Accounting-Best Practices

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If you own a business, one of the most important things you should do is to keep careful track of your expenditures and income. This is not only necessary to keep your business afloat financially, but also is an important way to analyze your spending and predict your future revenue. Careful business analysis allows you to predict what your future will be in a way that is not possible otherwise. But this requires best practices in accounting and bookkeeping. To do this efficiently and in a way that will best help your business, here are some of the best practices, according to accounting experts:
1. Have a certain time during the week that you double-check your records to be sure you haven’t made any mistakes. It often takes more than one or two times to make sure your banking information is accurate.
2. Run Quickbooks reports at least once per month and compare them to last month’s. What you are looking for is improvement over time. If you overspent on payroll last month, for example, try to isolate where the extra expenses took place and work on lowering this area the next month.
3. Compare accounting reports in different areas and try to focus your spending on the areas you want to invest more in, in order to improve your business and lower the expenditures which do not pay off for you.
4. Hire a professional bookkeeping agent to double-check your figures, to be sure you are on track with your budget and ask them for tips on how you can improve.
By practicing these helpful tips and accounting best practices, you will improve your financial situation and business and start moving toward more revenue and success for your business goals.
For information on how we can help your business with your accounting needs and help you reach your goals, contact us.
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Client Alert: New OMB Overhead Regulations

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The US Office of Management and Budget (OMB) announced the finalization of a new regulation impacting small nonprofits. OMB announced the finalization of new regulations increasing the audit threshold from $500,000 to $750,000 in annual Federal funding and setting a new minimum 10% indirect cost rate on Federal grants.

Recipients of Federal grants have long had to undergo an additional set of audit procedures known as the A-133 audit or single audit along with their financial statement audit. OMB has now exempted organizations receiving less than $750,000 per year in Federal funding from these procedures, saving small nonprofits both the additional cost paid to an audit firm to execute the procedures and the time of gathering all the required information.

The ability of a nonprofit to apply Federal funds to administrative expenses not directly associated with the purpose of the grant (indirect costs) has long been at the discretion of the Federal agency awarding the grant. Even within an agency there has been variation as some award programs have allowed spending on indirect costs and others have not. When spending on indirect costs is permitted, the same agency may sometimes set a fixed reimbursement rate or amount and at other times allow the nonprofit to negotiate reimbursement of its actual indirect cost rate or amount. Therefore, the ability of a nonprofit to achieve financial sustainability by funding its infrastructure has often had more to do with which Federal funding stream it is able to access than its own financial skill.

The new OMB regulations are an attempt to move the playing field closer to level by setting a minimum indirect cost reimbursement of 10% of direct costs. In other words, a nonprofit receiving a $100,000 Federal grant may now apply at least $9,100[1] of that $100,000 to infrastructure needs. The playing field will not be entirely level as some nonprofits will still be able to negotiate higher indirect cost rates. However, for small nonprofits without the resources or technical expertise to negotiate with the Federal government, this represents a significant increase in Federal support.

For math nerds: Indirect cost reimbursement = (Grant amount – (Grant amount/(1+indirect cost rate))). In this example, 9,100 = (100,000 – (100,000/1.1)

Source : http://www.amsolutions.net/articles/client-alert-new-omb-overhead-regulations

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