Is Your Business Fraud-Proof?

No small business owner wants to believe that their profits could be disappearing under the table – and certainly not by employees they trust. The Association of Certified Fraud Examiners’ (ACFE) 2014 Global Fraud Study revealed that organizations lose a median of 5% of revenues each year due to business fraud. And it’s not just revenue.

Businesses also suffer indirect costs, including decreased employee morale and productivity as well as effects on their brand and reputation. Bigger companies have learned that if they want to succeed, they have to do the things necessary to prevent fraud before it happens.

As a small business owner, you may have limited time and resources to dedicate to the cause, but with even just a little effort, you can take the following steps to fraud proof your business just as effectively as the big guys:

Hire competent & trustworthy employees.

Learn as much as you can about a potential employee’s character through background checks (criminal history, civil history/fraud-related lawsuits) their employment history, education and references.

Implement internal checks & balances.

When two or more employees are responsible for the financial duties, it helps to eliminate the risk of a single employee embezzleing funds without anyone noticing.

Perform audits.

Periodic audits, whether scheduled or unscheduled, are the best way to detect and deter fraud. Schedule an external audit at least once a year.

Implement an anonymous reporting policy.

Create an environment where employees can feel safe to anonymously report suspected incidents of fraud within your company without feeling like they are risking their job or peer relationships.

Enforce mandatory vacations.

An employee who never takes time off work is a red flag for fraud. Safeguard your company by implementing a policy that requires all employees to take at least five consecutive days of vacation each year.

Take Security to the Next Level with Sage 50

Sage 50  has features that are designed to help you protect your business:

  1. Built-in audit trail – Keep a transaction history so you can see when a person enters, edits, or removes data. This not only helps you find mistakes and determine appropriate employee training, but also alerts you to fraudulent activity that may require action.
  2. User profiles – Specific profiles will ensure employees only have access to certain areas. If you have a lot of employees, create role-based profiles to save time.  Either way, select from over 100 specific areas to give add, edit, view-only or no-access rights. To get there, go to System -> Set Up Security Now.
  3. Internal accounting review – This feature searches data for potential mistakes or fraudulent activity and allows you to generate comprehensive reports. To use this feature, go to System, in the Data Integrity section find Internal Accounting Review and click on Run Report.

When it comes to preventing fraud, it’s your job to foster a culture that places an importance on honesty and integrity. Don’t take a lax approach. Your employees are watching you; set an example as a leader and stick to the policies and procedures put in place. This will help everyone get on the same page when it comes to preventing and eliminating fraud.

 

 

photo attribution: © tashatuvango/depositphotos

Small Business Accounting Challenges

There are days when running a small business can certainly test your limits. There are always going to be challenges – whether you’re dealing with customers, employees, marketing or technology. One of the biggest hurdles faced? Small business accounting challenges. Productivity provider, Wasp Barcode Technologies recently asked small business owners exactly what their biggest challenge was and accounting functions rose to the top.  

Greatest Small Business Challenges

In their Small Business Accounting Report survey, Wasp found that only 42 percent of small businesses have a CFO or controller. For companies with 11-25 employees it drops to 25 percent. And while accounting is central to running a small business, most entrepreneurs are not professional accountants and only 40 percent of small business owners feel they are extremely or very knowledgeable on accounting/finance.

Nearly 400 small business owners were surveyed in the industries of nonprofit, retail, agriculture, banking/financial, education, energy, healthcare, hospitality, service providers, IT and professional services, as well as manufacturing, military and warehouse. The survey found that business owners find the greatest challenges in these five areas:

  1. Accounts receivable/collections
  2. Cash flow
  3. Managing paperwork
  4. Closing the books each month
  5. Managing payroll

Other key findings included:

  • Only 17 percent of small businesses use an asset management system that allows auditing
  • Accountants ranked among the top professionals in order of importance to small businesses; and, 88 percent of small businesses are very or somewhat satisfied with their accountants

Why then do so many small businesses go without a senior level accounting professional on staff?

There are ways to save on costs by managing some of the back-end work before it gets to an accountant, which can be simplified by managing it through your accounting software.

Simplify Your Business Accounting

With today’s advancements in technology and wide options of accounting software that can help you with your accounting functions. Sage 50 offers a business solution that manages your accounting as well as all your other operational needs, including:

  • Inventory
  • Sales Activity
  • Job Costing
  • Payroll and Taxes
  • Payments

These are just a few of the things well-rounded business solutions can manage for you. If you’re accounting software doesn’t offer all these benefits, you may not be using the right solution. Quantum Buyers has several solutions and can help you find the right one for your specific business needs.

 

Ready, Set, GOAL… with Sage Business Intelligence

It’s the New Year and a time to set new goals for your business. But do you often feel overwhelmed at the start of a new year? There’s no doubt that it’s hard to find the time to effectively manage projects and client relationships, let alone try to seek out new business opportunities and set goals for the future.

These days, data is king – especially when it comes to business and financial goals. Business owners have a wealth of data at their fingertips, but often don’t know how to use it.

Sage Business Intelligence (BI) reporting tools can help you accumulate, organize and analyze your data and use it to make better, more informed decisions.

Making the Numbers Work for You

If you want your business to succeed, you must learn how to manage your financial data. But don’t worry… there’s no need to be an accountant or even an expert at numbers to make sense of it all.

Sage BI offers you eighteen ready-to-use reports that give you immediate insight into and across your business. The reports are in Microsoft Excel and are customizable/flexible with drill-down capabilities. Plus, you can access them at any time or have them delivered, real-time, from your Sage 50 Accounting software in the format of your choice.

Here are four areas of financial intelligence you should pay close attention to so your business can thrive in the New Year:

Cash Inflow & Outflow 

Your cash in and out should be monitored regularly. Start by allocating your transactions into two broad categories of cash in and cash out, and then set up as many sub categories as you need for sales, purchases, marketing, overhead, payroll, etc. Sage Intelligence can help you access the information you need from your accounting system so you can automate your cash flow report and access it whenever you need it at the click of a button.

Budgeting & Forecasting

You should use budgeting and forecasting to guide your decisions, use of resources and to project the results you want. Sage Intelligence presents your financial data in a pre-formatted Excel report and allows you to make accurate predictions for the future with more control and flexibility. Review your results each month and compare them to the same time period of the prior year so you can track against your year-to-date. Regular assessment helps you see what’s working and was isn’t so you can take corrective measures if necessary.

Sales Trends

Tracking monthly and year-to-date sales versus your budgets and forecasts is key for business success. With Sage Intelligence you can easily identify trends, such as growth because of a new client or product roll-out and capitalize on it. Or maybe sales have declined due to the loss of a key sales person or a price increase. Sales trends give you valuable information that can be used to your advantage.

Built-In Dashboard 

Tracking the overall health of your business is easy with the Sage Intelligence dashboard. You’ll get essential information at a glance so you can quickly and easily make the right decisions. The dashboard is customizable, depending on your needs at a certain time – meaning you can drill down and focus in on areas of priority based on the month, timing of product or service roll-outs, etc.

Put the power of Sage Intelligence to work for you and get up-to-date financial information that will guide you in making informed decisions that will give your business the success it deserves.

Risk Management Matters

As a small business owner, you should be prepared to expect the unexpected. Don’t be one of those people who learn about risk management the hard way…it’s important to understand that all businesses (yours included) have risks.

What is Business Risk Management?

There are many things that can impact the health and operations of your business. While you can’t predict the future, one of the best ways for you to manage risk is to evaluate risk factors and make contingency plans on how to deal with the risk if/when it comes up.

Risk management is the process of identifying, prioritizing and reducing or eliminating risks. When you identify risks before they occur, you’ll better react to certain problems and feel confident when it comes to putting a solution in place.

Where Do You Start?

If you want your business to succeed, it’s imperative that you have a risk management plan in place. If you don’t, set aside a day or two sooner (rather than later) to identify risks surrounding the activities of your business. Ask yourself what if…

  • A personal or family emergency takes me away from my business for an extended period of time?    
  • A trusted employee steals from me or my business?   
  • Someone is hurt by a company vehicle driven by an employee?    
  • My largest customer decides to no longer do business with me?  
  • My largest supplier can no longer fill orders?    
  • I lose my bank line of credit or loan?
  • I am part of a lawsuit?
  • Your data or company information is compromised?   
  • A fire, flood or other disaster destroys my business?  
  • I lose an employee or manager to a competitor?
  • I become a victim of fraud?  

If any of the situations listed above happen to you, it can wreak havoc on not only your business, but your reputation and credibility. That’s why it’s so important to take the time to define, assess and prioritize risks as they are related to your business. Enlist the help of outside experts to help you in this process. Then, take it one step further by documenting and implementing a risk management policy.

Assess and evaluate your risk management policy at least once a year. As business needs change, so do the possible risks associated with it. Remember…it’s your job to protect you business. If you don’t do it, who will?  

 

photo attribution: © stevanovicigor/depositphotos

Stay on Track with 8 Essential Accounting Tips

The New Year is here! It’s a time when many of us make resolutions to improve our health, finances or family situations. As a business owner, New Year’s resolutions are also a great way to make positive changes for the future – especially when it comes to finances and accounting. If you’ve struggled with the daily challenges of running a small business, here are some essential accounting tips that will get you back on track and on the road to success.

Think ahead. Are there some expenses you’ll need to incur in the coming year such as new office equipment, computer upgrade or remodeling/repairs? Plan ahead by setting aside money now so you’ll have the resources when you need it. You can also take the stress out of next year’s taxes by putting back a certain amount of cash each month.

Invest in accounting software. A little investment in accounting software upfront will make all the difference in the long run. Programs like Sage 50 allow you to keep everything you need in one place for easy access and recovery and will help you track unpaid invoices, billable hours and your budget as well as create customized invoices. Always be sure your current program is up-to-date.

Don’t mix business with personal. As your business grows, it’s important to separate your business and personal expenses. If you use personal funds to supplement your business, record them as loans or capital contributions. Your accountant can assist you with any questions you have.

Check, check and re-check. Even though your accounting software does a lot of the work for you, data entry errors still happen. Monthly reconciliation of your bank account as well as running monthly error reports can go a long way in making sure your books are as accurate as possible.

Keep an eye on inventory. Track all inventory (i.e. dates purchased, stock numbers, purchase prices, dates sold, etc). Managing your inventory will help cut down on “misplaced” items or alert you to suspicious activity or theft.

Track every expense. Avoid using cash for businesses purchases whenever possible. A credit or debit card will make tracking statements easy, plus it will help you and your employees in recording true business expenses (which is information you’ll need to know come tax time).

If expense reports are a pain in your side, Expensify integrates with Sage 50 and makes capturing receipts, tracking time or mileage, business travel and creating expense reports in a timely manner easy — for both you and your employees. Just be sure to set up a clear, published time frame for submitting expenses — whether bi-weekly, monthly, etc). When employees delay filing their expenses, not only does it hurt their pockets, it can also cause cash-flow challenges for you, not to mention associated accounting nightmares.

Make your clients pay. Sending out an invoice doesn’t always mean a check’s in the mail. Don’t let your clients avoid regular payments and always follow up on unpaid invoices. Sage 50 allows you to put an account on hold once it reaches an outstanding dollar amount (set by you) so additional orders can’t be placed. This safeguard keeps past-due clients from accidentally slipping through the cracks.

Make time for your books. Don’t get caught up in the “end of the year scramble.” You may find yourself spending hours trying to track down receipts and other documents that are several months old and that is just plain stressful. Put your bookkeeping day on the calendar and stick to it – you’ll feel much better when the end of the year rolls around.

Can’t do it all?
Running your business can be stressful enough without dealing with all the financial responsibilities that come with it. If you simply don’t have the time it takes to keep it all straight, that’s OK. Hire a part-time bookkeeper to help keep you on track with finances and payroll. Maybe there’s a financial advisor or an accountant in your area who knows your industry that you can rely on for expertise and advice when needed.

Year-End Survival Checklist

There’s no doubt the holidays are the most wonderful time of the year, but once the celebrations are over, that tune quickly changes. January can be the busiest time of the year for you and your business with all that goes along with year-end close. Use this year-end survival checklist to get a strong start on the new year.

Make your list and check it twice
Here are a few items every business should look at and/or make sure are completed before closing the year:

  • Reconcile general ledger accounts to bank statements
  • Complete all invoicing
  • Record all your supplier bills
  • Print year-end reports for historical review (i.e. accounts payable/receivable, inventory, financial, payroll, etc)
  • Make adjustments to reports as needed ( i.e. write off bad debts, account for depreciation expenses, adjust entries for accruals of payroll tax liabilities or pre-paid expenses, etc)
  • Print and mail 1099s (due by 1/31)
  • Print and mail payroll forms if you do it yourself (W-2, W-3, 940, 941)
  • Print and mail 1096 to IRS (by 2/28)

Wiz Through Year-End with Sage 50 Year-End Wizard
When you’re ready, close any other applications and start the process at the end of your business day because you’ll want to leave your computer running. Before launching the wizard, print out any items such as invoices and payroll checks as well as clear the Waiting on Bill from Vendor check box in the Purchases/Receive Inventory window for any outstanding vendor purchases.

The Year-End Wizard guides you through the process. Simply select Tasks, System, Year-end Wizard.  Sage 50 requires you to make a backup so give the back up a unique name and consider putting it on removable media (CD, flash drive, external memory, etc.) for future reference.

You will also be prompted to run year-end reports, which you can do on paper, export to Excel, or to a PDF file. It’s recommend you retain a backup file of your Peachtree/Sage 50 data for seven years, plus save PDF copies of the following reports for seven years as well:

  • General Ledger for the year you are closing
  • Under general ledger, General Journal for the year you are closing
  • Under accounts payable, Check Register for the year you are closing
  • Under accounts receivable, Cash Receipts Journal for the year you are closing
  • Under payroll, Payroll Journal for the year you are closing

The best advice to survive year-end? Keep your financial activities consistent and thorough each month of the year (with the help of Sage 50), so you’ll prevent year-end from becoming a major undertaking.

 

photo attribution: © melpomene/depositphotos

Affordable Care Act Reporting Requirements

Are you up to speed on the mandates, penalties and new reporting requirements for individuals and businesses? If you’re a business that employs fewer than 50 people, you may not be aware of (or even understand) the punitive business provisions that do not apply to the roughly 96% of business owners like yourself.

How do Mandates/Credits Affect Me?

Businesses with fewer than 25 employees, can qualify for a credit of up to 50% in 2015, if you meet the following requirements:

  • Have fewer than 25 full-time employee equivalents (FTEs)
  • Not be a member of a controlled group with more than 24 FTEs
  • Have average annual wages for FTEs less than $50,800 (inflation adjusted)
  • Pay 50% or more of the cost of employer offered qualified health plan (QHP)
  • Offer QHP through a SHOP Exchange (for years after 2013)
  • Have not previously claimed the credit in two consecutive years (after 2013)

For businesses with 50 or more employees, the penalties are phased in: To be subject to a penalty in 2015, you must have employed 100 full-time and full-time equivalent employees in 2014. In 2016, that number drops to 50 full-time and full-time equivalent employees in 2015.

What you need to know about reporting employee health care benefits

The Affordable Care Act (ACA) means a new set of tax forms for business owners, and it’s now a requirement to report the types and extent of coverage being offered to employees. While 2014 was an optional year for reporting, that all changes for 2015 as the ACA’s reporting and coverage mandates will be enforced, and business owners like yourself need to understand exactly what is required.

Sage 50 can help you track and report health insurance information and the required 1094 and 1095 forms are expected to be available in time for year-end reporting in Sage 50 Pro, Premium and Quantum editions 2014 or higher.

Form W-2

You must report the cost of health care coverage under an employer-sponsored group health plan in box 12 using code DD.  The amount should include both the portion paid by the employer as well as the portion paid by the employee. This requirement has been in effect since 2012 and was meant to provide employees useful and comparable consumer information on the cost of their health care coverage. Sage 50 allows for easy reporting employer-paid health insurance on W-2 forms.  

Section 6055

Insurers, government agencies and employers of any size who sponsor self-insured group health plans must use forums 1094-B be and 1095-B to report the minimum essential coverage they provide to the IRS and to all covered individuals

Section 6056

Any applicable large employer regardless of whether it’s a tax exempt or government entity must use forms 1094-C and 1095-C to report the health insurance coverage offered to the IRS and to their full-time employees

Understanding all of the rules associated with the Affordable Care Act can be confusing. The good news is that incorrect filings will not be penalized for calendar year 2015 filing (reported in 2016) if you file on time and make a good faith effort to comply.

Don’t Stress Over Tax Time

Today’s tax laws can be complex and confusing. Do you have a hard time keeping up with the constant changes and revisions? What’s even more daunting is that the simplest, most innocent mistake can result in unexpected penalties.

It’s tax time, and as your business filing deadline looms, it’s important for small business owners to stay on top of current tax changes and be aware of what to watch for in the future.

What Can You Deduct?

In preparation for filing, there’s a lot for small business owners to think about, and just as many deductions to benefit from. Just to name a few:

  • Current capitalized expenses
  • Auto expenses
  • Business and professional fees
  • Bad debt
  • Insurance costs
  • Home office expenses
  • Retirement contributions
  • Meals and entertainment expenses
  • Travel expenses

The Affordable Care Act 

The Affordable Care Act (ACA) added an estimated 2,400 pages to the U.S. tax code, further complicating the tax landscape for businesses of all sizes. Most familiar to business owners is the tax penalties for businesses with 100 or more employees who fail to provide health insurance to full-time equivalent employees and/or not reporting to the IRS what type and the cost of coverage provided for employees. 

Beginning Jan. 1, 2016, businesses with 59 to 99 employees will also be required to offer health insurance.

Don’t Let Taxes Trip You Up

Tax law can be complicated, but they don’t have to trip you up. Consider these tips:

  1. Think about taxes all year long. Waiting until the last minute could make thing more complicated and limit your money-saving options. 
  2. Bring in a professional. Hire a knowledgeable tax attorney or accountant who can tackle complex tax laws with ease and help you identify tax breaks and deductions you might otherwise miss. 
  3. Always be aware. Even with the help of a skilled professional, it’s your job to keep up with news related to laws.
  4. Never assume. Even though Congress has always passed the tax-extender bill at the last minute, it’s never guaranteed. Don’t make any business decisions on the assumption that tax breaks will pass. 

Sage 50 Accounting not only has its Year End Wizard to help simplify your year end processes, this business management software also helps with simplified reports for you or your accountant to help speed up your filing process.

Sage 50 with Payroll offers error-free tax filing, standardized and customized reporting features, plus support from professional payroll experts.

Calculating deductions, keeping up with changing tax laws, and easily preparing employee paychecks and reports — reducing errors and saving time with every transaction.

Give Thanks & Give Back

The holiday season is upon us and for many, it’s a time to pause and appreciate the things that matter most in life. But it’s also a time to give back, and if you or your business feels especially fortunate this year, it can be incredibly fulfilling to do something for others.

Think Small… and Make a Big Difference

Large companies donate millions to charities all over the world each year, so it might be difficult to think that your small business could truly make a difference.  Instead of trying to think big, put your focus on how you can change the world in your own backyard. Anyone can write a check and simply let the charity put it to use as they see fit. But ask any charitable organization and they will tell you that giving of your time is equally valuable. Think about how you and your employees could donate your time.

Big or small, there are many ways to get involved and a wealth of people/organizations that could use a helping hand – during the holiday or any time of year:

Habitat for Humanity 

You and your employees can spend a day or two volunteering to build simple, decent, affordable houses. No construction experience or building skills are needed and volunteers are involved in most phases of construction.

Volunteer at a Soup Kitchen or Homeless Shelter

Budgets may be tight, but that doesn’t mean you can’t help serve a hot meal. Make it part of a team-building day where you and your employees can volunteer together and make a difference for those less fortunate.

Adopt a Family

Many families are in crisis this holiday season, so you and your employees can help make Christmas special by providing much-needed gifts to put under their tree.

Holiday “Ring the Bell” Shifts

The Salvation Army always has volunteer opportunities for bell ringers during their Red Kettle Campaign. It’s a great way to get employees and their families involved in their community.

Food/Toy/Coat Drive

Drives are great for smaller businesses and make a great impact on the community at-large. Encourage employees to make a donation and spread the word to their friends and family.

Care Packages for the Troops

Many soldiers are missing their families during the holiday and care packages/holiday cards are a great way to remind them they they’re not alone. You can also check into locals programs to adopt a military family and provide food or gifts during the holiday season.

As you begin planning for the remainder of the year, and for the future, consider how you can give thanks by giving back, and doing it in a way where everyone wins … you, your business, your employees and your charity. 

The Power of Customized Reporting

Put the Power of Customized Reporting to Work for You

If you’re like most small business owners, you might oftentimes find yourself feeling overwhelmed when it comes to effectively managing accounting, inventory, customers and employees. That in itself can be a full-time job.

Add running reports and analyzing all your business data to that task list and it can be down right daunting.  We are all familiar with added stress, which can also lead us to question whether we’re making sound business decisions. Are we even looking at the right data?

With the right accounting methods and software, you can rest easier. One of the most trusted is Sage 50 Quantum. It offers one of the most comprehensive reporting solutions available to small businesses,  providing access to all business information in one place. Sage 50 Intelligence Reporting (formerly knows as Sage Business Intelligence) works just like the Microsoft® Excel we’re all used to, and it’s right there within Sage 50 Quantum accounting software. (Did someone say, “pivot tables”?)

Custom Design Almost Any Report You Need

Is this different than the customized reporting feature already in Sage 50? Yes. Sage Intelligence Reporting (IR) is a supplement to the 140+ reports already available within Sage 50. And IR functionality is included Sage 50 Quantum.

When you finally get that report just right, save it and it will update real time… every single time you need it. Even combine auto reports and dashboards with KPIs – even from multiple divisions, modules and companies!

Sage 50 even has a report designer that makes life oh, so easy. With its drag-and-drop feature, reporting is simple, flexible and fast because you have the ability to customize your financial report layouts instantly.

Put the power of Sage Intelligence Reporting to work for your business so you can:

  • Get faster answers to your business questions
  • Access business metrics reports when and where you need them
  • Provide fast, invaluable detail for intuitive decision-making
  • Stay on top of cash flow
  • Gain insight into your unique customer behavior
  • Identify cross-selling and up-selling opportunities
  • Streamline operations and improve efficiency