Wednesday, July 21, 2010

Internal Controls and QuickBooks

Internal controls are necessary to reduce the risk of fraud. Even employees who are honest can be tempted when they handle large sums of money on a regular basis. This is especially true it the business owner has not implemented any access controls or set up shared control over the business finances. With the additional pressure of an unstable economy, the temptation can become too great for some people if there are no controls in place – remember desperate people do desperate things.

Once the control policies and procedures are established, management should ensure that the controls are being followed.

One thing to consider when creating an internal control policy is limiting permissions for people using QuickBooks® and creating a separate user sign-on for each user. In a small business environment, bookkeeping is often performed by only one or two employees. However, it is still important to give serious consideration to the areas of the system they are allowed to access. QuickBooks® will allow you to limit or even deny a user’s access to certain areas of the system. Management should take the time to become familiar with the capabilities of QuickBooks® and to limit an employee’s access in areas that might not be appropriate. Make sure you have a policy in place that does NOT allow employees to share passwords! If you have a larger accounting staff, you should limit access by areas of responsibility among staff (i.e. A/P vs. A/P). No single person in the organization (other than the owner) should have “ADMIN” rights to everything. The issue with making someone other than the owner an administrator is that it allows them to cover their own tracks, or over-ride important control provisions.

Summer Hiring

With politics and business laws continuously changing, it’s hard to keep up with all of the federal rules and regulations for running a business. What do I have to do and what is optional? How do I handle payroll for a student intern? What paperwork should I file if I employ my own child? With summer in full swing, many of you have probably signed on new employees for part-time help. Whether it is a full-time seasonal employee, a part-time student intern, or your own family member, there are some important things to keep in mind as you hire summertime help.


Remember:

• For 100% Parent Owned Entities Employing their Children

 If the parent owns 100% of the business, the owners’ children may work any number of hours or any time of day. Children under 16 years of age are not permitted to do hazardous work, work where food is cooked, or work near flammable or hazardous materials

 100% owners hiring only immediate family are not required to pay minimum wage. BUT if they regularly employ others minimum wage must be met, even for family.

 Wages are exempt from FUTA if owners’ children are under 21.

 If the owners’ children are under 18, wages are exempt from FICA but FIT must be withheld on W-2s filed for children.

 For other employed children under the age of 18, obtain an age certificate recognized by the U.S. Department of Labor and your state Wage and Hour Division (WHD). This is to be returned to the workers at time of termination; these workers may not do hazardous work.

 Other children ages 14-15 are permitted to work 8 hours/day, 40 hours/week, June 1- Labor Day, between 7 a.m. – 9 p.m. if school is not in session. These limits do not apply to news carriers or children employed by a parent who is the 100% owner of the business.

 Children under 14 cannot be hired unless hired by a parent who is the sole owner.

• Pay for a holiday is optional for part-time and summer help.

• No paid vacation time is required. However, if one chooses to give paid vacation time some federal and states laws apply.

• Providing health insurance or other benefits to temporary or part-time employees is optional. If these benefits are not offered, however, it should be stated in a written benefits plan.

• A Federal W-4 should be obtained from all summer employees, including seasonal workers, part-time, and foreign students.

• One should withhold FIT (Federal Income Tax) from all summer employees unless their W-4 results in no withholding.

• FICA should be withheld from all workers, even those who receive Social Security benefits and high school students. (students under 18 working for sole-owner parents are exempt from this)

• Overtime is due for any time worked past 40 hours in the workweek, but is not required for paid time-off.

• And don’t forget that you may be eligible for 6.2% HIRE exemption from employer Social Security tax on the wages of summer help.
Be sure to read about The Roper Group’s new hires at http://bit.ly/ropernewemployees

(information contained in this article was found in the June 2010 edition of The General Ledger: The Complete Newsletter for Professional Bookkeepers)

Tuesday, July 20, 2010

Going GREEN

"C'mon! Everybody's Doin' it!"
Tips for summer sustainability

• Mosquitoes are a pest in the summer months, but for some, chemical filled repellents aren’t worth it either. Using garlic or planting rosemary can ward off the summertime pests. If you need to pull out the big guns look into the Mosquito Magnet.

• Dehydration can be a person’s worst enemy and the risk of becoming dehydrated is substantially increased in the summer heat. Stay hydrated by using an at home water filter and carrying your own reusable water bottle. This reduces waste and is more cost effective!

• In your daily commute, try to avoid excessively high driving speeds. Gas mileage drops rapidly above 60 mph. Also, using the cruise control can help! It’s helps you maintain a constant speed and saves gas.

• Enjoy all the delicious tastes of summer this season and boost your local economy – eat locally grown foods. Besides being a fun way to spend an afternoon, farmer’s markets are great outlets for fresh fruits and veggies!

• Change your home and office lighting to energy efficient fluorescent bulbs. Not only will this simple change help you save money, it will save energy, too! If every American home replaced just one light with an Engery Star light it would prevent 9 billion pounds of greenhouse gas emissions – equivalent to the emission of 800,000 cars!

Wednesday, July 14, 2010

New Tax Credits Could Help You Save

In April, the IRS starting sending postcards to small businesses to inform them of the new Small Business Health Care Tax Credit. Even though it may seem that April is ages ago, small businesses can (and should) check their eligibility and take advantage of the new legislation!


There are four main eligibility rules:

1. A qualifying employer must cover at least 50% of the cost of health care coverage for some of its worker’s based on single rate.

2. A qualifying employer must have less than 25 full-time workers (“full-time” being the key word here. Example: an employer having less than 50 part-time workers may qualify)

3. A qualifying employer must pay average annual wages below $50,000

4. Both taxable and tax-exempt firms may qualify

The credit can be claimed as part of the general business credit starting with the 2010 income tax return to be filed in 2011. If a small business meets these requirements, it may receive a credit of up to 35% for a small business’ premium costs in 2010. As of January 1, 2014, this credit increases to 50%. (remains 35% for tax-exempt employers) Also note that the credit phases out over time for firms whose average wages fall between $25,000 and $50,000 and for firms who maintain between 10 and 25 full time workers.

Tax laws are constantly changing and new legislation is forever been put into place or repealed. As a small business owner...or any business owner...it's worth it to keep up-to-date on what you qualify for and what could help you and your business!

For more information on this and other new tax legislation visit www.irs.gov.