ISSUE
Liquidity is an essential element of running a successful business, but bridging the gap between “cash out” for production and “cash in” from customer sales can be a precarious balancing act. Are you doing everything you can to control the outflow of cash? How successful are your cash flow projections and what can you do to turn sales into real money quickly? Even with good profits, there will almost certainly be times when your business will run tight on […]
ISSUE
Expanding your operation can seem like a daunting task, particularly when keeping your venture afloat each month feels hard enough. In order to take your business to the next level, you’re seeking more than just financing – you need an engine that will best enable the business to achieve its primary business goals. Frequently, that engine is financial, such as the bank’s credit line or the venture capitalist’s cash. But it isn’t always. Sometimes, the right engine isn’t monetary […]
ISSUE
After all the planning that went into starting your business, the time has come to build on all that research and analysis investment to sustain short-term success well into the future. How long has it been since you revisited your business plan? Do your financial statements provide insights into the health of your business? How do you identify employees who can take on routine and managerial responsibilities, freeing you to envision what issues or trends affect your business expansion? […]
Larry Beebe, CPA
Entities have internal control systems that insure that investments owned by the organization are properly accounted for. Often the internal controls over the income of those investments is lacking.
During the audit of a pension fund, we examined whether the income on a $5,000,000 bond with a 9% interest rate had been received. We found that one of the semi-annual $225,000 interest payments was missing. When we tracked down the missing payment we found that it was being […]
ISSUE
Retirement, let alone plans to hand over the business, can seem like a distant speck on the horizon when virtually all of a business owner’s time is consumed by maintaining positive cash flow and a stable balance sheet. And if you don’t want to simply sell the business lock, stock and barrel – picking a successor isn’t always as easy as appointing a family member or assistant to take your place. Establishing a sound business succession plan is beneficial […]
Posting by Larry Beebe, CPA
The payroll audit firm should have a process identified for scheduling audits. It does not matter whether a supervisor, a clerical employee, or the auditor schedules the audit. What is important is that the person doing the scheduling keep a written diary of all contact with the employer during the scheduling process.
The great majority of employers cooperate with the scheduling process, but a few employers try to avoid scheduling the audit by refusing to commit […]
Larry Beebe, CPA
What does “cooking the books” mean?
Investopedia defines “cook the books” as “a buzzword performed by corporations in order to falsify their financial statements.” Examples include accelerating revenues and delaying expenses. A pension fund could make its year look better by holding open cash receipts until after year end to record receipts as income that should be recorded in the following year.
I once audited a business that showed a high cash balance at their December 31 year end. […]
Posting by Larry Beebe, CPA
A prospective payroll audit firm should answer this question with a question: What do you want us to do? The plan’s response depends on the circumstances. If the deficiencies have been fully identified by the end of the field work, the employer should be notified. On the other hand, if additional work is needed to determine whether more hours are covered by the collective bargaining unit (CBA), then a discussion with the employer may be […]
Larry Beebe, CPA
An employer to a collectively bargained employee benefit plan has a cash shortfall. He can’t stop paying his employees and he can’t delay the health and welfare contributions. What he can do is delay paying the pension contributions because his employees are unlikely to complain in the short or intermediate term.
I performed a payroll audit on an employer who was delinquent for months in pension contributions. The accountant for the employer admitted that he was delinquent to […]
Posting by Larry Beebe, CPA
A hypothetical example helps illustrate the importance of selecting an appropriate audit cycle for different employers. Let’s say a multiemployer plan has 300 contributing employers and a three-year audit cycle- It scheduled 100 audits each year. For each group of 100 audits, the plan has 30 with no deficiencies and at least 10 with deficiencies of $25,000 or more over the three-year period. Assume that the audit of each employer in the group with no […]
