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Take Your Accounting Firm Back to School With These Bookkeeping Tests

Denise Grier — Tue, 02 Nov 2021 10:41:06 +0000

The Rules of Thumb blog from MoneyThumb makes a point of bringing our readers educational and exciting content. Sometimes we find content from our peers in the accounting realm that is definitely share-worthy. One such blog post offers fun bookkeeping tests for your accounting firm brought to you by CPA Practice Advisor.

With fall here and back to school in full swing, the mood is perfect for accountants to take these bookkeeping tests and see what kind of grade they get. You will feel like you are back in school, for sure. The tests are complete with pop quizzes and homework. So get busy sharing this blog post after you take the tests with your accounting friends so they too can take these bookkeeping tests.

THE BOOKKEEPING REPORT CARD

What does your firm’s current bookkeeping report card look like – and what will it take to earn an ‘A’?

HITTING (AND CLOSING) THE BOOKS

POP QUIZ:

- How fast is your team closing the books?
- How much faster could the books be closing?
- And what can your talent do with that saved time?

YOUR HOMEWORK: After assessing the speed and accuracy with which your team is currently closing the books, think about how you can put those insights into action. Look beyond how fast, well, or easy things are being done – and work with your team to figure out possibilities for how much faster, better, or more conveniently they can be accomplished. More importantly, think about how your team can better spend the time freed up after automation.

CHEAT SHEET: Substitute ‘closing the books’ in the above example for any process you’re thinking of automating: AP, ledger balancing, report preparation, etc. Make sure you’re taking top-to-bottom stock of all your processes, including:

- Data entry
- Time entry
- Document requests
- Client communication
- Training and education
- Talent acquisition
- Prospecting

ROOM FOR GROWTH

POP QUIZ:

- Truthfully: is your firm currently meeting its full growth potential?
- What changes would be helpful to growing your business?
- What processes can be automated, streamlined, or eliminated in order to prioritize growth?
- What services are being demanded–or suit the observed needs–of your clients?

HOMEWORK: Identify not only growth opportunities for your firm, but areas where your firm can be optimized or streamlined in order to provide higher value, higher profit, and higher return on investment against the same level of manpower (with automation supporting and elevating them!)

CHEAT SHEET: As many as 94% of polled firms reported that automating more of their bookkeeping tasks would be helpful for growing their business. Time saved isn’t just an internal benefit; the quantity and quality of your firm’s output will increase, too. This includes:

- Client relationships or advisory services
- Investment in recruitment, training, or professional development
- Resolving technical accounting issues

FUTURE READINESS

POP QUIZ:

- Does your team regularly dig through boxes of receipts or sort through paper files for reconciliation?
- Are you manually entering financial or transaction data?
- Do you have incomplete audit trails?
- Are you still printing and mailing checks?
- Do you have the agility to adopt remote operations with little notice?
- Does it make sense for your firm to mandate automation, or is offering the solution as an option sufficient?

HOMEWORK: It’s one thing to have the right technology and tools at your disposal – but are you actually prepared to use them effectively when the pressure is on? After analyzing your processes by asking the questions above, stress tests them to make sure things will move smoothly even when pressure from external, internal, and client forces.

GROUP WORK & PARTICIPATION

POP QUIZ:

- How do your departments, teams— even leadership + junior employees—function together?
- If you’re seeking to streamline one process, how many different departments or employees will it affect? Stress test for unforeseen ripple effects.
- Do you have any processes that require more than 3 steps or more than 3 approvals? Where and how can they be streamlined?
- What support options are available in case of employee troubleshooting, questions, or issues?
- Do separate but equally important departments—for example, Legal and Marketing, or Sales and Production—have touchpoints with one another? Should they?

HOMEWORK: Fine-tuning individual processes or pain points within the organization is obviously important. However, don’t lose sight of the big picture! Take a step back and look at the touchpoints within your firm.

What makes life easier for one team may cause a headache for another, without proper consideration. On the other side of the coin, potential solutions could be overlooked if stakeholders haven’t had a chance to come together and commiserate.

IF YOU’RE IN NEED OF SOME EXTRA CREDIT…

The past year made clear that digital cannot be ignored or nudged onto the backburner. Fortunately, earning an ’A’ is feasible – as long as the momentum we’re seeing continues.

It’s essential for bookkeepers to be champions of change and promote wins. Don’t be afraid to start simple:

Prioritize and tackle the quick wins
Build consensus with stakeholders
Showcase returns-on-investment so that future projects will be more likely to graduate beyond the idea stage, too

Knowledge is power. The more you gather about – and share within – your accounting firm, the greater potential you’ll have and the higher grades you’ll earn.

The post Take Your Accounting Firm Back to School With These Bookkeeping Tests appeared first on MoneyThumb.

Accountants and The Hybrid Age: Is This Our "New Normal?"

Denise Grier — Tue, 21 Sep 2021 11:17:23 +0000

Normal--what does that word even mean anymore? As the blogger for MoneyThumb, I'd like to share this quote from--of all people, Morticia Adams--who was the wife in the old TV series The Addams Family, which was later made into a very popular movie. "Normal is an illusion. What is normal for the spider is chaos for the fly.”

As a society at large, we haven't experienced anything close to normal since the early spring of 2020, when Covid-19 arrived on the scene and literally turned our worlds upside down. In our blog post today we are going to discuss the new normal when it comes to what is now being called "The Hybrid Age" and how this hybrid of working in an office and working from home affects accountants.

To start this discussion off, let's refer to a fantastic article from CPA Practice Advisor, one of our favorite peers. The article is titled Remote, Hybrid, or In-Office: The Future of Work Will Vary. This is a quote from that article every accountant should read, "According to a survey of more than 2,800 senior managers in the U.S., 71% of respondents said they will require their teams to be on-site full time once COVID-19-related restrictions completely lift. Far fewer will allow employees to follow a hybrid ..."

For accountants and other career professionals who have totally enjoyed the remote work situation brought on by Covid, the above comes as a low blow. Many professionals cannot even imagine going back to a life of 9-5 at an office, stuck at a desk. In fact, the CPA Practice Advisor article offers a strong warning to employers:

Workers May Walk

Employers should be aware of the risks of mandating a full return to the office: Previous research reveals nearly half of employees (49%) prefer a hybrid arrangement, and about 1 in 3 professionals (34%) currently working from home due to the pandemic would look for a new job if required to be in the office five days a week. In addition, a separate survey finds 43% of workers feel much more productive when remote versus in the office.

"When it comes to hybrid work, there's a disconnect between what managers prefer and what employees expect," said Robert Half senior executive director Paul McDonald. "But in this talent-driven market, especially, companies need to prioritize their people and look to the future. Providing flexibility is a low-cost way to create a positive employee experience and inclusive workplace culture."

If employers are to retain their top talent, they need to be more open and flexible to allow those who want to work part of the time at home. There will be challenges of course, but keeping employees happy is how you keep them, period.

Hybrid Work Hurdles

Employers cited a variety of top challenges when managing hybrid teams, pointing to the complexities of supporting a dispersed workforce long-term:

Communicating effectively with team members: 22%
Trusting employees to get work done: 20%
Gauging workloads and helping staff avoid burnout: 20%
Effectively recognizing and rewarding employee accomplishments: 20%
Finding time for team development: 19%

Another article from our pals at CPA Practice Advisor offers some solid tips for handling the rest of 2021 and beyond when it comes to our work situations and Covid. We have listed those tips below:

Prioritize safety and avoid controversy

The first step toward fruitful collaboration is ensuring that all team members feel comfortable. Maybe you’re fortunate enough to have an entirely vaccinated staff who all feel okay about working in the office. Most workplaces aren’t so lucky, though. And if you try to force people with different views about health and safety to comply with a unilateral policy, you’re only going to cause resentment and foster antagonism. Your strategy needs to allow for the entirety of the team to feel secure, whether that means allowing everyone the option to work from home or only opening the office to those who are vaccinated or test negative for Covid.

Make time for small talk

With everyone’s calendar full of Zoom links, it’s obvious that we’ve figured out how to have meetings remotely. But what do those meetings look like? Does everyone arrive in time for a formal discussion and leave as soon as it's over? If so, you’re losing the benefits of casual conversation, which can sometimes generate powerful and important ideas. Try leaving 10 minutes at the end of the meeting for an unguided session of chit-chat. You may also want to leave open sessions for members of teams to get together if they want, creating a virtual water cooler of sorts, a place where people can freely collaborate without the pressure of a formal meeting.

Use asynchronous tools

Asynchronous collaboration means allowing collaborators to work on the same project at different times. A classic example is a relationship between writers and editors. In many working relationships, a writer submits a piece, an editor edits it, and it's then sent back to the writer. This process can happen in all sorts of team environments, especially in a world where we have the tools to share nearly everything over the cloud. Sometimes, everyone on a team will need to work on something simultaneously. But more often than not, giving folks the time and space to work on projects when it makes sense for them will yield better rewards. Users can ask questions via commenting features, share thoughts in suggestion mode, and brief their coworkers on what they’ve been up to. Allowing for a certain amount of asynchronous collaboration will also give team members the freedom to do their jobs in a way that makes sense for them.

Have leaders check-in individually

There are always going to be some workers who flourish less in a group setting, especially when that setting is part virtual. It’s a good idea for leadership to reach out to their team on a one-on-one basis to check in on everyone. These check-ins will make team members feel seen and heard, but they may also provide crucial feedback about improving your hybrid policies.

Maintain a flexible mindset

I probably don’t have to tell you at this point that everything regarding work policy is subject to change at a moment’s notice. Hybridity allows us to adapt quickly, but only if we’re willing to do so.

The post Accountants and The Hybrid Age: Is This Our "New Normal?" appeared first on MoneyThumb.

3 Very Important, Free Whitepapers For Accountants

Denise Grier — Tue, 10 Aug 2021 13:12:50 +0000

Today on the Rules of Thumb blog from MoneyThumb we'd like to share three very important, free downloadable whitepapers from CPA Practice Advisor. Each of the following whitepapers covers changes that have occurred in the accounting industry as a result of Covid-19 and the new era of remote work.

Remote Work for Accounting Firms: The Ultimate Guide for a New Era

This free whitepaper does a great job of redefining how remote work has affected the accounting profession. Here is a description of what you can expect to learn from downloading and reading this ebook. Remote work is tough for any professional to manage by themselves—but when you’re a CPA and dealing with financial data, there are legal repercussions for not getting it right. That’s where this eBook comes in.

Learn the easiest method for staying compliant and secure while on the road, at home, or in the office using our new guide: Remote Work for Accounting Firms: The Ultimate Guide for a New Era Author Roman Kepczyk, CPA.CITP, CGMA, shares the lessons he's learned after 25+ years of remote work, including:

How to get advanced level threat protection for your firm
Technologies to help remote or hybrid remote CPAs stay secure
Preventing cyber-intrusion while traveling to clients’ offices

What clients want in 2021 and beyond - and how to find them

Accounting firms were already evolving before recent events. If anything, these events only pushed things into warp drive. Many firms that would have reached the finish line in their own time have found themselves being pushed from behind by new kinds of client demands. And this isn’t going to change.

To be better prepared for client demands, download this free guide to discover:

The 7 things your clients want in 2021 and beyond
How to differentiate yourself from the competition
How to find (and keep!) clients

Businesses have always turned to their accountant in times of need, and recent times have tested this rule to its limit. Be better prepared for what your clients are looking for by downloading this guide today.

SOS: How to Enable a Distributed Workforce with the Cloud

The pandemic brought rapid change to CPA firms. Some struggled to handle remote working, new cybersecurity threats and changing technological needs. However, some handled the transition better thanks to the cloud. Now, many firms wonder what comes next in the “new normal.” They find themselves stuck between returning to the office and remaining remote. How can they ensure that they enter the post-pandemic era stronger than ever? Cetrom dove into the unique lessons CPA firms learned in 2020 and discussed how they can utilize the cloud to make a strong comeback in the new normal. Download this important whitepaper by following this link.

If you are an accountant who is now working remotely due to Covid-19 and haven't yet begun to use MoneyThumb's PDF financial file converters, this is the perfect time to take one of our versions for a free test drive. Our best-selling PDF financial file converters are a lifesaver for accountants who work from home.

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Three Trends That Will Rule Accounting in 2021

Denise Grier — Tue, 16 Feb 2021 12:16:41 +0000

While accountants are super busy right now with the official tax season underway, in the back of your minds, you are probably curious about what 2021 holds in store for the accounting profession. We think we have found the answers to that question. Today on the Rules of Thumb blog from MoneyThumb we will discuss 3 trends that are forecasted to rule accounting in 2021 by CPA Practice Advisor.

Many of the trends that will be on the rise this year are a direct result of the unprecedented circumstances caused by Covid-19. The pandemic forced us to consider how we work in an entirely new way, and the changes made by firms nationwide will influence practices going forward, even when Covid is no longer a daily concern (fingers crossed). The firms that try to go back to the way things were are in danger of being left behind. The ones that adapt the lessons of the pandemic to a new model going forward are those who stand to benefit. To make sure your firm is in the latter group, you’d be wise to keep an eye on the following movements in our profession.

Trend #1: Remote work, but with options

For most of 2020, remote work wasn’t a choice. Due to mandates throughout most of the country, many firms didn’t have in-office employees for months on end. Even when these mandates are gone, however, companies allowing employees freedom with regards to when and how often they come to the office will remain. Companies like Twitter and Dropbox are moving to a “virtual first” workforce, proving that the need to go remote has demonstrated benefits for employers and team members alike.

It seems a safe bet to assume that most firms will offer some level of hybridity in 2021 and for the foreseeable future. Deciding what that hybrid model will look like for you should be of chief concern in 2021. Which positions can remain remote forever? Which of your team members is itching to get back to the office? These are the sorts of questions that will allow you to build a policy that meets the needs of your team, your clients, and your company. Start asking them now.

Trend #2: Tech to keep us connected

The need to move people out of office forced firms to reckon with tech in new ways. You’ve likely experienced a case of Zoom fatigue this year but as much as you may be hoping otherwise, don’t bank on video conferencing becoming a thing of the past anytime soon. Cloud-based apps like Zoom and Teams were many firm’s lifebloods during the pandemic. The value of those apps, and cloud-based platforms in general, won’t decrease in the coming years.

When people move to the cloud, they don’t move back. The ability to work (and work effectively) from anywhere is a door that won’t shut once it’s opened. Now is the time to take a look at your suite of tech solutions and decide which are stopgap fixes and which are there to stay. Invest time in testing and learning the platforms that will power your company, as getting the most from them will have a huge impact on your success. With companies like Zoom enjoying huge profits as a result of the pandemic, expect their offerings to get even better as those funds are used to iterate and improve on their services.

Trend #3: Wellness as part of work

As the professional and personal spheres of our lives grew more intertwined last year, many companies doubled down on providing support to their team members that go beyond the strictly work-related. The simple fact is that what’s going on in our lives affects what goes on in our jobs. To help make sure those two things are in harmony for the people at your firm, take the time to consider wellness as part of your firm's values.

There are countless ways to be mindful of your team members’ inner lives. From enforcing no-meeting days to providing subscriptions to apps like Headspace and Calm, it’s wise to offer services and create policies that allow team members freedom, flexibility, and the sense that they’re cared for. No matter what viruses are in the air, after all, taking care of your employees will always be a wise investment.

Who knows what else 2021 will have in store for us but after what we’ve been through, we should all be more than capable of rolling with the punches.

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Cybersecurity is Now More Important Than Ever For Your Accounting Firm

Denise Grier — Fri, 15 May 2020 12:51:55 +0000

At this time in history, more people than ever are working from home. This applies to CPA and accounting firms as well as other types of small businesses. Working from home can be very convenient, but it also offers some challenging issues. One of the biggest issues we have come across that working from home presents, especially for those not used to it, is cybersecurity. Since CPAs and accountants are privy to so much crucial financial information of clients, cybersecurity is even more important for you.

The Rules of Thumb blog from MoneyThumb would like to offer some tips for making sure you and your CPA or accounting firm are providing your employees who work from home the best in cybersecurity, to protect the financial assets of your clients. This article from CPA Practice Advisor provides some very important pieces of advice for helping accountants and CPAs with cybersecurity for their remote workers.

As the article points out, understanding the new cyber threat environment is the first step in making sure your firm is secure. Connectivity and bandwidth issues are being tested like never before, and employees have been forced to perform more work on personal devices, which creates additional security risks. Therefore, data privacy risks have increased exponentially in this environment.

A second point made by the CPA Practice Advisor article is that even if your accounting firm is small, cybersecurity is just as important to you as it is to the big accounting firms. In order for CPA firms to keep their valuable client and company data secure, automation, and Artificial Intelligence, (AI) are a must to mitigate potential risk. New technology is now available that will enable CPA firms to automate security measures and integrate a more behavioral, always-on approach to keeping data secure. Partnering with a cloud service provider with deep data and information security expertise and current experience leveraging AI, machine learning, and automation can literally be a company-saving strategic effort.

Building remote work ecosystems that include Virtual Desktop Solutions, deploying synchronous and asynchronous communication and sharing channels, and using virtual meeting technologies, to name just a few tools, are all IT elements that prepare CPA and accounting firms, large and small, to remain agile and to scale up when they enter growth mode. To be able to react quickly and set a company up for future change and growth, CPA firms need to invest more heavily in IT tools and systems that enable this kind of environment.

A third and just as important point made by the referenced article discusses constantly educating and training your employees in cybersecurity practices and adapting your firms' security plan as needed.

We have listed below important steps accounting firms and CPAs can take from the CPA Practice Advisor article:

Augment Your Data Backup Processes. Implement multiple daily backups using different methods like the cloud and hard drive backups, for example. Backups should live outside your network, outside your physical office space and should not be virtually connected to your network. The key is the diversity of backup types and consistency.
Secure Home Networks. More people are working from home because of the coronavirus, which means an increased risk of security breaches via home networks working with your CPA firm’s data. Here are some tips for securing home networks:
- Use a wired connection
- Review equipment that’s being used by staff at the home
- Run updates, patch, and reboot until all updates are made
- Subscribe to antivirus software
- Use two-factor authentication (2FA)
- Remain vigilant both about updates and staff behaviors/education about the threat environment
Establish Company-Wide Security Policies. Technology like AI will not solve security issues. People remain a huge factor in the success of any cybersecurity system. Therefore it is critical that CPA firms build-out, distribute and update an enterprise security policy that is clear and promotes accountability. This policy should include:
- Clear, enforced password rules
- Restricted access and permissions
- Protection for all devices
- Two-factor authentication
- Documentation disseminated to all staff
- Remote work/Bring Your Own Device Policy
- A security emergency response plan
Stay Informed and Educated. The cyber threat environment is constantly changing, so keeping abreast of the latest reports and threats is critical to keeping your data safe. Following IT security-related resources like MSSP Alerts, Crowdstrike, Cybersecurity SmartBrief, and the Tech Republic for cybersecurity updates.

The team at MoneyThumb would like to add one more important step for CPAs and accountants to make sure your clients' financial information stays safe, and that is using the best PDF financial file converters on the market. We use SSL (Secure Sockets Layer) technology which is the industry standard and among the best software available today for secure commerce transactions. It encrypts all of your personal information including credit card number, name, and address, to prevent it from being read as it travels over the Internet.

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3 Valuable Free Goodies for Accountants and CPAs

Denise Grier — Fri, 17 Jan 2020 13:44:07 +0000

With all the holiday busyness finally settling, the team at MoneyThumb and this Rules of Thumb blogger are feeling excited and hopeful that 2020 is going to be a stellar year. We are feeling full of a giving spirit so we wanted to share today some great free goodies we found with our friends who are bookkeepers, accountants, and CPAs.

Since we have officially entered tax season, this first freebie from Accounting Web will surely make your job as a tax preparer easier in 2020. Capacity Planning For Tax Season: A How-To Guide will provide you with a framework to build a reliable capacity plan based on your clients' behaviors.

The intense pace from January through April each year can overwhelm and push you and your staff beyond capacity very quickly. Being able to predict when the busiest periods will be, and which clients will require attention, can make life a lot easier. That's where this sanity-saving guide comes in.

The guide is compiled by Susan Tinel, EA, author, and veteran of many tax seasons.

Inside you'll learn:

How to examine previous year client behavior
How to plot that into an easy-to-interpret plan
How to quantify the resources you have for this year so you can avoid difficult choke points

Fill out the form on this page for an instant download. You'll also receive a convenient link back to the document by email so you can download the file to your other devices.

For accountants who are planning to expand their business to include advisory services or those of you who already offer advisory services to clients, the next freebie from CPA Practice Advisor will be invaluable over the coming months. 7 Questions to Help Grow Your Advisory Services is a free whitepaper you can download by following this link. Described as "practical advice for accountants looking to move beyond basic offerings," below is an explanation from the download page with what to expect from this free whitepaper:

"Client advisory services, or CAS, continues to permeate as a hot topic of conversation throughout the accounting profession. However, many accountants are still unsure of how to make changes to their firm to incorporate CAS while some accountants even question why they should provide additional services when their core products—accounting, audit, and tax—have proved so successful.

But there can be no mistake. Moving to advisory services will benefit your firm and your clients. To help frame a story around why this whitepaper provides seven questions you can answer to help kickstart the process of adding advisory services to your firm.

93% of small businesses value accountants as their source of business advice, so the opportunity is out there. Learn more about CAS by downloading the 7 Questions to Help Grow Your Advisory Services whitepaper today."

Our third offering is a plethora of freebies from PF, a firm that specializes in marketing for accountants. Below is a list of freebies offered by following this link:

The Social Marketer--a series of DIY videos created exclusively for accountants learning more about using social media well. Who’s it for: Anyone in the firm! No matter what level of social media experience you have (or don’t) How do you access it? Join free and access the videos anytime – work through at your own pace.

Marketing Masterclass--Find out the four barriers all accountants face when it comes to marketing, and how these are actually opportunities which will bring you the greatest ROI. Who’s it for: Everyone within the firm, but primarily the owners and directors How do you access it? These are recordings of live sessions, so watch whenever you have time.

Traits of Entrepreneurial Accountants--this guide covers the traits that make for a great entrepreneurial accountant: the kind of person who isn’t “simply” an accountant, but is the best one, and the best business owner you can possibly be. Plus it includes quotes from Rod Drury CEO of Xero, Jason Blumer Founder of Thriveal and Owner of Blumer CPAs to name a few.

We hope these freebies we found from our peers in the accounting world help our MoneyThumb clients and the Rules of Thumb blog readers have a very successful and productive 2020. We would appreciate it very much if you would share the link to this blog post with your accounting peers. Share the love!

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State-by-State Guide to Candy Taxes for Accountants Just in Time for Halloween

Denise Grier — Fri, 25 Oct 2019 13:12:18 +0000

One thing the Rules of Thumb blog from MoneyThumb has noticed is that we as Americans celebrate Halloween on a grander scale than ever before. But what may surprise our readers is that not only are Halloween costumes big business for retailers these days, one of the most purchased items during the Halloween season is candy.

For accountants who handle the finances of retailers selling candy, you may be interested to know that about 90 percent of Americans are expected to buy candy for Halloween this year. Together, they’ll spend $2.6 billion on candy.

After the fiasco concerning sales tax across state lines brought on by the court case of South Dakota vs Wayfair--which we wrote about here--, our accountant readers with Halloween retailing clients selling candy will also find the following information we gleaned from CPA Practice Advisor very helpful:

Spooky Retail: A State-by-State Guide to Halloween Candy Taxes.

Candy is food and taxed the same as “food and food ingredients”

Ten states generally consider candy to be like any other food, and so generally tax it the same.

Alabama: Candy and other food products for human consumption are taxed at the full rate of state and local sales tax unless sold through a vending machine (vending machine sales are subject to a 3 percent state sales tax, plus various local rates). There have been attempts to exempt food/groceries at both the state and local level as recently as this year, to no avail.
Hawaii: Candy and other food are taxed at the general rate.
Idaho: Candy and other food are taxed at the general rate.
Kansas (SST member): Candy and other food and food ingredients are taxed at the general rate.
Mississippi: Candy and other food are subject to the regular sales tax rate in Mississippi.
Missouri: Candy and other food for home consumption are subject to a reduced state sales tax rate of 1.225 percent, plus applicable local sales tax.
Oklahoma (SST member): Candy and other food and food ingredients are taxed at the regular rate. However, food sold through vending machines is exempt.
South Dakota (SST member): Candy and other food are taxed at the regular rate.
Utah (SST member): Candy and other food and food ingredients are taxed at a reduced rate of 3 percent (1.75 percent state tax, plus 1.25 percent local taxes). Lawmakers have attempted to exclude candy from the definition of food and food ingredients, which would subject it to the full rate of tax, but their efforts have been unsuccessful as of this writing.
Virginia: Candy and other food and food ingredients are taxed at a reduced rate of 2.5 percent.

Candy isn’t food and is taxed differently from “food and food ingredients”

Close to 20 states don’t consider candy to be the same as other “food and food ingredients.” Consequently, they don’t treat it the same as food for tax purposes. Remember that SST states don’t consider candy-like treats containing flour or requiring refrigeration to be “candy.” Thus, while a Reese’s Peanut Butter Cup may be subject to sales tax, a Kit Kat bar or Twix bar would be exempt or taxed at a reduced rate for food and food ingredients.

Arkansas (SST member): Candy and soft drinks have been taxed at the regular state and local sales and use tax rate since January 1, 2018. “Candy” excludes products that contain flour (e.g., Kit Kat or Twix) or require refrigeration, so these deceptively candy-like products qualify for the reduced state sales tax rate that applies to “food and food ingredients” (1.25 percent) — unless they’re sold at a concession stand, the seller’s prepared food sales percentage is greater than 75 percent, and utensils are made available, in which case the general sales tax rate applies.
Colorado: Candy (including chewing gum) is generally subject to the full state sales tax rate, but grocery food items are generally exempt from state sales tax. Cities have the right to exempt or tax food for home consumption and food sold through vending machines. However, since candy isn’t considered “food,” it isn’t eligible for a local exemption.
Connecticut: Candy is generally taxed at the full rate. Vending machine sales of candy are taxable if priced at $0.51 or more. Candy sold in educational institutions and certain health and care facilities is exempt, and grocery foods are generally exempt.
Florida: Sales tax applies to most sales of candy, but grocery foods are generally exempt.
Illinois: Candy is subject to the general rate; other grocery foods are subject to a reduced rate of 1 percent.
Indiana (SST member): Candy is generally taxed at the full rate, although baking chocolate and similar products intended for use in cooking are generally exempt (unless in the form of bars, drops, or pieces, and are sweetened). Other food and food ingredients are generally exempt. As of July 1, 2019, food sold through vending machines is taxable if generally taxed and exempt if generally exempt (all vending machine sales were taxable prior to that date).
Iowa (SST member): Candy is taxed at the full rate; food and food ingredients are generally exempt.
Kentucky (SST member): Candy is taxed at the full rate, as is food sold through vending machines; food and food ingredients are generally exempt.
Maine: Candy is taxed at the general rate or at the higher rate for prepared food; grocery staples are generally exempt.
Maryland: Candy is taxed at the general rate; other food for home consumption is generally exempt when sold by a grocery store or market.
Minnesota (SST member): Candy is taxed at the regular rate; food and food ingredients are exempt.
New Jersey (SST member): Candy is subject to the general sales tax rate; food and food ingredients are exempt.
New York: Candy is generally taxable; groceries are generally exempt.
North Carolina (SST member): Candy is subject to the full rate of state and local sales and use tax, as is food sold through a vending machine. Other food and food ingredients are exempt from the general rate but subject to a 2-percent food tax. Some local sales and use taxes apply to food that’s otherwise exempt.
North Dakota (SST member): Candy is subject to sales tax; food and food ingredients are exempt.
Rhode Island (SST member): Candy is subject to sales tax; food and food ingredients are exempt.
Tennessee (Associate SST member): Candy is subject to the full rate of tax (7 percent); food and food ingredients are taxed at a reduced rate of 4 percent.
Texas: Candy is subject to the general rate of sales tax; food and food ingredients are generally exempt.
Wisconsin (SST member): Candy is subject to sales tax; food and food ingredients are exempt.

Candy is necessary and exempt

Some states exempt food and food ingredients (or food for home consumption) because they consider it essential. And some of them include candy in that clustering.

Arizona: Candy and grocery food sales are exempt.
California: Candy and other food and food ingredients are generally exempt. However, tax applies to 33 percent of gross receipts from vending machine sales of candy. Bulk sales of candy through a coin-operated machine are exempt when sold for 25 cents or less (think gum-ball machines).
Georgia (SST member): Candy and other food and food ingredients are exempt from state sales and use tax but subject to all local sales taxes except the special purpose local option sales tax (SPLOST) imposed in connection with equalized homestead option sales tax (EHOST).
Louisiana: Candy and other food and food ingredients are generally exempt; however, local taxes may apply.
Massachusetts: Candy and other food and food ingredients are exempt. There have been efforts to eliminate the exemption for candy and soft drinks in recent years, to no avail.
Michigan (SST member): Candy and other food and food ingredients are exempt, including food sold through vending machines.
Nebraska (SST member): Candy and other food and food ingredients are exempt.
Nevada (SST member): Candy and other food and food ingredients are exempt, though candy prepared for immediate consumption is taxable.
New Mexico: Candy and grocery foods are eligible for a New Mexico gross receipts tax (GRT) deduction.
Ohio (SST member): Candy and other food and food ingredients are exempt if consumed off-premises, but taxable if consumed on-premises.
Pennsylvania: Candy and other food and food ingredients are exempt.
South Carolina: Candy and other food and food ingredients are exempt from state sales tax, though local taxes may apply.
Vermont (SST member): Candy and other food and food ingredients are exempt.
Washington (SST member): Candy and other food and food ingredients are exempt.
West Virginia (SST member): Candy and other food and food ingredients are exempt.
Wyoming (SST member): Candy and other food and food ingredients are exempt.
District of Columbia: Candy and other food and food ingredients are exempt; however, candy and other snack foods sold through vending machines are taxed at a rate of 5.75 percent.

We hope the above guide courtesy of CPA Practice Advisor will cover any questions our accountant readers may have about the sales tax laws in and across any particular US State. Have a fun and very spooky Halloween!

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Women in Accounting Deserve Recognition

Denise Grier — Fri, 19 Apr 2019 12:45:22 +0000

It looks like 2019 could turn out to be The Year of Women, for several reasons. One is that of the 100 people named the most influential by Time magazine, more women are in the list than ever before. Another good reason is that Marianne Williamson, author and public speaker who is known for her spiritual influence, is running for president of the United States in 2020. And it looks like the Rules of Thumb blog from MoneyThumb is far from the only entity that thinks 2019 is turning out to be the year of the woman. This article from In Her Sight is titled 2019: The Year of the Woman and discusses history-making women in Congress.

When it comes to the field of accounting, 2019 is being heavily influenced by women. So much so that AICPA Engage 2019 is going to be aimed at celebrating women who made their mark on the accounting profession as well as those who are emerging as the next generation of firm leaders, through new technologies, practices, workflow or dynamic work environments. We think it is a wonderful thing that women are getting the recognition they deserve, especially when it comes to their work in accounting. For so many years, when you pictured an accountant, the image was almost always one of a man.

To help recognize women in accounting, The AICPA’s Women’s Initiatives Executive Committee (WIEC) and CPA Practice Advisor have teamed up to award 25 women the distinguished honor of being named one of the 2019 Most Powerful Women in Accounting. If you know of a woman in accounting who you feel deserves this award, below are the details of the award and how to nominate someone:

Nominate a professional for the Most Powerful Women in Accounting Awards.

Those honored with this recognition are women who demonstrated three attributes:

They have been the driving force to create a culture of innovation or excellence within their firm, or helped, as a vendor, develop the technologies that will empower firms to be more productive and profitable
They reached the highest level of management and ownership within their company and their leadership demonstrated an impact on the success of the organization
They have been mentoring those following in their footsteps

Our 25 winners will be recognized publicly at the AICPA Engage 2019 and featured in the June 2019 issue of CPA Practice Advisor magazine.

The deadline for nominations is April 30, 2019, so hurry and get your nomination in! The Rules of Thumb blog from MoneyThumb would really appreciate it if you shared this post so that everyone in your peer group has a chance to learn about this great award and nominate a deserving woman in accounting.

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The Value of Attending Accounting Conferences

Denise Grier — Fri, 26 Oct 2018 12:07:39 +0000

As a professional accountant with an individual practice or a firm, do you attend accounting conferences? If you have yet to attend an accounting conference, it may be time to start. With the QuickBooks Connect conference coming up in November, now is the perfect time to begin attending accounting conferences. The Rules of Thumb blog from MoneyThumb has listed the best reasons that accountants should attend conferences below:

Educational opportunities. No matter how experienced an accountant you are, everyone can learn. By attending accounting conferences you will become more open to new ideas and trends that can impact future results. The educational aspect of a conference can expose you to new ways of conducting your accounting practice and help you discover how to be more productive.
Networking with peers. Accounting conferences provide a great opportunity to network with your fellow accountants. You will meet accountants from other regions of the country who can become valuable resources for referrals.
Encounter new vendors and suppliers. Too often people shy away from the trade show exhibit hall at accounting conferences. They fear that they will have to talk to salespeople, but these accounting industry suppliers are some of the best people for you to get to know if you want to learn more about the current accounting climate. Discovering innovative products and services for your practice is necessary to stay competitive in today’s fast-paced world. Plus, these vendors who sell to the accounting industry fully grasp what is happening inside your competition. Invest time with the sponsors at the event and turn them into your friends and allies.
Position yourself as an expert. When you are active in the accounting industry, you can develop a reputation as an expert to your peers and your clients. Those who are engaged over the long term are often asked to speak at accounting events and to write articles for accounting industry publications. Like it or not, others like to associate with the experts in any industry. Clients feel good about doing business with those that are celebrated by their peers.
Have fun. Being an accountant can often be isolating. An accounting conference is a perfect way to get outside and have some fun. All work and no play can get old fast. Accounting conferences can add a layer of enjoyment to managing your career growth by mixing a social aspect into your learning and accounting industry branding efforts. Many events have fun activities such as parties, golf, and tours of the local area where the event is hosted. Taking an extra day at the beginning or end of the trip to explore or visit friends in the region is also a great way to maximize the investment in travel. Never underestimate the power of a little fun mixed with some interesting people!

Even though the internet has provided accountants with a way to further their education strictly online, the value of human-to-human connections will never cease. However, if webinars are something you regularly attend, the Rules of Thumb blog from MoneyThumb would like to share this upcoming webinar with you. This looks like a really important one and it is being presented by CPA Practice Advisor. The webinar is called Close the Books on Fiscal Year 2018 and it is being held on November 14, 2018. Here is the link to register for this free webinar. Below is a short description from the CPA Practice Advisor website of what you can expect to get from the webinar:

Time to close the books on the fiscal year 2018 and prepare for the upcoming year. We want to help make your end of year tasks a little easier.

Join this webcast to hear how a complete fixed assets tracking module can help you complete physical inventories and illuminate ghost assets. Learn about year-end reports you may not be aware of, including:

Audit Advisor
Midquarter Applicability
Tax Expense
4562 Depreciation and Amortization
4797 Sale of property

You will also get access to an end of year checklist.

Program level: Basic (no prerequisites required).

Receive 1 hour of free CPE credit for participating in this live webcast.

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Do Accountants Completely Understand the Laws Regarding Sales Tax?

Denise Grier — Tue, 21 Aug 2018 10:03:22 +0000

It is a given that accountants and CPAs know everything there is to know about income tax. But when it comes to different states and sales tax, as an accountant or CPA do you wonder if you understand the rules and laws that govern this area of taxes completely?

The issue of sales tax across state lines was brought to the forefront of our concern due to a landmark decision by the US Supreme Court. The recent Supreme Court ruling on the South Dakota v. Wayfair case grants the state authority to impose sales tax obligations on out-of-state transactions even if physical presence doesn’t exist in the state of delivery. The Rules of Thumb blog from MoneyThumb wrote a post back in July of this year titled Heads Up Accountants: Online Businesses Now Taxed Across State Lines where we discussed this issue and shared a webinar designed to help educate accountants, CPAs, and bookkeepers about this issue. Hopefully, you attended that webinar and maybe even received free CPE credits for doing so. Today we would like to share with our readers who are in the accounting niche another important free webinar coming up in September that will further your education on sales tax. This free webinar also offers free CPE credits.

Do Accountants Completely Understand the Laws Regarding Sales Tax?

On Wednesday, Sept. 12, 2018, CPA Practice Advisor is holding a free webinar titled, How to Start the Sales Tax Conversation with Your Client in Light of South Dakota v. Wayfair. Here is a description of the webinar from the registration page:

Middle market CPA firms typically specialize in tax and audit. But sales tax is often overlooked. Sales tax consulting (or even compliance) isn’t a specialty that most medium-sized firms offer. And yet, your client may expect you to be able to advise them in this area, particularly in light of the recent US Supreme Court ruling in South Dakota v. Wayfair. When a client receives notification of an audit, CPAs may find themselves on defense, as clients ask “why didn’t you tell me?”

This course won’t make you a sales tax expert in 60 minutes, but we’ll share some state tax basics, history and hot topics in the sales tax world today, and provide some key questions to ask your clients as you are already meeting with them for year-end planning, or during your tax return pre-conference. We’ll discuss how to relatively quickly determine the potential scope of a multistate sales tax problem, when to partner with a state tax specialist, and how that relationship works best, including how both the CPA and the consultant can work to maximize benefit to the client while also expanding the scope of projects to offer your client.

Learning objectives:

Understand nexus – the concept of taxable presence, economic nexus and how it’s easier than ever for your client to cross that threshold;
Provide a roadmap for how to walk a client through the steps to determine possible multi-state tax exposure, including unrecorded sales tax liabilities, penalties, and interest;
Understand the various ways for your client to come forward with states in cases of retroactive liabilities and possibly mitigate some of the costs;

To sign up for this important free webinar, follow this link to the registration page. The Rules of Thumb blog from MoneyThumb always encourages our readers to continue learning and growing as accountants, CPAs, and bookkeepers. Staying up to date on the latest sales tax rules and laws is one important way to do so. Another great way to stay on the cutting edge of the accounting world is by using the best PDF financial file converters on the market. By using these MoneyThumb tools you can save yourself tons of time and headaches by seamlessly converting your clients' bank statements and much more. Check out this link to learn more about our highly recommended after PDF financial file converters.

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