The Accounting and Bookkeeping Series…. Gwinnett/Atlanta CPA Advises on Keeping Good Internal Controls
His CPA: Serving Norcross, Alpharetta, Roswell & Beyond
This is the first of a Series about how Atlanta Business Owners & Entrepreneurs can make sound Accounting & Bookkeeping Decisions to Both Track and Record their Business Assets, Liabilities, Income and Expenses.
Having served as an Atlanta CPA for decades, I know firsthand that the beginning to properly running and managing an Atlanta Business is to have Adequate Bookkeeping & Financial Statements that reflect actual operating results
To ensure your company is legitimate, make sure that you keep your personal expenses separate from your business expenses. Keep and maintain a clear delineation of your company from your personal affairs you should only pay business expenses out of your business/corporate account. Accordingly you will want to ensure that you only issue monies for your personal affairs out of your business and not out of your corporate account/monies. Over the decades of being an Atlanta CPA, I have learned that running a business is hard enough, even while having proper books records and financial statements.
Predominantly one of the first issues if a legal challenge is faced will be for the judicial authorities to determine if you have indeed acted and behaved as a corporation would and should under the auspices of federal and state law. Corporations and other legally recognized entities have many legal laws as well as formalized business practices that they should follow. Many times when a small business owner begins their own venture they tend to let the area between personal and business become unduly blurred when there is confusion between what is a personal item versus what is business. Tax law generally requires that valid business expenditures are those which are necessary for the valid business affairs of a business and for the furtherance of its survivability and profitability.
Frequently the best to contemplate many of these questions in light of what you would do if a Fortune 1000 company employed you. It is prudent to ask yourself these questions in light of this environment then most of your decisions would gain clarity in this newfound light. If in working for a major company you were asked the questions below, what would be the anticipated/correct response:
- Does corporation have an annual Board of Directors/Shareholders Meeting?
- As a corporate officer would I sign contracts in the corporate name while being sure to also list my title (i.e., President)?
- In incurring business expenses, such as mileage, personally would I turn in an expense report to get reimbursed?
- Is my business expected to only pay valid business expenses out of the corporate account?
Evaluate these you can see that the answer to all of these particular questions is yes. As a benchmark to help keep you on track, please be sure to always ask yourself what would be the norm/expected if you were acting in a fiduciary relationship for another and what would be acceptable. In fact, though you may be the sole owner of your business you are indeed acting in a fiduciary capacity for your business as a corporation has most all of the same legal rights and responsibilities as an individual in protecting its rights and the full rights and abilities of ownership of all types of property both real estate as well as intellectual property. Given the ability to contract, a corporation may perform and expect others to fulfill their duties as detailed in a formal contract or everyday business practices.
All business owners/entities are required to have a valid business license. Typically these are gained from the county in which you live, unless your office is within the city limits of a town/municipality. If so you will obtain your business license there. Also you will be expected to file annual tax returns, to pay a company’s annual registration with the state, file and pay payroll as well as sales tax filings and reports, and property tax payments and reports for corporate real estate and fixed assets. Thus, the services of a good CPA will bode you well as you strive to overcome the complexity of the varying tax laws and rules from the varying governmental agencies.
A computerized accounting package which has a balance sheet and profit and loss capability is a great start to being able to track your business transactions accurately and efficiently. Generally speaking for many small businesses QuickBooks is good system and often has much more capability than you will ever need. However this program is not a universal fit for everyone and you should take care to carefully evaluate your needs to ensure that you select a system which will work for you long term. Special consideration, for example, should be given if you need a POS/Point of Sale System, detailed inventory costing/tracking/and valuation, or if your business will require a multiple user system.
Being proficient at running your business does not make you one at the responsibility of accounting for your business. By applying our decades of experience we are well suited to guide you to track the financial and operational affairs of your business.
Below is a Sample Letter I might send to let a client know of the potential for error as a direct result of poor internal controls:
This is to confirm that regarding your internal record keeping/check writing that:
-I suggest you have one person record all of the checks to help avoid theft, forgery of checks and insufficient funds.
-This will confirm that it is essential to trace your internal checkbook balance to help avoid theft, forgery of checks and insufficient funds.
-This will confirm that it is essential that you have only one person as the authorized check signor to help avoid theft, forgery of checks and insufficient funds.
This will confirm that it is essential that you both control your internal blank checks, write checks in order and to account for all checks to protect yourself to help avoid theft, forgery of checks and insufficient funds.
“Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!” What, then, shall we say in response to this? If God is for us, who can be against us? Romans 8:31 Why are these verses here? Learn how His CPA became a Christian Accounting firm visit http://www.hiscpa.com/christian-CPA.html
John Dillard, CPA of His CPA, PC (An Atlanta CPA firm) 1940 Woods River Lane, Duluth, GA 30097 Phone 770-814-9304 http://www.hiscpa.com/ http://www.john-dillard.com/
We advise clients on: IRS representation, Offer in Compromise, Tax Problems, and Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.
Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock, Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.
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