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.
With over 2.2 million registered online users, QuickBooks Online is far and away the most popular accounting software solution for small businesses. With ample room for customization via third party applications, QuickBooks is striving to be the leading choice for cloud-based accounting software. But are you getting the most out of it? Below is an overview of QuickBooks Online new features and some helpful tips to help you determine if you’re using the software to its fullest potential.
Over the past few years, QuickBooks has moved to a cloud-based system, making it easier for multiple team members to access the platform across multiple devices. Here are a few reasons why QuickBooks’ cloud-based system is best for small businesses:
One of the biggest pain points with QuickBooks used to be the lack of customization. In the past, there was a significant amount of manual work required to customize QuickBooks to meet your needs. They’ve solved this by allowing third party vendors to sell add-on plugins for specific requirements. With over 5,000 apps available on the Intuit app store, practically any need can be addressed. There’s truly a solution for everyone – from very complex to very simple installations. And, since the app companies are all competing for your business, they’re all striving to be more robust and less expensive, which is great news for you as the consumer.
Here are some benefits of third party plugins:
The biggest problems for QuickBooks users usually result from improper software installation. Even though QuickBooks has better user guides and online video tutorials than ever before, it’s still easy to make small mistakes that have big impacts in the future. If your software isn’t properly set up, you’ll expend a lot of time and effort backfilling incorrect reporting. To avoid this, the best practice is to contact someone from the Find a Pro Advisor directory to ensure that your setup and workflows are correct from the beginning.
Your accounting software should be as unique as your organization. At Cray Kaiser, we’re able to adapt your accounting solution to best fit the way you do business. If you have questions about the QuickBooks Online new features, please contact us today to speak with our in-house Certified QuickBooks Pro Advisors.
When you hear the term forensic accounting, images of perpetrators in handcuffs and espionage may come to mind. In reality, it’s not always a CSI moment. Forensic accounting is not only important when taking steps to prevent crime, it’s also vital among day-to-day operations and decision-making within your business.
The Forensic Accounting Academy defines forensic accounting as “the art and science of investigating people and money”. While forensic activities imply the investigation of a crime, many of these methods and techniques should be a part of normal routine oversight, such as analyzing financial statements, reviewing an irregularity, or even when considering significant bids or contracts.
Forensic accounting allows us to identify any deviation from expected results, whether it’s a product of a crime or a less devious mistake. However, when fraud is the culprit, keep some of the facts from the Association of Certified Fraud Examiners’ 2016 global fraud study in mind:
1. In 83% of cases, asset misappropriation was the most common form of occupational fraud. However, it caused the smallest median loss of $125,000.
2. Organizations of different sizes have different fraud risks. Corruption was more prevalent in larger organizations, while check tampering, skimming, payroll and cash larceny schemes were twice as common in small organizations. This is where we recommend our clients have policies and controls in place to minimize risk.
3. Likely your biggest risk is your check register and the controls you put around those procedures. Among forms of asset misappropriation, billing and check tampering schemes posed the greatest risk based upon their relative frequency and median loss.
4. The most common detection method was tips. Organizations with reporting hotlines were much more likely to detect fraud. Even if your company isn’t large enough to have a hotline, most tips will come from within your business. Build relationships with your employees to ensure that they will feel empowered and supported to contact you with any concerns.
5. When active detection methods identified tips, such as surveillance and monitoring or account reconciliation, median loss was lower than when schemes were detected by passive methods or accidental discovery.
6. Fraud perpetrators tended to display behavioral warning signs when they were engaged in their crimes. The most common flags were living beyond their means, financial difficulties, unusually close association with a vendor or customer, excessive control issues and recent divorce or family problems.
7. External audits of financial statements were the most commonly implemented anti-fraud control; nearly 82% of the organizations in the study underwent independent audits. An audit, however, looks at documentation and not controls. It is most often the lack of controls and procedures that enable fraud to take place.
Each organization is unique in its processes, employees and risk exposures. But understanding the activities and systems within your own business helps protect you from internal threats and mistakes. Forensic accounting also gives you the opportunity to implement routine reviews and processes that help your business run smoother. If you would like to learn more about controls and other forensic accounting practices, please contact Cray Kaiser today.
When Linda, CEO of Greenville Insurance, asked Gary, Vice President of Melville Manufacturing, for his experience with their accounting firm, she was surprised that his response was based on more than tax and accounting expertise. Gary shared how his accounting firm has also had a significant impact on Melville’s workplace culture. He went on to describe how they assisted with hiring their new bookkeeper, created a control system to correct exposure to fraud and developed a compensation system that was in line with industry best practices.
Gary’s shared experience exemplifies several ways that accountants help their clients evaluate and improve company culture. Accounting is more likely to conjure images of spreadsheets and tax forms than team meetings and high fives. But your accounting firm knows more about your workplace culture than you might imagine.
Today, many headlines for hiring and retention articles reference “workplace culture”. As competition across all industry sectors is on the rise, companies are realizing that workplace culture plays a significant, although often undetected, role in the success of their business. However, it’s often overlooked as day-to-day operating needs take precedence over building a strong workplace environment.
Yet, strengthening workplace culture is not as overwhelming as it may seem. It starts with the individuals you hire, the internal controls you have in place to allow them to work efficiently and the ways in which you compensate them. Just as Gary shared with Linda, be sure your company benefits from ways your accounting firm can add value to your company culture.
Hiring the best person for the job the first time has a major impact on company culture. When mistakes are made in hiring, company culture is negatively affected. The entire group suffers when a team member doesn’t do their job well or is terminated. For example, if a bookkeeper is hired who interviews well but is not truly skilled at their work, they may make mistakes that could create problems for other team members, taking up time in identifying and correcting errors, all causing frustration in the workplace environment.
Small business owners are charged with being the expert in their industry, running the operations and providing leadership. They are typically not the expert in the accounting arena. As with any industry, having an expert in the field on the hiring team helps to ensure a successful hire.
Your accountant can help you hire the right person first by assisting you with job descriptions, referrals and interviewing. Your accountant…
…knows the skills, talents and expertise needed for the job, and they know the right questions to ask to evaluate those skills and talents.
…can clearly and accurately communicate the job requirements and roles.
…can network on your behalf, refer people to you, and share best hiring practices.
Another way your accounting firm can help is by setting up proper control processes to prevent conflict with team members and upset the culture. These controls typically involve separation of duties and ensuring that more than one person is involved in accounting functions. Without control processes, fraud, theft and frequent errors can occur and affect not only your financial results but your culture. Control processes also divide labor, sharing the workload more evenly and leaving the team feeling like workload is fair.
Fair and reasonable compensation impacts company culture. Companies with teams who feel fairly compensated attract better talent, have higher retention rates and are more efficient. Your accountant can help by providing industry comparisons and evaluating budgets and projections.
Company culture is also affected by auxiliary compensation like incentive plans and benefit packages. Your accountant can share best practices and help you evaluate benefit package costs and value to your team. For example, while a tuition reimbursement benefit might be appreciated by a team of younger employees wanting to continue their education, it could be a wasted expense on a team of older employees who do not intend to further their education.
Take advantage of the objective, outside perspective your accounting firm has of your company. When he or she visits, ask about their observations.
After her conversation with Gary, Linda decided to ask her accounting firm to weigh in on a few workplace culture issues. She was pleased to discover that, like Melville Manufacturing, Greenville Insurance benefited from the recommendations they had on their company culture. Specifically, soon after meeting with the internal accounting team, their accountant pointed out that their bookkeeper had considerable skill and could easily be relied upon to manage some control processes.
Next time you meet with your accounting firm, be sure to consider how they can help you evaluate and improve your company culture. If you’d like to talk to Cray Kaiser about how we can assist you, please contact us today.
Every month you or your accountant creates a profit and loss statement (P&L) for your business and reviews any pertinent information. If you are like most business owners, you look at the net income and maybe a few other numbers and file it away. But if that is all you do, you are missing many of the important stories your P&L tells.
The language and format of a profit and loss statement may be unfamiliar to you if you are not an accounting professional. Once you understand how to interpret a P&L, it reads like a storybook that tells the tale of your business’ financial progress over the past time period, be it a month or a year. When you dive into some of those stories, you learn a lot about your business that you may not have discovered anywhere else. These stories are important because they can help you identify mistakes and fraud, profitability of jobs and opportunities for growth, such as new, more profitable product mixes.
The buzz around the office is about the big client the sales team just closed and how, that, combined with the decline in prices of raw materials, is going to make a great year. Sitting down to review the P&L, you anticipate seeing a nice big number next to net income, but it is much lower than you expected. The P&L is telling you the story of your business, but it is not matching up with your expectations. How could that be? The P&L offers clues to help you discover the problem. Looking at the P&L, you may see that it shows that raw material costs are going up, not down, which does not match with what you had been told by your operating crew. It may be due to a bookkeeping entry error or perhaps while some raw materials prices are decreasing, others are rising. This could also be a sign that some kind of fraud or theft is occurring, requiring you to review your internal controls.
The P&L may offer another explanation for lower than expected net income numbers: issues with job profitability. Even with a great year in the sales department and reduced prices on your raw materials, the jobs or products may simply not be profitable. The P&L can help you identify why. For example, did you hire more staff to manage the additional sales? Maybe those salaries are higher than what you can handle to still be profitable. Maybe additional staff was not yet hired and the quality of the work of the current staff is suffering, creating more warranty claims and returns, which you will also discover by reviewing and investigating these variances on your P&L.
Your P&L does not just identify potential problems; it also shines a spotlight on opportunities. The ratios on the P&L can be compared year-to-year, showing you which jobs or products are becoming more profitable over time and which are declining. This information can help you identify product mixes or job types that could increase the company’s financial performance. You may decide that the sales team for the area that is improving can share their techniques with the other departments.
Next time you sit down with your accountant to review your P&L, ask about the story it tells. If the story does not flow with the tales you have heard from your team, explore the reasons why. You may not find yourself sitting around the campfire reading your P&L to your grandchildren or anxiously waiting for it to come out as a movie, but it is still a story you do not want to miss.
If you’d like help with your P&L, please contact Cray Kaiser today.
As a family business owner, you are pleased when you walk by a marketing team meeting and see your son suggesting ideas for the new website. You have built a strong, successful business, and you are proud to be able to pass it down to your children someday. Inside this article you will learn seven key ways your business will benefit from including the next generation of business owners in accounting meetings and practices.
Ever since wire transfers moved online, both personal and work bank accounts are more vulnerable to fraudulent electronic funds transfers from tech-savvy thieves. Avoid malicious attacks by recognizing the tell-tale signs of a fraudulent wire transfer.
