Accounting News and Notes

Atlanta CPA on Using QuickBooks as an Accounting Package

Evaluating a client’s financial statement a CPA can gain much guidance and information about a particular taxpayer. However there is no substitute for a CPA being keenly aware of all information that they receive from a client. For whatever type of attestation services, if any, a CPA is offered, they should bring to bear their full insight and wisdom. Therefore it is widely suggested that you work with a CPA who: 

Is a leader in the Business Community 

Is a Christian 

Graduated at the Top of Their Class 

Is Award Winning 

Gives Back to Those Less Fortunate

When helping a client critique their internal books, the below is a sample letter that we might share with a client to ensure that all of the information for their QuickBooks/Internal Financial Statements to ensure that a timely and correct return is prepared thereby ensuring that only the lowest legal possible tax is paid: 

In getting started on your 2010 Corporate Data I noticed that: 

Your Legal & Professional Fees, Cost of Goods Sold and Advertising Expenses fell dramatically from the 2009 amounts. Please review/advise. 

Your Travel Expenses this year was zero while last year was $2.0K. Please be sure that you have listed all business expenses that you company has legally incurred. 

Please forward to me  a copy of the W-2’s the company issued along with the W-3. 

In looking at your August Internal Books the numbers do not add up which means that our starting point inadvertently changed. Please be reminded that after you close your internal books are closed that you should not make any postings to any current periods. 

To help you with tracking of this in the future I have added a schedule so that you can roll forward the year to date profit from month to month reflecting the cumulative balance on the Profit and Loss and the B/S. If you will go back and correct your internal books at July to agree to the YTD net income of $10,000 and then re-send the B/S, P/L’s, new recap schedule attached showing how it reconciles, the G/L and Journal. 

This will confirm you advice that: 

You confirmed that all of the Travel Costs in August was predominantly for prior periods and that there were no prepaid expenses. 

That you will review the coding of the larger items in the Travel Costs in the future to ensure that you accrue for any un-billed, but earned, Travel Costs. 

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/ We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

Determining the Net Worth of Your Gwinnett/Atlanta Business 

Knowing How to Evaluate the Market and Your Business Risks Will Do Much to Ensure You Receive Maximum Value When you Sale Your Business.

Determining the future net worth of your business, a determined and insightful understanding of your Profit & Loss statement (P&L) is essential and critical. Though a balance sheet is a recap of what has happened to a business’s assets and liabilities to date, a P & L, if properly presented/managed/understood is a look into the company’s short as well as its long term viability. A businesses P & L essentially measures how well the business is utilizing company assets, personnel procedures and facilities in its effectiveness of serving customers while keeping a keen eye on profit maximization. By properly gathering and studying one’s operations and its corresponding P & L, one can learn much about a business which is useful for measuring rates of return, detecting both positive and negative trends, taking corrective action, and business valuation.

With  all ratios, care and attention should be given to evaluate them in light of company size, maturity, business climate and industry. Though there are many general rules of thumbs for a variety of different industries, there is no substitution for wise and judicious counsel of a wise and trusted business adviser/CPA. They will help evaluate these and many other nuances which make your particular circumstances, operating overhead and unique niche.

By evaluating a client’s prior financial statement a CPA can gain much guidance and information about a particular taxpayer. However there is no substitute for a CPA being keenly aware of all information that they receive from a client. QuickBooks is an excellent startup Accounting Package for many clients and may serve the business well into the future. The below is a sample letter that we might send to a client to ensure that all of the financial information is received to ensure that a timely and correct return is prepared thereby ensuring that only the lowest legal possible tax is paid and that financial results are both timely and accurately compiled. 

I researched this last night and came to the conclusion that the checks that need to be voided in QuickBooks are for June to August. In voiding the checks to make our operating account come to a zero balance this is going to effect the June to August financials. Even if I change the date on the check to void them in August it will still effect the other months. 

The below is my response: 

If you make a journal entry to exactly offset the voiding in the prior months for those months it will offset and net to zero the net effect of the voiding. 

Then you can do in August a journal entry for the total of the voiding, so that the net effect of the changes in QuickBooks effect only the current period. 

To complete your 2010 Corporate Return for please forward: 

Copies of the W-2’s and W-3 for 2010. 

To know how much Meals & Entertainment is in the Travel & Entertainment account. 

The reports you forwarded for the Balance Sheet and Profit and Loss for  2010 while being sure to use the checklist to pull your information together at http://www.hiscpa.com/newclient.html  

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 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/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning,  Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.  

His CPA PC Says…What Does Tax Law Say About Having Adequate Tax Documentation?

The IRS tax law, surrounding the area of documenting most general business expenses, is generally summarized into three general areas.  Failure to satisfy all of these areas may result in an otherwise potentially deductible receipt being voided.  Tax law does not summarize the deductible tax items in this fashion.  However, following these general guidelines will greatly assist in determining both the validity of a deduction as well as the maintenance of substantive collaborating documentation.  The general guidelines are:

Business Intent

It should be clear from an unbiased observer that a deduction was incurred for the furtherance of the business.  This includes advertising, administrative duties, overhead and expenses incurred to produce or provide the product or service to be delivered.  Often direct expenses incurred in those efforts will be most obvious, as the absence of this occurrence will result in a product not being delivered. 

For many issues it is necessary to look at the intent or the reason why an expense was incurred.  For example, the sponsoring of a golf tournament most frequently is done by business to further its advertising efforts.  By raising awareness of its participants and attendees, business’s often underwrite and support such events to raise name recognition, gain market share and to increase brand loyalty.

What is Valid Tax Documentation? 

IRS tax law has often been misinterpreted as to what is required to adequately substantiate business expenditures.  Frequently a credit card receipt will suffice but that is only for those times and circumstances where it is most obvious as to what expenditure was incurred.  For example, a credit card receipt for a meal at a restaurant where a dinner was purchased, which documents the individual/business’s presence, and the nature of the business discussion should suffice as adequate documentation to substantiate a deduction.  However the best documentation will be to ensure that you attach a copy of the itemized invoice. The individual/business entertained would typically be an employee or independent contractor of the business, a past, present or future client the customer hopes, is, or plans to serve, someone who the business networks/prospects with in order to produce new business or a trade or services supplier (such as someone from whom your business purchases either product, supplies, or services.)

In the event that expenditures are larger or would not be clear by the payee, care should be taken to obtain a copy of the actual receipt, agreement, memorandum, or a copy of the contract for which expenditures are incurred.  Receipt/document/contracts should be clear as to the item being purchased for the business as being either an integral critical expense or those whose ancillary intended purposes (such as advertising) are clear.  Absent the clear evidence of either of two components it would be wise to add documentation to the receipt accordingly.

Scope of Valid Business Expense Documentation Receipts 

Tax law does not require any receipts below a certain level.  For all expenditures above this threshold, a receipt is required. To help out in coding of the credit card statements please be sure to attach both the credit card receipt as well as the actual receipt from the selling establishment. Tax law requires you to have the actual receipts and is not required to accept the credit card receipt as proof of a valid business expenditure. Tax law requires detailed invoices/receipts for all items over $75.

The  larger a receipt is, the more emphasis one would want to place on an expense to be sure that adequate documentation is received/available.  Typically, most business receipts provide sufficient documentation, as usually items/services are typically well detailed to assure good communication, a clear understanding, and therefore, prompt payment. 

Where the vendor or supplier does not supply appropriate documentation, and the expenditure is larger in nature, it would be prudent to prepare the documentation yourself and have the vendor or supplier sign and date it indicating their approval and agreement.  Absent this option being readily available, one would want to forward written documentation by regular mail or electronically by e-mail, a confirmation of the details of the transaction.  Written confirmation of this type is one of the most frequent mistakes business owners make.  Often, this simple step alone will be the key determining issue if a dispute or litigation occurs.  I have personally witnessed this issue alone being the key decision making point on which a judge or jury will rule.

Luke 12:31 But seek his kingdom, and these things will be given to you as well.

A Christian CPA Firm: Never Underestimate the Long Term Benefits

 John Dillard, CPA of His CPA, PC (A Duluth GA  CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

Duluth CPA: Advisers Entrepreneurs on QuickBooks & Bookkeeping for Your Gwinnett Business

Hire a Christian CPA as they will be committed to you and your business’s success. Finding someone who is looking out for your best interests are most apt to also refer other outside services such as a payroll company, which is most always a much faster and more economical option than either the CPA or the client preparing them. Also items such as preparing your internal financial statements can easily be taught to client personnel saving potential tens of thousands of dollars over a ten-year period.

Serving God while practicing the Golden Rule, who has some very specific advice as to a direction for your company, will share the information in the first meeting not waiting to be sure to have retained a client, desiring the best for a client rather than solely the service of their own needs and desires. A CPA will be able to offer insightful advice that clients have in turn taken back to their present CPA for compliance. This is certainly desirous in most all respects as we strive to serve, it fails to contemplate the reasons why advice was not forthcoming originally. As Christians we are exhorted to excellence in all things and it is to that end a hiring manager looking for a trusted CPA should spend adequate time and effort reviewing a CPA’s resume, credentials, and references. The below is a sample letter we might send a client to help them with the recording and tracking of their financial results while using QuickBooks for the internal bookkeeping and financial statements:

For the latest internal data you forwarded over I had the below critiques: 

Please go back into you books at the end of the prior year and ensure that they equal the page four of the last filed Form 1120S/Corporate Income Tax Return as they retained earnings you are showing at the end of the prior year does not equal the tax return. 

Please move the dollars listed as Miscellaneous Income and Other Income to Service Revenue. 

Please re-class the $2,000 you have in Miscellaneous Expenses to the correct general ledger account. 

Please move the Due to Shareholder account to an account called the same thing in the Current Liabilities section of the Balance Sheet. Please move the dollars in Owner’s Draw and the loan from you to the business to the Due to Shareholder account. 

I suggest you move all of the below accounts to Office Supplies (Bank Service Charges, Business Licenses, Dues and Subscriptions, Miscellaneous, Postage & Delivery and Printing & Reproduction). All of the dollars you have in these accounts are relatively small and insignificant. Accordingly I would not suggest tracking these in a separate account. 

I suggest moving the Internet Costs to Telephone and Fax and then to re-title this account Telephone & Utilities. 

After you make these changes then please resend your internal Balance Sheet and Profit & Loss.

Bookkeeping for Atlanta Small Business
Unleash the power of information by learning the ABC’s of accounting for the business and financial operations of your business. To learn the nuances of Small Business Bookkeeping http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
As your financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. To learn more visit http://www.hiscpa.com/financial-statements.html

A Christian CPA Firm: Never Underestimate the Long Term Benefits

 John Dillard, CPA of His CPA, PC (A Duluth CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

His CPA PC Says….QuickBooks is a Good Financial Package for Atlanta Small Business Owners

Bookkeeping for Business Owners

A CPA who is looking out for your best interests are most apt to also refer other outside services such as a payroll company, which is most always a much faster and more economical option than either the CPA or the client preparing them. Also items such as preparing sales tax reports can easily be taught to client personnel saving potential tens of thousands of dollars over a ten-year period.

A CPA who serves God and practices the Golden Rule, who has some very specific advice as to a direction for your company, will share the information in the first meeting not waiting to be sure to have retained a client, desiring the best for a client rather than solely the service of their own needs and desires. Frequently CPA’s have shared insightful advice that clients have in turn taken back to their present CPA for compliance. Although this is certainly desirous in most all respects as we strive to serve, it fails to contemplate the reasons why advice was not forthcoming originally. As Believers we are exhorted to excellence in all things and it is to that end a hiring manager looking for a trusted CPA should spend adequate time and effort reviewing a CPA’s resume, credentials, and references.

Hire a Christian CPA as they will be committed to you and your business’s success. The below is a sample of a letter we might send along to a client seeking to help critique their internal financial statements and to guide them in proper financial reporting:

To get down the road to get your bookkeeping for your internal data finalized I went ahead and forwarded you the attached. 

Please get to me today copies of where the checks were deposited into your payroll account which you said were written off of your operating account, and that you identified as transfers. Please forward me the pages on the operating account circling these transfers showing me how they reconcile to the deposits listed in your payroll account. 

Please close on the General Ledger the Money Market account, as per your advice it is closed. 

Please when printing both the year to date and the current month P/L reports before printing click in the Top Left Corner modify Report and then % on Income. This will allow you/the management to evaluate costs in relation to their percentage of total revenue. This will help you highlight variances for evaluation, critique and to take corrective management action to bring costs into control. 

That to update your tax planning I need what you anticipate you will net in the business before any salaries or shareholder distributions to yourself. 

I still need a copy of where the IRS accepted your S Election. 

Please review your P/L accounts to see if you purchased any fixed assets in the business that you need to re-class as Fixed Assets on the Balance Sheet. I suggest capitalizing all items over $1000.

Bookkeeping for Atlanta Small Business
Unleash the power of information by learning the ABC’s of accounting for the business and financial operations of your business. To learn the nuances of Small Business Bookkeeping http://www.hiscpa.com/keeping-books.html

Preparing and Reviewing Financial Statements for Atlanta Business Owners
As your financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. To learn more visit http://www.hiscpa.com/financial-statements.html

John Dillard, CPA of His CPA, PC (A Duluth CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Back Taxes, Business Acquisitions/Sales, Forensic Accounting, Business Valuations and Bookkeeping.

Gwinnett CPA Advises Atlanta Entrepreneurs on Preparing Financial Statements & Bookkeeping Issues 

When reviewing your company’s financial, it is usually best to review your profit and loss being sure to show the current period under review as well as the year to date totals. This will have the added advantage of reviewing specifically the most current operations for any significant variances or trends as well as contemplation of where you stand vs. your annual and year to date goals. Your financials are best reviewed and presented when you also add a column which calculates items as a percentage of sales which allows the reviewer to have a good grasp/rule of thumb of which to measure operational results. The below is a sample of what we might send to a client to assist them with the tracking and recording of your monthly operating results: 

In critiquing your internal books for October I noted: 

I did not get in my package the Profit and Loss for the current month. By your critiquing of both your Year to Date Profit and Loss and the Current Month Profit and Loss you will be able to better evaluate, understand and utilize your internal financial statements. 

Please add to the Both of Profits and Loss Statements you are preparing for this month and in the future the percent of each item of your total revenue. This will allow you to better gage and evaluate your internal costs vs. established standards/pricing standards. 

Please be reminded that you will want to begin using the previously forwarded management report so that you might gain needed/essential financial information for reflection in your internal financial statements. 

Please review the large debt payment of $4K against your long term debt vs. the lower year to date net income of $6K. I suggest that you do not make any larger debt principal payments until the below large variances in your net income are eliminated. Please be sure to prepare a twelve month cash flow analysis/forecast before making any additional debt service payments to avoid the business running out of cash. 

Per your last two months internal financial statements the company has a $11K loss. Please review/advise ASAP to eliminate/preclude further losses. 

Please advise as to what the $3K item is in Fixed Assets was for. 

Please review the charges to the Legal & Professional Fees account and advise as to what they are for and if they are classified correctly. Please be reminded that any costs incurred on behalf of client should be coded to Cost of Goods Sold. 

Please allocate the Credit Card to the Correct accounts as required (i.e., based upon the type of business expenditure required). 

Please note that on your bank account that you have sufficient balances in the bank to cover  open and outstanding checks but no monies in the account. Please advise/correct ASAP so that no NSF charges are incurred. 

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, 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 & Beyond.

Duluth CPA: Getting Your Bookkeeping Correct Pays Dividends for Gwinnett Business Owners

For a new business or any who are going to have short or long term financing needs, it is critical for an entrepreneur to consistently stay in touch with their company’s internal financial statements.  An owner needs to stay in touch with their CPA first and then develop a relationship and to adequately understand all of the many nuances of bookkeeping and the preparation of financial statements.  This is critical to a business owner’s success.  Many times I have personally witnessed a business owner rushing into a bank’s office seeking cash to cover the next day’s or week’s payroll, because of their failure to contemplate the longer term implications of their financial decisions.  Although this is an extremely valid need, as all would agree, the act of responding on an ad-hoc or emergency basis sends a negative message to all concerned. 

Upcoming cash needs should not be a surprise as the key managers and owners should be well versed in upcoming cash needs.  The best way to avoid this is to start with the building blocks of prudent bookkeeping and preparation of reliable internal financial statements. When you are meeting the needs of a rapidly growing company, you are often faced with the cash needs to finance new receivables, an expanding inventory and the increased needs of personnel cost all concurrently.  Thus, it is critical to constantly stay abreast of current financial operations and their intersection of financing needs and specifically how they impact the company’s cash balances. To this end I might send the below as a sample critique to a company who needs to address several issues in the preparation of their financial statements:

In critiquing your internal financial statements I noted: 

One of your back accounts is reconciled as a negative balance. Please review this ASAP to ensure that no overdrafts occur. 

It appears as if you have capitalized several items in the fixed asset accounts that are below $1,000 each. I suggest that all items below this threshold should be expensed. You had one item over $1,000 in the fixed asset accounts. Please advise as to what this is so that I might track accordingly or that you might expense as needed. 

I suggest you re-class all of the monies in your smaller miscellaneous accounts to Office Supplies and then to mark these accounts as Inactive so that no further postings to this account can be done. 

Please review the charges to the Legal & Professional fees account and advise as to what they are and consider a re-class as needed.

Please get a statement from the bank confirming the Note Payable balance as of month end to ensure that the balance listed is correct and then to do a detailed transaction search for the year on the account to ensure correct, based upon items paid/incurred. 

Please record $1,000 of Depreciation Expense for the Month and for when you do future months. 

Please review your bank account as you had several checks dated 7-1-10 to ensure that these are still valid open  and outstanding checks. Also please review the deposits to ensure that they were all correctly classified as income and were not loans to the business. 

For the credit card charges in Office Supplies. Please re-class these items to the correct accounts and please charge future credit card charges accordingly to the correct categories. 

Please do not hesitate to call should you need any help in addressing any of the above issues.  

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, 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

Atlanta CPA: Teaches Atlanta Entrepreneurs on Understanding an Engagement Letter from your CPA 

Working with a CPA should not be difficult. Though much of the work a CPA might do is very difficult and technically challenging, engaging a CPA to work with you should not be. Whether you retain a CPA to critique your internal financial statements, preparation of corporate income taxes, IRS representation or an Offer in Compromise be sure to work with a CPA who is willing to provide you with an engagement letter so that you will understand your rights and responsibilities. The below is a sample of an engagement letter that would be shared with a corporate taxpayer for whom which a corporate income tax return is being prepared: 

Date______________________ 

To:______________________________________                                                

     ______________________________________

     ______________________________________

     ______________________________________

 Enclosed you will find the federal and state income tax returns for the company for the year ended 2009. Enclosed I have included instructions with respect to the filing of these tax returns.                                           

This letter is to confirm our understanding of the terms and objectives of our engagement and the nature and limitations of the services I have provided in connection with these compiled financial statements. 

1. 1.      I have performed the following services: I have compiled from information you provided the annual financial statements of the company for the above year-end. A compilation is limited to presenting in the form of financial statements information that is the representation of management.  I did not review or audit the financial statements and accordingly, do not express an opinion or any other form of assurance on them. The financial statements will not be accompanied by a report.

 Based upon our discussions with you, these financial statements have been designed to meet your needs in managing your business. Accordingly, these statements are for management’s use only and are not intended for third-party use.

Material departures from Generally Accepted Accounting Principles (GAAP) exist and the effects of those departures, if any, on the financial statements are not disclosed. In addition, substantially all disclosures and the statement of cash flows required by GAAP have been omitted. Notwithstanding these limitations, you represent that you have knowledge about the nature of the procedures applied and the basis of accounting and assumptions used in the preparation of the financial statements that allows you to place the financial information in the proper context. Further, you represent and agree that the use of the financial statements will be limited to members of management with similar knowledge.  

The financial statements are intended solely for the information and use of management and are not intended to be and should not be used by any other party. Should you require financial statements for third party use, we would be pleased to discuss with you the requested level of service. Such engagement would be considered separate and not deemed to be part of the services described in this engagement letter.

 This will confirm that you are solely responsible to establish and maintain internal controls, including monitoring ongoing financial activities related to the services.  Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist. However, I will inform the appropriate level of management of any material errors that come to our attention and any fraud or illegal acts that come to our attention, unless clearly inconsequential. In addition, I will report to you any evidence or information that comes to my attention during the performance of our procedures regarding illegal acts that may have occurred, unless they are clearly inconsequential.  No such fraudulent or illegal acts came to our attention during the engagement. 

In the event of a dispute over our engagement, we mutually agree that any dispute that may arise in connection with our engagement will be submitted to mediation by selecting a third party to help us reach an agreement.  We acknowledge that the results of this mediation will not be binding upon either of us.  The costs of the mediation will be shared equally by both of us.  If I incur legal fees as a result of our reliance on any false representation by you, you agree to reimburse us for all of our legal fees and related costs of defense.  In view of the limitations described above, you agree not to take, or assist in, any action seeking to hold us liable for damages due to any deficiency in the financial statements I prepare and you agree to hold us harmless from any liability and related legal costs arising from any third-party use of the financial statements in contravention of the terms of this agreement. 

This will confirm that all of my work will be done at our standard hourly rate of $195 per hour, that invoices are due upon receipt, that finance charges at the rate of two percent per month and collection costs are due on all unpaid monies, and that you personally guarantee payment of all invoices, and that you acknowledge that both you and your business/corporation are both jointly and severally liable for all billings.   If the foregoing is not in accordance with your understanding, please notify me in writing within five days of this letter. 

Sincerely, John C. Dillard, C.P.A.,  President 

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, 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

Atlanta CPA Teaches Bookkeeping for Atlanta Business Owners

Preparing Tax Returns and Financial Statements for Atlanta Business Owners & Entreprenuers for Decades

We have learned that throughout the years that working with clients who have their own internal financial statements, such as Quickbooks is essential to keeping your own company’s internal financial statements current as well as to keep their CPA fees to only required minimum levels. One of the best ways to ensure good bookkeeping is to not make changes to a period after a month is closed. Below is  sample letter that we might send to a client to help them both understand their internal bookkeeping and to properly compile their internal financial statements:

It looks like you made some changes to prior months after those months were closed.

Starting with this month when you send to me the data for a month please also send a P/L just for the current month. Please go ahead and send me one for August at your earliest convenience. 

It appears so far from looking at your data that you internal YTD profit at 8-31-10 of $100K fell to $20K at 9-30-10 as a result of the substantial loss in September. 

To be sure that your internal books still equal the August  internal data please send me a copy of the August P/L showing the $100,000 of YTD internal profit as you reported. 

Perhaps sometime next week you can spend a bit of time with Quickbooks to see if you can automatically print one report that shows both the current and the year to date column so that you will not have to show separate reports so that you will be able to analyze, critique and understand financial operating results from period to period.

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

 John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, 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,

Atlanta CPA on Bookkeeping for Your Metro Atlanta Business

Establishing a Chart of Accounts for Your New Business

One of the most important steps to keep your company/business legitimate is to make sure that you keep your personal expenses separate from your business expenses. To 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. The below is a chart of accounts that you can use for the initial set up for your company’s internal accounting and bookkeeping:

Assets

Checking (List Bank Name)

Fixed Assets (items greater than $1000 each that is bought for company’s use)

Fixed Assets (Accumulated Depreciation)

Liabilities

Due to Shareholder

Due From (List Bank Name)

Equity

Retained Earnings

Common Stock

Shareholder Distributions

Sales – Gross Income

Cost of Goods Sold

Purchases/Medical Supplies

Salaries – Owners

Salaries

Salaries – Payroll Taxes

General Expenses

Taxes & Licenses

Independent Contractors

Rent

Advertising

Contributions

Depreciation Expense

Pension/Retirement Expense

Legal & Professional Fees

Telephone & Utilities

Insurance – General

Insurance – Medical

Insurance – Life

Insurance – Disability

Travel

Meals & Entertainment

Office Supplies

Please be reminded that in the initial/start-up phases of your business that the chart of accounts will experience the most changes and critiques and that you chart of accounts will be modified as the business needs change.

“Dare to Attempt Something so Great for the Kingdom of God, that it is Doomed to Failure Lest God be in it!”

John Dillard, CPA of His CPA, PC (An Atlanta Christian CPA firm) 1940 Woods River Lane, Duluth, GA 30097  Phone 770-814-9304   http://www.hiscpa.com/    http://www.john-dillard.com/ (All Rights Reserved) To retain John Dillard CPA (An Atlanta Christian Speaker/Author) for your business group or church congregation, you can contact him today at 770.814.9304. To discover John Dillard’s Published Books and their vision visit  http://www.john-dillard.com/

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, 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.