FAQ’s

TAX FAQ’S

What is a Certified Public Accountant (CPA)?

Certified Public Accountant (CPA) is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA. In most states, only CPAs who are licensed are able to provide to the public attestation (including auditing) opinions on financial statements.

CPAs function as independent auditors and act as advisors to individuals, businesses, financial institutions, nonprofit organizations, and government agencies on a wide range of finance and tax-related matters.

To qualify for certification and a state license, an individual generally must:

  • Have a college degree or its equivalent
  • Pass the rigorous uniform CPA Examination
  • Meet certain experience or postgraduate study requirements
  • Meet annual continuing education requirements
  • Adhere to certain ethical standards and codes of professional conduct established by governmental bodies and peer organizations

What Type of Services Does a CPA Offer?

The CPA plays an important role in business and the economy. Possessing technical knowledge and skills, the CPA is trained to apply sound judgment in business situations, helping people and organizations evaluate the use of economic resources. Today’s CPA provides a wide range of services to various sectors including, but not limited to, the business and corporate industry and government and nonprofit organizations, playing many roles such as:

  • Auditor
  • Educators
  • Management Consultants
  • Personal Financial Planner
  • Tax Advisor
  • Technology Consultant

Does This Firm Provide Year-Round Service?

We are here for you twelve months a year, not just during tax season. Whether you have a simple tax question, need advice on the tax implications of a business decision, or want clarification on a government notice, feel free to give us a call

Will My Information Be Kept Confidential?

We maintain a policy of the strictest confidence concerning our clients’ affairs. You can rest assured that no one will learn about your business or tax status – even relatives, associates or friends who might have referred you to us.

 

ACCOUNTING FAQ’S

What are the basic elements of accounting services?

Think of the accounting system as a wheel whose hub is the general ledger (G/L). Feeding the hub information are the spokes of the wheel. These include:

  • Accounts receivable
  • Accounts payable
  • Order entry
  • Inventory control
  • Cost accounting
  • Payroll
  • Fixed assets accounting

These modules are ledgers themselves. We call them subledgers. Each contains the detailed entries of its specific field, such as accounts receivable. The subledgers summarize the entries, then send the summary up to the general ledger. For example, each day the receivables subledger records all credit sales and payments received. The transactions net together then go up to the G/L to increase or decrease A/R, increase cash and decrease inventory.
We’ll always check to be sure that the balance of the subledger exactly equals the account balance for that subledger account in the G/L. If it doesn’t, then there’s a problem.

What are the Differences between Manual and Automated Ledgers?

Think of the G/L as a sheet of paper on which transactions from all four categories of accounts-assets, liabilities, income, and expenses-are recorded. Some of them flow up from various subledgers, and some are entered directly into the G/L through a general journal entry. An example of such a direct entry would be the payment on a loan.
The same concept of a sheet of paper holds for each subledger that feeds the general ledger. A computerized accounting system works the same way, except that the general ledger and subledgers are computer files instead of sheets of paper. Entries are posted to each and summarized, then the summary is sent up to the G/L for posting.

How is the organization of the Accounting Department set up?

Organize your small-business accounting system by function. Often there’s just one person there to do all the transaction entries. From an internal control standpoint, this isn’t desirable. Having too few people doing all the accounting opens the door for fraud and embezzlement. Companies with more people assign functions in such a way that those done by the same person don’t pose a control threat.

Having the same person draft the checks and reconcile the checking account is a good example of how not to assign accounting duties. We’ll talk extensively about internal control later. However, for now, small businesses often can’t afford the number of people needed for an adequate separation of duties. The internal control structure that we’ll install in your new accounting system helps mitigate that risk through mechanics and procedures rather than expensive people.

Who is responsible for Assignment of Duties?

Here’s your first assignment: Figure out who is going to do what in your new accounting system. The duties and areas of responsibility we need to assign include:

  • Overall responsibility for the accounting system
  • Management of the computer system (if you’re using one)
  • Accounts receivable
  • Accounts payable
  • Order entry
  • Cost accounting
  • Monthly reporting
  • Inventory control
  • Payroll (even if you use an outside payroll service, someone must be in control and responsible)
  • Internal accounting control
  • Fixed assets

In many cases the same person will do many of these things. However, these are the areas we’ll be dealing with in setting up the accounting system. The person you assign to be in overall charge of the system should be the one who is most familiar with accounting. If you are just starting your company, you might want to think about the background of some of your new employees. At least one should have the capacity to run the accounting system.

If you find it difficult to determine someone’s expertise in a field with which you are unfamiliar, here are some solutions:

  • Have them interviewed by an expert. Your own CPA will probably be glad to interview a few for you.
  • Carefully check references from past jobs. Ask detailed questions on exactly what they did in the accounting function. Compare the answers with what they say they did.
  • Ask them some accounting questions. It may sound odd that you (of all people) should be asking such questions. However, even if you can’t judge the technical merit of the answers, you can get a feel for how comfortable they are with the subject and the authority with which they answer.

BUSINESS PLANNING AND CONSULTING FAQ’S

Why should my company choose Pacific Rim for consulting services?

Pacific Rim Tax and Accounting partners with a powerful diverse network of consulting professionals.  We are strong and effective collaborators with our clients, becoming more integrated than typical consultants.  As a result, we are more effective at leveraging the intelligence within your company, rather than imposing our own thinking.  We find that the imposition of a consultant’s template or methodology alone isn’t sustainable in the long term, whereas plans and strategies collaboratively produced are readily adopted, effective, and sustainable.

Why Choose a Consultant?

There are many reasons an organization will choose to hire outside consultants.  Consultants can offer an objective review of the operations as it currently is, as well as facilitate discussions for future business development and growth.  Consultants can provide feedback for process improvement or impact an organization involved in conflict management between leadership and staff.  Consultants can be more economical in providing professional development programs versus sending employees on business trips or creating an internal department.  A consultant can objectively identify what the strengths and weaknesses of the overall organization or the workforce.  Many times it is more cost effective to use external consultants for project management than trying to add one more responsibility to an overworked workforce.

What kinds of businesses have been your clients in the past?

  • Health and Wellness Companies
  • Medical practices
  • Dentists
  • Chiropractors
  • Law firms
  • Financial planning companies
  • Staffing agencies
  • Travel agencies
  • Insurance Agencies
  • Real Estate Companies
  • Entrepreneurs
  • Non-profits
  • Manufacturing
  • Retail Stores

What kind of projects has Pacific Rim Tax and Accounting completed for other companies?

  • Revenue Management Cycle
  • Staffing pattern analysis
  • Operational assessments
  • Strategic Planning
  • Exit strategy for selling of business
  • Contract review
  • Educational programs
  • Merger-Acquisition negotiations
  • Buying/Selling medical practices

What size company is best served by retaining your company/services?

Our services are not dependent on the size of the company but on the commitment of the organization’s leadership and what they seek to accomplish.  We have worked with micro-businesses to large corporations and have achieved successful outcomes.

How long is the process?

The intent is to streamline the entire operations of an organization.  The process can range from a single brain storming session with leadership to a complete strategic planning effort through implementation and monitoring of the determined course of action.  It can be concerned with the entire process or any of the constituent phases within the process.  It can be designed to take an incremental, departmental, or complete organizational approach.

What is the process used for an operational assessment?

Consultants will interview the leadership, representative staff and customers, as well as review company documentation from several available sources.  This information is then compared to the goals of the company to identify discrepancies, measure progress, and report recommendations.  Operational assessments can provide a snap shot of the organization’s health and stability.  The assessment can also provide a foundation for an action plan that can either be implemented by the company or by retaining our services for assistance.

What is the time commitment for the owner? Employees?

Time commitment is determined by the scope of work.  It can range from just a few hours to a considerable amount of time over many months, depending on what your organization hopes to accomplish.

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