Reduce the Risk of Fraud – Bookkeeping & Accounting Services

Reduce Possibility of Fraud

Business fraud is a real problem. Its affects can be devastating to a small business and for this reason it’s referred to as a silent killer. Fraud can mask itself in different forms, some of which is complex to detect.

Some of the more common forms include: theft by employees of company checks or charges on company accounts, theft of inventory or office supplies, billing schemes, check tampering which can be done by paying non-existing suppliers, recording unapproved extra or overtime, claiming reimbursement for non-existing expenses, or outright theft of cash from the register, to name a few.

The Association of Certified Fraud Examiners (ACFE) has estimated that a business will lose about 7% of profit due to fraud annually. Although both large and small companies experience loss due to fraud, it’s the small companies who are most vulnerable. The reason is mainly because small companies don’t have the time or the resources to monitor for fraud activity.

As accountants and Business Advisers 

RR Accountants LTD entrusted with educating our clients on ways to safeguard themselves against loss of income due to fraud. Here is a list of key internal control practices we recommend for our clients:

Make a written policy outlining your internal control procedures and make them well known to management and employees. Before hiring a manager or an employee, review those procedures together and get his/her written commitment to those procedures. Oftentimes in a small business, the manager is the business owner or partner who takes hands-off approach due to his/her busy schedule. We’ll hear from our clients about the bookkeeper who is given the task of handling all the paperwork because the owner is just too busy. In addition, convey to the employees your culture of internal controls and let them know that they will be checked up on. This is important because studies show that employees who have an opportunity to commit fraud without being caught will exercise this opportunity. How often have you heard that it was the trusted employee or a family member who committed the fraud? Encourage employees to report fraud and have those sign agreement against anti-fraud behavior. As an owner, never let your employees see you break your own rules. This will set up a bad precedent which will only weaken your ability to enforce your own policies in the future. Setup a well functional accounting system through a program like QuickBooks and learn how to properly use it. I can’t stress enough how important this is. Knowing how to enter data or access reports will give you independent ability to review financial data. Additionally, you should setup user passwords which will limit employees’ access to sensitive information. 

Employees can easily exploit this by hiding or changing information. When setting up an employee on QuickBooks do not give them Admin rights. This should be reserved for the owner or an external accountant. Get to know your books – Regularly run and review financial reports and watch for fluctuations that don’t have reasonable explanations. Turn on the audit trail if you are using QuickBooks software. This function keeps track of all the activity by a user. You can uncover inappropriate employee accounting manipulations just by reviewing the Audit Trail Report. Use petty cash account sparingly and reconcile often – many businesses need cash on hand for various small or unexpected purchases. Unfortunately, we often see this being one of the most exploited areas of a small business such as a restaurant or a bar. If you maintain a petty cash account, use a ledger to record receipts and reconcile the account regularly. 

In QuickBooks we setup a petty cash account as a bank and record all cash purchases against that account. This makes reconciling much easier. Back up your data and keep multiple copies of the file. Also keep copies of the last 2 or 3 backups. If you give an employee a business credit or a debit card, make sure to review all their receipts. Designate cardholders per employee so no two people can disclaim charges from the same account. Reconcile bank accounts and credit cards monthly. If there is any inappropriate activity you can catch it quickly. Regularly review payroll records for unapproved employee loans, pay raises, overtime, extra hours or payments to phantom employees.

Install a time clock system to prevent time theft which is one of the biggest forms of employee theft. Inventory theft is also a huge problem, and it costs businesses billions of dollars annually. Companies should conduct a physical count for goods available for sale as well as for damaged and obsolete inventory. Those labeled unsellable must be written off in the accounting records. A comparison between the physical count and book balances will determine missing inventory.

Practice segregation of duties – do not allow the same employee handle functions where they have control or an ability to cover up fraud. Here are some common examples:

• Allowing the employee who requests purchase of goods to also approve the purchases 
• Letting the person who did the purchasing of goods reconcile monthly financial reports 
• Having any employee who is authorized to make purchases issue checks 
• Having the person who reconciles the check book also able to issue checks 
• Letting the employee who opens mail make deposits or maintain the A/R or A/P records 

Conduct Random Checks – get into the habit of checking in on employees and your financial data without any advance notice. Employees, who commit fraud, rely on predictable patterns of behavior or workflow and then exploit it. Review your financial statements with an outside accountant who will have an unbiased opinion about your financial activity.

Doctors and Dentists Accounting & Bookkeeping

At RR Accounting LTD Accounting Services firm in Birmingham, we help physicians better manage their practices through our systematic and accurate online bookkeeping services and tax services in Birmingham. We understand that no two medical practices are exactly alike but all require up-to-ate financial information on a regular basis.

For this reason, we approach each client by trying to understand how his/her business works and operates to which accounting practices would be best suited for that business. Our professionals will help you determine how your medical practice can streamline your accounting procedures so you can optimize productivity and minimize costs. 

RR Accountants LTD offer personalized strategies and custom-tailored management reports which will enable you to become more efficient and increase profitability. While you focus on turning your vision into reality our professionals will work on making sure your taxes, accounting and bookkeeping are accurately prepared. 

Our commitment to your company is focused on building a strong relationship to help achieve your financial goals!

Services we provide for medical practices: online Bookkeeping Preparation in Birmingham

• QuickBooks Setup & Maintenance 
• QuickBooks Training 
• Tax Problem Resolution1099’s Preparation & Filing 
• Financial Report Preparation 

Who we work with: Physician MD’s Medical Practices

•  Dentists 
• Optometrists 
• Chiropractors 
• Acupuncturists’ 
• Osteopathic Doctors 
• Physical Therapists 
• Mental Health Care 
• Veterinarians 

Interested in more information about our tax, accounting or bookkeeping services? Call our office 0121 766 5477 or use the Information Request Form. We will respond to your inquiry within 1 business day.

Bookkeeping Services for Small and Medium Size Business

Bookkeeper services won't necessarily include income tax preparation. This is because not all financial outsourcing is handled by CPAs. Only CPAs are certified and qualified to handle and prepare your company's taxes.

Bookkeeper Services and Taxes

If you want to work with a company that will handle both your bookkeeping and your taxes, you'll need to shop around. In my opinion, you don't necessarily need an outsourcing Accounting firm that can handle both. It's relatively easy to find a CPA to help you with taxes. It's harder to find a great firm to handle your outsource financial services needs. If you need someone to help you with an audit, you will need to contact a CPA, rather than a bookkeeper. A good bookkeeper outsourcing firm, however, will probably be able to give you excellent CPA recommendations. Plus, if you do have the misfortune of facing an audit, you can be confident in the state of your books when they've been prepared by a professional outsourced bookkeeper.

Additionally, most bookkeeper services outsourcing firms do not exist on the Internet alone. The best are extensions of more traditional accounting firms, firms that often employ CPAs. If this is the case with your outsourcing firm, the parent company will likely be an excellent place for you to turn come tax time, when you need CPA services.   

Budgeting techniques for small business owners

Budgets are an important and useful tool for organizations. Enterprise level organizations invest heavily in financial planning and analysis departments. The small business owner may not require a full time budgeting team, however it is important for small business owners to invest some time and invest in their accountant’s time on the budgeting process. Many business owners guide their employees and check current performance of their organization by just using their instincts (gut feeling). At times though, the gut feeling can be fogged by unrealistic expectations; so it is really important for business owners to have an objective tool / map to back up their instincts and protect their investment.

The budgets and ongoing Actual vs Budget analysis can act as such a guide and check that aids business owners in both directing their employees and reviewing their employees performance towards the organisation’s goals. Below are examples of techniques that business owners and their accountants can use to build budgets:

Incremental Budgeting:

Using Profit and loss (Income Statement) reports generated from their accounting software, broken down by month; business owners can mark up their budgeted revenue and costs for the next accounting year. Advantages of this technique are that it is quick and time-wise, cost effective method. A disadvantages of using this technique is that if the organisation is looking for growth, marking up will not take into consideration, the fixed costs and marginal costs associated with generating a revenue; so by just increasing costs by expected revenue growth may not give true reflection of the costs associated with growth, Zero based costing.

Zero based costing: 

Zero based costing is at the opposite end of the spectrum of Incremental Budgeting. Zero based costings assume the business is starting from scratch by using costs, generated from current market values. An advantage of this technique is that will be a more up to date map than one generated using Incremental Budgeting techniques. Though it is time consuming to collate the information; additional benefit to using this technique is that it encourages organisations purchasing department to collate market prices. This in turn encourages them to review their supplier contracts more regularly and assess if their supplier contracts are competitive.

Activity Based Budgeting
Activity Based Budgeting focuses on expected sales and calculates backwards the costs associated with doing activities that generate that sale. Costs are apportioned by product, service and indirect costs (such as headoffice costs) are put back in at product, service level. It is also a good method to identify loss making products, services streams and activities associated with these. Before attempting to implement a budget, business owners must gain buy in from department heads in the budgeting process at department level, by identifying costs that department heads can, or cannot control. Otherwise there is a potential of department heads becoming de-motivated because their performance is measured on costs they cannot control.

R R Accountants panel of accountants offers Services are; Taxation advice, VATAnnual returns, Payroll Services, Bookkeeping Services, Sage accounting, UK Film Tax Relief,Personal taxation, Business start ups, VAT Services - VAT registration, Return, Investigation,Self assessment and more...

R R Accountants Services in Birmingham

Enjoy Anytime, Anywhere Access to Your Reports! We hope that you will explore the various pages in our website to discover how our online bookkeeping service can help you reach your financial goals. 

Our growing list of clients enjoy the benefits of accessing reports -- anytime and anywhere -- that help you track and manage your business ... quickly, easily and the best part ... painlessly ... because we do all the work on your books that you wish ... from invoicing to paying bills to bank reconciliations to payroll and so on ... without the hassles and expense of hiring a part-time employee.   

How do we do it? 

You'll Call us or Email us info@westmidlandsaccountants.co.uk, United Kingdom #1 financial Website for a small monthly fee, allowing us to share access to your books over the internet.  Then simply decide what duties you wish our CPA-supervised bookkeepers to perform and relax. 

You will grant or restrict access to areas of your books as you see fit.  You will be able to spend your time doing what you do best and enjoy the benefits of real time access to the accounting information you need to successfully manage your business.   It truly is the most up-to-date accountant’s solution for your medium and small business.

Our passion is to help your business grow and prosper.  Call 0121 766 5477 Now!

Contact us for Accounting services in Birmingham.

Learn - A Better Bookkeeping Service Part - 2

Thus the concept of a 'trial balance' is born: If one lists and adds up all the debit(+) balances from the pages in the ledgers, the total should be the same as the sum of the list of all the credit(-) balances from those books.  This check is the primary purpose of a trial balance. In a single column, of course, the debits and credits will therefore sum to zero, and this is sometimes how a trial balance is presented, rather than the more traditional 2-column 'debit/credit' approach. So, the art of double-entry bookkeeping is to keep the debits and credits in balance; if you make a debit entry you must make an opposing credit entry of the same value. 

The (positive) debits in this system of accounting are the assets and the expenses, the (negative) credits are the liabilities and the income. At first, these pairings seem strange, but they work to keep the books in balance.  This is because the income less expenses makes up the 'Profit and Loss Account' section of the trial balance, and the assets less liabilities make up the 'Balance Sheet' section of the trial balance. For example, if you sell some goods to a customer for £100, that you purchased from a supplier for £80, the double-entry is as follows:   

 Debit : Purchases (in the nominal ledger) £80    

Credit : Supplier account (in the purchase ledger) £(80)    

Debit : Customer account (in the sales ledger) 100    

Credit : Income account (in the nominal ledger) £(100). The trial balance then extracted from this trader's ledger books is as follows:     Income - Sales £(100)    Expenses - Purchases of goods £80    Assets - Debtors in sales ledger : £100    Liabilities - Creditors in purchase ledger : £(80)Once the customer has paid for the goods, and the supplier has in turn been paid, the entries required are:    

Debit  : Bank account

£100    Credit : Customer account (in the sales ledger) £(100)    

Debit : Supplier account (in the purchase ledger) £80    

Credit : Bank account £(80)The trial balance then extracted from this trader's ledger books is as follows:    

Income - Sales £(100)    Expenses - Purchases of goods £80    

Assets - Bank account (in the nominal ledger) : £20    

Assets - Debtors in sales ledger : £nil    Liabilities - Creditors in purchase ledger : £nilAs can be seen, each entry 'balances' in its own right (and is called a 'journal entry' to the ledgers), and therefore a 'trial balance', of equal total of debits and total of credits, is always maintained (summing to zero).In this example, the profit of the business is £(20), measured as a (negative) net credit amount and this is represented by net assets of £20 held in the business.

For more detail about Bookkeeping, payroll and account management services Please visit R R Accountants Website

Learn - A Better Bookkeeping Service Part - 1

Introduction to double-entry bookkeeping

The first thing to appreciate is that many people first encounter 'debits' and 'credits' by having a bank account; but these terms are used from the bank's perspective and not from that of the account holder. So, when you pay money into your account, you are in fact lending your money to the bank and they say 'you are in credit'.  The bank has a creditor - you - to whom they owe some money.  But from your perspective, you have a debtor - the bank - who owes you money. The bank has a liability (a creditor, a debt)

and therefore you, the account holder, have an asset (a debtor). In other words, to say

 'I am in credit' when you have some money in your account, is technically incorrect in bookkeeping terms.

This is because the language of double-entry bookkeeping is spoken in the 'first person' for whom the records are being maintained, and not the bank's.  So, if a business has some money in its bank account, it is not 'in credit'; rather, as we have seen, it has an asset which is a debit balance.  So the business is in fact 'in debit' with the bank.

 The double-entry bookkeeping system in universally credited to Luca Pacioli (http://en.wikipedia.org/wiki/Luca_Pacioli) 

who in 1494 published the book "Summa de Arithmetica, Geometria, Proportioni et Proportionalità" containing a 27-page treatise on bookkeeping.  However, perhaps the earliest evidence of Double-entry bookkeeping is found in the "Farolfi ledger" of 1299-1300. 

Business transactions were recorded using this method by early traders because it was a reliable means of easuring profits and recording cash owed from customers and to suppliers.  The 'books of ccount' (books) of a trader consisted of separate pages for each account, bound together in 'ledgers'.  Typically, there was a 'sales ledger'; recording sales to and monies received from customers (and therefore a means of establishing balances owed from them), and a 'purchase ledger'; recording purchases and monies paid to suppliers (and therefore a means of establishing balances owing to them). All the other pages required to record expenses and balances for bank, stock and assets used in the business were grouped into a third book, called the 'general ledger' (or 'nominal ledger').  Each of the pages in these 3 ledgers would have a separate debit and credit column to record the

transactions, as each occurred. The mantra of 'every debit has an opposing credit' is

central to double-entry bookkeeping. 

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