- Virginia Society of CPAs Announces Outstanding Member of the Year, Top 5 Under 35
- Virginia Society of CPAs Recognizes 42 Members With Prestigious Life Member Award
- Congressmen Ask FASB to Reconsider Changes to Lease Accounting Standards
- New Exclusive Social Network Allows VSCPA Members to Connect Online
- Mobile Workforce Act Passes House
Friday, May 25, 2012
Top 5 Most Popular Articles: May 19–25, 2012
Here are the five most-read news articles on VSCPA.com! Articles are taken from the VSCPA News and Professional News sections and are ranked by unique page views.
Thursday, May 24, 2012
New Private Company Council: the Right Move?
On Wednesday, the board of trustees of the Financial Accounting Foundation (FAF) voted to establish the new Private Company Council (PCC) to deal with potential exceptions or modifications to U.S. Generally Accepted Accounting Principles (GAAP) for private companies.
The PCC’s changes will be subject to endorsement by the Financial Accounting Standards Board (FASB). The council laid out in a previous FAF proposal drew criticism for its lack of independence. However, the American Institute of CPAs (AICPA), which had criticized the previous proposal, voiced its support on Wednesday.
What do you think? How important is independence for private-company standard-setters? Sound off in the comments.
Monday, May 21, 2012
Guest Blogger: Seven Tips for Better Cash Flow Forecasts
By Mary Ellen Biery
Research Specialist, Sageworks, Inc.
Cash flow forecasts, the vital estimates of how much cash your business will have to continuing operating, are notoriously tricky because the many variables involved. Even so, accountants and other financial experts say there are several steps you can take to improve their accuracy.
1. Be conservative. Be skeptical about your managers’ and your own forecasts, especially when it comes to sales and expenses. “One incorrect assumption can have a large effect on your cash flow,” says Paula Griffo, chief financial officer of VoIP Supply, an Amherst, N.Y., provider of VoIP (Voice over Internet Protocol) solutions. “I always underestimate cash inflows and overestimate cash outflows to be on the safe side.”
2. Be aware of common pitfalls. For example, since you know accounts receivable is an area that can quickly ruin your cash flow forecast, improve your AR processes. David Douglass, a partner with Atlanta-based professional services firm Tatum, recommends that as customers go past 30 or 60 days, start calling, and set and enforce penalties.“If you are the CEO, send a message to the management team that invoicing customers as soon as possible, cash collections and cost controls are the lifeblood of any business, [and] are therefore ‘everyone’s concern,’” he says. “If the CEO doesn’t take cash forecasting very seriously, nobody else will.”
3. Update regularly. Perform and update cash flow forecasts frequently enough that you’re not surprised by the updated forecast, and as a result, caught with insufficient time to response.
4. Learn from mistakes. Strive to improve accuracy by comparing your actuals to your forecast so that you can learn from the process.
5. Hold others accountable. Several experts say that while the CFO is ultimately responsible for developing and updating a cash flow forecast, sales, manufacturing, shipping, accounting and other parts of the business should be held accountable for their roles in helping to achieve the forecast. Business owners and managers can structure performance quotas to meet a cash flow forecast and manage workers to those quotas.
6. Seek advice. “Everybody wonders, ‘What’s the secret to cash flows?’ and there isn’t one,” says Lauren Prosser, manager of advisory services at Sageworks. “There’s never a black-and-white answer. It’s always a matter of sitting down, looking at what you have and some what-if scenarios, and saying ‘I’m going to try that.’” Don’t be afraid to ask your accountant for help; he or she would probably welcome the chance to be more of an advisor for your business. “It’s a thought process, and someone has to walk you through it,” Prosser says.
7. Seek automated help. Cash flow forecasts are typically a standard part of budgeting or business modeling applications. “If you are considering an upgrade to your business modeling/forecasting processes, be sure that any applications being considered provide an integrated cash flow forecast that ties to the income statement and balance sheet,” says Douglass.
Mary Ellen Biery is a research specialist at Sageworks, a financial information company and maker of the ProfitCents suite of financial analysis applications. She is a veteran financial reporter whose works have appeared in The Wall Street Journal and on Dow Jones Newswires, CNN.com, MarketWatch.com, CNBC.com, and other sites. She received her undergraduate degree from Wake Forest University, where she graduated cum laude, and her master’s degree from the University of North Carolina at Chapel Hill.
Additional resources:
Sageworks’ solutions for cash flow analysis and projections: http://web.sageworksinc.com/cash-flow-projection/
JaxWorks Small Business Spreadsheet Factory: Has downloadable worksheets for weekly cash flow projections, 12-month cash flow forecast, etc. http://www.jaxworks.com/library.htm
How to Read a Financial Report, by John A. Tracy, John Wiley & Sons, 2004. http://books.google.com/books?id=Xzd3-NojmkgC&printsec=frontcover#v=onepage&q&f=false
Articles on Cash Flow Forecasting from the Government Finance Officers Association: http://www.estoregfoa.org/StaticContent/staticpages/TM0407.htm#1a
Research Specialist, Sageworks, Inc.
Cash flow forecasts, the vital estimates of how much cash your business will have to continuing operating, are notoriously tricky because the many variables involved. Even so, accountants and other financial experts say there are several steps you can take to improve their accuracy.
1. Be conservative. Be skeptical about your managers’ and your own forecasts, especially when it comes to sales and expenses. “One incorrect assumption can have a large effect on your cash flow,” says Paula Griffo, chief financial officer of VoIP Supply, an Amherst, N.Y., provider of VoIP (Voice over Internet Protocol) solutions. “I always underestimate cash inflows and overestimate cash outflows to be on the safe side.”
2. Be aware of common pitfalls. For example, since you know accounts receivable is an area that can quickly ruin your cash flow forecast, improve your AR processes. David Douglass, a partner with Atlanta-based professional services firm Tatum, recommends that as customers go past 30 or 60 days, start calling, and set and enforce penalties.“If you are the CEO, send a message to the management team that invoicing customers as soon as possible, cash collections and cost controls are the lifeblood of any business, [and] are therefore ‘everyone’s concern,’” he says. “If the CEO doesn’t take cash forecasting very seriously, nobody else will.”
3. Update regularly. Perform and update cash flow forecasts frequently enough that you’re not surprised by the updated forecast, and as a result, caught with insufficient time to response.
4. Learn from mistakes. Strive to improve accuracy by comparing your actuals to your forecast so that you can learn from the process.
5. Hold others accountable. Several experts say that while the CFO is ultimately responsible for developing and updating a cash flow forecast, sales, manufacturing, shipping, accounting and other parts of the business should be held accountable for their roles in helping to achieve the forecast. Business owners and managers can structure performance quotas to meet a cash flow forecast and manage workers to those quotas.
6. Seek advice. “Everybody wonders, ‘What’s the secret to cash flows?’ and there isn’t one,” says Lauren Prosser, manager of advisory services at Sageworks. “There’s never a black-and-white answer. It’s always a matter of sitting down, looking at what you have and some what-if scenarios, and saying ‘I’m going to try that.’” Don’t be afraid to ask your accountant for help; he or she would probably welcome the chance to be more of an advisor for your business. “It’s a thought process, and someone has to walk you through it,” Prosser says.
7. Seek automated help. Cash flow forecasts are typically a standard part of budgeting or business modeling applications. “If you are considering an upgrade to your business modeling/forecasting processes, be sure that any applications being considered provide an integrated cash flow forecast that ties to the income statement and balance sheet,” says Douglass.
Mary Ellen Biery is a research specialist at Sageworks, a financial information company and maker of the ProfitCents suite of financial analysis applications. She is a veteran financial reporter whose works have appeared in The Wall Street Journal and on Dow Jones Newswires, CNN.com, MarketWatch.com, CNBC.com, and other sites. She received her undergraduate degree from Wake Forest University, where she graduated cum laude, and her master’s degree from the University of North Carolina at Chapel Hill.
Additional resources:
Sageworks’ solutions for cash flow analysis and projections: http://web.sageworksinc.com/cash-flow-projection/
JaxWorks Small Business Spreadsheet Factory: Has downloadable worksheets for weekly cash flow projections, 12-month cash flow forecast, etc. http://www.jaxworks.com/library.htm
How to Read a Financial Report, by John A. Tracy, John Wiley & Sons, 2004. http://books.google.com/books?id=Xzd3-NojmkgC&printsec=frontcover#v=onepage&q&f=false
Articles on Cash Flow Forecasting from the Government Finance Officers Association: http://www.estoregfoa.org/StaticContent/staticpages/TM0407.htm#1a
Friday, May 18, 2012
Top 5 Most Popular Articles: May 12–18, 2012
Here are the five most-read news articles on VSCPA.com! Articles are taken from the VSCPA News and Professional News sections and are ranked by unique page views.
- Thomas Jefferson Institute Recommends Sales Tax on Services
- Applications for State Inspector General Due Thursday
- Virginia Groups Take Online Sales Tax Fight to Federal Level
- Virginia Society of CPAs Announces Outstanding Member of the Year, Top 5 Under 35
- New Designation Recognizes CPA-Qualified Management Accountants
Monday, May 14, 2012
Embrace Your Weaknesses: The Laziness Paradox
When is confidence a bad thing? Productivity expert Scott Young has the answer in his blog post “The Laziness Paradox: Embrace Your Weaknesses to Accomplish More.”
Young gives the example of a friend who was overconfident in his ability to accomplish some ambitious fitness goals. He writes: “The weakness of confidence is when you’re forming concrete, short-term plans. These occur on such small timescales that you’re unlikely to reap any of the benefit of your inadvertent boasting, so being too ambitious can actually hurt you.”
He goes on to discuss how recognizing his weaknesses helped him change bad habits:
Young gives the example of a friend who was overconfident in his ability to accomplish some ambitious fitness goals. He writes: “The weakness of confidence is when you’re forming concrete, short-term plans. These occur on such small timescales that you’re unlikely to reap any of the benefit of your inadvertent boasting, so being too ambitious can actually hurt you.”
He goes on to discuss how recognizing his weaknesses helped him change bad habits:
“For me, the biggest change in my life happened when I stopped trying to accomplish everything at once. I realized that I’m actually incredibly lazy—most of what I do has to do with habits and trivial stimuli, rather than deep thoughts.So consider acknowledging your weaknesses when planning your schedule and tasks. You just might get more done.
“Instead of trying to change every behavior at once, I would pick something incredibly small and simple and focus on it for an entire month. Even that can be difficult, but it meant I could make a change almost habitual before I tried something else.”
Friday, May 11, 2012
Top 5 Most Popular Articles: May 5–11, 2012
Here are the five most-read news articles on VSCPA.com! Articles are taken from the VSCPA News and Professional News sections and are ranked by unique page views.
- McDonnell Seeks Applicants for State Inspector General
- Virginia Groups Take Online Sales Tax Fight to Federal Level
- The 2011 Form 1040, Schedule D: Practitioner Issues
- Virginia Society of CPAs Recognizes Extraordinary Accounting Students in Virginia High Schools and Colleges
- Thomas Jefferson Institute Recommends Sales Tax on Services
Tuesday, May 8, 2012
'Amazon Bill' Headed Nationwide?
The “Amazon bill,” which recently made it through the Virginia General Assembly and was signed into law by Gov. Bob McDonnell, could be going nationwide.
The Virginia Main Street Leadership Council (VMSLC) will lobby Congress to pass a similar bill in order to create a more level playing field between brick-and-mortar stores and online retailers such as Amazon. Currently, states can’t collect sales tax from an online retailer unless that retailer has a physical presence in the state.
Virginia’s new bill allows the Commonwealth to collect taxes from Amazon because of its warehouse and data center in Sterling. Prior to the bill’s passage, even that didn’t require Amazon to collect and remit sales taxes because the building did not handle sales. (Since then, Amazon has announced plans to open distribution centers in Chesterfield and Dinwiddie counties.)
Amazon has also agreed to similar rules in Texas and Nevada. But the VSMLC will push for a federal law that applies to all states, rather than the current piecemeal approach.
The new taxes collected will raise an estimated $24 million for Virginia’s state and local governments. What do you think? Will a national approach simplify matters for taxpayers?
The Virginia Main Street Leadership Council (VMSLC) will lobby Congress to pass a similar bill in order to create a more level playing field between brick-and-mortar stores and online retailers such as Amazon. Currently, states can’t collect sales tax from an online retailer unless that retailer has a physical presence in the state.
Virginia’s new bill allows the Commonwealth to collect taxes from Amazon because of its warehouse and data center in Sterling. Prior to the bill’s passage, even that didn’t require Amazon to collect and remit sales taxes because the building did not handle sales. (Since then, Amazon has announced plans to open distribution centers in Chesterfield and Dinwiddie counties.)
Amazon has also agreed to similar rules in Texas and Nevada. But the VSMLC will push for a federal law that applies to all states, rather than the current piecemeal approach.
The new taxes collected will raise an estimated $24 million for Virginia’s state and local governments. What do you think? Will a national approach simplify matters for taxpayers?
Subscribe to:
Posts (Atom)