Cross-training: Essential for Small Business Survival

Cross-training: Essential for Small Business Survival

Have you considered cross-training your employees to ensure more than one person knows all key functions? Cross-training can be a win-win situation for you and your employees. Large companies often use it to prepare managers for future promotions. But in small companies, it can be the difference between success and failure.

Why companies cross-train

Cross-training provides greater flexibility in scheduling, especially when dealing with unexpected workload and staffing issues. It also helps employees develop expertise in other areas and increases their awareness of the company’s roles and functions — helping them better understand where they fit into the big picture.

For employees, some of the biggest advantages include:

  • Learning new skills
  • Working more efficiently and effectively with other departments
  • Feeling more invested in the company
  • Enjoying growth opportunities

Create your cross-training plan

How you implement cross-training will depend on the size and nature of your business. Consider prioritizing the departments that need and/or want cross-training the most. These departments may be understaffed or have many new employees. Look for important functions that are currently dependent on a single person’s knowledge. These areas should be a focus of your cross-training program.

If you’re considering cross-training your team, here are a few tips to help you prepare:

  • Document your key processes. You cannot cross-train if you don’t know the process. These written processes will turn into training documents as you implement your program.
  • Communicate to your team. It’s essential to get everyone involved before you start a cross-training program. Help your team understand why the company is cross-training employees. Reasons may be to prepare for organizational growth or new industry standards, or to adjust to a changing structure around roles and responsibilities. Then continue to communicate with your team throughout the program with status updates and team meetings about progress and next steps.
  • Present cross-training as an opportunity. Your employees may be more resistant to cross-training if it feels like it’s an obligation or a threat to their roles. You can help them feel motivated by highlighting the benefits, like honing different skill sets and having a better understanding of how their contributions positively impact the business.
  • Start with a small pilot program. Test the waters with a select group of employees to get a better understanding of what works and what needs to be tweaked. You can then expand the program later as you gain insight and experience.
  • Determine cross-training hours. Figure out how much time can be dedicated to cross-training for each team to still run efficiently. This may include carving out a few hours each day, or setting aside full days for a certain period of time to focus on cross-training. If your business is seasonal, ramp up cross-training during your low seasonal period.
  • Listen to feedback. You may learn that some employees have already started practicing cross-training on their own. You can use this kind of valuable feedback to fine tune the program.

Keep in mind that some employees may resist having to train others, and productivity may suffer in the short term. But remember the cost of not cross-training. If you lose a key employee and no one else knows how to do their tasks, your business may be in trouble.

 

Cross-training: Essential for Small Business Survival

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

The Dos and Don’ts of IRS Audits

The Dos and Don’ts of IRS Audits

Every year the Internal Revenue Service audits a number of U.S. businesses. Knowing how to prepare for and handle an audit can minimize stress and even provide opportunities to improve company operations. In some cases, audits may even lead to smaller tax bills.

 

Tips for an IRS business audit

Regardless of the type of IRS audit you and your business is involved in (correspondence, office or field audit), the best way to deal with an audit is to know what to do and not to do. Consider the following:

 

  • Be professional

    •  Do: Auditors have a job to do, and it’s in your best interest to show them respect. If you’re called to their office, show up on time, dress appropriately and have requested documents in hand. If auditors visit your place of business, encourage staff to answer questions honestly and completely. Within reason, it’s acceptable to ask for more time to locate a particular record. If you can’t find supporting documentation, say so.
    •  Don’t: Avoid arguing with the auditor. Ask for clarification if needed, but don’t question every document request. If you disagree with the auditor state your case and understand you have appeal rights should the disagreement become costly.

 

  • Be organized

    •  Do: If you keep business records on a computer, know how to create and print easy-to-follow reports. Prepare for the audit by laying out checks, invoices and other records in a logical fashion.
    •  Don’t: Dump a box of receipts into an auditor’s lap. The easier it is for an auditor to find what they need, the shorter the time period required to complete the audit. Remember, the longer an auditor spends with your records, the more likely he or she will find something amiss.Also keep in mind that it’s rarely a good idea to create records during an audit. Exceptions may be if you’re honestly trying to reconstruct transactions from memory or your records don’t exist (for example, after a natural disaster or fire). IRS agents are often suspicious of hastily prepared documents that smell of wet ink.

 

  • Be honest

    •  Do: Make a straightforward effort to justify deductions. If you can’t locate a specific record, look for alternative ways to support your tax return. For example, if you’re claiming a deduction for depreciation but can’t locate the paperwork, redo the calculation for the auditor. A vendor, landlord or mortgage company may have copies of pertinent records if yours have gone missing.
    •  Don’t: Never create numbers that can’t be corroborated or reasonably explained.

 

  • Ask for help

    •  Do: Get an expert in your corner if you’re facing an audit.
    •  Don’t: Ignore your need for help. Remember, auditors conduct audits all the time. This is a rare event for you. Too many businesses provide more information than is needed, opening themselves for a higher tax bill. Make sure this is not you!

 

For U.S. businesses, tax audits are a fact of life. By knowing what to expect, you can be prepared if the IRS comes knocking. contact us for assistance.

As always, should you have any questions or concerns regarding your tax situation please feel free to contact us.

 

The Dos and Don'ts of IRS Audits

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Cash-handling Rules to Protect Your Business

Cash-handling Rules to Protect Your Business

Cash theft ranks as one of the most common frauds perpetrated on small businesses, according to a 2018 report by the Association of Certified Fraud Examiners (ACFE). To ensure your business is protected from theft, develop and implement a strong cash-handling policy. Here are some ideas to help create a working policy to protect your cash.

 

  • Keep duties separate
    If one employee receives cash, someone else should prepare or oversee preparation of the cash deposit. A third person may record transactions in the company books. Although such separation of duties can be hard to implement in a company with few employees, creative owners will find ways to prevent such transactions from being concentrated in the hands of a single person. For example, you might cross-train staff so that today’s accounting clerk is tomorrow’s cashier. Or a supervisor might periodically assume one of those functions.

 

  • Document cash transactions
    Develop a cash count sheet that records the names of people removing money from the safe. Also document the date and time money is transferred for deposit. Include signature lines for both employees involved in the task. Have another employee routinely compare deposit slips and bank statements with cash count sheets. When cash is placed in the safe, record transactions with a similar detailed record.

 

  • Store cash securely
    Lock cash registers when not in use. Minimize cash on hand by requiring employees to periodically transfer excess cash to point-of-sale (POS) safes. Because such a system allows for one-way access only, it helps prevent cash skimming. POS safes should be unlocked only when cash is transferred to the back office safe. Limit safe combinations to authorized employees and ensure that combinations are routinely changed.

 

  • Conduct internal audits
    Employees should expect their cash-handling activities to be scrutinized. Inform staff that there will be surprise cash audits and detailed reviews of company books if irregular transactions come to light. If your company uses a currency counting machine, you might also print and review a sample of cash-count reports.

 

  • Communicate policies
    Make sure your policy is clear and straightforward. Post it throughout the workplace. Discuss it with new hires. Share it in staff meetings.

 

  • Hire wisely and train
    Conduct thorough background checks. Once staff are on board, train them to implement your cash-handling policy until it becomes second nature.

 

Cash-handling Rules to Protect Your Business

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Audit & Accounting Update: October 2019

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest financial reporting insights. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

Accounting

Proposed guidance related to classifying debt as current or noncurrent
The FASB has issued a revised proposal on classifying debt as current or noncurrent at the balance-sheet date.
The Financial Accounting Standards Board (FASB) recently issued a proposed Accounting Standards Update (ASU), Debt (Topic 470): Simplifying the Classification of Debt in a Classified Balance Sheet (Current versus Noncurrent). This proposed ASU reflects revisions to the original proposed ASU issued on the topic in January 2017.

Proposed accounting guidance for the effects of reference rate reform
The FASB recently issued a proposal on the accounting for reference rate reform (e.g., the planned discontinuation of LIBOR).
If finalized, the proposed ASU would provide guidance on how entities should account for changes to certain contracts, hedging relationships and other transactions affected by reference rate reform, including the planned discontinuation of the London Interbank Offered Rate (LIBOR). LIBOR is commonly referenced in loans, debt instruments, leases and interest rate derivatives.

Proposed guidance related to classifying debt as current or noncurrent

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
http://rsmus.com/our-insights/newsletters/financial-reporting-insights.html

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our service offerings, please contact us directly.

Tax Update: October 2019

TRENDING IN TAX

Emerging issues for the family office
From taxation complexity to understanding cyberthreats, what are today’s top five concerns for family offices?
Family offices come in all shapes and sizes and the differences from one to another can be vast. It’s been said that if you’ve seen one family office, you’ve truly seen just one family office. From single-generation members focused on mutual goals to a multigenerational family with complex interests and diverging investment and philanthropic objectives, variations of the family office construct are endless.

State and local gross receipts taxes a new trend in state tax law
Recent activity among state and local gross receipts taxes may signify that a historic approach to taxation is ready to be a new trend.
As states continue to face the uncertain impact of federal tax reform on their budgets, a possible downturn in the economy, and several years of lackluster state and local tax collections, many state legislatures have been considering new (or bringing back old) methods of revenue generation. In addition to rolling back spending, increasing tax rates, and broadening sales tax bases, one trend that may be developing is state and local gross receipts taxes. Gross receipts taxes are generally levied on a company’s gross receipts instead of its net income and are imposed with a low tax rate on a broad tax base with fewer exemptions and deductions than an income tax.

 

State and local gross receipts taxes a new trend in state tax law

 

Source: RSM US LLP
Used with permission as a member of the RSM US Alliance
https://rsmus.com/what-we-do/services/tax/additional-tax-resources/tax-ideas-insights.html

Disclaimer

At Insero, we make it our business to stay abreast of the latest trends and technical updates in accounting, tax, and audit; and we understand how important timely updates are to our clients. As a member of the RSM US Alliance, we also have the benefit of access to the resources and subject matter experts of RSM US LLP (formerly known as McGladrey LLP). This includes regular updates on the latest federal, state, and international tax news as well as updates pertaining to the Tax Cuts and Jobs Act. We hope that you find these informative and useful, and invite you to reach out to us if you have any questions.

What Is Real-Time Visibility and Why It Matters

Why Real-Time Visibility Matters

Business today moves fast—extremely fast—which places a lot of pressure on executives to quickly evaluate data and make informed decisions without delay. To do that, they need visibility into real-time metrics from across the organization, and they need that information to be readily available and easy to understand.

Take, for example, a retailer that operates two outlets. During a holiday sale (or on any given day), the manager might want to examine key metrics at one store and then see how those figures compare to those at the other location. By finding variances, the manager can identify opportunities and best practices to rapidly improve operations at each store.

Or consider another business that needs to track financial as well as business metrics. If executives need consolidated accounts receivable, or want to look at key data by programs or clients, how long should they have to wait? To be competitive, they need to be able to access that information, sorted as necessary, and take action within minutes.

 

The value of the latest accounting software

People who work in finance and accounting are often tasked with producing real-time reports to help executives make these types of on-the-fly decisions. That’s not easy to do with some accounting systems that require downloading accounting data to Excel and then combining it with statistical data. Sometimes IT has to get involved or new fields have to be added to accounting tables, which takes time and can lead to mistakes or oversights.

Every delay costs the organization in several ways: Employees are spending their valuable time on the task, executives are being delayed, and the business is losing out on whatever improvements could have been made in the interim.

These issues are why many organizations have adopted advanced accounting solutions such as Sage Intacct, the best-in-class cloud ERP platform. Sage Intacct is based in the cloud and can be accessed anywhere, anytime, from a range of mobile devices. The customizable dashboards are easy for decision-makers to understand, and they can drill down with ease to get to the bottom of the data that matters most to them.

In addition, Sage Intacct uses what it calls “Dimensions” to better capture the business context of transactions, budgets, and more. The eight built-in Dimensions include project, department, employee, and item, and additional Dimensions can be added as needed. That means organizations can quickly create reports that analyze real-time business performance by whatever business driver interests them—without having to create and manage a chart of accounts with hundreds of segments.

 

Get the visibility you need

With better visibility, decision-makers can make fast, smart decisions with confidence. Insero & Co. can help you evaluate best-in-class software solutions and transition to solutions that give you real-time visibility—and a competitive edge.

 

data available anywhere, anytime, from a range of mobile devices

10 Ways Automated Accounting Can Help Your Organization

10 Ways Automated Accounting Can Help Your Organization

Probably you know that automated accounting processes are more efficient than manual processes. And yet many businesses and nonprofits hang on to old, familiar accounting methods involving manual data entry, spreadsheets, and basic financial tools like QuickBooks.

One reason for maintaining the status quo might be that organizations don’t realize the full range of benefits of automation. With that in mind, here’s a list of 10 benefits of transitioning from manual accounting processes to advanced software solutions such as Sage Intacct that automate key processes.

Automate Your Accounts Payable

1. Save time

If your month-end closes are taking most of the month, it’s time to consider automating your accounting processes.

2. Focus on what matters

When employees no longer have to spend hours on mind-numbing manual tasks, they can instead devote those hours to strategic efforts that add real value to your organization.

3. Reduce errors

Automated accounting alleviates common data entry errors and ensures that every task is performed identically, so you and your clients or customers can trust in the numbers.

4. Lower costs

Manual tasks require more employee hours every week, month, and year. Automation makes you more efficient—and helps prevent errors that can lead to unexpected additional costs.

5. Make better decisions

By automating billing, collections, sales, and other processes, you can record and report on key metrics in real time, so executives have all the information they need to make smart decisions.

6. Reduce risk

Automated accounting solutions help ensure that you’re always in compliance with the latest regulations, as they’re automatically updated to adhere to the latest guidelines.

7. Be more secure

Top accounting software providers follow strict security protocols to ensure your organization and its data is protected against data breaches and other security threats.

8. Improve service

Manual processes lead to mistakes and oversights, like late payments to vendors and overlooked bill payments. With automated solutions, you can provide more reliable service to customers, partners, and your own employees.

9. Better audit preparation

By automating your accounting processes, you can prepare more effectively and efficiently for audits, ensuring that you have all the documentation you need to make the process as painless as possible.

10. Improved cash flow

By reducing the time it takes to get approved expenses into your accounting system, you can reduce the time between paying the credit card and getting reimbursed by the client.

Is it time to automate?

Insero & Co. can help you determine if it’s time to automate your processes and if so, help you make the transition as seamlessly as possible using best-in-class software. Contact us to talk about the relationship-based services we provide and how they might help save you time and money every month.

 

What to Consider When You Lease Commercial Property

What to Consider When You Lease Commercial Property

Decisions about location and leasing commercial space can be significant factors in determining a business’s long-term profitability. That’s because the cost of leasing space is often one of the biggest numbers on the profit-and-loss statement. Consider the following as you look for a space that fits your bottom line:

  • Give yourself time.
    At least six months before you plan to move in, begin the selection process. Scout out locations and narrow your choices. Waiting until you’re desperate for space may leave you with fewer options. Starting early may also provide opportunities to observe walk-by or drive-by traffic, the location’s visibility, and the habits of neighboring tenants. It may also provide more time to develop a better understanding of the level of lease payments your business can afford to pay.
  • Compare properties.
    In addition to identifying a property that’s located near your client base, comparison shopping can give you a better understanding of the value of the property you’re considering, as well as provide negotiating leverage. Develop a matrix of the must-have elements of your location. Then place each location you are considering into the matrix. It will give you a nice comparative visual to help make the right decision.
  • Negotiate terms!
    Use your location comparison matrix to begin negotiations with the landlord. Ideas include getting free rent while you build out your space, a longer-term lease with no or low escalation of rent, and getting the landlord to cover more of the maintenance costs.
  • Read the lease — then read it again.
    Once you’ve found your space and have the framework for a deal, you will receive your lease. Review the lease. Pay special attention to the length (term) of the lease, renewal options and scheduled rent increases. Scrutinize clauses describing your responsibility for utilities, maintenance and upkeep of common areas and systems. Make sure the lease agreement matches your understanding of the negotiated terms. The agreement must spell out your options for subleasing and delineate default provisions. Termination options, security deposits, allowances for leasehold improvements — all should be specified in the contract.
  • Work with professionals.
    It makes sense to hire a real estate attorney and other professionals to help find the right space and review the lease terms before signing. An experienced broker may also provide assistance when negotiating lease terms. Careful evaluation and bargaining at the front end may save dollars and avert headaches later on.

If you have questions about how leasing a commercial space will affect your business tax plan, contact us today.

commercial property for lease

 

As always, we hope you find our tips and news for businesses valuable, and look forward to receiving your feedback. Companies focused on growth have sought the help of Insero & Co. for more than 40 years. During that time they have consistently experienced the peace of mind that comes from knowing their CPA firm takes the concept of integrity seriously. Should you have any questions, please contact us directly.

Employee Benefits Update October/November 2019

This issue’s topics include:

Will a merger or acquisition upend your 401(k) plan?

Beware of ERISA entanglements and higher costs

Companies contemplating buying another company, or a division of one, must assess and plan for the impact on their 401(k) plan, and that of the company they’re acquiring, before pulling the trigger. The same applies for companies on the receiving end of an acquisition (though they might not be able to do as much if they’re the acquisition target). This article reviews the important decisions that companies must make regarding 401(k) plans when part of a merger or acquisition. A short sidebar reviews two ways to merge 401(k) plans.

Read More

IRS liberalizes availability of self-correction program for plan “failures”

A recent IRS Revenue Procedure allows plan sponsors to jump through fewer hoops to fix several so-called “plan failures” relating to plan loans. Specifically, plan sponsors can now fix more categories of loan glitches using the streamlined Self-Correction Program (SCP) under the IRS’s umbrella Employee Plans Compliance Resolution System, instead of the more burdensome Voluntary Correction Program (VCP). This article highlights what plan sponsors need to know about the changes.

Read More

Warn participants of the risks of front-loaded deferrals

Some 401(k) plan participants have been known to shoot themselves in the foot when taking aim at higher investment returns. Some of these individuals may not be open to advice, but plan sponsors can still provide information about the dangers of firing blindly and expecting to hit a target. This article looks at a case in point: front-loading deferrals in hopes of boosting returns over the course of the year.

Read More

New exempt status income threshold could impact 401(k) plan costs

The 401(k) plan employer contribution formula for hourly employees that includes overtime pay may increase plan costs next year — along with overtime pay outlays. That’s because in late September the U.S. Department of Labor published a revised rule (effective January 1) increasing the income threshold for overtime pay eligibility. This short article reviews the rule and what it means for plan sponsors.

Read More

Compliance alert

This feature lists a few key tax reporting deadlines for October and November.

Read More

As always, we hope you enjoy this edition of our newsletter and we look forward to receiving your feedback. Should you have any questions regarding the information contained in the attached materials or our Employee Benefit Plan Services, please feel free to contact me directly.

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When to Hire Third-Party Accounting Support

How to Tell When You Need Third-Party Accounting Support

Businesses and nonprofits need to weigh the benefits of in-house versus outsourced accounting support to determine which model is best for them. To make a wise decision, it is important to look not only at the more obvious hard costs but also at easily overlooked costs—including opportunity costs.

 

What is the real cost of in-house vs. outsourced accounting?

The first and most obvious cost to consider is the hard cost of in-house versus third-party accounting services. This includes not only employee costs compared to contractor costs but also the cost of maintaining on-site equipment to support your accounting team.

Many organizations find that outsourcing some or all accounting services can save money in the long run, but you will need to run the numbers to see what makes the most sense for your business.

 

What is the value of your time?

Another cost to consider relates to your time and where you choose to spend it. How many hours each month are your accounting team—and other employees—spending on accounting tasks, and could their time be better spent on more business-forward initiatives?

Careful tracking of employee time sometimes reveals that a surprising amount of time is spent on finance-related tasks that could easily be outsourced. Then the question becomes how those employees’ time could be better, and more profitably, be spent to help the organization grow and be more successful.

 

Are you missing out on valuable reports and forecasts?

Small organizations in particular often have owners and other executives working on bookkeeping and accounting-related tasks. They might be able to do the basics, but it is important to consider what value-added services they might be overlooking that could help the organization.

For example, accounting professionals can provide weekly cash flow forecasts that provide an early warning of positive and negative cash situations and offer insight into when funds are expected to come in and be paid out. These and other forecasts provide information that can translate into real savings.

Outsourcing to accounting professionals can result in other upgrades. For instance, more detailed, real-time reports can identify issues and opportunities that lead to better business decisions. Better audit preparation can also save hours of time and costs.

 

Is it time to outsource?

Insero & Co. can help you weigh the benefits of staying in-house versus transitioning to a third-party accounting service. If it’s the right step for your organization, we can help you get started.