump into the workplace, especially new graduates. There will be many students needing summer internship positions this summer and this is a low cost opportunity for optical businesses to see if they can find projects for students to work on that will benefit the business. Projects that the regular staff do not have the time or skills to attempt would be ideal.

Some What’s Hot for Summer – Optical Summer Intern project examples:

• Improving on or even creating a data base for customer mailings and follow ups

• Creating a Facebook page and Fan page with photos, images and events, explaining terminology

• Special Marketing events with Strategic partners
• Using Social Media to book appointments etc.

I recently read that ClearVision Optical has been selected as the Dowling College Internship Program “Employer of the Semester” for the Spring 2010 term. Reading this prompted me to write this post as Internship programs are a benefit to both parties and I have personally been a big fan of doing this for a long time. I believe the employer and other optical employees can learn from the intern. ClearVision Optical has been involved in internships for many years and is a great example of giving back to the community by mentoring the younger generation. Over 50 companies were considered for the award upon student nomination. ClearVision was the top contender based on the number and caliber of internship opportunities offered and the commitment made to help Dowling College students complement their education with real life experience.

Internships are appropriate in just about any working environment from a small optical practice to a multinational optical company. We would like to hear about any optical internship programs that you have been involved in or any tips as part of our What’s Hot for Summer topics.

Use a COIN to Reach Your Goals – Optical Women’s Association

I have trouble concentrating during my work day and I have not improved with age. I am always look for ways to help my concentration and focus. Sandy Likes of the Optical Women’s Association (OWA) provided this “One Minute Mentor” gem and I am putting it into practice right now!

• Ever wonder where the time goes and why you are missing achieving your goals?

• Are your thoughts and actions aligned? If thoughts lead to actions, what are you thinking?

Use this C O I N exercise to get your thoughts and actions aligned with your goals (we have posted on setting goals):

• Committed - you will do whatever it takes to get it done.
• Obsessed - you are spending too much time and effort on thoughts and actions you cannot impact and have no control over.
• Interested – you will do what is convenient to accomplish the goal, but not go the extra effort or take on the necessary risk.
• Not interested – you are spending time on thoughts, actions and people you have no interest in and will not help you achieve your goals.

Write down your goals and plans to achieve your goals. Next to each goal, determine your level of commitment or interest to achieving the goal.

Now write down what you have been thinking about for the past hour. Next to each thought evaluate it with a C O I N. Are your thoughts focused on the goals you are most committed to achieving?

Do the same exercise evaluating your actions for the past hour. You may be driving in a car but thinking about ways to get more sales.

Track your thoughts and actions throughout the day to learn if you are really committed to achieving your goals, or just interested. Hope is not a strategy for success; your thoughts do matter.

Sandy Likes has been involved in the Optical industry for many years and is currently President of BusinessRx. You can reach Sandy at slikes@businessrx.net.

What to Look For in New Optical Hires

A new optical employee is a big investment and knowing when you have found the right candidate is vital and is one of the most important aspect of Human Resource responsibilities. This means more than following your instincts. Supervisors need to know what important criteria to look for in new hires.

The following are red flags to be aware of when recruiting new optical employees:

Energy and Flexibility!

1. Flexibility. For most jobs, you don’t want a rigid person who can only do things one way. You want someone who is capable of blending in and being open to how things operated within the company.

2. Dependability. This may not be the world’s most exciting trait, but it surely is a useful one. This optical employee shows up on time, meets deadlines, performs well and doesn’t make excuses when something goes wrong.

3. Loyalty. You aren’t interested in an employee who is going to move on to another company in six months. Someone who may appear too good to be true or who has been switching jobs for a couple of years may not be a good pick.

4. Energy. It’s a good idea to bring in an optical employee with obvious energy to add to your team. Enthusiasm is contagious and pretty soon you find all your employees, as well as the new staffer, working at enhanced levels of productivity.

Source: US Vision - Supervisor Support and Smart Supervision