Category Archives: Small Business Accounting

How to Prepare for a Small Business Audit

Audits are one of the many reasons we, as accountants, exist. They are extremely stressful for our clients and can make for an extremely difficult situation, even for the most ethical and detail-oriented small business.

Before we go on, let’s start with what an “audit” actually means: accounting-audit AK Burton PCAccording to www.businessdictionary.com it is a “Systematic examination and verification of a firm’s books of account, transaction records, other relevant documents, and physical inspection of inventory by qualified accountants (called auditors). Quality control: Periodic (usually every six months) onsite-verification (by a certification authority) to ascertain whether or not a documented quality system is being effectively implemented.

In other words, it’s a detailed examination by auditors of a small business’s ledgers, statements and any other accounting records that the business uses. It may take days or months to complete, depending on the depth and volume of records.

So, now that you have an idea of what an audit means, let’s talk about Five Ways your Small Business Can Prepare for an Audit:

  1. Communicate with the accounting firm directly: The accounting firm doing the audit is not your enemy. They are only there to do the audit and submit a report. They are an objective reporter, not out to “get” your business. So, setting the tone with the firm and asking them for an itemized list of all records and documents needed will benefit you and them. Have them send a checklist which your company can use as an inventory list. Lastly, assign someone from your company as dedicated point of contact. Your staff person should have access to all the documents needed and be a friendly and helpful resource for the auditors.
  2. Provide a General Ledger: This is usually your Quickbooks account. You can export it to Excel and then send it to the auditor. This ledger will clarify for your auditor what documents they need to audit.
  3. Provide a Trial Balance: This can also be found in your Quickbooks account. Most auditors depend a lot on this information as all the numbers in your balance are traced back to the trial balance. It should also be on an Excel document.
  4. Copies of Loans, Contracts and Leases (if any): This one is truly a matter of accuracy. Your auditors need to see long- and short-term contracts with vendors to see if they contract match up with statements (Includes buy-sell agreements, too.) Loans mean any bank-related or other types of loans which were used by your business. Leases, if any, are important as they require the minimum monthly lease payments.
  5. Board Minutes: This one is often-forgotten but may be a crucial element in the accuracy of the audit report. These board meeting notes contain details on hiring, terminations, acquisitions, sales, statements and other pertinent information from that auditing year up to the present date. All notes including budget and administrative reports need to be included. These documents is one of the easiest to collect, too.

There are more steps to take but this is a good start. We will publish a sequel blog to this one with more details on what to do in the near future.

If you’d like more details on how our company can do your small business audit or assist you with it, contact us at A. K. Burton, PC. We can provide all of your private and business accounting needs. Call us at (301) 365-1974 for more information.

 

Four Quickbooks Tips and Tricks for 2017

When you hear the word “Quickbooks” does it send a shiver down your spine? Do you reflexively spill your mocha on your laptop keyboard? Kick the sides of your accounting files cabinet in disgust?

Well, we can understand your frustration with Quickbooks, we have all felt it at some time or other. However, this is not your grandfather’s accounting program anymore.quickbooks-intuit A K Burtong PC

In fact, Quickbooks continues to improve its user experience and make it a positive experience for accounting veterans and small business owners (who do it all), alike. Quickbooks is actually easier now, we think.

And, since 2017 is just around the corner and Tax Season (our favorite time of year) begins January 1, utilizing Quickbooks’ many features is essential for us and both our small business and personal business clients. Now is the time to master this stuff.

So, here are Four Helpful Quickbooks Tips for 2017 that will prove extremely helpful:

  1. Schedule with it: The scheduling feature plans employees’ work schedules and can keep track of meetings, dates and now can schedule the mortgage payment. Deadlines can be automated and bills paid through it, too. It is amazing how much can be loaded into this feature so you have more free time to meet with present clients and solicit new clients.
  2. Utilize the “Undeposited Funds” account: This Quickbooks feature scared a lot of users because we just didn’t understand it, frankly. It’s quite simple though as this is used to track moneys deposited until the deposit is entered in Quickbooks. This is actually not that intimidating anymore and very helpful. Your monthly reconciliation is simpler now as the amount entered in Quickbooks will match (or should, anyway) the deposit amount on the bank statement. Forget doing it manually from here on out. This is truly not worth having nightmares anymore. It works like a charm.
  3. Changing Transactions: Once the absolute bane of accountants everywhere because it was too easy for company personnel to make (unwarranted or incorrect) changes, this feature is much improved now. You can change the settings and password protect the “Date Warnings” so you can restrict changes to a select few. This is a vast improvement and will reduce some major stress as you manage accounts.
  4. Merge all finances into one program: You should track all your bank statements and transactions and then reconcile Quickbooks with your other statements. Your accounting numbers will be up-to-date, then. You can do your income, credit lines, billing and bank statements here. All your data runs through one central location.

There are many more aspects of Quickbooks (and their many programs) that we can explore in future blogs. The New Year is coming and certainly there will be updates and improvements. We will definitely keep you informed.

In the meantime, utilize Quickbooks! It’s not as intimidating or aggravating as it once was. So, drink your mocha and repair the dents in your filing cabinet. Life for us Quickbooks users is better now and, dare we say, simpler.

If your business needs accounting & tax services of any nature, our team at A. K. Burton, PC, can meet all your private and business accounting & tax service needs. Call us at (301) 365-1974 for more information.