Category Archives: Budgeting

CPAs have serious concerns about the U.S. federal budget deficit.

Fifty-four percent of the more than 1,700 AICPA members surveyed Dec. 4 through Dec. 24 said deficit reduction should be the top economic priority for the U.S. government.

Lagging far behind fixing the deficit were other priorities: Creating jobs (23%), tax reform (18%), and ensuring the long-term stability of Social Security and Medicare (5%).

“CPAs in communities large and small and from coast to coast are increasingly troubled by the government’s inability to come to grips with this economic calamity-in-the-making,” AICPA President and CEO Barry Melancon, CPA, CGMA, said in a news release.

Last week, the government passed legislation that helped the U.S. avoid the “fiscal cliff.”

Congress and President Barack Obama now are preparing for what’s expected to be an intense debate over the debt ceiling and spending cuts that would be designed to reduce the deficit.

Melancon said 76% of AICPA survey respondents are sending a clear message to federal policymakers to deal with the debt crisis without delay.

“Fiscal responsibility is essential to our country’s economic sustainability,” Melancon said.

Hiring freezes (55%), reduced capital spending (53%), reduced benefits (52%), and layoffs (52%) were identified by CPAs as the most likely consequences for their clients or company if the government fails to reduce the federal budget deficit.

The gravest effects of failure to fix the budget deficit would be felt by individuals, CPAs said. Almost three-fourths of respondents (73%) said individuals and families would be affected most severely if policymakers cannot reduce the deficit.

Solving the federal deficit problem has been an area of significant focus for the AICPA. In November, the AICPA board of directors passed a resolution describing the need to put the United States on a better economic path and supporting the nonpartisan Campaign to Fix the Debt and Comeback America Initiative.

Earlier last year, the AICPA developed a video, “What’s at Stake,” to inform the public of the danger the federal deficit poses to the financial sustainability of the United States.

“We call on everyone to join together in a public dialogue to make this a national priority,” 2011–12 AICPA Chairman Greg Anton said in the video.

The focus on that effort continues as political leaders gear up for talks about spending cuts.

via CPAs: Fixing deficit should be government’s top economic priority.

Companies pay out special dividends ahead of “fiscal cliff”: Major U.S. companies are rushing to authorize special dividends before Dec. 31st before the “fiscal cliff” takes effect and the tax on dividends jumps from 15% to 43.4%. Over the past two weeks, at least four Standard & Poor’s 500 corporations have announced special payouts.

Stock Pickers Game the Fiscal Cliff – WSJ.com.

The actual process of keeping books is easy to understand when broken down into steps:

1. Keep receipts and or other acceptable records of every payment and expenditure from your business.

2. Summarize your income and expenditure records on a periodic basis (generally daily, weekly, or monthly).

3. Use summaries to create financial reports that will provide specific information about the business. For example, how much monthly profit is the business making or how much the business is worth?

Bookkeeping and accounting functions of a business share two basic goals:

1. To keep track of income and expenses improving chances of making a profit.

2. To collect the necessary financial information about the business to file various tax returns.

Remind yourself of these goals whenever feeling overwhelmed by the details of keeping financial records.

Be reassured that there is no requirement that records are kept in any particular way. In other words, there is no official “right” way to organize the books. As long as the records accurately reflect business income and expenses the IRS will find them acceptable. Whether you do your accounting by hand, on ledger sheets or use accounting software, these principles are exactly the same.

Keeping records:

Summaries of business income and expenses are the heart of the accounting process. Remember that each business sale and purchase must be backed by some type of record containing the amount, the date, and other relevant information about the sale or purchase.

From a legal point of view, the method of keeping receipts can range from slips kept in a box to a sophisticated cash register hooked into a computer system. You will, of course, want to choose a system that fits your business needs.

For more information on how to get set up and ready to roll, call us today at 540.309.5165. We offer an hour free consultation!

via Business Income and Expenses Tracking | Virtual Bookkeeping Company – Your Administrative Solutions.