Author: kathy-beck

Workplace Factors that Cause Accountant Stress

It is a universal problem that comes with the territory. Yes, all accountants experience stress. Hopefully this gives you hope that you are not alone. Although this fact of universal stress is known, the common causes might be less known and a bit more subtle. To manage stress well, it is important to know specifically where it originates from first. Only then can those factors be dealt with effectively because they can be addressed individually. It is much more meaningful and productive to deal with individual stressors instead of simply seeing stress at a collective level and therefore be overwhelmed by it all. Beck and Company Certified Public Accountants and Business Advisors know all about accountant stress that impacts all of us and can assist you with this and with your specific accounting needs that may be one of the factors causing you worry.

What are the factors causing accountant stress in the workplace, and how can they be dealt with?

  • Role Ambiguity

This stress is created because an individual does not clearly understand what is expected on the job. It might be worth a conversation to get this sorted out or to ask for a list of responsibilities complete with deadlines and explanations of each.

  • Role Conflict

This stress is created because an individual is presented with conflicting demands or an unclear chain of command. Most organizations likely have organizational charts detailing who reports to who and who should be doing what. Ask for this document for clarification purposes or find a time to meet and clarify things with the co-workers who may be requiring opposing responsibilities without even realizing it.

  • Overload—Quantitative

This stress is created by the perception of too great a volume of work to accomplish in the allocated time or the job scope and depth. Figure out what your focus should be and prioritize tasks accordingly. Set time frames and parameters for yourself so you don’t get bogged down by menial tasks instead of essential ones.

  • Overload—Qualitative

This stress is created by job requirements which exceed the individual’s ability or skill level. Albeit awkward, have a conversation with your boss if you feel some of the expectations put in front of you are not correlated well to your expertise. You likely won’t be able to hand off all of that work to someone else, but you can educate your boss on your skills so future assignments are more aligned to your skills.

  • Career Progress

This stress is created by not having enough perceived opportunities to advance or learn new skills and techniques. Just like educating your boss on what skills don’t suit you, also inform him or her about your interests and ways you would like to grow as an accountant.

  • Time Pressures

This stress is caused by the perception of unreasonable deadlines and time demands. Although some of this is just the nature of accounting work, see if any work can be shared or if there is a way to spread tasks out more evenly. Consider ways to organize yourself better so deadlines don’t sneak up on you.

  • Personnel Tensions

Stress resulting from lack of trust in co-workers or dealing with challenging differences in opinion and/or work style. For more information on this and to help in developing strategies for coping with difficult staff member situations, visit here. The article details how to establish trust in the workplace, tips for communicating with others, recommendations on avoiding the troublemakers, and the importance of verifying rumors.

Take a look back through the list, and do a quick personal assessment of what the top accountant stress factors are for you personally. Take small steps in trying to alleviate what you can. Stay tuned over the next few weeks to discover or refresh yourself on some important stress management tips that go beyond the workplace. In the meantime, if you have realized there is one or more factors from above that you could use some help in addressing or for more assistance with your accounting practices, Beck and Company CPAs can help. Please contact us for a free consultation to find out how we can help you address your accounting needs.

Improving your Non-profit’s Public Perception and Transparency

Generally, transparency is considered as something required of entities that are asking for something whether it be politicians seeking votes, companies seeking to build new plants, or non-profit organizations seeking money. Donor transparency can be a useful means of fundraising for these organizations. On the other hand, a lack of transparency can be extremely costly because donors can choose to give their money elsewhere to organizations that are being more transparent. The public is desirous to engage in and give to causes they care about, but this only happens if your organization’s perception is positive and there is honest transparency. This honest transparency works both ways by allowing the potential donor to be transparent and by responding back honestly and transparently as an organization. Beck and Company Certified Public Accountants and Business Advisors offer many non-profit financial and accounting services to assist you in being truly transparent when it comes to your finances.

Donor Transparency

The process of receiving financial support for your non-profit begins by allowing potential donors the freedom to be transparent themselves. Donor transparency means supporters talking candidly about their reasons for considering giving.

This includes:

  • How important is it for a donor to get personal, public recognition for their generosity? It could be extremely important or something to avoid at all costs.
  • Whose approval is necessary before a sizable contributions can be made?
  • The deeply personal motivation behind a gift – which is different for everyone.
  • The kind of connection the donor wants to have with the organization. Some people want to be consulted regularly; others want anything but that.
  • The larger role played by the charity in the donor’s life. Many people become philanthropists because of a life-changing experience.
  • The worries the donor might have about giving. Many donors have concerns about spending, competence, or realistic chances for success, but they are often reluctant to voice them.

Financial Transparency as an Organization

The final point above is extremely important for your non-profit to address with donors. Financial transparency starts with effective and accurate financial reporting. Visit here to find out more about important tips for maintaining financial accountability in your reporting. These include tracking that raised funds were only used for their intended purpose, communicating openly in both good and hard times, maintaining practices that won’t hinder future networking opportunities, and having an infrastructure in place to manage finances well. If potential donors worry that the organization’s spending or financial competence is not up to par, this can be costly in losing the potential donation or future donations from current donors. On the contrary, having updated and accurate financial statements while being honest and open about common practices your organization follows can create needed trust.

When it comes down to it, transparency means trust. Your organization must be financially in good standing with sound business and finance practices in place to be able to secure donations and continue receiving more. Tell the truth to donors and potential donors about your organization, your partnerships, and your goals. Disclose who benefits from your services, how much they receive, and how and when funds are both raised and then disbursed.

In conclusion, no partnership between donors and non-profits can truly get off the ground until both sides have put all of their cards on the table in an honest manner. Donors need to state clearly what they can provide to the campaign and express concerns openly. Organizations need to prove what will be done and gained through these donor provisions. Transparency and positive perceptions will surely strengthen partnerships and cultivate needed trust. Transparency leading to partnerships can only be possible with sound non-profit practices. Please contact Beck and Company CPAs for assistance in making this a reality for your organization.

Financial Management Necessitates Acting on Key Performance Indicators

Your business financial management will only be successful if you know your key performance indicator facts and act based on what they are telling you. Over the last few weeks, we have discussed the importance of having a business/financial plan for your company and how to use this as a tool for ongoing planning using rolling forecasts and fine-tuning. The key performance indicators are aspects that should be an integral part of both your business’ plan and ongoing planning processes.

The key performance indicators discussed below should be viewed as a reference or guide. Essentially, they are like a checklist that will ensure that both your plan and ongoing evaluation truly do consider and respond to the essential components that make up a business and its success. Beck and Company Certified Public Accountants and Business Advisors are experienced in helping customers with their accounting and business practice needs. Please contact us so we can assist you in these processes.

Key Performance Indicators (KPIs) to Consider and Evaluate:

A key performance indicator or KPI is a type of performance measurement that organizations use to evaluate overall finances or a particular business activity’s success. When you evaluate KPIs, it is essential that you compare them to both your general business plan AND to your prior year’s results to get the best overall picture of where you are and what direction you are likely heading in. Here are ten important KPIs to evaluate within your organization.

  1. New Business Bookings Monthly Recurring Revenue (MRRs)- income from new customers that a company has reasonable assurance will occur at regular intervals in the future
  2. Net Business Bookings (after attrition)- a combination of income resulting from existing and new customers
  3. Recurring Revenue of Invoiced Customers– income from customers that a company has reasonable assurance will occur at regular intervals in the future
  4. Gross Profit Margin– profitability ratio that measures how much of every dollar of revenue is left over after paying for the cost of goods sold
  5. Operating Expenses– expenditures a business incurs to engage in any activities not directly related to production of goods and services
  6. EBIDTA– Earnings Before Interest, Taxes, Depreciation and Amortization
  7. Headcount– the total number of people employed in the organization
  8. Capacity Utilization Rate or Operating Rate– a measure of the rate at which potential output levels are being met or used that shows efficiency versus slack in the business economy
  9. Cash Balances and Debt Ratios
  10. Accounts Receivable Days Sales Outstanding (DSO)- a calculation that estimates the average collection period to illustrate how well a company’s accounts receivable (AR) are being managed. An equation for this would be= AR/Revenue X # of days

In addition to these top ten KPIs, there are many others that are also important. When it comes to customers, consider these KPIs: the cost of customer acquisition, the average revenue/billings per customer, the attrition value and percentage of recurring revenue from customers, and customer survey results. With regards to the business and employees, these KPIs should be addressed as well: the revenue and cost per employee, the number of months it takes to break even on sales and marketing costs, the current ratio of assets versus liabilities, average selling prices, the return on investment for both sales and service personnel, and the break-even point in revenue.

If you are a part of a non-profit organization instead of a for-profit business, you may need more specific guidance with regards to your organization’s financial management. In addition to the topics we have discussed regarding these best practices for businesses that are still applicable to non-profits, you can find more specific information for non-profits effective financial practices and reports by visiting here.

Our goal is that the financial management best practice information and tips over the past three weeks have benefitted and assisted your company. For more assistance related to your specific business, Beck and Company CPAs offer free consultations to assist you with any accounting needs you may have. Please contact us for more information, and we look forward to the opportunity to assist you.

Financial Management Requires Continuous Planning and Fine-tuning

The fundamental aspects of business finances need to undergo continual planning and fine-tuning as a means of helping to make important business decisions and improvements. Last week, we took a look at business and financial plans. Once these plans have been created, they must be modified consistently. The easiest way to make the distinction is to think of the business “plan” as fixed and to envision the fine-tuning as an ongoing process of “planning” that should always relate back to the plan. In essence, the plan remains the same while planning continues on revolving around that plan. Beck and Company Certified Public Accountants and Business Advisors have vast experience helping clients with their financial business planning needs and would be pleased to offer a complimentary accounting consultation. Let’s take a closer look at how to go about planning and fine-tuning business finances.

Rolling Forecasts: Planning for what is ahead

The ongoing planning that results from your business and financial plan is essential to sound financial management. You must take constantly changing circumstances and situations into account. Your planning process evolves along with these changes. Rolling forecasts act as this sound financial roadmap. Essentially, these rolling forecasts create an ongoing cycle of planning, evaluating, and updating organization-wide operations such as finances. The goal is to have this process help you understand problems, challenges, and trends sooner. The predictions made in rolling forecasts allow you to make changes before predicted outcomes are actually observed that ultimately save your company money and time. In its simplest form, it is a more “live” version of a budget that is also simplified so it can be generated and applied much quicker than a traditional budget could.

A rolling forecast provides many benefits to an organization in terms of reaction time, alignment of operations, and timelines. Management can better focus on making decisions that truly matter and have far-reaching implications that propel a business toward its strategic goals and overall plan. If a rolling forecast is done correctly, it will provide a competitive advantage in a rapidly changing business climate.

Here are five core components that make up a rolling forecast:

  1. Extends beyond the calendar/fiscal year or baseline set by the budget to be aligned to the actual business cycle regardless of its length
  2. Updates on a regular and pre-determined basis to keep a consistent rhythm that can be planned for and accommodated. Keep in mind that the number of forecast periods is dictated by real business drivers such as business cycle, competitive forces, price sensitivity, vendor reliance, and technology adaptation.
  3. Emphasizes key business drivers which are business decisions or influences that impact numerous areas and ideally link revenue and expense activities
  4. Rapid forecast creation by only focusing on key decisions not translating all business decisions into financial terms. Ideally, a rolling forecast solution will be able to generate an organization-wide forecast focused on a specific outcome in less than one business day.
  5. Blends actual performance along with the updated forecast by using the most recent actual data. The majority of effort should be spent on updating periods that were previously forecast and not on the new periods being added to the forecast because those are more variable and less controllable/predictable.

Fine-Tuning: What is working and what isn’t working?

Consider the following aspects that need to be continually fine-tuned no matter the type of business. In the process, assess the risks and then work to mitigate them.

     -Required and Generated Cash

A few questions to ask yourselves: Are we burning cash? Are we generating cash?

     -Revenue

Factors to consider: sources of revenue, predictability of revenue, other competition

     -Profitability

Questions to reflect on: Are we profitable? How can we be more profitable? Have we prioritized correctly if our goal is profitability?

     -Costs

Aspects worth assessing: Are we capital efficient? Have we prioritized?

The process of planning and using rolling forecasts in addition to fine-tuning essential business components can have a vast and positive impact on the way finances are managed within your organization. For more assistance with financial management, please contact us here at Beck and Company CPAs.

Financial Management Best Practices Start with a Business and Financial Plan

Business financial management starts with a plan. If “business” can be summarized as the prioritizing of limited resources, how you manage those resources can make or break your business. What, then, are the best practices when it comes to managing your business’ finances? It starts with a look at your company’s current reality and creating or reviewing your business and financial plan to be sure it is complete. In a sense, this process is aimed at creating a culture of financial management that is essential to business success. Beck and Company Certified Public Accountants and Business Advisors can help you with these financial plans. Feel free to contact us and request a free consultation.

Current Reality: How do you manage your business today?

A financial plan can only be truly accurate and applicable if you first determine how your business is currently managed. By knowing what gaps exist or what elements need more attention, you know which parts of a financial plan need the most attention. Consider the following questions and how many can be answered affirmatively for your business.

–          Do you have a formal planning process?

–          Do you know what the drivers are behind historical trending and forward looking plans?

–          Do you know if resources are aligned with your revenue and profitability goals?

–          Do you know which employees are more effective than others?

–          Do you know which customers or sources of revenue are more profitable than others?

If you cannot answer yes to some of these questions, you’ll need to put your focus on those aspects initially when you make or add to your plan. Then, all you need to do is fine-tune the other aspects of your business that are already in place in your plan. Stay tuned next week for a deeper look at fine-tuning key aspects of your business’ finances.

Business Plan: An overview of what to include

Now that you know more about your current reality, you are ready to take a look at your existing plan or create a new one. If you have an existing one in place, be sure all essential components are included or add where necessary. A business plan should include the following: an executive summary of your company’s overall objective, mission statement, and keys to success. This should be followed by a company summary of ownership, history, and locations. Next, you’ll need a description of products and/or services that you offer. A market analysis summary of your target market, needs, trends, and growth in addition to industry and competitor analysis is another important part of this plan. You will also need a summary of strategy and implementation for pricing, promotion, distribution, and sales. Two other important elements of your business plan are a web plan summary including website marketing strategies and a management summary of the organizational structure and management teams. Finally, your business plan will need to include a financial plan. Let’s take a closer look at what this should include.

Financial Plan:

A financial plan is one of the most important elements of your overall business plan. All of the other elements of your overall plan that we just discussed should correlate to the finances. The plan creation or revision also encourages your business to be financially transparent and open. To learn more about the importance of financial transparency, visit here.

Within a financial plan, you’ll need to address important assumptions to ensure clarity and agreement. These should include timing (when to do your plan- calendar or fiscal year), prioritization of new initiatives, run rate versus new business mix, competition and cyclical variations and their impact, employee utilization rate, and fixed plus variable cost structure.

After the assumptions are laid out, then you’ll need to include other elements in your plan such as key financial indicators, break-even analysis, projections of profit and loss, projected cash flow, business ratios, and a long-term plan. These financial aspects combined with the business plan components comprise your overall plan.

If you are in need of support with your business and financial plan, please contact Beck and Company CPAs for a complimentary consultation.

Financial Checklist for Non-profit Organizations

Non-profit organizations have a duty to be financially responsible and transparent for their board, themselves, their stake holders, and the government. This is no easy task, but a little organization can go a long way in helping non-profits to have success with regards to their finances and financial reports. This week’s focus is on keeping all of the necessary tasks organized and methodical, but you can visit here to learn more general information about what makes up an effective financial report to get you started.

It is easiest to stay current on needed accounting tasks by splitting them into what needs to be done more and less frequently. A checklist can help guide your organization in knowing what tasks need to be done and when to keep financial information up-to-date and ready for needed submissions to the government and people involved in the organization. Beck and Company Certified Public Accountants and Business Advisors can assist you with this and with your ongoing nonprofit and accounting needs.

Daily and Weekly Reminders to Keep at the Forefront

  • Each day’s tasks and meetings are established and prioritized (important ones are done first and others are scheduled around them).
  • The organization’s goals and mission should be reflected in and aligned to the work done.

Monthly Financial Checklist- Focus on the Budget and Collaboration

  • Review and compare budget projections and actual results: This will help you be sure that your revenue is sufficient to take care of expenses and will clarify how last month’s financial activity will impact future months.
  • Make adjustments based on these results: Your review and comparison should lead you to make immediate decisions about future actions based on your data.
  • Trim the budget’s fat: Analyze each line item to cut unnecessary or underutilized expenses.
  • Analyze costs as a team: Meet together as a budget task force to make decisions regarding variable costs to either remove them completely or determine if they should become fixed costs. Focus on budget efficiency without compromising the quality of your organization.
  • Submit grant proposals: Be aggressive in seeking more funding not only to sustain your organization but also to expand it.
  • Collaborate: Look for businesses and other non-profits to form partnerships with. Businesses with shared interests may support your cause, and other non-profits can be a great source of shared networking and fundraising efforts.

Quarterly Checklist- Focus on Important Board and Government Accounting Requirements

  • Report payroll taxes to the IRS: Submit the required Form 941 which is the employer’s quarterly federal tax return.
  • Prepare financial statements for the board: Knowing the current financial status for future planning and to fix potential finance problems is essential.
  • Submit financial status reports and progress reports for government grants and contracts: The government expects to know the current state of expenditures and what has been accomplished versus what was expected to be accomplished.
  • Meet with the board: It is a federal requirement to meet with the board of directors at least four times per year.

 Annual Checklist

  • Submit Form 990: This annual information report should be submitted to the IRS to report on financial activities, sources of income, and spending.
  • Release payroll reports: The Social Security Administration, IRS, and the employees need to know this information. This could include Form 941, W-2s, W-3s, and 1099s.
  • Get an audit of your financial statements: A CPA’s audit will serve as a second opinion regarding the validity of your finances and adds credibility to your accounting practices.
  • Create next year’s budget task force: Seek out staff and board members skilled to contribute to the assessment of the budget.
  • Organize a grant and contract application team: This important team researches, develops, and submits these applications for your organization.
  • Re-evaluate your goals: Prepare for your annual board meeting by evaluating achieved, ongoing, and new goals that should be put into place.

In addition to resources such as this financial checklist, we offer many nonprofit services to organizations just like yours. We would be happy to assist you with your specific needs.

Achieving Your Small Business Budget Goals- Part 2: Setting Profit Goals

Last week, we took a look at why any small business needs a budget and how to create one. Whether your company has just put a budget in place for the first time or is just in need of an overall budget revamp based on lacking profits, the following guiding questions are for you. They will help you set and achieve those goals so you can get to a place of maintenance and revision for your important financial decisions. Once these goals are set in motion, you can focus on revising and responding to ever-changing financial happenings as they occur with the peace of mind knowing you have a budget and profit goals to keep you on track. Beck and Company Certified Public Accountants and Business Advisors have been helping small business owners just like you with this process for years. We want to help you set and achieve business goals, too. Please contact us for a free accounting consultation.

Now that you have a working budget with clear figures to work with, ask yourself some important questions that will help guide you as you make initial revisions. These will assist you with further decision-making conversations as a team to set goals.

Here are some example questions to get you started:

What is the desired overall profit? What sales will be needed to achieve these desired returns?

After an initial budgetary plan is in place and all of the financial figures are together in one spot, an increase in profit should be the first consideration you make when you think about the prospects for your small business and make tweaks. The first draft of a budget often uncovers problems and suggests choices that will need to be made. Working up additional budgets after the initial one using the answers to your guiding questions will help you determine a workable plan with future goals in sight. Think of it as a map that helps you stay on the right path. To truly achieve profit, be sure this map leads you to returns on your services/products AND a return on your investments while also factoring in expenses and taxes.

What fixed expenses will be necessary to support these sales?

Once you have decided on your targeted profit, you’ll need to make sure it can actually be achieved. To do this, you must project your fixed expenses. Regardless of sales, fixed expenses stay the same. These could include insurance, rent, property tax, wages paid to salaried employees, depreciation of equipment, interest on borrowed money, maintenance costs, and office expenses among other factors.

What variable expenses will be incurred in producing these sales?

Again, profit goals are not realistic without factoring in projected expenses including variable expenses. Unlike fixed expenses, variable expenses do vary with sales. These could include but are not limited to cost of labor, sales commissions, payroll taxes, insurance, advertising, marketing, and delivery expenses.

How do taxes factor into our overall budget?

Keep in mind that taxes have to be included to have a realistic outlook on expenses versus profits. As you set profit goals for upcoming years, keep in mind that the larger your goal means the larger the amount of funds needed to account for taxes. We can help you determine the tax amount to account for regarding taxes.

Now that you have considered all of these questions and the factors that figure into your overall small business budget, determine if you have a workable budget. Your overall expected income will tell you if you are able to achieve your profit goals. This is done by calculating the difference between sales and the total of fixed and variable expenses in addition to taxes. For further assistance with the many components that go into determining a budget that is realistic and allowing you to achieve your profit goals, contact Beck and Company CPAs.

Achieving Your Small Business Budget Goals- Part 1: Budget Creation

As we previously discussed, having an effective and yearlong budget that is consistently being reviewed and updated is essential for your small business. If your business is not at a maintenance stage in budgeting because you lack a budget, the following recommendations will help you get started. They will offer insight into understanding the rationale behind the process/need and will help with initial action steps in creating such documents. Beck and Company Certified Public Accountants and Business Advisors have extensive experience in helping small business owners just like you with these essential tasks. We offer free consultations to help you achieve your financial goals.

Budget: What is it and why do it?

Definition: Before getting started with the action steps, it is important to know why what you are about to do is important. A budget is a tool that helps you deal with the future and turn expectations into reality. It allows you to set goals and list the necessary steps to reach those. It helps you think about what you really want from your business in the future.

Purpose: By planning, your business is in a much better position to act in prevention of possible crises instead of react to actual crises that may have already done damage. Having a detailed plan with listed future receipts and expenditures creates a guiding framework of projected profit and loss. This can then be used after a designated period of time to compare actual results with anticipated goals. The resulting decisions from this data can lead your business to greater success. For example, if some of your expenses were higher than expected, look for ways to cut them. If you’ve fallen short of goals, you will need to look for ways to increase income.

Action Step #1: Start by Creating a Budget

If you have not already done so, starting with the creation of a budget is a vital first action step. Now that you know more about what it is and why your business needs one, working up this document will help you clearly determine whether or not your profit goals are within reach. It should be written down with a focus on determining what is essential and non-essential to your business. Be sure to set realistic parameters.

Not sure where to begin? There are two common methods you can choose from. You can start with a forecast of sales and work down. Conversely, you can start with a forecast of profits and work up. The latter is more common. In this method, you should decide what profit you want to make and then list the expenses that will be incurred to reach that predetermined profit. For more tips and further details from Beck and Company CPAs on this initial process, visit here.

Action Step #2: Determine if Your Present Profit is Sufficient

Before being able to truly use your newly created budget effectively, you have to be sure that your current profit is what it should be. At the end of the year, it should be large enough to make a return on your investment and a return on your own work (pay you a salary). Do you actually make the same, if not more, than you could working for someone else doing the same thing? In addition, does this profit include a return on your investment into the company? That investment includes the money you put into the firm when you started it and the profit of prior years which you left in the firm (otherwise known as retained earnings). Don’t neglect the importance that taxes play into your overall totals so that you truly are making a profit.

Now that you know what you made last year through your newly created budget, you are ready to set goals for the future of your company. Stay tuned next week for a further look at setting and achieving these goals. Need more assistance before moving on to future profit goals? Beck and Company CPAs would be happy to help you. Please contact us.

Effective and Yearlong Small Business Budgeting

By this point in the year, it is likely that your small business budget for the year has been set and is simply filed away for now. Although it is often the case that budgets are not reviewed until the process of creating the one for next year begins, this can cause problems because businesses are not static so their budgets should not be either. Unexpected situations and cash flow issues can derail even the best of well-planned budgets. Instead of thinking about your budget as a task to complete before the start of each year, think of it as an ever-changing and dynamic document that carries serious weight for your business all the time. If your small business is not only in need of more consistent budget revisions but needs a budget overhaul, here are some suggestions for understanding what constitutes an effective business budget.

Do you need assistance in addressing and optimizing your specific business processes including budgeting? Beck and Company Certified Public Accountants and Business Advisors can help through our Client Accounting Services. In addition to the personalized consulting we provide, the following are some recommendations that can keep you on the track financially all year long.

Make Monthly Updates and Changes to your Budget

Are your expenses in line with projections or are there line items that need cut backs to stay on track financially? If you have trouble answering questions like this, it is probable that you need to review the budget more often. A monthly review and update of your budget allows unexpected situations to be resolved in a timely matter and will help you focus on real-time data not projected financials. Through a monthly review, you can make changes to your budget and see the impacts these have on income and profits. These changes can have a positive impact in a timelier manner. Use current business performance and expense information to inform immediate and future planning decisions. This does not mean that an annual budget review isn’t important, but it does mean that these monthly reviews can offer more insight into an annual review.

Expect the Unexpected- and Respond!

As changes are made within your own company, be in tune to what impacts these have overall. Be prepared to make adjustments especially when unexpected circumstances surface. Just as your company goes through various ebbs and flows, it is important to remember that your clients experience the same. Adjustments made to a client’s budget can impact yours and vice versa. Be prepared for reductions in revenue and reductions in how much a company does business with you. Be strategic in finding new business to make up for these losses while still considering how this could cost you in terms of marketing and hiring costs.

Consider Linking Incentives to Budget Performance

Are you having trouble or do you anticipate having trouble getting everyone on-board with a more active budget? In the process of concentrating on and interacting with the budget more often, consider tying incentives to this new practice. Set parameters when you plan annually for how performance and lowering/maintaining expenses will be tied to profit and how this impacts bonuses.

If these tips leave you with more questions than answers, it may be that you’re not quite in a place as a business to be developing techniques for maintaining and updating a financial plan. You may be more in need of creating a budget or transforming it to truly reach your profit increase goals. If this is you, be sure to stay tuned over the next couple of weeks as we dive in deeper to budgeting, increasing profits, and reaching financial goals for small businesses. In the meantime, contact us here at Beck and Company CPAs for assistance with your overall business process optimization.

Tips for a Successful Non-profit Financial Audit

Nonprofit organizations undergo financial audits for a variety of reasons. In addition to being in compliance with various covenant and membership requirements, audits also provide an organization with tools that can help with best practices and offer accountability to the institution. Just like the notion of having surgery, the idea of undergoing a financial audit can be less than appealing. At the same time, it is important to focus on the significant value that results. Here at Beck and Company’s Certified Public Accountants and Business Advisors, we can help you properly prepare for an audit and make the process less painful and more beneficial. We offer an array of auditing services to assist you.

How can your nonprofit prepare for, manage, and benefit from a financial audit? The following tips offer suggestions to do just that.

1.       Before the Audit- The Pre-Op:

Advanced preparation for your audit is essential. Your team should create and use a list of items that will need to be prepared before the auditor arrives. Having all of the necessary documentation ready for the auditor saves time and money in addition to resulting in less staff distractions during the actual audit process. Through many years of auditing and assisting nonprofits with this process here at Beck and Company CPAs, we have compiled a list of task items designed to help you successfully prepare for an upcoming financial audit. You can access it here. Remember that auditors are likely to request additional reports and information based on what is initially supplied. These requested reports should be added to the preparation list for the following year.

Choosing the right professional who will work with your company is extremely important. Just like choosing a competent surgeon that specializes in what needs to be operated on, you’ll want to choose an auditor that you feel comfortable with and who is experienced at working with not-for-profit organizations. Think of your choice in auditor as a partner not a distant professional.

In the preparation process, be clear about deadlines. The time frames for your audit are crucial. If bank submission, board meeting, audit committee session, or grant deadlines need to be met, be sure to communicate these to all teams involved and do this early on in the process. Clear communication eliminates surprises and delays.

2.       During the Audit- The Surgery:

Similar to the notion of having surgery without the surgeon present, the greatest efficiency and most useful results come from maximizing your time with the auditor. Be sure to get as much done and as many questions answered while the auditor is onsite. If there are any open items that cannot be accomplished, set completion deadlines before the auditor leaves.

3.       After the Audit- The Post-Op:

The most significant aspect of an audit is what results from it just as the results of surgery are why you had it in the first place. Without following recovery and therapy instructions, a successful operation still will not produce the intended outcome. Similarly, an audit will not be beneficial to your organization without implementing changes and using suggestions to make improvements. The most valuable part of an audit is often the management comment letter. It should highlight areas of control deficiency, concerns, and needed improvements. The implementation of changes, as appropriate, are the central benefit that an audit affords your organization. In addition, the results can help make future audits even smoother in the upcoming years.

Beck and Company CPAs have helped many nonprofits prepare for annual financial audits and would be happy to assist you as well. Please contact us and request a complimentary audit services consultation by visiting our website.