• Auditing revenue recognition

      The top line of an income statement for a for-profit business is revenue (or sales). Reporting this line item correctly is critical to producing accurate financial statements. Under U.S. Generally Accepted Accounting Principles (GAAP), revenue is recognized when it’s earned. With accrual-basis accounting, that typically happens when goods or services are delivered to the customer, not necessarily when cash is collected from the customer. [...]

    Published On: February 26, 2024Categories: Business, Featured
  • Liquidity overload: Why having too much cash may be bad for business

      In today’s uncertain marketplace, many businesses are stashing operating cash in their bank accounts, even though they might not have imminent plans to deploy their reserves. However, excessive “rainy day” funds could be an inefficient use of capital. Here’s a systematic approach to help estimate reasonable cash reserves and maximize your company’s return on long-term financial positions. What’s the harm in stockpiling cash? An [...]

    Published On: February 21, 2024Categories: Business, Featured
  • 9 tax considerations if you’re starting a business as a sole proprietor

      When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations: 1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you’re currently eligible to claim the 20% pass-through deduction, subject to limitations. The deduction [...]

    Published On: February 14, 2024Categories: Business, Featured
  • Inventory management systems: What’s right for your business?

      If your business has significant inventory on its balance sheet, it can be costly. The carrying costs of inventory include warehousing, salaries, insurance, taxes, and transportation, as well as depreciation and shrinkage. Plus, tying up working capital in inventory detracts from other strategic investment opportunities. Reducing these costs can help improve a company’s profits and boost operating cash flow. Here are two alternative inventory [...]

    Published On: February 11, 2024Categories: Business, Featured
  • Solid financial reporting can help attract debt and equity financing

      Financial reporting plays a key role when a business needs funds for continued operations and strategic investment opportunities. Lenders and investors will generally want to review your company’s financial statements before they give it money. Timely, reliable reports can increase the odds that a bank will approve your company’s loan application and equity investors will provide capital. Relevant financial information Financial statements are a [...]

    Published On: February 10, 2024Categories: Business, Featured
  • Best practices for M&A due diligence

      Engaging in a merger or acquisition (M&A) can help your business grow, but it also can be risky. Buyers must understand the strengths and weaknesses of their intended partners or acquisition targets before entering the transactions. A robust due diligence process does more than assess the reasonableness of the sales price. It also can help verify the seller’s disclosures, confirm the target’s strategic fit, [...]

    Published On: February 9, 2024Categories: Business, Featured
  • Auditing concepts: Close-up on materiality

      As audit season begins for calendar-year entities, it’s important to review issues that may arise during fieldwork. One common issue is materiality. This concept is used to determine what’s important enough to be included in — and what can be omitted from — a financial statement. Here’s how materiality is determined and used during an external financial statement audit. What is materiality? Under U.S. [...]

    Published On: February 8, 2024Categories: Business, Featured
  • 6 tips to improve job-costing systems

    Companies that work on customer-specific or long-term projects — such as homebuilders, contractors, custom manufacturers and professional practices — generally track job costs to gauge the profitability of each project. In turn, this helps them bid future projects. Unfortunately, the job-costing process tends to be cumbersome, causing some expenses to inadvertently fall through the cracks instead of being allocated properly. Here are six tips to [...]

    Published On: February 7, 2024Categories: Business, Featured
  • Inventory management systems: What’s right for your business?

      If your business has significant inventory on its balance sheet, it can be costly. The carrying costs of inventory include warehousing, salaries, insurance, taxes, and transportation, as well as depreciation and shrinkage. Plus, tying up working capital in inventory detracts from other strategic investment opportunities. Reducing these costs can help improve a company’s profits and boost operating cash flow. Here are two alternative inventory [...]

    Published On: February 6, 2024Categories: Business, Featured
  • Are you ready for year-end inventory counts?

    As year end approaches, it’s time for some calendar-year businesses to perform physical inventory counts. This activity is more than a time-consuming chore; it’s an opportunity to improve your company’s operational efficiency. Here are some best practices as you prepare to count your inventory, as well as guidance on how to get more from these counts. Getting an accurate count Accurate inventory counts are important [...]

    Published On: January 16, 2024Categories: Business, Featured
  • Overview of the offsetting rules

    As companies explore hedging strategies in today’s uncertain economy, management might need to become familiar with the accounting rules for offsetting. Here are the basics, including what needs to be disclosed in your footnotes about these contractual arrangements. Right of setoff In general, it’s not proper to offset assets and liabilities in the balance sheet — except when there’s a right of setoff. This exists [...]

    Published On: January 15, 2024Categories: Business, Featured
  • What is your external auditor’s responsibility for cybersecurity?

    Data breaches can be costly. The average total cost of a data breach has risen to roughly $4.45 million, according to a 2023 survey of information technology (IT) security professionals by the Ponemon Institute (a research center dedicated to privacy, data protection and information security policy). That figure has grown 15% overall in the last three years. Notably, data breach costs have increased 53% in [...]

    Published On: January 14, 2024Categories: Business, Featured
  • Tips for QuickBooks users: 5 mistakes to avoid during bank reconciliation

    Reconciling bank accounts is critical to ensuring the accuracy of your company’s accounting records. The primary purpose of a bank reconciliation is to confirm that the transactions recorded in your bank statement match those shown in your accounting records. Generally, bank accounts should be reconciled at least monthly. However, conducting weekly or daily reconciliations for accounts with a high volume of transactions can help uncover [...]

    Published On: January 13, 2024Categories: Business, Featured
  • The future of accounting: How to embrace cutting-edge technology

    Technology is transforming the accounting profession. When businesses moved from paper ledgers to spreadsheets, it improved the timeliness, accuracy and integrity of accounting-related data. Likewise, cloud computing and the ability to remotely access real-time data have allowed accounting departments to be far more responsive to an increasingly distributed workforce. Artificial intelligence (AI) is the latest technology to hit the accounting field. AI solutions can automate [...]

    Published On: January 12, 2024Categories: Business, Featured