Month: June 2018
In our recent post, we talked about all of the things lawyers have to do to keep their accounts squeaky clean: >
Deposit (most) retainers into a trust account.
Bill their clients, then apply all or some of the retainer funds against the bill.
Mark the invoice as paid, then transfer the applicable money from trust account to operating account.
Update the retainer balance accordingly.
In real life, here is what that looks like:
To see how closely related law firm billing and trust accounting are; take a look at this simple example:
1. On January 1, you opened a new case with an initial retainer of $5,000. You deposited the $5,000 in your attorney trust account. Your trust books need to reflect a retainer balance of $5,000.
2. In January, you record $2,700 in time and expenses. You charge it to the matter.
3. On January 31, your books need to reflect the following: $2,700 for the unbilled balance, and $5,000 for the retainer balance.
4. On February 1, you generate an invoice. This converts unbilled time and expenses to billed. Your books now need to reflect $0 for the unbilled balance, moving the $2,700 into the unpaid balance column. The retainer balance is still $5,000.
5. The same day, you pay the invoice from the client’s retainer balance. Your books now need to reflect the unbilled balance as $0, the unpaid balance as $0, and retainer balance as $2,300. You can make a deposit of $2,300 from your trust account to your operating account.
Skip one of these steps, and you are stuck playing detective.
Say you apply a retainer in trust to a specific invoice, but forget to write the check in your trust bookkeeping system. You’ll have an invoice marked paid, but no funds drawn. You might not even notice your own mistake. Imagine the headache involved in tracing this mistake.
Now multiply that scenario by a few occurrences. For each mistake? At best, you’ve got an administrative nightmare on your hands. At worst, you’re under billing-or in inadvertent violation of an ethical regulation.
An increasingly popular way of delivering IT services is through virtualization, which comes in several flavors. With server virtualization, a physical server is split into multiple virtual servers. Each virtual server can run its own full-fledged operating system, and these operating systems can be different from one virtual server to the next. The physical server typically runs a hypervisor program to create the virtual servers and manage the resources of the various operating systems. Then each virtual server can be employed as if it were a stand-alone physical server, thus reducing the number of physical servers needed in an IT shop and saving the organization money and space.
By desktop virtualization, whatever user sees on his/her desktop is completely isolated from the physical machine and accessed through a client/server computing model. This virtualized desktop environment is stored on a server, rather than on the local storage of the desktop device; when the user works from his or her desktop device, all the programs, applications, and data are kept on the server and all programs and applications are run on the server. In this kind of practice, the server does almost all the work and a thin client can be a normal desktop or it can be even notebook, smartphones.
The above virtualization model can serve ideally to the tax and accounting professional. For a general accountant or CPAs, the desktop consists of tax and accounting applications as well as many other supportive tools to process their operations. These applications require heavy system resources to function and there is even desperate need of any expert technician to manage their setup. Having separate desktop setup for each individual in the office not only costs in the term of licensing but also gives us huge burden of resource setup and management. A centralized server helps us to address these concerns.
Tax and accounting professionals can opt to use cloud computing to host their resources. Cloud computing is the latest form of the virtualization technology. By implementing cloud for tax and accounting practices, all the benefits of cloud computing get inherited to the operations of tax and accounting jobs. The major benefits of cloud computing are: increased performance, high availability, anywhere and anytime access and reduced expenses which can be very helpful to boost the performance of accounting firms or departments.
It is not necessary to have our own cloud computing or virtualization infrastructure to share the benefits of these technologies. We can choose any hosting provider to host our tax and accounting applications to get these features of technology. We even get full technical support on our resources. The hosting provider becomes responsible for setup, management and to fix the issues.
There are certain accounting errors that do not affect an accounting trial balance, including:
Error of total omission
This occurs when an accounting entry is completely omitted from the book of accounts. In such a case, the trial balance totals will still balance as no entry was ever made.
Original entry error
This occurs when the original entry was either overstated or understated by a certain amount. For instance, original purchases might be $200, but the accountant mistakes it for $100. The accountant then debits the purchases ledger account with $100 and credits the cash account or the creditors account with $100. This error will not affect the trial balance.
Compensating errors
These are multiple accounting errors that may individually affect the trial balance, but since they are multiple accounts, they end up canceling each other out and thus do not affect the totals of the trial balance.
Reversal error
This is an accounting error that occurs when the correct amounts are entered in the debit side instead of the credit side. This does not affect the trial balance.
Transposition errors
This error is caused when two adjacent digits are switched. The trail balance will still balance but the balancing amount would be wrong.
Error of principle
This accounting error occurs when the amount is entered correctly but is entered in the wrong account. This error will not affect the accounting trial balance.
These are some of the accounting errors that do not affect the accounting trial balance. Sometimes these errors may never be discovered.
There is a plethora of information on the web regarding Accounting errors that do not affect the trial balance. They have a good resources section and are helpful for both small businesses looking for a qualified certified public accountant AND CPAs looking for help with marketing. Their research service is free for small businesses looking for help with their accounting. The IRS website is also helpful but a little more technical.
A Jack of all trades is important to the quick demands on many businesses but Jack is a master of none. Although it may seem better to have a broad knowledge of many things, having a specialization can have its benefits, including helping in your decision-making. Career-wise, specialization does not mean that you do not have plenty of knowledge but it does require you to be an expert in at least one area. This gives you more job prospects and greater chances of getting noticed by recruiters. Strategic management programs are gaining popularity as employees become empowered to make strategic decisions, as they can one day become leaders of the company.
Realizing the potential for this area, Centennial College created a graduate certificate program in one of the popular areas in business: Accounting. The Strategic Management – Accounting (2844) program is based in accounting principles but with managerial leadership in mind. The School of Business deploys one of the best professors to teach the courses, contributing examples from their personal experiences to add much interest and value for students. The benefits of enrolling in this one-year program are described below:
Accounting graduates from universities and colleges can specialize in this program and increase their chances in getting hired as well as expanding their job prospects.
Students undergo an intensive training with theory, case studies, simulations and technical skills sought out by employers in the industry.
Upon graduation, learners can find employment in various industries in addition to financial institutions, including public administration, government offices, manufacturing industries, and public accounting firms.
As financial managers, graduates can become entrepreneurs and establish their own accounting firm.
Students canstart working on theirCGA Designation by moving up to level four of the requirements by the Certified General Accountants Association of Canada.
Students advance in their education, while progressing with their industry designation — a win-win situation where students spend their time resources wisely. Strategic management in accounting involves more than balancing books. The program teaches the following managerial perspectives:
A broader and more in-depth look into budgets, with lessons on capital budgeting, profitability analysis, and strategic accounting decision-making process
To define objectives and plan strategies for a multiplatform businesses by studying the five phases of strategy-making and strategy-executing process
Calculation and preparation of consolidated financial statements for non for profit and government organizations
Control the audit plan and audit program in accordance with the Generally Accepted Auditing Standards
Learn how to make decisions and apply actions in an ethical manner and in compliance with industry standards
Centennial College students will graduate with a positive outlook on their career in accounting. They are more prepared than ever to enter the workplace with strong knowledge of day-to-day operations and strategic view of the accounting function of a business. The Strategic Management – Accounting program also offers an articulated program for some graduates who want to pursue a degree with Centennial’s university partner.
If you are searching for a forensic accounting company, chances are that you are under too much pressure to deal with bookkeeping, file taxes, or investigate fraud, amongst other matters. Locating a reputable forensic accounting agency on the internet helps save some time to let you give attention to some other crucial aspects of your business.
Tip #1 – Evaluate If You’ll Need A Forensic Accountant
Forensic accountants can certainly be beneficial when it comes to gathering data that may be utilized in court in order to settle a dispute or assert a claim. Disagreements may occur between investors and partners, amongst doctors and their patients, as with medical malpractice; and also amongst spouses when identifying property in a divorce case. Business interruption as well as other kinds of insurance claims can be considered, as may professional negligence, employee fraud, and identity theft claims. If you or your company is involved in any of these issues, it is best to engage the services of an experienced forensic accountant that can assist with lawsuit support or investigation.
Tip #2 – Reduce Costs Through Outsourcing
Outsourcing your forensic accounting services needs will save you revenue and relieve the stress on your internal accounting staff. Forensic accountants are generally experienced when it comes to untangling bookkeeping errors and freeing up your employees to move forth with current accounting responsibilities to prevent additional blunders from happening. Sometimes, your accounting employees might not possess the experience to address your emergency situation. By way of example, in an employee discrimination suit, a forensic accounting professional has complex tools which will allow him to perform a complete, in-depth market analysis of pay rates that most in-house accountants are not able to access.
Tip #3 – Seek Out the Most Qualified Accountant
By far the most famous fictional detective, Sherlock Holmes, was an accountant. Many forensic accountants not only possess accounting diplomas, but are even CPAs (Certified Public Accountants) and/or CFEs (Certified Fraud Examiners. When exploring forensic accountants on the web, ensure that they have trained staff of which have these esignations, or perhaps that they are partnered with folks that are able to offer these types of skills.
Tip #4 – Start Earlier
If you have confirmed that the company requires the expertise of a forensic accountant, it is wise to employ one as soon as you notice you need assistance. The fact is, quite a few future business owners consult with a forensic accountant before purchasing a business to investigate the company seller’s assertions and make sense of the data given. Additional organizations hire forensic accounting professionals on an annual basis in order to spot-check books for fraud or theft. However you choose to proceed, the earlier a forensic accountant can gain access to the suspect information, the more quickly and painlessly the problem will be solved.