Accounting

Tax Deadline and Other Tax Season Changes

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Tax Deadline and Other Tax Season Changes

tax dealine

Many tax changes, including the tax day deadline, are occurring in light of the COVID-19 pandemic. These changes are affecting individuals, small business, and tax-exempt entities alike. This article provides a general overview of the federal tax relief measures and changes recently implemented.

 

Tax Deadline Day

The Treasury Department and Internal Revenue Service announced that the federal income tax deadline for filing has been extended from April 15, 2020, to July 15, 2020. Federal income tax payments are also deferred to July 15, 2020, without interest or penalties, regardless of the amount owed. The postponement applies to all taxpayers, including individuals, estates, trusts, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

 

Tax Credits and Relief

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), enacted on March 27, 2020, is designed to encourage eligible employers to keep employees on their payroll, despite experiencing economic hardship related to COVID-19, with an employee retention tax credit.

The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021.

The Families First Coronavirus Response Act (FFCRA) contains two separate provisions: The Emergency Paid Sick Leave Act (EPSLA) and The Emergency Family and Medical Leave Expansion Act (Expanded FMLA). It provides small and midsize businesses a refundable tax credits that reimburses them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.

Small-Employer FICA Tax Relief relates to sick leave and family medical leave payments authorized by the Act are exempt from the 6.2% Social Security tax component of the employer’s federal payroll tax that normally applies to wages. Employers must pay the 1.45% Medicare tax component of the federal payroll tax, but they can claim a credit for that amount.

 

Other Tax Updates

The Standard Deduction amounts will be increased slightly this year compared to previous years.

Single & Married Filing Separate $12,200

Head of Household $18,350

Married Filing Joint $24,400

 

The Insurance Penalty for not having health insurance no longer applies for 2019 federal tax returns. However, some states have their own individual health insurance mandate.

The Alimony Deduction was eliminated for divorce rulings signed after December 31, 2018 that require alimony payments. The payer will not be allowed a deduction for payments made, nor will the payee be required to claim the alimony as income on their respective tax returns.

 

Do your financial statements and accounting records give you what you need to optimize tax savings? Have you considered working with a reputable and experienced accounting firm?

If you need help with bookkeeping services or accounting services, or have questions understanding the new tax changes, please reach out to Consultance Accounting and we will be happy to assist.

 

Disclaimer: Consultance Accounting does not provide tax or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax or legal advice.

What are the 5 basic principles of accounting?

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It’s essential for any business to have basic accounting principles in mind to ensure the most accurate financial position. Your clients and stakeholders maintain trust within your company so recording reliable and certified information is key. What are the 5 basic principles of accounting? To better understand the principles, let’s take a look at what they are.

1. Revenue Recognition Principle

When you are recording information about your business, you need to consider the revenue recognition principle. This is the period of time where revenues are recognized through the income statement of your company. In order for your revenues to be recognized in the period that the services were provided if you are on the accrual basis, If you are on the cash basis then, the revenues need to be recognized in the period the cash was received.

2. Cost Principle

Recording your assets when you purchase a product or service helps keep your business’s expenses orderly. It’s important to record the acquisition price of anything you spend money on and properly record depreciation for those assets.

3. Matching Principle

Expenses should be matched to the revenues recognized in the same accounting period and be recorded in the period the expense was incurred. If there is a period of time where revenue was recognized on sold products or services, then the cost of those things should also be recognized..

4. Full Disclosure Principle

The information on financial statements should be complete so that nothing is misleading. With this intention, important partners or clients will be aware of relevant information concerning your company.

5. Objectivity Principle

The accounting data should consistently stay accurate and be free of personal opinions. Make sure the data is also supported by evidence that can include vouchers, receipts, and invoices. Having an objective viewpoint, in this case, helps rely on financial results. For example, your viewpoint may not be objective if you once worked for the same company that you are now an auditor for because your relationship with this client might skew your work.

Now that you’ve got all of these down, moving forward with the financial positioning of your business will be effortless.

Contact us at 877-232-6788 if you have any questions or concerns about implementing these basic accounting principles to your business.

Love Running Your Organization, But Hate Paperwork? 3 Reasons to Outsource Bill Payment

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If I asked the leaders of nonprofit organizations and associations, as well as business owners, how much time they spent on their true business at hand, or the things that matter most, I’d venture to say that most of them would say “not enough.”

When I bring new clients on board, I find that many of them spend a lot of time shifting through mounds of paper, trying to stay on top of vendor bills and payments and other administrative activities. By outsourcing their back office functions to Consultance Accounting and switching to Bill.com, an automated bill payment process solution, organizations can focus on what matters most, and let us handle their bookkeeping and accounting needs.

As a cloud-based firm that provides outsourced accounting services to clients across the country, Consultance Accounting leverages the use of top technology platforms, such as Bill.com, to streamline our clients’ operations. Bill.com is a bill payment process solution that integrates with QuickBooks Online and other accounting systems. Bill.com outlines Ten Reasons to Outsource (and Upgrade) Your Bill Payment. Here’s my take on some of the key points they discuss:

Bill Payment Process
Credit: Quinn Dombrowski CC BY-SA 2.0 via flickr

Get Rid of Paper Hassles: Have you heard of that tip about handling a piece of paper only once to increase your efficiency? With an automated bill pay solution, you can take that tip to the next level by eliminating those pieces of paper entirely! Here’s how it works for our clients’ Accounts Payable processes: We work with clients and their vendors to eliminate all paper bills, so instead, they are electronically remitted directly to a dedicated Bill.com email account. From there, our accounting specialists ensure the proper account coding and payment dates, and the Bill.com system will automatically forward the on-line bills to the appropriate people for approval. All the supporting documents are stored securely on-line, leaving you with a paper-less work environment.

 

 

Bill Payment ProcessEnhance Your Mobility: Do you ever feel like your handcuffed to your desk due to all the administrative work you have to handle? By outsourcing your accounting function and using Bill.com, you can free yourself from your physical office space and conduct business anywhere using your mobile device(s). This occurs for multiple reasons. First, you eliminate the need for an in-house bookkeeper to handle your accounting transactions, which saves you the time in the office managing that employee. Second, your vendor and payment data is easily accessible on your mobile device(s). As a business owner who is always on the move, I can personally attest to how easy it is to access my vendor invoices using my smart phone. For example, if a vendor calls me up and asks about a payment, I can easily pull up the Bill.com app on my smart phone, review the vendor’s information, and approve a payment on the spot. It’s that simple.

 

Bill Payment Process
Credit: 401calculator.org via flickr

Experience Financial Savings: In addition to helping you reprioritize your precious time, it’s important to note the opportunity to save money too. By outsourcing your back-office functions to an accounting services firm, you can reduce your employee-related overhead costs (e.g., training, office space, benefits, etc.). By using a bill payment solution like Bill.com, you can save by transitioning your paper checks to electronic payments. Bill.com estimates that the total yearly cost for paper checks can be $24,540, as compared to total yearly cost for electronic payments of $1,680.  Click here for more info.

 

 

 

If you’re like most business owners and leaders of nonprofit organizations, you take great pride in the services or products you provide. You want to focus your time and energy on business strategy and goals. Outsourcing your back-office functions to a dedicated, highly-skilled accounting services firm that uses proven technology apps to streamline your workflows allows you to do exactly that.

So, are you ready to concentrate like Arnold Palmer? Whether it’s serving your customers, fundraising for future growth, or expanding your reach in the community, Consultance Accounting in partnership with Bill.com can help you save valuable time, reduce operating costs and gain peace of mind that you’re focused on what matters most.  Contact Us if you’d like to learn more.

Consultance leverages exceptional talent, proven processes, and top technology platforms to deliver timely & accurate financial solutions that help small and medium-sized organizations improve productivity, increase profitability, and achieve their goals.

Consultance Accounting Services

 

Expense Management: 6 Ways to $ave in 2020

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Image by Shutterbug75 from Pixabay

The challenges of running a business or nonprofit and staying on top of the financial bottom line can be challenging. Growing your top line revenues is critical to your success in 2020. However, keeping your expenses in check is just as important and can help sustain your business while you build your revenues.

Having an expense management process, where you review and analyze the details of your spending activity, will help keep your costs down and in line with your industry standards. Here are six expenses that will yield the biggest bang for your buck and are worth investing time reviewing to reduce your costs:

  1. Payroll – Payroll is often the largest expense for most businesses and it’s easy to ignore. If you are over-staffed, then you are reducing your chances of sustaining your business. Look at each staff position and assess employee productivity.  Determine how much headcount your business can actually sustain based on industry averages. If your payroll is too high, you should consider alternative staffing scenarios to better fit your current ability.
  2. Inventory/Cost of Goods Sold – For many businesses, cost of goods sold is typically a large expense. Make sure you have an inventory tracking system in place. Review your costs of goods sold each month as a percentage of sales. If you’re not where you need it to be, it’s time to take a deeper dive and figure out why your business is not producing the desired results.
  3. Credit Card Fees – When was the last time you looked at your merchant fees? Better yet, how about converting credit card payments into ePayments, where the fees are a fraction of the cost? Give your customers and clients better options to pay that don’t have high merchant fees.
  4. Advertising/Marketing – When was the last time you calculated your Return on Investment (ROI) for your various Advertising and Marketing expenses? Many businesses have recurring charges that are returning very little to the financial bottom line. It may be time to get rid of these charges and tighten up your budget.
  5. Equipment Rental/Leases – New equipment to service customers and clients can generate new revenue streams, but having the wrong lease on your equipment rentals can cost you in higher interest.  These costs can add up over a 3-5 year term. When pursuing a new lease, shop around for the best financing and don’t just go with what is offered because it is convenient. Also, make sure you have a capital budget plan in place each year to account for new equipment and the cost that comes along with it.
  6. Professional Fees – How many third party consultants and other professional service providers are you paying? Are the services they are performing helping you achieve your strategic goals? Calculate the ROI and value each one is providing. If they are not helping you achieve your desired results, you need to re-evaluate the expenditure.

In sum, by putting a process in place to review your largest expenses on a regular basis, you can achieve the cost reductions that you desire.

Contact Us if you’d like to learn more about how Consultance can help you with cost management through our CFO Services.

Consultance leverages exceptional talent, proven processes, and top technology platforms to deliver timely & accurate financial solutions that help small and medium-sized organizations improve productivity, increase profitability, and achieve their goals.

If you have any questions, feel free to contact us here.

Consultance Accounting Services

A Prescription for Better Cash-Flow Management (Part 2)

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Note: This article is the second in a two-part series on achieving better cash flows for your business or nonprofit organization/association. See the first article here, which defines Cash Flow and why it’s important to understand, as well as how to do Cash Flow Projections.

How to Improve Cash Flows?
To manage your business or nonprofit organization’s cash flow better, look for opportunities to improve the timing of money going in and out of your operations. Let’s dive deeper into potential action steps to consider:

Faster Cash Inflows
Consider the following ideas to achieve better cash inflows:
• Faster payments from customers, clients and members – assess reasons for delays in payments, reimbursements and other balances due, and identify ways to achieve more efficient receipts, such as e-payments. Incentivize those who owe you to make prompt payments by charging penalties for late payments.
• Diversify your revenue streams so that you aren’t relying on just one source of income.
• Make sure your billings process is effective and efficient to avoid delays in invoicing and following up with late payers.
• Assess your payment terms for refinement opportunities.

Slower Cash Outflows
Slow down your cash outflows by considering the following:
• Delay big purchases when your anticipated cash inflows are low. Before deciding on big investments, take the time to assess whether the expense will add significant value to the practice.
• Consider obtaining a line of credit or short-term loan to spread the cost of big-ticket items over a period of time. Make sure you do your research to identify the best loan rates and terms. (For more info on Business Lines of Credit, see this Nav article at https://bit.ly/2K4M05j.)
• Determine whether it’s better to lease vs. buy assets.
• If you already have some short- and/or long-term loans, look for opportunities to consolidate your debt at a more attractive interest rate.
• Analyze your inventory turnover rates and avoid carrying too much inventory on the books.
• Identify your fixed costs and prioritize them.

• Look for ways to cut discretionary expenses.

As noted in last month’s article, it’s a good idea to first understand your current cash flows and project your future monthly cash flows, since that will give you some good insights as to where the opportunities may lie within your business/organization.

Understanding your cash flows and taking action to improve them will enable you to sustain unexpected challenges and help you to build a successful business/organization.

Need Help?
If you have questions and/or would like to understand more about Improving Your Cash Flow, please reach out to me, I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting https://www.consultancellc.com

How to Achieve Better Cash Flow Management (Part 1)

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Note: This article is the first in a two-part series on achieving better cash flows for your business or nonprofit organization/association. Next month’s article will cover specific strategies to improve your cash flows.

According to a CBInsights study, running out of cash is the second highest reason why startups fail. To prevent this from happening to your new business/organization, it’s important to manage your cash flow efficiently. So let’s first cover some basics about cash flow.

What Is Cash Flow?
Cash flow is the money you have available at any given point in time. This balance represents the money flowing in and out from your day-to-day operations. Inflows of cash can come from customer/client/member fees received, point-of-sales receipts, and program income. Outflows include vendor payments, rent or mortgage payments, payroll as well as owner distributions and tax payments.

How Is Cash Flow Different than Profitability?
Many business owners fail to distinguish between cash flow and profitability. While cash flow relates to the actual money coming in and out of your company, profitability relates to the amount of revenues left after deducting all expenses. It’s great if your company is profitable, but you can still have major issues if you don’t have the money available to pay your obligations when they are actually due. This may occur if you hold accounts receivables (A/R) related to those revenues earned. So a practical challenge exists if your A/R collections take too long and bills come due before money is available in the bank.

How Do Cash Flow Problems Occur?
Cash flow problems often are caused by timing issues. Regardless of your company’s overall profitability, your available cash balance can fluctuate greatly based on when your money is actually received and paid out of your bank account. If your services and/or sales revenues are cyclical in nature, it may be difficult to cover your regular monthly bills during the “down” revenue cycles. That’s why the timing of your cash inflows and outflows are important to understand.

On the other hand, your cash flow problems could be a sign of a deeper issue with your company’s profitability. That’s why it’s important to review and understand your financial statements, to see if you need to improve your bottom line by increasing revenues and/or reducing expenses. See my article for an example of how to address your profitability risk.

Understand Your Current Cash Flows
To achieve better cash flow management in the future, you’ve got to understand your current cash flows. For a non-accountant this may be a little daunting, but it’s essentially a simple equation:

 

 

 

 

 

 

 

 

 

 

 

 

Project Your Future Cash Flows
Once you start tracking your cash inflows and outflows, you’ll begin to get a sense of any cyclical trends. This will help you to do the next step, of forecasting your future cash flows. By forecasting, you’ll can anticipate your cash requirements, helping you to see months where you expect deficits (more cash paid out than received) and surpluses (more cash received than paid out).

Cash Forecast Tools
Users of QuickBooks can create a Cash Flow Forecast Report using the Reports feature, and there are apps available that integrate seamlessly with QuickBooks, such as Cash Flow Frog and Plan Guru. Excel also has a cash flow forecast template.

Sound Business Decisions
Cash flow forecasting enables you to make better business decisions. For example, let’s say you’re considering investing in more equipment, moving to a larger space, or expanding your inventory. Since these actions require a cash outlay, you’ll want to consider your cash flow projections before making the investment to be confident you can cover those expenses when they become due.

Next Steps
Once you understand cash flow and how to do cash flow projections, you can chart a course for improving your practice’s cash flow going forward! In next month’s article, I’ll cover what actions you can take.

Need Help?
If you have questions and/or would like to understand more about Improving Your Cash Flow, please reach out to me. I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting https://www.consultancellc.com.

Payroll Accounting Pitfalls: How to Avoid Common Mistakes

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Do you do your own bookkeeping or have another non-accountant employee tackle this as “other duties as assigned”? I find that non-accountants often struggle when recording payroll-related entries. Challenges may occur even if you use an outside payroll service, since someone still needs to record the payroll entries in your accounting records in an accurate and timely manner. Here are some areas to consider to help you avoid common payroll accounting mistakes:

Start With Your Chart of Accounts Set Up
To facilitate proper payroll accounting, make sure you’ve set up your Chart of Accounts correctly in the first place. Entries involve recording your payroll-related costs and the related liabilities owed to others, such as the IRS and health insurance providers. To illustrate, below is a simplified version of what your payroll accounting entry might look like:

Debit: Gross Wage Expense* $5,000
              Credit: Federal Withholding $500
              Credit: FICA Payable $750
              Credit: State Withholding $250
              Credit: Employee Health Insurance $500
              Credit: Cash $3,000

*Note: If you desire, you can break down Gross Wage Expense even further to distinguish between any key staffing groups in your business/organization, such as professional versus administrative staff expenses.

Create Efficiencies in Your Accounting System
Human errors often occur when manually inputting data into your accounting system. To save you or your staff time and help avoid errors due to inconsistent processing, take advantage of features in your system that allow you to set up memorized transactions for recurring accounting transactions. You’ll still have to update your payroll journal entry for the appropriate payroll dates and amounts for that pay period, but the general accounts used will be automatically stored and easy to use each time.

Check for Negative Balances in Your Payroll Liabilities Accounts
To check for payroll mistakes, generate a balance sheet report for the month from your accounting system. If you pay your PR taxes when required, then the liability accounts generally should be zeroing out on a monthly basis. If you find they’re not, you’ll have to do further research to understand why; it’s possible that a mistake has been made that requires fixing.

Perform a Quarterly Analytical Review
In addition to checking for negative balances, I recommend performing a quarterly review of your payroll activity to identify potential issues so they can be addressed promptly. This involves generating a profit-and-loss statement at the end of each quarter, which shows your payroll expenses (as well as other expenses) for each month in the quarter. Review the data for any unusual inconsistencies. For example, if your Gross Wage Expense shows significant variances across each month, but your staffing levels and salary amounts have not changed and there is no other logical explanation, it’s possible your payroll accounting entries were entered incorrectly.

Understand Payroll Filing Requirements
Even if you use a payroll service to manage your payroll process, you should still understand what forms are required to be filed with the federal, state, and local authorities and when they are due, since you have primary responsibility for compliance. Federal forms include your IRS Forms 941, 940, W-2, and W-3. For more information, go to https://www.irs.gov/businesses/small-businesses-self-employed/employment-tax-due-dates. You should also consult your state and local authorities for other filing requirements.

For more info on how to optimize your payroll process, see my article.

How Consultance Accounting Can Help
As a virtual accounting firm who performs outsourced accounting services for small- and medium-sized business and not-for-profit organizations and associations, Consultance Accounting can perform your bookkeeping and accounting services, to include processing, recording, and reconciling your Payroll. I’ll be happy to talk with you about ways to address your improve your practice. Orin Schepps, Founder and CEO @consultanceaccounting  https://www.consultancellc.com

Not-for-Profit Time Management

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A Not-for-Profit Executive’s Guide to Better Time Management: Eat That Frog!

Image by Alexas_Fotos from Pixabay

Mark Twain once said that, “If the first thing that you do when you wake up in the morning is to eat a live frog, you’ll have the satisfaction of knowing that’s probably the worst thing that’s going to happen to you all day long.” Self-development author Brian Tracy delves into this concept further in his book “Eat That Frog.”  Tracy discusses how procrastination significantly impacts your productivity and ability to achieve success. Therefore, the key is to act on your biggest, ugliest task (i.e., your live frog) first.

So, as a not-for-profit executive, what’s your live frog? You may have many live frogs to tackle in your organization, but which one, if accomplished, will make the most difference? In the long run, what counts the most?

As Easy As ABCDE

Like many time management advisors, Tracy recommends planning ahead and creating a list of all your to-do’s for the next day. His ABCDE method includes reviewing your to-do list carefully and assigning them as follows:

A – Activities that have serious potential consequences. These are the things that matter most to your organization
B – Activities that would be nice to do, but aren’t as serious as an A activity
C- Activities that would be fun to do, but have no consequences

After prioritizing your to-do list, the objective is to get your A tasks done – do these things well and do them quickly, and stop wasting time on lower value activities (B and C items). The D and E components of Tracy’s ABCDE method are “Delegate” and “Eliminate.” These are two important steps that many not-for-profit organizations and associations, as well as other small and medium-sized businesses have a hard time addressing, so let’s talk about these further:

Delegate: If you personally take care of your not-for-profit’s financial operations or have a non-accountant perform these duties along with other tasks on their plate, it’s time to consider delegating your bookkeeping and accounting tasks to an expert in that field. Have an experienced accounting services firm help you manage those areas outside your core competencies. For more on this, see my article on outsourcing.

Eliminate: Take a thoughtful look at your operations and identify ways to eliminate non-value-add tasks. From the bookkeeping and accounting perspective, this often can be done through integration and automation. For example, if you use QuickBooks Online, you can automatically download and categorize bank and credit card transactions, resulting in less manual processing. QuickBooks also syncs directly with many cloud-based apps, such as Bill.com and Expensify, to eliminate data entry for bills and expense transactions.

Eating the frog for many not-for-profit executives means focusing your precious time on meeting the needs of your members and program participants. Delegate your bookkeeping and accounting tasks and leverage accounting technology to eliminate low-value tasks on your to-do list. This can facilitate the success of your not-for-profit!

Need Help?
If you have questions and/or would like to pursue other actionable steps to ensure your business or not-for-profit organization’s continued success, please reach out to me. I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting https://www.consultancellc.com

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Sources:

Tracy, Brian. (2017). “Eat That Frog.” Berrett-Koehler Publishers, April 17, 2017.

 

 

 

 

 

 

 

5 Key Cybersecurity Steps to Protect Against Payments Fraud

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Payments fraud
Image by Gerd Altmann from Pixabay

Are you confident that cybersecurity controls in your bookkeeping and accounting operations are effective? In this article, I’ll address five key cybersecurity steps to protect your financial operations and help against the prevalent threat of payments fraud.

Your Business or Organization Is Susceptible to Fraud!
If you think that only large corporations are vulnerable to attacks, think again. According to Ponemon Institute’s 2018 State of Cybersecurity in Small & Medium Size Businesses sponsored by Keeper Security, small businesses increasingly face the same cybersecurity risks as larger companies, yet only 28% of those surveyed feel they’re highly effective in mitigating those threats, vulnerabilities and attacks.

According to the Ponenom report, most businesses surveyed experienced a cyber attack or data breach with severe financial consequences. Phishing/social engineering was the number-one type of attack experienced, followed by web-based attacks and general malware.

Imagine a scenario where payment data from your business or not-for-profit organization is compromised. I’m guessing you’ve already got a full workload as it is – so preventing issues in the first place is the way to go, since not only will you be protecting your brand, but you’ll also avoid the heartache and financial pain of the remediation process in the event your financial data is compromised.

Manage your risk of payment fraud by taking these 5 key steps:

1. Train your staff
Business Email Compromise (BEC) schemes are now common events. According to a Symantic Internet Security Threat Report, “In 2018 employees of small organizations were more likely to be hit by email threats – including spam, phishing, and email malware – than those in large organizations.” BEC schemes include fraudsters impersonating an employee, supervisor or existing vendor and requesting that payments be made to a fake bank account.

To prevent BEC schemes from occurring in your office, raise staff awareness about the common schemes that can occur. Regular reminders are a must, since it’s common for busy colleagues (including you) who are in the midst of their hectic daily schedules to inadvertently open up questionable email attachments or haphazardly respond to questionable email requests. So, instill in your team a healthy dose of skepticism when it comes to payments requests.

When a suspect payment request arises, everyone in your office should know the proper protocols. This includes how to correctly follow-up to validate the questionable request. You wouldn’t want your bookkeeper to just contact the purported vendor by calling back the phone number on the email in question, right? Don’t assume everyone knows what to do, so be very specific on how to verify the validity of a request and the appropriate bank account instructions to avoid leaving anything up to chance. And don’t forget to train your part-time and temporary staff too.

2. Implement bill approval processes
Having a second set of eyes involved in reviewing and approving requests for payment is another type of control used by many companies. To facilitate an efficient process, you can establish a dollar limit for approvals, so that anything over a certain amount needs a second review and approval. Using a cloud-base payment app such as Bill.com can facilitate your payments and the approval workflow.

3. Use Positive Pay
Positive Pay is a service offered by banks in which the bank verifies that the checks presented for payment match the list of checks you’ve issued. The bank performs this double check prior to payment, to make sure the information matches. If there’s a mismatch, the bank alerts you before any funds are issued, so you prevent losses from check payments fraud.

4. Strengthen your Bring Your Own Device (BYOD) practices
Do you allow your staff or contractors to use personal devices to access your office’s data and conduct work? According to a Keeper Security article, hackers take the path of least resistance, which is often times employee-owned mobile devices. Therefore, you need strong cybersecurity policies for personal devices if you’ve decided to allow employees to use them for work. Make sure employees protect the physical security of their devices and maintain the latest version of software (to keep security updates current). Enforce limitations on what can be accessed on them and require that the data be encrypted on these devices. Strong password controls should be implemented for both work and personal devices.

5. Check in with your outside bookkeeping and accounting firm
If you use an outside firm/person to do your bookkeeping and accounting, be sure to have a robust discussion with them to gauge the firm’s commitment to protecting the security and privacy of your information. Get comfortable that your outsourced firm is committed to strong security measures. The firm should have a formal security policy that includes strong technology safeguards for prevention, monitoring, detection and encryption, controlled access, ongoing employee security awareness training, and back up and maintenance procedures. If you use a web-based system(s) to conduct your bookkeeping and accounting operations (think QuickBooks Online, Bill.com, or the various payroll service providers out there), then typically, most providers of such services undergo stringent security procedures or SSAE16 attestations that test their data center’s level of security.

Need Help?
If you have questions and/or would like to pursue other actionable steps to ensure your business or not-for-profit organization’s continued success, please reach out to me, I’ll be happy to talk with you. Orin Schepps, Founder and CEO @consultanceaccounting  https://www.consultancellc.com

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Sources:

Ponemon Institute. “2018 State of Cybersecurity in Small & Medium Size Businesses.” Keeper Security, 2018. <https://start.keeper.io/2018-ponemon-report>

Symantic. “ISTR Internet Security Threat Report.” Symantic, February 2019. <https://img03.en25.com/Web/Symantec/%7B1a7cfc98-319b-4b97-88a7-1306a3539445%7D_ISTR_24_2019_en.pdf>

Keeper Security. “5 Cybersecurity Tips For Small and Medium Sized Businesses.” Keeper Security, 27 September 2016. <https://keepersecurity.com/blog/2016/09/27/5-quick-cybersecurity-tips-for-small-businesses/>

Bill.com. “Protecting Yourself From Business Email Compromise (BEC) Schemes.” Bill.com, 26 March 2019. <https://support.bill.com/hc/en-us/articles/360015918451-Protecting-yourself-from-Business-Email-Compromise-BEC-schemes>

MDL Technology, LLC. “Cybersecurity Tips for Accounting Firms in 2018.” MDL Technology, 8 January 2018. <http://www.mdltechnology.com/cybersecurity-tips-accounting-firms-2018/>

Your Mid-Year Accounting Checkup for Your Business or Not-for-Profit

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accounting checkupTake Stock of Where You Are Mid-Year
It’s hard to believe we’re halfway through 2019! As busy professionals, it’s easy to get caught up in the day-to-day needs of your business or not-for-profit. However, it’s a great time to perform a mid-year check-up of your accounting operations, to ensure they’re supporting the overall success of your organization.

Consider your answers to the following important accounting questions so that you can identify any trouble spots early and make the necessary mid-course corrections. This will help you avoid costly fixes over the long-run and make sure you’re still on the right path to success:

1. Are Your Bookkeeping Processes Up to Date?
If you or your staff are getting lost in mounds of paperwork or spending too much time on manual bookkeeping entries, and/or you’re still paying bills using paper checks, it’s likely that your bookkeeping and accounting processes are outdated and costing you valuable time and money. Invest the time to bring your back-office operations up to date through more automated and integrated systems. For more information, read my article.

2. Are You Closing the Books on a Regular and Timely Basis?
The main objective of the closing process is to ensure the completeness and accuracy of the financial reports you need to run your business. The process includes properly recording all financial activity for the period and reconciling all accounts. Regardless of the size of your organization, it’s important to close your books on a regular basis, preferably monthly, so that you have an accurate and complete set of financial statements that reflect how you are doing.

If you’re uncertain about how to close the books, or you have a hard time closing them in a timely manner, it may be time to have a professional accountant provide guidance on how to build standard operating procedures (SOPs) to close the books effectively and efficiently.

3. Do You Have a Good Understanding of Your Financial Position?
Even if you have someone else do your bookkeeping and generate financial statements, you need to understand your business or not-for-profit’s financial status and review reports regularly so that you can make informed business decisions. If you have a hard time understanding what your statements are telling you about the financial condition, it’s time to get help. Take the time to walk through your financial statements with your accountant and don’t be afraid to ask questions.

4. Is Your Accounting System Working for You?
As part of the check-up, assess how well your accounting system is meeting your needs. If you’re experiencing rapid growth, make sure the current system is scalable and can grow with you. If it’s currently difficult to access real-time, accurate information about your financial activity in a secure and user-friendly way, it may be time to upgrade your current system. Click here for more info on the advantages of moving to QuickBooks Online.

5. Does Your Current Staffing Meet Your Accounting Needs?
If you find yourself spending too much time in the weeds of your day-to-day back office operations and it’s taking you away from what matters most to your organization, then it’s time to delegate certain tasks to others. During your mid-year check up, assess your staffing structure and determine whether it’s effectively meeting your growing needs. It may be time to hire outside experts to handle areas outside your core competencies. If you’re considering outsourcing your accounting, read my article on the benefits of outsourcing.

Summary
Investing the time to step back and take stock of your bookkeeping and accounting operations is a prudent best practice. Your mid-year check-up will help you assess how you’re doing and refine your practices in a cost-effective manner.

Questions?
If you have questions and/or would like help in any of the above areas, please reach out to me. I’ll be happy to talk with you about ways to improve your business or not-for-profit. Orin Schepps, Founder and CEO @consultanceaccounting  https://www.consultancellc.com

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