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Outsourcing Accounting Options: Which Is Best for Your Business?

December 20, 2016 / by Jennifer Lang posted in Santa Monica, Los Angeles


jennifer-lang.pngIn a recent post, Supporting Strategies' Garrett Smith made a compelling case that growing companies should consider outsourcing select non-core business functions.

Basically, the point of the article was that the more responsibilities the business owner can hand off, the more they can focus on their company's reason for being. If you're in the medical-supplies business, you should spend your time figuring out ways to sell more medical supplies. Time spent on anything else takes away from your focus.

As Smith noted, accounting is one obvious business function that is ripe for delegation. Let's take a look at the three basic options.

1. Full-Time
If you have a full-time bookkeeper or accountant on staff, you've already effectively delegated this responsibility. The question here is one of value. You need to calculate the cost of that full-time staff member relative to their production and then determine whether it is possible to outsource that position to a more cost-effective part-time resource.

When comparing costs, be sure to factor in not only a full-time staffer's salary, but also the cost of their benefits package, employment taxes and insurance, use of office space, etc. Then it becomes a simple bottom-line comparison.

2. Part-Time
If you're a small-business owner who's wearing too many hats, including a bookkeeper's, you face a dilemma: You don't have enough bookkeeping or accounting work to hire another staff member, but you have too much to effectively handle yourself — or to pile on one of your already overworked employees.

The solution is straightforward, particularly if you're looking to outsource a few tasks like payroll, accounts payable or accounts receivable rather than the whole accounting cycle: Pay an hourly rate or flat fee each month to outsource those responsibilities. Chances are you and your staff can use the time you free up to bring in enough new business to more than offset the cost.

3. Special Projects
This takes that logic a step further. If you need help with a temporary or short-term challenge, such as your tax returns or an audit, you can bring in an outside accounting-services firm to help. You might also go this route if you grow to the point where you need to update your business infrastructure.

For example, say you want to implement a new system of inventory tracking and integrate it with your overall accounting system. Your best option is probably to outsource that job to an accounting-services provider with proficiency in that particular software.

Choosing the Best Option …
You know your business better than anyone else. You also know better than anyone else which of these outsourcing options would best fit your company. Options 2 and 3 are relatively easy to jump into without a lot of commitment, so often our new clients start off this way and grow from there. Consult your CPA or other business advisors for recommendations and further guidance in helping you make this value-creating decision for your business.

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Hubdoc: The Solution for Collecting Source Documents

December 16, 2016 / by Melody Gibbons posted in South Florida


Melody-Gibbons.pngEveryone in the accounting services industry has a horror story about not being able to obtain source documents. Maybe a client routinely makes bank deposits without recording where they came from. Or they stuff all invoices and receipts into a folder and wait until the end of the month to sort through them.

This results in frustration and wasted time not only for the accountant, who has to chase the documents, but also for the client, who has to work with the accountant to retrace their steps.

Get on the Same Page with Hubdoc
Fortunately for business owners and providers of remote accounting services like Supporting Strategies, there's a solution to the challenge of managing source documents. It's called Hubdoc.

Here's how it works: Basically, all the business owner has to do is set up a Hubdoc account (for a nominal fee) and enable the accountant to "autofetch" all relevant source docs. Your bank and credit card statements, vendor invoices and all other online docs flow into a central repository automatically. Once you've finished the one-time setup, you literally don't have to do anything else. You don't have to send the documents to your accountant — and just as important, your accountant doesn't have to ask for them.

Hubdoc recognizes that (unfortunately) not all documents are available online. Its mobile app allows you to photograph receipts while you are on the go; these automatically funnel into your account for processing by your accountant. Plus, you can also drag and drop or email scanned documents into your Hubdoc account.

The system offers bank-level security encryption and restricted access. In addition, the files are "read-only," so neither the accountant, the business owner nor anyone else (including Hubdoc) can alter them.

Optical Character Recognition
Another neat feature is Hubdoc's Optical Character Recognition (OCR) capability. The OCR technology will extract relevant information for your Hubdoc and bill payment records — date, amount, vendor name, etc.

Hubdoc can then be integrated with QuickBooks or — or whichever automated payment service you prefer — so all bills get entered automatically. This eliminates a lot of computer keystrokes from the process, not to mention human error.

All documents are archived in searchable files. So if you need to check an invoice from Acme Vendor Service, for example, you can search the keyword "Acme" and find it immediately.

End That Stressful Paper Chase
Source documents are the financial foundation of any business. They're the only way for you to prove that your numbers are what you say they are — for tax filings, audits and many other purposes. Hubdoc provides a means for you to record and file all of your source docs in one place, and to share them with your accountant in a seamless, secure environment.

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Start Your Business Year off Right

December 15, 2016 / by Dawn Hershik posted in Chicago


Dawn-Hershik-for-web.jpgWhether you set formal New Year’s resolutions or not, now is a good time to think about what you want to accomplish in the new year. Maybe you just started the business and want to grow sales by 30%, or perhaps you’ve been in business for years and need to figure out how to keep your products or services fresh. Whether you’re in year one or 20, the tips below can help any business kick off the New Year right.

  1. First things first: Determine what you want to achieve in the New Year. Call it a resolution or goal—just get it down on paper so you and your team have something to work towards. Be realistic. Don’t set yourself up to fail by having an out-of-reach goal that will not be achievable during the year. But don’t make it so easy that you reach the goal within the first few months. And make sure the goal fits in with the overall mission of the company.
  1. Identify where not to focus: Is there a product or service you should eliminate this year? Now is a good time to figure out if it still makes sense to offer a product that does not sell well. Is there a process that you do because you’ve always done it? Figure out if there’s a better way to do it, or see if you’re duplicating efforts.
  1. Set up target timelines: Now that you know where to focus you’ll want to keep track of your progress and make sure you’re on target. This could mean checking monthly or quarterly to figure out if you need to adjust the plan to achieve your goal by year end.
  1. Get help: You can’t do everything, especially if your plan is to grow the business this year. Delegate some of the work load. If you don’t have internal people, outsourcing is a great option.

Finally, don’t forget to reward yourself and your team. Schedule some time on the calendar for a massage or a walk in the park for yourself. Remember the target timelines? If the company hit the target during a quarter, take the team out to lunch. These little things go a long way in showing your appreciation for your teams’ hard work and dedication throughout the year.

Happy New Year!

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Be Wary of Third-Party Application Promises

December 14, 2016 / by Christina Reynolds posted in Santa Monica, Los Angeles


Christina-Reynolds-for-web-2.pngI'm a big proponent of third-party applications. After all, with the right app, you can customize an accounting system like QuickBooks to streamline many of your specific accounting processes and save a considerable amount of money and time on bookkeeping.

As with any major purchase, however, you need to read the fine print. Third-party apps might involve cutting-edge technology, but a bad sales rep can still resort to unscrupulous sales techniques that date back to the days of horse-trading. Beware of the bait-and-switch or an obvious mismatch, where the rep pushes an expensive app that's not right for your needs.

Here are some questionable practices to watch for:

  • Free trials: Get the sales rep to define "free." Is it a completely free trial, meaning with no strings attached? With some trial offers, you have to sign an annual contract, and only the first 10 days are free. Depending on the application, 10 days might not even be enough time to figure out how to use the app, let alone determine whether it suits your needs. A month into the contract, when you determine the app isn't right for you, it's too late — you're on the hook for the full year.

    Never sign a contract without thoroughly vetting it. And don't sign one that automatically kicks in if you fail to opt out after the trial period.
  • Third-party implementation consultant required: Some third-party apps need to be adapted for your needs. This step could require a third-party consultant with specialized training — which, depending on the app's complexity, could be an additional cost upwards of $10,000. So be sure to ask for details about every step and related cost involved in the setup process when pricing a third-party app, and get the details in writing.
  • Actual monthly costs vs. advertised monthly costs: If an advertised monthly cost seems too good to be true, it probably is. It could be the cost per month per user, for instance. So if you have five users, the actual monthly cost would be five times higher. Make sure you understand how the advertised monthly cost is calculated and what it includes. Is it a simple flat fee? Or is it a subscription, with the advertised per-month cost contingent on signing a long-term contract? In some cases, you'll have to ask a lot of questions to ferret out the true monthly cost.
  • Upselling or overselling: Finally, you have to be careful that the rep isn't upselling you or overselling the app. One of my clients wanted a basic third-party app and a sales rep tried to force-fit a sophisticated, super-detailed app that was way beyond what the client needed. It was like selling a riding lawnmower to someone who needed a weed trimmer. We spent many, many hours over several months wrestling with overly complex details for this client — all of which could have been avoided if the right-sized solution had been selected at the start.

Spread the Word
Many third-party apps, like, are great products with transparent terms of service. But if someone tries to sell you a third-party app that you're not familiar with, do your due diligence. Review demos and contracts. Call references and consult third-party vendors that you have a good relationship with. Get as much information as you can before making the commitment.

And if you come across a disreputable sales rep or a third-party app that isn't all it claims to be, speak up and let others know. Even in a high-tech world like ours, word of mouth is still our best defense.

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How to Ensure Good Client Communication When Working Remotely

December 12, 2016 / by Laura Conner posted in Santa Monica, Los Angeles


Laura-Conner-for-web.pngIn our digital age, miscommunications in emails are an all-too-common occurrence. How can you avoid making mistakes that may have significant consequences for your organization?

As a national leader in providing virtual accounting and bookkeeping services, Supporting Strategies knows a lot about communicating effectively when working remotely. Here are some tips on how you can do the same.

  • Polish your writing skills. Whatever industry you're in, writing skills will help. For example, any accountant can do numbers. But not every accountant can tell you the story behind the numbers. Good writing skills will come in handy when writing a summary to go along with your monthly reports.
  • Don't rely on email exclusively. Even good writers run into problems at times when using email because it's tone-deaf. Take a simple two-word reply like "Got it." What does that mean? Is your client simply acknowledging that they received your email? Or are they too busy to review and answer questions? When in doubt, pick up the phone immediately. It's a simple way to resolve any misunderstandings.
  • Schedule regular meetings. Be sure to check in with your clients by phone or videoconference periodically. That's the best way to ferret out key pieces of information that would otherwise have fallen through the cracks. It often works best to schedule recurring meetings in advance so both parties are available and prepared to get right down to business at the scheduled time, reducing the need for inefficient back-and-forth correspondence between meetings. It also helps to maintain a shared "open items" list so everyone is on the same page with any pending items between meetings.
  • Listen. This might be the most important communications skill of all — and it requires no special training, no software and no advanced degree. All you need is a willingness to hear what your client has to say. And you can do that no matter where you're working.

Here at Supporting Strategies, being proactive in our communication is part of the package. After all, just because we work remotely doesn't mean we're out of touch.

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How to Deal with (and Make Deals with) Your Vendors

December 8, 2016 / by John Gleason posted in Metrowest, MA, North Shore


John-Gleason-for-web.jpgInsufficient oversight of vendor relations can drain your company's resources and lessen your bottom line. Lost potentials range from money left on the table due to not taking advantage of available or possible discounts, to insider scams perpetrated by dishonest employees or vendor salespeople.

If you haven't reviewed your vendor contracts lately, it's time to do so with your eyes wide open.

Is That the Best You Can Do?
That's the cold, hard question you should ask yourself at least once a year about each vendor contract.

Maybe you're on good terms with all your vendors — but how do you know you can't find even better terms elsewhere? Has your business grown with the vendor in question? Perhaps it's time to strike a better, fairer deal. Has your local business climate changed since you struck your vendor deal? You have to look around and compare. And if you negotiate a better deal with another vendor, your incumbent vendor might be willing to match it, just to preserve the relationship.

At the same time, be sure to treat your vendors fairly. Be honest with them, and don't string them along. Recognize the good work they've done for your firm, and make sure you always hold up your end of the deal. As Megan Sullivan writes at, "Paying your vendors on time demonstrates that you respect them and the work they do."

Also remember that many vendors won't offer you a better deal unless you ask for one. Make it clear to your vendors that you're always on the lookout for deals that increase your competitive advantage. After all, it's part of your job as your company's manager.

Can They Sweeten the Deal?
There are many other ways to save money on vendor contracts.

  • Some offer a discount for ordering in bulk. If you started small and have increased your order over time, you might have reached the discount threshold without knowing it.
  • You might be able to get a great discount by utilizing a different timetable. For example, if you buy 30 widgets a month and the vendor offers a discount on orders of 50 or more, you might buy 60 widgets every two months to get the discounted terms.
  • Most vendors will offer a net discount for early payment. Two percent, 3% or even 5% discount net 10 days payment, or greater, are very common discounts that can be arranged. These net discount arrangements and payment terms vary per industry.
  • Can your supplier offer you consignment for their goods? In that situation, your firm has vendor goods on your floor that aren't yours until you sell or use them. This is an especially advantageous vendor relationship for just in time (JIT) manufacturing and reducing A/P burden.
  • Is your vendor a national firm that can provide your firm with marketing help if you utilize their services or products?

Other options include group buys and affinity programs. Again, it's often a simple matter of asking.

Never Accept a New Vendor Purely on an Employee's Word
Even if you don't deal with your vendors directly, it's important that you know who they are.

We get it. You're busy. So you might be tempted to delegate vendor relations to one of your employees — particularly if that employee knows more about that portion of the business than you do.

Instead, use two sets of eyes — yours and your accountant's — to review any new vendor contracts or changes made to the A/P vendor list. The ugly reality is that deceitful practices and outright fraud can happen. Employees sometimes make vendor deals that favor friends or relatives, or potentially siphon money from the company through falsified vendor contracts or phony vendors. Vendors should be assigned numbers, and the vendor list itself should be reviewed annually.

No conscientious, trustworthy employee will balk at you doing your due diligence. Neither will a reputable vendor. In fact, if a vendor is anything less than forthcoming with you, that's a bright red flag.

As Jonathan Long of Market Domination Media told, "There are plenty of potential partners and vendors. Don't waste your time with ones who aren't 100 percent honest and upfront from the beginning." The same point holds true for employees and other business stakeholders.

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Be Careful with Those Not-For-Profit Allocations

December 6, 2016 / by Sandra Bowman posted in Santa Monica, Los Angeles


sandra-bowman-for-web-square.jpgOne of the stickiest aspects of accounting for not-for-profit (NFP) entities involves allocations — how these entities account for where they spend the funds they receive.

For-profit businesses don't have to worry about this too much. If you have a pizza parlor, it doesn't matter if you use the profits from your pizza sales to pay the rent and the profits from your soda sales to pay the utilities (or vice versa). The customers don't care what you do with their money, as long as they get their pizza and their drinks.

It's not so simple at an NFP entity.

How You Got the Money Can Determine Where You Spend It
Many NFP entities receive funds that are earmarked for specific purposes. For example, let's say an organization receives a grant expressly to provide wheelchairs for the physically challenged. The organization can't use that funding to sponsor an event instead. They have to spend it on wheelchairs — and they need documentation to prove they did. (This is called "direct identification.")

Allocations can get incredibly granular. If, for example, an NFP entity decides to include information about both an upcoming fundraiser and an annual membership drive in the same mailer, they actually have to break down the percentage of the mailer devoted to each purpose to properly allocate funds. (These are considered indirect allocations.) If 30% of the mailer is about the fundraiser, then 30% of the cost should come from the fundraising budget. The remaining 70% comes from the membership-drive budget.

How does the NFP entity calculate those percentages? That's where the guidelines toggle from precise to vague. (Speaking of vagueness: There's a subtle distinction between an NFP entity and nonprofit organization.) A recent Accounting Standards Update from the Financial Accounting Standards Board (FASB) says only that each NFP entity's method of allocation has to be "reasonable."

Setting the Standards
So what's "reasonable"? Whatever method an NFP entity chooses to determine its allocations, the key is to apply it consistently. If, in our example above, an organization determines the percentage of the mailer devoted to fundraising based on the number of lines, they need to do that with all mailers. Or they can use the number of words as a determinant. Again, consistency is the key.

Other key takeaways from the recent update include:

  • Make sure allocations are accurately calculated. Breaking down the allocation of every dollar an NFP entity spends is painstaking but necessary.
  • Make sure management reviews all allocations. Given the complexity and importance of accurate allocations, this is a task that should require high-level sign-off.
  • Document your allocation plan and circulate it to all involved. When it comes to allocations, everyone needs to be on the same page — literally.
  • Make sure all expenses fit the scope of your organization. NFP entities are governed by strict guidelines. You need to adhere to them or risk trouble with the IRS. Use a critical eye to compare your expenses to those of similar organizations, and be sure you're in line with accepted standards.

We've barely scratched the surface here. The FASB's Accounting Standards Update on this topic consumes 270 pages — and even then, the report concedes that "The amendments in this Update make certain improvements that address many, but not all, of the identified issues about the current financial reporting for NFPs." So stay vigilant.

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Can't Afford to Invest in Internal Controls? You Can't Afford Not To.

December 2, 2016 / by Christi Todd posted in Santa Monica, Los Angeles


christi-todd-for-web-square.jpgCould your small business survive a six-figure loss and the ensuing turmoil? Unfortunately, many can't. And that highlights why instituting internal controls is so important.

According to the Association of Certified Fraud Examiners' 2014 Report to the Nations on Occupational Fraud and Abuse:

  • The median loss to small businesses (those with fewer than 100 employees) that experienced a fraud loss was $154,000.
  • Small businesses suffered 28.8% of all losses studied.
  • In nearly 60% of cases, NO assets were recovered.

Those are sobering facts. The good news? There are a number of low-cost ways to reduce your business' exposure to loss from someone stealing your organization's assets. Let's look at a few of them:

Code of conduct/anti-fraud policy: Will signing a piece of paper keep an employee from stealing? Probably not. But it will set out your understanding of what is acceptable and unacceptable behavior.

An activity that is clearly theft to you might be perceived by an employee as simply a perk of the job. Spell it out upfront. Your payroll provider probably has some good examples, and an internet search will yield more. Cost to you: a few hours' research and some paper. We recommend also consulting your labor attorney on this type of matter.

Employee assistance programs (EAPs): What does this have to do with reducing employee theft? Well, an EAP won't keep bad people from taking advantage when they have the opportunity. However, fraudsters are frequently good employees with a great work history who make bad choices due to personal stressors such as financial or health problems, divorce, addiction issues, etc. Taking away the motivation to commit fraud can help keep fraud from happening in the first place.

An EAP directs employees to the resources they need to get help and is surprisingly affordable. Speak with an insurance broker who specializes in employee benefits.

Eliminating checks: Check tampering is still a common way to commit theft, and the median loss in check-tampering cases is around $120,000. Many business owners give their accounts payable (A/P) resource signing authority on the company checking account or direct access to their online banking bill-pay service, which are unnecessary risks.

A better option: Change your A/P system from a manual check-issuance program to an application such as With this application, you can review and approve vendor bills, and then issues the payment. You control who in your organization is authorized to review and approve bills and who can release them for payment, minimizing opportunities for fraud. No more blank checks floating around your office, and the system keeps a detailed log of each authorized user's activities so nothing in the A/P system can happen in secret.

Segregation of duties: Two is better than one! Segregation of duties has traditionally been impossible for small organizations. But that's changing. For example, at Supporting Strategies, our tech-forward, team-based approach enables proper segregation of duties and provides clients with direct access to a full-time accounting back office while only paying for the hours they use.

We reconcile bank activity and all balance sheet accounts with two sets of eyes, which adds quality assurance to your bookkeeping. Plus, we double-check our own work and stay abreast of the latest accounting software, payroll services and other applications so you don't have to.

Final Thoughts
There are plenty of other highly effective techniques that you should explore, such as hotlines (THE number one way to detect fraud, by the way). I encourage you to read more at the ACFE web site.

As the Report to the Nations makes clear, there is no one way to eliminate fraud. Having the right internal controls in place, though, can help reduce the impact. Thanks to Paul McCormack at McCormack Writes for this topic idea.

Contact us to learn more about how to set up the proper internal controls for your business.


Legal and Tax Disclaimer
This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.

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A Big Win for a Supporting Strategies Client — and for a Greener Tomorrow

December 1, 2016 / by Mark Wald posted in Santa Monica, Los Angeles


Mark-Wald-2.pngSupporting Strategies | Los Angeles appreciates the opportunity to work with clients that make a difference in people's lives.

One such client, EV Connect, recently won a $4 million contract from the New York Power Authority to install and manage approximately 300 Level 2 electric vehicle charging stations across New York State, in addition to the 100 charging stations they already manage in the region.

This is just the latest of EV Connect's many wins in our era of climate change. The company provides the industry's most robust and flexible cloud-based platform for managing charging stations and the drivers who use them. Their work to improve the global environment has earned them the distinctive status of "Impact Rated Company" under the Global Impact Investing Rating System.

Established in 2009, EV Connect serves a variety of clients, including Fortune 100 companies; transportation authorities at the state, local and foreign-country levels; and municipalities. We're proud to be an integral part of the EV Connect team, and congratulate them on this well-deserved contract.

Environmentally friendly policy is at the core of our business model at Supporting Strategies. Our 250+ staff members (and growing) work virtually, thereby eliminating emissions from commuting and holding office space. This leads to a much smaller carbon footprint. We also work with clients to minimize printed paper, further reducing environmental impact.

In addition to running a green business, I'm personally an enormous fan, supporter and equity investor in environmentally friendly initiatives. Contact me any time to discuss how we can help your business run more efficiently, minimizing wasted money and resources!

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For Manufacturers, End-to-End Inventory Tracking Is Here

November 30, 2016 / by Christina Reynolds posted in Santa Monica, Los Angeles


Christina-Reynolds-for-web-2.pngAt Supporting Strategies, we often recommend that our clients use QuickBooks Online for their bookkeeping and accounting needs because it is inexpensive and offers many time-saving features. But for those in the manufacturing sector, we recommend QuickBooks Enterprise — in particular, QuickBooks Desktop Enterprise Advanced Inventory.

Why? For one thing, the Advanced Inventory module offers sophisticated inventory tracking across multiple locations. Once you enter an item's serial number or lot number, you can track that item anywhere — right down to a specific bin. That makes it great for FIFO inventory management. Advanced Inventory's barcode-scanning feature streamlines reordering, while its real-time tracking lets you adjust on the fly to shift inventory from one location to another to avoid the dreaded backorder.

But it gets even better. Advanced Inventory syncs with a host of third-party applications, so you can track inventory all the way from purchase order to payment. Here's how it works with three popular apps:

  • Salesforce CRM: Here's a customer relationship management app that puts all data regarding your customer base — including each customer's complete sales history — in one place. And because it's compatible with Advanced Inventory, you can estimate (and anticipate) each customer's next purchase order. The system updates in real time through integration with QuickBooks Enterprise, making it easy to replenish inventory.
  • This digital business payment system syncs with both Advanced Inventory and the A/P system in QuickBooks Enterprise. As a result, you'll instantly know how much inventory you have at a given location as invoices, sales orders and purchase orders enter the system.
  • ShipStation: This advanced shipping software works with QuickBooks Enterprise as it tracks all aspects of fulfillment. So Advanced Inventory documents quantities and populates sales orders and invoices with tracking information.

The bottom line? With QuickBooks Desktop Enterprise Advanced Inventory and compatible third-party add-ons, you can more accurately forecast your orders and adjust inventory accordingly. You can then track each item you sell all the way from purchase order to payment.

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