In most areas of our lives, strong relationships are dependent on good communication. This goes for working relationships as well as personal ones. So, when you work with an accountant who isn’t regularly spending time in your office, proactive communication is crucial. Remember – there are some things that we simply won’t know unless you tell us!
Here are a few common situations that you should always communicate to your accountant to ensure that your financials are up-to-date and compliant with current accounting standards.
Signing a New Lease
The Financial Accounting Standards Board released an accounting standards update to help lessors account for leases with variable lease payments. The accounting standards update amends the lease classification requirements for lessors so they aren’t required to recognize a loss upfront at the start of a sales-type lease if they eventually expect to make a profit.
The leases standard puts leases on the balance sheet for the first time at many companies. Public companies were supposed to begin implementing the standard in 2019, but FASB has delayed the standard twice for private companies and nonprofits because of the complexities that have arisen for companies and the pandemic until 2022.
With these new lease accounting standards going into effect next year, signing a new lease is a topic that is likely to be on your accountant’s mind. Your accountant may be asking you to share any existing leases that you have – for property, equipment, office space, or anything else. Always be sure to let your accountant know when you sign a new lease so they can properly account for it on your balance sheet in accordance with the new standards.
Moving to a New Office
A move to a new office space is obvious to any employee who goes into the office each day, but your outsourced accountant may not know that you’ve relocated. Don’t forget to let your accountant know as soon as the new address is in use so they can update their internal records and any public-facing documents.
Your accountant probably keeps an eye out for any expenses that might need to be capitalized. It’s relatively easy to identify when a new asset is purchased, but it’s harder for an accountant to know when an asset (such as computer equipment) was discarded, sold, or recycled. When it comes to the disposal of an asset, we won’t know unless you tell us! If you sell or otherwise dispose of an asset, let your accountant know so that they can update your fixed asset schedule.
If your accountant sees a large donation come in, they will usually ask if there are any donor restrictions on those funds. However, you can make your accountant’s life easier by telling them before they have to ask. In order to properly track the balance of restricted funds in your accounting system, your accountant needs to know when restricted funds are received, as well as when they are spent.
Err on the Side of Oversharing with Your CPA
If you’re unsure whether something needs to be shared with your accountant, it’s best to err on the side of oversharing. Most accountants would much prefer to have too much information than not enough. The more proactive that an organization can be in sharing information, the smoother things will run with an outsourced accountant!
Trust the Professionals at Goldin Group CPAs
At Goldin Group CPAs, we can help nonprofits and small businesses with bookkeeping, taxes, and all other accounting needs. We understand that as a business owner or non-profit manager, keeping up with accounting and taxes is time-consuming and can even be overwhelming. We work with nonprofits and businesses, offering a one-stop-shop for financial services. If you are a nonprofit looking to outsource your accounting or if you need help managing any aspect of your nonprofit’s finances, we would love to hear from you! Call us at (301) 913-0008 or email firstname.lastname@example.org to make an appointment.