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A Day in the Life of a Marshall Jones Auditor

A Day in the Life of a Marshall Jones Auditor with Mallory Howard

A Day in the Life of a Marshall Jones Auditor

Auditors do essential work for businesses, non-profits and other organizations, helping them ensure their financial records are accurate and that they follow generally accepted accounting principles (GAAP). It’s a rewarding job, but you may want to know more about what an auditor does during the average workday. We asked Mallory Howard, one of our senior auditors, to tell us about her typical day at Marshall Jones.

Making a Plan for the Day

Auditors are committed to staying on top of the work they’re doing for clients. Mallory usually starts her day by looking at her calendar and preparing for any meetings she has coming up. She also creates a record of what she worked on the previous day and how much time she spent on every project. This process allows the firm to keep track of the work she does for each client.

Mallory also likes to check her email early in the morning — keeping her inbox empty helps her stay on track and ensure her email is organized. When an email includes a new assignment or requires some time to write a response, Mallory will schedule blocks of time on her calendar for taking care of this new work. Time blocking helps her ensure everything she wants to accomplish that day is included in her daily schedule and she can move the email out of her inbox.

Working on Behalf of Our Clients

After she sets her plan for the day, Mallory turns her attention to her top priorities for assisting Marshall Jones’ clients. These tasks typically include fieldwork, which is an essential part of the audit process. During fieldwork, Mallory and her colleagues gather and analyze documents and other information from the organization they’re auditing. With these details, Mallory makes sure everything is running smoothly and that the organization’s financial statements are accurate and consistent.

Drafting those financial statements is another important of Mallory’s day. Financial statements are records that provide a full picture of an organization’s assets and money — what it owns, how much it earns and how much it spends. High-quality financial statements allow an organization to understand its operations better and make improvements. They also give investors, government authorities and others access to reliable information about the organization.

Throughout the day, Mallory may also communicate with the firm’s clients and with colleagues who are working with her on particular audits. When she’s not working from home, she also enjoys chatting and catching up with her colleagues.

At the end of the day, Mallory makes sure to wrap up any urgent or time-sensitive tasks and begins creating her schedule for the next work day.

Learn More About a Career in Auditing

The fulfillment and enjoyment we find in our work is a key part of how Marshall Jones has become one of Atlanta’s top CPA firms. If you’re considering becoming an auditor, contact our team today to learn more about the profession and your opportunities with our firm.

Bookkeeping Basics for Small Businesses

Bookkeeping Basics for Small Businesses

Business bookkeeping basics are essential to a small business’s success in maintaining compliance and monitoring milestones. The tax professionals at Marshall Jones have put together this quick-start guide for small business bookkeeping to help you begin.

5 Bookkeeping Tips for Small Business Owners 

Five key bookkeeping tips recommended by senior tax professionals can help your small business stay on track this year. 

1. Open a Business Bank Account

It’s vital to have a distinct bank account and credit card for your business so that you have clear records when filing your taxes. Unless you’re a sole proprietor, you’ll need separate tax reports for home and business. Also, if the Internal Revenue Service (IRS) decides to audit your business, having mixed personal and business accounts can complicate the process further.

2. Expedite Your Accounts Payable Process

Bill.com is a legitimate and secure accounts payable and accounts receivable software that integrates with QuickBooks. It helps businesses integrate automated digital tools into their bill and invoice processes. It simplifies the process by making it easy to record bills and pay vendors via the Automated Clearing House (ACH), credit card, check and even international wire transfer. 

3. Digitally Track Expenses

Managing multiple employees with company credit cards can become complex if receipts become lost, faded or damaged. Divvy is an online expense management and business budgeting software ideal for allotting spending money to your team. For example, an employee booking a hotel room for a business trip can receive the exact amount of cash they need with no more and no less. The employee simply snaps a photo of their receipt for digital recordkeeping. 

4. Use Your Financials to Make Strategic Business Decisions 

It’s key to take advantage of your financial records beyond tax time. Business owners should be familiar with a profit and loss statement to analyze their spending and costs, whether that’s year over year, month to month or even biweekly. It’s also helpful to learn financial analysis ratios like the receivable turnover, current, return on assets and debt to equity ratios — and much more. 

5. Be Proactive About Your 1099 Tax Documents

A 1099 form is a tax document business owners use to report payments over $600 in a given year to independent contractors. The best policy is to take a proactive approach to prepare for 1099 forms by issuing a W9 to each vendor at the time of the transaction. Then, you’ll have their tax identification number and address on file to report on the 1099 form during tax season. 

Get Professional Help With Small Business Bookkeeping Basics

Marshall Jones has been helping small businesses like yours with accounting and bookkeeping services in Atlanta for decades. To find out more about how we can help you with small business bookkeeping, contact us online and schedule an appointment today. 

hinking financial advisor businessman working in office.

When Should You Hire an Accountant?

When Should You Hire an Accountant

Every small business should know when to hire an accountant. In general, it’s advisable to meet and build a relationship with a certified public accountant (CPA) at least once to cover the basics of your business. There are also specific reasons why you should hire an accountant, such as when you need to make critical business decisions and handle key tax documents that will face government scrutiny. The experts here at Marshall Jones have created this guide to help you learn the ins and outs of when you should hire an accountant.

Commonly Outsourced Business Functions

The goal of partnering with a CPA is to have a professional in your corner who cares about your business and is sensitive to your needs. The accountant should understand how to meet you where you are currently and help you achieve your future goals.

A CPA can help you with many practical business and tax tasks, including: 

  • Advisory services: If you need to make a significant accounting or business decision, you can hire a CPA to review your strategy with you and consult on potential advantages and pitfalls. 
  • Audit and assurance: An accountant can help you audit your books and ensure you’re meeting regulatory compliance requirements for the Internal Revenue Service (IRS), your state, lending agencies and more. Accountants can also properly prepare income tax returns, financial statements and sales tax returns. 
  • Entity and tax structure: If you need to discuss your tax structure to maximize value for your entity, a CPA can help. 
  • Mergers and acquisitions: Mergers and acquisitions have complex regulations to manage when considering debts and taxes you will acquire in the process. An accounting professional can help you anticipate these expenses. 
  • Outsourced accounting: Outsourced accounting allows you to farm out your internal bookkeeping, recordkeeping and accounting tasks to a CPA firm. Teams can perform your functions on-site with your employees or off-site to meet all your accounting needs. 
  • Accounting information systems: Many firms use accounting information systems to redesign your accounting processes for optimal performance. They can even handle all the accounting functions for your business on your behalf. 

Hire an Accountant for Your Small Business Today

For more than three decades, Marshall Jones has served the Atlanta business community with integrity and excellence through CPA accounting and audit services. Our capabilities include outsourced professional accounting solutions, audit and assurance, tax planning and preparation and professional bookkeeping and consulting. 

Ready to find out more? Reach out to our team online and schedule your appointment today to get started. 

Are you prepared financially for retirement?

Recent surveys suggest that about 44 percent of American workers who are saving in a workplace retirement plan feel confident they will retire comfortably. However, generation by generation, the numbers show that many individuals are way behind when it comes to reaching their savings goals.

A new survey from Natixis Investment Managers finds that 44 percent of American workers who participate in a 401(k) or other workplace retirement plan feel secure about their retirement, as long as they watch their spending .Another survey which found that more than half of adults are either somewhat more confident (30 percent) or much more confident (27 percent) about their ability to save for retirement than they were three years ago. 75% of Americans are rejecting financial help and that can spell disaster

Baby boomers

The oldest baby boomers are in their early 70s and possibly well into retirement by now. The youngest boomers are around age 55 with only a few years left to save. However, for most boomers, their savings aren’t ready for retirement; the median account balance for baby boomers is just $152,000.

That may sound like a lot of money, but the average person age 65 and up spends around $46,000 per year, according to the Bureau of Labor Statistics. At that rate, that $152,000 would barely last three years.

According to the Transamerica survey, most boomers realize their current savings won’t cut it – nearly 70% say they expect to work past age 65 or possibly not retire at all. However, only a quarter of them said they had a backup plan in case they were forced to retire earlier than they had anticipated.

How much should the average baby boomer have saved, then? It depends on how much you expect to spend each year, but you can estimate your retirement number by using the rule of 25. It’s based on the 4% rule, which states that you can withdraw 4% of your savings the first year of retirement, then adjust that number each subsequent year to account for inflation. The rule of 25 essentially allows you to work backward to figure out your total savings based on how much you expect to spend in the first year of retirement.

For example, say you expect to spend $46,000 in your first year of retirement. Multiply that by 25, and you get $1.15 million. (You can check your work by taking 4% of $1.15 million, which comes out to $46,000). Keep in mind that Social Security benefits will play a part here, too. If you expect to receive, say, $15,000 per year in benefits, that’s only $31,000 you’ll need to save on your own. Multiply that by 25, and your adjusted retirement number is $775,000

Gen Xers

Generation X-ers still have a few years left before retirement – but it’s approaching quickly. Individuals in this generation only have around an estimated median of $66,000 saved for retirement. With the youngest Gen X-ers in their early 40s, that’s a concerning number.

People this age also seem to be aware that they’re struggling. Only 14% say they’re “very confident” they’ll be able to retire comfortably, and nearly a third have taken a loan or withdrawal from their retirement account.

So how much work would it take for the average Generation X-er to get back on track? If you’re on the older side of the spectrum (about 54) with only $66,000 saved, you’ll need to dramatically take your savings to the next level. Even if you save $2,000 per month earning a 7% annual return, you’d only have around $500,000 saved by age 65. For those who are around age 40 with $66,000 saved, stashing away $800 per month will get you to savings of about $1 million by age 65.

Millennials

The median estimated amount in millennials’ retirement accounts is $23,000, which isn’t surprising considering they have a lot of time left to save for retirement. However, given their young age, millennials are very much engaged in the topic of retirement. More than half (53%) say they expect their primary source of income in retirement to be their personal savings (as opposed to a pension or Social Security benefits), and 72% say they’re interested in learning more about how to achieve their retirement goals.

Whether that $23,000 now will amount to enough savings in the future, though, largely depends on how much you’re saving and how long you have until retirement.

Millennials are classified as those born between 1979 and 2000, which is a huge range. If you’re a 40-year-old millennial with only $23,000 saved, you may need to supercharge your savings earlier rather than later. For example, if you want, say, $800,000 saved by age 65, you’d need to save roughly $900 per month for the next 25 years to reach that goal, assuming you’re earning a 7% annual rate of return on your investments.

What’s holding workers back ?

Ideally, each generation should be much farther toward their retirement savings goals — particularly because they have access to retirement plans provided by their employers.

But other financial concerns get in the way. The biggest one: daily living expenses, which was cited by 65 percent of respondents. Then there’s generational debt, with 43 percent; housing costs, 43 percent; and health-care costs, 32 percent. Surveys show that 22 percent of workers admitted to taking a lump sum distribution from their retirement funds without moving the money to another plan. It’s not all bleak when it comes to retirement. There will be other sources of income, such as Social Security or the proceeds you may see if you decide to sell your home. Workers would be wise to understand the benefits that contributing to a workplace plan can bring. That includes the potential savings from lowering your taxable income, the extra money you may receive from employer matches, and the potential to save more once you’re 50 and older through catch-up contributions.

What to do if you’re off track?

Even if your numbers align with the median amount people in your generation have saved, that doesn’t necessarily mean you’re saving enough. If you’re falling short, the best thing you can do is set a goal for yourself and make some lifestyle changes so you can save more.

First, figure out your retirement number so you have something to shoot for. Play around with a retirement calculator to see how much you should have saved by retirement and how much you’ll need to save each month to get there.

Once you have a monthly savings goal, take a good look at your budget to see where you can make cuts. These cuts don’t have to be drastic – saving a couple of hundred dollars by cooking at home more often or riding your bike to work rather than driving to save on gas can make a big difference. If you’re seriously behind, though, you may need to make some dramatic changes, possibly by downsizing your home or moving to a less expensive neighborhood.

Regardless of how you choose to save money, the best thing you can do if you’re behind on your saving is to realize you need to make a change and then create an action plan. By making an effort to get back on track, you’re already well on your way to achieving your retirement goal.

Breaking news on cryptocurrency

The introduction of a cryptocurrency ETF (Exchange Traded fund) could catalyze an influx of institutional capital and open a new channel for investment in the sector. On June 26, 2018, the SEC received an application from Cboe Futures Exchange to launch the world’s first Bitcoin ETF

One of the first to launch Bitcoin futures, CBOE (Chicago Board Options Exchange) Global Markets has partnered with Van Eyck Investment and SolidX to introduce a Bitcoin ETF to global markets.

On June 26, the SEC received an application by CBOE to offer clients the buying and selling of SolidX shares, which are currently valued at approximately 25 bitcoin. If approved, accredited investors will be able to trade a Bitcoin ETF in the form of baskets of 5 SolidX shares (100 bitcoin) on the CBOE exchange.

This is one of the biggest news items since the advent of the Bitcoin several years ago. What this basically means is that an investor will be able to invest in cryptos by investing in the stock market through ETFs, and not buy cryptos individually.

Note that the most significant item regarding Bitcoin was the invention of the Blockchain, the technology that allows cryptos and many, many other things to be transferred totally secured over the Internet. This is why the large banks, accounting firms, brokerage firms and real estate companies are investing heavily in this technology. For instance, Etherum, the second largest crypto, has nothing at all to do with currency. It’s a platform for companies to build “smart contract” applications.

Gaining Understanding of the Blockchain

We should think of the Blockchain as another class of thing like the Internet – a comprehensive information technology with tiered technical levels and multiple classes of applications for any form of asset registry, inventory, and exchange, including every area of finance, economics, and money; hard assets (physical property, homes, cars); and intangible assets (votes, ideas, reputation, intention, health data, information, etc.). But the blockchain concept is even more; it is a new organizing paradigm for the discovery, valuation, and transfer of all quants data (discrete units) of anything, and potentially for the coordination of all human activity at a much larger scale than has ever been possible before. This technology has a built-in ‘robustness’ as it stores blocks of information that are identical across its network and can be controlled by any single entity and has no single points of failure. The days of hearing large corporations make public statements  about data breach are long gone. Blockchain technology is the platform that was invented to allow Bitcoin and other cryptocurrencies to function. Bitcoin was invented in 2008 and since then has not had one significant disruption.  This will also lead to the idea of decentralization. Blockchain technology is managed by a network, not one central authority. Stock market trades will become simultaneous and will basically eliminate the need of record keeping.

So, how does this pertain to you? The Blockchain does not need to be necessarily understood for it to provide use in your life. Before using the internet did you actually understand how it works? Probably not, but you used it. Think about the amount of money spent on money transfers. In 2015 the World Bank estimates over $430 billion was sent via money transfer. With the Blockchain this would basically eliminate the middleman. While it may seem foreign now it  will soon become a large part of everyday life.

 

Keeping Your R&D Credit

 

 

Business owners are often surprised to learn they may be able to claim the Research & Development tax credit.

The credit was originally created as way to encourage American companies to conduct R&D activities domestically. While initially thought to apply to large companies with formal R&D departments, “smaller businesses” in a wide range of industries, such as manufacturing, engineering, software development, architecture, pharmaceuticals, aerospace and defense, metal foundries, chemical companies and others, have discovered they can also claim the benefit. However, it’s important to be aware of best practices when claiming the credit, especially in areas where issues commonly arise, such as a lack of supporting documentation. Mistakes in documenting qualified research can result in missed opportunities and create problems should the company be selected for an IRS audit.

 

 

Common Documentation Mistakes

  • Lack of supporting documentation: R&D tax credit studies are at their weakest when they lack contemporaneous supporting documentation. Studies are often performed after the tax year is closed out. Some studies simply comprise a report that summarizes the findings and a brief description, if any, of the qualifying business component. One of the objectives of an R&D tax credit study should be to answer a common question under audit: Why does this business component qualify? In order to properly address this question, it’s important to take a fluid approach to documentation. No two taxpayers are the same. No two projects are the same. As such, taxpayers may need to be creative in the identification of documents that show how projects meet the qualification criteria with specific emphasis on the presence of uncertainty and experimentation. Information such as project records, lab notes, design drawings, photos of the design/build and testing trials, prototypes and patent applications are needed to corroborate customary R&D expenses. Having access to this information is especially helpful in the event of an IRS audit.

 

  • Informal documentation process: If a company is considering claiming the R&D tax credit for a project, it would be useful to implement a formal documentation process before beginning. Because many companies don’t understand who should be documenting, what they should be documenting and when the process should be occurring, it’s often left as a task to complete at year-end. When this happens, a single person is often assigned the task of poring over hundreds of documents to find proof of qualifying expenses. The result is that expenses are often missed, and the potential credit value is diminished. To overcome this, a best practice would be to implement a process that collects relevant information on an ongoing basis, while the R&D activities are occurring. The more thorough the process, the greater the likelihood that qualifying expenses will be captured and used appropriately when claiming the credit.

 

  • Lack of clarity: A common issue in the documentation process is that it’s unclear how the various expenses, personnel or other items relate to the R&D project. Remember that an IRS agent will not be familiar with your business, product or research process. Because they will be the primary judge of whether an expense qualifies toward the R&D credit, it’s essential to ensure the relationship between the expense and qualifying activity is clear. Avoid incomplete or inadequate descriptions, general statements that sound canned, and documentation that is not clearly related to the project. The more you rely on an IRS auditor to figure out how your documentation supports expenses, the greater the risk of exposure.

Lesson 1.03 – Jane learns about cash flow

Lesson 1.02 – Jane gets a big sale

Lesson 1.01 -Jane starts a business