Sage Intacct

Article Dean Dorton

For those companies dealing with international sales and multicurrency management, the multicurrency capability is a necessity. Intacct provides multicurrency in a real-time environment throughout the ERP system. By enabling Multicurrency in Intacct, users can create and process transactions in an unlimited number of currencies. Intacct accounting transactions can be recorded against any currency, and because Intacct is a real-time processing system, financials are automatically converted to base currency for on-demand reporting.

Behind the scenes, Intacct derives its currency information from OANDA – an internationally recognized organization that provides live currency translation. Activity recorded in Accounts Payable and Accounts Receivable can be recorded against any currency, and when payments are recorded, currency adjustments are automatically calculated by Intacct. Cash transfers between bank accounts of differing currencies are also automatically adjusted for differences in exchange rates at the time of transfer.

Intacct’s multicurrency capability is also compliant with GAAP, as well as Sox, GAPP, IFRS, FAS52, FAS141R, and EITF 87-12. With the additional of the IGC (Intacct Global Consolidations) module, Intacct extends the capability of Multicurrency to reporting consolidated financials in base currency for multiple business entities, as well as overall consolidation of a business enterprise whose subsidiaries are operating in differing currencies.

For more information on Intacct Multicurrency module and how it can make your global business operations more efficient, contact us.

Article Dean Dorton

It’s been talked about for many months now and the new FASB guidelines for nonprofit organizations are here – or at least the first phase.
We sat in on the FASB webcast “IN FOCUS: Accounting Standards Update on Not-for-Profit Financial Statements (ASU 2016-14)” and here are the key takeaways from the presentation.

The key objectives recommended by FASB’s NFP Advisory Committee (NAC) are as follows:

• Update, not overhaul, the current model
• Improve net asset classification scheme
• Improve information in financial statements and notes about:

  • Financial performance
  • Cash flows
  • Liquidity

• Better enable NFPs to “tell their financial story”

So, what has changed?

Phase 1 ASU 2016-14 issued in August 2016 has five areas requiring change.

Net Asset Classes – New FASB Guidelines for Nonprofit Organizations

The first area covered is Net Asset Classes, specifically the classification scheme, disclosure of board designated net assets, underwater endowments, and expirations of capital restrictions.

Another net asset classes change requires disclosure of board designated net assets.

“Underwater” Endowments with revised net asset classification and enhanced disclosures and was defined this way:

Revised net asset classification: to be reflected in net assets with donor restrictions rather than in net assets without donor restrictions.

Enhanced disclosures: in addition to aggregate amounts by which funds are underwater (current GAAP), also disclose aggregate of original gift amounts (or level required by donor or law) for such funds, fair value, and any governing board policy, or actions taken, concerning appropriation from such funds.
 

Expiration of Capital Restrictions is the final area impacted by net asset classes requirements. When it comes to gifts of cash restricted for acquisition or construction of PP&E (property, plant, and equipment), in the absence of explicit donor restrictions, NFPs would be required to use the placed-in-service approach (no more implied time restrictions). This is something nonprofit healthcare organizations are already required to do.

Expenses/Investment Return – New FASB Guidelines for Nonprofit Organizations

Expense Reporting

The new guidelines are looking to create better, more consistent information about expenses. Nonprofits are required to report expenses, either on the face of the financial statements or in the notes by Function (currently required in GAAP), Natural classification, and Analysis (disaggregate function by nature).

Nonprofit organizations are required to provide qualitative disclosures about methods used to allocate costs among program and support function. ASU also provides enhanced guidance on allocations from M&G expenses.

Reporting of Investment Return

Net presentation of investment expenses against investment return on the face of the statement of activities:

• Netting limited to external and direct internal expenses
• May report net return in multiple, appropriately labeled lines. For example, from different portfolios, in different net asset classes, or in operation versus non-operating

Disclosure of investment expenses no longer required (if reported, carefully label and don’t include in expense analysis). Also, it is no longer required to disclose investment return components.

Operating Measures – New FASB Guidelines for Nonprofit Organizations

Reinforcing current GAAP requirement about transparency of components of any operating measures presented:

Nonprofit organizations utilizing an operating measure that reflects governing board designations, appropriations, and similar actions (internal transfers) must report these types of internal transfers appropriately disaggregated and described by type (either on the face of the statement of activities or in the notes).

Liquidity/Availability – New FASB Guidelines for Nonprofit Organizations

When it comes to liquidity and availability of resources, nonprofit organizations are required to provide:

Qualitative information on how the organization manages its liquid available resources and its liquidity risk (in the notes).

Quantitative information that communicates the availability of an organization’s financial assets at the balance sheet date to meet cash needs for general expenditures within one year (on the face and/or in the notes).

Statement of Cash Flows – New FASB Guidelines for Nonprofit Organizations

Cash flow statement guidelines will continue to allow a choice between the Direct Method and the Indirect Method in presenting operating cash flows. However, indirect reconciliation is no longer required for Direct Method.

Summary – New FASB Guidelines for Nonprofit Organizations

The effective date for Phase I Accounting Standards Update on Not-for-Profit Financial Statements (ASU 2016-14) will be for organizations with fiscal years beginning after December 15, 2017 (for example calendar year 2018, fiscal year 2018-19) with interim financials the following year.

The rollout of Phase II is still to be determined. Some of the issues under consideration for Phase II include: whether to require a measure of operations; how to define a measure of operations; potential realignment within the statement of cash flows; and segment reporting for nonprofit health care entities.
 

Article Dean Dorton

Intacct Collaborate can help a company that suffers from any of the problems in the following common scenarios: 

  • An upset customer asks his sales rep to get an invoice corrected because it does not reflect the terms they agreed. The sales rep then has to dig up all the emails that show the finance team approved the terms so the incorrect invoice can be fixed.  
  • A credit and collections person puts a customer on credit hold without realizing there was a problem with the shipping of a big order for that customer. Now all new orders for that customer are incorrectly held up.
  • A frustrated accounts receivable person struggles to reconcile invoices that appear to be short paid because the customer has deducted a discount that does not appear on the order or the invoice.

Fortunately, the days of sales, finance and services teams working on separate systems and using email to keep track of decisions affecting customers and their transactions can be a thing of the past. Situations like those described above can now be avoided.

Intacct, the best-in-class ERP solution, in an effort to remove barriers to fast execution, introduced Intacct Collaborate into its financial system. Intacct Collaborate embeds Salesforce Chatter, the leading enterprise social network, into Intacct to create a secure social layer across all finance processes and across all devices.

The partnership of Intacct Collaborate and Salesforce Chatter means that communications on accounts, projects, orders, invoices, requisitions and more can appear simultaneously in the Salesforce Sales Cloud and in Intacct. This allows the sales, finance and services teams to ask and answer questions, take actions and resolve issues in the system they use daily.  

Intacct Collaborate incorporates many other useful features.

  • With Dashboard snapshots you can create conversations that flag issues or discuss trends.   
  • Collaboration groups can promote communication amongst teams focusing on specific tasks or events such as month-end-close or an audit.
  • Relevant documents that belong to a specific customer or transaction can be uploaded directly into the corresponding conversation.  
  • Individuals can set alerts to receive notifications on tasks or actions and when new comments are posted on followed items.

Intacct Collaborate lets you communicate faster and smarter.  Gone are the days of missing out on important decisions, asking around for a supporting document, having to read endless email chains to understand what is happening with a customer or having your inbox flooded with unwanted emails.

Better communication facilitates teamwork across the entire company and expedites processes and decision-making.  When everyone knows the context, it is much easier to clarify policies, manage exceptions and speed approvals.

Contact us to now to learn more about how Intacct Collaborate can improve communication between your sales, finance and services teams, increasing their productivity and your customers’ satisfaction.

Article Dean Dorton

Controlling expenses is a big part of running any business and budgets are crucial to preventing overspending of company resources. However, with many resources and employees it can be hard to maintain control over spending. With the Intacct spend management system you can automatically apply those spending limits in the purchasing module and keep your budget in check.

The Intacct spend management system is integrated right into the purchasing module. Once configured, the system will validate all purchasing transactions against the specified budget. During configuration, you can specify which combination of dimensions the system will compare transactions against. That means you can budget by one set of dimensions but only validate by a subset. For example, your company might budget by location and department, but you may only validate based on department.

Intacct spend management can also be setup to validate against a specific period such as the current month, current year, or current year through current month. If you picked current month for example, then Intacct will validate expenses for the month based only on the budget for that month.

Another feature available in spend management is the ability to select only certain purchasing transactions for validation. With this functionality, your company could allow users to enter purchase requisitions without validation, but still enforce your budget before converting those to purchase orders.

After the validation runs, if Intacct has determined that any particular budget amount has been exceeded, the system will either warn the user about the budget overage or deny posting the transaction completely based on your preference.

Controlling expenses is now easier than ever with Intacct spend management.  It’s one more reason Intacct is the most innovative and most award-winning cloud ERP system on the market.  Gain rich features by migrating to Intacct today – and control your expenses!  To get more information on Intacct, contact us or view our Intacct page.

Article Dean Dorton

Time is running out! The deadlines for private companies to comply with new FASB accounting and reporting standards is less than a year away.

For the first time in several decades, the organizations that establish accounting and reporting standards for public and private companies – the Financial Accounting Standards Board (FASB) in the USA and the International Accounting Standards Board (IASB) – have announced new guidance for contract revenue recognition – ASC 606 and IFRS 15.

To comply, affected companies will need to review contracts and possibly restate timing of their revenue. It may be necessary to modify computer systems and change procedures in areas such as sales, accounting, financial reporting and internal audit.

What is ASC 606 and IFRS 15?

The Accounting Standards Codification (ASC) 606 issued by FASB and the International Financial Reporting Standards (IFRS) 15 issued by IASB are both titled Revenue from Contracts with Customers and reflect the organizations’ agreement on best practices for contract revenue recognition across industries.

What is changing?

The new standards define Contracts with Customers as transferring goods, services or non-financial assets unless the contracts are already covered by other standards such as leases or insurance contracts. The change establishes a 5-step process for revenue recognition:

  1. Identify contracts signed with customers.
  2. Identify timing of separate performance obligations in each of those contracts.
  3. Determine the transaction price for the contract.
  4. Allocate the transaction price to each of the performance obligations.
  5. Plan for and recognize revenue as performance obligations are satisfied.

A major implication of the new process is that instead of recognizing revenue when the cash is received, companies will recognize revenue when performance obligations – formerly referred to as deliverables – are met.

Who is affected and how?

Companies who frequently change the terms of a customer contract will be most affected. Each time a customer contract changes, the new standards require companies to reassess the performance obligations and if necessary, reallocate revenue across the contract and defer expense recognition to align with the contract’s new delivery schedule.

So, it should be obvious that companies relying on Excel spreadsheets to prepare financial statements will see their workload significantly increased with the change. Additionally, accountants will have to keep two sets of books for a number of years to show and compare revenue recognition under old and new regulations.  

Take a look at this video for details on how easy Intacct makes ASC 606 and IFRS 15 compliance

Article Dean Dorton

 
“One of your biggest sources of professional pride is probably also one of its most frustrating parts: You’re doing the work of three people!”

The above, opening sentence of the Guidestar blog post caught our attention immediately.

The article was written for Development Directors, but we’ve seen the same problem among Finance Directors, CFOs, and just about everyone on the accounting team. You’ve been doing more with less for a long time.

The Guidestar article strongly urges avoiding burnout and reducing stress by looking for opportunities to automate workflows. We want to take a look at the benefits of automation from the perspective of a Finance Director.

Take a moment to think about all the repeat activities that are a part of your departmental duties.

Take a moment to think about all the repeat activities that are a part of your duties and make a list. Keep the list for future reference and continue to add to the list as new repeat activities spring to mind. Those repeat duties might center on allocation of funds or the correction of allocations that are miscoded. What about collecting and combining data to get the requested reporting? How often are you importing and exporting into spreadsheets? How often are you creating or updating spreadsheets? How long does it take to compile, create and distribute period-end and grant reporting each month? How often are you tracking down the status of an approval?

All of the things we’ve mentioned (and more) are areas where workflow automation could save an enormous amount of time: time that would be better spent on more strategic activities that would benefit your organization.

Additional benefits

Automation Completes Repeat Activities While You Address Bigger Issues

Without automation, when you are pulled to address an issue that needs immediate attention, all those little repeat activities are put on hold. Not only are they still waiting for you after you’ve dealt with the challenge, you now probably have to rush to get these tasks completed. When we’re in a hurry, there’s an increased likelihood of error. As the Guidestar article points out, “One of the biggest benefits of automating things that need to be done over and over is that, by setting them up to work correctly initially, you ensure they’ll be completed in a consistent manner every time.”

Staff Turnover or Absence Becomes Less of a Disruption

Not only do you have a laundry list of repeat tasks, so does your staff. Ever notice how Murphy’s Law kicks in when someone is on leave, retires, or leaves the organization to take another job? There’s one less person (who was also doing the job of three people) and now those duties must be divided between the remaining staff members. Automation of the departing staff members repeat tasks, means that those activities continue to be executed until the position is filled.

Automation Frees Up Time for High Touch, High Value Activities

How much more impact would you have if you could take your financial expertise and assist colleagues with more analysis? Help them with developing dashboards that keep their real time key metrics a glance away. Assist a program manager and grant writers in determining, based on the organization’s existing resources, which grant awards to apply for. Spend more time analyzing the data that, in the past, you barely had time to compile. You’ve probably thought of dozens of other activities that would be a more valuable use of your time – and hence the title of this article – the best contribution you can make to your nonprofit is to remove the repetitive and mundane from your job in order to deliver your true value and expertise!

What it takes

You need to invest in an accounting solution that:

  • Does what a nonprofit needs done without excessive Excel intervention
  • Doesn’t require a total overhaul of servers, networks, and devices
  • Does integrate with other mission critical solutions in use in the organization (think fundraising, online giving, tuition management, medical billing, payroll, human resources, etc.)
  • Doesn’t require an unreasonable investment, but rather costs less than a part-time employee and provides a rapid return on investment

Massey Consulting helps organizations move from QuickBooks to Intacct on a regular basis. We’ve also helped organizations move from legacy systems to cloud-based Intacct. These organizations have enjoyed the benefits of saving large chunks of time through automation of workflows so that they can focus their attention on optimizing processes and helping program managers become even better stewards of funds in order to serve more constituents.

Other Nonprofit resources from Massey Consulting:

White paper ’13 Questions Nonprofits Need to Ask When Buying a New Accounting System’

Monthly webcasts for nonprofits