Accounting Tips Guides

To qualify for being able to file shortened accounts a small company should satisfy at least two of three conditions. The three exemption conditions prior to April 2008 were that annual turnover is less than 5.6 million pounds, balance sheet total is less than 2.8 million pounds and the average number of employees is less than 50.

Where the financial year started after April 2008 the parameters increased to, annual turnover less than 6.5 million pounds, balance sheet total less than 3.26 million pounds and average number of employees less than 50.

Medium sized companies may also submit abbreviated accounts and the parameters to be classified as a medium sized company are significantly higher than those for a small company. For example for financial years starting from April 2008 two of the three qualifying conditions for a medium sized company to be satisfied were increased to sales turnover of under 25.9 million pounds, balance sheet total under 12.9 million pounds and average number of employees less than 250.

When a small company satisfies the audit exemption parameters it can maintain that audit exemption for a full financial year afterwards even if the parameters were exceed in that following financial year.

There are benefits in submitting abbreviated accounts as simpler and easier accounting records can be maintained reducing time spent on accountancy work. In addition although potential suppliers and financial institutions may require details of the year end financial accounts it is acceptable not to publish full details.

The main differences that can be produced under the banner of abbreviated accounts basically mean that a small company does not have to include a full balance sheet, profit and loss account or directors report which would normally be required by Companies House.

The small company is still required to submit a shortened balance sheet together with notes that explain the year end balances shown in the balance sheet. Under the audit exemption rules the year end accounts for a small company do not have to include an auditors report. When an auditor has prepared the accounts and submits a special audit report that report should state that in the auditors opinion the abbreviated accounts are being submitted in accordance with the appropriate section of the Companies Act.

Small companies must include a statement in the balance sheet that the year end accounts have been prepared in accordance with the special provisions contained in Part V11 of the Companies Act 1985. For financial periods starting after 5 April 2008 the accounts must be prepared in accordance with the Companies Act 2006 and include a statement that the special provisions applicable to small companies have been adopted

The statements to accompany the balance sheet of a small company submitting abbreviated audit exempt accounts are that:

The company was entitled to audit exemption for the financial year under the relevant section of the Companies Act 2006.

The shareholders have not required the company to obtain an audit.

The company directors acknowledge their responsibility for preparing accounts that comply with section 221 of the Companies Act 2006.

The company directors acknowledge their responsibility for preparing accounts which give a true and fair view of the state of affairs of the company and the profit and loss for the year.

The accounts have been prepared in accordance with the special provisions of the Companies Act relating to small companies

The rules on audit exemption apply not only to the year end accounts supplied to companies house but also those supplied to HMRC. This enables the small company to submit the short version of the corporation tax return, CT600, with the abbreviated accounts for tax purposes.

Terry Cartwright is a qualified accountant in the UK and producing Accounting and Audit Exemption packages for small limited companies in accordance with Companies House submission requirements.

Maybe you are one of the numerous taxpayers who have been affected by tax penalties levied by the IRS, as you were not able to pay your tax dues on time. It is obvious that for the taxpayers who have tax debts, the IRS will swiftly asses penalties and late fees on the due amount.

The interest may not be very high, but will accrue at a considerable rate and can increase your liability in general which will make it tougher to pay back to the IRS.

In case you have a very big amount of unpaid taxes and what you had to pay originally was much less than at present, then it is a good option of seeking tax relief by way of penalty abatement

What this means is that you as the taxpayer can get a total or part forgiveness of the money you owe to the IRS. And there are actually a number of cases where the IRS removes 100% of the penalty.

The IRS makes decisions on case to case basis, and this is very heartening as the reasonable cause can be anything as long as you can convince them of your inability to pay the tax and it also depends on your circumstances.

In fact, IRS guidelines generously suggest that abatement should be “generally granted when the taxpayer exercises ordinary business care and prudence” in trying to pay their taxes.

Penalty abatement is a very good chance for you to put forward your case to the IRS. Penalty abatement unlike other tax relief claims presents a human face of your case and that surely helps things going in your favor.

It is even possible that the IRS gives back the penalties which you have already paid to them on your tax defaults.

Penalty abatement gives an opportunity to a taxpayer to reduce the levied interest and penalties for some reasons as mentioned below.

-Reasonable cause is a very considerate clause by the IRS. In case you were conscious of tax laws, someone passed away in the family, you have been suffering from a serious ailment and could not do the needful then you can be eligible for penalty abatement.

-The other reason why you can ask for penalty abatement is administrative waivers. In case of some untoward adversity like natural disaster, bad advice from a tax professional, new to tax filing, mental problems, being unemployed for a long time, misplacing financial records or any other such problems.

-Another important reason for asking for this tax relief is when there has been a mistake from the side of the IRS in assessing your case or there was some wrong advice given by them when you filed your taxes.

There are three ways to present a case for abatement; written, verbal and through Form 843. The choice is yours but it is imperative to clarify your reason for asking penalty abatement and also explain how difficult it was for you to pay the tax dues. One can’t be sure of the result of your appeal, but you have better chances of abatement if your reasons are convincing enough.

You should be prepared for tough questioning from the IRS even if you have stated your case very well. Present your case forcefully and be persuasive and you may have a good chance of being granted penalty abatement.

Neil Lemons is a freelance writer on behalf of Allied Tax Solutions, a company of 20 year ex-IRS agents who help you negotiate your tax debt for pennies on the dollar. For more info on penalty abatement check out http://www.alliedtaxsolutions.com

You might be under the false impression that because someone owns a medical practice they are very wealthy. It might be true, but just as easily it might not. If a physician isn’t making the kind of money he should it might be because he doesn’t have the skills necessary to take care of the business side of his business.

A physician who recognizes this weakness will use the services of a medical billing company to take care of the details of his office.

These companies have a trained staff of medical billing professionals who are trained to take care of every billing need a medical practice would have. They can handle the insurance details as well as the medical coding part of the business.

Insurance companies can be very difficult to work with. They will deny a claim for the slightest reason and some of those reasons border on the ridiculous.

A medical practice that is quite busy with patients and chooses to submit their own claims to insurance companies will find that their claims are denied a good deal of the time. If a medical billing company is used, however, this does not happen as often.

A medical practice that sees a great many patients must fill out the insurance claim forms for every one of those patients. One person could be responsible for filling out the forms for every patient that visits the practice. That person must write out the insurance forms and send them off to the insurance company. If one error is made on those insurance forms the claim will be automatically denied. It is then sent back to be corrected and filled out again.

This can often overload the person that is responsible for handling the medical insurance forms.

When the claims are all filled out properly and everything is fine it can still take the insurance company months to send a check. If the practice is relatively small this can wreak havoc on the budget of the small practice. Especially, if there are claims that are denied all in the same time period.

When a medical billing company does the work the practice is relieved of the duty to handle the insurance forms and all of the problems that are associated with it. There are professionals working on the claims and getting them to the insurance company through electronic methods. This eliminates the need to enter the claims manually to the insurance company.

A medical billing company will also make sure that the claim goes through the process error and problem free. They will constantly monitor the claims to make sure that there is no problem. Most of these businesses have a success rate of more than ninety percent.

An electronic submittal of a claim gets either rejected or accepted right away. If it is accepted the check will be sent to the practice in days not months as happens with a manual system.

If the practice is small a business that will get them their checks from the insurance company quickly is the difference between success and failure. If the practice thinks that the cost of a medical billing company is too much for the small business to afford they should consider what is at stake and then analyze the cost.

A medical billing company will work for any type of practice no matter what kind of medicine they practice.

Peter Geisheker is CEO of The Geisheker Group marketing firm. One of the types of clients that Peter helps are medical billing services

“Just when you thought Sarbanes Oxley concerns had been sufficiently addressed so that non-public companies could take the issue off their dashboard, things have changed, ” says Gary W. Patterson, Enterprise Risk Management expert and speaker. He forewarns that Enterprise Risk Management (also referred to as ERM) will soon become a business issue for almost every business on the planet, including family-owned businesses, private companies, and nonprofits. This is a strategy shift for many of these organizations, which up until this point thought Sarbanes Oxley (sometimes affectionately known as Sarbox) applied only to public companies, and big ones at that.

One major reason for this sea change in philosophy is that both Standard & Poor and Moody are soliciting comments on their approach to ERM analysis and how they plan to factor it into their ratings. Their discussions will accelerate activity under way where bankers, governmental organizations, and regulators, in particular, have been considering the need for stronger corporate governance. For them Sarbox is an easily obtainable platform to use for drafting programs they believe should exist in corporations directly or indirectly under their jurisdiction. Lest you have any doubts, note how user friendly definitions from Wikipedia describe this trend.

“In business, enterprise risk management (ERM) includes the methods and processes used by organizations to manage risks (or seize opportunities) related to the achievement of their objectives. ERM provides a framework for risk management, which typically involves identifying particular events or circumstances relevant to the organization’s objectives (risks and opportunities), assessing them in terms of likelihood and magnitude of impact, determining a response strategy, and monitoring progress. ERM can also be described as a risk-based approach to managing an enterprise, integrating concepts of strategic planning, operations management, and internal control. ERM is evolving to address the needs of various stakeholders, who want to understand the broad spectrum of risks facing complex organizations to ensure they are appropriately managed. Regulators and debt rating agencies have increased their scrutiny on the risk management processes of companies.” per wikipedia.

Exactly when ERM programs will be implemented is a tougher question. Understandably, non-public companies have a range of reasons for preferring to delay the time when ERM factors will apply to them. However, the question is WHEN - not IF - some form of Enterprise Risk Management requirements will be applied. Family-owned business, other forms of private companies, and non-profits have been forewarned in a number of publications, speeches, and white papers over the last two years.

Some will say that we are drowning in white papers on ERM, corporate governance, Board of Directors, and risk analysis available and dismiss the issue. But those who are proactive, not reactive, will find the time well spent if they begin some level of enterprise risk management dialogue before something critical happens and your company is being second guessed by the ratings agencies, your auditors, or worse yet, a trial attorney.

The topic most companies neglect at their peril is the impact of a fast-approaching clean-energy-influenced economy. Here, we must reassess how much sooner we need to think about a renewable energy world as it relates to areas of your business that will be impacted both positively and negatively, and how that will change your company’s current and long range business plans, including the magnitude of those changes. After all, most C-level executives and their top management teams that I know do not like being second guessed and blind sided.

Gary W. Patterson has helped companies improve their profitability, reengineer their business models, and strengthen or gain competitive advantage in the marketplace. You can reach Gary at www.FiscalDoctor.com or take the free Fiscal Test at http://fiscaldoctor.com/fiscaltest.html.

The following item was reported in a recent American Institute of Certified Public Accountants communication:

“The Exempt Organizations Division of the IRS had posted on the IRS web site a controversial document setting forth the Service’s view on what constitutes good governance practices for tax-exempt entities. Included in the document was the suggestion that audit firms be rotated on a regular basis, with five years as the suggested term. The Institute protested the inclusion of this item in face-to-face meetings and in writing. Last month, the IRS dropped the document from its website, explaining that the new Form 990 sets forth the IRS’ current position on good governance practices which do not include the five-year rotation suggestion. ”

This is another sad example of a professional organization placing the good of its members over the public interest. The Institute has a long history of this type of advocacy. Why would the IRS recommended a five year audit rotation as a good governance practice for non profit organizations?

Audit rotation is designed to overcome two problems that can occur if an organization hires the same audit firm year in and year out. The first problem is that there is a tendency for audit firms to get too cozy with the management of the organizations they are assigned to audit. Personal and professional ties can easily impede auditor independence. Secondly, audit rotation provides the opportunity for the organization to be examined with a fresh pair of eyes.

This second issue is subtle. Accountants are creatures of habit and checklists. Things are done the same way as they were last year and often in a very mechanical and non critical manner. Many audit procedures and tests are numbingly mechanical and clerical and it is very easy to not view the audit process from a sufficiently critical and analytical point of view. Sometimes the most glaring internal control weaknesses can be overlooked simply because the auditors were not looking at the big picture but only concentrating on the minutia. A change in auditors guarantees that the organization in its entirety will get a fresh look and glaring internal control problems that may have been overlooked by the prior auditor may get picked up by the new one.

Of course CPA firms with long standing engagements with non profit organizations do not want to give up them up for obvious financial reasons. So these firms use their professional association, the Institute, to advocate against the obvious good governance practice that is clearly in the public interest. Such cynicism is sadly the rule not the exception for most professional organizations.

The IRS also should share some of the blame for caving into the audit firms on this issue. But it probably was not the IRS staff that caved but the higher ups who were pressured from the Bush administration. Whenever there is a divergence between private sector interests and the public interest you can pretty much count on the Bush administration siding with the private interests.

In any event the IRS had the right idea to begin with. Non profits should rotate their audit firms on a regular basis.

Michael Sack Elmaleh is a Certified Public Accountant and Certified Valuation Analyst. His book, “Financial Accounting: A Mercifully Brief Introduction”, has received wide critical acclaim. He has nearly 30 years of accounting and 10 years of teaching experience.His web site is understand-accounting.net

So you are thinking about asset tracking software for you business. There are a lot of options with as many price ranges to consider. Every time you call a business for help, they want to sell you a system that costs more then your total infrastructure. Asset Tracking SoftwareWell here are the basics to understand when shopping for the right asset tracking system for your business.

There are a few things to take into consideration when thinking about asset tracking software.

* What asset tracking software makes the most sense for your business? A hosted solution that is based on your server and maintained by your IT department on the network or a stand alone asset tracking software that is on one PC in the building.
* What is the total cost of ownership? Is the up front cost low only because there are a lot of hidden costs for upkeep and upgrade fees later?
* What is the main priority? Do you need a total solution to cover all your bases, or are you looking for a smaller, niche program to fit in with your overall ERP System?
* Is Customization and scalability important to your business plan? Do you want the solution to grow with your business needs in the future?

Once you have a baseline set with the answers to those questions, then you can look at a few of the solutions on the market. The solutions we have reviewed are the Redbeam Asset Tracking software solution, the Intellitrack Asset Tracking Software solution and then a custom package that is tailored for your ERP system and hard coded in.

Well, as you may know, the least expensive route to go is with the Redbeam asset tracking software. This package is a powerful stand along solution that is affordable and meets 90% of any asset tracking needs. The package is very limited in its ability to be customized, but it is based on an Sql Database and data can be dumped into text files for manipulation in MS Excel of other spreadsheet programs. Data can also be uploaded into the database on provided templates. The software comes in a standard addition and a mobile addition. The standard addition begins for a 1 user application at $495.00. This price allows the smallest business to automate their asset tracking with software that is dynamic and rich in features.

The Redbeam asset tracking software is a complete fixed asset database with the ability to use cabled barcode scanners attached to PC workstations. The software keeps asset records up to date and periodically allows users to take a physical inventory of assets. Data fields include barcode ID, location, department, maintenance, purchasing, warranty, lease, deprecation, information technology and 50 other user definable fields. The mobile addition works with the ability to collect data on scanner-enabled mobile computers.

Intellitrack also offers a complete asset tracking software solution. The Intellitrack product has many of the same features that the Redbeam software has, but the main difference is that it is completely scalable for your business. As business needs change, the software can grow with you. Intellitrack’s tracking software can even be RFID enabled taking advantage of the latest in smart label technology. Of course this package has a higher ticket price. The base software starts at $1,800.00 with 1 batch devise license.

Finally the last option we recommend is either using the Intellitrack base and customizing that to meet the full needs of your company or go with a total custom solution where software developers with develop and integrate a tracking software solution to your exact needs. This can range from $20,000 on up depending on how open your current system is.

Using the Redbeam product can accommodate most of the asset tracking applications. Our recommendation is the try the free demo’s by either of these 2 software developers and test them for yourself. We have many clients on both of these packages ranging from general offices tracking computers to police agencies tracking evidence in the evidence rooms. They are very satisfied and find no reason for a custom package to meet there asset tracking software needs.

John Barth founded Adazon Barcode Labels and Barcode Equipment www.adazonusa.com in 2003 and has a wealth of information in the barcode arena from over 20 years of experience in distribution. John’s experience allows companies to cut costs on asset tracking software, custom labels and total barcode solutions. For more information call 847-235-2700.