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December 2012
Inside This Issue Features Update from Jennifer Warawa Accounting Today.com—preparing your firm and clients for an emergency —by Jennifer Warawa Year-end activities Training Opportunities Presentation skills workshop—live in Irvine, CA Partner training site—finding the right training courses made easy Training videos—Sage 50 Accounting Complimentary webcasts Sage 50 Business Intelligence complimentary webcasts Newsworthy Sage supports National Meet the Firms Week Beyond 415—IRS alert—it’s CP2000 season SAN connectivity series—interested in networking? Take a break Social media for accountants—My Twitter profile is created; now what? The 36 rules of social media The best careers for your zodiac sign Want to be a guest columnist in the Partner Pulse?
Update from Jennifer Warawa I can hardly believe that I write this on the precipice of yet another year, looking ahead to 2013! I say it every year, but the time just seems to speed up with the days (and years!) going faster and faster. As you prepare your personal and business resolutions for another year, make sure to set aside some honest, reflective time to evaluate the year that just happened before defining your next round of goals. Be specific about what worked both financially and functionally for your business—and what went sideways for one reason or another. Identifying how to spend your resources and how to course correct mislaid goals plays a critical piece in future planning. And while we are on the topic of resolutions, if you don’t currently have a Disaster Recovery Plan in place for your business, add it to your list of resolutions! In the wake of Hurricane Sandy my thoughts go out to all the people affected. As the cities rebuild, and the communities refocus, I can’t help but wonder how many small businesses were critically impacted and how much business information and data was swept away in the floods. When you think of the services you provide to your clients, and the guidance you give, consider making some suggestions on emergency readiness. I had the pleasure of providing an article on this subject to Accounting Today magazine, and I encourage you to take a look for more details on how to support your clients (and yourself!) in this regard. I think you’ll discover as you read through this newsletter that we tried to provide you with tips for surviving, year end and tax season. As members of the Sage Accountants Network (SAN), I can assure you that your technical support calls are prioritized and queued for fast answers, but that doesn’t mean there won’t be a wait. If you’re looking for tips to get quick answers without the elevator hold music, consider these tips: 1. If you really need to call, consider calling between 6–8 a.m. PT or between 5–8 p.m. PT 2. Try online chat. You can continue multitasking, your phone line is kept open, but you’re still able to “chat” like you would a phone agent. Yes, it really is a real person on the other end of the chat window! 3. Visit the Year-End Center. Chances are, if it’s a question about W2s, advancing the year, or installing the software, you’re not the only person to have the question. Chances are good, you’ll find tips and instructions that help you with common year end issues in the Year-End Center. I wish you all a warm, cozy holiday season and a prosperous, productive new year. I look forward to a new year full of innovation, excitement, and a continued partnership with all of our Sage Accountants Network members who do so much to support clients using Sage 50. Sincerely,
Jennifer Warawa Vice President, Partner Programs & Channel Sales Sage North America Jennifer.Warawa@Sage.com Twitter: @jenniferwarawa
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Preparing your firm and clients for an emergency now can lead to saved time and money later Your firm probably has plans in place for nearly any situation, but have you considered what should be done to prepare for, or in case of, an emergency? What about your clients? How can you help them be prepared and ultimately show your value as a business partner? There are many types of emergencies to prepare for: natural disasters and more common ones like theft, fire, and data loss. Making sure you are prepared for the worst before it happens can save time, money, and frustration in the long run. A July 2012 Sage study found that 61% of surveyed small businesses have not established a formal emergency or disaster preparedness plan. Those businesses cited not having any past issues to influence the decision to develop a plan (33%), not thinking about it (30%), or not thinking it is important for their business (27%) as their reasons. Let’s take it a step further. While it is extremely important for your firm to be prepared, there is also an opportunity for your accounting firm to step in and help your clients develop a plan for emergencies. This type of assistance can really show the value of your firm as a business partner, always looking for ways to help your clients succeed. Below are some tips to help prepare for, deal with, and overcome an emergency situation. 1. Draft and share a basic emergency plan—It is not always possible to plan ahead for a crisis, but outlining the potential main issues and the actions to take to prevent and/or solve them will give you a great advantage if an emergency does take place. Visit government agency or business association sites, such as the Federal Emergency Management Agency, for resources and strategies to deal with both natural and manmade disasters. Then, share your plan with others at your firm and your clients. Make sure to perform emergency drills and exercises with all employees at your firm and encourage your clients to do so as well. 2. Develop a disaster recovery plan—A good disaster recovery plan will include preparations for the resumption of applications, data, hardware, communications (such as networking), and other IT infrastructure. A solid backup strategy is important whether it be an on-site system, an off-site server, or the cloud. Backing up your firm’s information on a very regular basis—about twice each week—could be the difference between emergency recovery and the end of your firm. It is important for your clients to back up their data, and as a business partner you can benefit from recommending a strategy. 3. Understand digital doesn’t mean forever—Banks keep digital statements for five years, and then they’re gone. To avoid surprises, use software that creates and stores your financial statements or download your monthly bank statements—and back them up. You never know when you might need them. Inform your clients of this as well; many people don’t know their statements will disappear! 4. Have an attorney you can contact in case of emergency—Partner with a local attorney who can work with your clients through difficult situations. This can be a business opportunity for you and for the attorney and will give your clients peace of mind. 5. Get insurance and invest in prevention—While insurance may be costly and seem unnecessary for a rare, potential event, your firm will be glad it is covered if the situation does take place. Also, investing in a security system and waterproof safe may save you thousands if and when a crisis hits.
SAN Partner Pulse December 2012
Preparing your firm and clients for an emergency now can lead to saved time and money later (continued) 6. Designate an emergency point person—It is essential that more than one person knows critical information, such as passwords or the location of an important document. Choose someone at your firm and have your clients select a trusted person who can implement the emergency plan, handle financial or legal matters, or recover information in the event you are unable to do it. 7. Consult with a professional—If you are unsure how to identify the potential issues your firm needs to be prepared for or how to plan for recovery, find a disaster expert who can not only point out possible crises you may not have considered, but also inform you of the best solutions for your type of organization. You can then share this information with your clients. Let Hurricane Sandy be a lesson learned in the importance of being prepared. Now is the time to get your firm ready and then lend a hand to your clients. Even though it may seem like your firm, or your clients, are in no immediate risk of a disaster, it is crucial to prepare for a worst-case scenario. Jennifer Warawa is vice president of partner programs and channel sales at Sage. This article was published in Accounting Today.com—Published November 19, 2012.
Year-end activities Update taxes and benefits for the new year In order to process payroll at a beginning of a new year, all payroll formulas used by employees must be updated to the current payroll year. The first time you run payroll in the current year, you will be prompted with an update wizard that lists your current company-specific taxes and employee benefit formulas and allows you to update the limits, percentages, and/or formulas prior to running your initial payroll of the year. Note: If you subscribe to the Sage 50 Payroll Solutions tax service, most payroll formula updates are made automatically when you download the tax updates from within Sage 50. However, you still need to update your company-specific formulas with the latest limits and percentages for the current payroll year. Sage 50 Payroll Solutions tax update subscribers can find the latest limits and percentages in the Tax Bulletin file that comes with the service. The Tax Service Bulletin is also accessible through the Start menu in Windows and contained with the folder labeled “Sage 50 Accounting.” If you do not subscribe to the Sage 50 Payroll Solutions tax service, consult your tax authorities before updating limits or percentages. Closing the fiscal/payroll year Year end is fast approaching. This time of year brings all sorts of challenges to company files in regards to payroll and fiscal closures. When is the best time to close the fiscal payroll year? Usually there is no need to close a fiscal year exactly at the end of the last accounting period. Sage 50 allows you to keep two years’ worth of transactional data open and accessible at any one time. For example, if your fiscal year is based on 12 accounting periods, then period 13 is the "first" period of the second open fiscal year and period 24 is the "last" period of the second fiscal year. It is not necessary to close your first open fiscal year immediately after the year is over, nor is it necessary to wait until the end of the second fiscal year.
Year-end activities (continued) Closing the fiscal year Sage 50 recommends that you close your fiscal year once you are confident that no more adjustments will need to be made to the closing year's general ledger, typically around the twenty-second or twenty-third period. This allows you enough time to make adjustments and corrections to the prior year if necessary while at the same time giving you enough of a buffer before the next fiscal year begins in case you have unexpected challenges while closing your fiscal year. Note: If your fiscal and payroll years are both on the calendar year, it is recommended to close the payroll year and the fiscal year at the same time following the same guidelines referenced above. However, if your fiscal and payroll years are different, it may be necessary to close each independently.
What to do before closing fiscal payroll year Sage 50 highly recommends that you wait to close the first fiscal year until after you have sent your tax returns for the previous year. You can operate your company in the software’s second open fiscal year (for example, periods 13–24). The first fiscal year (periods 1–12) holds the previous year's transaction detail and allows you to make adjustments, if necessary. Before you close the fiscal year, if you are using batch posting mode, you need to post and print all journals and the Yearly General Ledger report. Also, you need to print all open invoices, vendor, and payroll checks and back up all of your data. Sage 50 will prompt you to perform these functions. If you are using batch mode, the program will not let you continue a fiscal year close until all transactions are posted. Usually in the last accounting period of a fiscal year you need to make adjusting entries. Once the adjustments have been made (if necessary), you are ready to begin closing the fiscal year. What forms should you purchase in order to process your W-2s/W-3s in Sage 50 Accounting—U.S. Edition? If you use Sage 50 to prepare your year-end tax forms, your W-2 choices are: • For form only use item #LW2BLANK4, laser W-2-4-Up—plain perforated paper with filling instructions on the back. • For form bundled with compatible self-sealing envelopes use item #LW2BK4DWS, laser W-2-4-up, plain perforated paper with filling instructions on the back and compatible self-sealing envelopes. The latest release of your accounting software includes “Print-n-Sign Tax Forms” functionality for payroll tax forms. This feature eliminates the need for some preprinted forms—allowing you to instead print on plain paper. However, IRS regulations require that the employee’s copy of Form W-2 (Copies B, C, and 2) be printed on perforated paper and individual filing instructions be given to each employee (IRS Publication 1141 Sec. 2.05 and 2.19).
What to do before closing fiscal payroll year (continued) Sage Checks and Forms now offers plain paper W-2s in the required perforated format, with individual filing instructions preprinted on the back. These blank forms will save you money and eliminate waste by combining the employee’s tax information and filing instructions, giving them both essential documents in one. Don’t order unnecessary forms that will not be compatible with your software. Simply contact one of our tax form specialists at 1-800-617-3224 to order the right IRS-compliant forms— the first time! Sage 50 users who are also Sage 50 Simple Payroll or Sage 50 Select Payroll customers are required to use blank paper for their payroll tax forms in conjunction with the new “Print-n-Sign Tax Forms” functionality. These forms include 940, 941, 941b, 943, 945, W-2, W-3, and over 230 state forms. IRS regulations require the use of perforated paper in conjunction with W-2 (Copies B, C, and 2). Additional fees required.
Training opportunities Presentation skills workshop— live in Irvine, CA Are you responsible for training colleagues or customers? Do you conduct presentations to peers or management? Attend this two-day in-person workshop to enhance your presentation skills. You will learn how to deliver effectively in various environments and what taboos to avoid that most presenters are unaware they do. The course is very interactive, enabling you to build confidence whenever and wherever you are presenting. This course is a prerequisite for Sage Partners enrolling in the Certified Trainer Program.
Tuesday February 5, 2013, and Wednesday, February 6, 2013, 8:30 a.m.–4:30 p.m. PT (U.S. and Canada)
Year-end assistance
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• H elp your business grow with Sage 50 Accounting Platinum Certified Consultants. Sage 50 Accounting training videos Get the most out of your Sage 50 Accounting software! The Sage 50 Accounting How-to videos offer easy access for clarification and simplicity of certain tasks and procedures. Watch Video
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Complimentary webcasts Why do businesses get audited for sales tax? Join us for this webcast, led by a former California state sales tax auditor, who will show you the logic behind the audit process and tell you how your clients might be able to get off the audit merry-go-round. In this CPE webcast you’ll learn: • Why some businesses more than others are targeted for sales tax audits. • Key areas of noncompliance across business types.
Welcome to Sage 50, the new era of Peachtree
• Overview of the audit selection process. • Types of audits. • The "cardinal sin" of sales and use tax. 1 CPE credit
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SAN Partner Pulse December 2012
Complimentary webcasts (continued)
Sage 50 Business Intelligence complimentary webcasts
IRS penalties: reasonable or unreasonable cause? Join us for this complimentary webcast, led by New River Innovation, Inc., which will answer some of your IRS questions, like: What are the methods to challenge penalties? Do they differ based on the penalty type? What is the most effective way to request penalty abatement? Does my client have reasonable cause? In this CPE webcast you’ll learn: • Practical ways to effectively evaluate your client’s situation for penalty abatement. • If your client has reasonable cause and what the most effective method is for abating your client’s penalties.
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Wednesday, January 9, 2013
Sage Intelligence Showcase: Writing real world customized reports— Attend this Sage Intelligence free session to learn how to write fully customized Business Intelligence reports from start to finish. You´ll walk away being the king or queen of reporting!
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• Insight into how the IRS evaluates penalty abatement for each type of penalty. • How to have your client’s penalties abated in the most efficient manner. 2 CPE credits Date
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Wednesday, December 19, 2012
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Sage 50 Business Intelligence complimentary webcasts Sage 50 Business Intelligence complimentary webcasts These webcasts will provide information you can use now! With Business Intelligence you have customized reports, on demand, without having to manually update any spreadsheets. In these sessions the presenter will be showcasing the features and benefits of this powerful reporting tool. Details
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Wednesday, December 19, 2012
Sage Intelligence Product Showcase: Creating customized reports from standard containers. Learn how to create new reports in the report manager with this step– by–step process of using the standard containers that ship with your Sage Intelligence software.
11 a.m.–12 p.m. ET Register Now
Thursday, December 20, 2012
The proof is in the pudding. Join us for a Sage 50–U.S. Edition Business Intelligence product demonstration. Introducing Sage 50–U.S. Edition Business Intelligence: an easy, yet powerful Microsoft® Excel®-based reporting solution that anyone can use.
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Sage supports National Meet the Firms Week “The future of the accounting profession is in the hands of these job-seeking college students, so we have the responsibility to foster development and encourage them as they enter the profession,” said Jennifer Warawa, vice president, partner programs and channel sales, Sage North America. “Meet the Firms Week is the perfect event for young professionals looking to get started in accounting, and we are proud to be a partner with CollegeFrog, helping to build and sustain relationships to ensure a prosperous future.” This premier virtual accounting recruiting event ran from October 29– November 2 and was created to alleviate the challenges faced during the recruiting process and to increase exposure. Students and firms alike were encouraged to visit www.MeettheFirmsWeek.com and create a profile. When the event kicked off on October 29, each participating firm gained access to all student profiles in their state of operation. Sage provided Sage 50 Accounting 2013—U.S. Edition product certification to participating students and a discounted membership rate to the Sage Accountants Network for the first year to participating firms. In addition, Jennifer Warawa led a complimentary educational webcast for accounting students called ”Using Social Media to Build Your Personal Brand.” Listen to the entire webcast.
Beyond 415—IRS alert—it’s CP2000 season Here are five best practices to serve your clients In the first week of December, the IRS starts the first of two rounds of underreporter inquiries for 2011 Forms 1040. Last year, the IRS sent 4.7 million CP2000 notices to taxpayers. For 2012, the IRS has reformatted the CP2000 notice to make it easier to understand. Although the letter format changed, there were no procedural changes in responding to CP2000 notices. This year, the IRS also began an underreporter program for businesses: the CP2030/2531 program for business underreporting. In this program, the IRS is matching Forms 1099 to business returns and is proposing adjustments to the return. According to the IRS, these letters started at the beginning of October. The Internal Revenue Manual was also updated in October to reflect the new program.
Beyond 415—IRS alert—it’s CP2000 season (continued) 5. If the IRS sends a premature notice of deficiency, ask for CP2000 reconsideration. The IRS often allows practitioners to "back up" the notice of deficiency because of processing delays. However, if the IRS considered a response and issued the deficiency notice, it's best to petition if you disagree. Remember that you can appeal CP2000 deficiencies to the IRS Office of Appeals, but to do so, you must appeal before the IRS issues a notice of deficiency. One tip is to include the following statement in all responses you send to the IRS: "In the event that the IRS disagrees with this response, the taxpayer requests an appeals hearing with the IRS Office of Appeals." This will protect your internal IRS appeals rights. These tips will also work for the new business matching CP2030/2531 program. When you use these best practices, you will get the best results for your clients and cement yourself as their year-round trusted tax adviser.
CP2000 best practices IRS statistics show that one out of every three CP2000 notices sent does not result in additional taxes owed. However, to show that your client doesn't owe, you must respond effectively and by the deadline for the IRS to change its proposal for additional tax. CP2000 notices can also present a client retention risk: Handle the issue incorrectly, and your client may lose confidence in you as a trusted adviser. Here is a reminder to use these five best practices when dealing with your client’s CP2000: 1. Respond quickly. It takes time for the IRS to process responses. In 2011, the IRS sent more than four times the number of CP2000 notices than it sent in 2001, and it only doubled the number of tax examiners to handle them. The result: a backlog of mail at the IRS that is processed on a first-in, first-out basis. Respond early to avoid a premature notice of deficiency. 2. Ask for an extension if you are within ten days of the deadline to respond. If you can't respond within ten days of the deadline, call the IRS to request an extension. Tax practitioners can call the Practitioner Priority Service hotline at 866-860-4259 and select Option 6, which will direct you to the Automated Underreporter Unit. The IRS will grant 30 additional days without much resistance. 3. Format your response. Because the IRS processes more than 20 million pieces of postfiling correspondence annually, it is important to compile one organized response. Start with a cover letter clearly stating that you are responding to a CP2000 notice. Include the taxpayer’s name, identification numbers, year, and form in the reference section of the letter. In the letter, state your position and clearly reference the attachments that prove your position. Include a copy of the CP2000 notice and indicate your agreement or disagreement in Step A of the notice. It's helpful to attach supporting documentation, as well as a corrected tax return to help the IRS compute the liability. Label the tax return "Corrected—for CP2000 response purposes only—Do not process." That way, the IRS will not process this return if it gets separated from the other response documents.
Sage Accountants Network—Connect Are you interested in networking and connecting with other Sage Accountant Network members in your area? One of the most beneficial relationships you can have is connecting with peers through local regularly scheduled meetings. We are committed to supporting these connections and want to involve as many community members as possible. If you are interested in organizing or attending a local meeting in your community, contact Mark.Hubbard@Sage.com for details.
Being social Sage social media for accountants—a step-by-step guide My Twitter profile is created; now what? Twitter works like the news. It moves quickly, and information gets passed rapidly. All tweets need to be a maximum of 140 characters, so oftentimes links are provided to outside sources for additional information, like web pages or other social media sites. By creating your followers list, you are creating a “newsfeed” of tweets to view. Depending on whom you follow and how often they tweet, your newsfeed will update at a variable rate. If you like what someone posts, pay them a compliment and retweet their post. Not only does this expand their reach, it allows you to share something you enjoyed with your followers. To retweet, click the square arrow icon that says Retweet. An example of a Twitter page:
4. Do not file an amended return. Tax practitioners commonly make this mistake. Filing a Form 1040X as the result of a CP2000 notice only confuses the IRS. This is because Form 1040X routinely gets routed to a filing unit, rather than the underreporting function. In the end, the IRS may not process the Form 1040X as a reply, the IRS assesses the CP2000 tax, and a mess ensues when practitioners try to correct the issue.
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Learn more about how Social Media can help grow your business at Sage Social Media Guide for Accountants.
SAN Partner Pulse December 2012
Being social (continued)
Key contacts
The 36 rules of social media
Prioritized Technical Support: Call: 1-866-665-2559 Option 2, Option 1 (English), Option 2 (Technical Support). All Sage Accountants Network members are entitled to free, unlimited priority technical support with a second-level support representative. Account Management: Call: 1-866-665-2559 Option 2, Option 1 (English), Option 4 (Account Management). Key Web Resources: www.Sage50Accounting.com http://Partners.SageNorthAmerica.com www.SageU.com
Calendar of events Looking for training? Regional partner meetings? Conferences? Webcasts? Check out the Sage Accountants Network Calendar of Events If you are hosting a Regional Partner Meeting, we can add your event to the SAN Calendar of Events. Just email your request to Editor.PartnerPulse@Sage.com
Take a break
Quote of the month “The way to get started is to quit talking and begin doing.” —Walt Disney
The best careers for your zodiac sign (This article is for entertainment purposes only) Sagittarius (November 22–December 21) Key traits: Philosophical, optimistic, straightforward. You enjoy your freedoms of movement and self-expression and do best working in a field that allows you both. Best careers: Entrepreneur, airline pilot, sports industry, police officer, flight attendant. Careers to avoid: Any full-time desk job. Capricorn (December 22–January 19) Key traits: Ambitious, resourceful, patient, and authoritarian. Driven and competitive, any project you take on, you’ll do whatever it takes to be the best. Best careers: Finance, business development/management, doctor, trainer. Careers to avoid: A financially risky job or a career where there is no room for advancement.
Want to be a guest columnist in the Partner Pulse? You can submit your 500-word article or send us your article idea or feedback: Editor.PartnerPulse@Sage.com Submissions may be published at the discretion of Sage. Any ideas or feedback submitted may be used by Sage at its discretion.
©2012 Sage Software, Inc. All rights reserved. Sage, the Sage logos, and the Sage product and service names mentioned herein are registered trademarks or trademarks of Sage Software, Inc., or its affiliated entities. All other trademarks are property of their respective owners. SPK 12-02686 12/12