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Financial management & reporting system
Three aspects: Accounting, Reporting & Management
Money in - Money out
Accounts Receivable, Payroll and Accounts Payable
Assets, Liabilities, & Equity
Income, Expense, Profits
Balance Sheet, Income Statement, Cash Flow Statement
External vs Internal reporting
Management reporting (costs, profitability, budgets, forecasts, etc)
Allocation of capital
Who gets paid & when?
Cost management
1. Lay a good foundation
2. Keep it simple
3. Avoid the landmines
Cash flow forecast
Accounting software system
Internal controls
Procedures
Week 1 Week 2 Week 3
Starting Cash 100,000 85,000 60,000
+ Receipts 10,000 5,000 10,000 -Payroll (20,000)-Loans (8,000)-Rent (2,000)-Accts Pay. (15,000) (10,000) (10,000)
Ending Cash 85,000 60,000 60,000
Industry-Specific vs. Generic
Cloud vs. LAN
Plan for near term growth
Consider cost of maintenance
Accounting staff familiarity
Protection of assets
Reduce risk of errors in reporting
Separation of duties
Bank reconciliations
Check signing authorizations
System security controls
Keep it simple
Who does what and when
Routine deadlines – weekly, monthly, quarterly and annually
Monthly closeout schedule
Address significant accounting policies
Payroll taxes› “Responsible Person”› Trust Fund Recovery Penalty› OUTSOURCE!!
Sales taxes› Taxable vs Non-taxable sales› State specific› “Nexus”
Nexus for California:
“for sales and use tax purposes include (but are not limited to) the following:
Maintaining, occupying or using any type of office, sales room, warehouse or other place of business in California. This includes use that is temporary, indirect or through an agent or other representative.Having any kind of representative operating in the state for the purpose of taking orders, making sales or deliveries, installing, or assembling tangible personal property.Making repairs or providing maintenance or service to property sold, whether by employees, agents or other representatives.Deriving rentals from a lease of tangible personal property located in California.”
Employee vs Contractor› Employer is responsible for employees’ payroll taxes› Contractor is responsible for self-employment taxes› 20 Factor test – IRS Revenue Ruling 87-41
“In September 2011, former Secretary of Labor Hilda L. Solis announced a major step forward with the signing of a Memorandum of Understanding (MOU) between the Department and the Internal Revenue Service (IRS). Under this agreement, the agencies will work together and share information to reduce the incidence of misclassification of employees, to help reduce the tax gap, and to improve compliance with federal labor laws.”
Overtime rules
Owner transactions
Tax filing requirements (“nexus”)
“Creative” accounting
Todd Giustiniano, CPA
E.K. Lozano & Company
CPA’s & Consultants
220 Dalwill Drive
Mandeville, La 70471
985-727-9695
