Late

Article Dean Dorton

It’s a fact of life in the business world that sometimes you need to pay for something in advance, sometimes long in advance. Take software licensing, for example. In order to access critical digital tools, it may be a requirement to pay for months or years of service upfront. That’s not necessarily a bad thing. However, it comes with some unique accounting requirements.

A company that prepays for a good or service must recognize that expense as an asset on the books. Then, accountants amortize the expense within the period it was incurred. In the software licensing example, if a company paid $12,000 for one year of service, it would need to amortize $1,000 in expenses each month and transfer those to the profit and loss statement. Done correctly, the total paid upfront would steadily get smaller until it reached zero by the end of the year.

There’s nothing unusual about this process. Companies pay in advance and amortize expenses for many things: technology, insurance, equipment, interest, etc. And when they have just a few expenses to amortize, it’s fairly easy to keep the process running smoothly. When they have dozens or even hundreds of expenses, though, managing them all becomes prohibitive to put it mildly.

If accountants don’t have a dedicated tool to help them track prepaid expenses, they have to use spreadsheets, cross references, manual data entries, and diligent attention to detail. That takes lots of time and energy that accountants would rather apply elsewhere. Just as bad, it makes errors and oversights a lot more likely, which can have repercussions ranging from confusion to catastrophe.

That’s the bad news. The good news is that a dedicated tool already exists to make tracking prepaid expenses simple and seamless. Better yet, it’s free.

The Prepaid Module in Sage Intacct

Sage Intacct is a powerful and popular financial management tool built for mature or growing enterprises that need sophisticated accounting capabilities. And with the option to add-on a free prepaid expense module, Sage Intacct improves amortization like never before. That module comes with these key features:

  • Upon putting an invoice for a prepaid expense into Sage Intacct, the add-on will automatically capture information relevant to amortization like the beginning and end dates of the contract.
  • Accountants can set rules for how expenses should be amortized – consistently over time or all at once on a future date – then let the process run itself exactly as accountants would have done it.
  • Journal entries for asset creation and expense amortization are created automatically by the Sage Intacct add on.

In practice, the prepaid expense module doesn’t just make this particular accounting challenge easier – it makes it almost effortless since automation handles the most time and labor-intensive aspects while double checking every detail. And remember, it’s free. But first you need Sage Intacct. Contact Dean Dorton to explore what an implementation involves.

Philip Massey,
Software Services Director
pmassey@ddaftech.com • 919.796.5408

Article Dean Dorton

The Health Resources & Services Administration (HRSA) has announced an opportunity for providers who missed Reporting Period #1. This would apply to providers who have received letters requesting repayments of the provider relief fund payments they received. The Provider Relief Fund (PRF) Request to Report Late Due to Extenuating Circumstances process is intended for providers who were required to report in an applicable reporting period, but extenuating circumstances prevented them from submitting a report by the required deadline. (Information below obtained from HRSA website – https://www.hrsa.gov/provider-relief/reporting-auditing/late-reporting-requests)

  • Providers are strongly encouraged to complete their report in the PRF Reporting Portal by the deadlines indicated in the Post-Payment Notice of Reporting Requirements(PDF – 232 KB) in order to remain in compliance with the Terms and Conditions of the PRF payments.
  • Providers will have an opportunity to submit a Request to Report Late Due to Extenuating Circumstances if one or more of the extenuating circumstances described below apply.
  • Providers whose Request to Report Late Due to Extenuating Circumstances is approved will have the opportunity to complete their report in the PRF Reporting Portal.
  • Providers whose Request to Report Late Due to Extenuating Circumstances is denied will remain non-compliant with the Terms and Conditionsand will be required to return all funds to HRSA that were not reported on in the applicable reporting period. Review the Returning Funds webpage for additional details.
  • Providers may not utilize the Request to Report Late Due to Extenuating Circumstances process to request an opportunity to make edits or adjustments to an already submitted report. Contact the Provider Support Line at 866-569-3522 for assistance regarding revising a submitted report.

Please note that submission of a Request to Report Late Due to Extenuating Circumstances does not guarantee the request will be approved or that a provider will be allowed to enter the PRF Reporting Portal to complete and submit a report. Approval or denial of requests are subject to determination by HRSA.

Extenuating Circumstances

For each PRF Reporting Period, a provider may request an opportunity to complete their report after the reporting period deadline based on attestation that one of the following allowable extenuating circumstances applies at the time of the deadline:

  • Severe illness or death– a severe medical condition or death of a provider or key staff member responsible for reporting hindered the organization’s ability to complete the report during the Reporting Period.
  • Impacted by natural disaster– a natural disaster occurred during or in close proximity of the end of the Reporting Period damaging the organization’s records or information technology.
  • Lack of receipt of reporting communications– an incorrect email or mailing address on file with HRSA prevented the organization from receiving instructions prior to the Reporting Period deadline.
  • Failure to click “Submit”– the organization registered and prepared a report in the PRF Reporting Portal, but failed to take the final step to click “Submit” prior to deadline.
  • Internal miscommunication or error– internal miscommunication or error regarding the individual who was authorized and expected to submit the report on behalf of the organization and/or the registered point of contact in the PRF Reporting Portal.
  • Incomplete Targeted Distribution payments– the organization’s parent entity completed all General Distribution payments, but a Targeted Distribution(s) was not reported on by the subsidiary.

Process for Submitting a Late Report Request

  1. All providers who are considered non-compliant will be notified by HRSA after the conclusion of the Reporting Period and be given details on how to submit a Request to Report Late Due to Extenuating Circumstances.
  2. Providers who plan to submit a Request to Report Late Due to Extenuating Circumstances, but have not registered in the PRF Reporting Portal, should complete registration prior to submitting their request. Registration instructions are on the PRF Reporting webpage.
  3. Providers will submit a Request to Report Late Due to Extenuating Circumstances Form indicating the extenuating circumstance. Provider must indicate and attest to a clear and concise explanation related to the applicable extenuating circumstance; however, supporting documentation will not be required.
  4. Providers must attest to the truthfulness and accuracy of their extenuating circumstance(s) within the Form.
  5. Providers who submit a Request to Report Late Due to Extenuating Circumstances will be notified by HRSA if their request is approved or denied.
  6. Providers whose request is approved will receive a notification to proceed with completing the report. Providers will have 10 days from the date the notification is received to submit a report in the PRF Reporting Portal.

Late Reporting Timeframes

Reporting Period 1

  • Requests can be submitted from Monday, April 11 to Friday, April 22, 2022 at 11:59 p.m. ET

Lance Mann, CPA, CFE, CGMA
Assurance Director
lmann@deandorton.com • 502.566.1005

Article Dean Dorton

Because of a weekend and a Washington, D.C., holiday, the 2016 tax return filing deadline for individual taxpayers is Tuesday, April 18. The IRS considers a paper return that’s due April 18 to be timely filed if it’s postmarked by midnight. But dropping your return in a mailbox on the 18th may not be sufficient.

An example

Let’s say you mail your return with a payment on April 18, but the envelope gets lost. You don’t figure this out until a couple of months later when you notice that the check still hasn’t cleared.

You then refile and send a new check. Despite your efforts to timely file and pay, you’re hit with failure-to-file and failure-to-pay penalties totaling $1,500.

Avoiding penalty risk

To avoid this risk, use certified or registered mail or one of the private delivery services designated by the IRS to comply with the timely filing rule, such as:

  • DHL Express 9:00, Express 10:30, Express 12:00 or Express Envelope,
  • FedEx First Overnight, Priority Overnight, Standard Overnight or 2Day, or
  • UPS Next Day Air Early A.M., Next Day Air, Next Day Air Saver, 2nd Day Air A.M. or 2nd Day Air.

Beware: If you use an unauthorized delivery service, your return isn’t “filed” until the IRS receives it. See IRS.gov for a complete list of authorized services.

Another option

If you’re concerned about meeting the April 18 deadline, another option is to file for an extension. If you owe tax, you’ll still need to pay that by April 18 to avoid risk of late-payment penalties as well as interest.

If you’re owed a refund and file late, you won’t be charged a failure-to-file penalty. However, filing for an extension may still be a good idea.

We can help you determine if filing for an extension makes sense for you — and help estimate whether you owe tax and how much you should pay by April 18.