The Exuberant Accountant - Scott Heintzelman

Payroll Fraud - The Wrong Type of Raise

Fraud is a risk that most everyone is aware of in business, but it is addressed in different manners by different people at different times. This type of inconsistency can lead to holes in your company's protection against fraud. Taking a look at the risks is the first step in addressing the issue, and payroll fraud prevention is the focus today.

 

Who doesn't want a raise? That nice feeling when you receive a paycheck and it is a bit larger than the prior one. But when that paycheck or bonus was not approved or authorized, management will probably take issue when you cash that check. Within your business, you should be aware of the following schemes and how they might be perpetrated. Otherwise, how will you act to detect such frauds or prevent them from occurring in the future?

 

Here is a link to a story about a long standing employee looking to make a few more dollars.  If you click on the link you can read all the details of how the well respected office manager was able to steal $300,000 over a 5 year period. This organization had some control weakness (such as no segregation of duties) and the office manager was able to steal with little resistance.  Here is a list of controls that your organization can look for:

The Lost Wages of Youth: Has the Minimum Wage Increase had Unintended Consequences to Teens?

I recently read an interesting article in the Wall Street Journal about youth and the recent increases in minimum wage.  Since 2007, congress has increased the minimum wage 3 times (from $5.15 to $7.25).  Politicians do this because they believe it helps the poor and disadvantaged.  But does this have some negative impact and unintended consequences?

 

According to the Employment Policies Institute, 85% of the people who earn minimum wage aren’t the primary bread winner in a family and are often teenagers.  Looking at the chart below it shows the unemployment rate for teens age 16 – 19 for the past 3 plus years:

Employee Ownership Roundtable: Making Your Organization Excel with Engaged Employees

Do you want to attract, engage and keep great employees?  Is succession planning important to you? Are you looking to increase your company’s performance? If yes, then you may want to attend the Lancaster County Chamber’s Employee Ownership Roundtable. 

Chip Cargas, CEO of Cargas Systems and I will be leading this roundtable.  Chip is a dynamic business leader and Cargas Systems is an employee owned company.  Cargas has been recognized as a Best Places to Work in Pennsylvania for 5 consecutive years.  Chip will share how his company became employee owned and how this has fueled growth and success.

I plan to share strategies related to succession, valuation related issues and how employee ownership increases corporate performance.  I also plan to share how McKonly & Asbury has been able to engage our employees and consistently make the list of Best Places to Work in Pennsylvania.

This breakfast meeting will be held on Tuesday, April 6^th at 7:30 in Lancaster.  If you would like more information, please click this link or feel free to contact me.

Finance for Non-Financial Managers Workshop

In partnership with the S. Dale High Center for Family Business, McKonly & Asbury will be presenting a four-phase course titled, “Finance for Non-Financial Managers.”  The training will be two separate days: Friday, May 7^th and Friday, May 28^th and will include such topics as:

 

1.   Differentiating profit and cash flow

2.   Understanding transactions

3.   Using financials to measure performance

4.   Developing performance measurements

5.   Creating value through financial management

6.   Valuation of your business

7.   Cost of Capital

8.   Debt/Equity mix

9.   Budgeting/forecasting

10. Reading financial statements

 

This course will be lead by Kurt Trimarchi and me, partners at McKonly & Asbury. This will be a great workshop for all business leaders, but especially for next generation leaders, non-active shareholders, and business & family members in non-finance roles. 

 

If you would like more information please click here for specific details or feel free to contact me.

Senate Passes Jobs Bill Offering Tax Breaks for New Hires

Today, the Senate passed a $35 billion jobs bill designed to get people back to work and to spur spending on public works projects. The bill has two components. First, when a company hires an unemployed individual, the business would be exempt from paying the 6.2 percent Social Security payroll tax through December 2010. It would also give that company an additional $1,000 tax credit if the new worker stays employed with the company for a full year.

 

The second component would extend highway and mass transit programs through the end of this year and put $20 billion into these projects. This infusion of tax money is intended to make up for less than expected gas tax receipts.

 

Many expect this bill to pass the House quickly and then Obama to sign the bill into law shortly thereafter. More details on how to get the credit are expected later.

Credit CARD Act of 2009: Provisions Start February 22, 2010

A new federal credit card law that takes effect this week could have changes that impact you and your business. On May 22, 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure, or Credit CARD, Act of 2009 into law. The legislation is intended to improve consumer disclosures and end some aggressive fee practices in the credit card industry. Most of the provisions related to the act go into effect on Monday, February 22, 2010.

 

I will highlight the key changes below, but basically the law bans many of the hidden profitable tactics that credit card companies and banks use to make money. The law does not limit the amount of fees or the interest rates that banks charge (but they must disclose these fees).  The act also does not apply to business or corporate credit cards.

No Estate Tax is a Good Thing...Right?

A recent blog post on our firm's McKonomics Website was very interesting and I thought it may be of value to my readers as it relates to some tax planning.

 

Generally speaking, the fact that we currently have no federal estate tax is a good thing. However, the unprecedented temporary repeal may cause problems for some estates.

 

Most advisors assumed the Senate would extend the 2009 estate tax exemption and rate structure through 2010. Little did we know, the healthcare reform battle would be at the forefront of our legislator's minds and the looming estate tax repeal would go unchanged. Here we are, roughly a month into 2010 and no word on if and how Congress will fix this mess. Will new legislation be passed during 2010? Will it be retroactive? How do we deal with basis step-up? We will save those debates for another time. For now, we want to focus on a simple, yet BIG issue that the current repeal may cause for many estates.

Video of Recent Financial Freedom Seminar

Due to reader demand J I am adding a new section on my blog titled Scott’s Presentations.  Obviously, not everyone can attend the various speaking engagements and presentations that I make and several have requested video to view (thanks for asking Mom and Dad…I can always count on your support!). 

 

The most recent clip is from my Financial Freedom Seminar that I presented a few weeks ago.  You can click on this link to watch a 5 minute clip of that presentation.  As always, I do appreciate feedback and suggestions.  Thank you.

Save the Date for an ESOP (Employee Stock Ownership Plan) Webinar

Have concerns about how to sell your business?  Not sure how to maximize the business value when you sell your company?  Looking for a way to minimize your tax on a transaction?  Want to put a succession plan in place?  If you answered yes to any of these questions, you will want to join me for a Webinar training session with Attorney Steve Greenapple of Steiker, Fischer, Edwards & Greenapple, P.C.

 

Steve and his firm are one of the premier authorities on ESOP’s and during our one hour presentation we will share the many benefits.  The seminar will be held on Wednesday, March 24th at 12:00 noon EST.  During the webinar, Steve will share insights and he will also field questions. 

 

To read more about ESOP’s check out this link or check out SFE&G’s website.

 

This webinar will be live and all participants can join in by simply dialing into the session and, if they desire, to follow along online.  If you are interested, please contact me for more details.

Ford CEO Alan Mulally: LB Smith Ford Lincoln Mercury Second Mile Celebration of Leadership

This past Friday evening I had the privilege of meeting and listening to the man credited with turning around both Boeing and now Ford Motor Company – Alan Mulally.  Alan came to Hershey to headline The Second Mile’s flagship fundraiser, The Celebration of Leadership dinner, and I came away very impressed with his down-to-earth nature and his humble servant leadership attitude.  Numerous times during the evening he mentioned how he was “honored to serve such an American and global icon.” 

 

There were many leadership and management lessons in what Alan shared (especially as it related to turning around a struggling global company). When Alan came to Ford three years ago, the company and the automotive industry had many challenges.  The company was hemorrhaging cash, had well over 100 makes and models competing against each other, and lacked a global corporate strategy.  Early on he knew the company needed to streamline the product line, give the consumers safe and efficient transportation and cars they want to buy, and focus on being “best in class” for each make and model they produced. This required new product development, retooling factories and most importantly, this required CASH, something Ford did not have.