Where accounting makes "cents"

When I look at employer posts that are recruiting for a staff bookkeeper, most of the job descriptions listed make me cringe and fear for the company. When positions list that the responsibilities will include, processing all payroll and payroll tax returns, filing out sales tax returns, processing accounts payable checks and reconciling the bank statements and recording customer payments, and also must work independently - 𝐢𝐭 𝐭𝐞𝐥𝐥𝐬 𝐦𝐞 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐡𝐚𝐬 𝐚𝐧 80% 𝐜𝐡𝐚𝐧𝐜𝐞 𝐨𝐟 𝐛𝐞𝐢𝐧𝐠 𝐝𝐞𝐟𝐫𝐚𝐮𝐝𝐞𝐝. These situations involve management leaving the finances and running the operations to someone else and hoping the employee will be ethical and do right by the company. Go ahead and hire the staff person but expect fraud.  Do you want to know how to avoid this from happening? DM me today to learn more!

𝑪𝒐𝒏𝒔𝒕𝒓𝒖𝒄𝒕𝒊𝒐𝒏 𝒑𝒓𝒐𝒋𝒆𝒄𝒕𝒔 𝒂𝒓𝒆 𝒂𝒕 𝒂𝒏 𝒂𝒍𝒍 𝒕𝒊𝒎𝒆 𝒉𝒊𝒈𝒉 𝒘𝒊𝒕𝒉 𝒊𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚 𝒍𝒐𝒘 𝒂𝒏𝒅 𝒅𝒆𝒎𝒂𝒏𝒅 𝒉𝒊𝒈𝒉. 𝑻𝒉𝒆𝒓𝒆 𝒊𝒔 𝒂 𝒔𝒖𝒑𝒑𝒍𝒚 𝒄𝒉𝒂𝒊𝒏 𝒑𝒓𝒐𝒃𝒍𝒆𝒎, 𝒂 𝒍𝒂𝒃𝒐𝒓𝒆𝒓 𝒔𝒉𝒐𝒓𝒕𝒂𝒈𝒆 𝒂𝒏𝒅 𝒑𝒓𝒆𝒎𝒊𝒖𝒎 𝒑𝒓𝒊𝒄𝒆𝒔 𝒑𝒂𝒊𝒅 𝒇𝒐𝒓 𝒆𝒂𝒓𝒍𝒚 𝒄𝒐𝒎𝒑𝒍𝒆𝒕𝒊𝒐𝒏. 𝑻𝒉𝒆𝒔𝒆 𝒂𝒓𝒆 𝒔𝒐𝒎𝒆 𝒇𝒂𝒄𝒕𝒐𝒓𝒔 𝒕𝒉𝒂𝒕 𝒄𝒂𝒏 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆 𝒕𝒉𝒆 𝒍𝒊𝒌𝒆𝒍𝒊𝒉𝒐𝒐𝒅 𝒐𝒇 𝒇𝒓𝒂𝒖𝒅. Most frauds start small and get bigger until someone notices unusual changes. Construction fraud has red flags that can be detected when you have the right controls in place or outsource to a consultant that maintains a neutral position. 𝐂𝐨𝐧𝐬𝐭𝐫𝐮𝐜𝐭𝐢𝐨𝐧 𝐟𝐫𝐚𝐮𝐝 𝐜𝐚𝐧 𝐛𝐞 𝐜𝐨𝐦𝐦𝐢𝐭𝐭𝐞𝐝 𝐛𝐲 𝐚𝐧𝐲𝐨𝐧𝐞 𝐭𝐡𝐚𝐭 𝐡𝐚𝐬 𝐚 𝐝𝐢𝐫𝐞𝐜𝐭 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩 𝐭𝐨 𝐭𝐡𝐞 𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐨𝐫 𝐭𝐡𝐞 𝐥𝐨𝐬𝐬 𝐨𝐧 𝐭𝐡𝐞 𝐩𝐫𝐨𝐣𝐞𝐜𝐭. Some flags to look out for are: 1. Missing subcontractor lien releases 2. Unauthorized changes or...

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...

  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...

  𝑫𝒐 𝒚𝒐𝒖 𝒏𝒆𝒆𝒅 𝒂 𝒃𝒐𝒐𝒌𝒌𝒆𝒆𝒑𝒆𝒓 𝒐𝒓 𝒂𝒏 𝒂𝒄𝒄𝒐𝒖𝒏𝒕𝒂𝒏𝒕? 𝑶𝒓 𝒃𝒐𝒕𝒉?! While the roles overlap, businesses often start with a bookkeeper and as the business grows the owners hope that the bookkeeper can grow with the increasing responsibilities. Often times that’s not the case but business owners will not implement a change. There’s no one size fits all approach but business owners need to understand that bookkeepers are the ones responsible for keeping the data while accountants are the ones responsible for analyzing the data. 𝘈𝘴 𝘵𝘩𝘦 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘦𝘹𝘱𝘢𝘯𝘥𝘴 𝘴𝘰 𝘸𝘪𝘭𝘭 𝘵𝘩𝘦 𝘯𝘶𝘮𝘣𝘦𝘳 𝘰𝘧 𝘵𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯𝘴 𝘢𝘯𝘥 𝘵𝘩𝘦 𝘤𝘰𝘮𝘱𝘭𝘦𝘹𝘪𝘵𝘺 𝘰𝘧 𝘵𝘩𝘦 𝘢𝘤𝘤𝘰𝘶𝘯𝘵𝘪𝘯𝘨, 𝘢𝘱𝘱𝘭𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴 𝘵𝘰 𝘭𝘰𝘢𝘯𝘴 𝘢𝘯𝘥 𝘤𝘰𝘯𝘷𝘦𝘳𝘴𝘢𝘵𝘪𝘰𝘯𝘴 𝘸𝘪𝘵𝘩 𝘵𝘢𝘹 𝘱𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭𝘴 𝘵𝘰 𝘮𝘢𝘹𝘪𝘮𝘪𝘻𝘦 𝘵𝘢𝘹 𝘱𝘭𝘢𝘯𝘯𝘪𝘯𝘨. 𝐇𝐚𝐯𝐢𝐧𝐠 𝐚𝐧 𝐞𝐱𝐭𝐫𝐚 𝐬𝐞𝐭 𝐨𝐟 𝐞𝐲𝐞𝐬 𝐨𝐧 𝐲𝐨𝐮𝐫 𝐛𝐨𝐨𝐤𝐬 𝐝𝐨𝐞𝐬𝐧’𝐭 𝐡𝐮𝐫?...