Member of Russell Bedford International, a global network of independent professional service firms.
Member of Russell Bedford International, a global network of independent professional service firms.
In this first video in our series about supporting college foundations, Dan Swanson, Assurance Manager, shares his passion for helping college foundations fulfill their missions. With more than a decade of experience in the firm and a lifelong connection to education, Dan explores the unique financial challenges and opportunities that college foundations face.
Transcript
Welcome everybody. I’m very excited to be here today. My name is Dan Swanson. I am an Assurance Manager here at Cray Kaiser. I’ve been with the firm for about 12-13 years now, and I wanted to talk about a subject matter that I’m very passionate about. And that is college foundations and some of the important factors that we need to be considering, some of the hot topic issues. I want to talk about some success stories, some issues that they commonly face.
One of the reasons I’m very passionate about this, because we always hear that question, if I wasn’t an accountant, what would I be doing? You know, I’m a big fan of education, my parents were teachers, I have brothers that are teachers, so if I wasn’t an accountant, I would be a teacher. So by serving these college foundations, I feel like I get the best of both worlds. I’m helping students, while getting to use my accounting knowledge and expertise. So, it’s very near and dear to me. So, I wanted to kind of talk about foundations and how we here at CK have helped foundations in a number of different areas.
So, when you think of college foundations, what do you think about? You know, what are some of their big struggles? What are they? What’s their mission? What’s their vision? What are their values? So, with college foundations is they get funds, they get dollars, they get money, they get to invest, and hopefully those earnings, it earns returns, which then turn into scholarships, turns into real dollars for real students to pay for real education. So sounds simple, but if you only had like two or three scholarship funds, not a big deal, but some of our clients that we serve have over a hundred different individual unique scholarship funds or program funds and they have millions of dollars of investments. So how do we ensure that everybody’s getting their fair share of these investment earnings. How do we ensure that the financial statements are telling an accurate story to the board, to the executive director, to the finance committee, to all those involved to make sure the end to the day, the maximum amount of dollars are going out to students to serve the mission.
A big thing that I see with a lot of these foundations is the budgets. Every year, the board, the finance committee comes up with budgets. How much are we going to budget to spend out in scholarships? How much are we going to budget for various, just kind of general expenditures? So how do we make sure on a monthly basis our budgets to actual are being monitored and tracked and appropriately recorded. So that’s the overall goal. That’s the overall purpose of what we here try to accomplish when working with foundations.
The board, the finance committee spends a lot of time coming up with budgets. Whether it’s kind of revenue budgets based upon donations that are coming in or investment earnings. But it’s also some of those management in general costs, you know, because we all know that there’s some just overhead that they need to cover. They need software, they need to pay for people, supplies, printers, etc. So, it’s not 100 % of it’s not going to scholarships. There are these overhead manager, we try to minimize it or they try to minimize it, but there are those costs. So a good way to kind of monitor and track that is through like is through budgets.
So how do we make sure as expenses are being incurred and checks are being cut, that we’re matching up the right expense item to the right budgeted line item. Seems simple but it can get it can get kind of tricky depending on the volume of invoices and who’s coding the invoices. You know, are we consistently coding this vendor to this budgeted line item? So again, what I like is kind of being on the outside is we’re that second set of eyes. You know, we can go in there and kind of build some of these expenses and enter your payables and run your checks for you. But you know, you are the kind of the initial person at you being the foundation, but we’re that second set of eyes. Hey, did you think about that? Did you think about this? Does this match up with the budget? And then we can kind of catch some inconsistencies in real time. And as we catch them, we can try to implement best practices because consistency is key. So, if we can implement these best practices, we’re consistent. And then the financials, again, tell the story. If you have any questions that you would want to ask me, you know, please feel free to reach out. You can go to the Cray Kaiser website and you can find me again I’m Dan Swanson. I’m an assurance manager here.
CPA | CK Principal
Corporate credit cards are a valuable tool for businesses. They simplify purchasing, make expense tracking easier, and give employees flexibility to do their jobs. However, with this convenience comes the responsibility to ensure that these cards are used wisely and ethically.
That’s where a clear credit card policy and the right technology come in. Together, they help protect company resources, reduce fraud and build trust across the organization.
A strong credit card policy serves as both a safeguard and a roadmap. It clearly sets expectations for appropriate usage and explains the reasons behind the rules. When paired with expense management platforms such as Bill.com, Expensify and Ramp, to name a few, it can provide solutions to track transactions in real time, flag suspicious activity automatically, and simplify reporting and receipt collection. This combination of policy and technology gives finance teams the ability to detect irregularities before they escalate into larger issues, along with fostering transparency, accountability, and trust, ensuring that employees understand not only how to use their cards, but also the rationale behind the guidelines.
To create an effective policy, organizations should begin by considering both the operational needs of their teams and the inherent risks associated with credit card programs. This thoughtful approach lays the foundation for a culture of fiscal responsibility.
Technology makes monitoring and enforcement easier. Sometimes, business applications may require specific credit cards, so app selection should align with company policies. The right tools give firms both flexibility and control over purchase and expense management.
A clear, well-communicated policy, supported by the right technology, protects companies while giving the employees the resources they need to succeed. For more information on strengthening your credit card policies and integrating technology into your accounting systems, please contact Cray Kaiser.
MSA | Senior of Accounting Services
As your business grows, financial decisions become more complex and more critical. Clear reporting, stronger internal controls and a plan for the future are essential. But hiring a full-time Chief Financial Officer (CFO) or Controller can be costly.
The good news? You don’t always need to add expensive executives to your payroll. Outsourced CFO and Controller services provide the expertise you need, when you need it, without the full-time expense.
Partnering with an outsourced accounting firm gives you access to executive-level financial leadership, tailored to your business’ needs. This flexible solution ensures you have the correct level of support.
With an outsourced CFO or Controller, your business can achieve:
Outsourcing doesn’t just reduce costs, it increases insight and efficiency. Businesses that leverage outsourced CFO and controller functions gain a competitive edge and the freedom to focus on what matters most: running your business.
If you want clarity, confidence and sustainable growth, outsourcing your CFO and controller functions may be the smartest financial decision you make this year.
Whether you’re a startup preparing to scale or an established business seeking better financial discipline, fractional CFO and outsourced controller services can provide the expertise you need without the full-time cost.
At CK, our mission is to help business owners move beyond the day-to-day challenges of managing their finances and step confidently toward growth. In this audio blog, Amy Langfelder and Eva Koziel discuss how our Client Accounting and Advisory Services (CAAS) provide the tools, insights and support needed to transform financial confusion into clarity.
Transcript
I am Amy Langfelder and I am one of the principals here at CK. In my role, I lead the client accounting and advisory services. We often call this CAAS. In our CAAS department, we want to help move clients from surviving to thriving. To do this, we come alongside them where they are at and provide them various services to help them along the way. Today we want to highlight some of those services. Today, I am joined by Eva Koziel, our manager of accounting and advisory services. She is going to provide some ways that she is helping our clients grow.
First things first, we start by assessing your current accounting state. Imagine you’re struggling to keep your financials organized. We conduct a thorough review of your existing systems, identifying strengths and weaknesses. For example, if you’re using outdated software or inefficient manual processes, we highlight these issues and help you understand where improvements can be made.
How can companies achieve more through outsourcing some of their accounting functions? Once we’ve assessed where you’re at, we move into providing recurring services. Whether it’s monthly or quarterly, we can prepare your day-to-day accounting or review the work your team has done. Think about it as your business having its own financial health checkup. We’re there to ensure everything looks good and even catch issues before they escalate. We can also assist with streamlining processes, particularly through AP and AR automation. Imagine you’re spending hours manually processing invoices. We can help you implement software that automates these tasks, drastically reducing the time spent and minimizing errors. For example, our clients have seen up to a 30% reduction in time spent on AP simply by switching to an automated solution.
As owners look to the future, how can CAAS come alongside them and help them on their journey to thriving? We know that many business owners find their financials confusing. Our team provides personalized explanations, breaking down your income statements, balance sheets, and cash flow statements. For example, one of our clients was unsure why their cash flow was fluctuating. We took the time to walk them through their statements, allowing them to make informed decisions for the future.
Finally, let’s focus on the future. We don’t just stop at the numbers. Our advisory services help you strategize for growth. Let’s say you’re looking to expand, whether that’s a new employee or opening a new location. We provide insightful analysis and recommendations tailored to your business goals.
Thank you for your time today. We look forward to ways we can help you on your journey to thriving. Visit our website, craykaiser.com for more information.
MSA | Senior of Accounting Services
Technology is advancing at an exponential rate. To put this into perspective, it took 2.4 million years for our ancestors to discover and control fire for basic needs, yet only 66 years passed between the first airplane flight and having humans landing on the moon. Knowing this, if your accounting software looks and feels like it was designed in the early 2000s, it’s probably time for an upgrade. Here’s why:
These are just a few of the ways outdated accounting software can hold your business back from achieving growth and success. As you begin researching your next upgrade, you’ll likely discover even more areas for improvement. Now, let’s explore why modern accounting solutions are so effective.:
Upgrading to modern accounting software isn’t just about keeping up with the times. It’s about making your life easier, saving money, and setting your business up for long-term success.
Client Accounting Advisory Services (CAAS) at Cray Kaiser can help you modernize your accounting systems. We take the time to understand the story behind those numbers. Our goal isn’t to only provide data but to empower you with the knowledge and understanding needed to make confident, strategic decisions. With CK’s CAAS, you’ll have a trusted partner helping you navigate the transition to modern accounting software. You can learn more about our services by visiting our CAAS page.
Starting January 1, 2024, a significant number of businesses were required to comply with the Corporate Transparency Act (“CTA”). The CTA was enacted into law as part of the National Defense Act for Fiscal Year 2021. It is anticipated that 32.6 million businesses will be required to comply with this reporting requirement. The BOI reporting requirement intends to help U.S. law enforcement combat money laundering, the financing of terrorism and other illicit activity. To learn more about the CTA, listen to this audio blog by Matt Richardson, a senior tax accountant at CK.
Transcript:
My name is Matt Richardson. I’m a senior tax accountant at Cray Kaiser.
So the Corporate Transparency Act is a piece of legislation that went into effect in 2024. And it requires certain companies to report their beneficial ownership information, also known as BOI. And this is a report that goes not to the IRS, but to the FinCEN, which is the Financial Crimes Enforcement network, which is the law enforcement arm of the US Treasury Department. Information that needs to be reported for the business includes the full legal name and any DBA names ortrade names, a business address and the state or jurisdiction of formation, and an IRS taxpayer ID number. Additionally, information has to be reported for each beneficial owner, including a name, address, and an ID number from a valid ID like a passport or a driver’s license. With a few exceptions, the filing is required for any domestic corporations, limited liability companies, or other entities that are formed by a filing with a secretary of state or a similar office to do business under a state or a tribal jurisdiction. Foreign-incorporated entities are also required to file if they’re registered with a state or tribal jurisdiction to do business, and domestic entities that are not created by filing with a secretary of state, like an unincorporated sole proprietorship, are not required to file this reporting.
So a beneficial owner under the CTA is any individual who has substantial control over the company, either directly or indirectly. It can also include anyone who controls at least 25% of ownership. And this is important to note because it’s not only ownership, but it’s also control. So a non-owner officer who has decision-making power can also be considered a beneficial owner under the legislation. The purpose of the BOI is to aid law enforcement and enforcement of financial crimes like fraud, money laundering, sanctions evasion, and the financing of other crimes like terrorism or drug trafficking. And this disclosure of corporate ownership is intended to make it harder for criminals to use shell companies to cover up the financial aspects of their criminal activities. So the BOI reporting requirement has exceptions for certain categories of companies, as well as what it calls large operating entities. The specific categories of companies are highly regulated areas like banking and publicly traded companies and non-profit entities. A large operating entity is defined as any company that has 20 or more employees, five million dollars in gross sales or more, and a physical presence in the United States.
Many are confused about why large companies are exempt from reporting rather than small companies. Since so many government reporting requirements do exempt small companies. But this is because in general these larger companies are going to be visible to law enforcement and regulators through other types of tax and payroll banking reports. Whereas the purpose of the legislation is to make these smaller companies more visible, I mean, easier to track ownership for law enforcement.
So there are different filing requirements for the BOI report depending on when the entity was formed. New entities created in 2024 have 90 days after their creation to file the report. New entities created starting January 1st, 2025 have 30 days to file the report and existing entities created before January 1st, 2024 have until January 1st, 2025 to file the report. And then any companies that have a change in their ownership information or have a correction of an error to report have 30 days from the discovery of the error or from the change in information to file an updated report.
Penalties for willful non-compliance are steep, so the risk involved in shirking the requirements are serious. Consequences can include civil penalties of over $500 per day that the report has filed late, and those can escalate to up to $10,000 in criminal fines or up to two years in jail time. These requirements are generally covered by the Treasury Department’s criminal enforcement arm, which is different than the tax law and IRS matters that CPAs are generally authorized to address. And there are some legal complexities in determining who is a beneficial owner and who is subject to the requirement that need the expertise of a lawyer.
CPA | CK Principal
As the accounting industry evolves, businesses increasingly rely on advisory services to navigate the complexities of their financial landscapes. CAS (Client Accounting Services) and CAAS (Client Accounting Advisory Services) are two such services often discussed. Although these acronyms may sound similar, they represent distinct offerings tailored to different needs. At Cray Kaiser, we aim to empower our clients with the knowledge they need to confidently make informed decisions. By understanding the differences between CAS and CAAS, you can understand which service best aligns with your business’s unique requirements.
Client Accounting Services (CAS) refers to the traditional accounting services that businesses rely on to manage their financial records and transactions. These services are essential for maintaining accurate financial data and ensuring compliance with relevant regulations. CAS focuses on the day-to-day accounting functions that keep a business running smoothly.
Services typically included in CAS:
Bookkeeping: Managing daily financial transactions, including recording sales, expenses, and other activities.
Payroll Services: Processing employee payroll or working with a payroll provider, managing deductions, and ensuring compliance with tax laws.
Financial Reporting: Preparing financial statements and reports that provide insights into the business’s financial health.
Tax Preparation and Compliance: Ensuring businesses meet their tax obligations and prepare necessary tax filings.
Client Accounting Advisory Services (CAAS) takes CAS further by combining traditional accounting services with high-level strategic advice and guidance. It is designed to handle routine accounting functions and provide insights that help businesses make informed decisions and achieve their goals. By integrating advisory services with accounting functions, CAAS offers a more comprehensive approach.
Services typically included in CAAS:
All CAS Services: Including bookkeeping, payroll, financial reporting, and tax compliance.
Strategic Planning: Assisting businesses in developing long-term strategies for growth and success.
Financial Forecasting and Budgeting: Providing insights into future financial performance and helping businesses plan accordingly.
Business Process Improvement: Identifying inefficiencies in business processes and recommending improvements.
Risk Management: Helping businesses identify potential risks and develop mitigation strategies.
The primary difference between CAS and CAAS lies in the level of advisory support provided. While CAS focuses on the essential accounting functions necessary to keep a business operational, CAAS offers strategic advice and guidance beyond that. CAAS is ideal for businesses that need both reliable accounting services and the added benefit of high-level advisory support to drive growth and efficiency.
At Cray Kaiser, we recognize that no two engagements are alike, which is why our proactive strategies are customized to meet each client’s unique needs. Whether you’re looking for dependable accounting support, strategic guidance, or a combination of both, we’re here to help you navigate the complexities of your financial landscape—all under one roof.
If you’re ready to learn more about the CK team and how CAAS can benefit your business, call (630) 953-4900 or click here.
CPA, CVA | Manager
Implementing new accounting standards can often be a daunting task for businesses, requiring significant adjustments to their financial reporting processes. One such change came in February 2016, when the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)”. This update, effective for annual reporting periods beginning after December 15, 2021, marked a significant shift in how companies must account for leases. As businesses navigate these new requirements, understanding the nuances of ASU 2016-02 became crucial in ensuring compliance and accurate financial reporting.
In this ASU, lessees are required to recognize a right-of-use asset and associated lease liability on their balance sheet for most operating leases, with exemptions provided to those operating leases with an initial lease term of twelve months or less.
The reasoning behind this ASU is that when entities enter operating leases, they have a “right-of-use” asset and liability with this agreement that prior to this ASU, would have only needed to be disclosed in the footnotes to the financial statements in the form of future payments.
What this pronouncement requires is that the operating right of use assets and lease liabilities are recorded on the date of lease commencement based on the present value of the lease payments over the lease term. Further, over the course of agreement, both the asset and the liability are amortized, which is calculated based on the discount rate. The pronouncement allows for using the risk-free or incremental borrowing rate, depending on the entity’s policy election, that most closely aligns with the terms of the lease agreement at inception.
Think of it as the entity purchasing a tangible asset and financing by obtaining a loan, even though no such loan exists. Therefore, cash paid on the lease will no longer be solely categorized as a lease expense in accordance with Generally Accepted Accounting Principles, but rather a combination of the cash paid, periodic lease expense, and the amortization of the right-of-use asset and right-of-use-liability.
If the entity is subject to financial covenants with a financial institution, this pronouncement may affect the financial ratios to stay in compliance. It is important to discuss with the financial institution and to adjust any covenant calculations to remove its impact from these calculations.
The bad news is regarding the increased burden of implementing ASU 842, especially considering that the resulting change, usually is a marginal change to the entity’s bottom line as it mostly impacts the balance sheet. The good news is that we at Cray Kaiser, understand the ASU and its calculations and can assist with consulting and calculations to navigate this new standard. You can contact us here or call us at (630) 953-4900.
Amy Langfelder
CPA | CK Principal
As a business owner, the first quarter of each year can be a blur. You work to finalize the prior year’s operating results and complete tax reporting in a timely manner so you can focus on the current year’s operations. As changes occur in tax legislation, this becomes increasingly difficult as different information is being requested from the outside accounting firm and more time is needed to comply. You feel the impact of staff shortages in your company, and you hear murmurs of this occurring at your accounting firm too. Before you know it, you are having a conversation about tax extensions. Which only means more uncertainty in the weeks ahead as you continue to wind down operating results from the prior year and continue to stay afloat in the current year. If this sounds familiar to you, read on. We will offer some considerations to make year-end more manageable and simultaneously allow you to have control of your financial reporting all year long.
Implementing the following tips throughout 2024 will help streamline your financial reporting, plan for tax obligations and bring a sense of “certainty” in uncertain times.
As we embark on the second quarter of 2024, we have plenty of time to make some tweaks so that the year-end scramble is more manageable and will allow you to be confident as you approach 2025. Contact Cray Kaiser at 630-953-4900 to help you understand how you can implement some of these tips today.
CPA | Senior of Accounting Services
What is outsourced accounting? It is generally defined as an option for a business to hire an outside third party to complete accounting and finance functions for the organization. This can include but is not limited to bookkeeping, accounting and compliance work. It typically can encompass accounts payable and receivable and payroll as well as month-end closing tasks such as reconciliations and bookkeeping and tax and compliance preparation. Increasingly common are other engagements such as financial reporting, budgeting, financial planning as well as ad hoc projects, advisory and consulting services. Business owners seeking more time to focus on their core business are increasingly turning to firms such as Cray Kaiser that can do everything from performing the bookkeeping and accounting tasks to providing CFO-level financial analysis and advice.
In the past, accounting and finance was a function that was required to be in-house for access to records and other company resources and employees. Outsourcing is losing its stigma. The negative connotations associated with hiring out tasks are fading as the pace of life accelerates, work-life balance priorities shift, entrepreneurship expands, and business challenges grow increasingly complex. With the availability of cloud-based software and advances in technology, outsourced accounting has become easy to implement and is a proven time and cost savings for many businesses. Our firm can be on the same system and remotely share files and documents, allowing for real-time conversations. Owners of small businesses gain valuable time to focus on growing their business instead of managing and running the accounting functions. Businesses benefit from cost savings and efficiency by considering outsourcing many of the accounting functions to a team of specialists that offer expertise and flexibility to meet business needs as they change.
Some thoughts about the positive impact of outsourced accounting so you can grow your business not your management of accounting functions:
Important considerations when reviewing outsourcing options and engaging a firm:
Cray Kaiser can help – let’s start a conversation as to how best to help your business grow and gain efficiencies in order for you to reach the ultimate goal of focusing on your core business and areas of growth. If you feel now is the best time to learn more about outsourcing your accounting department give us a call at (630) 953-4900 to discuss options and opportunities offered in our Accounting Services Division.
