Where accounting makes "cents"

  𝐅𝐨𝐫𝐞𝐧𝐬𝐢𝐜 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭 – 𝐒𝐮𝐛𝐣𝐞𝐜𝐭 𝐌𝐚𝐭𝐭𝐞𝐫 𝐄𝐱𝐩𝐞𝐫𝐭 𝐨𝐫 𝐄𝐱𝐩𝐞𝐫𝐭 𝐖𝐢𝐭𝐧𝐞𝐬𝐬? I was engaged in a conversation with someone recently and it reminded me of the Seinfeld episode where Jerry wants to be called “Jerry the Great” because Elaine is dating the Maestro. Elaine says to Jerry that he can’t call himself Jerry the Great and his response is why not, my name is Jerry and I’m great. I kept explaining to the person that there are grounds to be considered an expert witness in the financial field and they denied my argument because that wasn't the answer they wanted. I am a Certified Fraud Examiner, I have a Masters Degree in Forensic Accounting, I investigate fraud, I teach business owners about deficiencies in their processes, red flags associated with fraud, have been interviewed and published in various magazines, I interview bookkeepers convicted of fraud, I engage in many hours of continuing education every year and I’m in the process of w...

𝐑𝐚𝐫𝐞𝐥𝐲 𝐬𝐨 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐨𝐰𝐧𝐞𝐫𝐬 𝐬𝐞𝐞 𝐭𝐡𝐞 𝐯𝐚𝐥𝐮𝐞 𝐚𝐬𝐬𝐨𝐜𝐢𝐚𝐭𝐞𝐝 𝐰𝐢𝐭𝐡 𝐨𝐮𝐭𝐬𝐨𝐮𝐫𝐜𝐢𝐧𝐠 𝐭𝐡𝐞𝐢𝐫 𝐚𝐜𝐜𝐨𝐮𝐧𝐭𝐢𝐧𝐠 𝐮𝐧𝐭𝐢𝐥 …. One day the business owner says – we have enough office people in place and everything is running smoothly we don’t need to keep paying you so we don’t need your services any longer. The consultant explains that because of all the work and measures implemented the business is in that position. Separating will be detrimental to the ongoing operations. Fast forward 6 months – the cash is low, the bank keeps calling, the IRS is sending penalty notices, the sales tax returns haven’t been filed, the bank reconciliation is out of the balance, the payroll isn’t being run on time and the payroll tax liabilities haven’t been paid because there’s not enough cash and the audit adjustment is the highest it’s ever been and nobody knows what’s going on. The consultant starts to receive frantic emails, calls and text messages from ...

  𝑨𝒇𝒕𝒆𝒓 𝒓𝒆𝒗𝒊𝒆𝒘𝒊𝒏𝒈 𝒕𝒉𝒆 𝒃𝒐𝒐𝒌𝒔 𝒇𝒐𝒓 𝒂 𝒓𝒆𝒂𝒍 𝒆𝒔𝒕𝒂𝒕𝒆 𝒅𝒆𝒗𝒆𝒍𝒐𝒑𝒆𝒓, 𝑰 𝒔𝒉𝒐𝒘𝒆𝒅 𝒉𝒊𝒎 𝒕𝒉𝒂𝒕 𝒉𝒊𝒔 𝒃𝒐𝒐𝒌𝒌𝒆𝒆𝒑𝒆𝒓 𝒉𝒂𝒔 𝒄𝒓𝒆𝒂𝒕𝒆𝒅 𝒂 𝒈𝒊𝒈𝒂𝒏𝒕𝒊𝒄 𝒎𝒆𝒔𝒔 𝒐𝒇 𝒉𝒊𝒔 𝒂𝒄𝒄𝒐𝒖𝒏𝒕𝒊𝒏𝒈 𝒓𝒆𝒄𝒐𝒓𝒅𝒔. All projects under construction are classified as capitalized assets shown on the Balance Sheet until sold where it will be moved to the Profit & Loss statement. The bookkeeper has recorded all the project expenses on the Profit & Loss statement instead of creating an accumulated project cost. When I asked what was the “all in” figure as of today for total cost he provided me with the purchase price that was shown on the Balance Sheet. Here’s what happens using the current scenario. Purchase price $250,000 – on the Balance Sheet Expenses $750,000 – on the Profit & Loss over multiple years Sells the project for $1,500,000 – Bookkeeper will record a profit on the Profit & Loss for $1,250,000 I̳f̳ ̳t̳h̳e̳ ̳p̳r̳o...

  𝐍𝐨𝐭 𝐚𝐥𝐥 𝐛𝐨𝐨𝐤𝐤𝐞𝐞𝐩𝐞𝐫 𝐟𝐫𝐚𝐮𝐝 𝐢𝐬 𝐚𝐧 𝐞𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐞 𝐬𝐜𝐡𝐞𝐦𝐞… There’s no shortage of schemes that bookkeepers perpetrate against their small business employers, but most schemes are simple and can be the largest dollar value loss a small business experiences. Some of the more popular embezzlement schemes are:  Cashing customer checks  Overbilling customers  Employee Reimbursement padding  Theft of cash deposits  Theft of supplies / inventory  Fake employees / payroll When there are no internal controls and the bookkeeper is responsible for writing checks, making deposits, processing payroll and reconciliation of the bank account, the business becomes susceptible to being defrauded. 𝑰𝒇 𝒚𝒐𝒖 𝒅𝒓𝒐𝒑 𝒕𝒉𝒆 𝒃𝒂𝒏𝒌 𝒂𝒏𝒅 𝒄𝒓𝒆𝒅𝒊𝒕 𝒄𝒂𝒓𝒅 𝒔𝒕𝒂𝒕𝒆𝒎𝒆𝒏𝒕𝒔 𝒐𝒏 𝒕𝒉𝒆 𝒃𝒐𝒐𝒌𝒌𝒆𝒆𝒑𝒆𝒓’𝒔 𝒅𝒆𝒔𝒌 𝒘𝒊𝒕𝒉𝒐𝒖𝒕 𝒐𝒑𝒆𝒏𝒊𝒏𝒈 𝒂𝒏𝒅 𝒓𝒆𝒗𝒊𝒆𝒘𝒊𝒏𝒈 𝒕𝒉𝒆 𝒕𝒓𝒂𝒏𝒔𝒂𝒄𝒕𝒊𝒐𝒏𝒔 𝒕𝒉𝒂𝒏 𝒚𝒐𝒖 𝒂𝒓𝒆 𝒂 𝒅𝒊𝒔𝒆𝒏𝒈𝒂𝒈𝒆𝒅 𝒃?...

  𝑨 𝒔𝒖𝒄𝒄𝒆𝒔𝒔𝒇𝒖𝒍 𝒄𝒐𝒏𝒗𝒆𝒓𝒔𝒊𝒐𝒏 𝒃𝒆𝒈𝒊𝒏𝒔 𝒘𝒊𝒕𝒉 𝒂 𝒄𝒐𝒏𝒗𝒆𝒓𝒔𝒂𝒕𝒊𝒐𝒏. Many business owners are apprehensive about outsourcing the accounting because they don’t think it will work and there’s no value. This could be true, but you won’t know that until we have a mutual conversation. I don’t sell my services; I don’t bully business owners and I don’t tell them what they have to do. Outsourcing involves a mutual respect learning about how your business works and how I can make it better by enhancing your processes. Outsourcing provides value while introducing change - implemented in steps. What am I going to solve for you? 1. What workflow inefficiencies are you experiencing? Is there an app or a third-party cloud solution that can help? 2. Where is the company cash going? Is there internal control deficiencies that need to be tightened? 3. How are the budgets comparing to actual operations? Are you meeting targets? Are you over budget? 4. What is each emplo...

𝐇𝐨𝐰 𝐰𝐢𝐥𝐥 𝐭𝐡𝐞 𝐧𝐞𝐰 2022 𝐭𝐚𝐱 𝐫𝐮𝐥𝐞 𝐟𝐨𝐫 𝐜𝐚𝐬𝐡 𝐚𝐩𝐩 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐚𝐟𝐟𝐞𝐜𝐭 𝐲𝐨𝐮𝐫 𝐛𝐮𝐬𝐢𝐧𝐞𝐬𝐬? If you pay or receive funds electronically through payment apps such as Zelle, Venmo, Cash App and Paypal the IRS will now be tracking those payments by cross referencing the 1099-k that the processor will generate to your tax return. 𝐈𝐟 𝐲𝐨𝐮 𝐫𝐞𝐜𝐞𝐢𝐯𝐞 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 $600 𝐟𝐨𝐫 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐭𝐨𝐰𝐚𝐫𝐝𝐬 𝐠𝐨𝐨𝐝𝐬 𝐨𝐫 𝐬𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐨𝐯𝐞𝐫 𝐭𝐡𝐞 𝐜𝐨𝐮𝐫𝐬𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐲𝐞𝐚𝐫, 𝐲𝐨𝐮𝐫 𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐢𝐬 𝐫𝐞𝐩𝐨𝐫𝐭𝐞𝐝 𝐭𝐨 𝐭𝐡𝐞 𝐈𝐑𝐒. If your payment record keeping and bookkeeping processes are sub-par, you better get ahead of the change and consult with a qualified accounting professional that can help navigate the new obligation. If you are in the estimated 30 million small businesses, solopreneurs, and independent contractors that avoided reporting the income now is the time to make the change.

  𝑾𝒉𝒂𝒕 𝒎𝒆𝒄𝒉𝒂𝒏𝒊𝒔𝒎 𝒅𝒐 𝒚𝒐𝒖 𝒖𝒔𝒆 𝒕𝒐 𝒄𝒂𝒑𝒕𝒖𝒓𝒆 𝒄𝒖𝒕-𝒐𝒇𝒇 𝒆𝒙𝒑𝒆𝒏𝒔𝒆𝒔? 𝑫𝒐 𝒚𝒐𝒖 𝒉𝒂𝒗𝒆 𝒂 𝒑𝒖𝒓𝒄𝒉𝒂𝒔𝒆 𝒐𝒓𝒅𝒆𝒓 𝒔𝒚𝒔𝒕𝒆𝒎? I’ve seen businesses that have bookkeepers that are great at paperwork but don’t have a clear close process for month-end financial reconciliation. A common problem is not capturing expenses recorded as a liability or an accrued expense because the month-end close process occurs very shortly after the end of the month. Most companies have an accrual-based accounting system which means they record revenues when earned and expenses when incurred. Not capturing these costs have an impact on the financial statements and cash expectations to cover bills for the following month. 𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝒑𝒂𝒚𝒂𝒃𝒍𝒆 𝒎𝒂𝒚 𝒔𝒆𝒆𝒎 𝒍𝒊𝒌𝒆 𝒂𝒏 𝒊𝒏𝒔𝒊𝒈𝒏𝒊𝒇𝒊𝒄𝒂𝒏𝒕 𝒕𝒂𝒔𝒌 𝒊𝒏 𝒕𝒉𝒆 𝒐𝒗𝒆𝒓𝒂𝒍𝒍 𝒐𝒑𝒆𝒓𝒂𝒕𝒊𝒐𝒏𝒔 𝒐𝒇 𝒂 𝒄𝒐𝒎𝒑𝒂𝒏𝒚, 𝒃𝒖𝒕 𝒊𝒕 𝒊𝒔 𝒊𝒎𝒎𝒆𝒏𝒔𝒆𝒍𝒚 𝒊𝒎𝒑𝒐𝒓𝒕𝒂𝒏𝒕. 1. A poorly run process...