Cash vs. accrual reporting: Which is right for your business?

Small businesses often use the cash-basis method of accounting. As businesses grow, they usually convert to accrual-basis reporting for federal tax purposes and to conform with the U.S. Generally Accepted Accounting Principles (GAAP). Starting this tax year, the Tax Cuts and Jobs Act (TCJA) has increased the threshold for businesses that qualify for the simpler cash method for federal tax purposes. Here’s how these accounting methods compare and how the TCJA could affect your financial and tax reporting decisions.

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Hidden liabilities: What’s excluded from the balance sheet?

Financial statements help investors and lenders monitor a company’s performance. However, financial statements may not provide a full picture of financial health. What’s undisclosed could be just as significant as the disclosures. Here’s how a CPA can help stakeholders identify unrecorded items either through external auditing procedures or by conducting agreed-upon procedures (AUPs) that target specific accounts. Read More

Auditing Related-Party Transactions

Business owners generally prefer to work with entities they know and trust. But related-party transactions can provide opportunities for individuals to act in a manner that’s inconsistent with the interests of shareholders. That’s why auditors take pains to identify and properly address related-party transactions.

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Feeling Lucky? How to Find a Pot of Gold in your Financials.

Every business experiences occasional cash shortages. When this happens, owners often assume they should go out and sell more. But this strategy can sometimes compound money troubles over the short run. Why? The answer lies in a concept known as the “Cash Gap.” Understanding this concept can help your business generate extra cash to meet working capital needs. Here’s how… Read More

Understanding the Impact on Revenue Recognition and Inventory Based on International Shipping Terms

Understanding the Impact on Revenue Recognition and Inventory Based on International Shipping Terms

Does your company currently have international sales?  Do you plan to begin selling merchandise in an international marketplace now or in the future?  If the answer is yes, then having knowledge of when revenue is properly recognized is critical to accurate financial reporting.  Even if your company does not sell products internationally, you may be purchasing items from an international vendor. Understanding when the products become part of your inventory and when you are liable for them is equally important.

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Why Getting Your Finances on Track is Good for Your Business

Why Getting Your Finances on Track is Good for Your Business

Blackberry, Dell, and Banana Republic were once big iconic brands. They will also be known as the big business failures and cautionary tales unless, by some kind of economic miracle, one of them will bounce back and sweep the market off its feet again. There are a number of reasons for their collapse. But they are all related to a bad decision or a number of them that revolve around a complicated and finally disastrous financial structure. If you are a small business owner, it is about time you know your financial structure or you just might suffer the same fate.

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Tips for Choosing The Right CPA for Your Business

Choosing The Right CPA

Tips for choosing the right CPA for your business

The right certified public accountant can make or break your business. Errors in accounting can lead to the horrors of bankruptcy and might even send you to court for unintentional tax evasion.  Conversely, the right accountant can deliver smooth and successful business operations on your behalf. You must therefore be careful when hiring one. Here are some tips before you hire a CPA.

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Rarely used surprise audits, are reported as a leader in fraud detection

Detecting fraud

Surprise audits are one of the least-used forms of anti-fraud controls, but one of the most effective, according to a 2014 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE).

Only 29 percent of American companies who were victims of fraud in the ACFE study used surprise audits as a method of detection. Read More