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TEXAS SALES TAX EXEMPTION FOR LABOR TO REPAIR STORM DAMAGE

Posted by Admin Posted on Sept 20 2017

Texas Sales Tax Exemption for Labor to Repair Storm Damage

EEPB would like to remind our Clients who may have experienced Harvey related storm damage that there is an exemption from Texas sales tax on labor to repair damage to tangible personal property and commercial real property that was damaged as a result of Harvey. There is no exemption for Texas sales tax on the purchase of tangible personal property such as equipment or construction materials used to repair or reconstruct the
damaged property. However, if the equipment or construction materials qualify for some other Texas sales tax exemption such as the manufacturing exemption, these exemptions can still be used.


In order to claim the exemption from Texas sales tax on labor charges for storm damage repairs, the Texas Comptroller’s Office has established certain requirements which must be met. The exemption requirements are as follows:

  • The tangible personal property or the commercial real property being repaired must have been located in the area that was declared a disaster area by either the Governor of Texas or the President of the United States; and,
  • The amount of the labor charge must be separately stated from any charges for tangible personal property on the invoice, contract, or similar documents provided by the service provider.

 

The owner of the damaged tangible personal property or commercial real property must provide the service provider with a signed exemption certificate in order to claim the exemption on the service charges. Any contracts or invoices which contain a lump sum charge to include all materials and labor will not qualify for the exemption.

Should you have any questions regarding the Texas sales tax exemption for labor charges to repair storm damages, please call Carl Kluge at 713-622-0016, ext. 7742, or contact him by e-mail at carl.kluge@eepb.com.

HURRICANE HARVEY TAX RELIEF

Posted by Admin Posted on Sept 01 2017

EEPB, P.C. is open during regular business hours, Monday through Friday from 8am – 5 pm.  We hope that you were not affected by Hurricane Harvey, but if you were, please read the following valuable information.

The IRS has provided tax relief for the victims of Hurricane Harvey residing in several Texas counties. Additional counties are being added to the tax relief regularly.  The tax relief postpones various tax filing and payment deadlines that occur starting on 8/23/17. Affected individuals and businesses now have until 1/31/18 to file returns and pay any taxes that are originally due during the relief period. This includes the following:

  • ‚ÄčThird and fourth quarter 2017 estimated tax payments
  • Extended 2016 individual & business income tax returns originally due 10/16/17
  • Extended 2016 business income tax returns originally due 9/15/17
  • Extended 2016 Trust income tax returns originally due 10/02/17
  • Quarterly payroll and excise tax returns

 

The IRS noted that tax payments related to 2016 individual tax returns were originally due on 4/18/2017, and therefore, not eligible for this relief.  Penalties and interest will continue to accumulate until you pay your 2016 individual tax liability.

Please follow the link below for the full details related to the Hurricane Harvey IRS tax relief.

https://www.irs.gov/newsroom/tax-relief-for-victims-of-hurricane-harvey-in-texas

If you need additional assistance or would like to discuss how you were specifically impacted by Hurricane Harvey and how EEPB can help, please give us a call at 713-622-0016.

Posted by Admin Posted on Mar 22 2017

2016 IRA CONTRIBUTIONS — IT'S NOT TOO LATE!

Posted by Admin Posted on Mar 22 2017

There’s still time to make 2016 IRA contributions: The deadline is April 18. If the contribution is deductible, it will lower your 2016 tax bill. But even if it isn’t, a 2016 contribution is likely a good idea. Your money can grow tax-deferred (tax-free in Roth accounts). But annual contributions are limited by law, and any unused limit can’t be carried forward; once the deadline has passed, the savings opportunity is lost forever. The 2016 limit is $5,500 (plus $1,000 for those age 50 or older on Dec. 31, 2016). Want to learn more? Contact us. 

FAQs ABOUT AGREED UPON PROCEDURES

Posted by Admin Posted on Mar 22 2017

Have a financial reporting issue that needs a custom solution? An agreed upon procedures (AUP) engagement uses procedures similar to an audit, but on a smaller, limited scale and with no conclusion drawn by the CPA. Unlike audits, AUP engagements can be performed at any time during the year, and they allow you to choose only those procedures you feel are necessary. These engagements also may help third parties evaluate specific information, such as accounts receivable, related-party transactions and compliance with royalty agreements. Contact us to learn more. 

TAXPAYER IS ON THE HOOK FOR FOREIGN EARNED INCOME

Posted by Admin Posted on Mar 10 2017

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Taxpayer is on the hook for foreign earned income. The U.S. Tax Court held that a taxpayer-contractor who worked in Iraq, providing security for visiting dignitaries, wasn’t entitled to the tax code’s foreign earned income exclusion because his place of abode was the United States. To qualify, a person’s home must be a foreign country. The court also held that his former spouse was entitled to innocent spouse relief under the code, leaving him responsible for all the deficiencies relating to the improperly excluded foreign earned income. (TC Summary Op. 2017-10) 

WHICH TAXES WILL BE REPEALED UNDER THE PROPOSED AMERICAN HEALTH CARE ACT?

Posted by Admin Posted on Mar 10 2017

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Which taxes will be repealed under the proposed American Health Care Act (AHCA)…and when? The proposed bill, introduced by congressional Republicans to replace the Affordable Care Act, repeals several taxes, including individual and employer mandates (retroactive to 2016); the 3.8% net investment income tax (beginning in 2018); the 0.9% additional Medicare tax (2018); and the medical device excise tax (2018). The “Cadillac tax” on high-cost employer sponsored health plans is delayed until 2025 under the AHCA. It’s currently scheduled to go into effect in 2020.

WHY 2016 MAY BE AN ESPECIALLY GOOD YEAR TO TAKE BONUS DEPRECIATION

Posted by Admin Posted on Feb 15 2017

Bonus depreciation allows businesses to recover the costs of depreciable property more quickly by claiming additional first-year depreciation for qualified assets. The PATH Act, signed into law a little over a year ago, extended 50% bonus depreciation through 2017. 

Claiming this break is generally beneficial, though in some cases a business might save more tax in the long run if they forgo it. However, 2016 may be an especially good year to take bonus depreciation. Keep this in mind when you’re filing your 2016 tax return.

Eligible assets

New tangible property with a recovery period of 20 years or less (such as office furniture and equipment) qualifies for bonus depreciation. So does off-the-shelf computer software, water utility property and qualified improvement property. And beginning in 2016, the qualified improvement property doesn’t have to be leased.

It isn’t enough, however, to have acquired the property in 2016. You must also have placed the property in service in 2016.

Now vs. later

If you’re eligible for bonus depreciation and you expect to be in the same or a lower tax bracket in future years, taking bonus depreciation (to the extent you’ve exhausted any Section 179 expensing available to you) is likely a good tax strategy. It will defer tax, which generally is beneficial.

But if your business is growing and you expect to be in a higher tax bracket in the near future, you may be better off forgoing bonus depreciation. Why? Even though you’ll pay more tax for 2016, you’ll preserve larger depreciation deductions on the property for future years, when they may be more powerful — deductions save more tax when you’re paying a higher tax rate.

Making a decision for 2016

The greater tax-saving power of deductions when rates are higher is why 2016 may be a particularly good year to take bonus depreciation. With both President Trump and the Republican-controlled Congress wishing to reduce tax rates, there’s a good chance that such legislation could be signed into law.

This means your tax rate could be lower for 2017 (if changes go into effect for 2017) and future years. If that happens, there’s a greater likelihood that taking bonus depreciation for 2016 would save you more tax than taking all of your deduction under normal depreciation schedules over a period of years.

Also keep in mind that, under the PATH Act, bonus depreciation is scheduled to drop to 40% for 2018, drop to 30% for 2019, and expire Dec. 31, 2019. Of course, Congress could pass legislation extending 50% bonus depreciation or making it permanent — or it could eliminate it or reduce the bonus depreciation percentage sooner.

If you’re unsure whether you should take bonus depreciation on your 2016 return — or you have questions about other depreciation-related breaks, such as Sec. 179 expensing — contact us. 

© 2017

PASSIVE ACTIVITY LOSS RULES

Posted by Admin Posted on Feb 15 2017

Passive activity loss (PAL) rules can be tricky. Generally, PALs can only offset passive activity income, though taxpayers may treat activities of one or more trades or businesses as a single activity, if appropriate. However, when the IRS regrouped the income from a surgeon’s two businesses into one activity, the U.S. Tax Court called the treatment inappropriate on several grounds, including that income from the surgeon’s practice (a sole proprietorship) couldn’t be combined with his partnership interest in a surgical center under PAL rules. (TC Memo 2017-16)

2 POSTMORTEM ESTATE PLANNING STRATEGIES FOR MARRIED COUPLES

Posted by Admin Posted on Feb 15 2017

It’s crucial to review and update your estate plan in light of significant life changes or new tax laws. It’s equally important to be aware of strategies that can be implemented after your death to achieve your estate planning goals. The flexibility postmortem strategies provide is especially important during times of estate tax law uncertainty, like now. If you’re married, here are two postmortem estate planning strategies you should know about. 

1. Spousal right of election

The spousal right of election provides a way to alter the planned distribution of your wealth after you’re gone. In most states, a surviving spouse has the right to circumvent his or her spouse’s will and take an elective share (one-half or one-third, for instance) of certain property. 

So, for example, let’s say you leave all of your assets to your children or other beneficiaries. Your spouse might exercise his or her right of election if it would produce a more favorable tax outcome. Even if the federal estate tax is repealed, which is on the agenda of President Trump and the Republican majority in Congress, there may be state estate tax or income tax consequences to consider.

2. QTIP trust

Qualified terminable interest property (QTIP) trusts are often used to take advantage of the marital deduction while ensuring that assets are preserved for the children (particularly children from a previous marriage). They also receive some creditor protection.

Ordinarily, to qualify for the marital deduction (which allows assets to transfer from one spouse to the other free of federal gift and estate tax), you must transfer assets to your spouse with no strings attached. The QTIP trust is an exception to this rule. 

So long as your spouse receives all of the QTIP trust income for life and certain other requirements are met, your estate can enjoy the benefits of the marital deduction while still preserving assets for your children or other beneficiaries. When your spouse dies, any remaining trust assets pass to your beneficiaries but are included in your spouse’s taxable estate.

Here’s where the postmortem planning comes in: To claim the marital deduction for amounts transferred to a QTIP trust, your executor (called a “personal representative” in some states) must make an election on your estate tax return. A properly designed QTIP trust gives your executor the flexibility to make the election, not make the election or make a partial election, depending on which strategy would produce the optimal results. Because a QTIP trust creates opportunities for postmortem estate planning, it may be a good strategy even if you don’t need it to protect your children or assets.

Contact us to learn more about postmortem estate planning strategies.

© 2017

MEDICARE AND HEALTH SAVINGS ACCOUNTS

Posted by Admin Posted on Jan 23 2017

The collision of Medicare and Health Savings Accounts (HSAs). In an Information Letter (IL), the IRS outlined how retroactive Medicare coverage may affect a taxpayer’s eligibility to add to an HSA, which is subject to contribution limits. Eligibility for Medicare makes an individual ineligible to have an HSA. If Medicare coverage is retroactive, it may trigger a 6% excise tax on the excess contributions. The IL advised taxpayers how to avoid the excise tax on contributions that are deemed excessive by virtue of retroactive Medicare coverage. (IL 2016-0082)

SUCCESSION PLANNING AND ESTATE PLANNING MUST GO HAND IN HAND

Posted by Admin Posted on Jan 23 2017


As the saying goes, nothing lasts forever — and that goes for most companies. Then again, with the right succession plan in place, you can do your part to ensure your business continues down a path of success for at least another generation. From there, it will be your successor’s job to propel it further into perpetuity.

Some business owners make the mistake of largely ignoring succession planning under the assumption that it’s taken care of within their estate plans. Others create a succession plan but fail to adequately integrate it into their estate plan. To avoid these mistakes, it’s important to recognize the difference between succession planning and estate planning.

Similar, but different

Essentially, succession planning is the careful identification and training of those who will not only take over the day-to-day operations of your company, but also lead it forward to future growth. Your family members and other heirs will likely be affected here. But many others will be as well — including your named successor (whether or not a family member), business partners, employees, vendors and customers. 

Estate planning, meanwhile, involves determining the distribution of your assets through gifting strategies, wills and other tools (such as trusts and insurance). The people affected by it are your family members and other heirs.

Because of this important distinction, it’s critical to undertake succession planning and estate planning as a joint effort. After all, who gets leadership responsibilities in the business and who gets ownership interests in the business may or may not be the same.

You must ask yourself who is best suited to run the business when you depart, and what ownership transfer plan will treat you and all of your heirs fairly or otherwise achieve your estate planning goals. This includes, among other things, knowing when you want to retire and how much income you’ll need to do it.

Success today and tomorrow

Do you have both a clear succession plan and a well-documented estate plan? And are the two compatible in every respect? To make absolutely sure you can answer “yes” to both of these questions, please contact us. Our firm can help you develop plans that will distribute your assets per your wishes while putting your company in the best position to succeed going forward.

© 2017

HELP PREVENT TAX IDENTITY THEFT BY FILING EARLY

Posted by Admin Posted on Jan 13 2017

If you’re like many Americans, you might not start thinking about filing your tax return until close to this year’s April 18 deadline. You might even want to file for an extension so you don’t have to send your return to the IRS until October 16. 

But there’s another date you should keep in mind: January 23. That’s the date the IRS will begin accepting 2016 returns, and filing as close to that date as possible could protect you from tax identity theft. 

Why early filing helps

In an increasingly common scam, thieves use victims’ personal information to file fraudulent tax returns electronically and claim bogus refunds. This is usually done early in the tax filing season. When the real taxpayers file, they’re notified that they’re attempting to file duplicate returns. 

A victim typically discovers the fraud after he or she files a tax return and is informed by the IRS that the return has been rejected because one with the same Social Security number has already been filed for the same tax year. The IRS then must determine who the legitimate taxpayer is.

Tax identity theft can cause major headaches to straighten out and significantly delay legitimate refunds. But if you file first, it will be the tax return filed by a potential thief that will be rejected — not yours.

Another important date

Of course, in order to file your tax return, you’ll need to have your W-2s and 1099s. So another key date to be aware of is January 31 — the deadline for employers to issue 2016 W-2s to employees and, generally, for businesses to issue 1099s to recipients of any 2016 interest, dividend or reportable miscellaneous income payments. 

Delays for some refunds

The IRS reminded taxpayers claiming the earned income tax credit or the additional child tax credit to expect a longer wait for their refunds. A law passed in 2015 requires the IRS to hold refunds on tax returns claiming these credits until at least February 15.

An additional benefit

Let us know if you have questions about tax identity theft or would like help filing your 2016 return early. If you’ll be getting a refund, an added bonus of filing early is that you’ll be able to enjoy your refund sooner.

© 2017

2017 Q1 TAX CALENDAR: KEY DEADLINES FOR BUSINESSES AND OTHER EMPLOYERS

Posted by Admin Posted on Jan 12 2017

Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2017. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.

January 31

  • File 2016 Forms W-2, “Wage and Tax Statement,” with the Social Security Administration and provide copies to your employees.
  • File 2016 Forms 1099-MISC, “Miscellaneous Income,” reporting nonemployee compensation payments in Box 7 with the IRS, and provide copies to recipients.
  • File Form 941, “Employer’s Quarterly Federal Tax Return,” to report Medicare, Social Security and income taxes withheld in the fourth quarter of 2016. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return. Employers that have an estimated annual employment tax liability of $1,000 or less may be eligible to file Form 944,“Employer’s Annual Federal Tax Return.”
  • File Form 940, “Employer’s Annual Federal Unemployment (FUTA) Tax Return,” for 2016. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it’s more than $500, you must deposit it. However, if you deposited the tax for the year in full and on time, you have until February 10 to file the return.
  • File Form 945, “Annual Return of Withheld Federal Income Tax,” for 2016 to report income tax withheld on all nonpayroll items, including backup withholding and withholding on accounts such as pensions, annuities and IRAs. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 10 to file the return.

 

February 28

File 2016 Forms 1099-MISC with the IRS and provide copies to recipients. (Note that Forms 1099-MISC reporting nonemployee compensation in Box 7 must be filed by January 31, beginning with 2016 forms filed in 2017.)

March 15

If a calendar-year partnership or S corporation, file or extend your 2016 tax return. If the return isn’t extended, this is also the last day to make 2016 contributions to pension and profit-sharing plans.


© 2016

A BRIEF OVERVIEW OF THE PRESIDENT-ELECT'STAX PLAN FOR INDIVIDUALS

Posted by Admin Posted on Jan 12 2017

Now that Donald Trump has been elected President of the United States and Republicans have retained control of both chambers of Congress, an overhaul of the U.S. tax code next year is likely. President-elect Trump’s tax reform plan, released earlier this year, includes the following changes that would affect individuals:
 

• Reducing the number of income tax brackets from seven to three, with rates on ordinary income of 12%, 25% and 33% (reducing rates for many taxpayers but resulting in a tax hike for certain single filers),
• Aligning the 0%, 15% and 20% long-term capital gains and qualified dividends rates with the new brackets,
• Eliminating the head of household filing status (which could cause rates to go up for some of these filers, who would have to file as singles),
• Abolishing the net investment income tax,
• Eliminating the personal exemption (but expanding child-related breaks),
• More than doubling the standard deduction, to $15,000 for singles and $30,000 for married couples filing jointly,
• Capping itemized deductions at $100,000 for single filers and $200,000 for joint filers,
• Abolishing the alternative minimum tax, and
• Abolishing the federal gift and estate tax, but disallowing the step-up in basis for estates worth more than $10 million.
 
The House Republicans’ plan is somewhat different. And because Republicans didn’t reach the 60 Senate members necessary to become filibuster-proof, they may need to compromise on some issues in order to get their legislation through the Senate. The bottom line is that exactly which proposals will make it into legislation and signed into law is uncertain, but major changes are just about a sure thing.

If it looks like you could be eligible for lower income tax rates next year, it may make sense to accelerate deductible expenses into 2016 (when they may be more valuable) and defer income to 2017 (when it might be subject to a lower tax rate). But if it looks like your rates could be higher next year, the opposite approach may be beneficial.

In either situation, there is some risk to these strategies, given the uncertainty as to exactly what tax law changes will be enacted. We can help you create the best year-end tax strategy based on how potential changes may affect your specific situation.

© 2016


 

ARE YOU READY FOR THE NEW REVENUE RECOGNITION RULES?

Posted by Admin Posted on Jan 12 2017

A landmark financial reporting update is replacing about 180 pieces of industry-specific revenue accounting guidance with a single, principles-based approach. In May 2014, the Financial Accounting Standards Board (FASB) unveiled Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. In 2015, the FASB postponed the effective date for the new revenue guidance by one year. Here’s why companies that report comparative results can’t delay any longer — and how to start the implementation process.

No time to waste

The updated revenue recognition guidance takes effect for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The update permits early adoption, but no earlier than the original effective date of December 15, 2016. Private companies have an extra year to implement the changes. 

That may seem like a long time away, but many companies voluntarily provide comparative results. For example, the presentation of two prior years of results isn’t required under GAAP, but it helps investors, lenders and other stakeholders assess long-term performance. 

Calendar-year public companies that provide two prior years of results will need to collect revenue data under one of the retrospective transition methods for 2016 and 2017 in order to issue comparative statements by 2018. Private companies would have to follow suit a year later. 

A new mindset

The primary change under the updated guidance is the requirement to identify separate performance obligations — promises to transfer goods or services — in a contract. A company should treat each promised good or service (or bundle of goods or services) as a performance obligation to the extent it’s “distinct,” meaning:

1. The customer can benefit from it (either on its own or together with other readily available resources), and

2. It’s separately identifiable in the contract.

Then, a company must determine whether these obligations are satisfied over time or at a point in time, and recognize revenue accordingly. The shift to a principles-based approach will require greater judgment on the part of management. 

Call for help

Need assistance complying with the new guidance? We can help assess how — and when — you should report revenue, explain the disclosure requirements, and evaluate the impact on customer relationships and other aspects of your business, including tax planning strategies and debt covenants. 

© 2016

ARE YOU READY FOR AUDIT SEASON?

Posted by Admin Posted on Jan 12 2017

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It’s almost audit season for calendar-year entities. A little preparation can go a long way toward facilitating the external audit process, minimizing audit adjustments and surprises, lowering your audit fees in the future and getting more value out of the audit process. Here are some ways to plan ahead.

The mindset

Before fieldwork begins, meet with your office team to explain the purpose and benefits of financial statement audits. Novice staff members may confuse financial audits with IRS audits, which can sometimes become contentious and stressful. Also designate a liaison in the accounting department who will answer inquiries and prepare document requests for auditors. 

Reconciliation

Enter all transactions into the accounting system before the auditors arrive, and prepare a schedule that reconciles each account balance. Be ready to discuss any estimates that underlie account balances, such as allowances for uncollectible accounts, warranty reserves or percentage of completion.

Check the schedules to reveal discrepancies from what’s expected based on the company’s budget or prior year’s balance. Also review last year’s adjusting journal entries to see if they’ll be needed again this year. An internal review is one of the most effective ways to minimize errors and adjusting journal entries during a financial statement audit.

Work papers

Auditors are grateful when clients prepare work papers to reconcile account balances and transactions in advance. Auditors also will ask for original source documents to verify what’s reported on the financial statements, such as bank statements, sales contracts, leases and loan agreements.

Compile these documents before your audit team arrives. They may also inquire about changes to contractual agreements, regulatory or legal developments, additions to the chart of accounts and major complex transactions that occurred in 2016.

Internal controls

Evaluate internal controls before your auditor arrives. Correct any “deficiencies” or “weaknesses” in internal control policies, such as a lack of segregation of duties, managerial review or physical safeguards. Then the auditor will have fewer recommendations to report when he or she delivers the financial statements.

Value-added

Financial statement audits should be seen as a learning opportunity. Preparing for your auditor’s arrival not only facilitates the process and promotes timeliness, but also engenders a sense of teamwork between your office staff and external accountants.

© 2016

ACCOUNTING FOR M&AS

Posted by Admin Posted on Jan 09 2017

 



Many buyers are uncertain how to report mergers and acquisitions (M&As) under U.S. Generally Accepted Accounting Principles (GAAP). After a deal closes, the buyer’s postdeal balance sheet looks markedly different than it did before the entities combined. Here’s guidance on reporting business combinations to help minimize future write-offs and restatements due to inaccurate purchase price allocations. 

Purchase price allocations

Under GAAP, buyers must allocate the purchase price paid in M&As to all acquired assets and liabilities based on their fair values. The process starts by estimating a cash equivalent purchase price. 

If a buyer pays 100% cash up front, the purchase price is already at a cash equivalent value. But the cash equivalent price is less clear if a seller accepts noncash terms, such as an earnout that’s contingent on the acquired entity’s future performance or stock in the newly formed entity.

The next step is to identify all tangible and intangible assets and liabilities acquired in the business combination. The seller’s presale balance sheet will report most tangible assets and liabilities, including inventory, equipment and payables. However, intangibles are reported only if they were previously purchased by the seller. But intangibles are usually generated internally, so they’re rarely included on the seller’s balance sheet. 

Fair value

Acquired assets and liabilities are then added to the buyer’s postdeal balance sheet, based on their fair values on the acquisition date. The difference between the sum of these fair values and the purchase price is reported as goodwill.

Goodwill and other indefinite-lived intangibles — such as brand names and in-process research and development — usually aren’t amortized for GAAP purposes. Instead, companies generally must test goodwill for impairment each year. Impairment testing also is needed when certain triggering events occur, such as the loss of a key person or an unanticipated increase in competition. If a borrower reports an impairment loss, it could mean that the business combination has failed to achieve management’s expectations. 

Rather than test for impairment, private companies may elect to amortize goodwill straight-line, generally over 10 years. Companies that elect this alternate method, however, must still test for impairment when certain triggering events occur.

Bottom line

A business combination is a significant transaction, so it’s important to get the accounting right from the start. We can help buyers identify intangibles, estimate fair value and allocate purchase price even when a deal’s cash-equivalent purchase price isn’t readily apparent.

© 2017

ARE YOUR EMPLOYEES TRAINED TO GUARD AGAINST RISK?

Posted by Admin Posted on Jan 09 2017

Many companies, especially smaller ones, minimize in-house training to cut costs. But the current business environment — with its hard-to-predict changes, external threats and regulatory demands — is causing some owners to rethink this strategy. A strong training program can not only help you attract and retain quality talent, but can also help you reduce operational risk. 

Renewed emphasis

Today’s companies face many challenges beyond simply turning a profit. Many industries are highly regulated, and just about every type of business has become, in some sense, technology-dependent. This has brought a renewed emphasis on risk management. 
One of the keys to managing operational risk is well-trained personnel at all levels. After all, no matter how carefully a business designs its policies, procedures and controls, they’re only as reliable as the employees entrusted to implement them.

2 examples to consider

Here are just a couple of examples of operational risks that can be reduced with good training:

1. Compliance. As mentioned, many businesses are now more heavily regulated. (This may change with the incoming presidential administration, but it’s hard to say when or how any deregulatory measures may occur.) Failure to comply with federal, state or local regulations can expose your company to penalties ranging from monetary fines, to rescission of loans or other contracts, to criminal liability. Train your employees to avoid breaking the rules and to spot compliance threats when they arise.

2. Cybersecurity. As companies’ reliance on technology and automation continues to increase, so does the risk of cyberattacks. Although the techniques cybercriminals use are becoming more sophisticated, many businesses also remain vulnerable to simple tactics, such as email phishing. 

Phishing involves sending emails to employees or customers that appear to be from a legitimate source. By tricking recipients into clicking on links that install malware, cybercriminals can gain access to company assets or customers’ sensitive personal information. Teach your staff how to deal with suspicious emails and other technology-related threats. 

On the lookout

It’s not enough to be aware of risks to your business at the ownership or management level. You’ve got to train your employees to be on the lookout, too. Please contact our firm for help.

© 2016

Welcome to Our Blog!

Posted by Admin Posted on Jan 23 2015
This is the home of our new blog. Check back often for updates!