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B2W Software has recently released a whitepaper titled "Driving Profitability with a Field-Centric Approach to Cost Management." In this whitepaper, they dive into these six essential steps:
  1. Transfer Data Seamlessly
  2. Collaborate Across Workflows
  3. Track Performance in Real Time
  4. Go Mobile
  5. Integrate Operations and Accounting/ERP
  6. Turn Data into Actionable Intelligence
Additionally, sections and a table discussing why not rely on accounting/ERP systems and putting it all together: a unified operational platform complete this comprehensive overview on driving profitability to cost management. [/fusion_text][fusion_button link="http://cicpac.com/wp-content/uploads/2019/07/2019-06-driving-profitability-with-a-field-centric-approach-to-cost-management-B2W-Software.pdf" text_transform="" title="" target="_self" link_attributes="" alignment="" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" color="default" button_gradient_top_color="" button_gradient_bottom_color="" button_gradient_top_color_hover="" button_gradient_bottom_color_hover="" accent_color="" accent_hover_color="" type="" bevel_color="" border_width="" size="" stretch="default" shape="" icon="" icon_position="left" icon_divider="no" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]DOWNLOAD WHITEPAPER[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">Whitepaper: Driving Profitability with a Field-Centric Approach to Cost Management

B2W Software has recently released a whitepaper titled "Driving Profitability with a Field-Centric Approach to Cost Management." In this whitepaper, they dive into these [...]

By |2019-07-03T20:07:23+00:00July 3rd, 2019|CICPAC, Construction, Resources|

Marketing to Contractors 101, a whitepaper by Foundation Software

Marketing has perhaps never appeared more complicated, especially to those outside the trade. There’s SEM, SEO, inbound and content marketing, in addition to traditional direct [...]

By |2019-05-23T16:16:21+00:00May 23rd, 2019|CICPAC, Construction, Resources|

Yeo and Yeo, CPAs and Business Consultants When fraud strikes, the culprit might be sitting in your accounts payable department. This department is particularly vulnerable to fraud because of the volume of transactions it processes and the varying pricing and billing policies that vendors use. Here’s a close-up of common vendor fraud scams and ways to lower your risks.

Phony Vendors

A common type of purchasing scheme involves fictitious vendors. Here, an employee in the accounts payable department might set up a bogus supplier in the accounting system and then deposit payments to the supplier into his or her personal checking account. Warnings of fictitious vendors include invoices that are photocopied, sequentially numbered, and from companies that have post office box addresses or addresses that match an employee’s home address. Also be wary of invoices with amounts that consistently fall just below sums that require approval for payment and, depending on your business, invoices for round dollar amounts.

Bogus Invoices with Real Vendors

Some purchasing scams require collusion between an employee in the accounts payable department and someone at the vendor’s office. For example, a vendor might submit falsified invoices, and then an employee in the accounts payable department will deposit refunds into his or her personal account or split duplicate payments with his or her accomplice at the supply company. Connections between procurement staff and suppliers may provide clues to these types of schemes. Is an employee related to, or otherwise linked with, the owner or management of a supplier? If so, that employee shouldn’t make purchasing decisions that involve the vendor.

Kickbacks

If you perform contract work, you also might be susceptible to kickbacks. That is, the person who approves the contracts could be receiving kickbacks from vendors. Red flags include fewer bids than expected or required, widely divergent bids on the same projects and unexplained deadline changes. Kickbacks also might occur if it seems like you’re paying higher prices for lower quality products. Cash payments to employees can be difficult to detect because those payments are not reflected in the company’s books. They probably are, however, reflected in higher pricing from the vendor. Even fraudulent vendors must cover their costs. Companies should look for consistent shortages, informal communication (such as mobile phone calls or personal emails) between accounts payable/purchasing staff and suppliers, and poor record-keeping.

Preventive Measures

You can prevent vendor fraud by targeting one of the legs of the fraud triangle: motive, opportunity and rationalization. Many preventive measures strengthen internal controls and develop policies and procedures to prevent theft, thereby reducing the opportunity to commit fraud. For example, no employee should be authorized to handle most or all of your purchasing or accounts payable procedures. The person who orders supplies and materials, for example, shouldn’t check shipments or approve invoices. Consider separating these functions or rotating who’s responsible for them every quarter. Also consider performing background checks on new vendors. Such checks can provide information on the vendors’ affiliations, ownership, litigation, regulatory or legal violations or suspensions and financial standing. This can help you weed out vendors with dubious histories. Companies also should state in writing how they expect employees — and vendors — to conduct business. This code of ethics should be reviewed and updated annually, and employees and vendors should be required to sign it every year, even if nothing changes. Annual reminders will reinforce the idea that the company considers ethical, professional business practices a priority. Anonymous hotlines — one for employees and a separate one for vendors — can be a cost-effective way to detect purchasing frauds, especially those involving collusion. Giving vendors a separate hotline makes them more comfortable sharing concerns, and allows them to ask questions about the business’s ethics practices.

To Catch a Thief

If you notice the warning signs of vendor fraud, contact your CPA immediately. He or she can help unearth the cause of any anomalies, quantify your losses, build a defensible case (if you decide to prosecute the thief) and fortify your defenses against future scams.

About Tim Crosson, Jr., CPA

Timothy P. Crosson, Jr., CPA, is a Senior Manager in Yeo & Yeo’s Ann Arbor office and serves on the firm’s Not-for-Profit Services Group. His areas of expertise include audit services for nonprofit organizations, government agencies and school districts, and single audits. Original blog posted here." target="_blank">Vendor Fraud: Know the Warning Signs

Reprinted with permission from CICPAC Member, Tim Crosson, Jr., Yeo and Yeo, CPAs and Business Consultants When fraud strikes, the culprit might be sitting in [...]

By |2019-05-23T16:17:31+00:00April 24th, 2019|CICPAC, Construction|

Reproduced with permission from our Associate Member, Beneco Retirement plan fees are complicated. Between administration, investment management, recordkeeping, consulting, revenue sharing, sub-TA and 12b-1, it isn’t always clear to plan participants or plan sponsors exactly what they’re paying, how much they’re paying or even who’s paying the fees. ERISA Section 408(b)(2) states that plan fiduciaries have to determine whether the agreements and compensation of service providers are “reasonable.” The rule requires service providers to supply plans with disclosures to help them determine if fees are “reasonable.” Beneco helps fiduciaries with this complicated determination by identifying:
  • All of the total plan cost components
  • The various primary drivers of retirement plan pricing
  • The role of revenue sharing

Cost Components

The three main components are administrative fees, investment fees and plan consulting fees. Administrative and plan consulting fees may be paid by the plan sponsor or the participant. Investment fees are always paid by participants and deducted from plan assets.

Primary Pricing Drivers

Several key factors can impact plan pricing. The larger the plan in terms of assets, the lower the plan sponsor out-of-pocket (per participant) costs. Other factors to consider include:
  • Number of plan participants
  • Average account balance
  • Service requirements
  • Plan design features

Revenue Sharing

Revenue sharing includes payments made by investment managers to service providers or plan consultants for a portion of the revenue generated from the management of a particular fund or funds. Historically, such allowance may or may not be known to a plan sponsor. Regardless, it’s imperative that plan sponsors with fiduciary oversight of their organization’s retirement plan understand the distribution systems that most investment management organizations use and how they share revenue. The most common forms of revenue sharing can include 12b-1 fees, shareholder servicing fees and sub-transfer agent (sub-TA) fees. In some instances, a portion of the investment management fee for proprietary funds may include some revenue sharing. The diagram below illustrates potential fund expenses.

Fiduciary Best Practices

Best practices dictate that plan fiduciaries must go through a prudent, comprehensive and measurable process of monitoring and documentation to ensure that only reasonable fees are being paid. This process includes:
  • Working with an experienced consultant who understands retirement plan fee components
  • Disclosing and documenting all fees from retirement plan service providers
  • Benchmarking fees annually for due diligence purposes
  • In-depth, live-bid benchmarking of fees, services and investments against alternative providers every three years to ensure competitive reasonableness
[/fusion_text][fusion_button link="https://www.beneco.com" text_transform="" title="" target="_self" link_attributes="" alignment="" modal="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" color="default" button_gradient_top_color="" button_gradient_bottom_color="" button_gradient_top_color_hover="" button_gradient_bottom_color_hover="" accent_color="" accent_hover_color="" type="" bevel_color="" border_width="" size="" stretch="default" shape="" icon="" icon_position="left" icon_divider="no" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]Learn More about Beneco[/fusion_button][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]" target="_blank">Understanding Retirement Plan Fees

Reproduced with permission from our Associate Member, Beneco Retirement plan fees are complicated. Between administration, investment management, recordkeeping, consulting, revenue sharing, sub-TA and 12b-1, [...]

By |2019-05-23T16:21:22+00:00April 12th, 2019|CICPAC, Construction, Member News, Resources|

Marcum Releases 2018 JOLTS Analysis Report

CICPAC member firm, Marcum (locations serving Deerfield Illinois, Nashville Tennessee, New Haven Connecticut and Irvine California) releases 2018 JOLTS Analysis report. Marcum is pleased to [...]

By |2019-05-23T16:20:58+00:00March 13th, 2019|Announcements, CICPAC, Construction, Member News, Resources|

Read the full article here or for additional information, email Mike or (832) 742-2411." target="_blank">Mike Karlins Published in Construction Accounting and Taxation Magazine

Mike Karlins, Partner with Calvetti Ferguson (The Woodlands, TX), was published in the Construction Accounting and Taxation magazine's January/February 2019 edition. His article focusing on [...]

By |2019-07-26T16:24:35+00:00March 7th, 2019|CICPAC, Construction, Member News, Rev Rec|
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