• Well Kept Accounting Records are Key to Business Survival
• How to Send Financials to Your Accountant for Tax Preparation
• Whose Hands Are in the Cookie Jar?
• Let Recurring Entries Help you Work Smarter

Well Kept Accounting Records are Key to Business Survival
At a recent MYOB Certified Consultant Conference, Chris Lee, one of the company founders, quoted the following statistics about small business success:

1. How frequently you do your accounting, and the company's survival rate:

2. How well are the records being kept, and the company's survival rate:

Every year, every business sends financial reports to its tax preparer. It is possible (even easy) for Mac users to provide this information to their Windows based accountants. The following is a guide for preparing your data.

A standard request from the tax preparer is for a year-end Balance Sheet, an Income Statement (Profit & Loss Statement or P&L) for the year just ended, and a Detail Trial Balance for the year. Excel files are the universal language of accountants so no matter what accounting software or computer platform you use, you can email these reports as Excel files, eliminating printing huge lists, and enabling the tax preparer to use your records in the software of his/her choice.

To provide this information from MYOB AccountEdge or FirstEdge, select the report you need under the Accounts tab in the Index to Reports. In the Report Customization screen enter the date range and click on display to be sure you have the information you want. Then in the lower left hand corner choose Send To and Excel. Now you have your report in Excel and can save it to be an email attachment. You can send multiple attachments to an email but the Detail Trial Balance is huge so send it separately.

In MultiLedger you will select the required report and, after looking at it to be sure it is what you want, save it as a Text File (button at the top left of the screen says TXT). You can email the text files or open and save them as Excel files to be email attachments for the tax preparer. When preparing the Balance Sheet, the Prior Year Comparison is a good choice. It allows the tax preparer to compare your prior year-end balances with the prior year tax return.

Both AccountEdge and Mac MultiLedger files can be opened in the Windows version of the software, as long as it is the same release version. If your tax preparer has the software you can send your data file attached to an email for his/her use. MYOB offers complimentary software for you tax preparer. To get this free copy go to www.myob-us.com/promo/acctfree.

Sending your data in a machine readable form should reduce errors and data entry time. It may also help contain accounting fees, particularly if you have tied out the balances before you send it.

Is someone other than you doing the bookkeeping in your business? Are you sure that the bills are being paid as you would like? Have office supplies or inventory been walking away with your employees?

Enron isn’t the only company with accounting problems in our economy. Small businesses are seeing an increase in what accountants call “internal control” problems. It may be the bookkeeper who “borrowed” a little money and ultimately could not repay it; payables that accumulated to the point that they result in late fees, up-front deposits, even business failure; or out-right theft. You, Mr. or Ms. Business-owner, are responsible for establishing processes and oversight which eliminate, or at least reduce, these opportunities. The general rule is: “Be sure two pairs of eyes see all transactions.” The following are specific suggestions that can protect your business and your bookkeeper from serious trouble.

• You sign the checks that your bookkeeper has prepared
• Never approve the cashing of an unsigned check in a phone call from the bank. Never sign blank checks to be filled in later.
• You reconcile bank accounts or AT LEAST review and approve the printed reconciliation report. Understand the status of uncleared checks or deposits in transit.
• Be sure that all checks are accounted for. (Void checks should be filed, not destroyed.)
• Review outstanding payables at least monthly. The easiest way is to have all payables entered in the accounting system and look at the report of current payables.
• Get all receipts from anyone who has a company credit card.
• Review each monthly credit card statement.
• Know why any bill payments are late or credit cards not kept current. Have a plan for getting payables under control.
• Verify that 941 deposits are made on time. It can take the IRS several years to catch up with delinquent accounts and by then the tax due, plus penalties and interest can be insurmountable.
• Be sure that all payroll tax returns are filed on time. There is a late filing penalty in addition to late payment penalties.
• Have someone other than the warehouse person take inventory.
• Know why there are any differences between the perpetual inventory (maintained in the accounting system) and the physical count of inventory on hand.
• Review outstanding receivables at least monthly. In addition to preventing fraud, following up promptly on late payments will improve your cash flow.
• Read and understand your monthly financial statements. Your Balance Sheet is as important as your P&L.
• Know the accounting software (and have access to it) enough to look at any report at any time, without the help of the bookkeeper. Make a point of doing that regularly, and let the bookkeeper know you do it.

Having good internal control practices in place is a deterrent to fraud. If you need to know more about the hows and whys of these practices, your CPA should be happy to help you.

Regular review of financial reports will also ensure that you are on top of what is happening in your business. It is easy to assume that everything is going fine. Taking a hard look at the numbers on a regular basis can show you potential problems while you still have time to solve them. Helping you understand and use the information in your financial reports is the best use of your CPA’s expertise.

Let Recurring Entries Help You Work Smarter
- by Martha Swanson (modified from MYOB “Tips and Tricks” newsletter)

Do you have complicated transactions that you have to sort out each time you pay them, for example splitting out the mortgage or health insurance payment? Many accounting software users think Recurring Transactions are useful only for things like the rent, when the payment is always the same.Certainly this saves times and reduces errors, but the greater value of Recurring Transactions is with more complex transactions, even if the amounts change or the frequency is irregular. Consider the health insurance payment. You pay part from the amount that is withheld from the employee and part is the business’ insurance expense. The premium varies with each employee and may change for various reasons. If you take the time to set up the Recurring Transaction in Purchases with three lines for each employee, the withholding, the expense and a subtotal (under the Edit menu in MYOB, or Insert Line and enter subtotal in MultiLedger), then each month you can pull up that transaction, quickly verify the amounts and be sure any changes are appropriate. This saves time, reduces error, and assures the accuracy of both your work and the insurance bill. When you pull up a recurring transaction for a simpler payment like phone or utilities, you get notice of any change from last month. From this prompt, you can decide if the change makes sense to you.

If you save a Recurring Transaction like the mortgage payment or the depreciation adjustment that you do quarterly or even annually, you can add notes in the Transaction Memo and the Memo column (MultiLedger Insert Line), to remind you next time which numbers go to which account and where the numbers came from on the form. Next time just pop in the numbers and you are done. The list, when you click on Use Recurring, shows the next due date for the transaction. It is a good reminder of entries that need to be made. Be sure to delete any Recurring Transactions you no longer need and get the Last Posted dates correct, to make this list truly useful. Those changes are made in the List menu, Recurring Transactions in MYOB. Click on the particular transaction in the list and on Edit Schedule or Delete. In MultiLedger, click on Recurring under the Transaction list and make your changes.