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Article Dean Dorton

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With hopes for a much better 2021, the changes in 1099 forms could make for a rough start to next year if you’re not prepared! For the calendar year 2020, the requirements for reporting “Non-Employee Compensation” will include a new form. Previously, all “Non-Employee Compensation” payments were reported to recipients and the IRS in form 1099-MISC, Box 7.

Form 1099-NEC was created to separate the 1099-MISC, Box 7 forms and will be required for the year 2020. Businesses will need to be ready to use this new form as well as the revised 1099-MISC. Below is a summary of the changes made:

  • All amounts formerly placed in 1099-MISC, Box 7, ($600 or greater) will be reported on 1099-NEC, Box 1. These forms will be mailed out to recipients and the IRS by or on January 31st. (Please note for the 2020 Forms, February 1, 2021 is the due date since January 31st is on a Sunday.)
  • Other amounts formerly reported on 1099-MISC may be reported in a new box. At least $600 in:
    • Rents (box 1);
    • Prizes and awards (box 3);
    • Other income payments (box 3);
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate (box 3);
    • Any fishing boat proceeds (box 5);
    • Medical and health care payments (box 6);
    • Crop insurance proceeds (box 9);
    • Payments to an attorney (box 10) (see Payments to attorneys, later);
    • Section 409A deferrals (box 12); or
    • Nonqualified deferred compensation (box 14).
  • Form 1099-NEC is due to recipients and the IRS (postmarked by or on) January 31st. 1099-MISC forms must all be submitted to the IRS by February 28th. However, the recipient due date varies based on the type of transaction. Please see https://www.irs.gov/pub/irs-pdf/i1099gi.pdf for detailed due dates.

So, how does a business prepare for all of these changes? First of all, start reviewing vendor activity early. Are W-9s for all vendors used in calendar year 2020 on file? If the answer is no, start contacting vendors as soon as possible. Keeping vendor records up to date is key in preventing being overwhelmed in January.

Next, is the accounting system ready for the 1099-NEC changes? If the existing accounting software is being updated regularly (cloud based services or the latest version desktop software), accountants should be able to appropriately flag vendors and transactions with the correct form. If this is not the case, then further planning needs to happen prior to January.

The best approach would be to update accounting software, if possible. If this is not an option, another plan needs to be put in place. It’s possible to manually pull the information from the accounting software and then report on the appropriate form. This may involve using 1099 outsourced services. There are many online options at a reasonable price, that will allow businesses to report 1099s through online portals and will send out recipient copies as well as filing the IRS copies on behalf of the business.

Contact us at ddaf1099@deandortonstg.wpenginepowered.com for any questions regarding 1099s or our related services.

Article Dean Dorton

C-suite and technology leaders need to assume a more strategic role in organizational intelligence and planning. To do that, you need better visibility into technology, financial, and operational metrics, so you can make better decisions and keep your team members’ productivity high and keep your organization’s information secure working across various platforms in multiple locations.

Virtual Desktop

Significant improvements have been made to virtual desktop platforms during the past five years. In order to keep your productivity high, it’s important to have a system that is fast, secure, and easy-to-access. When is the last time you thought about upgrading your virtual access?

Here are some things to consider:

Hardware Costs in a Virtual World

As you consider your technology costs, it’s important to critically look at your current stance and analyze how best to utilize cloud solutions to help support your organizational goals and mitigate technology expenses. Cloud-based systems are far more secure, easy-to-access, and easier to manage from the technology team’s perspective across your organization. The right cloud-based solutions are scalable to your organization’s size and complexity making them cost-effective and efficient. Additionally, Cloud-based systems ensure your team always has access to the latest tools making working anywhere, anytime easier and more productive.

Cybersecurity Risks

As cybersecurity threats become more sophisticated, it’s not a matter of if but when your company will fall victim. Is your system fully secured against an attack? Do you have the visibility to know where your company is most vulnerable? Do you know what your first five steps should be after you know an attack has occurred? Does your current security insure you can avoid spending hundreds of thousands to millions of dollars in remediation when you get hit?

We worked with many clients throughout the last year who needed remediation assistance for cyber-attack incidents that could have been avoided if they had the right cyber tools in place. We often see companies pushing cybersecurity initiatives out to the next year:

  • Cybersecurity Scorecard for Small Business
  • Cybersecurity Risk Assessments (for medium and large businesses)
  • Multi-factor Authentication Platforms
  • User Awareness Training (for your team members as they are often prime targets)
  • Security tools and technology that integrates seamlessly with your existing systems

If you’d like to explore how to better control costs to meet your company’s needs and keep projects on budget, please contact me.  I am happy to answer your questions and offer meaningful recommendations.

David Rice
Senior Infrastructure Engineer
drice@ddaftech.com • 859.425.7735

Article Dean Dorton

The budgeting process is an important time to carefully analyze the value new technology solutions can provide while balancing long and short-term cost mitigation with bottom line opportunity costs. The advantages far outweigh the risk or pain of technology upgrades, but only if you take time to understand your options, what suits your business size, industry, and functions best. Working with an experienced partner, like Dean Dorton Technology, provides the expertise to deliver the meaningful insights and recommendations that can help guide well-founded decisions.

Below are our recommended considerations for budgeting for collaborative technology in 2021.

Collaborative Meeting Solutions

Using collaborative meeting solutions for workers in meeting spaces, at their desks or when mobile, with integrated voice, video, messaging and content sharing can increase your efficiency dramatically. Is your chosen collaborative meeting solution working for you? Have you discovered things you like or don’t like? Are you not sure how to fix the problems or how to make your solution function best?

Now is the ideal time to take a look at the functionality of all your systems. Is it easy and effective for team members or customers to use? Do you have access to recordings? Is the quality of audio, visual, and screen sharing up-to-par for your standards? Will your solution integrate seamlessly with your technology inside the office? Will it fit into your budget?

Hybrid Workplace Solutions

While it’s exciting that innovative collaboration experiences are changing the way business is done, your main focus is keeping productivity high. Integrating your technology systems together to provide powerful easy-to-use customer experiences can take your team and your organization to new heights. Consider how artificial intelligence will continue to impact the way you work and lay the foundation for the next-gen workplace. Considerations:

  • Do your current systems allow for a consistent experience no matter where you are?
  • Can you effortlessly move between your virtual and physical worlds?
  • Does your technology allow for suppression of background noises?
  • Are your systems secure through encryption and authentication methods?
  • Are you able to take notes and “whiteboard” out ideas in the meeting spaces and have them saved for access anytime for those on the team?

Questions about benefits/cost analysis, budget, best-in-class tools, average costs, timing, or implementation?

David Rice
Senior Infrastructure Engineer
drice@ddaftech.com • 859.425.7735

Article Dean Dorton

By: Polina Nikolova | pnikolova@ddaftech.com

The coronavirus pandemic has forced many businesses to send employees home without much, if any, lead time to set up company-approved technology services for a secure remote work environment. States have cautiously eased stay-at-home orders over the last few months. Many businesses finally see light at the end of the tunnel as they re-open and reinstate services and production.

Nevertheless, as we start to emerge from the initial chaos and the rush to work from home, there will be a shadow cast behind—scattered remnants of unmanaged technology software, subscriptions, and hardware. The remnants may involve client or customer files and company data disseminated through different file sharing platforms, home computers, or unsupported (and unsecured) devices. Also, team members may have individual plans for messaging and video conferencing solutions, subscriptions and trials to Dropbox, WebEx, Zoom, Microsoft Teams, SharePoint, Google Hangouts, Google Docs—the list goes on.

How did we get here?

While some companies were well-positioned to accommodate the needs of a remote workforce, many businesses were unprepared and struggled to provide the technology and tools needed for a seamless transition. Employees took matters into their own hands, looking for new ways to perform their daily work, signing up for a trial of Zoom, using their personal Dropbox account to transfer files, or storing documents on a home computer or other personal device.

This leaves IT administrators scrambling to identify what tools or cloud platforms employees are using and how files are being stored and shared in their effort to regain control of data governance and security.

Shadow IT refers to the use of unapproved technology services or devices without the knowledge or approval of the company’s IT department.

This practice presents significant risks to a company’s information security: increasing the possibility of data leaks, breach of client confidentiality agreements, and data compromise or theft. It bypasses and disregards company security controls for data protection and usually violates the organization’s Information Security Policy and Employee Acceptable Use Policy.

Safeguarding client or customer data and protecting company resources is a shared responsibility.

A company must ensure that effective information security policies and processes are in place. IT professionals must implement the tools, policies, and controls needed to safeguard company information. And, employees must follow the organization’s policies to safeguard client or customer information and company resources.

As a team member or leader, reach out to your IT administrator to make sure you and your team have the tools needed to enable you to work securely and efficiently, using approved technology and services, governed by your IT department.

Article Dean Dorton

The average organization loses an estimated 5% of revenues each year to fraud, with a median loss per case of $125,000, according to the 2020 Report to the Nations on Occupational Fraud and Abuse.

While this is a current study, it does not quantify the additional impact that COVID-19 has had (and will continue to have for an indefinite time) on employee fraud in the workplace. Let’s take a look at how this pandemic has strengthened the three elements of the Fraud Triangle (pressure, opportunity, and rationalization) and how your organization can limit the damage.

Financial Pressure

Financial pressure is a need or incentive to commit fraud. COVID-19 undoubtedly has created additional pressure on many workers’ lives as a result of lost jobs, reduced hours, health concerns, medical bills, future uncertainty—the list could go on. Are your employees experiencing an unusual amount of pressure?

How can organizations alleviate the pressure? Staying connected with employees builds trust and rapport. Monday morning video calls and Friday afternoon virtual happy hours are a couple of ways to stay connected. These small things can go a long way in boosting a team member’s morale. Also, counseling services can have a positive impact and could be a wise investment for an organization.

Opportunity

Opportunity is the means or access to commit fraud. The pandemic has shaken up our business processes. Corporate desks have shifted to dining room tables, and essential employees have found themselves in a ghost town of what formerly was the office. With these changes, opportunities for fraud have formed. In particular, a few opportunities stand out:

  • New vendors: With process changes and supply-chain issues due to shutdowns during the pandemic, companies are expediting the approval of new vendors and purchases to quickly obtain needed products and supplies. This is an opportunity for fake vendors to be added and fraudulent payments to be made without detection.
  • Digital approvals: With more employees working remotely, digital approvals are being relied upon more, which can make it easier to falsify signatures on documents such as expense reports, purchase orders, and vendor contracts.
  • Sensitive information: Company information such as IP, customer lists, payroll reports, and emails may be less secure in a remote work environment. Without proper IT controls over printing and distribution, sensitive information can be sold by employees or third-parties without detection.
  • Timekeeping: Reduced physical oversight in a remote work environment can provide employees with the opportunity to abuse time tracking controls.
  • Lack of communication: Being physically distanced from co-workers can make it less natural to ask questions when something doesn’t look right. For instance, a bookkeeper who sees a suspicious expense receipt may be less likely to inquire further about the legitimacy of the purchase when an email or phone call is required. Also, changed work hours of employees can be an obstacle to efficient communications.

How can you minimize fraud opportunities? You should reassess internal controls based on your modified financial and accounting processes during the pandemic. The interactive Fraud Risk Management Scorecard, produced by COSO and the ACFE, is a great starting point in assessing your organization’s fraud risk.

The ACFE’s 2020 Report found that 43% of fraud schemes were detected by a tip. Implementing an ethics hotline and raising organizational awareness about its use are great ways to combat fraud. If your organization needs an ethics hotline, reach out to the Dean Dorton team. We offer effective and affordable ethics hotline solutions to organizations of all sizes.

Rationalization

Rationalization is the ability of a fraudster to justify unethical actions. When the world feels like it’s been turned upside down, it can become easier to rationalize unethical behavior. While perpetrators of fraud have always found ways of rationalizing behavior, recent months have provided additional fuel for this kind of thinking:

  • “This is the only way I can provide for my family right now.”
  • “I’ve been loyal for 25 years, then they cut my hours. I have earned this.”
  • “My employer is doing fine; they just got free money from the government.”

Poor “Tone at the Top” was found to be the primary risk factor for financial statement fraud, according to the 2020 Report. “Tone at the Top” refers to the trickledown effect that an organization’s leadership has on the organization’s overall ethical culture. That tone is more important in times of crisis.

What steps can organizations take to maintain an ethical culture and “Tone at the Top?” Management’s words and, especially, its actions in setting that “Tone at the Top” are critical. Emphasize the team’s goals and the importance of each team member to the team. Truthful and empathetic communications are key.