If you have employees, you have the distinct honor once per year of being part of a worker’s compensation audit. 

You likely receive a form in the mail, an email request, or a phone call that will ask you about your payroll numbers and employees for the prior year.  

Worker’s compensation is an insurance program that covers employees in the case they get hurt on the job.  Each employee receives a classification code that describes the type of work they do, and a rate is figured based on the classification and its risk factors.   

Your numbers need to tie back to the numbers reported on your quarterly payroll reports for both state and federal. The provider may also want copies of your 941s and your state payroll reports. 
 
Once you’ve submitted your numbers, the insurance provider will calculate whether they owe you or you owe them additional fees. 
 
The worker’s compensation audit happens every year (even if you pay worker’s comp premiums each pay period, some companies still request an annual audit).  It’s not difficult, but it is time-consuming. If you would like our help completing your audit, please feel free to contact us.   

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact us, your CPA or tax advisor for additional details.

Tracking data is then entered into a system where data is kept about the item. A simple system may be a spreadsheet.

There are also software apps more sophisticated than spreadsheets that track all of the fixed assets for a company, including original cost, depreciation method and history, and tax treatment. 

You never know how many of an item you might have until you record and count them.  How many computers (and computer parts) do you have lying around your office?  Extra desks and chairs? Maybe you even have extra office space or extra land. 

Part of being a great entrepreneur is fully utilizing all the resources you have at your disposal.  Where can you put to better use the extra assets you have? Could you sell the surplus items?  Or donate them for a write-off? Do you have extra room to rent out to a tenant, earning rent? 

Sometimes we’re so focused on operating the core of our business that we don’t see what else is a money maker right in front of us. In addition to focusing on income and expenses from operations, consider the resources you have in your fixed assets.

For assistance with developing or reviewing your a fixed assets schedule, please give us a call.
 
And if you do sell some of your fixed assets, be sure to contact us so we can help you book the transactions properly.  

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact us, your CPA or tax advisor for additional details.

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact us, your CPA or tax advisor for additional details.

Internal control is a very special phrase in the accounting profession. Tactically, it’s the set of processes that help a company produce accurate data throughout the organization, follow reporting requirements and laws, and maintain consistency and accuracy in its operations. Strategically, it’s an entirely new way of thinking and doing business.
 
Internal control helps to reduce organizational risk. A blunt way of putting it is internal control is what you put in place to avoid mistakes, intentional or accidental, and to control accuracy and quality. It impacts every aspect of an organization.

• Have someone check that your bank balance matches the reconciled amount in your books, and that someone should be different from the person who does the reconciliation.  This is an example of what’s called segregation of duties. 
• Lock up paper checks and use the missing check number report to make sure none of the stock could be used for nefarious purposes.
• Have employees sign in and out equipment that they take home.  This is part of asset management.
• Write and enforce a hardware and software use policy that includes items like employees should make sure their anti-virus software is active at all times, they should not bring in disks or CDs, and they should not download games or other unauthorized programs.  This protects from computer viruses and helps to avoid catastrophic network failures.

 
There are literally hundreds of internal control procedures that should be implemented in small businesses as they grow into larger businesses. 
 
Internal control is typically a big part of an audit or an attest function in accounting; it determines how many additional procedures an auditor needs to do in order to provide assurances about the reliability of the financial reports.  But it’s also just good plain common business sense to implement as many internal control processes as are cost-effective for your business to protect it at the level of risk you’re comfortable with. 
 
If you’d like to discuss the idea of internal control further, please feel free to contact us at any time.  

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact us, your CPA or tax advisor for additional details.

As we get through the craziness of tax season, a few reminders are always a good thing. Check out this article for a good overview of common tax subjects that you may deal with both personally and as a business owner. And if you have questions, please contact us for tax review and preparation services as well as tax planning for the upcoming year.

​Remember: You don't need to pay full price for your accounting software and services! For special discounts on QuickBooks products and services not available when buying directly from Intuit, click the button below or contact us to discuss your business needs. 

The information presented is of a general nature and should not be acted upon without further details and/or professional guidance. For assistance in identifying and utilizing all the tax deductions to which you are entitled, please contact us, your CPA or tax preparer.

The products and services your business sells make it unique. The same thing is true of how these items are set up in your accounting software.  Whether you’re using QuickBooks Online or something else, getting your products and services set up right can impact the quality of the information you can get out of your accounting system. 
 
Here are the types of items you can set up in most systems.
 
Inventory Items

Inventory items are used in retail and wholesale businesses. They are physical items that the system can keep count of for you.  You can purchase or make the items, and the associated cost is usually tracked when a shipping receipt or bill is entered.  They are sold when a sale is made and an invoice or sales receipt is entered. 
Transactions using inventory items impact a lot of accounts on both the balance sheet (cash, accounts payable, accounts receivable, and inventory) as well as the income statement (cost of goods sold, sales, and returns).  The inventory item can be tied to default sales and purchase accounts in most systems. 

Non-Inventory Items

QuickBooks offers a type of item called a non-inventory item. There’s a big difference in that non-inventory items do not have quantities associated with them. They don’t increase or decrease the inventory account. But they can be tied to default sales and purchase accounts like inventory items above. 
Examples of non-inventory items include items purchased for a specific job, such as a contractor purchasing appliances for a custom home, items you sell but do not buy, such as an e-book or other digital product, and items you purchase but do not sell, such as shopping bags. 

Service Items

A service item is a special type of non-inventory item. There are no quantities, which makes sense because services are not physical items. They also are only connected to a sales account and not a purchase account. 
With service items, you could set up service packages or hourly rates. 

Bundles

A bundled item is a group of items that were designed to be sold together. For example, if you sell a gift basket of coffee products, you would bundle the items used to create the basket.   

Assembly Items

An assembly item is a special type of inventory item where the quantity is tracked, but it differs from an inventory item in that it can’t be sold separately because it is a component and not a whole item.  Assembly items are available in larger accounting and inventory apps, such as QuickBooks Enterprise, and are used in conjunction with a Bill of Materials or other build feature.
An example is a set of shelves. The assembly components are the individual shelves and the frame pieces that you may want to keep counts of. An inventory item that contains the shelves, the frames, and other parts is “built” from the assembly items.  The nuts and bolts could be non-inventory items or assembly items, depending on whether you wan to keep count of them or not. 

Sales Tax Item

Sales tax is a very special type of item used on an invoice or sales receipt to calculate sales tax due on the order. In many accounting systems, it’s usually kept in a separate list from the other product and service items. Rates can be entered for each sales tax jurisdiction.

Other Items

Some systems have an “other” category to capture items such as freight, shipping, handling, and other add-ons to the sale. 

Tracking Profitability

Setting up the right type of products and services is critical to matching costs and revenue for accurate insights into gross margin. This section of your accounting system is also the one that’s most different from industry to industry and company to company.

For best results when setting up Products & Services, be sure you get professional help from experts who know both the software and your industry for best results. Contact us to find out how we can assist you!

This is general information and should not be acted upon without first determining its application to your specific situation. Please contact us, your CPA or tax advisor for additional details.