Business

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 [...]

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 [...]

Every fall, CPAs are busy preparing for audit season, which generally runs from January to April each year. This includes meeting with clients, assigning staff and scheduling fieldwork. Likewise, organizations with calendar year ends should prepare for audit fieldwork. A little prep work this fall can help facilitate the process, minimize adjustments and surprises, and add more value to the audit process. Here are four [...]

Timely financial information is critical to a successful business or nonprofit organization. In today’s dynamic marketplace, you may need to act fast to ward off potential threats and risks — and jump on new opportunities. But if you wait until your financial statements are released to react, you’ll likely miss out. Flash reports can provide real-time data that can help management respond to changing conditions. [...]

It’s common for high-growth and seasonal businesses to have occasional shortfalls in their checking accounts. The reason relates to the cash conversion cycle — that is, it takes time to collect on customer invoices. In the meantime, of course, employees and suppliers want to get paid. The “cash gap” is currently getting wider for many companies. A recent study by CFO / The Hackett Group shows that [...]

Accrual-basis financial statements are considered by many to be the gold standard in financial reporting. But with the increasing cost and complexity of today’s accounting rules — in particular, the updated lease guidance that went into effect last year — some private companies are seeking a simpler alternative to U.S. Generally Accepted Accounting Principles (GAAP). The solution for some is to switch from accrual to [...]

If your profitable business has trouble making ends meet, it’s not alone. Many business owners mistakenly equate profits with cash flow, leading to shortfalls in the checking account. The truth is that there are many reasons these numbers might differ. Fluctuations in working capital Profits (or pretax earnings) are closely related to taxable income. Reported at the bottom of your company’s income statement, they’re essentially [...]

Many people speculate that artificial intelligence (AI) will replace humans for certain work-related tasks in the future. But accounting and finance jobs may be safe — at least for now. Recent study Brigham Young University recently put AI to the test. Academic researchers administered an accounting exam, covering such topics as accounting information systems, auditing, financial accounting, managerial accounting and tax. The results? Undergraduate students [...]

Private companies can breathe a sigh of relief: The Financial Accounting Standards Board (FASB) and the Private Company Council have agreed to give them a pass on a coming proposal that, if approved, would require expanded footnote disclosures about expenses. The reason for the exemption is that the projected costs of complying with the proposal are expected to outweigh the benefits for private companies. However, [...]

Traditional business models in many sectors have been disrupted by the COVID-19 pandemic, geopolitical uncertainty, rising costs and falling consumer confidence. If your company is planning a major strategic shift this year, management may need to comply with the updated accounting rules for reporting discontinued operations that went into effect in 2015. Discontinued operations typically don’t happen every year, so it’s important to review the [...]

Working capital — the funds your company has tied up in accounts receivable, accounts payable and inventory — is a critical performance metric. During times of rising inflation and interest rates, managers search for ways to free up cash and eliminate waste. However, determining the optimal amount of working capital can sometimes be challenging. Balancing act The amount of working capital your company needs depends [...]

Many businesses and nonprofits use QuickBooks® as a cost-effective solution to manage their accounting processes. However, the software’s capabilities extend beyond organizing and streamlining your company’s accounting. QuickBooks can also help you detect fraud. Here’s an overview of the software’s fraud detection and prevention features: Transaction audit trails QuickBooks creates audit trails that capture user activities. This can help your company identify unauthorized changes. The [...]

Generally Accepted Accounting Principles (GAAP) is generally considered the gold standard in financial reporting in the United States. But private and public entities may sometimes use non-GAAP metrics in their disclosures and press releases or when applying for financing. GAAP vs. Non-GAAP GAAP is a set of rules and procedures that accountants typically follow to record and summarize business transactions. These guidelines provide the foundation [...]

Accounting and auditing standards have come under scrutiny in the wake of recent high-profile bank failures. Investigations are currently underway about what went wrong with Silicon Valley Bank and Signature Bank. But it’s likely that some “gray areas” in the accounting rules were exploited to make these organizations appear more economically secure in their year-end financial statements than they truly were. Lessons from Enron Andrew [...]