Finance – Beck & Company

How to Help Fundraising and Finance Work as a Team

In complex office environments where nonprofits are comprised of specialists, a high value is placed on leaders and systems that can bring departments together to get things done. Oftentimes, the finance and fundraising departments face similar challenges yet act like they are playing for separate teams. Aligning departments starts with a mutual consideration of roles.

Understanding Challenges

There’s an old saying that you don’t know what it’s like to be someone else unless you’ve walked a thousand miles in their shoes. With fundraising and finance teams, there are perspectives and tasks that each wished the other better understood.

Fundraising wishes that finance could…

Understand the challenges and process of fundraising.
Accept that you must spend money to make money (or get donations).
Help us maintain good donor relations.
Offer us some flexibility—things aren’t always black and white in our world.
Respect that fundraising isn’t easy.

And finance wishes that fundraising could…

Understand the fact that finance’s job is complex and time-consuming.
Accept help from experts in finance.
Help us do our jobs better by providing us with information we need.
Offer to sit with us to learn some basic accounting practices.
Respect deadlines.

Coming to a consensus is much easier when you understand and respect one another’s positions in a situation. Knowing what the other ‘team’ wants can help you step closer to a compromise and to supporting each other’s vital roles in an organization.

Different Departments, Similar Needs

Although finance and fundraising reflect different departments with varying needs, both seem to experience similar challenges when it comes to data and information. Ways in which both departments can help each other overcome their shared challenges include:

Collaborate on budgets and tracking
Improve reports and reconciliation of financial information
Have joint planning and goal-setting tasks
Communicate frequently and in a timely manner
Identify ideal processes and procedures
Integrate fundraising and accounting software

One tool that can help both departments communicate, collaborate, and plan together is nonprofit accounting software. Various software packages such as Intaact, work independently or together to provide data sharing among teams, timely updates, and more. Cloud-based solutions enhance communications because they can be accessed anywhere there’s a web connection. It makes it easier for fundraisers who travel to visit important donors to update their accounts, for example, which in turn provides information to finance to help them do their jobs better.

While the right software can’t solve all internal scuffles, it can help fundraising and finance join hands across the net and play for a winning nonprofit. It’s an important step in the right direction.

Intacct Cloud-based ERP Software

Intacct is specifically designed to provide nonprofits with the control needed to simplify financials and fundraising so you can determine where – and how – to allocate your resources and time. Built in the Cloud environment, Intacct provides organizations with true business visibility and flexibility so they always are in the know. Designed to automate your organization’s financial processes and transform your financial department into one that strategically drives your company toward growth, Intacct has been voted one of the best-in-class financial ERP solutions on the market today.

To learn more about Intacct, or how Beck & Company CPAs can help your finance and fundraising teams work together using our nonprofit accounting services, give us a call at 703-834-0776 x 8001.

FASB Set to Release Nonprofit Accounting Changes Summer 2016

The Financial Accounting Standards Board (FASB) is set to release the first wave of nonprofit accounting changes during the summer of 2016, according to an article in Accounting Today.

The article indicates that FASB has completed its assessment of the feedback received on Phase 1 of its intended changes. The organization appears ready to release the first set of accounting standards changes that will guide nonprofit organizations in the near future.

The changes are expected to significantly affect the way nonprofits report net revenue, as well as other less significant changes impacting how nonprofits report and account for their finances. This is the first major overhaul of the nonprofit accounting guidelines in over 20 years. The overhaul came because FASB recognized the changing face of the nonprofit sector, with newer types of nonprofits requiring a different view on accounting standards.

Nonprofits Prefer to Stay Flexible, In-Sync with For-Profit Accounting

One thing that surprised the people at FASB was the outpouring of feedback they received from the nonprofit sector. Typically, the standards board receives only a smattering of feedback when it requests public input. The nonprofit sector sent in 250+ letters detailing feedback on the proposed changes.

The biggest request was that FASB retain the flexibility it has previously allowed in nonprofit reporting. Another request that came over loud and clear was the desire for nonprofits, in similar industries as for-profits, to continue using accounting methods and standards in line with the industry itself, rather than based on tax status.

The goal of keeping both for-profit and nonprofit accounting models in sync is to keep their reporting methods clear and easily understandable by most people. Because many people are at least familiar with basic accounting concepts used by for-profits, by keeping the nonprofit model similar, donors and the general public can better understand the finances of nonprofits. Transparency is maintained as it pertains to financial records because the information can be understood more easily.

The Rollout Schedule: What to Expect

As Phase 1 begins rollout this year, it will impact reports generated starting December 2017. Financial statements for the fiscal year ending December 2017 should follow the new guidelines, with early adoption permitted.

The Big Change: Two Net Asset Reporting Categories Instead of Three

The biggest changed planned for Phase 1 includes condensing the three net asset reporting categories into two. The current categories include unrestricted, temporarily restricted and permanently restricted. The two new categories will be donor restrictions and without donor restrictions. The “without donor restrictions” category replacing the former unrestricted category.

Other areas impacted by the changes include some minor tweaks in the reporting of investment returns, as well as liquidity and availability.

Help Navigating the Changes

An upcoming webinar will be discussing how the FASB and IASB have released a new revenue recognition standard – which will dramatically impact the financial processes of software companies. Although the effective date is several quarters away, you need to begin taking action now. Click here to register for the New FASB Rev Rec Standards, Actions You Should Take Now Webinar on Thursday, June 16th at 11 AM PT/2 PM ET.

It can be difficult to discern which changes may truly impact your nonprofit organization and which may be considered and evaluated for your particular needs. The professional CPAs and consultants at Beck & Company can assist you through these changes, helping you update your accounting standards to reflect your nonprofit’s financial models and goals. We invite you to contact us to learn more. Call us at 703-834-0776.

Nonprofit Accounting Best Practices: Fund Diversification

We are continuing on in our Nonprofit Accounting Best Practices series. As you prepare for the future, sustainable funding is a critical part of your plan. Some organizations get comfortable to the more traditional types of funding such as philanthropy which has proven to not be a sustainable method. Most growing nonprofit organizations need a true funding strategy that is wide in scope including sustainable forms of funding.

Whatever your current process is, you will probably be planning for expanded services. Most nonprofit organizations see an increase in the demand for services while facing increased competition for funding. In this environment, you need the support, credibility, and visibility with the community, funders, and constituents. Strong nonprofit accounting and financial management is key and includes performance and outcome reporting. You also need more to bring stability and sustainability – while allowing you to scale for growth. By diversifying your funding streams, you strengthen sustainability while expanding your influence and impact by partnering with new and diverse resources that you may not have considered previously. We are going to start with some basic information to help you get started and navigate the world of social finance. As with most things, balance is key to successfully diversifying your funding.

Social Finance is an approach to mobilizing private capital that delivers a social dividend and an economic return to achieve social and environmental goals. It creates opportunities for investors to finance projects that benefit society and for community organizations to access new sources of funds. Social finance is fairly broad in its definition, but we will give you a thumbnail of a few of the most interesting ‘instruments’ included in the social finance realm.

Impact Investments are investments made into companies, organizations, and funds – with the intention to generate measurable social and environmental impact alongside a financial return. Impact investments are made with an expected return of capital as well as a return on capital, and most importantly, a commitment to measure and report the social and environmental performance and progress of the underlying investments. Global Impact Investing Network says it well: “Impact investing has the potential to unlock significant sums of private investment capital to complement public resources and philanthropy in addressing pressing global challenges.”

Program Related Investments (PRI) are defined as investments made by foundations to support charitable activities that involve the potential return of capital within an established time frame. PRIs include financing methods commonly associated with banks or other private investors, such as loans, loan guarantees, linked deposits, and even equity investments in charitable organizations, or in commercial ventures for charitable purposes. For the recipient, the primary benefit of PRIs is access to capital at lower rates than may otherwise be available. For the funder, the principal benefit is that the repayment or return of equity can be recycled for another charitable purpose. PRIs are valued as a means of leveraging philanthropic dollars.

Social Enterprise’s standard definition is applying commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Nonprofits are starting to leverage this strategy as they seek to create earned income to increase their sustainability and funding strength. NESC has published a great report on Social Enterprise’s Expanding Position in the Nonprofit Landscape. Social Enterprise activities offer nonprofit organizations the opportunity to generate earned income which in turn will provide consistent cash flow to further the mission of the organization. Social Enterprise activities can enhance the brand/reputation of the organization. A direct benefit of Social Enterprise activities for nonprofit organizations, can be the enhancement of management.

The world of social finance and funding is expanding at a fast pace. New funding resources are being developed often to help nonprofits ensure mission success. In the beginning stages of your funding and growth planning, be sure to seek out the best fit in the multitude of new funding opportunities, and incorporate it into your fiscal plan and performance goals. We also encourage you to remember to track and report your funding diversity as your donors and constituents need to be aware of this information.

Do you have questions? Please reach out to us. You can also follow us on Twitter (@BeckCPAs). Check back next week for the next post in our series, where we will focus on scaling for growth and impact.

At Beck & Company we specialize in not-for-profit accounting and auditing. We understand the unique challenge of balancing the needs of your various stakeholders – contributors, members and your board, too. We have experience serving not-for-profit organizations such as unions, homeowner’s associations, religious organizations, charities, and social service organizations. If you have any questions regarding the filing of your form 990 we are here to help. Contact us today for more information.

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.

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
Net Business Bookings (after attrition)- a combination of income resulting from existing and new customers
Recurring Revenue of Invoiced Customers– income from customers that a company has reasonable assurance will occur at regular intervals in the future
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
Operating Expenses– expenditures a business incurs to engage in any activities not directly related to production of goods and services
EBIDTA– Earnings Before Interest, Taxes, Depreciation and Amortization
Headcount– the total number of people employed in the organization
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
Cash Balances and Debt Ratios
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:

Extends beyond the calendar/fiscal year or baseline set by the budget to be aligned to the actual business cycle regardless of its length
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.
Emphasizes key business drivers which are business decisions or influences that impact numerous areas and ideally link revenue and expense activities
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.
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.

Why Financial Transparency is Important to Your Business

Recent financial scandals among businesses and corporations have led to extreme distrust in America’s businesses. Today’s consumers are more hesitant to contribute to the financial success of businesses they feel of unethical and dishonest. In an effort to increase financial transparency among businesses, the government has implemented several new laws and financial reporting regulations. While these changes may seem like an inconvenience, they are actually beneficial to the long-term success of your business.

Financial transparency can help your business build and maintain trust with its customers and financial partners. When a customer knows that you are spending your money ethically and responsibly, they are more inclined to support your business through the purchase of your products and services. While it may seem instinctive for companies (particularly private companies) to keep sensitive financial data such as employment numbers and growth plans away from the public, sharing information about your financial performance is actually to your advantage.

When you are forthcoming about your business’ financial performance to your business partners, you minimize the risk of having your business as a partner. Having fewer unknowns can also increase your success when it comes to supplier relationships. By sharing your financial information with your suppliers, you might be able to delay payments to vendors by 30 days instead of having to pay in cash upon delivery. When your suppliers see that you can be trusted with a line of credit, they will be more flexible when it comes to payment.

Some companies have even seen an improvement in their bottom line increase after adopting internal financial transparency policies. Sharing financial information with your employees may be uncomfortable at first, but many companies are saving money because of it. When your employees see how their actions impact the company’s bottom line, they have an incentive to make changes and stick to their department budgets. By increasing your financial transparency internally, you are giving your employees the tools they need to stay on track and keep your business profitable.

If your business is interested in building the trust of its suppliers, partners, and customers, consider being a little more transparent with your company’s financial information. When your partners and customers see that your company is financially stable, their confidence in your brand will increase. Read our blog for more tips on increasing your business’ financial transparency through effective financial reporting.

Do you need help becoming financially transparent? Are you looking for an accountant to help you better manage your company’s finances? Beck & Company’s CPAs are available to assist your company with all of your financial matters – from helping you create more effective financial reports to assisting you with your tax returns. Give us a call today!

5 Finance Tips from Small Business Owners Just Like You

Are you a small business owner? If so, you are more than likely familiar with the stress related to running a small business. You are required not only to be available to answer questions pertaining to the day-to-day activities of the business, but you are also required to keep an eye on your business’ finances and plan for the future. It’s a hard job, but somebody’s got to do it…right?

While we cannot assist with the day-to-day tasks or make the hard decisions for you, we can offer some tips designed to help improve your finances. Our Washington DC CPAs and business advisors meet with business owners like you every day to provide financial services to their companies, and we receive a countless number of tips from our time meeting with them. Keep the following finance tips in mind as you continue on in your business ventures:

Always keep your finances in order. This may seem like a no-brainer, but you’d be surprised at the state of some companies’ finances. Make sure that you are maintaining your finances effectively and have someone who is keeping an eye on the financial status of your company. Hiring a CPA or accountant to perform crucial financial services would be a smart move if you do not have one on staff. Remember that potential investors will want to take a look at your company’s finances, so don’t let this area slide. Maintaining your finances now could make you more attractive to investors, not to mention that it will set up business up for future success.
Minimize financial risk. Minimizing risk is essential in financial management. Make sure that your most important and valuable business items are well-insured, and evaluate all financial decisions prior to making them. Make sure that your financial records are well-maintained so you have the knowledge you need to make all financial decisions.
Maintain separate personal and business financial accounts. Maintaining boundaries where money is involved is always a good idea. Consider separating your personal and business bank accounts. This will not only be helpful when it comes tax-time, but it will also be useful in maintaining your company’s finances.
Record all of your transactions. This is bookkeeping 101. If you haven’t been recording all of your transactions from Day 1, it is time to start now. It is crucial to be meticulous about your financial and business records so you can answer any and all questions about your company’s finances. Maintaining good records will help you with taxes, running your business, and investing in other business ventures. Make sure you write down (or input into your accounting system) everything. Don’t leave any financial questions unanswered and don’t set yourself up for an audit by maintaining poor records.
Remember to file your taxes quarterly. Self-employed business owners have different tax obligations. Rather than filing once a year, small business owners are required to file their federal and state taxes quarterly. Don’t make the costly mistake of filing only once a year. Figure out what you owe every quarter, and remember to put the money aside prior to its due date. Consider your tax bill as simply another bill you have to pay and – if it helps – invoice yourself regularly so you remember to put the money aside.

Stay tuned to our blog for more important small business tips from business owners just like you. If you are looking for financial services for your small business or simply need an accountant to come alongside you, contact us today. We offer many financial services to businesses just like you and would be more than happy to answer any financial questions you have regarding your business.