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  (ARCHIVES)Back to Current
Money Management (11/28/2007)
Give Your Business an IT Check-up

To be successful in business you don't need to be a technology whiz - but you should have a plan in place for making the most of your company's data. According to the Minnesota Society of CPAs (MNCPA), the end of the year is an excellent time to carefully examine your company's technology to determine what's working well and what could be improved. Start by asking yourself the following questions.

Is it time for my business to update its computer equipment?

Technology changes rapidly, so although your company's systems may appear to be working well, you may be missing out on new ways to protect your business information, help your business run more efficiently, and better serve your customers.

For example, to run some of today's most powerful programs, you need a fast and large hard drive with significant memory capacity. You might consider adding newer technology, such as wireless capabilities, to older equipment, but often the cost of

upgrading a computer is more than the cost of a new model.

If you do need new computers or other equipment, consider making the investment before the end of the year, so you can take advantage of the 2007 expensing deduction. Under the Section 179 expensing allowance, small businesses that qualify may expense -- that is, deduct -- up to 100 percent of the cost of most business property in the year it is put into service, rather than recover the cost through depreciation deductions. The maximum amount of equipment placed in service that businesses can expense increased under the Small Business and Work Opportunity Tax Act of 2007 from $112,000 to $125,000. This expensing limit is reduced if the cost of the eligible assets placed in service during 2007 exceeds $500,000.

Do I have an effective system to protect my equipment from power surges and power outages?

Loss of electrical power and power surges are the most common causes of data loss and weaken computer components. If your business depends on computers, protecting your power source is critical. This is especially important if your area is prone to power fluctuations or electrical storms.

An Uninterrupted Power Supply (UPS) unit offers both superior surge protection and, depending on the model, anywhere from 15 to 45 minutes of backup power - enough time to save and copy critical files. The idea of a UPS isn't to continue your business dealings while the lights are out, but to ensure that your data is available when the lights come back on.

Have I installed the latest version of my computer's operating system and software?

CPAs strongly recommend that you keep your operating system (OS) and software applications current by regularly downloading and installing all updates. Updates improve performance, fix bugs, and may add new features. You should also regularly update and run anti-virus software.

Generally when registering your software, you will be enrolled in or be informed about the vendor's upgrade strategies, which often include automatic online checks for updates.

How strong is my data backup system?

You need to consider your storage needs in terms of both capacity and physical location. Depending on the amount of data you have, you can back up your hard drive to USB flash drives, CDs, DVDs, tapes, or an external drive. You might also want to look into off-premise backup. There are many firms on the web that will store your backup data for you for a monthly fee.

How well is my company's data integrated?

Over the years, small businesses tend to produce multiple silos of data. Your inventory, sales data, and marketing information need to be linked together to better serve your customers and increase your company's productivity and profitability. Without this integration, you may not know who your best customers are or, worse yet, you could end up agreeing to provide a top customer with an item you don't have in your inventory.

Consult with a CPA

To optimize the systems you have in place and to ensure that they are secure, it's wise to consult with a CPA who specializes in information technology.

Information and resources are available to the public on the MNCPA Web site (www.mncpa.org/information) including state and federal tax forms and information and financial planning information for individuals and small businesses. A free CPA referral service is also available on the Web site or by calling 800-331-4288. The MNCPA is part of the national 360 Degrees of Financial Literacy campaign to help Americans' improve financial literacy; information and resources are available at www.mncpa.org/360.

 

 

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