Phoenix Arizona CPA | Arizona Tax Accountant | Arizona Income Tax

Occassionally, a negative balance arises in Accounts Payable (A/P), and business owners who take care of their own books don’t understand how the problem happened or what to do about it. Here’s the scoop:

A negative balance in A/P can sometimes mean that bills were entered, and checks were written against those bills, but the original bills somehow got deleted or voided. The bill-payment checks are left “hanging” in the system, creating a negative balance in A/P. Read the rest of this entry »

Every individual running a business wants to be free of the burden of paying money which they owe to anyone as soon as possible. Accounts payable literally means the money which a business owes to sellers for products and services which have been bought from them on credit. If not paid in time accounts payable can pile up and spell trouble for any business. If you are finding it difficult to keep a track of the amount of your accounts payable, then get accounts payable outsourcing service from an outsourcing company. This is the perfect way to deal with this condition. Read the rest of this entry »

The Old Deadline

On November 8, 2006, the Internal Revenue Serviced issued press release stating that six states and the District of Columbia had until Tuesday, April 17, 2007, to file their income tax returns for 2006. All other states, according to the press release, had to file by Monday, April 16, 2007.

The reason given was that April 16 was Patriot’s Day, a legal holiday, in those six states. Therefore, those states were granted one extra day to file their tax returns. States not celebrating Patriot’s Day were not granted the extra day.

The New Deadline Read the rest of this entry »

Accounts receivable simply means the money owed by customers (which may include organizations, companies, and corporations) to another business entity in exchange for various goods or services that have been utilized but not paid for. Receivables usually come in the form of lines of credit that have various time periods ranging from a few days to a year.

In the balance sheet of a company, accounts receivable is recorded as an asset since this is a legal obligation for a customer to remit cash for short term debts. On the balance sheet, accounts receivable basically reflects the amount that customers owe the company. Read the rest of this entry »

New small businesses and entrepreneurs quickly discover that the accounts payable process can turn into a monster. If it isn’t handled properly, unpaid bills pile up and get paid late, making vendors angry and possibly damaging the business’ credit rating.

Once a consistent procedure is developed, the accounts payable process can go smoothly. If you are in business by yourself and cannot afford to hire outside help, here are ten tips to help establish a consistent accounts payable process: Read the rest of this entry »

Factoring may not be the world’s oldest profession, but not far from it. This financial practice can be traced back to the Roman Empire. Factoring was the dominant form of finance in the American colonies before the Revolution (mainly textile firms). Over the past few decades, consolidation has created two distinct types of funding sources (called factors): large, institutional-owned factors and several small, independent factoring firms. Read the rest of this entry »

Create & Maintain an Appropriate Culture

Culture is important in any organization but to have the appropriate attitude of honesty and high ethical standards is important to prevent fraud.  Management must demonstrate this model by providing a tone at the top emphasis on this culture.  After setting the tone, management must follow up on this commitment by hiring the right people for the job and ensuring that their hiring policies are effective at eliminating those people that do not meet the standards set by the culture.  The hiring process should entail some form of background check in order to gather some information about their past ethical behavior.  After acceptance of new employees, management should clearly communicate their expectations and require written confirmation of a mutual understanding of these expectations. Read the rest of this entry »

Fraud Symptom Categories

1. Internal Control Problems - material weakness

The first thing to remember when looking at internal controls is the fraud triangle.  Without all three elements of opportunity, pressure and rationalization it is less likely that fraud will occur.  By creating controls that prevent these elements or detect them in a timely manner after occurance managers can effectively monitor compliance.

Specific internal control issues stem from the organizations structure.  Examples of symptoms of control deficiencies include a lack of the following: segregation of duties, independent verification, proper authorization, physical safeguards, overriding the system in place, and proper documentation. Read the rest of this entry »

Finding a good tax attorney who is competent to handle IRS tax matters can be challenging.  There are a number attorneys who claim to provide tax services, yet they have no tax experience or education.  The following is a top ten list of desirable tax attorney characteristics that will help taxpayers narrow down their list of potential tax attorneys:

1. The tax attorney has actual IRS experience, meaning that the tax attorney has actually worked for the IRS.  If you have a non-criminal tax matter (such as a tax debt, a tax lien, or you need to negotiate with the IRS), then you will want an attorney that has worked for the IRS Office of Chief Counsel.  This is the IRS’ legal department.  Taxpayers would be well advised to ask their would-be tax attorney whether they have worked for the IRS. Read the rest of this entry »

According to statistics, close to 1 million people will start a small business in the U.S. Unfortunately, at least 400,000 (40%) of those businesses will fail within the first year and more than 800,000 (80%) of them will be out of business within 5 years and 960,000 (96%) will have closed their doors before their 10th year in business.

The two key ingredients to help insure the success of any business are marketing and accounting. Marketing is extremely important because this is how you are going to acquire your clients. Accounting on the other hand will let you know if your business is making or losing money because if you’re a business owner, you need to know the score at all times. Where does your company financially stand today at any given moment? Generating lots of sales with no clue as to the financial position of your company is the same thing as saying we’re lost but we’re making great time. Read the rest of this entry »