I'd like to hear the co-founder's stories as well. I think this would give us a complete story of the situation.
Mistakes You Should Never Make
121–130 of 348 posts
Re: Mistakes You Should Never Make
#122[deleted]
Re: Mistakes You Should Never Make
#123Earlier quoted context omitted.
It boils down to not having a handle on the general ledger, which if not suicide is at least reckless self-endangerment. But I think it is plausible for someone who is administrativaphobic. But there is a reason this is mistake #1 .
> it is plausible for someone who is administrativaphobic Okay. But then you shouldn't really call oneself a CEO.
Isn't that why he was writing this? To explain that his mistakes aren't representative of what he now knows he should do as CEO? I understand what you're saying on a literal level, but it's very possible he's been a good CEO in other areas that he hasn't mentioned here. I would hold off on the judgment.
Re: Mistakes You Should Never Make
#124Earlier quoted context omitted.
This is why you use a payroll company that takes all the money for you for each paycheck and handles the quarterly filing for you -- no "extra cash" hanging around. I think this is called "Full Service Payroll" and can even include insurance against tax liability. I assume they make money on the float, but I'm not sure.
That's very dangerous, no matter what the reputation of the firm. The thing to do is to use separate accounts for reserves like these and to pay directly into the coffers of the tax man, lest the party that you do business with unexpectedly goes bust (they do) and you end up being liable again for the same amount of tax that you already paid to the payroll company. Don't for one second think that you're off the hook…
This may be good advice in NL, but it's sort of diametrically the opposite of best common practice in the US. Payroll being handled by payroll firms is the norm in the US, and the stories about terrible payroll withholding screwups hurting companies are, as far as I can tell, invariably the result of people trying to handle this themselves, paying "directly into the coffers of the tax man".
Re: Mistakes You Should Never Make
#125Can someone clarify why dropping out of Harvard Extension School is a subset of dropping out of Harvard University? I checked out Wikipedia, but it's not very clear about Harvard's system and the different colleges (Harvard College, Radcliff College, Extension School, ...) I've always assumed there was just one "University of Harvard", but apparently it's more complicated...
Harvard Extension School is an adult education program, like night classes. Your teachers may be Harvard faculty (but never were in the 7 classes I took there), and the other students are not Harvard undergrads. Also there is no application: they take anyone with a credit card. (There may be an application if you want to earn a degree rather than just take desultory classes; I don't know.) That's all not to say the classes aren't very good, but it's not the same as "getting into Harvard."
Re: Mistakes You Should Never Make
#126This is why you pay an accountant the big bucks and pray they don't mess up in turn, very frequently if they do the responsibility is still yours. Running a company comes with a lot of responsibilities that tend to keep you awake until the small hours of morning. Details like these can get you, especially because they are retro-active and hardly anybody is in a position to absorb an instant loss of say 7 years remitt…
This practise is in my opinion SO wrong.
There is a saying: "... as humanly possible" in other words people make mistakes !
Re: Mistakes You Should Never Make
#127It would be really interesting to hear Seth's former co-founders response to this well written piece.
Re: Mistakes You Should Never Make
#128[deleted]
This is probably not great advice, because the state and federal IRS (reasonably) get pissed when you misclassify FTEs as contractors, and there are penalties if they decide that's happened.
Re: Mistakes You Should Never Make
#129Of all the financial mistakes you can possibly make running a company, withholding payroll taxes and then failing to remit them is probably the worst. Be thankful you caught this before the liability exceeded your available funds, because company operators are apparently routinely held personally liable when there's a shortfall, and I'm not sure that debt is even dischargeable in bankruptcy. What's worse, minor versi…
The logic here appears to be that since the employee is deemed to have paid the government on the day that an employee receives his or her paycheck, the employer is holding those funds in a trust for the government, to be remitted quarterly. The government appears to believe in Monteiro's strategy: "Fuck you, pay me." So you -- as an officer, an employee who pays bills, possibly a board member, or possibly other rela…
Weirdly, I feel for the IRS here.
Early on in the days of the Internet, I would actually call up spammers and try to help them understand why they should stop. 80% of the people were confused small businesspeople who were glad somebody gave them the straight scoop. 20% were weasels who would say or do anything as long as it got them what they wanted.
After a few decades of bullshit excuses from irredeemable idiots, I would also end up in the "fuck you, pay me" category. Because nothing short of being as inevitable as death would be enough to get inveterate weasels to actually pay, and nobody wants to be jerked around by weasels.
It sucks for the rest of us, though, because it turns reasonable mistakes like this into land mines.
Re: Mistakes You Should Never Make
#130Mistake 1: Taxes This thing about not noticing that you weren't paying payroll taxes wasn't a "mistake." It was pure head-in-assery. How can you "miss" the fact that you weren't being subtracted for payroll taxes? One quarterly / annual review after another, for 3 years? It's like running a personal budget, and "missing" the fact that you aren't paying rent.
I think this mistake had a cascade effect on the other ones. If you remove this one, a lot of other ones should be manageable.