Welcome to the fourth installment of our “Perkins Milestones” anniversary series, which explores our employees’ career paths and their time at Perkins. (If you missed our other anniversary posts, check out our blog to scope them out.)
At a young age, Kimberly developed a desire to help people thrive and a love of real estate and community building. Her family, starting with bare land, built a variety of different businesses on their farm: donut shop, convenience store, and an ice-cream parlor to name a few — all in addition to the production and care of 20,000 chickens, horses and cows. Growing up surrounded by entrepreneurs, Kimberly was raised with a can-do attitude and keen interest in business.
While attending Oregon State University to study business, Kimberly’s father suffered a massive stroke, so she put her studies on hold to assist her mother with the financial aspects of the family’s businesses. Years later, Kimberly is still helping businesses with their finances. Her kind and friendly nature makes everyone feel like family. For 20 years Perkins & Co has been fortunate to have this caring and clever dynamo on our team. We recently asked her to reflect on her time at Perkins, and here’s what she had to say:
Q: How did you first hear about Perkins?
My professors in college recommended Perkins as a good alternative option to the Big 4.
Q: What attracted you to Perkins?
I was attracted to the size of the firm, the people and the firm’s reputation.
Q: What was your first project at Perkins & Co and in what industry was it?
When I first started at Perkins, I was doing both audit and tax work. However, the most memorable projects are from my time as a senior. Tim Kalberg was my supervisor, and we worked on tax returns for a premier new & used store fixture supplier and a prominent high-rise commercial office building in downtown Portland. At the time, those were two of the most complex returns to prepare; they involved crazy work papers to track the various book/tax differences and reconciliations of accounts. The work was further complicated by the fact that Tim used Lotus and 12 column paper work papers, while I only knew Excel. Our team for these projects definitely burned the midnight oil to make things work and ensure the projects were completed on time.
Q: What do you like most about working at Perkins?
I adore the people — both internal at the firm and the clients. We have a smart group and great teams to work with. We also have awesome clients. The sophistication of the interconnected services we can provide allows us to do a better job and make our work more fun! It’s great to be able to simply walk down the hall and get answers to, or brainstorm about, complex or unusual issues.
Q: What’s your best memory at Perkins (so far)?
That’s a tough one. Some of my favorite memories include the family picnics and the fun activities we do as a firm. Back in the day, Cheryl Perkins, our former president, hosted family picnics at her house where people could water ski and the kids giddily played in the mud. I also enjoyed playing on the city league softball team and participating on our firm’s Hood to Coast teams for five consecutive years.
Also, let’s not forget the delirious moments in busy season. After you’ve worked very long hours you say and do some silly things—like wearing one blue shoe and one black shoe to work—and can’t help but laugh at yourself.
Q: What’s one thing you wish you knew before entering “the real world” about the accounting profession?
To be honest, I wish I had known how rewarding a career at an accounting firm could be. You’re surrounded by smart, dedicated, creative (yeah, who ever thought accountants and creative would be in the same sentence), and, surprisingly, very competitive people. You often hear only about the long hours you’re expected to work during busy season.
Q: What advice would you give to younger accountants or individuals entering the accounting field?
Know yourself and what drives you. Learn the business of accounting and what makes a firm successful and you, too, will be successful. You’ll be surprised how important soft skills are versus technical ones.
Q: What do you look for in a candidate who’s looking to join Perkins &Co?
Personality. For me it’s important that a candidate has a sense of humor — it gets us through some crazy times, as I mentioned earlier. Someone who’s naturally curious and self-motivated is extremely important too. Be motivated to learn for yourself and to learn about the clients and their needs; that’s why we do what we do…to help clients reach their goals and build their legacy.
There’s no doubt Kimberly is a legacy-builder; we’ve had the benefit of experiencing that first-hand! Kimberly has been integral to building Perkins’ reputation as the go-to firm for the accounting needs of local commercial real estate and construction businesses. Her focus on real estate building a community versus just a building gives her work depth and breadth. She brings skill, experience and a lot of heart to everything she does. Thank you for your great work, Kimberly!
Author: Taylor Valdes, Administrative Assistant
Welcome to the third installment of our “Perkins Milestones” anniversary series. In case you’ve ever wondered why someone would choose the life of accounting, this series explores our employees’ career paths and their time at Perkins. (Missed our first two? Read up on Lindsay Park and Trina Headley who celebrated their 10th and 15th anniversaries.)
“It’s been a ride, hasn’t it?” reflected Keith Meyers and Drinda Roth, Shareholder and Office Manager respectively, as we sat down to chat about their time at Perkins & Co. They walked through our firm’s doors over 15 years ago after one fateful meeting with former Perkins & Co president, Jim Jeddeloh, and they haven’t looked back.
Keith and Drinda first met almost 35 years ago while she was working for an attorney’s office located on the same floor as Keith’s accounting firm. But it wasn’t until after her brief stint as a flight attendant followed by a year at an insurance company, that she started working for Keith, who hired her as an administrative assistant to support his clients’ 1040 work (accounting speak for individual income tax return forms) while he focused on the corporate and financial statements.
Then, in the mid-90’s, Keith took an interest in business valuation (BV) work and began migrating his focus away from traditional accounting; it turns out Keith’s business partner wasn’t as interested in BV and was perfectly content focusing on financial planning. So, Keith decided to embark on starting his own firm with Drinda as his right-hand woman. They were 99% sure it was going to happen when larger-than-life president of Perkins & Co, Jim Jeddeloh, swooped in. Jim was keen to start a valuation department at Perkins, and after meeting with him Keith agreed to join Perkins as a principal with the stipulation that Drinda was brought aboard as well. He assured Jim that within six months they wouldn’t know what to do without her.
When Drinda first arrived at Perkins, she worked as a tax staff and did whatever was required to support the transition of Keith’s practice to their new firm. Working a regular 55-hour week (a requirement during busy season) her days were filled with 1040 prep and completing individual income tax returns. A few months after Drinda’s arrival, Jim’s administrative assistant departed, and she moved into the role, which set the foundation for her career progression at Perkins. As if she wasn’t busy enough, shortly after her arrival Drinda recognized another area where she could be an asset—with her keen attention to detail and master of organization, she added the role of event planner to her cap and has since managed all of the firm’s internal events, including our annual holiday party. Ensuring that all employees feel welcome and that there’s an activity for everyone, Drinda’s events have become quite infamous at Perkins (did we mention they’re wickedly fun?).
So, what are they up to today? Well, almost eight years after joining Perkins as a principal, Keith became a shareholder, and his primary focus continues to be business valuation and litigation support (he co-leads the firm’s respective practice groups), and he has an increased presence in providing winery valuations. In addition, he’s also a leader of the firm’s Beer, Wine & Spirits practice. As for Drinda, with the retirement of our former Chief Operations Office, her role has morphed and her responsibilities—in addition to event planning—include overseeing the firm’s facilities and office maintenance. That entails managing work orders and construction projects (including two buildouts in the past five years) for 40,000 sq. feet of space in the PacWest Center and our satellite office in Vancouver, WA, and she supervises a staff of a half dozen. On top of that, even after all these years, she still interfaces with clients that made the move to Perkins with her and Keith. You could say Drinda is the glue that holds our firm together. Keith was right; we don’t know what we’d do without her!
From a firm of roughly 60 employees when they first arrived to a firm of over 175 employees, Drinda and Keith have experienced a lot of change and growth throughout their careers; you could say they’ve grown alongside the firm. But throughout it all, the root of the culture remains the same and that’s family among coworkers (how else would you describe working with someone for almost 30 years?). Keith and Drinda have certainly contributed to our “work together, play together” mentality, and we’re proud of the culture they’ve helped us build. It’s been a wild ride, indeed! We’re glad they were up for the journey.
Chances are if you’re clicking on this post your first time audit is on the horizon. Perhaps you’re expanding your business and taking out a new line of credit to finance that growth. Maybe you’re entering a business area with a regulatory environment that requires an audit, or you’re taking on new investors or getting ready to sell your business and you’re looking for the confidence and assurance that audited financial statements can provide. Whatever the reason, an audit is in your future. With some planning and up-front work your audit experience can be a good one and you may even gain some efficiency and improve your processes. Below is a list of best practices to help make the audit run seamlessly.
Talk to Your People
One key factor to ensure a successful audit is preparing your employees and setting the right tone. The word “audit” can cause worry and concern if your employees don’t understand the context and reasons behind the audit. When the auditors visit your offices they will talk to employees at every level in your company and it’s important to make sure they are comfortable. Empower your employees to answer questions, or defer to you or others in your organization, when it’s appropriate. Assign roles and point people for the various audit areas. Communicate this internally and also to the auditors and they will know the right person to go to when questions arise. Stress the importance of being open and honest with the auditors. Establishing an environment that treats the auditors as partners will help ensure they are as effective as possible.
Document Your Internal Processes and Controls
If you don’t already have detailed process and control documents, draft them ahead of the audit. Auditors are required to document their understanding of your internal control environment and no one knows your internal control environment better than you and your employees. By documenting your processes and controls you can ensure the auditors hit the ground running and understand all the strengths of your controls.
At a minimum consider compiling the following process and control documents:
- Cash in-flows
- Cash out-flows
- Controls over financial reporting and month/year-end close
- Information technology general controls
Consider if you have any internal documents (job descriptions, training manuals etc.) that you can leverage to turn into the process and control documents.
Check Your Records and Fix Any Gaps
The auditors will be requesting a significant number of documents supporting transactions and business activities. Making sure you have a complete set of records up front will save you the headache of having to recreate them during the audit process.
- Ensure you have support for transactions (invoices, purchase orders, cash payments/receipts).
- Gather all contracts, lease agreements and organizational documents.
- Review your notes and records and make sure you’ve documented any unusual items or transactions, especially large ones.
- Reconcile your books and check that your subsidiary ledgers agree to your general ledger.
- When you’re providing schedules to the auditors make sure they agree to the general ledger. You don’t want the auditors spending their time (or your money) reconciling reports that you can reconcile more easily.
- Ask questions, often and early. The auditors want to provide you with a great audit experience and you can help ensure they do just that by starting a dialogue early and getting to know the whole audit team. Even though the shareholder and manager will ultimately be responsible for the audit, it’s the audit staff and seniors that you will be working with on a daily basis.
- Set an expectation for any communication preferences you and your employees may have. If you prefer to have a record of everything to refer back to, let the auditors know you like e-mails. Alternatively, if you like face-to-face meetings to address questions, let them know that too.
- Request the client request list ahead of time and make sure you understand what’s being requested. If there’s an unusual transaction or complex accounting issue, the auditors want to be your resource and are always happy to help you work through the details.
- Consider asking to receive sample selections in advance of fieldwork. That way you can pull all the document requests before the auditors arrive to ensure they can maximize their time in your offices. You will have to provide populations sooner, but the payoff will be huge in terms of efficiency.
- Staying ahead of the auditors will make sure they’re able to stay on track with your timelines and ensure you the best audit experience.
There’s no way around the fact that a first time audit is a lot of work. But by following the tips provided above, and taking time upfront to make sure you understand the audit process and getting your records and employees ready, you can ensure the process is efficient and valuable.
Author: Megan Whalen, Audit Senior Manager
This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.
January 26, 2017
Portland, Ore. – The American Institute of CPAs (AICPA) Standing Ovation program has recognized Paris Powell as one of 25 CPAs age 40 and under to be honored for their contributions to the areas of forensic accounting and business valuation. Powell, along with the other talented young Standing Ovation CPAs from across the country, was honored at the AICPA’s 2016 Forensic & Valuation Services (FVS) Conference in Nashville in November.
Author: Marketing Department
Topic: Financing Options — Latest Trends & Challenges
Join us at the Skype Live Studio on Thursday, February 9th, from 3:30pm – 6:30pm to hear our panelists discuss the latest trends and challenges in financing options. Register now.
Summer has officially ended and school is back in session, which means we’re in full-on “Meet the Firms” season. Not to worry, you still have time to prepare; this post will provide you with a few pointers to help you prep for this exciting event. Even if you’re not an accounting student, these tips can help anyone who’s attending networking events or interviews.
Meet the Firms is an accounting-specific career fair, where students or new graduates have the opportunity to speak with potential employers that are seeking interns and new staff. Firms who participate in this event include public firms, private companies, and government agencies.
At Meet the Firms, you will meet recruiters, as well as client service employees at various levels, who are eager to meet you. They’ll be looking for personalities that fit with the company and will want to hear about your career goals. This is your chance to get to know each company and determine your fit with them as well – after all, the decision goes both ways. This recruiting event is also your chance to develop professional connections before applying and interviewing. So let’s dive in.
- Set yourself up for success. Depending on your school, Beta Alpha Psi, the accounting fraternity, will often have students register for the event. By doing this, you can submit your resume which will be distributed to the companies and firms. There are also other events and opportunities hosted by respective companies to help prepare you for this event – we highly encourage you to go. Usually, there will be workshops hosted by various firms for subjects starting from resume writing to networking and even interview preparation. This is a great way to meet professionals, learn a little more about them, and make an impression.
- Do your research. Take time to check out who’s participating – this event spans a few hours (usually from 6-8:30PM), so your time is limited. Check out the firm size and location, and get an initial feel for the firm – you want to spend time with the firms and companies you are interested in and can envision being at in the long run. You also want to have time to check out some other promising companies that might have not been on your radar. Use your professors and the accounting students from upper level classes, as they can shed insight on what firms they are interested in and why.
- Brainstorm. Create a list of your skills and have a quick summary of your previous experiences. Having a well thought out “elevator speech” will help prevent you from rambling in case you get nervous. This ‘pitch’ can also equip you to start a conversation.
- Questions. Write down specific questions you’d like to ask. Since your time is limited, make sure to maximize it and use the time to obtain the information you seek.
- Dress appropriately. This event is business formal. Yes, this means suits! You’ll be on your feet almost the entire time, so make sure you wear comfortable shoes (I speak from experience). However, it is important to dress to impress, so find shoes that make you feel confident, in addition to being comfortable.
- Ask for a business card. You’ll be meeting a lot of professionals, and this is a great way to help you remember who you’ve met. If you have any follow up questions, you can easily contact the representative. If you don’t have any follow up questions, remember to send a quick thank you note. Thank you notes are an invaluable professional habit to have – they’re a small gesture, but they go a long way.
- Lastly, be enthusiastic! This is an exciting time for both you and the potential employer. This is your chance to market yourself and network – let them get to know you while you learn about them, as well.
If you’re not affiliated with a school but interested in an accounting career, the OSCPA hosts an annual, free Career Showcase, which was recently held at the Oregon Convention Center.
We hope you found these pointers useful. As noted earlier, while we’re specifically writing about “Meet the Firms,” these tips can be used for a variety of networking situations. Good luck, and let’s get networking!
Author: Victoria Uong, CPA, MBA
IRS Proposes Regulations Restricting Discounts on Family Transfers
Experts have been able to assist families transfer wealth between generations using methods that reduce the value of closely-held entities. By properly drafting the governing documents and deploying some valuation “slight-of-hand”, experts have been able to make 2+2=3. Though this is a great answer for family gifting, the IRS didn’t find the trick entertaining, and is taking steps to shut down the magic act.
Specifically, the IRS recently issued proposed regulations that reduce our ability to apply valuation discounts to intra-family transfers in entities like corporations, partnerships and LLCs. Currently expected to occur sometime in early 2017, these proposed regulations are not yet law, but will become effective once they are finalized.
If you are considering a gift or sale of an interest in a family-controlled entity to another family member, completing the transfer before these rules become final will most likely result in a lower valuation, lessening gift-tax consequences. These rules apply to both operating companies and “holding companies.” However, the mechanics of how they apply are complicated. While it appears that the valuation of holding company interests will be more directly impacted, operating company transfers to family members could also be affected.
You may only have one last opportunity to take advantage of the great disappearing-value act before the show closes. Call your advisor now if you are planning or considering these types of transfers and we will discuss your situation and options. We might still have a trick or two up our sleeves.
Author: Keith Meyers, CPA, ABV, CFF, Shareholder
August 31, 2016
Portland, Ore. – Since its founding in 1986, Perkins & Co has been committed to placing women in positions of leadership, a commitment that started on day one with the company’s namesake, former founding partner, Cheryl Perkins. Today, Portland’s largest locally owned public accounting firm is excited to announce the promotion of Paris Powell, Lisa Zauner, and Colleen Murray from Senior Managers and Director of Operations, respectively, to Shareholders. In addition, Tax Senior, Rosie Brammer, is one of just a few young CPAs nationwide to have been selected to attend the AICPA Leadership Academy.
Author: Marketing Department
Welcome to the second installment of our “Perkins Milestones” anniversary series. In case you’ve ever wondered why someone would choose the life of accounting, this series explores our employees’ career paths: what interested them in accounting, how they got to Perkins, and what Perkins means to them. (Missed our first one? Read up on Lindsay Park, who celebrated her 10th anniversary with us earlier this year.)
So let’s get started. Today, let us draw your attention to Tax Senior Manager, Trina Headley, who got her start at Perkins & Co 15 years ago. When Trina first began, Perkins was all of 60 employees-large, and the accountants were required to do both tax and assurance work. Today, Perkins has almost tripled in size, employees are either tax or assurance, and there are a multitude of industries in which they can get involved.
Trina knew she belonged in our Real Estate Practice Group (even back in 2001) — perhaps it was her desire as a young student to be a real estate agent that helped steer her. After a real estate practice group team builder at Oba, she knew she was going to be a Perkins and real estate team lifer. Fast forward 15 years, Trina specializes and works solely in our tax department; she even still does work for a local commercial developer that was one of her first depreciation projects at Perkins.
Recently we sat with Trina to learn more about what makes her tick. Here’s what she had to share:
1) What helped sway you to do tax work?
I prefer doing tax work as I like helping clients save money versus scrutinizing their books, which is a task on the audit side.
2) What drew you to the accounting industry?
My dad is an accountant. We moved out to Portland, from New York, for a position he accepted at PricewaterhouseCoopers. Plus, I love numbers, and I took accounting classes while attending Beaverton High School. After high school, I pursued an accounting degree at Portland State University (PSU), and once I graduated I made the leap to Perkins & Co.
3) What about Perkins attracted you?
While at PSU, I went through the recruiting process and attended Perkins & Co’s “meet the firms” event. There, I met Paul Kester, who, at the time, was an audit shareholder. What impressed me the most: he made it his mission to remember recruits’ first names. He was very personable and introduced me to the firm’s other shareholders. He definitely made an impact, as I’ve noticed that one of our current audit shareholders (who was at the firm even back then) still makes it a priority to get to know all the recruits’ first names. That small gesture made me feel welcomed.
Also, I went through a pretty intense interview process, but I was grateful for it. I had four interviews and met employees from all levels of the firm. I had lunch with two seniors who provided me insight into the culture and the type of work I would be doing at Perkins.
4) What do you like most about your job?
I like the clients. I like being in a consulting role and helping them along their tax journey. A few of my clients and I have been together since I first started at Perkins. It’s been a great experience to grow along with them. Being on the tax side has really allowed me to get to know my clients, and we frequently swap travel stories.
One of my favorite moments in my career is from two years ago. I worked on a tax strategy with a client and we were able to save their condo; they were so grateful. I received a touching letter of thanks for the work I did for them; the client still brings it up in conversation to this day.
Additionally, no two days are the same. I like the different challenges each day brings, and I get to work on different client projects each year. Plus, I learn a lot from my co-workers. In particular, Tim is a great teacher and is always willing to train employees. I consider him a thought leader in the industry and view him as a mentor.
5) What has been the most significant change since you started (in the industry and/or in the firm)?
There have been a number of changes which have impacted the firm since I started. From a culture standpoint Perkins announced a relaxed dress code earlier this year – we can wear jeans every day. Not many other firms offer that. However, since I’m usually meeting with clients, I don’t wear jeans, and I keep a blazer behind my door for days when I have those really important meetings.
From a sustainability standpoint, another significant change within the firm occurred when we went paperless. Before the days of the client portal and digital software, I remember using rolling filing cabinets and seeing mounds of papers at people’s desks.
6) What do you do in your leisure time?
I love to travel. Most of my travel revolves around relaxation and warm climates and being around water is a must for me. I got my scuba diving certification 26 years ago, and my favorite dive to date has been at Grand Cayman, the largest of the Cayman Islands.
I also try to visit the coast at least once a month throughout the year (as I can), thanks to my timeshare. This past busy season I went to the beach for an overnight trip. Listening to the waves was so soothing and helped me relax. Watching sunsets at the beach is another way I like to unwind, and Depot Bay has some of my favorite sun and moon sets.
When I’m at home, I enjoy spending time with my four year old grandson and hiking Wahkeena Falls trail in the gorge.
In addition to her leisure activities, Trina spends her time out of the office serving as co-chair for Commercial Real Estate Women’s (CREW) 12-person membership committee. She first got involved with CREW with thanks to Brigitte Sutherland, Tax Shareholder. Four and a half years later she still enjoys attending their events and luncheons.
Thank you, Trina, for letting us take a peek inside your experience at Perkins over the past 15 years. We are grateful to have you on our tax team, and we can’t wait to see what the next 15 years have in store for you!
Author: Erika Kirkland, Marketing Specialist
Welcome back to Tips from the Trenches! For our fourth series installment, we’re going to talk about tips to help you untangle formulas. First, let’s take a tour of the Formula Bar and the Formula tab of the Ribbon.
This is the Formula Bar:
You can add some rudimentary formatting within the formula editing bar by pressing Alt and Enter to add a carriage return and entering spaces wherever you find them helpful. This is especially useful for sorting out which arguments go with which function if you’re combining more than one function (“nesting”) in your formula.
Next, let’s take a look at the Formula tab of the ribbon.
Now, let’s take a look at how formula auditing and defined names can work together. To define a name, you highlight the cell(s) and type in your desired name in the name box. Names can’t start with a number, can’t look like a cell reference, and must be only numbers and letters (no spaces or special characters). The simplest way to create a Defined Name is to select the cell or cell range it should apply to and type the name into the Name Box (see the first image in this post). In the example below, we’ve got a spreadsheet to help a married couple who get paid at different times figure out their income for the first quarter of the year. We’ve named each of the variables to help us write clear formulas.
Using Defined Names can help your formulas read more like English and less like gibberish. This is the same cell with “Trace Precedents” on:
And here’s the Evaluate Formula box at work:
For our final navigation trick, let’s talk about links. The keyboard shortcut (in any Office application) to insert a link is Ctrl + K. This may not seem terribly handy in Excel at first, but you can create links WITHIN an Excel document using cell references or… defined names. This means you can create links that walk the user of your Excel workbook exactly through the places in the workbook they need to go. Here’s the dialog box that pops up with Ctrl + K:
You highlight your name or type in your cell reference and boom! It looks like a regular hyperlink, but it works within the world of your workbook.
Thanks for joining us for this installment of Tips from the Trenches. We hope this ROUNDUP of tips will help you get your formulas sorted out and your users herded in the right direction.
This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.
Last year we addressed the question, “Do I Need an Identity Protection PIN to File My Return?”, as the IRS received an increase in fraudulently filed tax returns. Thieves used stolen identities to claim false refunds, and to combat this, the IRS issued Identity Protection PINs (IP PINs) to certain taxpayers who were at risk for identity theft.
The six-digit IP PIN is included on the taxpayer’s federal tax return to authenticate that they are the rightful filer of the return. The IRS has increased the usage of IP PINs to improve their efforts against identity-related theft. So, most taxpayers affected by past identity-related theft issues should have received an IP PIN for the tax year 2015.
However, on January 5th, the IRS announced that the IP PIN correspondence dated January 4th, 2016 incorrectly stated the tax year to which the PIN applied. The IRS announcement advised taxpayers that IP PINs issued on CP01A Notices are intended for use on the 2015 tax return as opposed to the tax year listed on the notice—2014. Here’s the IRS’s explanation regarding the Notice CP01A error.
Taxpayers who file their 2015 federal tax returns without the IP PIN will encounter IRS processing delays of their returns as the IRS will need to take additional steps to verify their identity.
For additional questions on using the IP PIN, see the IRS’s IP PIN page or call Identity Protection Specialized Unit at 1-800-908-4490.
Author: Meredith Miller, Tax Senior
This blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern.
January again! The busiest time of year for many accountants and bookkeepers. There’s the general ledger to reconcile and close out, financial statements to produce, 1099 forms and payroll filings to complete, and personal property tax returns to file. But wait! There’s another task to consider…the income tax return.
Fortunately, the CPA prepares the income tax return for you, but they need your help. There are several strategies you can employ to make your working relationship a successful and productive one.
For starters, double-check your accounting software to ensure you’ve posted your CPA’s journal entries for last year (2012). Your CPA may have included these entries in the same packet with the 2012 tax return. If the person who signed the 2012 tax return didn’t pass on any journal entries, check in with your CPA to find out if there were any. If so, be sure to post them to your general ledger as of December 31, 2012 (for calendar year entities).
If the business experienced changes in ownership, or any other type of significant transaction during the past year, gather the relevant legal documents (buy-sell agreements, promissory notes, etc.) and forward copies to you CPA. These documents will provide specific information about the transaction that will help your CPA report it properly on the tax return.
The “PBC List”
Many CPAs send out a document that includes a list of the information they typically need each year to prepare your company’s income tax return. These documents are commonly called Prepared by Client Lists, or “PBC Lists”. If you have questions about some of the items on the PBC List, don’t hesitate to contact your CPA and ask them what they’re expecting. If some of the items on the PBC List won’t be available for a while, ask your CPA if they’d like you to send the information you’ve gathered so far. You can forward outstanding items once they become available.
Standard items accountants almost always need
If you don’t have a PBC list, feel free to request one. Even without a PBC list you can accomplish a lot by addressing these common items:
- 1) Ensure that your books are complete for the tax year: complete the December reconciliations for all cash, credit card and loan accounts; make sure all reimbursable expenses have been submitted by employees and recorded in the company’s books; review the year-end balance sheet and profit & loss statement for erroneous amounts or unusual items.
- 2) Once you’re comfortable with the balance sheet and profit & loss statements, export a copy of the company’s trial balance from your general ledger software. We recommend that the file be exported in excel. Many CPAs prefer to receive the trial balance in this format for ease of import into their firm’s trial balance software. Or, if your business uses Quickbooks, create a “portable file” which backs up the data in a condensed format that can make transferring the file to your CPA simpler.
- 3) Collect copies of the company’s year-end bank statements and bank reconciliations for each checking and savings account.
- 4) Gather copies of the company’s year-end bank line or credit, bank loan and credit card statements. Since some loan and credit card statement periods cross over month ends, be sure to collect the statements with coverage periods that include the last day of the business’s tax year.
- 5) If the business has fixed assets, prepare a list of asset additions that includes a description of each asset, its in-service date and cost. If any assets were retired or sold during the year, prepare a list of each disposed asset that includes the same elements as the asset additions list and also includes the amount of proceeds received from sale of the asset, if any. You could also request a copy of the fixed asset list from your accountant; use that listing to identify disposed assets and the related sales proceeds.
- 6) If the business has a retirement plan, contact your plan administrator and ask what information they’ll need from you in order to calculate the required amount of the employer contribution to the plan in accordance with management’s intent and plan requirements.
- 7) Prepare a schedule of officers’ compensation showing each officer’s Medicare wages. If the business has a calendar year-end, you can take the amount from box 5 of the W-2 (or simply provide copies of the officers’ W-2s).
- 8) If the entity is an S corporation or a partnership, prepare a schedule listing the medical and dental insurance premiums paid on behalf of each owner.
- 9) Review any account where you have recorded meals and entertainment expenses. Be sure that these accounts don’t include the expense of any company parties, or meals served on-site to permit employees to meet or work beyond their normal workday. (Those types of expenses may not be subject to the same tax limitations as business lunches at restaurants, or golf or sporting events with a client.) If you have any questions about the tax treatment of any items in your meals or entertainment accounts, ask first – it will save time in tax preparation, and may save tax dollars, too.
- 10) Sign the tax engagement letter, or locate the letter and have the business owner sign it. This agreement describes the terms of the arrangement between the business entity and the accounting firm for the preparation of the return. These letters are often mailed in January, so check with your employer to find out whether they have already signed and returned the letter; if they haven’t returned it yet, you can remind them to do so.
Why do they keep asking me questions?
After you’ve provided this information and whatever else was requested on the PBC List, your CPA will probably contact you with some follow-up questions and requests. This is normal! Your CPA wants to understand your business thoroughly, and help you take advantage of all allowable deductions and tax accounting methods. (Also, we like to talk to you!)
Happily, once you’ve submitted everything to your accountant, you’re likely nearly done – until next year!
Have a question about our post? Don’t be shy! We welcome you to contact us at any time.
Author: Chalayane Woodke, CPAThis blog post is a summary and is not intended as tax or legal advice. You should consult with your tax advisor to obtain specific advice with respect to your fact pattern. Based on the most recent “best practice” standards for tax advisors issued by the Treasury Department, commonly referred to as Circular 230, we wish to advise you that this blog post has not been prepared to be used, and cannot be used, to provide assurance that penalties which may be assessed by the IRS or other taxing authority (including specifically section 6662 understatement penalties) will not be upheld.