Nonprofit Accounting Blog – Page 24

Do I Need to Have Special Insurance Coverage for My Fund Raising Event?

As we discussed last month, it’s important to hold fund raising events throughout the year to increase donor support and contributions. These events are often large-scale and require extensive planning to pull off effectively. While they certainly have the potential to bring in a substantial amount of funds, these events are also a significant risk for nonprofits. In order to help alleviate the risk that comes with planning large-scale fund raising events, nonprofits need to invest in the proper amount of insurance coverage.

What is a Special Event?
Before we discuss the intricacies of special event insurance, you need to know what a special event is. A special event, by definition, is an event that falls outside of a nonprofits core function (think large-scale fund raising events). Because these events are not the “norm”, nonprofit organizations are limited in their experience and knowledge regarding the requirements surrounding these types of functions. Risks at these types of events can range from personal injury and accidents to fraud and theft, cancellation due to unforeseen events, and nonappearances by featured performers or hosts. Additional coverage can ensure that your organization is protected from all of the associated risks.

What Coverage Do I Need?
Now that we’ve established what a special event is and why it’s important to have special insurance coverage for your fund raising events, we need to explain the type of coverage you’ll need. Special event insurance does exist, and it offers nonprofits great protection from lawsuits and claims brought by a third party; however, this insurance is generally expensive and is not practical if you a planning a single event. Depending on the type of fund raising event you’re hosting and your current insurance coverage, it might be more beneficial (not to mention cost-effective) to extend one of the following types of insurance policies rather than investing in special events insurance coverage. Any of the below insurance policies can be extending to cover your fund raising event:

Comprehensive/General Liability: CGL insurance will cover claims that allege property damage or bodily injury. In the case of a special event, this coverage can be extended to include volunteers, members, temporary workers, outside sponsors, board members, and landlords.
Fidelity: Fidelity bonds protect your organization against the loss of money or property due to dishonesty among staff or volunteers.
Product liability: This insurance offers protection against claims resulting from injury or loss as a result of product malfunction from products sold or distributed at the event.
Weather: This type of insurance covers the losses resulting from the cancellation of an event due to weather reasons. While it is particularly important to outdoor fund raising events, it is not restricted to outdoor events.
Directors and officers liability: D&O insurance protects an organization from claims arising from managing directors or governing officials of the organizations. It includes coverage for both high-ranking staff and the members of the board.
Nonowned/hired automobile liability: If your volunteers or staff are using their own vehicles during the event (or if you are renting cars or hiring drivers), you may need this type of insurance coverage.
Nonappearance/cancellation: If your event is structured around the appearance of a celebrity or performer, this type of coverage could come in handy should he or she cancel. It protects your organization against all losses when your guest of honor fails to appear.

Your current insurance policy most likely covers some of the areas listed above; however, to be sure, you need to contact your insurance provider and see if your event has adequate coverage. If not, ask if you can pay a one-time premium for additional coverage during your fund raising event. While it may not seem crucial or necessary pay for additional coverage, you will wish you had the protection should someone file a claim with your organization after the event.

Make sure you include event insurance coverage in your event planning tasks and solidify any insurance changes or adjustments prior to the event. With the proper amount of planning and foresight, you can ensure that your fund raising events occur without a hitch.

Are you looking for more information on event planning? Stay tuned to our blog for more tips on planning a flawless fund raising event.

Is it Time to Hire an Accountant for My Business or Nonprofit Organization?

Running a business or not-for-profit organization is hard work. Not only do you have to effectively manage the day-to-day operation, but you also have to effectively manage and maintain your business and organization’s finances (which is no small feat). Many businesses and not-for-profits choose to handle their finances on their own in an effort to save money; however, the stress of managing these financial responsibilities on their own often leads to frustration and unintentional errors.

Businesses and not-for-profit organizations are not always aware of federal regulations and changing laws, and managing their finances on their own can become cumbersome as they have to commit more time to researching ever-evolving accounting regulations to maintain full compliance. Hiring an accountant or CPA would be beneficial in this aspect, as they have full knowledge of business and not-for-profit accounting regulations. Whether you decide to hire someone full-time or part-time, the help of a CPA can ease your business stress (at least where your accounting and finances are concerned).

If you are unable to keep up with the financial demands required of running your business or not-for-profit, it may be time to hire an accountant. If your answer to any of the following questions is “yes”, it’s time to actively look for a CPA or accountant to handle your finances:

Are you deciding on a business entity or trying to determine 501(c)(3) status?
Do you need help with your taxes?
Could you use some help with your financial reporting?
Are you being audited?
Do you need help differentiating between business and personal expenses for tax purposes?
Are you having a hard time comprehending your financial statements?
Do you need help determining which expenses are tax deductible?
Do you need advice about large purchases, such as buying or leasing a property for business use?

An accountant or CPA is qualified to help in the areas listed above. Whether you need help filing your taxes, determining an entity or not-for-profit status, or creating financial reports, an accountant is a wise investment. If your business or not-for-profit organization is searching for a CPA, give us a call today at (703) 834-0776. Our team of accountants and CPAs are more than qualified to help you with both your small and large accounting tasks.

Want to learn more about our client accounting services? Visit our Accounting Services page to learn how our experienced CPA’s can help you make sense of your company’s or nonprofit’s financials.

Not-for-Profit Fund Raising Tips for the New Year

The beginning of the year translates into a fresh start for not-for-profit organizations. If your organization did not meet your year-end giving goals, now is the time to refocus your efforts and start planning for the year ahead. Many not-for-profits are reluctant to start planning their fund raising efforts this early in the year, especially if they just completed their year-end giving campaigns. While the beginning of the year may seem like the perfect time to put your fund raising efforts to rest, it is actually the most ideal time to start planning your fund raising strategies and goals.

By now you should have a good idea of where your organization stands in terms of financial support and stability, making it the perfect time to formulate a new fund raising plan. Every not-for-profit organization knows that fund raising changes year to year, and – in order to effectively meet your fund raising goals – you need to have a detailed plan in place that addresses the challenges your organization encountered last year. We’ve created several tips designed to help you spur on your fund raising plans for the New Year so you can focus your efforts on more mission-related activities in the months to come:

Set specific fund raising goals. Before you can even begin creating a fund raising plan, you need to have some goals in mind. Determine how much money you need to raise, when you need to raise it by, and estimate the costs for your fund raising initiatives. Write down these goals and share it with everyone in your organization.
Brainstorm fund raising ideas. Before you start analyzing what worked and what didn’t work last year, brainstorm some new fund raising ideas to use in upcoming campaigns. There are many possibilities where fundraisers are concerned – walk-a-thon events, galas, online charity auctions, and charity golf tournaments to name a few. Choose ones that work well for your organization and with your mission. Engage your staff and encourage their input from the start so they feel involved in the planning process.
Solidify a plan for your fund raising event. Once you’ve decided upon the type of fund raising event your organization is going to hold, it’s time to begin planning the details of the event. Create a written project plan detailing everything, from goals, timelines, roles, and responsibilities. Assign key staff and volunteers specific tasks and equip them with the tools they need to get the job done. Set a tentative date for your fund raising event, and create a detailed timeline and checklist outlining everything you need in preparation for the event.
Identify prospective donors and sponsors for each event. For each fund raising event, you will need to create a list of prospective donors and sponsors. The donors and sponsors you choose will vary depending on the type of event and audience. Be sure to include local businesses, coworkers, friends, and family in your list of prospects and ask your staff to do the same.
Spread the word about your fund raising event. You need to have a plan when it comes to marketing your event. Create a fund raising page on your website where you can collect online donations and generate interest for your fund raising events. Send out emails detailing your current fundraiser, publish press releases, and post listings on local event calendars. Spread the word on social media so all of your followers are aware of your organization’s effort.

How is your not-for-profit planning on gaining support this year? Do you have a strategic fund raising plan in place? Keep the above fund raising tips in mind as you continue into the New Year, and – if you have any further questions – give us a call today. We offer a variety of nonprofit services to help you meet all of your nonprofit management needs.

Is Your NonProfit Following These Financial Management Best Practices?

NonProfit organizations are under increased scrutiny where financial reporting is concerned. As government and donor requirements continue to become more and more stringent, nonprofits are challenged with creating effective financial reports for their donors and grantors in addition to juggling the everyday challenges involved with running a nonprofit organization. Accounting solutions, such as Quickbooks, Abila MIP Fund Accounting (formerly Sage MIP Fund Accounting), Blackbaud, Microsoft Dynamics, Peachtree or Intacct, can help nonprofits effectively manage their daily accounting tasks as well as meet donor demands. No matter which accounting solution you use to manage your accounting processes, accounting software can help you create effective financial reports to answer your donors’ most important questions.

Accounting software can help nonprofit organizations develop good financial practices for years to come, as well as provide them with a clear view into their financial records so they can make better decisions for the organization. Nonprofits rely on accounting software to meet growing government and donor requirements, but in order to create effective reports they need to know how to use the software effectively. We’ve created a list of financial management best practices to help your nonprofit maintain effective financial reports:

Cash flow should be a priority.
Managing cash flow and contributing to cash flow projections needs to be a priority for nonprofit leaders. Accounting departments often lack the insight needed to create accurate cash flow projections, so nonprofit leadership needs to have a part in developing these projections. It’s important to anticipate cash flow issues and form a plan to solve any potential cash flow problems. Remember that timing problems can often be prevented by improving internal accounting systems, properly managing the timing of payments and receipts, and arranging for a line of credit.Many financial reports document spending trends from the past so nonprofits can easily review and analyze their financial habits. It’s important to run these reports regularly so you know how the organization’s cash flows and can address issues where it does not.
Create an annual operating budget.
Budgeting is an essential financial best practice for nonprofits and businesses alike. It’s important to compare your organization’s expenses to your annual income (this includes donations, grants, etc.). Your budget should include both guaranteed and as-yet-to-be-identified income; however, the Board and leaders need to be aware of the amount of unidentified income in the budget as well as the plan to raise funds during the year.
Don’t avoid “restricted” grants.
Restricted grants certainly require more reporting than regular grants and because of this, nonprofits often rule out these types of grants. Restricted grants, however, can be beneficial to nonprofits if you know how to handle them. Rather than looking at the restriction as a whole, you should consider what the grant is restricted to. If the grant is funding a program essential to your organization’s mission, accepting the grant would be in your best interest. If, however, the grant pulls you in a different direction than you’d like to go (or goes against your mission), you’re better off avoiding it.
Hire an accountant to handle your nonprofit’s finances.
Hiring an accountant is essential to your organization’s success. A professional accountant will not only ensure that your records are in order come tax season, but he or she can also help you manage your financial records in your accounting software and develop the reports you need to meet federal and donor requirements.

Are you looking for nonprofit accounting services? We offer our clients a variety of accounting and nonprofit services. Click here to learn more about our services.

If your nonprofit organization is in need of an accountant to help you better manage your finances and create more effective financial reports, give us a call today at (703) 834-0776.

Keys to Effective Financial Reporting: Setting Internal Controls

Since the passing of the Sarbanes-Oxley Act of 2002, businesses and corporations have had to reevaluate their financial reporting processes and procedures to comply with more restrictive federal laws. In an effort to protect businesses and organizations against costly errors and fraud, the government is cracking down on financial reporting and the storage of electronic financial documents. Business accounting software can only get you so far. While the software is certainly helpful in tracking and auditing your financial transactions, you need to develop sound internal controls to establish the required “separation of duties” (or “checks and balances system”). Financial responsibilities should be separated within a business or organization, and there should be policies implemented that discourage one person to have complete custody over the financial decision-making and review process.

Setting internal controls ensures compliance with Sarbanes-Oxley and protects the financial integrity of your company or organization. Below are several tips designed to help you set effective internal controls and increase the effectiveness of your financial reporting:

Do not let the person (or persons) managing your company’s bookkeeping functions handle cash.
Reconcile bank statements on a monthly (30-day) basis. Make sure this is done by someone who is not responsible for bookkeeping, cashiering, or depositing. When complete, these bank reconciliations should be reviewed by supervisors for accuracy and completeness. Make sure both the reviewer and preparer signs off on each monthly reconciliation so you can track who reviewed it.
Do not allow employees who handle cash have access to accounting records.
Reconcile all receipts with deposits made into the company account to verify that all collections are accounted for in the system (and bank). This task should be performed by someone who is not responsible for making the purchases or deposits.
All cash disbursements need to be approved by an employee who is not involved in the check preparation, bookkeeping or bank reconciliation process.
Checks need to be written and/or printed by someone who is not responsible for disbursement approvals, check distribution, or maintaining the company’s accounts payable ledger.
As soon as checks or cash is received, a receipt of payment needs to be prepared; all checks need to be endorsed immediately upon receipt.
The frequency of the deposits into your company or organization’s bank account should be determined by the volume of funds you receive. If your receipts total more than $500 (or a reasonable amount for your organization), they should to be deposited within a day. For amounts under the threshold, the funds can be properly secured in your office for a week or until the amount reaches the threshold.
Require two signatures on all checks for cash disbursements, and make sure at least one of the signers is not responsible for any cash receipt or disbursement functions.
Mark all paid documents (invoices, receipts, purchase orders, etc.) “PAID”, and write the check number and payment date on each document. This will ensure integrity and help you track when you paid what outside of your accounting system.

Setting internal controls is important to your company’s reputation. It can help ensure financial integrity, as well as help you create more effective (and accurate) financial reports. Stay tuned to our blog for more effective financial reporting tips.

Do you need help setting internal controls? Are you looking for ways to improve your accounting processes? Learn more about our accounting services – we’d love to help you get on the right track!

How Can I Prepare for My Upcoming Nonprofit Financial Audit?

While it’s always a good idea to ensure your organization’s financial accountability through an audit, not all nonprofit organizations are required to undergo extensive audits on a yearly basis. As of now, if your nonprofit organization expends more than $500,000 or more in direct or indirect government grants and awards, you are required to undergo a single audit in accordance with the Office of Management and Budget (OMB) Circular A-133. You can determine if your organization is required to undergo this audit by reading our blog, “How the Proposed A-133 Changes Could Affect Nonprofit Organizations”. This single audit is similar to that of a traditional audit prepared by a CPA; however, it is conducted according to government accounting standards (also known as “Generally Accepted Government Auditing Standards”). Like a traditional audit, the auditor is required to determine whether the organization’s financial statements comply with the standards set apart in the government accounting standards.

Preparing your organization for a nonprofit financial audit can be stressful, to say the least. It requires you to stay on top of your organization’s financial processes throughout the year so you aren’t scrambling right before the scheduled audit. Over the years, we have audited several nonprofit organizations and have helped numerous nonprofits prepare for the dreaded annual audit. From our experience, we’ve compiled a list of tips designed to help you successfully prepare for your upcoming nonprofit financial audit:

Make sure key staff are available on the days you’ve scheduled your audit to occur (this includes both preliminary and fieldwork). The auditor will need full access to your staff in case any questions or concerns arise during the audit, so make sure key staff members are aware of the upcoming audit and present.
Review your client assistance letter and prepare the requested documents beforehand. This document is designed to help nonprofit organizations gather the right information for the audit, including details of internal controls, government contracts and summaries, and major program compliance. Your letter should include a timeline to help you prepare all of the necessary information before the auditor arrives to complete the final fieldwork. Make sure you review this letter with your staff as soon as you receive it, and relay any questions or concerns to the auditor as soon as possible.
Make sure you have a thorough understanding of the compliance requirements for each of your government grants. Read over your grant agreement before your audit, and ensure that program staff are made aware of compliance areas that will need attention. This agreement will become a compliance roadmap for both you and the auditor, so make sure you know it well.
Review the current OMB A-133 Compliance Supplement for an idea of additional compliance requirements.
In order to determine whether a federal expenditure is an allowable cost, you need to have a thorough understanding of the cost principles applicable to your organization. This information can be found in OMB Circular A-133 – Cost Principles for Nonprofit Organizations. Once you are familiar with these principles, hold a meeting to discuss what is allowable under each federal grant and what is not. Determine if any unallowable costs can be identified and segregated in your current accounting records.

Preparing for a nonprofit financial audit takes time as you still have to continue managing the day-to-day tasks of running your organization. Auditors understand that you need time to prepare, and they are willing to work with your organization to answer any questions or concerns you have before the final fieldwork. For a detailed checklist designed to help your organization prepare for your upcoming nonprofit financial audit, click here.

Did you know Beck & Company can help you with your auditing needs as well as your accounting needs? Learn more about our accounting and auditing services for nonprofit and government organization.

Effective Budgeting Tips for the Small Business

As we near the end of the financial year and begin closing out 2013’s books, it’s important to start thinking about next year’s financial situation. For small businesses in particular, reviewing this year’s financial situation and projecting next year’s is crucial to success; however, many businesses enter the new year grasping last year’s budget hoping it will be enough to get them through the year successfully. Instead of planning for the new challenges and situations ahead, they rely on what “worked” for them in the past.

This is a recipe for failure.

Effective budgeting requires planning, often yearly and monthly. If you are not looking ahead and actively anticipating costs, then your budget is not preparing you for success. Here are a few crucial tips to help you develop an effective budget so your business can succeed in 2014 and beyond:

Take the timing of payments and expenses into account.
Many small business owners make the mistake of averaging yearly incomes and expenses and allocating that amount for every month in the year. While this may seem like a good practice in theory, reality is that your business is probably not be bringing in the specified amount of income every month. You need to take into account the timing of your payments and bills. If you make the majority of your money during peak seasons, make sure that your budget reflects this. If some of your expenses are only annually or quarterly, your budget will need to reflect that as well. Dividing the sum over 12 months is not a realistic – or effective – budget, and it can lead to some serious cash flow errors. Effective budgeting involves projecting each month’s income and expenses so you have a better idea of what you are facing every month.
Review last year’s numbers.
Before you start planning for next year’s budget, you need to thoroughly evaluate this last year’s budget. Make sure that your employees and business partners have taken a look at last year’s capital and rate of returns, as well as your business’ expenses. Brainstorm ways to cut costs in the coming year and anticipate changes, such as the need to purchase new software or hire additional employees.
Run periodic budget comparison reports.
An important part of effective budgeting involves comparing your budget to your business’ actuals. We suggest performing a monthly, quarterly and yearly budget comparison in which you compare your budget with the actual amounts earned and expenses incurred in the specified time frame. This will help you determine the changes you need to grow your business, as well as provide you with some insight into your business’ current financial situation. If you are not running periodic budget comparison reports, your budget is ineffective. Don’t let your budget be something you look at once at the beginning of the year; make sure that it plays an active role in your business and business decisions.
Reevaluate your technology purchasing plans.
Investing in new technology is usually a good idea. New technology solutions, such as Peachtree, Sage software or Microsoft Dynamics, often save small businesses a significant amount of money and time, as well as help them improve efficiency and employee productivity. Investing in too much technology, however, can be detrimental to your business. Before you invest in yet another technology, take a look at your budget. An effective budget will give you a realistic picture of your company’s financial situation and help you determine if that purchase is a “smart” investment.If, in fact, you do have room in your budget to justify the purchase, make sure that you have thought through the alternatives before you add the technology purchase to your budget. Is there a cheaper alternative? Is there a more affordable way to accomplish the same task? How have you been able to get along without the technology this far? Is it really necessary? Answering these questions will help you determine whether or not your company should make the investment.

Effective budgeting requires extensive planning and realistic oversight. If your budget is not realistic, it is not going to do your company any good. For more effective budgeting tips, stay tuned to our blog.

Should You Hire a Tax Preparation Business Consultant?

Does your business prepare and file its own taxes? While preparing and filing your own taxes may seem more logical than hiring out a professional to do it, it may be in your best interest to hire a tax preparation business consultant. As the tax code continues to expand and become even more complicated, business owners are having a hard time understanding new tax laws. That is, if they even have time to read the lengthy tax code.

While the cost of hiring a tax preparation business consultant may seem expensive at first glance, it will actually save your company a substantial amount of time, money, and frustration in the long run. A professional consultant will know the tax laws and regulations that apply to your business and be able to prepare an accurate return for your business. Choosing the right consultant, however, is essential.

The IRS has provided a lengthy list of requirements business owners should use when hiring a tax professional. For your convenience, we have compiled a tax preparation business consultant checklist to assist you in your search for the perfect tax consultant. Keep the following characteristics in mind as you review your tax preparation business consultant options:

Is the consultant licensed? Licensed professionals are the only ones authorized to represent you before the IRS on tax matters (including audits), so make sure your tax preparation business consultant meets the proper licensing requirements. You can view these requirements here.
Do they offer a free consultation? The initial consultation is essentially the “interview”, and it is just as important as hiring a new employee. Remember, you are legally liable for the information on your tax return, so you your tax preparation business consultant with care. Bring a copy of last year’s tax return to the consultation and discuss how your business situation has changed over the year. Clarify your needs during this consultation to see if the consultant can deliver upon your requests.
How will they charge you for their services? Find out as much information as you can about the tax preparer’s fees before you begin your service with him or her. Some consultants will charge for the number of forms (also known as Schedules) filed while others will charge by the hour. Gaining an understanding of these fees beforehand is important so you aren’t blindsided by a high bill months down the road. One good way to gain an understanding of their charges and fees is to ask what they would have charged to complete last year’s tax return.
Will the consultant be available a year from now? It’s important for businesses to be able to contact their tax preparation business consultant about any questions they have regarding their tax return, whether that be months or years later. Make sure your consultant has a stable history before you hire them.
Does the consultant have any complaints filed with the Better Business Bureau? Make sure that you have thoroughly investigated his or her credentials and find out if they have any complaints filed with the Better Business Bureau. If they do have complaints, begin looking for other options.
Does the consultant ask for receipts / more information to determine whether expenses qualify for deductions? A reputable tax preparation business consultant will ask for any and all receipts to determine what expenses qualify for deductions, and they will ask multiple questions to gain a better understanding of your business expenses.
Will your tax return’s preparation be outsourced? This could lead to significant security risks, particularly if your personal information is being transmitted via the Internet. Find out if the consultant will be preparing your tax return his or herself. If not, you may want to look elsewhere. After all, you are paying for the consultant – not the outsourcing service.
What is the consultant’s experience with IRS audit? Ask about their history with the IRS and whether or not they would represent you should your tax return be audited.
Do they have a reimbursement policy in case you end up owing back taxes on a return they prepared? Many reputable tax preparation business consultants have insurance for this particular case.

A tax preparation business consultant is a smart investment if you choose the right person. By using the above tax preparation business consultant checklist, you will be prepared to ask the right questions and – ultimately – hire the right consultant for your business.

If you are looking for a tax preparation consultant, contact us today. Our team consists of Certified Public Accountants (CPAs) and Business Advisors to help your business navigate the complicated tax laws and legislation.

Checklist for a Financial Audit of a NonProfit Organization

The term “audit” usually sparks fear and apprehension in businesses and nonprofit alike. An audit can refer to any internal review, contract review, or external review by the nonprofit Board or other managing body; however, many people immediately think of a visit from the IRS.

This is not the most common type of audit for nonprofit organizations. A financial audit typically refers to an independent review of a nonprofit organization’s books and accounts. This is usually done annually as a way to ensure that the nonprofit is in compliance with federal regulations and private donor requirements.

If your organization is getting ready to undergo a financial audit, you need to be prepared. In order to ensure a smooth auditing process for all parties involved, we’ve compiled a checklist for a financial audit of a nonprofit organization. The following checklist is designed to help you prepare for your financial audit and know what to expect from your auditor.

Before the Audit

Before you even begin to compile documents and reports for your financial audit, you need to select a CPA or auditing firm. When it’s time to find a CPA or audit firm for your nonprofit’s financial audit, keep the following in mind:

Ask other nonprofit organizations for recommendations on CPAs or auditing firms in your area
Check each professional’s references and request a copy of their Peer Review
Prepare a Request for Proposal (RFP) once you have narrowed your selection down to a few CPAs or audit firms
Involve your board members in the selection process
Interview all potential CPAs and audit firms
Ask for the references or resumes of CPAs in larger firms
Make sure the CPA or audit firm has experience in nonprofit financial audits
Research their memberships and associations in the accounting profession
Review each firms costs and fees

Preparing for the Audit

There is a lot your nonprofit organization can do to successfully prepare for a financial audit. The following checklist will help you save time (and frustration) during a nonprofit financial audit:

Ask the auditor for a list of documents you will need during the audit and compile these documents before the auditor arrives
Make sure the documents are in the proper format suggested by the auditor
Make sure your accounting records are organized, accurate, and up-to-date
Create an electronic folder on your computer for all of the documents and records you will be needing for the audit
Make sure that you have the proper documentation for every financial transaction made throughout the fiscal year
Create an audit committee or oversight group
Plan a pre-audit meeting to get further guidance on what your organization will be needing for the audit

After the Audit

Once the audit is complete, the audit committee meets with the auditor to ask the following questions:
- Was our team cooperative and forthcoming with the requested information and documentation?
- How do our accounting procedures and policies compare to similar nonprofits?
- Are there any “at-risk” items that could be disputed by the IRS? If so, what documentation do we need to prepare in order to support these items?
- Did the team follow suggestions recommended by past auditors to improve our internal accounting system?
- Do you have any suggestions for improvement in reporting, accounting, or other procedures?
- The audit committee, financial directors, and executive director reviews the draft of the audit report
- The above group asks questions about the auditor’s discoveries
- The group evaluates any recommendations prior to presenting the final audit report to the board
- The final audit report (signed and dated by the auditor) is delivered to the board of directors
- The final audit report is presented to the board of directors

As you can see, the audit process is a lengthy one. However, it does not have to be a scary one. With the right amount of information and preparation, you can come out of a nonprofit financial audit successfully.

If you’d like to learn more about the auditing process or would like to connect with a CPA, contact us today. Our CPAs are experienced in nonprofit financial audits and have the tools and information you need to prepare you for a smooth auditing process.

Bookkeeping and Accounting Tips for Business Owners

A business owner’s job is never ending. In addition to ensuring that the business is running smoothly and meeting customer expectations, business owners are also required to keep track of important data and information that is crucial to the business’ operation. Many business owners prefer to do the “bookkeeping” in their heads, a method that – while proven sufficient – is not highly recommended. As federal laws and regulations become more stringent, business owners are seeing a need to reevaluate their current processes and move their bookkeeping to a more reliable system.

If your business does not have a financial system and specific processes in place to account for your company’s financial situation, it’s time to invest in a new bookkeeping and accounting system and processes. This will help you gain a better handle over your company’s financial situation, help you better meet your business goals, and maybe even increase your profit.

We’ve created a few crucial bookkeeping and accounting tips to help business owners just like you prepare their company for financial success. Keep the following tips in mind as you reevaluate your company’s bookkeeping and accounting processes and procedures:

Track your expenses.
This may seem obvious, but you’d be surprised how many business owners skip this crucial step. Tracking your expenses is extremely important, otherwise you may miss crucial tax write-offs or put your business at risk during an audit. Many business owners track their expenses by using a single credit card for the business only. Once the credit card statements come in, they enter the information into the bookkeeping and accounting system to they can keep track of all their purchases throughout the year.Business owners should also write down business trips, lunch meetings, and other events that require a company pay-out or reimbursement in their day planner (or phone). This habit, while hard to establish at first, will ensure that you have all of the information you need for your tax records in the case of an audit.
Plan for any major expenses.
Take a look at your business goals for the next five years and plan out any potential expenses you see on the horizon. If your company is expecting to upgrade its computer software a year from now, go ahead and put it on the calendar (as well as in your budget). This will give you adequate time to prepare for the upgrade, both financially and operationally.
Record your deposits accurately.
Implement a system that is designed to keep your financial information straight. You can record your deposits in a variety of systems, such as Excel, Quickbooks, Peachtree, or Sage accounting software. Business owners make a variety of deposits into their bank accounts every month; therefore, it is crucial to keep meticulous records so you don’t accidently report on income you don’t actually have.
Put your tax money aside.
We cannot stress this point enough. Putting money aside for your taxes as you generate income is extremely important as you can be penalized for not filing and paying quarterly taxes on-time. By automatically setting aside money throughout the year, you will be more than prepared to pay your quarterly taxes on-time, every time.
Watch your invoices.
You cannot do it all. Assign someone within your company to track your billing process, for late or unpaid bills will only serve to damage your cash flow. Once you have set up someone to keep track of your company’s invoices, establish a process for follow-up. This can either be in the form of a second invoice, phone call, or letter stating that the client will be billed an additional fee if the invoice remains unpaid. Just because you’ve sent out the invoices does not mean the billing process is over; it has, in fact, just begun.

Stay tuned to our blog for more bookkeeping and accounting tips. If you are a business owner and would like some help developing new bookkeeping and accounting processes, give us a call today at (703) 834-0776. We would be more than happy to help you find the best way to keep track of your company’s finances.