how are you using your reviewers?
by edward mendlowitz and andy mendlowitz
how to review tax returns: the field-tested update
tax season is a microcosm of everything done in an accounting practice. one of the primary concerns of a business is having the proper processes and quality control procedures. choosing how to properly use the reviewers’ time and interface them with the staff can contribute immensely to a smooth tax season.
plus the principal tasks.
every business has a system of internal controls. very small businesses likely rely on luck and the honesty of their one or two office staff. small businesses rely on their independent auditors to check their system once a year and large companies employ one or more internal auditors on their staff.
more: the ten financial controls that’ll make you a hero | rule #1: start with cash | organization minutes too often overlooked | five cash reports you can’t live without | the priorities were backward | the seven-minute financial statement
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this post explains the internal audit process that applies to every size business. businesses have voluminous transactions; multiple people involved, companywide; and assets that need protection.
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this is not a question, but a story and comment.
by ed mendlowitz
202 questions and answers: managing an accounting practice
one sunday evening my wife and i went into a reasonably upscale restaurant and we had terrible service from everyone we interacted with.
more: how to offer family office services | why hiring out of school works | 15 tips for novice managers | what’s your ‘kg’ value? | when clients call you at home
when we were seated, the table wobbled, and we asked if they could do something or move us to another table. ten minutes later, someone showed up with a wad of napkins that made it worse. five minutes later, they asked if we were ok and put us at another table. ten minutes after that, they took our order, but we asked for some drinks immediately, which we only got after complaining to the manager.
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it doesn’t matter how great the system is.
by ed mendlowitz
77 ways to wow!
my last column addressed the importance of controls when trying to get a client. but it is also important to retain the client. a good system that is not monitored is a sure way to not only lose the client but be kept awake at night.
more: how to explain internal controls to clients | the ten financial controls that’ll make you a hero | five cash reports you can’t live without | when an audit is a great thing
if you have been around long enough, you’ve experienced a theft at a business or not-for-profit organization. for nearly ever fraud i have seen, the slightest effort would have thwarted those frauds. nowadays the only frauds i encounter are new engagements, where i try to quantify what was taken.
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bonus: sample letter.
by ed mendlowitz
101 questions and answers: managing an accounting practice, the complete 2-volume set
q: some of my clients are getting older and are becoming unable to handle their own financial affairs and i have been asked if i could assist them. what is involved and how do i charge for it?
more: why hiring out of school works | how to improve quality control | why no one listens to you | how to stop yourself | how to handle referrals with attorneys | why checklists?
a: many large firms provide “family office” services. this is a complete one-stop financial service that helps clients manage their money, pay their bills, collect their dividends and interest, and make sure insurance isn’t cancelled; mortgage, car lease or condo fee payments aren’t skipped; and tax payments paid on time.
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then you have to use them.
by ed mendlowitz
77 ways to wow!
what are internal controls? auditors widely use this term. it also appears multiple times in engagement letters for audits of businesses and not-for-profits, but i do not believe many outside of the accounting profession really know or understand what internal controls are. i will try to explain it here.
more: the ten financial controls that’ll make you a hero | rule #1: start with cash | the priorities were backward | how to read a financial statement | 77 thoughts about client needs
internal controls refer to an organization’s system of deterrence, oversight, checks and balances. an illustration is where someone in a business writes and mails the checks to pay a bill. if this same person then receives the bank statement and performs the reconciliation of that account, there would not be any control or oversight on that person and whether the payment was proper and not misdirected. they are checking their own work. this is how many frauds occur.
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what clients need to know.
by ed mendlowitz
77 ways to wow!
if you want your business to grow, don’t focus on only the easy financial controls where you can see quick results – such as holding down petty cash expenditures or checking expense accounts for accuracy.
more: rule #1: start with cash | organization minutes too often overlooked | the seven-minute financial statement | the kpi an absentee manager needs
instead, go for the tough steps that affect long-term profits and facilitate growth.