Category: Information management

Posted on

Cash flow troubles can get you in more than just debt: CFOs can be liable for Payroll Tax liability, potentially criminal

Cash flow troubles can get you in more than just debt:

CFOs can be liable for Payroll Tax liability, potentially criminal

With the economy being sluggish and, in some regions, stalled and even worse, a lot of businesses both large and small are feeling the crunch.  Cash isn’t coming easily for anyone, and the cost of running the business and employing workers just keeps going up even if revenues don’t.  Managing cash flow is important when there is cash to manage, but keeping it all going when there isn’t much coming in takes real skill and planning.   Knowing where to cut or limit expenses is essential, but knowing what NOT to forgo when paying the bills can be just as critical if not more so.  You don’t pay the light bill, maybe the lights to out.  You don’t pay payroll taxes, maybe you go to jail.

A recent article on CFO.com discusses the findings where, in cases where payroll taxes were unpaid by the business, specific individuals were held directly and personally responsible for the liability.  And the liability is not contained solely within the walls of the C-level; it may extend to any and all individuals considered to be responsible.   Those who control the purse strings, making the daily decisions on what to and what not to pay, are the folks being identified as responsible for the failure to pay whether they were able to come up with the funds or not.

Responsible individuals, according to the penalty, may include corporate officers, directors, shareholders, bookkeepers and even third parties, such as CPAs, or corporate counsel. In exceptional cases, responsible individuals can have criminal tax liability for failure to pay payroll taxes.
CFO.com (http://s.tt/1p9wf)

To be fair, insufficient funds may seem like a logical reason for not paying payroll taxes. But the Ninth Circuit Court of Appeals in another case, United States v. Easterday, 564 F.3d 1004 (9th Cir. 2009), determined that Easterday could be convicted of a crime even though he may have been able to prove that his company didn’t have enough funds to pay the payroll taxes.
CFO.com (http://s.tt/1p9wf)

Accounting professionals working with businesses and acting as the Trusted Advisor can help their clients avoid facing this type of decision and risk by helping them to monitor and actively manage their businesses more closely – at an operational as well as financial level. Rather than relying upon a current bank account balance or after-the-fact financial reporting to provide the information for making decisions each day, business owners need continuous, real time, actionable data to help them keep the business going forward, and to help keep them out of trouble.

With better information, trend analysis and a little forecasting, accounting services and consultative advice from a trusted accounting professional does not simply help the business stay in business, it could help prevent the business owner, CFO or controller from having to wear an unfashionable orange jumpsuit and shackles.

Make Sense?

J

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
Posted on

Road Trip! Guidance You Can Count On

Road Trip!

Guidance You Can Count On

Keeping up on where you’re going is vital to any business, small or large. Watching trends, tracking expenses and monitoring cash flow are all basics of good business. You wouldn’t keep driving straight if the road veers to the left, would you? You might, if you don’t notice the curve. That’s the type of problem any business can run into, if you just don’t watch where you’re going.

Metrics are the lifeblood of any industry; from Information technology to accounting, manufacturing, and retail. Acting like a guidance system, or GPS, your company’s metrics will tell you where and when you need to make a change to keep up with your industry and the needs of your clients. Look at your business the way you look at a road trip across the country. Would you leave home without a map or directions to your destination? Probably not. You could, but getting where you want to be would become an almost insurmountable task. Without directions you end up taking wrong turns, getting lost, and just have a difficult time making forward progress.

The possibility of breaking down in the middle of nowhere grows as well. Like on a road trip, it’s probable that anything that goes wrong will do so at the worst time imaginable. Unlike your car, however, your business doesn’t have AAA. No one to call to bring you gas or give you a tow, so knowing you have what you need to get where you’re going is the best bet. The only way to do that is with metrics; gathered, compiled, and triple checked. Your business needs maintenance just like your car does. Oil changes, alignments, tune-ups, new tires when the weather changes or the old ones have worn out. It’s all part of being prepared; which is a good thing to be, in business or on a road trip.

Watching how your business is performing in the market should be a simple thing, but it’s not. Not usually anyway. It requires poring over spreadsheets, running the numbers a dozen times, and re-evaluating the information you gather again and again. It takes hours of your time. It takes hours of your clients’ time. Just pulling up all of the information you need is time-consuming, and often daunting, but compiling it into a usable form is a hefty task in and of itself.

In any business, using your time efficiently is a priority and usually easier said than done. More often than not the process of seeing where you’re heading takes hours. Literally, hours. Of course your financial software has reports and statistical data monitors built into it, but the information is usually presented in a way that is less than helpful when it comes to seeing trends or where you’re heading in any given aspect. One would think that in today’s society, where easier is always better, someone somewhere would come up with a solution to this problem.

Well, someone did. The Corelytics Financial Dashboard, from Corelytics.com, integrates directly with your accounting software of choice and pulls all of the data you need into one place. What used to take hours only takes minutes. The dashboard even gives you the ability to compare your business with industry standards and set customizable goals.  You’ve got the green light, so check your dashboard, get direction, and get your business moving forward.

Make Sense?

See the dynamics of your business come alive through the award-winning Corelytics dashboard at Cloud Summit 2012.

Get Cloud Summit information here.

Summit Sponsors include:

Posted on

Everybody Clicks: Keeping in touch with your business online

Everybody Clicks

Keeping in touch with your business online

In today’s technology focused market, it’s hard to find a way to stand out from the crowd. Making that effort to communicate with clients is more than just sending them a quarterly newsletter or email. It’s about evolving your business to meet their needs. Everyone wants everything online these days. It’s not just convenient anymore, it’s expected.

If your business doesn’t provide your clients with the level of online service they have come to expect, they probably won’t stay your clients for very long. If you want to make sure these new expectations are being met it means building and maintaining a presence on the web. That’s right; your website is the new face of your business. It’s often the first thing new clients see so it has to make a good impression. As the old saying goes, “you only get one first impression.” This adage is just as true for your website as it is for you. Old, outdated websites just aren’t good enough anymore. People want somewhere they can go to get the latest updates on the services your business provides, and they want it to be easy to find that information. Maintaining your website, keeping it up to date and full of useful information is important. It can also be time-consuming or expensive.

As a business professional, probably a bookkeeper or accountant, you probably spend as little time as possible managing your website and composing newsletters. Now, imagine that you just got back to the office after lunch and you want to do some work on the company website, maybe check on the traffic statistics while you’re at it. Normally you’d go and log in to three or four different places, one or two to do the work on the site and the other one or two to look at your statistics. This is a waste of time and energy, but not one you can avoid. Now let’s say you have some time left before you go home for the night and you realize you haven’t sent out this month’s newsletter. That’s another site to go log into. Site after site, a new interface or dashboard each time. Not to mention the hassle of entering your new contacts into your CRM or selecting the right recipients for the newsletter from your contacts lists. Everywhere you go there is another step to the process of staying in touch with your clients, to keeping the website updated and accurate. Login after login and dashboard after dashboard. What if there was something that could streamline everything? Keep your company’s blog in the same place as your site traffic statistics or web-based CRM solution? (Wouldn’t that be neat?) One login to get to everything. Keeping your clients informed, organized, and satisfied. Everything you want at the click of a mouse.

Your time is your money, so saving time is saving money. Having all of your online tools in one place would do just that. No wasted time, no need to repeatedly log in. Just getting everything taken care of, from one place. Not to mention your clients’ needs. Every business has a website nowadays; online payment options, blogs, forms to request information, the list goes on and the need for them is not confined to accounting and bookkeeping firms.

Let’s say you’re a small hobby shop, selling model trains and cars with all the odds and ends needed to build or maintain them. Do you rely solely on word of mouth or paper ads to bring you the business you need? Of course not. You get a website. The problem is you don’t know where to start. So, you hire someone to build it for you and to make changes when needed. That gets expensive. Ok, so you build it yourself using one of the many solutions available on the web today. Now you control everything, from the colors and graphics to the content but how do you track the traffic your site gets? Or what information your customers look at the most? Analytics of course! Unfortunately that means another thing to buy and another page to log into. The same goes for CRM solutions or email domains. Each aspect of your business is locked away in its own little corner. Frustrating, isn’t it?

Wouldn’t it be grand if you could change your homepage, send a newsletter, and track today’s site visits all from one place? Well, that’s where Nakea.net comes in. Nakea.net is a solution that is perfect for any business. It has web design, analytics, email marketing, contact management, and much more all in one place. That’s right.  One login and you have your world at your fingertips.  Just click to log in, and it’s all right there, with easy to use features and templates that allow you to gear your website, and your communications, to your clients and customers.

Make Sense?

Nakea.net, delivering the smartest social website your business can build, is a sponsor of Cloud Summit 2012.

Get Cloud Summit information here.

Summit Sponsors include:

Posted on

Accounting Professionals: It’s Good To Be Sticky

You’re a professional services provider, perhaps an accountant.  Your client is a growing business, and they came to you to prepare the corporate tax return.  After several years of faithfully performing this service for your client, you send them the annual email reminding them to bring in the information to get this year’s return completed.  When they don’t respond, you call them.  And find out that the tax return was completed by another accountant this year, the accountant who took over the bookkeeping.  “But we could have done that for you, too”, you say.  But now it’s too late, and the client has a different accountant.  Consider it an opportunity lost, along with the client.

Is this something you run in to fairly frequently, losing clients to others who provide substantially the same services as you do?  It happens to the best of firms, and the secret to keeping it from happening is to be sticky – delivering the services which securely attach the client to your firm – and provide the ongoing value that your business clients can’t do without.

The first place to create stickiness is in your service offering.  One-time or annual projects (like tax returns and audits) don’t keep you in front of your client often enough for them to think of you daily, and daily (or at least frequently) is how often you want them to think of you.  As the business owner faces daily decisions, do they consider calling you for advice or insight?  If not, then you probably aren’t delivering the value, or the sticky service, which will tie your practice to the client for the long-term.   Daily bookkeeping, or helping the client keep their books in order, is a valuable service that most small businesses need.  While your firm may not be realty interested in performing or supporting the business bookkeeping, it is important to recognize that this level of work allows the firm to be more intimately involved with client business processes, providing a great deal more insight and understanding into client operations than through an annual tax interview.  By attaching your firm to the daily activities of helping to account for business activities, you elevate your position from an occasional service provider to a consultant whose advice is sought after on a regular basis.  You are now in a position to understand better what areas of business may need focus and attention, and have placed yourself as a trusted advisor who can help determine the best course of action in any given situation.

The other, critical element to being sticky is to make sure your clients know what you can do for them.  Don’t assume that each of your clients knows what service or value you can offer them (you know what happens when you assume, right?).  You have to tell them; spell it out and thoroughly communicate the variety of ways your firm can help them.  Just because you’re an accountant, you should not assume the client will ask you to help them with various business issues.  Often, a business owner will face a challenge and not know who to turn to.  Seeking out the assistance of specialty consultants is a standard approach, as is turning to IT contractors, software consultants, attorneys, or other service providers. Why not you?  Did they know you were available to help with this?  If they didn’t call you, then they probably didn’t think this was a service you provide.

Accounting professionals serving business clients must not only make their range of services known, but should also actually ask for the additional business from those clients.  Only through consistent exploration and value building, asking the client if services offered might be valuable to them and demonstrating how those services have benefitted others, will the firm begin to make the impact necessary to keep the client coming back, and coming back for more.

When the client comes back for more, you know you’re getting sticky.  That’s a good thing.

Make Sense?

J

Posted on

Mobility and the Cloud – Managing “Bring Your Own Device” and Securing Company Resources

There are lots of reasons why businesses are adopting cloud and Internet technologies in great number, and supporting mobile workers is one of the big ones.  In order for traveling sales people or workers in remote offices to have access to business applications and data, many organizations are turning to hosted and cloud solutions to centralize systems and make enterprise-wide access easier to deliver and manage.

What many businesses are just now realizing, however, is that allowing individuals to use their own mobile devices to access corporate data is exposing the enterprise to new (and often unknown) risk with each and every device and app that gets used.

Most businesses recognize the need to secure corporate systems while allowing users to remotely access resources from home or mobile computers.

Many CIOs and IT managers are failing to address the vulnerabilities introduced through the proliferation of tablets and smartphones in the business. Some enterprises initially embraced the concept of “bring your own device” [BYOD], as it tended to encourage users to work from home or while on the road, increasing employee productivity and keeping workers more “attached” to their jobs – all without the business having to pay for the device.

With growing numbers of reported “rogue apps” and apps that secretly collect and pass data, the potential benefits of allowing workers to use their own devices is rapidly being overshadowed by the risks involved.

Earlier this year, Apple, Facebook, Yelp and several other firms were sued for privacy-infringing apps that, among other things, pillaged users’ address books. …but what if the app uploads a sales representatives’ contact list and the developer then sells it to a competitor? That’s a new type of data leakage that most organizations aren’t ready for.

http://www.cio.com/article/716368/Free_Mobile_Apps_Put_Your_BYOD_Strategies_at_Risk  

Phones, in particular, have not traditionally been viewed by most business owners as a primary platform for information theft or damage – other than when an employee uses one to tell someone something they shouldn’t.  But in terms of intrusion, data theft, application hacking and things like that… not so much.

But that was before phones got really smart.

Phones that most folks carry around now are actually computers with a great deal of processing and storage capacity, and as such are just as capable of running bad programs and being vulnerable to attack as their more obvious portable computer counterparts.  Perhaps they are even more vulnerable because of the “connected” nature of the device, because by its very nature it is geared towards communication of information, not just processing it.

It’s not that hackers and developers of exploits (or just bad code) are necessarily focusing on stealing your business data (well, OK, a lot of them are).  Maybe someone just got lucky one day, when they first realized that the employee phone was the “camel’s nose under the tent” which would get them inside, far enough to deliver access to confidential corporate information and data someone would pay for.  People tend to be the weakest element in the security chain, and exploiting vulnerabilities under the guise of “making things easier” for the user has been a highly successful approach (would you like to sign in with your Facebook account?).

..because attacks that target employees may well end up targeting the employer as well, even if the employer wasn’t the original target.

Whether it is intentional or not, the risk is very present, and every business and enterprise has a responsibility to recognize the vulnerabilities introduced with mobile device use and to do what it can to mitigate that risk.  It is also important to recognize that the risk is not a purely personal one, either.

Since the information held by most businesses also includes the information of others – customers, vendors, partners, etc. – it is essential that the business not expose itself to unnecessary problems (litigation, fines or penalties, or simply lost opportunity) caused by accidental leakage of confidential information belonging to 3rd parties.

For some businesses, the best answer may be to only allow use of devices the business provides, along with clearly written use policies and guidelines.  This approach allows the organization to determine which applications may be installed and to dictate how the device is to be used for business needs.

There are even solutions available which can assist businesses in managing the expenses related to mobile devices in the enterprise, addressing not only security and privacy concerns but also helping to optimize expenditures on mobile devices by monitoring contracts and usage, identifying underused agreements or overage charges, or even identifying contracts still in force which should have been cancelled.

For many businesses, however, allowing users to continue accessing business resources with their personal devices may be desirable for a variety of reasons, cost being only one of them.  If this is the case (as it is most often in small and growing businesses), it is important to make certain that users understand what is and is not appropriate device use, and to inform users on the policies relating to apps which may or may not be allowed and why.

Make sense?

J

Posted on

Turn Risk into Opportunity: Focusing on Value and Supporting Profitability

Turn Risk into Opportunity:

Focusing on Value and Supporting Profitability

Most businesses accept that they have “customers”, people who pay for the products and/or services that the business provides.  However, the customer many businesses fail to recognize is the “internal” customer – the consumer of services delivered internally to the organization.  These customers, most frequently recognized as co-workers and team members, depend upon the services delivered to them in order to do their jobs for the company.  This dependency represents the value of the service, and every organization has a need to get as much value as possible for the cost they expend for these services.  When the business approaches these internally delivered services as profit centers rather than pure cost centers, the impact to the business could highly beneficial as the application of resources gets focused on building strategic benefit for the company and not simply on supporting status quo.

Calling a part of the business a profit center doesn’t mean it’s going to sell services externally for money.  Rather, it means that the activities of the department can have a direct and meaningful impact to business profitability, and are participants in the development and facilitation of business strategy.  Profit centers can come in many flavors in a business, and may be identified as managers and owners reflect on areas of the business where changing conditions may introduce business risk.  Risk often translates to opportunity at some level.

A fairly obvious example of this is in the placement of IT departments and services within an organization.  If information technology is viewed purely as a cost-center and a “necessary evil” of doing business, it is more likely that IT services will have a perceived higher cost and lower level of value, as the technology is not considered a player in business strategy.  When technology is leveraged more directly to realize the strategic vision of the business, and is applied in ways which assist in delivering higher levels of service at a reduced cost while providing a means for market differentiation, the positive impacts in efficiency and profitability can be great.

A not-so-obvious example of a cost center which could be re-oriented towards increasing strategic positioning while making a positive improvement in internal service delivery (resulting in increases in performance and profitability) is the area of sales tax compliance.  Particularly with the emerging complexities introduced with cloud and Internet services, and with the lack of standards being the only consistency across the country, sales tax compliance is becoming a significant consideration and risk factor for businesses seeking to adopt cloud services and SaaS application solutions.

“Don’t just think of the tax department as a compliance shop,” says Waterfield. “It should also be considered a profit center. If given the proper resources, and access to information, it can provide the company the ability to become competitive in the marketplace either from assistance in calculating the proper price point or reducing overall tax expense on purchases.”
CFO.com (http://s.tt/1n56t)

Unless the tax compliance department is a direct participant in the consideration and adoption of cloud IT and other services, the business could end up with a significant liability and risk exposure that was not expected or allowed for.  Rather than finding this out after the fact, reviewing these types of potential impacts should be part of that same process which considered the adoption of the solution in the first place.

Accounting and tax professionals can find additional value to deliver to their existing and prospective clients by placing focus on these very important aspects of operating and managing a business.  As technology and globalization introduce more, and more complicated, issues relating to sales taxes and reporting compliance (which even the smallest of businesses must address) accounting and tax professionals should help their clients meet these changing requirements by offering proactive consultative guidance and support.

Make sense?

J

Read more about Should you be paying sales tax on your cloud solution?

Read more about Cloud FAQs for CFOs: CFO.com