Now is the Time! (Year End Accounting)

 Now is the time to start getting your year end tax work ready for the accountant.

Of course some materials will not arrive until January, and some information cannot be processed until after December 31st.

But now is the time to double check your bookkeeping procedures, schedule the work necessary to do year end payroll, payroll taxes and payroll forms, and to look for weaknesses in the accounting system or inadequacies in your staff.

If you have any questions about your relationship with your accountant - as regards accounting or tax, now is the time to clarify the relationship. Busy season is so named for a reason.

NOTE!

New rules apply to 1099 electronic filing, and these rules will impact many small businesses. Check with your accountant.

My Accountant Just Raised My Tax Return Fee

So your accountant just sent you a letter with a X% increase for your tax service.

What? Why?

Higher labor costs. There is a shortage of qualified accountants.

Higher technology costs. Needs more and better technology.

Higher insurance costs. More risk.

So that is why your accountant is raising fees.

Fired by Your Accountant?

 Accountants are having a tough time, especially in the tax work space.

More rules, more clients, sloppier bookkeeping, expensive technology, expensive staff, shortages of qualified staff, and the IRS which has been crippled over two decades by inadequate budgets.

And when clients take bad tax advice (especially from social media) guess who gets to clean up the mess?

Tax accountants are responding by firing clients - the hassle is not worth the fees on really difficult clients.

If you get fired, take it to heart. What is the problem with working with you?

And if you do not pay your bill promptly, expect to get fired at some point. And you may have to prepay your returns.

The Importance of Internal Controls

Everybody needs money. Some have enough, some have enough and want more, some do not have enough, some do not have enough and will take shortcut to get more.

Every organization have assets to utilize and protect.

Every organization has cash flow to use effectively and to protect.

All of these are reasons to design, implement and operate an effective set of internal controls.

Other assets need protection as well.

Experts estimate US annual losses to employee theft, including embezzlement,  at $400B, that is Billion.

 

Why Quality Bookkeeping is Important

 

Bookkeeping. Boring, right?

Right. 

Critical, right?

Yes it is.

Bookkeeping, the capture, recording and summation of transactions, is critical to the health of your business.

Critical to accurate financial statements.

Critical to useful analytics.

Critical to accurate tax returns.

Critical to keep accounting fees at a reasonable level.

Critical component of internal controls.

More discussion to follow. 

Cheap bookkeeping can be very expensive.

Learning From Experience

 October 15th is the final rush for business and personal tax filing.

Have we learned anything?

Giving your paperwork/schedules to your accountant close to the deadline is a very bad idea.

Giving your paperwork/schedules to your accountant in bunches and pieces is a bad idea.

If your bookkeeping is sloppy it will be costly to clean up the mess.

If your bookkeeping is sloppy it is difficult to produce meaningful analytics.

Do better in 2023 and do a lot better in 2024.

Aw C'mon

 

A small service business puts together attractive and informative door hangers, and hangs them through our neighborhood.

I need the service.

I call. And call again.

Answer the phone, or return the voicemails.

This makes no sense.

Why is your accountant (CPA, EA) a little grumpy?

Why is your accountant a little grumpy and demanding at tax time?

Some of it is because tax time runs at least from January 1 through October 15th these days.

Some of it is because tax preparation technology is complex and expensive.

Some of it is because business client bookkeeping is often an amateurish mess.

Some of it is because the federal tax law has been turned into a really complex snarl.

Some of it is because clients are late with documentation.

Some of it is because clients bring messy documents.

Some of it is because clients do transactions and then ask for tax advice.

Some of it is because clients have unreasonable expectations about turnaround time.

Some of it is because clients want excellent work for low prices.

Some of it is because clients take bad tax advice from amateurs and do dumb things.

 

Cyber Security Issues

 Supplying smart phones to a large number of employees is expensive.

Allowing them to use their own phones saves money.

Allowing them to use their own phones may create issues, especially if they deal with business apps and confidential information.

Either way, you need a cyber security plan, and a plan for onboarding, and a plan for employee transition (termination and resignation).

Lord May My Words Be Tender....

.... because I may have to eat them.

If you are going to mix business with social media be careful about the content.

Best to keep business with business, and keep personal rants on personal accounts.

Separate accounts are best.  

Are Video Cameras a Requirement?

 Many businesses have video cameras, inside, outside, or both.

Question: in this environment are cameras a requirement to protect employees and customers?

Answer: probably yes

Keep context in mind:

      location

      hours

      type of business

      etc.

But you probably need some level of protection for employees and customers.

Small Business Blues

 So I stop at a car wash to vacuum my car.

Both change machines were out of order.

All three vacuums were broken.

If you are going to have a small business, active or passive.

TAKE CARE OF BUSINESS

Phishing Gets Really Nasty

 Phishing attacks directed at businesses appear to be on the rise.

An email comes in asking for a payment on a contract with wiring instructions included, except the instructions are phony.

Or an email arrives asking for a change in payment routing information on a real vendor, but the new routing information goes to a thief.

Defense:

Employees should always check with superiors before accepting such changes.

Any payment activity, especially large sums, should be subject to multiple checks and double checks.

Now Is The Time

 Now is the time to start getting ready for your 2023 income tax returns.

Yes, now.

The cleaner your bookkeeping the easier the tax return.

Study your 2022 tax return to determine what information is needed and reflect on how easy it was to deliver information to your CPA or EA.

Now really is the time.

The Latest Fraud Scheme

Check washing is the latest fraud scheme.

The check is stolen, soaked in acetone, the original ink fades, and new payee and amount information is added with a dark pen.

The bank cannot detect the difference. So......

NEVER mail checks in the outdoor blue box, thieves have stolen master keys.

NEVER mail checks in a home or business box with a red flag.

Take the checks into the post office and mail in the indoor slot.

What is Consulting? Part 1

 What is consulting, and what exactly do consultants do?

Consulting is advice from an outsider person or firm, not including accounting or legal advice (although these three types of advice are often interrelated).

The consultants offer either specific technical advice or general business advice, or both. Some consultants may be hands on with implementation, often in tech projects, where the users are not sophisticated enough to do installations and set up.

At times the role is crisis management - financial, strategic, operational or HR among others.

The role of the consultant is to add value to the business, either by fixing problems or improving operations or both.

This series will discuss types of consulting, relationships with consultants and the business of consulting.

Driving through the front door

 A frequent event these days is a car or truck driving into a business, often through the front door. All hell breaks loose.

Sometimes it is by accident.

Sometimes it is a robbery after hours.

Every business should have architectural barriers protecting the front door, yes, maybe those unsightly yellow posts or large concrete flower planters.

Security Protocols for a Harsh World

If you are in any sort of retail business, you need protocols and training for 1) armed robberies, 2) shoplifters and 3) active shooters.

Office complex? Active shooter reaction.

Yes, the world has come to this.

 

Publication Announcement

 This month our publishing company is rolling out our first book:

Childcare Centers: Business Manual

The book is already available on Amazon as a Kindle book.

Don't have a Kindle? Download the Kindle app on just about any computer and you can read any Kindle E-book.

Estimates Vary, But

 Estimates vary, but it is likely that at least one of ten businesses have an embezzlement problem at some time.

And that does not count other forms of theft (merchandise theft, expense account abuse, etc.).

Our publishing company will be addressing this very soon.

BYOD = Bring Your Own Device - Part II

 

If you expect and/or allow your employees to use their personal smart phones for business, you need to be willing to accept a certain level of cyber risk.

If you provide smart phones for your employees, be very clear about allowable personal use.

Bad Manager Syndrome Part I

There are sites on the Internet dedicated to stories about bad managers. Reddit in particular. 

These sites also features reports of employee revenge (quitting, quiet quitting, malicious compliance).

Try not to be one of the managers who become a story on the Internet.

Why bookkeeping is important

 Bookkeeping, the mechanical accounting work of analyzing, recording and summarizing transactions, is critical to every company and organization because:

1) financial statements and tax returns depend on accurate bookkeeping

2) internal controls depend on accurate and timely bookkeeping

3) your CPA depends on accurate bookkeeping, especially at tax time *

4) internal analytics depend on accurate bookkeeping

The type of bookkeeping you need depends on the size and type of your business. The accounting system should be customized to your industry and your organization.

There are many computerized systems, some general and some specific, which can be customized to your organizations. Your CPA may have direct involvement, or less direct involvement, depending on circumstances.

Cheap is not better. Procrastination does not bring results.

*the cost and timeliness of your returns depends on your inputs