Get your small business set for the new year

We strive to be the complete Small Business solution for all of your accounting needs, which is why we offer our payroll services at very competitive prices.  Our payroll services are customizable and are offered at a flat monthly rate so there are never any surprises with your small business's finances.  Use your preferred method of communication including call, fax, email or uploading time sheets.  Easily access your balanced books, access tip reporting, vendor payments and convenient W2 and 1099 production.

• Save time
• Better manage cash flow
• Employees can access services, like pay stub retrieval

Easily, securely, and conveniently take care of payroll issues! 

With flexible payroll options, you can choose a schedule that works for you. Weekly, bi-weekly, semi-monthly options for employees and contractors including direct deposit or checks.  Along with other payroll benefits.

• 401K
• Health Insurance
• Garnishments
• Tax Services
• General Ledger
• Workers Compensation Compliance

Employers have online access to a variety of reports and activities.  Employees have online access to their individual paystubs and W-2’s.  Everyone can pick up the phone and get a prompt and professional response to any payroll related question that arises.  Here are many of the commonly used features that we offer: 

• We can receive and distribute information via an online portal, e-mail, phone, fax, or in person at our office
• Pay employees with paper checks or direct deposit
• Automated filing of all quarterly and annual reports
• Automated payment via bank draft for tax remittance
• Both you and your employees have access to custom online dashboards
• We handle all types of employee deductions including pre/after tax health insurance, employee advance repayments, garnishments
• Tip reporting
• Compliance with tip-to-minimum

We love working with you! 

As always, we believe that our customer service is what gives us the edge over our competition.  If you have an issue with payroll, you don’t have to call an 800 number! Email, call us, or come to our office - we’re local! How many other payroll companies get to say that?


Basic Fees and Pricing

Basic Fees and Pricing: 

    $150   -    Setup Fee 

    $125   -    Monthly Payroll 

    $155   -    Semi-Monthly/Bi-Weekly Payroll 

    $195   -    Weekly Payroll 

    $3       -    Per employee, per month fee for total monthly employees over 10 

    $50     -    Annual W-2 base fee 

    $7       -    W-2 fee per employee

9 Avoidable Payroll Mistakes

Engaging employees allows your company to function and grow. But doing so puts employer responsibilities on your shoulders. Running afoul of these responsibilities can trigger penalties, and failing to take advantage of opportunities can cost you taxes, both of which can hurt your bottom line. Here are 10 payroll mistakes to avoid.

Payroll Mistakes to Avoid
Small Business Trends |  Nov 2, 2017  |  By Barbara Weltman

Giving Comp Time
When your non-exempt employees (generally hourly workers) work more than 40 hours in a workweek, you owe them time and a half. You can’t sidestep this obligation by giving them comp time (allowing them to take off the overtime hours worked). Doing so violates the federal Fair Labor Standards Act (FLSA).

Classifying Workers Improperly
If workers are your employees, you owe payroll taxes on their wages and taxable benefits. You can’t avoid these taxes by labeling workers as independent contractors if they truly are employees. Doing so can result in serious tax penalties as well as penalties from other federal and state agencies.  Check IRS guidance on worker classification.

Delaying Last Paycheck
When you terminate a worker or he or she quits, you owe a final payment. While federal law doesn’t require that you pay the worker immediately, state law may. Review the rules in your state. Violating these rules can result in penalties or even legal action.

Reimbursing Travel and Entertainment Under a Non-accountable Plan
If you reimburse employees for the cost of traveling or entertaining on company business, you may be incurring needless employment taxes if you don’t arrange the reimbursement properly. If they simply ask for reimbursement and you pay it, the reimbursement is taxable to them and subject to payroll taxes. If, however, you adopt an “accountable plan,” the reimbursement isn’t taxable to them and you don’t owe payroll taxes; you deduct the T&E expenses. To be an accountable plan, you need to follow IRS guidelines.

Paying Creditors Before the Government
If you’re experiencing a cash crunch, be sure to put the IRS at the top of your list. If you choose to pay the landlord or other creditors instead of first paying payroll taxes, you can become personally liable for all of these outstanding taxes, even if your business is incorporated or a limited liability company. Make payroll taxes a priority so you don’t trigger a trust fund recovery penalty.

Ignoring Unemployment Claims
When a worker leaves the company, he or she may apply for unemployment compensation. If the departure is voluntary, or the worker was terminated for serious misconduct (e.g., sexual harassment of a co-worker, being intoxicated on the job, stealing from the company), he or she isn’t entitled to unemployment compensation. If you fail to challenge erroneous claims, you may needlessly be paying higher state unemployment tax. Check with your state about how to challenge a worker’s erroneous claim for benefits.

Being a Bad Record Keeper
The law requires you to maintain payroll records and make them available to the IRS under certain circumstances. Usually, you must keep records for at least four years. These records include time sheets or other records of hours worked, expense accounts, copies of W-2s and I-9s, accident reports, and any other relevant payroll information.

Failing to Have New Employees Complete Form 8850
You can tell by looking at a new employee whether he or she is from a targeted group that would entitle you to claim the work opportunity credit. Have each new worker complete Form 8850, an IRS form. It is used to pre-screen workers for purposes of the credit. The form must be submitted to your state employment security agency (SESA) no later than the 28th calendar day after the date the member of a targeted group begins working for you. If you don’t, you can’t take the work opportunity credit even if you’d otherwise be entitled to it.

Missing Employment Posters
You are required to display posters for certain federal and state employment laws. If you fail to do so, you can be penalized. The amount depends on the type of poster that’s required to be displayed. Find the federal posters you need from the DOL’s Poster Advisor. Your state labor department can tell you which state law posters to use. Don’t pay an outside company for them. Download required posters from government websites.

Tax Planning Options for Year-End

Here are some great options for individuals looking to maximize their year-end tax planning!

With 2018 Fast Approaching, It's Time for Some Year-End Tax Planning Tips 

By Amy Neifeld Shkedy and Rebecca Rosenberger Smolen | November 02, 2017

As we approach the end of 2017, it’s a great time to start thinking about year-end tax planning issues. Rather than wait until the end of December, getting a head start on planning can improve your chances of concluding matters by Dec. 31. Here are some options that we suggest you consider before the end of 2017 to enable you to start 2018 in the best wealth planning shape possible:

• Annual Exclusion Gifts. Each individual can make a cumulative annual gift tax exclusion gift of $14,000 per donee during 2017, without using any portion of his federal estate and gift tax exemption. This annual gift tax exclusion amount is set to increase for the first time since 2013 to $15,000 in 2018. The federal estate and gift tax exemption is also set to increase from $5.49 million per individual this year, to $5.6 million in 2018 (allowing a married couple to shield $11.2 million from federal estate and gift taxes). Annual exclusion gifts can be made outright, through 529 Plan benefits (education savings accounts), or in special qualifying trust structures. For those still considering such gifts, it may be worthwhile to plan for 2017 and 2018 at the same time (noting the $1,000 increase in the exclusion amount for 2018), keeping in mind that gifts for 2018 can be made effective as of Jan. 1.
• Accelerate Deductions. Prepay deductible expenses due in January (including state and local income tax estimated payments which may not be due until January).
• Loss Harvesting. Harvest tax deductible losses to offset taxable gains for 2017. However, be mindful of the 30 day wash sale rule of Internal Revenue Code Section 1091, which could disqualify a deduction of the capital loss if the same, or substantially identical, security is purchased within 30 days after selling at a loss.
• Required Minimum Distributions. For those who have reached their required beginning date or who hold inherited IRA accounts, be sure to take your required minimum distribution for 2017 from your traditional IRA or qualified plan account by Dec. 31. Note that taxpayers who are 70 ½ or older are able to transfer up to $100,000 from an IRA (other than an inherited IRA) directly to a qualifying charity (a charitable rollover) in partial or full satisfaction of their required minimum distribution for 2017. This IRA charitable rollover law, which had formerly been a temporary measure, was passed permanently as of Dec. 18, 2015, by its inclusion in the Protecting Americans from Tax Hikes (PATH) Act of 2015.
• Qualified Retirement Plan Establishment. Business owners who are considering funding a new retirement plan have the opportunity to establish a qualified retirement plan by the end of the year but defer the decision about the funding amount (and the actual contribution) until later during 2018 (contributions can generally be delayed until at least Sept. 15). The limitation for tax deductible contributions for 2017 is $54,000 per participant for defined contribution plans (or up to $60,000 when including the $6,000 catch-up contribution for a participant who has reached the age of 50). Next year this cap will be increased to $55,000 (or $61,000 when including the $6,000 catch-up).
• Roth IRA Conversion. Convert a traditional IRA to a Roth IRA to take advantage of lower brackets or absorb excess deductions. All or any portion of the converted amount can be recharacterized to a traditional IRA on or before Oct. 15, 2018.
• Basis Step-Up Planning. For individuals who have funded “grantor” trusts for their families, year-end is a good time to consider swapping back low basis assets (e.g., appreciated stock) for high basis assets (e.g., cash) to help make tax reporting after the swap cleaner (rather than switch tax identification numbers in the middle of a tax year). It’s better to own the lower basis assets at death because of the opportunity for a basis step-up to fair market value under Internal Revenue Code Section 1014.
• Charitable Giving. If you are in a high income year, consider “prepaying” future charitable contributions to generate current income tax deductions. This can be accomplished simply by increasing the contributions to your favorite charities, in general, or you can defer the receipt by the charitable organizations you wish to benefit (or even defer the decision as to which ones to benefit) by contributing to a donor advised fund, a private foundation, charitable lead trust or charitable remainder trust or purchasing a charitable gift annuity.  Both the charitable gift annuity and charitable remainder trust options allow you to retain an income stream for life and defer the transfer of the remaining funds to the charity until after your death.
• IRAs and HSAs. While you technically have until April 15, 2018 to fund your Individual Retirement Account and Health Savings Account for 2017, it’s always a good idea to start planning for such funding at year end. Consider helping your children (to the extent that they have earned income) to fund tax favored Roth IRAs if at all possible. The maximum contributions for IRAs for both 2017 and 2018 is $5,500 ($6,500 for those who have reached the age of 50). The maximum family contribution for an HSA in 2017 is $6,750 (or $3,400 for individuals), with an extra $1,000 available for those who have reached the age of 55. For 2018, the maximum family contribution will increase to $6,900 (or $3,450 for individuals).
• Trust Income Tax Planning. While a trustee will generally have until 65 days after the end of the tax year to shift trust taxable income to a beneficiary, it’s worthwhile to monitor the issue at year end to get a jump start on evaluating the issue. This is becoming a more consequential issue with the Medicare tax imposed at 3.8 percent and the extra 5 percent tax which is imposed on dividends and capital gains at the higher brackets (which are reached pretty quickly for a trust).
• Estate Plan Review. Although it’s not necessarily year-end sensitive, the end of the year is a great time to review your estate plan to see if changes might be in order (whether because of changes in the tax law, your wealth, your chosen fiduciaries, or objects of your bounty). If you don’t review it at year-end, you might never review it before it’s too late, since you may not have any advance notice of the actual deadline.

Rebecca Rosenberger Smolen and Amy Neifeld Shkedy are members and co-founders of Bala Law Group. They focus their practices on tax and estate planning.

To view the original blog visit Law.com

A Small Business Owner's Guide to FLSA rules

As a small business owner, it's a big part of running your company to be current with fair labor laws and operational compliance - on top of everything else you have to do!  Instead of putting more on your plate, why not just have a reliable team of experts in your corner to ensure you're up-to-date with all your payroll compliance needs? From the HR Blog at Fuse, here are a few basics on Federal Labor Standard Act regulations.

What is FLSA coverage? Who is covered?

The Fair Labor Standards Act covers certain employees entitled to labor law standards like overtime pay and minimum wage. Employees with FLSA coverage have FLSA non-exempt status. Employees without FLSA coverage have FLSA exempt status. 

Employers pay exempt employees for the job duties they perform, not the hours it takes them to do the work. Therefore, exempt employees are not eligible for FLSA coverage and are not entitled to certain labor standards like overtime pay and minimum wage. There are several considerations that determine employee FLSA status including salary basis, salary level, and duties performed. 

How do you define FLSA status classifications?

FLSA NON-EXEMPT: The provisions of the FLSA cover non-exempt workers for minimum wage standards, overtime pay, and other labor standard protections. Employers must pay their FLSA non-exempt employees the federal minimum wage (at least) for hours worked. For all hours worked over 40 hours in a workweek, the employer must pay non-exempt employees overtime (time and one-half the regular rate of pay).

FLSA EXEMPT: Unlike non-exempt workers, FLSA coverage does not protect exempt workers. Employers pay exempt employees for the job they do, not the hours it takes them to do the work. Simply put, exempt employees are exempt from coverage.

In some cases, other federal labor laws override the FLSA. As a general rule, if another federal labor law governs a job, the FLSA does not apply.

How do you determine FLSA status?

First, you should determine whether the worker is an employee or independent contractor. If you define your workers incorrectly, you could be liable for unpaid taxes and fines.

The IRS provides three Common Law Rules for determining worker status. Is the worker an independent contractor or employee? Ask these questions:

1. Behavioral: Does the company control or have the right to control what the worker does and how the worker does his or her job?
2. Financial: Are the business aspects of the worker’s job controlled by the payer? (these include things like how worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc.)
3. Type of Relationship: Are there written contracts or employee type benefits (i.e. pension plan, insurance, vacation pay, etc.)? Will the relationship continue and is the work performed a key aspect of the business?

If the answer is ‘yes’ to these questions, your worker is probably an employee, not an independent contractor. Though, the IRS says there is no magic formula that determines status. The most important thing to look at when identifying a worker is the entire relationship between the worker and employer. Then, document all information about this relationship.

Once you have determined that your employees, you must now identify their FLSA status: exempt or nonexempt.

There are several considerations that determine employee FLSA status including salary basis, salary level, and duties performed. In order to determine employee FLSA status classification, an employer must answer the questions about the employee and his or her duties. The Department of Labor calls these questions the FLSA exemption test.  

FLSA Exemption Test

To classify employee FLSA status, you must answer the following questions:

1. Does the employee earn a salary?
2. How much does the employee earn per week or per year?
3. Does the employee’s role require certain responsibilities or functions that the Department of Labor considers exempt duties?

While there are a few exceptions, employees must meet all three of the tests above to be considered exempt from FLSA coverage (meaning NOT covered by the FLSA). There are some exceptions, however, where other federal labor laws override FLSA coverage. The FLSA states that, as a general rule, if a job is governed by another federal labor law, the FLSA does not apply. 

An employee passes the FLSA exemption test if:

• The employee receives pay on a salary basis.
• The employee earns at least $23,600 per year or $455 per week. (If the DOL's Final Rule takes effect, the threshold will increase to $47,476 per year or $913 per week.)
• The employee performs exempt job duties.

The DOL’s exempt duties typically include these roles:

• Executive
• Administrative
• Learned Professional
• Creative Professional
• Computer Professional
• Outside Sales

Salary Basis Test

Is the employee paid on a salary basis?

An employee paid on a salary basis earns a guaranteed minimum amount of payment for any amount of work done in a given week. This minimum payment includes accrued PTO days for vacation and sick days. Salaried employees may earn above the guaranteed minimum amount of pay through bonuses or other incentives but they may never earn less. 

There are permissable and impermissable reductions in salary basis level for employees. Permissable reductions could include docked pay due to disciplinary suspension or an employee taking more sick/personal days than he/she has accrued. This does not affect an employee's FLSA exempt status. If an employer docks an employee's pay for impermissable reasons (and the employee does not reach the guaranteed minimum amount of payment), it would have an effect on that employee's FLSA status and the employee would be classified with FLSA nonexempt status. 

Salary Level Test

Does the employee earn above the salary threshold? 

If an employee earns a salary above the FLSA threshold of $23,600 per year ($455 per week), the employee is exempt from overtime pay and other FLSA coverage. Remember, if the DOL's new overtime rule takes effect, it will increase this threshold to $47,476 per year ($913 per week).

Duties Test

Does the employee perform "white collar" exempt duties?

The Department of Labor determines exempt duties based on the primary duty and other duties the employee does in his or her job. This is not determined by the employee's job title or description but by the actual work performed. White collar exempt duties typically fall under roles such as executives, administrators, and other professional positions requiring certain degree levels or high-level work.

“Primary duty” as stated by the Depratment of Labor means the principal, main, major, or most important duty the employee performs. Determination of an employee’s primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee’s job as a whole.

Executive Exemption

The Executive Exemption includes the following responsibilities:

• Regular supervision of at least two or more other full-time employees.
• Management as the primary duty of the job.
• Has input in other workers' employment such as hiring, firing, and promotions.

Some examples include CEOs, mid-level managers, and shift managers.

Learned Professional Exemption

The Learned Professional Exemption includes primary duties which require advanced knowledge in order to perform including:

• Consistent exercise of judgment and discretion
• Advanced knowledge in the field of science or learning (including law, medicine, accounting, theology, actuarial computation, teaching, architecture, pharmacy, and other occupations distinguished from mechanical arts or skilled trades)
• Advanced knowledge acquired by a prolonged course of specialized instruction.
• Required to analyze, interpret, or make deductions from varying facts or circumstances. 

Note: The DOL states that advanced knowledge cannot be attained at the high school level.

Some examples include lawyers, doctors, teachers, accountants, and clergy.

Administrative Exemption

The Administrative Exemption includes the following primary duties:

• Office or non-manual work directly related to business operations or management
• Exercise of judgement and discretion 
• Support production or line employees and keep the business running without engaging in the production or sales of the actual product or service of the business.

Some examples include Human Resources, Payroll, Benefits Management, Marketing, Public Relations, and certain computer-related jobs. Read more about the FLSA Computer Exemption here.

FLSA and overtime rules FAQs

What is Back Pay?

Back pay is a retrospective payment relating to a prior pay period. This typically happens due to salary increase or incorrect rate of pay in the cases of minimum wage and overtime pay.

Here is a guide from the Department of Labor on FLSA methods employees may take to recover unpaid minimum wage or overtime pay:

(1) The Wage and Hour Division may supervise payment of back wages.

(2) The Secretary of Labor may bring suit for back wages and an equal amount as liquidated damages.

(3) An employee may file a private suit for back pay and an equal amount as liquidated damages, plus attorney's fees and court costs.

(4) The Secretary of Labor may obtain an injunction to restrain any person from violating the FLSA, including the unlawful withholding of proper minimum wage and overtime pay.

If an employee has received any back pay wages under the Wage and Hour Division or the Secretary of Labor has filed suit to recover lost wages, the employee may not bring suit under the FLSA.

What is considered work?

According to the FLSA (and the courts), “work” includes all time spent performing job-related activities which (a) genuinely benefit the employer, (b) which the employer "knows or has reason to believe" are being performed by an employee, and (c) which the employer does not prohibit the employee from performing. These can include activities performed during "off-the-clock" time, at the job site or elsewhere, whether "voluntary" or not.

What is overtime?

FLSA sets a threshold of hours to be worked in a single seven-day workweek at 40 hours. Any time worked over the threshold is considered overtime. Some jobs like, medical or government, may have different thresholds.

When should overtime be paid?

Unless an employee is exempt from FLSA coverage, an employee must receive overtime pay at the rate of time and one-half the regular rate of pay for any amount of time worked over 40 hours in a single workweek. Overtime pay is due in the corresponding pay period for which the overtime work was performed.

Is it illegal to work ‘off-the-clock”?

Yes! Any work performed off-the-clock is illegal. Workers should be paid for any hours worked, whether or not that work is counted on a timesheet. Even work that is not specifically requested but allowed must be compensated. Some of the most common types of the off-the-clock work include:

• Preparation like prep work to open a restaurant before a shift begins or transferring equipment to a worksite.
• Post-shift work that “should have” been completed during the time of the shift.
• Rework a project to correct errors or when project objectives change.
• Administrative work such as paperwork or follow up, even employee training.
• Waiting for work when nothing is immediately available and workers are required to wait for a task.

Under the FLSA Statute of Limitations, how long does an employee have to file a claim for unpaid overtime wages?

With the impending changes to overtime rules, employers and HR managers should be familiar with the rules of FLSA procedures, specifically the FLSA statute of limitations. Do you know how long your employees have to file a lawsuit for unpaid overtime wages?

The basic answer is two years-to-date after the wage violation, unless the employer willfully violated the FLSA, in which case the employee has three years to file.

If the employee experienced ongoing wage violations (not just one time), he or she will only be able to recover unpaid wages (called back pay) for the two years prior to filing the claim.

What is the difference between a wage claim and a lawsuit?

Employees may file a wage claim with the Wage and Hour Division of the DOL and, in some states, employees may be able to file with their state department of labor. A claim does not involve the court system, whereas a lawsuit does. If the claim cannot be resolved, the employee may file a lawsuit—if there is still time under the FLSA statute of limitations. A lawsuit may occur if the claim could not be resolved or if the claim was impractical, in which case an employer may take the suit to court.

Note that some states have different requirements for filing wage claims. In Delaware, for example, employees must file wage claims at least 90 days before the FLSA statute of limitations ends. In New Jersey, employees may claim wages worth $30,000 or less.

FLSA changes to overtime rules have consequences for many businesses in the U.S. Human Resources needs to know all the ways employees may claim back pay for overtime or off-the-clock work and what they could be entitled to under the FLSA statute of limitations.

The original article can be found here!

Upcoming Tax Deadlines for Small Business & Individuals

October is a big month for Small Businesses and Individuals alike!

Monday, October 16th

• C corporations: File calendar year Form 1120 if you timely requested a 6-month extension
• Individuals: File Form 1040, 1040a, or 1040EX if you timely requested a 6-month extension 

Tuesday, October 31st

• File Form 720 for the third quarter.
• File Form 230  and pay tax on wagers accepting during September
• File Form 2290 and pay the tax for vehicles first used during September
• File Form 941 for the third quarter
• Deposit FUTA owed through sep if more than $500 

The Small Business Owner in One Infographic

A great overview of what the small business owner deals with every day! They are pulled in a million different directions on a daily basis - putting out fires, daily operations, employee management, customer service, overworked and not enough time in the day!  According to this infographic from Small Business Trends, 39% of owners find paperwork to be the biggest time waster.  However, it's a necessary evil that no one escapes from! Make it easier on yourself and hire an accounting firm that has your back!

National Payroll Week Offer for Small Business

We are continuing to expand our services even broader to be THE full-service small business accounting firm preferred by RVA!  Payroll is a must with most small businesses and also one of the biggest hassles.  A time-consuming and often costly task that won't go away week after week.  Which is why, in honor of National Payroll Week (September 4-8), we will be offering a special promotion to new Payroll clients and those that refer them to us!

New Clients:

• If you sign up before September 30th your one-time setup fee of $150 will be waived!

Referrals:

• If you refer a small business to us for Payroll Services and they sign up by September 30th, we will send you a $50 rebate check!

We work with our clients to maintain a payroll system that gets our clients as close to a “push button” payroll as possible.

Our clients submit their employee hours, change in pay or new hires in a variety of ways and combinations.  We’re set up to work with them all: e-mail, fax, phone, mail, online entry, and even by stopping by our Richmond office.

Employers have online access to a variety of reports and activities.  Employees have online access to their individual pay stubs and W-2’s.  Everyone can pick up the phone and get a prompt and professional response to any payroll related question that arises.  Here are many of the commonly used features that we offer:    

• We can receive and distribute information via an online portal, e-mail, phone, fax, or in person at our office
• Pay employees with paper checks or direct deposit
• Automated filing of all quarterly and annual reports
• Automated payment via bank draft for tax remittance
• Both you and your employees have access to custom online dashboards
• We handle all types of employee deductions including pre/after tax health insurance, employee advance repayments, garnishments
• Tip reporting
• Compliance with tip-to-minimum

Basic Fees and Pricing:

$150       Setup Fee

$125       Monthly Payroll

$155       Semi-Monthly/Bi-Weekly Payroll

$195       Weekly Payroll

$3           Per employee, per month fee for total monthly employees over 10

$50         Annual W-2 base fee

$7           W-2 fee per employee 

The Many Hats of an Accountant

There are so many facets of an accountant's role in Small Business, the first of which is to get to know yours!  Understanding the different needs of different small businesses is vital to our role in helping them be successful - there is no one-size-fits-all solution as you can read about in the unique solutions we found for Paisley & Jade.  This article sheds light on the many ways we can help you!

Shutterstock

It's a Bird, It's a Plane: The Four Financial Superheroes That Will Benefit Your Small Business
By: Bryce Welker
Forbes.com

Accountants are no longer confined to “bean-counting” tasks. The days of pocket protectors and short-sleeved shirts with ties are long gone. Now, accountants are viewed as superheroes (or violent hitmen if you’ve seen the Ben Affleck movie, The Accountant) who save businesses from financial risks and lead monetization efforts.

Having an accountant by your side as you make business plans for the future is the best way to ensure you are protected from any potential financial dangers. An accountant’s detailed knowledge of trends or tax laws, and his or her fiscal expertise, in general, will take down any villainous threats that could be looming on the horizon.

Not all businesses need a traditional accountant but having someone on your team who really knows finance can help you in a variety of ways. They can act as an advisor who can improve ineffective operational systems that cut company margins. If you are showing quarter-over-quarter growth, you may not be aware of any waste in the design of company procedures. An expert in money management will be able to easily spot inefficiencies and find ways to lower expenses or increase sales.

I realized my accountant was my hero when I began to have more and more time at work after delegating to him. Even though I had accounting knowledge, I needed to concentrate on running other areas of the company. As a CPA and CEO, I knew I had an advantage over other CEOs when it came to financial planning, but I didn’t want to devote too much of my workday to those tasks. An accountant can help with anything from preparing client proposals to pinpointing risks in need of mitigation. A skilled accountant can find missed deductions or help avoid a costly audit by carefully preparing tax filings. And with the changing times, accountants’ roles are also evolving every day.

The Changing Role Of The Accountant

Obviously, key accounting tasks like bookkeeping remain a focus. But technological advancement has prompted a shift away from strictly dealing with numbers to providing broader services that not only calculate, but also analyze. Now, accountants can act as specialists in many areas of business, and clients are welcoming this type of support.

Not all accountants wear capes and wield calculators. Let’s look at some of the undercover financial superheroes:

1. Business Analysts: Accountants are constantly working with data, like the company’s profits and losses. This data is one part of a larger puzzle. Look for a specialist who has the ability to see the details and the bigger picture. The powers of a business analyst can help you synthesize the company’s data and determine how different initiatives fit together. A good business analyst needs to have a strong background in accounting and a knowledge of programming languages like Python.

2. Entrepreneurs: Throughout an accountant’s career, they will experience different business needs and meet all sort of clients. An accountant will start to see the gaps for products or services that don’t exist. And that’s exactly what happened to me: I was a CPA and entrepreneur when I saw a niche that had a need. By having a strong understanding of financial implications when starting a business, accountants can become very successful entrepreneurs. So if you have aspirations to become a entrepreneur, start with a foundation in finance.

3. Investor Relations Specialists: Accountants make great investor relations specialists because of their background in finance and their ability to quickly understand and strategically communicate all elements of the company to different audiences. Look for an investor relations specialist with top-notch communication, analytical and reporting skills if you struggle with clear communication between your company and investors. Not all businesses need this type of specialist.

4. IT Specialists: Like many other things in this world, a lot has changed with technological advancements. Software and information systems play a critical role now more than ever. And in order for any business to be efficient, they need to integrate IT into their business. An accountant's knowledge and experience with multiple IT systems can offer companies valuable insight that can increase efficiency. IT specialists can advise and guide a business on its IT choices and ultimately save the company money by creating more effective systems.

You might not think you need an accountant in the traditional sense. But there are so many ways financial know-how can benefit your company. A CPA will be able to fit into most positions, given their experience and expertise. Even if you don’t have an immediate need, consider opening a line of communication with a CPA who you may want to bring on in the future, at least part time. If your business is growing, it's a smart choice.

Paisley & Jade: Unique Solutions for a Unique Business!

Paisley & Jade, a vintage and specialty rental company, will celebrate their 5th Anniversary of being in business this summer. As a specialty prop house their warehouse stores furniture, accessories, some in-house made specialty items, and lots and lots of chairs! Annually, they supply a gamut of events from weddings, to trade shows, to film, theatre and ads.  Perkins Morgan and Morgan Montgomery, the co-owners of P&J call it, “Hoarding with a business license.” Now that Spring has arrived and events are around every corner, their feet barely hit the ground.  With schedules, logistics and a warehouse of goodies to keep track of, it left the owners little time to worry about their small business accounting needs. After going through a “handful of doozies,” they reached out to Accounting Works owner, Stephen Fishel, to find the solutions they desperately needed.

Photo Credit: Michael Thompson, RichmondBizSense.com

With such a unique and seasonal business, they had some interesting accounting challenges to face. Both Morgan and Perkins knew Stephen as the accountant for a local catering company, where the pair worked prior to starting P&J. After being frustrated with previous accounting firms’ approach, they contacted Accounting Works.




"Something he said always stuck with me," recalled Morgan, “He said that he could always advise on what the right financial decision is, but that might not be the right business decision.”

A custom table top designed and fabricated in-house.

They’ve been working with him for over a year now and couldn’t be happier.

“Off the bat, he offered to come to us, which is huge.” Said Perkins, their previous experience had been with accountants trying to stuff their business model into the rigid guidelines of the way they did things, not the other way around. They recalled a placard mounted in one office that read ‘You can’t fix stupid.’ And that’s how they felt, “They hated questions, they thought we ‘didn’t get it,” and after contacting Stephen, he “apologized for our bad experience,” they said laughing. “We just love Stephen, our meetings with him he makes really fun, jovial and personable.”

Photo Credit: KatelynJamesBlog.com

Morgan had a two-page bullet point list of things they needed to change or fix with their accounting practices.  “We struggled with HOW to do our bookkeeping,” they said, “one trip to Lowe’s could have 10 different categories on one receipt; asset purchase, office supply, warehouse supply…” but after working with Stephen, they came up with a custom method that was much more streamlined, with “way less of a delay to crunch month-end numbers.”

According to the P&J duo, their cash flow improved as well, “he did a great job researching because it’s such a niche business.”  Cash flow is critical to year-long survival for any business with seasonal variability.  “Other accountants blindly guessed, but he took the time to get to know us.”  They noticed an immediate flexibility of resources once they started working with Stephen and implementing the systems they put in place.

A wall of decorative accessories is every designer's dream.

Like Paisley & Jade, many small businesses struggle to find accounting solutions to fit their needs.  And like Paisley & Jade, it’s okay not to fit in one particular box or another! Diversity is the spice of our Richmond community, which is why Stephen of Accounting Works has dedicated his practice to finding practical solutions for small businesses!

What You Need to Know About Robo-Advisers

As our society continues to automate, Robo-Advisers have become a mainstay in the financial sector. Basically, Robo- Advisers are computer programs that use algorithms to provide investment advice. This article from the Journal of Accountancy gives an overview of the service and what to watch out for.


By Ken Tysiac
February 23, 2017

Robo-advisers represent a substantial segment of the financial services industry, and their rise presents challenges to the investment advisers who operate them and the investors who use their services.

Popular especially with younger, tech-savvy investors, robo-advisers use computer algorithms to provide investment advisory services online, often with limited human interaction. These services may charge lower fees but may not provide the level of personal service that traditional investment advisers deliver.

Information and guidance related to robo-advisers for both investment advisers and investors was published Thursday by the SEC.

The SEC’s Division of Investment Management issued guidance for investment advisers on meeting disclosure, suitability, and compliance obligations under the Investment Advisers Act of 1940. The guidance includes suggestions that a robo-adviser:

Should consider providing clients with a statement that an algorithm is used to manage individual client accounts, a description of the algorithmic functions used, and a description of the assumptions and limitations of that function.
May wish to consider whether its client questionnaires elicit sufficient information from clients to conclude that its investment advice is suitable and appropriate for the client.
Should consider adopting written policies and procedures in addition to those that address issues relevant to traditional investment advisers. Additional policies and procedures may address areas such as the development, testing, and backtesting of the algorithmic code; disclosure to clients of changes to the algorithmic code that may affect their portfolios; and cybersecurity issues.
Meanwhile, the SEC’s Office of Investor Education and Advocacy issued an investor bulletin containing information investors may need to make good decisions if they consider using robo-advisers. According to the bulletin, investors may wish to consider:

• How much human interaction is important to them, their level of financial literacy, and how often they will have contact with the robo-adviser.
• What information the robo-adviser is using to create its investment recommendations.
• What the robo-adviser’s approach is to investing.
• What fees and costs the robo-adviser will charge.
• Information about the robo-adviser’s licensing and registration.
• “As technology continues to improve and make profound changes to the financial services industry, it’s important for regulators to assess its impact on U.S. markets and give thoughtful guidance to market participants,” SEC Acting Chairman Michael Piwowar said in a news release.

—Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.

Oscars Mistake Threatens Reputation of PricewaterhouseCoopers

If you saw the Oscars last night you know... and even if you didn't you have probably heard by now. For the first time in 83 years, the Oscars botched the Best Picture winner announcement.  What's interesting to me is that PricewaterhouseCoopers are the ones taking the blame.  Check out this article  from the New York Times that breaks down what happened and why.

What went wrong?

Hollywood and movie lovers were reeling on Monday, trying to understand how PricewaterhouseCoopers, the accounting firm that oversees the voting, mistakenly allowed the Academy Award for best picture to go to “La La Land” Sunday night when “Moonlight” was the real winner. Details were still coming together on Monday, but several factors may have contributed to the error.

There are two identical sets of envelopes, handed out from either side of the stage.

The envelopes’ design was changed this year, to red paper with gold lettering, which may have made them harder to read.

And then there is simple human error, in the crucible of one of the most highly anticipated television moments of the year — the announcement of the best picture Oscar at the end of the ceremony.

It all added up to a nightmarish several minutes for PricewaterhouseCoopers.

For 83 years, the company has performed this task without any major snafus. But in one of the most astonishing moments in Oscars history, chaos engulfed the stage of the Dolby Theater in Hollywood, after “La La Land” was named the top picture. As the film’s producers were making acceptances speeches, awards show staff rushed onstage and began searching for the envelopes.

PricewaterhouseCoopers had given the presenters, Faye Dunaway and Warren Beatty, the wrong envelope.

The stunning reversal instantly became the central theme of the Oscars, repeated endlessly on television and swamping social media. And just as quickly, PricewaterhouseCoopers, one of the so-called Big Four accounting firms, had a major brand crisis on its hands.

“Not since Janet Jackson and her wardrobe malfunction on the Super Bowl have we seen something quite as glaring as this snafu,” said Andrew D. Gilman, chief executive of the crisis communications firm CommCore Consulting Group. Although most of PricewaterhouseCoopers’s clients are aware that mistakes can happen, “the name of the firm has unfortunately been a little sullied,” he added.

The two identical sets of sealed envelopes are stationed on either side of the stage. The two PricewaterhouseCoopers partners who oversee the voting process, Martha L. Ruiz and Brian Cullinan, each have a briefcase with a complete set of the envelopes.

The envelope for best actress, the penultimate award of the night, came from one side of the stage.

After Emma Stone accepted that honor, Ms. Dunaway and Mr. Beatty came out to present best picture award. But they were handed an envelope from the other side of the stage, where the other best actress envelope was still unopened.

And Mr. Cullinan, who handed Mr. Beatty the envelope, clearly picked the wrong one.

After Mr. Cullinan and Ms. Ruiz realized that the wrong winner had been announced, they notified the stage manager, which set in motion a chaotic scene watched by the celebrity crowd in attendance and tens of millions of viewers on television.

Yet it still took more than two minutes between Ms. Dunaway announcing “La La Land” as best picture and an announcement from the “La La Land” producers that “Moonlight” was in fact the winner.

Why the wrong envelope was handed off is not yet clear. But it could have to do with the design. The envelopes containing the winner’s names were redesigned this year, and they featured red paper with gold lettering that specifies the award. Last year’s envelopes featured gold paper and red lettering, which may have been more legible. The Academy of Motion Picture Arts and Sciences, not PricewaterhouseCoopers, is responsible for the design and procurement of the envelopes.

Those details, provided by people familiar with the process who spoke on the condition of anonymity because the episode was still being investigated, helped clarify some of what happened onstage on Sunday night.

PricewaterhouseCoopers declined to comment beyond the statement it put out early Monday morning accepting responsibility for the mix-up and apologizing to those involved.

“The presenters had mistakenly been given the wrong category envelope and when discovered, was immediately corrected,” the firm said in its statement. “We are currently investigating how this could have happened, and deeply regret that this occurred.”

PricewaterhouseCoopers, a privately held company, reported sales of $36 billion during its last fiscal year, up seven percent from the previous year. Revenue from the entertainment and media sector account for just 4.2 percent of sales. Based in London, the firm employs more than 220,000 people and provides accounting, tax advisory and consulting services to most of the world’s largest corporations.

The company promotes the firm’s longstanding relationship with the Academy Awards on its website.

One video posted there, introducing the leaders who oversaw this year’s ballots, began with the line: “The reason we were even first asked to take on this role was because of the reputation PwC has in the marketplace for being a firm of integrity, of accuracy and confidentiality.” It went on to note that the relationship was “symbolic of how we’re thought of beyond this role and how our clients think of us.”

The two PwC partners who oversee the Oscars' voting process Video by PwC US
This is not the first time an incorrect winner has been announced at the Oscars. In 1964, Sammy Davis Jr. announced the wrong winner for the best music score. But he quickly realized his mistake, before an erroneous winner was giving an acceptance speech.

“They gave me the wrong envelope,” Mr. Davis said at the time. “Wait till the NAACP hears about this.”

He soon had the correct envelope in hand and announced the correct winner. “I ain’t gonna make no mistake this time, baby,” he said.

But never before has PricewaterhouseCoopers made such an enormous mistake at such a pivotal moment during the Oscars.

“I’m sure there will be a logical explanation for what happened, but they’re going to be the butt of jokes for late-night TV for at least a week, there will be memes written, and I think it’ll be interesting to see if they hold on to their contract,” Mr. Gilman said. “They have branded themselves around this event saying, ‘We’re trusted’ — that’s the implication. Now, I think that will take a hit.”

Original article by By David Gelles and Sapna Maheshwari of The New York Times


Correction: February 27, 2017
An earlier version of this article misidentified the location of the Dolby Theater. It is in Hollywood, not downtown Los Angeles.

Key Accounting Issues for 2017

4 Key Accounting Issues to Watch in 2017
Terry Sheridan
Jan 11, 2017
accountingweb.com

As if 2017 doesn’t promise enough drama and change already, the accounting profession is poised for a year brimming with expected regulatory issues and scrutiny.

Bloomberg BNA recently released its 2017 Tax & Accounting Outlook report that covers the gamut of legislative, state, international, and tax administration issues. But it also highlights the following four key accounting issues that could impact practitioners and companies in the new year.

1. Banks and credit losses. New rules on the reporting of loans and other credit losses portend one of the biggest changes ever in the financial accounting of banks and other companies, the report states.

Under Accounting Standards Update (ASU) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was issued by the Financial Accounting Standards Board (FASB) last June, banks and other lending institutions will be required to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

The “current expected credit loss model,” the core of the new standard, replaces the long-standing accounting model shaped around incurred losses.

This year “promises to be a period of preparing for the sweeping modifications in accounting for credit impairments,” the report states. “Companies have to assess what information must be assembled to shift to the new standard.”

Companies that file reports with the US Securities and Exchange Commission (SEC) will apply the new rules beginning in January 2020. Smaller and private companies have until 2021.

“Work that led to the credit losses rules of FASB and the International Accounting Standards Board was spurred by the 2008-09 financial crisis,” the report states. “Working in tandem for several years, the two boards sought to remedy the widely seen problem of recording loan losses ‘too little, too late.’”

2. Insurance. Life insurance and annuities are complex as it is, and a FASB proposal to change insurance accounting rules “brings hurdles, because of challenges inherent in the sector as a whole,” the report states.

Overall, the proposed ASU, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, seeks to modernize an accounting model dating back more than 35 years that doesn’t address the newest insurance products, Bloomberg BNA says. FASB contends that better and more consistent information will result.

Companies will need more data, which means more IT, internal controls, and more people in an industry that’s already faced cutbacks.

The proposal, which was issued last September, is expected to most affect traditional life insurance companies that issue long-term care policies and disability income, sell participating contracts, and sell products with market risk benefits, such as variable universal life and variable annuities, the report states.

Trouble spots include financial reporting projecting 30 years outward; how companies account for market risk benefits, like variable annuities; and disclosures.

Look for a FASB public roundtable early this year on the proposal and at least some changes to be made final later in the year.

3. Non-GAAP financial reporting. Will the SEC’s intense scrutiny of non-GAAP financial reporting continue this year? That’s the big question, according to Bloomberg BNA. A “flurry” of cautionary letters is expected, says one SEC staffer in the report.

Proponents of non-GAAP reporting indicate that its use can tell a better corporate story than GAAP, particularly in earnings reports. Whether the FASB will get involved isn’t clear, but at least one industry source in the report indicates that the board might want to begin by considering what issues lead to non-GAAP reporting.

When Bloomberg BNA recently asked SEC Chief Accountant Wesley Bricker whether the commission would continue to aggressively address non-GAAP reporting in 2017, he said, “I am confident that the commission will remain focused, as it always has, on the appropriate administration of the securities laws.”

4. Auditor disclosure rules. New requirements in audit transparency and a revamp of the auditor’s report are coming, courtesy of the Public Company Accounting Oversight Board (PCAOB).

Beginning on Jan. 31, audit firms must disclose the name of the audit engagement partner in the new PCAOB Form AP, Auditor Reporting of Certain Audit Participants. The form also will disclose other accounting firms that participated if they did at least 5 percent of the total audit hours. Foreign countries already require this.

“US auditors have vehemently opposed this requirement for liability reasons,” the report states.

Audit firms will have until June 30 to disclose the other firms’ participation.

A proposed revision to the auditor’s report will require auditors to explain “critical audit matters,” which PCAOB members initially described as “those matters that kept the auditor awake at night,” the Bloomberg BNA report states.

The board also wants experienced or “lead” auditors to supervise inexperienced auditors instead of simply signing off on their work.

The report cites an email from Larry Shover, a member of the PCAOB’s Investor Advisory Group, in which he states that the supervision of other auditors is the most significant of all the board’s projects to investors.

6 Tax Deductions Homeowners Won't Want to Miss

Last year was a big year for Richmond's Real Estate Market! If you bought a home, you know how expensive it can become.  Take advantage of all that's afforded you this tax season, and deduct some of those homeownership costs!

6 Tax Deductions Homeowners Won't Want to Miss
By Maurie Backman, January 4, 2017

Though there are plenty of good reasons to buy a home, owning property can be a costly prospect. From maintenance to insurance to real estate taxes, there are numerous costs that come with buying a home. But one major upside to homeownership are the tax benefits that come along with it. If you're a new homeowner, here are six deductions you don't want to miss out on.

1. Mortgage interest deduction
Looking at your mortgage statement can be a demoralizing prospect during the early years of homeownership, especially once it becomes obvious that the majority of your payments are going toward the interest portion of your loan and not its principal. But before you get too down, remember: That interest will serve as a helpful tax deduction when the time comes to file your taxes. You can deduct interest on up to a $500,000 mortgage as a single tax filer or $1 million as a couple filing jointly.

2. Home improvement loan interest deduction
Looking to spruce up your home? You might get a tax break for it. If you borrow money for the purpose of making home improvements, you can deduct whatever interest you pay on that loan with no upper limit. The only thing to keep in mind is that your loan must be used for capital improvements to your home, not repairs. If you borrow money to put up a new fence, finish your basement, or build an addition, you can deduct whatever interest you pay on your taxes. But if you take out a loan to repair a leaky roof, you won't be eligible for a deduction.

3. PMI deduction
Many homeowners aim to make a 20% down payment to avoid getting hit with private mortgage insurance Opens a New Window. , or PMI. But if you're stuck paying PMI, there's some good news: You can deduct your premiums provided you don't make too much money. The PMI deduction starts to phase out when you earn $50,000 a year as a single tax filer or $100,000 as a couple filing jointly. And the deduction goes away completely when you earn more than $54,000 as a single filer or $109,000 as a couple filing a joint return.

4. Mortgage points deduction
Some borrowers pay mortgage points, which are up-front fees, in exchange for a lower long-term interest rate. A point on a mortgage is equal to 1% of the loan amount, so the higher your mortgage, the more you'll pay per point. On the other hand, points can serve as a tax deduction, either immediately or over time. If the points you pay are consistent with what most lenders are charging and you use your loan to buy your primary home, you can typically deduct the entire cost of your points right away. Otherwise, you'll need to spread out that deduction over the life of your loan.

5. Property tax deduction
The average U.S. homeowner pays a little more than $2,000 a year in property taxes, but in some states, that figure can be anywhere from two to five times as much (or more). And while nobody wants to spend a fortune on property taxes, they can serve as a nice tax break. If you're going to claim a property tax deduction, just make certain to do so the year you actually make your payments. Property taxes are often billed quarterly, so it could be that you pay the first part of your 2018 taxes at the end of 2017 -- in which case you'd take the deduction for the 2017 tax year.

6. Home office deduction
If you're self-employed and have a dedicated space in your home that you use for work purposes, you can claim a home office deduction against your income. To calculate your tax benefit, figure out how much you spend annually on costs like water, electricity, internet service, and homeowners' insurance. Next, calculate the amount of space your office takes up relative to your home, and then prorate your expenses to arrive at your deduction. For example, if you spend $3,000 a year on eligible expenses and your office takes up 10% of your home's total square footage, you can claim a $300 deduction.

Whether you're new to homeownership or have carried a mortgage for years, it pays to learn more about the tax deductions available. The more you're able to claim, the more cash you'll manage to pocket and keep away from the IRS.

Original article appeared on foxbusiness.com