Cabin Business

Recession pressures have businesses spanning the economy discovering new ways to do more work with fewer workers, cutting payroll for good.

Employers became leaner and more efficient during the third quarter of 2009.

Clint Johnson, a University of Central Arkansas professor of economics, said that because of, not despite layoffs,  productivity — output per hour of work — has jumped at the fastest pace in six years.

“Employers always try to counter declining sales revenue by substantial cost-cutting, both by layoffs — having fewer people doing the same work, boosting productivity — and by capital-for-labor substitution, replacing humans with machines or computers.”

A small-business owner may be tempted to purchase an inexpensive software package to prepare his or her tax return and forgo enduring an annual audit from an outside CPA firm. After all, the small business may have a good product, good cash flow and few employee issues. The owners may not see the need for an annual audit because the business is family-owned, does not need bonding and does not anticipate having to borrow any money in the near future.