What companies can do now to get ready for the 2016 tax season

Tracy Kaufman | October 5th, 2015

It’s time to do your business tax planning and, just like a doctor’s check-up, if you decide to skip it, you may regret it.

You could face a larger tax bill because you weren’t in close enough contact with your advisers when you did a transaction, changed a policy or practice, or amended what you are doing with insurance. You may encounter wide swings in income and tax due from one year to the next if you don’t check in with your advisers.

Smart Business recently interviewed Tracy Kaufman and Joe Popp about tax strategies business can implement now to prepare for the upcoming 2016 tax season. Want to learn more and see what you can start doing now? Check out the interview on Smart Business’s website.

What to read more posts about tax planning strategies? Check these out:

The Truth About Tax Extensions

Is Simplicity Worth The Cost Of Peace Of Mind?

5 Tax Deductions To Ease Your Business’s Tax Burden

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Happy Manufacturing Day 2015

Frank Festi | October 2nd, 2015

Randy Bennett | Automation tool & Die | Manufacturing DayToday, the team at Rea & Associates is celebrating you – our manufacturing leaders who continue to work hard to promote the American values that continue to make our country a great place to live, work and play.

We are proud to stand at your side as you educate our citizens about the value of seeking prosperity through a career in the skilled trades; and we are united in the mission to build strong, sustainable communities – both locally and throughout our great nation.

The manufacturing industry is undoubtedly the cornerstone of the American economy and we are proud to stand with you as you continue produce and disperse high-quality products, employ countless hard-working men and women, and give your ongoing support to our local and national educational systems, nonprofit organizations and business communities.

You, our manufacturing leaders, have helped shape our history; and you will continue to forge our future. Thank you for all that you do.

This year, in celebration of Manufacturing Day 2015, we had the opportunity to speak with manufacturing leaders who are doing great things throughout Ohio to find out what they consider to be some of the most challenging aspects of owning a manufacturing business and they had a lot to say about today’s regulatory roadblocks.

Click here to read what other manufacturing leaders facing and why they are calling for regulation reform.

We also thought you might find this slideshow to be a valuable resource.


Take A Detour: Top 4 Detours For Financial Relief – Created with Haiku Deck, presentation software that inspires

We hope you have a happy manufacturing day and a great weekend.

Check out these articles to discover more tips for manufacturing leaders:

Research & Development Credit Benefits Businesses Of All Sizes

From Good To Great: 5 Ways You Can Improve Your Manufacturing Business

The Cost Of Reimbursing Employees For Health Care

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Drebit’s Top 5 Insights In September

Dear Drebit | October 2nd, 2015

Sharing top financial and business news keeps a frog busy. In September he helped get the word out about new changes within the credit card industry, fraud, cyber security … and even shared a little bit of personal finance advice.

But, what were you reading? Great question! Below is a quick recap of the top blog post from September. If you haven’t already, take a look. Some of these tips could save you and your business a lot of money!

  1. Fraudulent Credit Card Transactions Will Become Merchant’s Problem On Oct. 1 – As of Oct. 1, 2015, the liability for fraudulent transactions will no longer be assumed by the credit card issuing institution. Instead, if you (the merchant) fail to adopt EMV technology, your business will be responsible for any loss that results from a fraudulent transaction. Is your business ready?
  2. Who Is That Email Really From? – E-mail Account Compromise (EAC) is a sophisticated scam that uses legitimate email accounts that have been compromised to target unsuspecting victims, oftentimes tricking even the most tech-savvy individuals. Want to know how to protect your email? Read on.
  3. 5 Financial Secrets Of Successful Business Owners – After following through with a 13-week cash flow for almost a year, you will have better insight into how to spend your profits to help your business generate additional cash and sales. Want to learn more? Check out Rea’s podcastUnsuitable on Rea Radio.
  4. Will EMV Technology Change The Online Payment Option? –  Does a company that doesn’t physically swipe credit cards have to worry about increased liability when the new EMV rules are implemented in October? The answer might surprise you.
  5. How Far Back Can The IRS Go For Tax Auditing? – As a CPA I am frequently asked, “How far back can the IRS look to audit my tax return?” That’s a great question. Can the IRS go back and audit your tax return from five years ago? 10 years ago? 25 years ago? Before you start to panic, rest assured that the IRS has a statute of limitations in place that generally puts a limit on the time allowed to audit you and assess additional tax. Keep reading to find out how far back they can go.

Drebit is glad that you’ve been finding the tips and insight shared on his blog to be valuable and we want to keep providing you with the information and advice that matters most to you. So, if you’ve got a burning financial or business question? Ask away, Drebit – and the bright team at Rea – is here to help!

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5 Financial Secrets Of Successful Business Owners

Dave Cain | September 29th, 2015
Financial Secrets Of Successful Business Owners - Rea & Associates - Ohio CPA Firm

After following through with a 13-week cash flow for almost a year, you will have better insight into how to spend your profits to help your business generate additional cash and sales. Visit www.reacpa.com/podcast to learn more and listen to Rea’s podcast — Unsuitable on Rea Radio.

Many business owners find difficulty coming to terms with their financial obligations. They will dedicate long hours combing through their company’s expenses, invoices and payroll to arrive at an annual budget, only to let the report sit until it’s time to repeat the exercise again a year later. A 13-week rolling cash flow helps take the stress off business owners when it comes time to make important strategic decisions throughout the year. But in order to get your company back on the right track, you must be ready to change the way you look at your company’s finances. These five financial secrets of successful business owners will get you on the right track.

Listen To Unsuitable On Rea Radio – Why $1 Million Doesn’t Matter

1)     Know how much cash you have on hand.

We’re talking about tangible cash here; and to know how much you actually have on hand you will have to look beyond the ending balance on your business’s bank statement while not letting yourself get caught up in a sea of technical information, graphs and presentations. The three most important questions you should be asking every week are:

  • How much money do we have in the bank?
  • What is our accounts receivable balance?
  • Who do we owe and how much we owe them?

The other information and reports are still important, they just aren’t as critical when you have to make big decisions without a lot of time to ponder your company’s short- and long-term financial state.

2)     Understand your billing practices.

To get an accurate picture of your company’s cash flow, you will need to take a closer look at your current billing practices to find out if you are getting your bills out on a timely basis. Don’t be tempted to gloss over this step. It may surprise you to learn that a lot of decision-makers and business owners think they are on top of their billing activity, only to learn that they’re not. A 13-week cash flow budget will expose this weakness and will get you back on track.

3)     Delegate ownership of your cash flow. 

We are all busy and it’s easy to be enthusiastic about implementing a 13-week cash flow strategy — in theory. But when it’s time to actually put your strategy into action it’s easy to blame “lack of time” for why you put it off. The good news is that you can delegate the work to someone who has the time. You really can’t afford to ignore your cash flow. When you understand where your money is coming in from and where it’s going, you will begin to see positive results.

4)     Review your cash flow projection often.

While it’s great to write out an annual budget or a three-year-projection, most owners will push the document to the side … where it will begin to gather dust. Then, when the day comes when you need to know the financial state of your company for decision-making purposes, you are left with inaccurate, outdated information. When this happens, your effectiveness and accuracy as a leader is challenged. It doesn’t have to be though. When you review your cash flow regularly, you arm yourself with the tools need to make financially strategic decisions. For example, after following through with a 13-week cash flow for nearly a year, you will gain greater insight into how to spend your business profits to help generate the additional cash and sales needed to facilitate sustained growth.

5)     Put your accrual basis profit in its place.

While you may still need to have an accrual statement or generally accepted accounting principle statement to appease regulatory agencies, you would do well to remember that when it comes to the lifeblood of your business, cash flow is king. In all likelihood, businesses of all sizes should consider keeping two sets of records — an accrual and a cash basis statement — to maintain your company’s compliance among all stakeholders.

You can’t spend accrual basis profit. You can, however, spend cash basis profit. Which is why, at the end of the day, you’ll find that your banker, your lender, your shareholders, etc … will take more interest in your cash flow strategy and your cash flow budget than your other reports.

Want to learn more? Click here to listen to Unsuitable on Rea Radio and find out “Why $1 Million Doesn’t Matter.”

By Dave Cain, CPA (Dublin office)

Visit www.reacpa.com/podcast for more episodes of Unsuitable on Rea Radio or click here to subscribe to the podcast on iTunes or click here to listen to the show on SoundCloud.

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Don’t Get Blown Away By A Cash Windfall

Ryan Dumermuth | September 28th, 2015

4 Tips for Managing Sudden Wealth

Manage Sudden Wealth -  Ohio CPA Firm

Before you make a move with your money, take a little time to think about you want to do with your cash and consider getting some advice from a financial professional and review these four tips for managing sudden wealth.

Congratulations – you just won the lottery! Or, in a more realistic scenario, a significant amount of money has landed in your lap through an inheritance or the sale of property.

Now what?

As many who have been in your shoes will attest, it’s important to pause, take a step back, and evaluate your options before making any big financial decisions. Sure, that brand new sports car would look
great in your driveway, but will you regret spending the money down the road? Significant money creates many opportunities. Some? Wonderful. Others? Money pits.

Read Also: Considering Gifting Your Family Owned Business?

Before you make a move with your money, think it through and talk to a pro. The truth is, there’s no right answer, as no two financial situations are exactly alike. But these four steps will help you decide what’s best for you.

  1. SLOW DOWN. It’s easy to get caught up in the excitement of new wealth, and the tailspin that can ensue. But don’t allow yourself to lose your footing and don’t be tempted to make excuses for reckless spending.
    Avoid making any significant or impulsive purchases for at least a month or two. Take a step back from the moment and think long-term … what sort of financial goals do you have for the future? How do you really want to spend this money? Begin thinking about this and write down your thoughts. Writing down goals and thoughts is a proven method of helping you achieve your goals. It’s also helpful to have these things in writing when you meet with your advisors.
  2. FAIL FORWARD. Think about some of your past financial blunders. We’ve all made mistakes – but they’re only truly mistakes if you don’t learn something and prevent them from happening again. You know yourself better than anyone, and you owe yourself this honest examination. Use your missteps to your advantage.
  3. DO YOUR HOMEWORK. If your decisions affect others, talk with them before acting. If someone has an investment idea, consider whether it’s too good to be true.
    If you are approached to help a charitable cause, ask yourself if it’s something you’re passionate about. And make sure you have an understanding of the organization. You should also find out if they will publicize your contribution.
  4. CONSULT WITH A PRO. Navigating new wealth is complicated, and it’s imperative you find experts to help guide you through the process. Talk with a few people you trust and respect. If an advisor’s name is mentioned more than once, it’s probably someone you should talk to. If you already have an advisor, consider whether or not they are up to the task at hand.
    You’ll want to work with a CPA, attorney and investment advisor. Be prepared to invest some time meeting with each advisor in an effort to decide who to hire. Each one will play a different, but valuable role.
    Depending on your situation, you could lose a chunk of your newfound wealth to income taxes, so be sure to talk to a CPA with a specialty in income tax. You will want to know what you owe and when you owe it. More importantly, you’ll want to learn if you can avoid, reduce or defer any of the tax.

Finally, before selecting the advisors you want to work with be sure you understand all of the fees involved with their services up-front. Be prepared to get what you pay for.

Whatever the reason for your windfall, make sure you take the time to respect it – and your financial future. Email Rea & Associates to learn more about managing sudden wealth.

By Ryan Dumermuth, CPA, CFP (Mentor office)

Want to learn more about managing your sudden wealth? You may like these articles:

Can Your Charity Profit From Instant Bingo?
How Can I Make The Most Of My Retirement?
Estate And Gift Tax Exemptions: New Wealth Transfer Rules

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Will EMV Technology Change The Online Payment Option?

Joe Welker | September 21st, 2015
Online Payment Option -Ohio CPA Firm

Does a company that doesn’t physically swipe credit cards have to worry about increased liability when the new EMV rules are implemented in October?

Dear Drebit: Does a company that doesn’t physically swipe credit cards have to worry about increased liability when the new EMV rules are implemented in October? Sincerely, Online Payments Only

Dear Online Payments: As you may already know, I recently wrote an article to inform merchants about the Oct. 1 deadline to implement Credit Card EMV (EuroPay, MasterCard and Visa) technology. When this change takes effect, the liability for fraudulent transactions will no longer be assumed by the credit card issuing institution. Instead, if you continue to use the credit card’s magnetic stripe to process payments, your business will assume liability for any resulting fraud. For most businesses – especially smaller businesses – a single instance of fraud could be crippling.

EMV technology essentially swaps out the magnetic stripe used on credit cards today for an embedded chip. The chip scrambles sensitive cardholder data at the point of sale, which makes it increasingly difficult to fraudulently access and replicate consumer data.

Click here to read the full article.

But what changes lie ahead for businesses that utilize online payment methods and don’t require customers to physically swipe their credit card to pay for a product or service? Do they need to be concerned about this liability switch on Oct. 1 too?

EMV Concerns For Online Merchants

Your third-party processor (such as PayPal), is responsible for ensuring that the payment is authentic. These companies validate payments using a variety of methods.

Natalie Gagliordi, a blogger with Small Business Matters, writes that “for most online merchants, whatever payment processing technology they are using will likely contain out-of-the-box security and authentication protocols.” PayPal, for example, “has developed complex end-to-end encryption to help protect consumers and merchants with their payment information.”

But just because your business doesn’t bare the sole responsibility for keeping your customers’ credit card data safe, doesn’t mean you have nothing to worry about – quite the contrary. Some experts expect credit card fraudsters to pay more attention on hacking online consumer data. This means, for your customers’ sake, you must continue to be informed of online security best practices and should not only be knowledgeable about what your third-party payment processor is doing to keep credit card data safe, but what your third-party payment processor requires of you to maintain your compliance. This could include maintaining current antivirus protection, a secure firewall and other online safety protocols.

The EMV Migration Forum’s Card-Not-Present Working Committee recently published an informative whitepaper to address the growing threat of Card-Not-Present Fraud. This resource will give online merchants a little more insight into the numerous options currently available to help authenticate online payments.

In the meantime, if you have additional questions or concerns, contact your third-party payment processor immediately. Requirement 12.9 of the Payment Card Industry Data Security Standard v3.0 states that they must provide you with – in writing – the details of its role in providing PCI compliancy, as well as any requirements of your organization. Click here to learn more.

How Can Drebit Help You?

Readers, do you have questions about data security, fraud, accounting, succession planning and other general business topics, but don’t really know who to ask? Let Drebit help find the answer! Simply fill out the brief form at the top, right side of this page. You can also click here to reach out to one of fraud experts directly. If you like the advice we offer, why not click here to subscribe to Dear Drebit and get notified of new articles and updates the minute they are posted?

By Joe Welker, CISA (New Philadelphia office)  

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Malware Threat Spreads To Smart Phones

Joe Welker | September 16th, 2015
Malware Goes Mobile  Ohio CPA Firm

According to the digital media analytics company comScore, between the months of December and March 2015, more than 187.5 million people in the U.S. owned smartphones. During that time, Google Android led the pack as the number one smartphone platform with 52.4 percent platform market share. In other words … that’s a lot of potential LockerPIN victims.

Would You Pay A Hacker’s Ransom If Your Phone’s Data Was At Risk?

Researchers and IT security experts from ESET, a global IT security company, recently announced that they had discovered a malware application that is designed to encrypt files and change PINs on Android devices in the United States. In return, victims are demanded to pay up to the tune of $500. Only then will hackers provide users with the recover key.

If it continues to spread, this form of malware could result in a staggering number of victims. Once again we are reminded of how important it is to vigilantly protect ourselves against fraudsters who will continue to exploit such weaknesses in our technological infrastructure.

According to the digital media analytics company comScore, between the months of December and March 2015, more than 187.5 million people in the U.S. owned smartphones. During that time, Google Android led the pack as the number one smartphone platform with 52.4 percent platform market share.

Read Also: Could Your Company Be Ransomeware’s Next Victim?

Malware Goes Mobile

The malware, called LockerPIN, spreads via third party applications, which are downloaded by the user to their Android device. Similar to the CryptoLocker and CryptoWall malware that has inundated users over the past several years, LockerPIN spreads malware’s reach to the mobile user.

Originally discovered in Ukraine in 2014 the malware has been modified to the point that it is just now making its North American debut. Disguised as a system update, the application changes the user’s PIN to a random setting without their knowledge. The worse part? The only known recovery solution is to perform a complete factory reset, which will result in the loss of all your data.

Fair Warning

It’s only a matter of time before this malware progresses to the point of being able to infect all phones. In the meantime, there are actions you can take to protect yourself.

1)     Never download apps outside of certified app stores.

2)     Back up your mobile devices to your computer or to the cloud regularly.

3)     Do not grant administrator privileges to apps unless you truly trust them.

4)     Stay away from suspicious apps and sites.

By Joe Welker, CISA (New Philadelphia office)

Want to learn more ways to protect yourself and your business from IT threats? Check out these articles.

Who Is That Email Really From? Red Flags To Be Aware Of When Opening Your Email

Who’s Fishing For Your Data Today?

Could A Cyber-Attack Cripple Your Business In 2015?




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Will An Audit Find Fraud In My Business?

Mark Van Benschoten | September 10th, 2015
Fraud in My Business - Ohio CPA Firm

Your annual audit isn’t designed to detect fraudulent activity, but if across suspicious transactions are discovered a fraud detection expert should be called in.

For the same reason you wouldn’t expect your eye doctor to repair your tooth, you shouldn’t depend on your annual audit to detect occupational fraud in your business. A financial statement audit validates your financial records and provides reasonable assurance that they are materially accurate. It does not look for fraudulent activity.

Of course, if your auditor comes across suspicious transactions or questionable information, they will certainly share their findings with you. In addition, a good auditor will be able to recommend a fraud detection expert to help you dig deeper into the questionable activity.

So, if your audit won’t detect fraud, how will you know if it’s happening in your organization? 

According to the Association of Certified Fraud ExaminersReport to the Nations on Occupational Fraud and Abuse, only 3 percent of the nearly 1,500 reported cases of occupational fraud were detected by an external audit. According to the study, employee tips continue to be the most common way in which fraudulent activity is reported – usually through a fraud reporting hotline.

Your employees are likely honest, hard-working individuals who would never do anything to jeopardize your business. But until you empower them with a secure, anonymous outlet to tip off this behavior, you will never truly know for sure.

Are you serious about protecting your business from fraud? Learn more at www.reacpa.com/red-flags or contact me directly.

This article was published in the September 2015 issue of Columbus Business First – Ask The Expert.

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Fraudulent Credit Card Transactions Will Become Merchant’s Problem On Oct. 1

Joe Welker | September 9th, 2015
Credit Card Fraud Prevention - Ohio CPA Firm.

As of Oct. 1, 2015, the liability for fraudulent transactions will no longer be assumed by the credit card issuing institution. Instead, if you (the merchant) fail to adopt EMV technology, your business will be responsible for any loss that results from a fraudulent transaction.

PCI to EMV – Protecting Credit Card Data

Your customers want their payment experience to be as easy and painless as possible, which is why you have come to depend on the ability to process credit card payments – especially if your average transaction is more than $20. But providing your consumers with the ability to pay with plastic has also been helpful to fraudsters looking to steal the information hidden within their card’s magnetic stripe. In an effort to crack down on fraudulent transactions, protect consumers and transfer liability from the credit card company to your business, the United States will begin to implement Credit Card EMV (EuroPay, MasterCard and Visa) technology.

Read Also: Businesses Beware: Sloppy Data Security Could Cost You

Change Is Necessary

Due to the increasing number of credit card breaches where millions of credit card numbers and associated data have been stolen, the industry has forced retailers and merchants to adhere to PCI (Payment Card Industry) Security Requirements. Supported by the PCI Security Council, the ultimate goal of EMV is to stop and prevent further fraudulent activity. Success has already been noted in countries outside the U.S. “Currently, almost half of the world’s credit card fraud happens in the U.S. where magnetic stripe technology is the standard,” states David Navetta and Susan Ross in a blog on Data Protection Report. “Outside the U.S., an estimated 40 percent of the world’s cards and 70 percent of the terminals already use the EMV technology. These countries are reporting significantly lower counterfeit fraud levels with EMV cards than with the magnetic stripe cards.”

Understanding EMV Technology

Credit Card EMV technology, which has been used in Europe since the early 1990s, replaces the magnetic stripe we have grown accustomed to with an embedded chip that, scrambles sensitive cardholder data at the point of sale terminal. This technology ultimately makes it more difficult to access and replicate consumer data in an attempt to commit fraud.

Businesses Can’t Afford Not To Comply

Why should you be concerned about the credit card industry’s switch-over to EMV technology? As of Oct. 1, 2015, the liability for fraudulent transactions will no longer be assumed by the credit card issuing institution. Instead, if you (the merchant) fail to adopt EMV technology, your business will be responsible for any loss that results from a fraudulent transaction. If your business currently accepts credit cards as a form of payment (and you would like to continue this practice), unless you want to be hit with potentially devastating losses, you must make sure to install and activate the new technology before the Oct. 1 deadline. That being said, some types of businesses will have a little more time to comply. If you aren’t quite sure whether or not your business is exempt, visit the website of each payment brand you accept to learn more.

Next Steps

  1. If you have not investigated or planned for EMV Technology, contact your card processor immediately to determine your business’s specific needs.
  2. Implementing EMV technology can be a cumbersome and time consuming project, but the best way to protect yourself from fraud and liability is to implement the new technology as soon as possible.
  3. If EMV technology has been implemented be sure to confirm that the chip reading capability has been enabled. In addition, confirm with issuers that cryptographic values are being associated with the card number to ensure that the EMV technology has been setup and configured properly.  Verifying that cryptographic values are being assigned will eliminate the chance of misconfiguration and possible fraudulent activity.
  4. Train your staff on the new procedures. When a customer tries to pay for a product or service using their card, they will notice some changes, such as their credit card being held in the EMV reading slot throughout the entire transaction process. This is normal, however your staff should be prepared to answer the questions that will certainly arise.

By Joe Welker, CISA (New Philadelphia office)

Want to learn more ways you can protect your business and your customers from a fraudster? Check out these articles:

Could Your Company Be Ransomware’s Next Victim? Don’t Turn A Blind Eye To PCI Compliance How Much Is Your Data Worth To Criminals?

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