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Let’s Talk About Accounting Advisory Services

FAS CPA & Consultants

What Is Accounting Advisory Services?

There are some things you cannot do without outside support. Sometimes, you don’t have the time or the inclination, and sometimes you do not know-how.  Your accountant can provide tailored advice and opinions and the infrastructure to do some of those unpleasant tasks on your behalf. In addition, an experienced accounting professional possesses the expertise to provide guidance.

 

Small business owners must deal with numbers they find meaningless and financial conundrums that leave them uncomfortable and vulnerable. The trust relationship that develops between you and your accountant in these situations is where your use of advisory services starts.  A good accountant will listen actively and gather all the required information to understand your situation and goals.  From that point on, they can become valuable coaches that provide instinctual advice.

 

Your accounting advisor will become a member of your team.  It is their task to develop strategies that will grow your business.

 

Accounting advisory services often specialize in these fields, amongst others:

⇒ Cash Flow Forecasting.

⇒ Revenue Projections for Future planning.

⇒ ‘Budget v Actual’ Reviews.

⇒ Financial Advisory.

⇒ Process Advisory.

Apps Advisory.

⇒ Compliance and Forensic Advisory.

⇒ Successor Advisory.

 

The Role Of Advisor

The accounting advisory service addresses the financial health of the enterprise.  CFOs and financial coaches pursue the same goal, but they follow a somewhat different route.  A CFO will typically be very clinical and use precise methods to improve the enterprise’s financial health.  An accounting coach will also consider the entrepreneur’s unique personality and the specific character of the enterprise as part of his plan to improve the company’s financial health. 

 

For most small business owners, numbers mean nothing. They struggle to do forecasts, create budgets, and develop cash flow plans.  What they do wonder, often, is, “where did the money go, and how can I make more?”  They do not have much spare time, and they often lack complete financial understanding, so they need an accounting advisor to assist them. 

 

For those small business owners who fully grasp the numbers, an accounting professional can offer a fresh perspective once a team and coach relationship are established to facilitate guidance and drive introspective thinking that fosters results.  Those small businesses that already employ an accountant should expect her to have the financial expertise to perform Accounting Advisory Services. 

 

Advice

When you struggle to find your way through the numbers, you need someone to filter out the noise and focus on what’s important.  An accountant who is an authority in the field can elucidate your situation, increasing confidence and certainty.

 

Coach

Uncertainty over their lack of confidence and financial knowledge, many entrepreneurs become indecisive.  “Should you purchase assets, now?  What should my investment strategy be this year?” 

A great coach will be able to provide guidance designed for your specific needs. 

 

Perspective

As a businessperson, you spend your time scrutinizing your books.  You do things in a certain way.  An accountant (and advisor) has a broader perspective gained by his greater exposure. He is involved with many enterprises and various approaches to problem-solving.  They can ask the right questions and shine a new light on your old problems by reviewing processes and applying best practices.

 

Affirmation

Entrepreneurs are famously impatient and, in a hurry, and when change seems slow, they run the risk of drifting back to their old ways. A good coach will help set a realistic timeframe and touch base with you as often as necessary to help you stick to the plan and stay on track.

 

Consistency

You cannot develop a successful budget without an adequate understanding of all your requirements, and neither can your accountant.  You have to have frequent meetings to understand that it’s not all about accomplishment but also about developing long-term goals and plans.  It might take twelve to eighteen months to get this right.  Improvement is a marathon and not a sprint.  Reading your financials is more like watching a series than a movie.  The whole story over twelve months is told in your bank statements, and this shows you where the money came from and where it went.

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The Role Of Technology

Online accounting programs connect you with your advisors.  This way, they have real-time access to your bank feeds in a shared workspace.  Apps are available for the entrepreneur, and seamless integration is the norm.  Due to your accounting advisor’s continuous involvement, they will develop a unique understanding of your finances and processes, and they can use their expertise in technology to modernize and transform your enterprise.

 

Managing your technical accounting, tax, and financial reporting requirements is critical for your long-term viability.  Your Accounting Advisory can provide varied transactional support services to simplify the accounting issues across all your business activities.

⇒ Complex technical accounting skills.

⇒ Tax analysis.

⇒ Financial reporting analysis.

⇒ Combined accounting, valuation. Integration, tax, and technology skills.

⇒ Customized guidance to resolve numerous accounting issues before they jeopardize your enterprise.

⇒ Knowledge, insight, and perspective.

 

Challenges You Shouldn´t Face Alone 

⇒ Analyzing and handling data.

⇒ Complex reporting matters.

⇒ Cross border transactions.

⇒ Federal Government cost accounting regulatory reporting and audit readiness.

⇒ Ongoing compliance with complex accounting standards.

⇒ Preparation of financial statements.

⇒ Restatement of financial reporting.

⇒ SEC filing requirements.

⇒ The tax impact of individual transactions.

 

The information your Accounting Advisor seeks:

⇒ What are your short-term and long-term goals?

⇒ What will your business look like in one year, three years, and five years?

⇒ What type of information do you currently use to make critical business decisions?

⇒ How much money will you need to pay for future growth?

⇒ Who is your (target) customer?

⇒ How much does it cost to serve one customer? Or to produce one unit?

⇒ Do you have an exit strategy?

 

Typically, your first meetings with an Accounting Advisor can be exhausting and often lead to more confusion.  Pretty soon, you will develop an understanding of the information as you develop your insight.

 

The Accounting Advisory Service will follow a monthly worksheet that would look a lot like this one:

⇒ Gather business information.

⇒ What does the client need from a Accounting Advisory Service?

⇒ Daily, weekly, and monthly bookkeeping had been performed.

⇒ Monthly financial review completed.

⇒ Cash Flow management completed.

⇒ Budget developed and reviewed.

⇒Forecast for next period completed.

 

This process is repeated every month, and meetings occur to develop an action plan for the following month. 

 

Compliance Advisory vs Forensic Financial Advisory

Compliance advisory services deal with the prevention and remediation of fraud. Forensic services deal with discovering who, what, why, and how internal controls were broken down and circumvented to commit fraud.  The aim is to uncover information that can be used in legal proceedings to prove and substantiate fraud.

 

Compliance is the hallmark of a responsible business owner.  It’s about more than just being current with filing and paying your taxes—it is about confirming that your data is accurate and reliable.

 

Compliance Services

Most of the accountant’s tasks are compliance activities:

⇒ Preparing an income tax return.

⇒ Filing Sales Tax.

⇒ Running Payroll.

⇒ Reconciling a Bank Account.

 

Processes exist to ensure that federal, state, and local laws are followed, and that accuracy and transparency exist in a company’s financial reports.

 

It is the task of the Compliance Advisor to monitor changes and events that can affect the accuracy and reliability of your company’s records and reports.  In this context, a compliance advisory is a part of an accountant’s bookkeeping services.

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A Clean-Up Engagement

When you ask your accountant to organize your financial records following accounting standards and practices, you are involved in compliance activity. Typically, the advisory will be included in the service already provided, but sometimes the accounting professional will need a separate engagement for the clean-up project.

 

Clients who engage in a clean-up assessment most often also require further advisory engagements, including:

⇒ Internal Controls Assessment.

⇒ Full Forensic Examination.

Types Of Compliance And Forensic Services

⇒ Business Registration/Deregistration

All new enterprises must register with the federal government and the states and towns where they operate.  Your compliance advisor will guide you through the forms you need to file.

 

Your accountant must be careful when they offer advice on compliance. For example, helping you to complete business registration forms and other requirements fall in their purview. Still, they cannot help you complete your articles of incorporation or other legal, organizational documents – this might be construed as the unauthorized practice of law.

 

⇒ Accounting System Setup

Another task for the compliance advisor is the setup of your accounting system.  It entails selecting charts of accounts, the design of workflows, and the creation of internal controls.

 

⇒Audit Support and Tax Representation

You will need your compliance advisory when you receive a letter from the IRS, state, or local tax authorities.  Your accountant in these matters must be authorized to represent you before the IRS and state tax authorities.  Their representation allows them to correspond and negotiate with the authorities on your behalf.  Audits can relate to:

⇒ Income Tax.

⇒ Sales Tax.

⇒ Payroll Tax.

⇒ Property Tax.

 

⇒ Workers’ Compensation & Other Insurance Audit Reporting

Prices for worker’s compensation insurance policies are based on your expected payroll for a period. Then, at the end of the policy, an audit is done to “true-up” the price based on the actual payroll.

 

Failure to submit the required audit report can allow the insurance company to ‘lock in’ the quoted rate, and you can end up leaving money on the table.

 

⇒ Assistance with Loans

You might need help organizing the paperwork to apply for loans or guidance on the best credit card products and merchant service providers out there.

 

Specialty Compliance Services 

Specialty Compliance Services require expert knowledge and unique skill sets to meet specific rules and regulations.

 

⇒ Federal Defense Contracting Accounting Audit Support.

Contractors to some US government agencies are subject to the Federal Acquisition Regulation (FAR).  Set forth by the Office of Regulation Management and enforced by the Defense Contractor Management Agency (DCMA), these regulations are substantive.

⇒ Contractors are subject to mandatory audits of their accounting system processes.

⇒ An annual audit of their financial records for every year they receive contracts.

 

Setting up a FAR compliant accounting system is complicated, and you will require support from your compliance advisory.

 

⇒ Internal Control Assessments

As your business grows and needs more staff, internal controls become critical to prevent fraud.  Your compliance advisory can do internal control assessments to help uncover inadequacies and create procedures and processes to protect your interests.

 

⇒ Subject matter-or expert witness

When you are involved in legal proceedings, you might one day require a compliance advisory with deep knowledge and experience to appear as a subject matter expert or an expert witness.

 

Compliance Advisory comes in many forms. It includes tax and regulatory advice, loan advisory compliance, and institutional needs like personal asset statements.  Compliance is about a lot more than filing tax returns on time.  Your data must be accurate – you have to be sure that you are not fraudulently understating income to relieve your tax burden.  Without internal controls and proper procedures, the value of a company goes down.

⇒ Anything that poses a very high risk to the enterprise MUST be fixed within thirty days. Therefore, timeline goals are always related to the risk level.

⇒ Compliance advisory is about knowing what information is required and when and maintaining relationships to comply with the rules and regulations.

Check The Video Version Importance Of Accounting for Business

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