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Date: 6/28/2016 7:14 PM UTC

Sarbanes Oxley
 The Sarbanes-Oxley Act of 2002 was passed by the United States Congress as a way to protect investors from the risks of fraudulent accounting conducted by corporations. This act put strict reforms into place to improve financial disclosures and prevent fraudulent accounting practices. There are also regulations within the act that apply to privately held companies, such as the willful destruction of evidence to interfere with Federal Investigations.

The need for this Act arose after one too many large-scale corporate accounting scandals such as Arthur Andersen and Enron. With these big names in the news for fraud, public confidence became rather shaky.

The bill was signed into law on July 30, 2002 in hopes of reestablishing some of the public’s trust in corporations. It stands as the largest-reaching US securities legislation passed in recent years.

The Senate refers to the Sarbanes-Oxley Act as the “Public Company Accounting Reform and Investor Protection Act,” and the House refers to it as Sarbanes-Oxley, Sarbox or SOX.  

Regardless what you call it, the Act outlines how corporations must comply with the law. The Act is also intended to add stricter criminal penalties for certain acts of misconduct.

11 Titles Of Sarbanes-Oxley

There are many details outlined by this monumental Act, broken down into 11 different titles. Here are the fundamental points from each title that help make the overall premise more understandable for businesses and investors.

Title I: Public Company Accounting Oversight Board
The Public Company Accounting Oversight Board was instituted in order to manage the audit of all public corporations. The board creates and sets forth the standards and rules for auditing reports as well as inspects, investigates and enforces compliance with these rules. The board is also tasked with central oversight of the independent accounting firms assigned to provide auditing services.

Title II: Auditor Independence
In aims of removing conflicts of interest, there are nine sections within Title II that outline standards for external auditor independence. For instance, audit firm employees must wait one-year after leaving an accounting firm to become an executive for a former client. There are restrictions concerning new auditor approval and auditor reporting requirements. A company that provides auditing services to a client is not legally allowed to provide any other services to that same client.

Title III: Corporate Responsibility 
In order to further uphold accountability, regulations impose all senior executives with the individual responsibility of the accuracy of financial reports.

Title IV: Enhanced Financial Disclosures
The Act greatly increases the number of disclosures a company must make public such as off-balance-sheet transactions, stock transactions involving corporate officers, and pro-forma figures. All of these disclosures and more must be reported in a timely fashion.

Title V: Analyst Conflicts Of Interest
The point of Title V is to improve investor confidence regarding the reporting of securities analysts. This section includes codes of conduct as well as the disclosure of any and all conflicts of interests known to the company. Everything must be reported, such as if the analyst holds any stock in the company or has received any corporate compensation, or if the company is a client.   

Title VI: Commission Resources And Authority
Title VI outlines a number of practices including the SEC’s authority to remove someone from the position of a broker, advisor or dealer based upon certain conditions.

Title VII: Studies & Reports
Title VII outlines certain studies and reports the SEC and the Comptroller General must perform. These tests and reports include analyzing public accounting firms, credit rating agencies and investment banks to ensure they do not play a role in facilitating poor/illegal practices in securities markets.

Title VIII: Corporate and Criminal Fraud Accountability
Any alterations, concealment or destruction of records in hopes of influencing the outcome of a Federal investigation is punishable by fines and up to 20-years in prison. Anyone that plays a role in defrauding shareholders of publicly traded companies is subject to imprisonment and fines. Title VII also outlines special protections for whistle-blowers.  

Title IX: White Collar Crime Penalty Enhancement
There are 6 sections in Title IX, all in aims of increasing criminal penalties for white-collar crimes. This Title adds failure to certify corporate financial reports as a criminal offense, and encourages stronger sentencing guidelines in hopes of making punishments outweigh the potential for quick financial gains.

Title X: Corporate Tax Returns
 Section 1001 from Title X mandates the need for the Chief Executive Officer to sign company tax  returns.

Title XI: Corporate Fraud Accountability
Title XI includes seven sections dedicated to defining corporate fraud. It defines any tampering  of records as a criminal offense punishable under specific penalties. It also outlines sentencing guidelines and increases overall penalties. This particular Title gives the SEC the ability to freeze transactions considered “large” or “unusual.”

Posted by Brian Good | Post a Comment

Date: 6/23/2016 7:46 PM UTC

Every business needs bookkeeping and accounting to remain successful, and while these two terms are often lumped together they are not the same thing.

In simplest terms, bookkeeping includes the actual recording of all financial transactions. Accounting is the process of interpreting, analyzing, classifying, reporting and summarizing the financial data.  

Bookkeeping is a generalized set of repetitive tasks, while accounting is more complex in its jobs and responsibilities. As a result, accountants require a higher level of education and experience to get the job done right.

What Does A Bookkeeper Do?

The average bookkeeper is in charge of recording basic accounting transactions including:

  • Invoices from suppliers
  • Cash receipts from customers
  • Making sure suppliers are paid in a timely fashion
  • Processing payroll
  • Changes in inventory
  • Petty cash transactions
  • Any issues that arise with customer invoices

All of these procedures are mechanical in nature and even if the numbers change, the process follows the same routine month after month. While this data is used to generate financial statements, these statements alone are not considered complete. That’s because information generated by an accountant is necessary for a complete look at your overall financial picture.  

What Does An Accountant Do?

Accountants add to the information recorded by a bookkeeper, giving the adequate information necessary for a quality financial statement. An accountant adds the accruing or deferring expenses as well as the accruing or deferring revenue.

Additional tasks handled by an accountant include:

  • Creating a general ledger
  • Making the chart of accounts
  • Creating customized management reports that address any issues
  • Designing financial statements
  • Making a budget to compare with results
  • Completing a set of controls to operate the financial system within
  • Using financial information to create tax returns
  • Making adjustments to the classification or recordation of transactions in order to meet accounting standards
  • Creating a system that records, archives and destroys unnecessary documentation

Medium to large-sized businesses generally have an accountant on board that is in charge of these procedures. These same businesses often have multiple bookkeepers in charge of recording the mass amounts of data that come in and out of the company each day.

Can Someone Be Both A Bookkeeper & An Accountant?

People often confuse the two professions because there is a lot of overlap. Both deal with finances and require understanding of financial data. Some people are trained to handle both bookkeeping and accounting, but not everyone is.

A bookkeeper can successfully tackle their line of work by taking a few accounting courses and grasping a basic understanding of accounting. On the other hand, in order to perform high quality and beneficial accounting services one needs more specialized training. That’s because accounting requires a higher level of expertise in order to handle every aspect from recording data to analyzing it and understanding what it all means. Bookkeeping simply requires someone that knows how to properly record data.

While an accountant is qualified to also play bookkeeper, their time may be better-spent analyzing data as opposed to making note of it.

Does Your Business Need An Accountant?

A few clear signs your business could benefit from the addition of an accountant include:

1. You or the person hired to do bookkeeping is not experienced or familiar with accounting processes.

2. No one at your company specializes in U.S. Tax Code. 

3. Accounting tasks are taking you or other employees away from other tasks that directly impact your ability to grow. An accountant not only shows you how to incur growth, but they free up time to pursue endeavors that lead to growth. 

4. Your company is rapidly expanding and therefore producing more paperwork and overall number crunching.

5. You notice an increase in revenue but are not seeing an increase in profits. This is not an uncommon problem, but one that should be addressed by an accountant as soon as possible.

6. You have investors that want to see professional financial reports.

7. You plan to expand your business into other states.

If your business has a bookkeeper that you rely on to generate financial reports you could benefit greatly from having a certified accountant take a look at all of the data. There are so many things the trained eye can identify to drastically improve your overall financial picture. Instead of hiring a full-time accountant, you can save money by outsourcing accounting services to DGK Group.   

Posted by Brian Good | Post a Comment

Date: 6/16/2016 7:24 PM UTC

When a business is seeking a greater understanding of their financial position they often turn to a CFO, a Chief Financial Officer. An outsourced CFO provides ample insights to help your business increase in strength and financial security without the same costs of hiring an experienced CFO full-time.  

By outsourcing this important service with DGK Group, your business receives the benefits of knowledgeable outsider perspective along with a whole new set of efficient tools. Plus, it’s more affordable than hiring someone in-house full-time with comparable experience. We are still available to you every day to provide fast and reliable answers, solutions, reports and so forth.   

What Can A CFO Do For Your Business?

A CFO is in charge of reporting and interpreting the financial data needed to analyze and manage the growth of your business.  The exact extent of a CFO’s responsibilities may vary based upon the needs of your company. Overall, the CFO is responsible for helping a business conduct strategic financial objectives as well as to oversee operational accounting. The CFO deals with cost control measures, cash-flow management and forecasting, budgeting, capital acquisition, and so forth.  

An experienced and knowledgeable CFO should be on top of new-wave ideas in order to work with the current culture, economic conditions, taxes, government regulations and so forth.

8 Signs Your Business Needs A CFO…

1. You Have High Transaction Rates

The overall volume of business you conduct will help determine if you need a CFO. It’s not just how much money you generate, but the number of units sold and the overall complexity involved. More transactions warrant the need for a higher level of knowledge and experience as well as attention to detail.

2. Your Business Is Undergoing Rapid Growth

Growing pains are a real thing businesses face under the pressures of rapid expansion. When orders and production increase, so too does the need for additional capital and/or financing. This is where things can get complicated and an experienced CFO becomes your best friend in terms of figuring out where to acquire additional capital and how to keep up with growth and changes.   

3. You Are Preparing For A Merger Or Acquisition

In the instance your company is preparing to merge or acquire another company it’s important to have a qualified CFO on board.

4. You Spend A Lot Of Time Playing Financial Manager

If your daily duties are becoming distracted by a heavy financial workload, you could increase your personal work potential by outsourcing a CFO. A CFO will lighten your workload and help you find new ways to accomplish more through strategic planning.

5. Your Current Financial Procedures Are Not Efficient

Outsourcing CFO services gives you instant access to a much more efficient set of financial tools. As a result, you get a clearer picture of your business without the costs of investing in new technology. This also saves you a considerable amount of time, which can be best served elsewhere. Tools provided by an outsourced CFO can help you better collaborate with vendors, bankers, lawyers, unions and so forth.  

6. Your Staff Needs Training

If your financial department could use some training to improve efficiency and overall transactions, a CFO can help guide your team in the right direction. A CFO is also a great asset in order to make business accounting operations completely transparent.

7. You Need To Increase Profitability

If you are noticing discrepancies between what’s coming in the business and what’s going out, a CFO serves as a useful tool to help you get your business back on the right track to profitability. An experienced CFO has the tools and knowledge to help you make better financial decisions that could drastically alter how much profit you generate.  

8. You Need A CFO But Don’t Have The Budget To Hire Someone Full-Time

A full-time CFO with adequate experience is going to cost you a good deal of money in terms of annual salary. It’s not typically beneficial to sacrifice experience in order to pay less in salary. Instead, you can outsource CFO services to DGK Group and reap all the benefits of a truly experienced professional for a fraction of the cost to hire someone of equal experience full-time.    

Posted by Brian Good | Post a Comment

Date: 6/3/2016 7:37 PM UTC

Acquiring a new company is about more than just gaining a lead on the market. It’s about combining two separate entities into one successful force. The process includes merging computer systems, financial challenges and marketing teams, plus so much more. Mergers equate to a lot of work, but when done properly can lead to a lot of rewards.

Around 80% of mergers fail due to a number of easy to make mistakes, even for seasoned business professionals. Here are some important tips to consider when going through the M&A process for the most successful outcome possible.

1. Broaden Your Outlook Along With Your Brand

It’s important to recognize that any M&A results in a new company that requires a fresh outlook. It’s not just your company growing larger. Instead, it’s about adapting your mindset for a successful integration of two separate companies.  

You’ve got Culture A (your business) and Culture B (business you are acquiring), and you must create a Third Culture that combines both. Both businesses have their own unique culture and it’s your job to build the necessary bridges for the best of both to survive and thrive.

2. Know Where Your Business Stands Financially

Before entering any agreements it’s so important that you have a strong understanding of where your business stands financially, before and after the acquisition goes into play.

There was a time when it was all about profits and loss but now businesses see the importance of looking at liquidity. Does your business have enough liquidity to successfully pull off the transaction?

Acquisitions offer an exciting entryway to growth but it’s important to consider the strain it will place on company finances. Are you completely confident in its ability to carry this burden, and do you have the right capital funding strategies in place to handle anything that comes your way?

3. Rely On Your Team Via Clear Communication

Your team must be there to help assist the success of the merger so it’s important that they are in the know about what’s going on. Without clear communication and direction, worker morale will greatly suffer, ultimately hurting the success of your business.

If you need additional assistance pulling things off, you may want to bring in a team of temporary, specialized leaders that can help your business throughout the process in immeasurable ways.

4. It’s Not Just About Finances

One of the largest mistakes companies make during the M&A process is to view it as strictly financial. There are too many people with real feelings to ignore the non-financial side of things.

Communication is key, as listed above, but so too are presenting methodologies, teaching best practices, providing solid leadership, offering evaluations and reinventing the company from the bottom up. Large-scale collaborative efforts for creating change get everyone involved and feeling like a part of the change, as opposed to a victim of it.

5. Have Clear Goals

M&A strategies must include a clear set of goals including what you plan to do with your business and where your highest values rest.  This includes everything you plan to gain from the transaction. For instance, do you plan to gain market share? Do you plan to acquire new products or intellectual capital? Are you trying to beat out the competition by becoming the low-cost company dominating your industry?

Your goals are the most important component of the entire deal. An experienced financial consultant can help decipher the best ways to go about achieving all of your goals, and then some.

6. Turn To DGK Group

DGK Group has extensive experience working with companies going through the process of M&A. As a result, we have the insights necessary to give you a leg up during this often-trying time. Don’t go at it alone, we can help you prevent many common mistakes and enjoy greater success.

Posted by Brian Good | Post a Comment

Date: 5/24/2016 8:56 PM UTC

Financial Projections
Financial projections for startup companies are incredibly important for several reasons. You will need financial projections to secure financing from prospective lenders and investors, as well as to make sure your business is on the right track.

Comparing actual financial statements with projections allows you to determine if your business is breaking even, falling short or surpassing overall goals. As a result you are prepared to make the best decisions to help your business maintain healthy growth. 

DGK has the experience necessary to create realistic financial projections startup companies can depend on for guidance and to help secure financing. 

How Far Into The Future Should Startup Financial Projections Extend?

A quality financial projection highlights all facets of your business, including what comes in and what goes out in order to produce profits.

These projections generally extend three-years into the future. The goal behind this time frame is to break past the period of losing money nearly all startups face. In general, start up companies take around 18-months to hit the break-even point. By projecting out three-years you have the opportunity to forecast actual profit potential.

Two Key Components Of Financial Projections

The two key components all financial projections must include are sales forecast and an expense budget.

A Sales Forecast is a projection of sales extending out three-years into the future. In general, you tally monthly sales for the first year and quarterly sales for the following year. Important questions to consider when creating sales forecasts include: How many customers do you expect to obtain in the coming years? How many units do you plan to sell? What are the costs of goods sold?   

An Expense Budget incorporates both fixed costs and variable costs. Fixed costs include things like rent, while variable costs include things like marketing. An expense budget may include general figures as opposed to an exact break down of every last office supply purchased.  

3 Important Documents You’ll Need

Three core documents are required to create a financial projection statement: income statement, cash flow statement and balance sheet.

Income Statement shows how much money your business will produce by calculating projected income and expenses.

Cash Flow Statement goes into greater detail regarding all income and expenses for your business. At the end of a given period you total up all income and expenses to see if your business earned a profit, broke even or lost money.

Balance Sheet details your business’ overall finances. This includes assets, equity and any liabilities.

How To Determine Future Sales  

Perhaps the most challenging aspect is to determine how much money your business will be making three years from now. Some helpful tips in doing so…

- Make use of all market research you originally conducted when developing your business model and plan. Census data provides keen insights regarding profits of others in your industry. Industry associations and publications are also helpful tools to look into.  

- If you worked in your industry prior to starting a company you can use this experience to help create realistic financial projections.

- Get help from an experienced accountant with in-depth first-hand knowledge regarding small businesses and startups within your industry.  Under the guidance of our expertise, you’ll have a realistic list of expenses, as well as sales and profits you can expect to incur under good management. 

After creating a first draft, you should go back through and carefully extract or highlight any and all ‘assumptions’. You could then go back through in the future and see how these assumptions change and fluctuate based upon certain factors. 

Let Us Help You Create Beneficial Financial Projections

Experienced lenders and investors know that financial projections are simply estimates and anything can change. That doesn’t mean financial projections should be unrealistic, on the contrary they should be conservative and as realistic as possible.

It is not uncommon for a startup company to greatly overestimate figures, after all your business is your baby and naturally you have high hopes and expectations. Keep in mind that it’s always better to supersede expectations than to come up short. Plus, lenders and investors are trained to be skeptical of inflated projections that sound too good to be true.  

Allow our experienced accountants help your startup business create sound financial projections that benefit you long into the future.

Posted by Brian Good | Post a Comment

Date: 5/10/2016 5:39 PM UTC

There is no one size fits all employer-sponsored retirement plan. Instead, there are many options out there, and the best one for you depends on a number of factors. In general, an employer-sponsored retirement plan provides useful benefits to both employees and employers. These plans include things like automatic paycheck dedications transferred to savings, tax breaks and some companies even offer to match employee contributions up to a certain amount.     

Two Main Categories Of Employer-Sponsored Retirement Plans

There are two main categories that define retirement plans: a defined benefit plan and a defined contribution plan.

A defined benefit plan provides a guaranteed monthly benefit amount at the time of retirement. Also known as pension plans, defined benefit plans are sponsored by employers whom generally hire investment managers to handle accounts. The employer takes on the risk in this type of plan.

A defined contribution plan does not offer the same guaranteed payout at the time of retirement. A 401(k) is an example of a defined contribution plan. These types of plans include contributions from both employer and employee, often at a set percentage rate of an employee’s annual salary. The employee takes on the risk in this type of plan. The overall value of the account will change based upon the value of investments. At the time of retirement, employees receive the account balance based upon contributions plus or minus gains and losses from investments.  

Common Types Of Retirement Plans Offered By Employers

There are many types of retirement plans including 401(k) plans, 457 plans, Roth 401(k) plans, SIMPLE plans, 403(b) plans and many more. Talking the options over with a certified accountant will help you to determine the best plan for you.

1.     401(k) Plan
This is the most common type of employer-sponsored retirement plan. Most large, for-profit businesses offer this type of plan to employees. The employee is responsible for funding this plan but many companies offer to match a certain percentage of employee contributions. Employees have the opportunity to select which investments their money goes towards and retain complete control of the account at the time of retirement.

Employee contributions are eligible for annual tax deductions up to $18,000 as of 2016. If you are 50-years or older you are granted a catch-up provision that allows you to contribute an additional $6,000 per year. You pay tax on the money when you go to withdraw it from your 401(k).

Related Article: 7 Things You Need To Know About Your 401(k)

2.     Roth 401(k) Plan
This type of plan offers the same benefits as a traditional Roth IRA with the same employee contribution limits as a traditional 401(k) plan. A Roth 401(k) does not offer tax-deductions for contributions, but when you withdraw this money during retirement you will not pay tax as long you are over 59 ½ years old and have maintained money in the account for a minimum of 5 years.

Employees can offer to match contributions to a Roth 401(k), but these contributions must be placed into a regular 401(k). Employee contribution limits remain the same for both Roth 401(k) and 401(k) plans. If you have both a 401(k) and a Roth 401(k), combined contributions to both accounts cannot exceed the maximum contribution allowed to a standard 401(k) plan.

3.     403(b) Plan

A 403(b) plan is virtually the same thing as a 401(k) plan, but it is designated for nonprofit organizations such as hospitals, public school systems, churches and so forth. Employees largely fund these plans, and contributions come with tax deductions up to a specified amount. Employers have the option to match contributions based on a certain percentage. At the time this money is taken out of the account it is subject to taxation.

4.     SIMPLE Plan
SIMPLE (Savings Incentive Match Plan for Employees) is an IRA plan typically offered by smaller businesses. Employees make tax-deductible contributions to the plan and employers match contributions up to 3% of the employee’s salary, or make nonelective contributions.

The max amount of money you can contribute to a SIMPLE IRA plan in 2016 is $12,500. If you are 50-years or older the maximum amount goes up to $15,500 (or an additional $3,000).

These four plans are far from your only options. Allow DGK Group to assist you in finding the right employer-sponsored retirement plan for you.

Posted by Brian Good | Post a Comment

Date: 5/2/2016 5:47 PM UTC

Audit Help For Small Businesses: How To Prepare For An Audit By The IRS

Tax Audit
There is a great deal of stress associated with business audits, but with proper preparations the entire ordeal can be a lot less intimidating. There are few, if any, people that are unafraid of the IRS—even if you’ve done everything right as best to your ability. When you are notified of an audit you should respond to the IRS as quickly as possible. Once you send in a response it’s time to start preparing all necessary documents.

If you do not come prepared to your meeting the auditor is forced to estimate income and expenses, which comes with a separate penalty for poor record keeping. Don’t let this happen to you. Fear not the IRS with DGK Group on your side! We help obtain and assess all necessary information for small business audits.

What You Need To Find & Assess Prior To Your Audit

Tax Return(s) For Years Being Audited
The first thing to look at is the tax returns being audited. You’ll need to dig these returns out of your files in order to understand how you or your tax preparer assessed and came up with all listed figures.

The most important factor is the ability to back up all claims listed on your taxes with hard facts. If someone prepared your taxes you are in luck because they can help you go through all figures and explain things in plain terms.

All Records That Back Up Data On Tax Returns
The IRS has the legal rights to investigate any records used to help prepare tax returns. These records include receipts, checks and anything else that will validate the numbers you claimed.

It’s important that all of this information is well organized and easy to understand.
If you simply toss a huge envelope of random receipts at the auditor things aren’t going to go well. If the IRS has to start digging through your records, chances are they are going to make it worth their time by finding other things to go after you for.

Avoid needless digging by providing the facts in a clear and concise manner. Auditors don’t want to do more work than they have to. As a result, they tend to reward neat recordkeeping. Auditors are usually accountants by trade, meaning neat record keeping appeals to them. On the other hand, poor or messy record keeping raises huge red flags.  

Proof Of Tax Benefits
You may need to do some research on tax laws in order to back up deductions or tax benefits you received. This is where a professional really comes in handy. No matter how much research you conduct, there’s no way to have the same background knowledge as a professional accountant with vast experience working with and around tax laws.

What To Bring To Your Audit

The items you are required to bring to an audit should be listed on your audit notice. The most basic documents required include:

Bank Statements & Receipts
You will need to bring bank statements for both personal and business accounts in your name. Even canceled checks or invoices should be kept in your records and brought with you. Any payments made in cash should be backed up with receipts, handwritten notes, petty cash vouchers or some other form of proof.

Books & Records
Tax code laws state that small businesses don’t have to maintain formal books, but that doesn’t mean an auditor won’t try to tell you otherwise. It is legal for a small business to keep all records using a checkbook, cash register tape or other documented measure. If you do maintain more formal and detailed records be sure to bring them, as they can be very helpful.

Electronic Records
Print out bank and charge card statements in order to produce proof of payments and expenses. These electronic records must list the amount, date, name and address of payee. These details are not always included in online bank statements, which is why other forms of record keeping remain so important.  

Appointment Books & Logs
If you schedule appointments your business likely maintains an appointment book or log full of services provided throughout the year. If this helps back up some of the things listed on your taxes, bring it along. If the entry appears logical it may be accepted as proof.  

Records Of Office Equipment
‘Listed property’ used for both business and professional purposes include computers, cell phones and vehicles. This category does not include materials used strictly for business. If equipment is used for both business and pleasure the auditor may request a copy of all records of usage. If you don’t have records of this, you’ll have to create a working list from memory using things like documented projects as reference.

Auto Records
If you use vehicles for business make sure to keep careful record of expenses and uses. For instance, a collection of fuel receipts marked with the use of the vehicle at the time of filling up.  You could also add up all gas receipts and then divide the total number by the gas mileage your vehicle gets in order to show mileage traveled.

Travel & Entertainment Records
If you included travel and entertainment expenses on your taxes make sure to bring documented proof of these charges. In order to be considered valid you need written record as well as receipts. Keep detailed logs of all business expenses as you go to help make this less challenging. 

Learn about the common misconceptions with IRS Tax Audits here

DGK Group is here to help make your audit go smoother, reducing your risk for paying steep back taxes and fees. Contact us today to learn more.

Posted by Brian Good | Post a Comment

Date: 4/26/2016 5:46 AM UTC

Forensic Accountant
If you have been robbed or financially taken advantage of in any way you may need to hire a forensic accountant in order to seek justice. A forensic accountant is a trained professional that combines a host of skills to investigate financial cases from the inside out.

There are many reasons people hire Forensic Accountants, ranging to include suspected company fraud and even divorce.  You can accuse someone of taking millions of dollars from you, but you must prove it on paper for the courts to take it as truth. Forensic Accountants serve as expert witnesses in charge of researching, analyzing and then presenting the facts in a persuasive and undisputable manner to judges, jurors and mediators.

Attorneys, insurers, creditors and many other entities hire forensic accountants to conduct research and present findings as witness testimony in court.  It takes an experienced accountant for the job, someone great at crunching all the right numbers to reveal a raw look at overall damages in totality. As well as someone that knows where to look to find the most telling of damages. This helps prove exactly how much money you are owed to make right a wrong.

You May Benefit From A Forensic Accountant If…

You Suffered Commercial Damages: Forensic accountants provide the expert witness testimony you need to prove unjust commercial losses in court. They not only present the facts but they do the research to pinpoint complex matters involving breach of contract, product liability, fraud, construction claims, intellectual property infringement and so forth.

Employees Were Caught Stealing From Your Business: Business/employee fraud relations are complex. Every last dollar that was taken out from under you deserves to be returned. The only way to know the full sum total of damages is to have a forensic accountant investigate the situation. Many methods are used throughout these types of investigations including tracing of funds, suspect interviews, forensic intelligent gathering and more.

You Are Going Through A Messy Divorce: Divorce is one of the most stressful life experiences, but a good forensic accountant can be a valuable member on your team. When splitting assets, a forensic accountant is often required to make sure all parties are given their fair share. They are also hired to uncover how much income one should pay for spousal or child support.

Your Commercial Insurance Is Not Following Through On Claims: If you are not being properly supplemented through commercial insurance you may need this type of accountant to investigate coverage issues as well as calculate how much is owed in losses. The actual losses of the insured individual are assessed in regards to their current financial picture to determine how much coverage is owed.

You Have A Personal Injury Claim: Under these sorts of circumstances, the investigator puts together a sum total picture of losses and damages including everything from medical bills to lost wages. These claims may involve wrongful termination, medical malpractice, wrongful death cases and more.

You Are Involved In A Shareholder or Partnership Dispute: If partners are having disputes over who gets what, a forensic accountant will take a look at the entire picture, down to every last number. As a result, they come up with the exact amount of compensation or benefits owed to each shareholder or partner.

When To Hire A Forensic Accountant

It’s better to hire a forensic accountant early on in a lawsuit so that the opposing party does not have the opportunity to retain your expert. A forensic accountant knows how to get the discovery process moving quickly in the right direction, saving you time, money and hassles from the start.

Forensic accountants are useful in different elements of court cases. In fact, many cases would end much differently without their expert testimony. A forensic accountant is only as good as his or her track record. You want to hire someone that knows their stuff and has a strong background in accounting and financial analysis, as well as strong communication skills and the drive to never give up.  

DGK will proudly stand as your partner in and out of the courtroom! We do all of the research and analysis to back you up on paper, as well as present our findings in a way that the judge, jurors and mediators understand and accept as fact. When it comes to messy battles that involve money, you don’t want to go at it alone. With DGK on your side you never have to.

Posted by Brian Good | Post a Comment

Date: 4/18/2016 5:15 AM UTC

Accounting Mistakes
Small accounting mistakes can cost your business big time, limiting growth and causing serious setbacks. Here are 5 common accounting mistakes that you can avoid by simply being in the know.

1. Counting Profits As Cash Flow

In order to operate a business you have to make investments and purchase product, supplies, etc., but beware you are not buying product faster than profits can catch up. Otherwise, you could find yourself in a lot of debt.

It’s important to know how much money you are bringing in vs. how much money you are spending on product development. If you are making money on paper but constantly have no money left over at the end of each month it might come down to miscalculations in expenses vs. earnings.

The Solution:
Hire our certified CPAs to keep track of profits, expenses and losses, providing you with a clear picture of where your business stands at all times. It’s also important to carefully look over financial plans before embarking on an expansion to ensure your business will make back its investment within a reasonable time.  

2. Throwing Away Receipts

We live in a digital world but paper trails still hold power when it comes to deducting expenses or making up for any mistakes or gaps in accounting records. All purchase records for small and big purchases should be saved and accounted for. If you ever need to prove purchases to the IRS it’s going to be hard to do so if you don’t have any record of it.  Without the receipts to prove certain transactions the IRS will consider it an invalid dedication, charging you back tax and penalties.

Even if you don’t pay with cash you should still keep all receipts. Just because you use a card or check doesn’t mean you will have any record of what that charge was for.

The Solution:
Instead of hoarding piles of paper receipts for the rest of forever, there are online programs that will digitize receipts and save a copy so that you reduce clutter and increase ease of finding what you want. Let us help you keep track of all valid expenses in order to earn the tax credits that you deserve without hassle.

3. Mixing Up Business & Personal Expenses

Using business accounts to pay for non-business related expenses complicates things and raises red flags with the IRS. It never looks good if you are using company money to fund your personal life just as much, if not more, than you are investing back into the company. Not to mention, it complicates the numbers making it difficult to determine if you are breaking even, losing money or in the green.

The Solution:
Keep separate credit cards and bank accounts for business and personal use.  This makes it much easier to keep track of all profits, expenses and losses for your business. It will also simplify things when it comes to doing your taxes. 

      4. Not Checking Invoices & Vendor Statements 

Is someone in charge of checking over invoices and vendor statements to ensure everything matches up? One of the biggest ways employees steal from employers is by making up phony invoices that appear legit, but only at surface level. All that it takes is a little digging to ensure all invoices add up to the real deal.

The Solution:
Keep careful tabs on all charges that go through the company. There are software programs available that make it more difficult for employees to create new vendors or get away with creating phony invoices. 

      5. Not Staying On Top Of Receivables 

Playing bill collector is never a fun gig but it’s necessary in order to stay on top of company finances and keep your business financially thriving. Oftentimes businesses bill out invoices and then don’t keep track of when they are paid, and sometimes even if they are paid.

The Solution:
With so many invoices going out all of the time, it’s hard to keep track of what’s what.  Unless someone is assigned to the task it’s easy for invoices to become long overdue or underpaid. Accounting software can help automatically keep track of what is paid and when. Many of these same programs will send out reminders for late payments and offer clients a platform to pay online.

We Help You Avoid These Mistakes And Many More

DGK takes pride in helping small businesses keep track of finances to avoid IRS penalties, fraud, and other common issues that often arise from accounting mistakes. At the same time we can help your company find more opportunities for growth by creating concise reports packed with valuable insight.

Posted by Brian Good | Post a Comment

Date: 4/12/2016 5:27 AM UTC

Detailed Look At Four Basic Financial Statements

Accounting can be complicated but when you break it down into different parts it’s far more manageable. The four main financial statements include: balance sheets, income statements, cash flow statements and statements of shareholders’ equity.

These four financial statements are considered common accounting principles as outlined by GAAP. Businesses should keep careful track of all four of these statements. Especially if your company has shareholders, in which case you will need to produce these statements for them to review on a regular basis.

DGK offers hands on accounting services for businesses. Let us take care of the technical accounting details so that you can focus on running your business.

1. Balance Sheet

Balance SheetThe balance sheet is a basic financial statement that provides valuable up to date insights on the financial positioning of your business. The balance sheet is used to report entity resources as well as evaluate long-term obligations and goals. Balance sheets vary from year to year and offer a great comparison tool.

The balance sheet is based upon the following equation: 

Liabilities + Equity = Assets

There are two different types of assets, current and fixed. Current assets are easy to convert into cash and include things like notes receivable, inventory, marketable securities and prepaid assets. Fixed assets are marked as what you originally paid for them and may be worth a lot more when you sell them. Fixed assets include things like land, buildings, and equipment.

Liabilities are assets owed to creditors broken down into current and long-term classifications. Short-term or current liabilities include things like accounts payable, wages payable, and taxes payable. Long-term liabilities classify things like mortgages and bonds.

Equity defines owners and stockholders’ equity in a business. Equity owners only have a right to payment after creditors are paid. If the business were to close down for any reason, creditors are paid off before owners or shareholders receive anything.

2. Income Statement

Income Statement
Your income statement defines how much money you made in a certain period of time, for example one year. A simple equation used to define income statements:

Revenue – Expenses = Net Income

All expenses accumulated to produce a sale must be subtracted from revenue in order to know if your business is making money. In order to get a more detailed picture you also need to take into account any gains or losses that result from a good investment, a natural disaster or maybe even an unhappy client that refused to pay for services already provided.

3. Statement Of Owner’s Equity

Also known as Statement of Retained Earnings, this statement utilizes information produced by the Income Statement and in turn provides information to the Balance Sheet.

The basic equation for a sole proprietorship is:

Beginning Equity + Investments – Withdrawals  + Income = Ending Equity

If you are creating a Statement of Owner’s Equity for a corporation the equation goes as follows:

Beginning Equity + Investments – Dividends Paid  + Income = Ending Equity

Stockholder equity is calculated by:

Common Stock + Premium on Common Stock + Preferred Stock + Premium on Preferred Stock + Retained Earnings = Stockholders’ Equity

The premium on a stock is reflected by the actual price your company sold the stock for. Stockholders’ equity does not fluctuate with changing stock prices.

4. Cash Flow Statement

Cash Flow Statement
It’s very common for profitable companies to struggle keeping adequate funds in the bank.  The Cash Flow Statement helps to evaluate what’s really going in terms of cash sources and uses, while providing a solid way to assess how well your company can pay its bills. The information that goes on the cash flow statement is originated from the beginning and ending balance sheets, as well as the income statement for the same period.

Cash Flow Statements reflect:
-Where cash is sourced
-How company cash is used
-Any fluctuations in cash balances

This form of analysis breaks cash sources and cash flow into three categories: Operating, Investing and Financing Activities. From there you can determine where to make cuts if necessary.

Let Us Take Care Of Your Small Business Accounting

Outsourcing accounting can be a valuable tool for small businesses. DGK can help your business save money, time and hassles with our thorough small business accounting services. Let us take over all of your accounting needs or offer advisory support.

Posted by Brian Good | 2 Comments

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