Financial Reporting – Beck & Company

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.

Maintaining New Governments Standards with Reporting Health Plan Coverage

2015 brought new standards of reporting Health Plan Coverage to both employees and the IRS. Although official reports won’t be due until January of 2016, there are several steps to take now to ensure you are prepared when the time comes. Depending on if you are a small or large employer, the requirements are as follows:

Small Employer: If you are an employer with self-insured health plans and are not considered a large employer (over 50 full-time equivalent employees), you are required to issue Form 1095-B to every covered employee, and file copies with the IRS.
Large Employer: If you are considered a large employer, you are required to issue a Form 1095-C to every employee and file copies with the IRS.

The following information will be required to report for each employee receiving a 1095-C

Health care coverage. You must report the health care coverage that was offered or not offered to the employee
Amount. You will need to report the amount that was paid by the employee for their portion of the lowest-cost monthly premium. This applies to self-only minimum value coverage.
Reasoning. Should an employee not be offered insurance at any time within the calendar year you must indicate the reasoning using the corresponding code. For instance, if the employee was not employed in that month (2A) or employed at a part time level (2B).

A list of codes is available at www.irs.gov/instructions/i109495c/index.html and should be reviewed to ensure all form requirements are begin met throughout the year.

Self-insured Employer Reporting

Any employer offering a self-insured health plan must provide the following information:

List of each employee, including spouse, dependents or others covered under the plan who was given coverage for a minimum of one month throughout the year.
Date of birth and social security number for each covered individual.
Each month for which the person was covered

Large Employers will report using Form 1095-C, part 3. If you are not considered a large employer you will want to use 1095-B.

See www.irs.gov/instructions/i109495b/index.html. For the comprehensive requirements of form 1095.

Transition Relief for Large Employers

Transitional relief has been provided by the IRS for a variety of employer and plan situations including penalties for incomplete or incorrect returns. Generally, the relief will provide extra time to develop processes for data collection in compliance with the new requirements. However, no relief will be extended to employers who can show a concerted effort to collect and provide required information. Transitional relief will be extended in specific circumstances, some of which are detailed below:

If by December 27, 2012, your health plan was not on a calendar you may be eligible for transitional relief for the first calendar months of 2015. Please note you must have offered affordable coverage providing minimal benefits by the first day of 2015.
If your company has wavered at the 50 Full Time Employee (FTE) mark you may be eligible for Transitional Relief. You may use a six consecutive month measuring period in 2014 to assess whether you are considered a Large Employer.
The requirement states that you must offer coverage for all days within the month, for January 2015 if you provided coverage before the first payday you will be considered as offering coverage as of January 1, 2015.
If you did not offer coverage in 2013 or 2014 for dependents you will not be subject to shared responsibility liability in 2015. However, you must prove that you are taking steps to offer dependent coverage.
Should you have more than 50 but fewer than 100 FTE, for 2015, you are not held liable for the shared responsibility payment. However, you must show that you
- Have fewer than 100 FTE employees
- has not reduced its hours of service or workforce between 2/9/2014 and 12/31/14
- Are maintaining previously offered coverage. Forms 1094C and 1095-C will verify these requirements.
An employer will have a reduced penalty if they have over 99 FTE employees and have offered affordable minimum coverage to at least 70% of its employees

The Affordable Care Act requirements have had their challenges. Concerns have been identified and requirement changes have been made. However, it is advisable to prioritize compliance and planning to adhere to these regulations. Reports to the IRS and employees are imperative to the compliance process and should be followed.

At Beck & Company, Certified Public Accountants and Business Advisors, we are an accounting and consulting firm delivering specialized expertise, creative thinking, and unsurpassed service to ensure that our clients’ financial endeavors flourish.

Serving small and mid-sized organizations and individuals, we provide audit, tax, accounting, and consulting service that address all aspects of your business with one goal in mind – exceeding your expectations. We are able to do this by drawing on our combined business backgrounds and experience in public accounting to help you in virtually any area of your business. Contact us for more information on our accounting and consulting services that can help you.

Nonprofit Leaders and How they Influence Board Members

The factors that contribute to the success (or failure) of nonprofits are many. Over the past month, we have taken a closer look at many of these factors. These include following through on commitments to staff and nonprofit constituents, prioritizing people over tasks, advocating for instead of simply satisfying the needs of constituents, using data to inform decisions, and using technology to take advantage of all possible venues with which to connect with all involved in the organization. In addition, we looked at how directors can help their board members to enhance organizational success by the ways in which meetings and other interactions with board members are structured in order to maximize the boards’ expertise. To learn more about this, visit here.

In addition to structuring board meetings and other interactions, leaders and directors of nonprofits have other powerful potential to positively influence the board of directors. These can be split into tasks and effective use of time. Let’s take a closer look at both.

Tasks Essential to Leaders and Directors of Nonprofits Positively Assisting Boards in their Job and the Organization Overall

Ensuring compliance and control of organizational practices even as the organization grows, changes, and increases in complexity
Ensuring financial practices are in place, monitored, upheld, and secure
Helping structure, navigate, and implement the strategic direction of the nonprofit and being sure operations are matching intended goals and outcomes
Building capability for the future by guiding current practices, future decisions, and daily operations well in addition to evaluating prior actions for effectiveness

Tips Essential to Leaders and Directors of Nonprofits Using Time with Board Members Effectively

Carefully plan interactions, meetings, and prioritization of tasks/decisions that need to be done/made
Manage expectations of what can be achieved in the time given to make strategic decision-making possible instead of challenging by not overwhelming board members but still wisely using instead of wasting time
Use opportunities for conversation unrelated to actual board meetings (such as dinners or other gatherings) to gain better overall insight into board members and their skill sets in order to better leverage the talents they possess
Think strategically about what the board truly needs to hear about and be involved in versus what can be handled within the organization’s daily operations instead. The ultimate waste of valuable time is spending it on areas that are unnecessary and not seeking guidance and direction in areas that are essential to success.
Use technology effectively to communicate with board members in a convenient way that also keeps communication flowing. This means using emails or other forms of communication for check-ins between scheduled board meetings. In addition, this can involve telephone and video conferencing to make it possible for meetings to occur without requiring everybody to be in the same place at the same time in order for a meeting to be held.

Beck and Company Certified Public Accountants and Business Advisors know that achieving success as a nonprofit and positively impacting board members are no easy feats. That is why we are here to help. Needing to focus on so many people (including board members) even with time limitation plus carrying out important tasks makes it hard to also need to focus time and energy on the financial side of operations. We can help with this aspect so you can focus on the others areas that will help you be successful. Beck and Company CPAs offer a large variety of financial services that are tailored to nonprofit needs. For more information on these nonprofit services, visit here.

Contact us here at Beck and Company CPAs to request financial nonprofit service offerings or to get more information on how to help your board and constituents in order to be successful as a nonprofit.

Helping your Nonprofit Board of Directors to be Successful

Being a successful nonprofit organization has never been an easy task. Unfortunately, it is more difficult than ever to be a successful nonprofit thanks to the quick pace of changes in our modern world, higher stakes than ever before, rapid technological advances, added pressures to keep up with all of the venues being used to get the word out, and many other facets. To find success, much is required on the part of the organization. To learn more about four keys to success for nonprofits, visit here.

When it comes to your board of directors, the challenges they face are no different. The modern board faces constantly evolving challenges with multiple issues competing for its attention in a limited period of time. With so many factors influencing nonprofits and such limited time for boards to meet, how can you help your board maximize the use of their board meeting time?

Structuring Board Meetings: Have a Central Focus

As directors of your nonprofit, it all begins with careful planning of the agenda to secure adequate time for the issues you most want to focus on. As we’ve discussed over the past few weeks, if you don’t know what to focus on at your nonprofit, this can be costly and detrimental to success. If it is unclear where to put emphasis and energy, you will likely need to change your focus from day-to-day operations to people and your mission in order to ensure success. Be sure your priorities, goals, and focus are defined and prioritized first and foremost. Once you know what to focus on during the meeting, start it with the strategic issues of priority for that year, ensuring there is time for quality discussion. Routine matters can be slotted in later.

Ways to Engage the Board of Directors during Meetings and Other Venues of Involvement

In addition to the idea of using traditional board meeting discussions and forums during board meetings, site visits and specialized briefings help to draw all the key strands of the agenda together to support strategic decision-making and gain a better understanding of what goes on at the organization. After these visits and briefings, a next step is to look at trends, call out the impact of technology, and use this body of evidence to influence and inform where the organization anticipates and desires to go moving forward. However, it is also important to provide an opportunity for unstructured discussion– a free flow of information with you as the chief executive or director before the demands of the agenda take over. This also provides an opportunity to hear about and benefit from board members’ wide-ranging experience and expertise.

As Beck and Company Certified Public Accountants and Business Advisors, we understand all that goes into being successful as a nonprofit and how much work goes into being intentional in helping your board members along this same path. For this reason, we are here to help. You can allow yourself to focus on your mission and being the liaison between the organization and board if you have less to focus on in terms of the financial side of daily operations. We would be happy to assist you with your auditing, accounting, and overall financial needs. Visit here for more information on the variety of nonprofit services we offer including CFO, controllership, and accounting services.

Contact us here at Beck and Company CPAs so we can equip you as nonprofit directors to equip your board of directors while easing the burdens of financial responsibilities by helping with them. We look forward to being part of your success as a nonprofit!

4 Keys to Being a Truly Successful Nonprofit

It is often the case that mainstream businesses are a bit “ahead of the times” of what most nonprofits are doing. High-performing companies are not just sitting on the sideline in order to get ahead of the curve. Instead, they are actively implementing innovative processes and honing their focus to get ahead. These companies are increasing revenue, growing in profits, raising market shares, and improving customer satisfaction. Although the desired outcomes are a little different for nonprofits, the desire to achieve success in goals is no different between mainstream businesses and nonprofit organizations. By implementing some of the same practices these successful companies are using at your nonprofit, you can help your organization to not only get out of its own ruts but be a leader and innovator among nonprofits. In turn, you can have the level of success in achieving your mission and goals that many large and successful businesses are having in achieving their desired profits.

It all starts by putting your focus in the right place. When it comes to businesses, they have found that there is connection between strong customer and employee engagement. A genuine customer focus is needed in order for businesses to thrive. This is no different for nonprofits. There needs to be a focus on nonprofit constituents and staff members instead of just day-to-day operations. To evaluate where your organization lies in putting your focus on the people and fulfilling commitments made to them, visit here.

If the focus of your organization, just like high-performing businesses that focus on customers and employees, is on the mission/constituents and staff, you are on the right track. Now, let’s take a closer look at four key areas that will help you, along with the right focus, to be truly successful as a nonprofit that are based on keys to success found amongst successful mainstream businesses.

4 Keys to being a Truly Successful Nonprofit

Right priorities start from the top but run deep. The behaviors of nonprofit leaders and board members support a focus on nonprofit constituents and the mission in high-performing nonprofits, and the practice is drilled down to include the behaviors of staff members, too. Success stems from supporting the execution of constituent- and mission-focused strategies. Leadership involvement includes crafting a formal strategy (such as a solid mission and action steps to meet it), setting clear goals, and aligning internal systems and processes with the needs that need to be met.
Focus beyond just constituent satisfaction to extend to customer advocacy. Satisfaction is the global standard for measuring a focus on customers for businesses and constituents for nonprofits. But, high performers across the spectrum recognize that active engagement is essential. Feedback and referrals are both important. In addition, advocating for constituents as a whole instead of simply meeting a need or two is essential.
The focus of the nonprofit should be driven, at least in part, by data. In the age of Big Data and evidence-based business activity, high-performance companies use customer insights, shared organization-wide, to shape products, services, and strategy. This should not be any different for nonprofits. Are you regularly collecting and actively using data to help meet your mission and goals?
Connect with constituents in as many ways as you can, including the use of technology. Are you putting technology to good use to better make connections with everyone from donors to those who receive the services offered by your nonprofit? This can include social media venues and technology offerings meant to track interactions plus marketing initiatives. These connections should encompass sharing stories and service offerings, soliciting feedback, listening to and acting on feedback, and promoting participation.

Beck and Company Certified Public Accountants and Business Advisors know that being a truly successful nonprofit, just like a successful business, is no easy task. That is why we are here to help. With so much focus needed on prioritizing, keeping people satisfied, advocating for constituents, using data to enhance success, and connecting well with those involved, it is hard to also need to focus time and energy on the financial side of operations. Leave this part to us so you can focus on the others areas that will help you be successful. We can help with a large variety of financial services that are tailored to nonprofit needs. For more information on all of our nonprofit services, visit here.

Beck and Company CPAs would be happy to help you achieve your nonprofit goals by helping with your financial practices and carrying out audits, etc. Contact us to learn more.

Setting your Nonprofit Organization Apart: Where Do Your Commitments Lie?

It is undeniable that you want your nonprofit organization to be as successful as possible, but do you really know what that takes? It can be easy, almost too easy, to simply do what has always been done at your organization instead of trying to be the best you can be and set yourselves apart from the pack. Too often, nonprofits do what they have always done instead of being innovative leaders themselves. Don’t let the success of your organization be robbed by a lack of initiative and best practices to simply maintain what has always been done and what is comfortable.

If you agree that you want to be as successful as possible as a nonprofit, that some things will need to be developed instead of staying the same in order to get there, and that you want to separate yourselves from the identity of “surviving” with acceptable practices to “thriving,” how do you do this? It starts by having a true focus on so much more than just day-to-day operations and tasks. It stems from a focus on people.

Developing the Right Focus on People instead of Operations

Let’s take it a step further and consider if your organization really does even focus at all beyond the day-to-day operations. Should your focus just be on routines and practices or should there be more of a focus on the people? Have you considered the people you are trying to reach and the people trying to make this outreach possible by working for your organization? This is an important starting point to evaluate your priorities and where your focus actually lies. It takes being focused on your mission and its constituents and helping your staff to be successful in these efforts.

If the focus of your organization should be on the mission/constituents and staff, you need to evaluate how they currently are being reached and how they are feeling. Let’s take a closer look at how to evaluate this by using some reflection questions you can ask yourself. The reality is that these questions should highlight if you are keeping your commitments to these groups because keeping commitments is essential to success.

Questions to ask yourself regarding those you are trying to reach based on your mission (your nonprofit constituents):

Are we meeting the needs we said we would meet or failing to provide what was promised?
Are constituents satisfied or disgruntled?
Does our mission come across to our constituents in how we act upon it or not?
Do constituents feel comfortable interacting with staff members and that their needs are being understood and responded to?

Questions to ask yourself regarding your organization’s staff:

Are we keeping promises made to our staff?
Are staff members feeling like they are being taken for granted, or are they appreciated?
Are staff needs being met by the organization to the point that they can truly focus on meeting the needs of others—of the nonprofit constituents being served?
Are staff members treating constituents well?
Are staff members bought in to the mission?
Are staff members equipped with the resources and training they need or not?

As Beck and Company Certified Public Accountants and Business Advisors, we realize just how much goes into being successful as a nonprofit. This is so much more than just day-to-day operations but requires pouring time, energy, and resources into the people serving and being served by the nonprofit. That is why we are here to help. You can allow yourself to focus on your mission and the important people involved with your nonprofit more if you have less to focus on in terms of the financial side of daily operations. We would be happy to assist you with your auditing, accounting, and overall financial needs. For more information on the variety of nonprofit services we offer including CFO, controllership, and accounting services, visit here.

Contact Beck and Company CPAs to find out more about helping your nonprofit to be successful and how we can help you achieve this by meeting your auditing and accounting needs.

Cloud Computing: Improving Financial Reporting and Strengthening Security

As we’ve looked at solutions for increasing effectiveness in financial reporting over the past couple weeks, one solution we’ve explored is Cloud computing. We learned that it is an effective way to have financial reports be accessible anywhere at any time and is a trend that is set to become even more widely used in 2015. But, you may be left wondering if the Cloud truly is a solution that can help in strengthening security instead of compromising it. Financial records are so important that your data security should not be taken lightly. Beck and Company Certified Public Accountants and Business Advisors know that there is too much at stake to not be putting your organization’s safety as the number one priority. Without safeguarded data and accurate records, you could be in serious trouble. If your data is stored in the Cloud, will it truly be safe? Let’s take a closer look.

What are Cloud backup services?

These are becoming more and more popular throughout the world because they are both cost effective and flexible. Storing your information and data in the Cloud not only protects it from disasters of all kinds, but it also does not require additional resources such as hardware or software. Because content is transferred automatically, it ensures data is protected from threats that are either physical, digital, or environmental. Recovery time, in case of an emergency, will be reduced substantially because of this. This gives all constituents the peace of mind they need to know that information is safe and recovery will be quick and easy if something happens.

This backup protection is even more important because so much of the data you have is financial information. Your financial reporting and accounting records, when used through the Cloud, are protected as well. This information is just too precious to risk losing, but the Cloud allows for this protection.

For the sake of clarification, there are other backup services available besides on the Cloud, but they are not as comprehensive. Local backups are one example. This means storing data on a hard drive, CD, or flash drive. Unfortunately, lost or broken data storage tools present a problem, and the backup needs to be done at least weekly and done manually to be sure nothing is lost. Offsite data storage is another example. They may offer more protection from physical dangers (natural disasters, theft, etc.), but they require more planning and resources. They require numerous and portable media, a secure location offsite to store the media, and a plan to be sure data is being regularly backed up and transported to the location.

Beck and Company CPAs offer technology consulting services and would be happy to help you understand the Cloud more. We can help you with your technology needs so you can ensure you have easy access to all of the financial reporting capabilities your business needs while strengthening security of the information instead of compromising it. Find out more about our technology consulting services here.

Is the Cloud Safe?

While the first impression of the Cloud may be a good one, businesses still question whether the Cloud really is a safe solution in which to store their business-critical data and accounting information. Like many new technologies, the Cloud has come under serious scrutiny. How, then, can a data backup solution that is maintained online be safe?

First of all, the Cloud has strong data encryption to prevent hackers (and even your backup service provider) from unlocking your data and violating your client confidentiality. The encryption technology is so advanced, in fact, that it offers complete confidentiality of all of your data stored in the Cloud. Make sure that your data is encrypted prior to (and during) transmission and that it remains encrypted while it is stored in the Cloud for safekeeping.

Your online data archive will also be fully protected with a digital encryption key. In order to keep your data locked up tight, make sure your provider allows you (or a designated person in your office) to be the only one with access to the encryption key.

Contact us here at Beck and Company CPAs to find out more about the best ways you can accurately record financial information whether through a Cloud computing solution or by partnering with one of our accountants to help you get your business finances in order.

Financial Reporting Made Easy and Accurate with the Cloud- 2015 Trends

Last week, we took a look at a cure for financial reporting management mistakes. This week, we’ll take a look at another way to help your financial reporting to be more efficient and on track with the times. This is through Cloud computing.

Our fast-paced world means it is likely you don’t spend every minute in your office and are more reliant than ever on mobile technology. No matter where you are, you likely have times when you have a need to instantly access company information about finances and financial reports. Technological advancements have meant that it is now possible to send emails, check account balances, and view reports anywhere, any time, and on virtually any device. With a mobile framework quickly becoming the norm, there is also an increasing need to have instant access to accounting information and other vital statistics at any time. All of this is achieved through The Cloud. Cloud computing allows businesses to have this flexibility of instant access of data from any device for any constituent that is needed today.

Do ever fear that information stored on the Cloud is less accurate than that of the data stored on-premise? Well, you have no need to fear. The same data that is used for financial reporting at the office is simply saved to the Cloud so the information you access on the go is just as accurate. Essentially, it is the exact same data in a mobile format.

With the trend being that more and more organizations will transition to the Cloud in 2015 and that the Cloud offers many capabilities beyond what an on-premise solution can, the time is now to consider it. Beck and Company’s Certified Public Accountants and Business Advisors offer your business a variety of technology consulting services if you would like more personalized information about the Cloud and its application to meeting your company’s needs. Find out more about our technology consulting services here.

What, exactly, are the trends in Cloud computing as we finish out 2014 and look toward 2015? These will help you see that Cloud computing is likely to not be just a technology trend of the time but one that transforms the business world. In fact, it has the staying power and potential to forever change the way we do things. Through automation of manual processes, streamlining of tasks, and instant access to your company’s information and data, the Cloud has made nearly anything possible.

What does Cloud Computing’s Future Look Like for 2015?

1. More companies will transition to the Cloud in 2015 than ever before

For some companies, this will mean simply deciding if they will transition to the Cloud while others will move their Cloud solution to the hybrid Cloud that offers the security of a private Cloud with the scalability of the public Cloud.

2. Disaster recovery services will transition fully to the Cloud

No longer will companies use Cloud services as a simple backup. With continued reliability of the Cloud being proven, many organizations will chose to move everything to the Cloud in terms of disaster recovery service.

3. Those currently using the public Cloud will transition over to the private Cloud

Security concerns and control issues are contributing to this transition already.

4. Apps that are powered by the web are likely to become top tools for companies

The unmatched efficiency and scalability of mobile apps means they will become even more prominent.

Contact us here at Beck and Company CPAs so we can help you start off on the right foot in 2015 by transitioning your financial reporting to a Cloud-based operation through our technology consulting services. Stay tuned next week as we look at if the Cloud is truly a safe and secure solution for storing your important financial information and reports.

The Cure for Unhealthy Financial Reporting

Are you feeling like your financial management is ineffective and inaccurate? Do you need a CURE for “unhealthy” financial reporting practices and records? Look no further. We have just the financial management treatment you need to nurse your financial records and reports back to health. And, there is no better time to do this than now as you finish up the year 2014 and look to the new year of 2015. Having your financial reports in order now will help you with upcoming budgetary and company decisions that you will be making and will keep you on track to get a clean bill of health throughout all of 2015. This will also set you up for success in being prepared with reports at a moment’s notice upon request. Who doesn’t want to be healthy in the New Year?! We all do. Your business needs to be in a healthy place, too, and financial reports that are accurate and organized are vital lifelines in this health and are important tools and resources for constituents of your company or organization.

If you are in need of personalized help and attention in the area of financial reporting, Beck and Company’s Certified Public Accountants and Business Advisors are trained professionals who can help you reduce costs through business process optimization. This involves improving workflows and operational efficiencies that can ultimately have a positive impact on your bottom line. Learn more about our client accounting services here.

In addition to the personalized accounting services we offer, here are some general tips for what characterizes good and healthy financial reports and statements. As a general rule of thumb, keep in mind that the information contained within the reports should have the needs of the users of the reports in mind. Consider the audience when creating reports so the needed information is included and information that is not pertinent is not included. Not all audiences are created equal so not all reports should be created equal. Regardless, though, the reports must be correct, and more detailed information must be available upon request when more concise reports are shared. Just think of C.U.R.E., and you’ve got the cure you need when it comes to healthy financial reports!

C- Comparability

The information must be comparable to the financial information presented for other accounting periods so that users can identify trends in the performance and financial position of the reporting entity.

U- Understandability

The financial information must be readily understandable to users of the financial statements. This means that information must be clearly presented with additional supporting information supplied as needed to assist in clarification.

R- Relevance

The information must be relevant to the needs of the users, which is the case when the information influences the economic decisions of users. This may involve reporting particularly relevant information or information whose omission or misstatement could influence the economic decisions of users.

E- Error-free

The information must be reliable and therefore free of material error and bias while also not being misleading. Thus, the information should faithfully represent transactions and other events, reflect the underlying substance of events, and prudently represent estimates and uncertainties through proper disclosure.

In addition to the CURE above, there are many other characteristics of effective financial reports. These include showing context and keeping investors in mind, being compliant with rules and regulations, following the Disclosure Management Cycle, creating the reports in collaboration with others within a business team, etc. You can learn more here. Please contact us to learn more about how we can help you and your business to succeed in all areas including in the financial realm with your financial reporting practices and efficiency. Stay tuned next week for another cure to the financial record mismanagement blues!

Tips for Cleaning Up Accounting Records

With all that goes into smoothly running a business, it is likely that some tasks will end up getting less attention than others. Don’t let your accounting records be one of those areas. Instead, make sure that they are a priority and are updated regularly. Whether you manage all finances in house or need outside help from an accountant, having your records in order is still essential. Without proper records or records that are disorganized, it will be difficult for you or your accountant to properly track and record financial information. If you are looking for accountant assistance for your business, Beck and Company’s Certified Public Accountants and Business Advisors are here to help you with these needs. We provide many accounting services.

It may be that you feel financially illiterate and have no idea where to even begin with organizing accounting records. It could also be the case that you have not had the discipline nor the systems in place as a company to keep records cleaned up. Regardless, you likely are aware that having these records organized and efficiently laid out would be immensely helpful in so many ways. With a fast-paced business world and so much at stake, there is no need to spend valuable time sorting through messy records time and time again. Instead, creating a system for a month-end accounting process clean-up will allow you to make informed decisions with ease and quickness while also helping you to focus more time on the future of the business instead of on financials alone.

How can your records be cleaned up so financial reporting is both possible to do and accurate, too? Below are some tips to do just that on a monthly basis. This checklist will help when evaluating the performance of your own accounting support and will make outside help from an accountant easier thanks to records that are ready to use and organized.

Do retained earnings agree with my tax return? If not, do I understand exactly why it’s different? You don’t have a good starting point if this isn’t right.
Cash accounts are reconciled and agree with bank statements. Items that are not reconciled are investigated.
Fixed assets are appropriately capitalized. This means that you look at accounts in your profit and loss for lease payments and other purchases that should be capitalized.
Other assets are appropriately stated. If you have an asset account that hasn’t changed, look into whether or not it’s still realistic.
Credit cards are reconciled.
Unrelated party loans (e.g. lines of credit, bank loans) agree to statements, and interest is booked appropriately.
Related party loans (e.g. inter-company) agree on both sets of accounting records (if you own more than one company and loan money back and forth).
If your balance sheet is accurate (steps 1 – 7), review your profit and loss statement. Are expenses within tolerable thresholds relative to prior years and periods?

If you do all of this, you know you have good data, and you can make decisions based on accurate information or have an accountant help you with this. It also ensures that, when asked, you can produce financials at a moment’s notice to interested parties. Beck and Company CPAs can help you in this process of preparing accounting records for accurate financial reporting so you are ready when the need arises for these records. Please contact us to learn more about how we can help you and your business to succeed in all areas including in the financial realm.