How to Prepare for an Audit | GBACO's Essential Tips

Posted by Stephanie D. Wright, CPA on Nov 20, 2017 2:38:11 PM


2018 is fast approaching and with it comes busy season for auditors. If your company is subject to an audit (as of and for the year ending December 31, 2017) this means it is time to start preparing.  

Companies need audits for a variety of purposes and the accounting personnel of auditees vary in size, background, and experience. Suppose you are the owner of a construction company that's subject to an external audit for insurance purposes. Maybe you are the internal accountant of a larger company. Whatever the reason for your audit, or the position you hold, sometimes it can difficult to know how to best prepare for your audit.

If you are in charge of communicating with your external auditors, we advise that you review the following. Ask yourself if any of the tips below are applicable to you.  Being prepared will not only reduce the headache involved with finding the answers to your auditors' questions, but will also reduce the overall cost of your audit by increasing your auditors' efficiency. 

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Topics: Audit & Assurance, Tips for Preparing for an Audit

Federal and PA Tax Exempt Filing Requirements | Form 990 series and BCO-10

Posted by Patrick M. Rossiter on Nov 7, 2017 1:08:00 PM

Despite tax-exemption, nonprofit organizations are still subject to reporting requirements with taxing authorities, namely the Internal Revenue Service and various state revenue departments. For the Boards and Executive Directors of nonprofits, this means it's important to have a clear understanding of their organization and where it falls within filing requirements. 

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Topics: Nonprofit Filing Requirements, PA Nonprofit Filing Requirements, Form 990

QuickBooks Tips | Managing Cash Flow Using the Vendor Center

Posted by Lauri A. Lisanti, CPA, MAcc, CPS, Certified QB ProAdvisor on Oct 23, 2017 5:26:40 PM
Accounts payable is the outstanding bills a business owes money on. In many small businesses, the person who is responsible for paying these bills, will write out the checks as the bills come in or at predefined intervals (once a week, twice a month or even monthly).
Which is an acceptable practice. However, this can inhibit the business owner from having an accurate picture of the business's cash flow without calculating it manually or sorting through a large pile of papers. QuickBooks' accounts payable module, allows businesses to maintain their cash flow without the clutter or risk of not paying the bills on time. This also minimizes any surprises and the chance of affecting the business’ credit report adversely.
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Topics: Certified QuickBooks Proadvisor, Quickbooks Tips, Bookkeeping

Single Audits/Federal Audits/OMB A-133 Audits | Which is it? What is it? and Determining Who Needs One.

Posted by Jennifer A. Varley, CPA on Oct 9, 2017 10:50:00 AM

Which is it?

Entities that receive federal assistance (i.e. federal funds, federal grants, and federal awards) are subject to audits in order to ensure that the federal assistance programs are utilized in compliance with the federal government. Before 1984 these audits were performed per program rather than per entity. In other words, entities with multiple assistance sources were subject to multiple audits and the costs of those audits.

Single Audit:

For the sake of efficiency and cost-effectiveness the Single Audit Act of 1984 was passed. The act earned its name because its purpose is to consolidate these audits, allowing entities to receive one audit over all of their federal assistance.

Due to this act these audits are referred to as "Single Audits".

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Topics: Nonprofit Audit & Assurance, Single Audit, Audit & Assurance

QuickBooks Tips | How to Fix Duplicated List Items

Posted by Lauri A. Lisanti, CPA, MAcc, CPS, Certified QB ProAdvisor on Sep 18, 2017 4:19:00 PM

Using QuickBooks requires the creation and maintenance of lists such as customer, vendor, chart of accounts lists. Frequently, clients come across a scenario where they find duplications within these lists. For instance, they find two slightly different versions of the same customer or vendor.

Unfortunately, this can become a data management nightmare. Applying payments to a customer's account, pulling a report to determine if a vendor should receive a 1099, or posting a transaction to a general ledger account, etc. when there are active duplications in the necessary lists will result in potentially major errors.

This issue seems to be more prevalent when more than one person has access to the QuickBooks® data. One person may not see the name already created in the list by another individual and will proceed to create another. QuickBooks has a built-in feature to prevent this. A warning message should appear indicating the name is already in use and asks would you like to merge them. However, even the slightest variable in how the names are entered will bypass this feature. It only takes one small difference in the name to create a new one. An example is putting a middle initial in a name of an individual or a comma in the name of a business.

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Topics: Certified QuickBooks Proadvisor, Quickbooks Tips, Bookkeeping

The EZ way to Form a Charitable Organization

Posted by Stacey L. Schroeffel, CPA, MST on Sep 11, 2017 3:42:00 PM

In July 2014 the IRS released a new, easier version of Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code. 

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Topics: Nonprofit Organizations, Form 1023-EZ, Charitable Organizations, Forming a Nonprofit

QuickBooks Tips | Memorizing Transactions

Posted by Lauri A. Lisanti, CPA, MAcc, CPS, Certified QB ProAdvisor on Aug 28, 2017 4:55:45 PM

Businesses can make any number of transactions in a given year. A transaction being any business agreement or exchange that one makes with another person or business.  To minimize mistakes and increase efficiency business should utilize QuickBooks to memorize transactions.

QuickBooks Memorized transactions:

Instructions on memorizing QuickBooks transactions.

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Topics: Advice from a Certified QuickBooks Proadvisor, Quickbooks Tips, Bookkeeping

Real Estate Investments | The Cash Flow Approach

Posted by Derek M. Backa, CPA, CVA on Aug 14, 2017 5:36:37 PM
I recently went on vacation to the Outer Banks, a barrier island off the coast of North Carolina. It is a popular tourist destination, known for the wide expanse of beach front, state parks and unique history. Driving along the main road, a relative of mine, noted all the for sale signs on million dollar properties. I started wondering how many first time buyers had purchased these properties.
 
Perhaps these owners decided to purchase a property and then rent it out believing that the $8000 per week rentals would cover all their expenses and a mortgage payment. They may have expected to have a vacation spot without needing to pay any rent. When the property began needing repairs, maybe they realized that the rental season is too short to cover the real estate company's commission, the mortgage payments, utilities, and repairs.
 
What these potential first time owners discovered was that it costs more to keep the place up and pay the bills than the amount of rental income they receive. Ultimately, renting a place may be less expensive than owning. So these hypothetical owners put the house on the market, if they are lucky the property appreciated enough for them to recoup part of their cash outlay. If they aren't lucky and hit a down market (like the real estate market crash in 2009), they'll end up paying to get out from under the property.
 

Many of my clients ask me about real estate investment as a means to diversify their investment portfolio.

Real estate investments are easy to track and calculate net income compared to other business investment options and only require some upfront calculations to determine if they will be profitable.
 
Unfortunately, many real estate investors are first time investors who are emotionally devoted to finding their dream vacation home. In most of these situations this is a second home and not an investment. It’s important to not let emotions get in the way of doing the homework involved in real estate investing.
 
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Topics: Real Estate Investments, Cash Flow

QuickBooks Tips | Using Class Tracking

Posted by Lauri A. Lisanti, CPA, MAcc, CPS, Certified QB ProAdvisor on Jul 31, 2017 1:15:00 PM

What is QuickBooks Class tracking?

Class tracking is a feature in QuickBooks that enables you to keep track of your transaction data by creating classes to categorize them.  

What is a class?

Classes are assigned to transactions that relate to one another by category.  For instance, many clients have a need to track income and expenses by categories such as, department, business segment, location, etc.

This feature is the best way for a business to separate any significant segments of the business without having to add additional income and expense accounts to the general ledger.

Examples:

  • For profit companies may want to track multiple locations or divisions of the company.
  • Not-for-profit companies may need to track grants and restricted and unrestricted funds.
  • Any company doing business with a governmental entity can use classes to track fixed priced jobs versus cost plus jobs versus overhead.
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Topics: Advice from a Certified QuickBooks Proadvisor, QuickBooks Expert, Quickbooks Tips

Types of Business Entities | S Corporations

Posted by Rick J. Alfera, CPA, MST, PFS on Jul 17, 2017 4:48:18 PM


  Previously in this blog series, we discussed
sole proprietorships, partnerships, LLCs, and Corporations, and areas to consider when deciding on a business structure (read our first post in this series for more detail regarding these areas). In this post we'll be discussing S corporations.

What is an S Corporation?

A Subchapter S (S Corporation or S Corp.) is a form of corporation that meets specific Internal Revenue Code 1361 requirements, giving a corporation with 100 shareholders or less the benefit of incorporation while being a pass-through entity.  S corporations pass income directly to shareholders and avoid double taxation on the dividends of corporations, while still enjoying the advantages of the corporate structure. 

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Topics: Different Types if Business Entities, Structuring Your Business, S Corporations