Tips for Year-End and a Smooth Audit Prep

By: Stephanie Berggren, Eide Bailly LLP

Year-end is always a hectic time. Your company is making sure that all required state and federal filings are done and internal documents are completed. Plus, to make things even crazier, you’re also starting to think about and prepare for your annual audit. Can you say overwhelming?

One question that is fairly common: How early is too early to start on year-end procedures? The answer? There’s no such thing as too early. We are in a world where activity happens every day that will affect your year-end and your audit, so paying attention and staying up to date is important.

So what does year-end preparation look like?

To get started, at a minimum, you should have a review process that documents when purchase orders are created, when bills are paid and when cash/checks are reviewed and deposited. This will help lay a solid foundation you can use to make sure you’re on the right track.

Monthly, you should be doing reconciliations for the following common accounts:

  • Bank accounts – this helps verify that all revenue and expenditure activity is captured in your records on a monthly basis.
  • Accounts receivable – this will help you make sure your customers are paying in a timely manner, and will also help with your collection procedures.
  • Accounts payable – this will help verify that amounts showing due are true payables and to make sure your vendors are getting paid timely. This may also help you take advantage of discounts given by your vendors for early payment.
  • Capital asset inventory – this will help establish that any capital outlays are added to your software and/or external schedule. This list is an audit necessity.
  • Payroll accounts (accruals and expenses) – this will help verify that payroll is being accounted for properly in the correct accounts.

Doing these tasks on a monthly basis establishes good review and control habits. It also gives you, or your accounting and finance team the ability to find and fix errors during the year – and before your auditors find them.

Now that we’ve reviewed what to do on a monthly basis, let’s discuss year-end. Annually, you should:

  • Review checks paid after year-end to make sure they are properly included in or excluded from your accounts payable ledger. This not only helps make sure your auditor isn’t finding any adjusting entries during their audit, but also helps ensure you have included all your expenses in the proper year.
  • Review old outstanding payables/credits to see if either payment was missed or if payments were misapplied.
  • Review your deposits received after year-end to make sure you applied payments to the correct customer and year.
  • Review old outstanding accounts receivable to see if an allowance is necessary for accounts that may not be collectible.
  • Update your capital asset listing for any disposals/deletions that have happened. This can be done by having each program/department/etc. do physical counts of their assets and submitting that to the finance department or selecting a lucky individual to verify the entire list.
  • Review year-end adjustments, usually prepaid, accruals, and current versus long term debt, which are required for the audit. This is the last part that has an impact on your findings if the auditor is the one posting these journal entries. Below are a list of accounts that are usually adjusted:
    • Prepaid rents, real estate taxes and insurance
    • Accrued payroll and taxes
    • Compensated absences
    • Long term debt (car and equipment loans)

Because you have accounted for your monthly procedures, your year-end procedures should become less burdensome since those issues were addressed throughout the year (and who doesn’t want an easier year-end?). With the confidence that your company gains from knowing you have reviewed and reconciled your financial information, you are able to concentrate on accurately and confidently preparing your financial statements.

Year-end work can be time consuming and sometimes tricky. If you need to save time or need help figuring out where to begin, let us know. Ours numbers nerds are no stranger to this type of work – and they even enjoy doing it!


How Accountability Can Help Your Organization Succeed

You have a lot of great ideas, but nothing’s really getting accomplished. Or, you’re trying to move things along on a project, only to find out no one really knows who’s in charge of the project.

Welcome to the need for one of the most important aspects of a successful business. ACCOUNTABILITY.

Why you may ask?

Accountability provides the roadmap to get things done.

When there is accountability in an organization, the employees know what is expected of them and what they can expect from the organization. Not only does accountability help foster a positive work environment, it also helps increase the overall performance of the business. Who doesn’t want that?

So how can you create accountability in your business? Here are a few tips:

  1. Have clearly defined roles and responsibilities. Do your employees know their place on the bus? Do your employees know what their overall responsibilities are? How about their day-to-day expectations? Do your employees know what their critical success factors are?Critical Success Factors – what an employee needs to accomplish to succeed and help the business succeed.
  2. Give your employees a sense ownership. Do your employees feel that they are a part of something bigger; that their performance matters to the business as a whole? Do they feel they have control over the measurements they’re being evaluated on?
  3. Build a trusting team environment. Do your employees feel they are able to give and receive feedback without ramifications? Do your employees feel they are able to seek information from other team members?
  4. Give your employees the resources and knowledge to make decisions. Are your employees empowered to make day-to-day decisions regarding tasks? Do they have the freedom to make those decisions?
  5. Don’t make it about punishment– rather, make it about improvement. When your employees fall short, are you the first to point it out and yell? Do you provide constructive feedback about ways to improve or hit the mark next time? Are there incentives for a job well done? If your employees fear failure, you will lose qualities like innovation.
  6. Make sure you have a performance evaluation in place. Do your employees know what they are doing well? How about areas of improvement? Do they know the value they bring to your business? Feedback (constructive, of course) in the workplace is invaluable. In addition, it’s a good idea to have multiple forms of feedback to ensure a fair evaluation. Sources of feedback can be from customers, key metrics, supervisors, peers, and/or subordinates. The feedback can be in the form of surveys, dashboards, roundtable discussions, etc.

In summary, accountability is one of those characteristics a truly successful business needs. It provides traction to achieve your goals and vision. If no one is accountable for the success of your business (other than you), it will be hard to steer the bus in the direction you envision it going. Need help? We have the resources to help you create accountability in your business.

Why Legal Help Matters

Guest Blog by Adam Wogsland, Attorney at Law, Severson, Wogsland & Liebl PC

 If you plan to start a business, you should get a lawyer involved right away. Why, you may ask? Well, here are just a few of the main reasons:

  1. Lawyers Save You Money.

Successful businesses know the value of time and allocate resources accordingly. We’re going to go out on a limb here and guess that you probably didn’t get into business to read legal documents. So you can spend the time reading laws and regulations to put your company on solid legal footing, or you can hire a lawyer who already knows how to do it.

For instance, every new business needs to form an entity. If you don’t form your entity correctly from the start, you’ll be dealing with it continually until it gets fixed. And as fun as that sounds, a lawyer could have helped you do it correctly the first time. The time you save and the peace of mind you have knowing it’s done right will outpace what you will spend on an attorney.

Still don’t believe us? Here are a few tips on how to save money by hiring a lawyer:

  • Get a lawyer involved early. If you get a lawyer involved late, chances are that the lawyer has to fix something or that a filing deadline has been missed. This means lost time on your side and more money to pay for your lawyer’s time to fix the problem. As a general rule, prevention is cheaper than fixing, and both are cheaper than fighting.
  • Be organized. If you do not have your thoughts and documents organized, then you will be spending money on your lawyer organizing everything for you. Organization by a lawyer is an inefficient use of your money.

 2. Lawyers Reduce Your Risk.

Successful businesses reduce risk in all forms. Without a lawyer, you may not choose the right type of entity. You may undercapitalize. You may fail to observe corporate formalities. You may not properly organize governance of your entity. You may not properly govern your entity. You may not file the correct regulatory or licensure documents with the state or federal government. You may not structure and operate your entity in a way to avoid personal liability. You may not have the right documents memorializing the relationships between the owners in the event of a dispute. You may not plan for impactful contingencies like disability, death, bankruptcy, termination of employment, or divorce. You may not implement measures to reduce your employment liability risk. Lawyers will help you plan for and reduce these risks.

The risks are real. Liability protection is not automatic. Courts may disregard the corporate entity and allow creditors or plaintiffs to pierce the corporate veil if your entity is not structured and operated pursuant to the law. This means you (as the owner of the business) will be held personally liable for the entity’s debts and obligations. To drive this point home, this means your judgment creditor can reach your personal assets: personal property, deposit accounts, pets (yes, you read that right. Pets are personal property), cars, boats, homes (in North Dakota, any equity over $100,000.00), ERISA qualified plans like IRAs (in North Dakota, amounts over $100,000.00 for each plan; $200,000.00 in the aggregate), and wages.

3. Lawyers Provide Non-Legal Value.

Successful businesses know the value of relationships. We’ve seen many different clients in many different business spaces confront many different issues. Even if it’s not a legal problem and we will not be directly involved, we can help you find someone who can help. It’s good to have a network of trusted business advisors on your side.

Adam Wogsland is an attorney licensed in North Dakota and Minnesota and concentrates on helping small and medium sized businesses. This information is for informational purposes only. Please contact a lawyer to discuss the specifics of your situation.





Top 10 Fraud Tips

By Liz Johnson, Forensic Accounting Manager

A list of easy and effective safeguards for entrepreneurs and small business owners to follow:

10. Review bank statements and all cancelled checks on a monthly basis.

9. Make daily deposits of cash and check. Also, keep cash and checks secure until they’re in the bank.

8. Approve employee hours before payroll is processed and review payroll reports on a regular basis.

7. Insist that full time employees take mandatory vacations of at least five consecutive days per year.

6. Purchase employee dishonesty coverage.

5. Look over monthly company credit card statements and corresponding supporting receipts/documentation for employee issued credit cards as well as employee expense reimbursements.

4. Require individual usernames and passwords for accounting system access. Turn on audit trail features and restrict employees to specific functions within the accounting system relating to their job functions.

3. Install security cameras in high risk areas such as where cash, inventory and equipment are located.

2. Implement a fraud policy in the employee handbook.

(The Association of Certified Fraud Examiners has a sample fraud policy available on their website.)

And the number one tip for preventing fraud is …

Drumroll, please.

1. Don’t allow employees to use your signature stamp. It is your signature. And keep it in a secure location, such as a safe or locked drawer that only you have access to, when you are not using it.

Fraud Top 10




Takeaways from #SWNDWomen

Last weekend we were honored to be part of North Dakota Women’s Startup Weekend. There was so much inspiration and innovation. From hydroponic technology to help end the obesity crisis to jingles for your loved ones and more, it was a truly engaging weekend. For the full scoop on the projects and winners, check out Emerging Prairie’s recap.

Here a few of our takeaways from Sunday’s final presentations:

The need for good people. We’re not going to lie. We can’t imagine how stressful and exhilarating it must be to put together a startup in 54 hours. It probably helps when you have good people on your side to help you make your dream a reality.

The same can be true for any startup (not just those built in a condensed timeframe). “The number one difference in the success of a startup is people,” said speaker Mari Baker (learn more about her here). “A good hire makes all the difference in the world.”

Build a culture, not just a business. Yes you have to have a product or solution. Yes, you should probably have a business plan so you know where you’re attempting to go. Yes you should have an understanding of your finances.

But you also need to have culture in place to help drive your company. “Culture trumps strategy every time,” said Baker. It’s important to put it in place early on so that as your startup grows, you don’t lose sight of who you are at the heart of your company.

Don’t forget about YOU. You’ve put a lot of time, effort, blood, sweat and tears into this dream of yours. You’ve worked hard. But along the way to seeing your dream become a reality, don’t lose sight of YOU. According to Baker, one of the keys to success is being able to take care of yourself first. She likens it to the security talk on an airplane: put your oxygen mask on before helping others.

Further, know where your strengths are … and where they’re not. Come on, no one is perfect. Identify areas where you have weaknesses and hire people who have strengths in those areas. A well rounded team who has the ability to learn, adapt and adjust along the bumpy startup way is key to success.

And a few more …

  • Fail fast.
  • Life ebbs and flows. Try to achieve balance over time.
  • Always ask: Who are the smartest people? Work with them.


Cheers to everyone involved in _SWNDWomen




Bootstrap Boogie

In honor of Leap Day, we’re featuring a local entrepreneur who took the leap, pursued his passion and started his own business.

Guest Blog by Mike Dragosavich, CEO of Spotlight Media

If there was a song called “Bootstrap Boogie”, I would have been line dancing to it for the last six years.

Definition of a Bootstrap Entrepreneur:


(of a person or project) using one’s own resources rather than external help.

The fact that I started a company with little capital was both the most frustrating and fulfilling situation that I could have ever imagined. I am extremely happy I decided to take that path in business and, while I know this might not be the best path for every business, it was important for me personally and for my business model.

With no money to operate outside of paying essential bills, my focus was always on finding ways to execute and grow without investing financially. The one resource I had on my side was time. I was willing to work 16 hour days and seven days a week. I think, if this wasn’t the case, there is no way I would still be in business. As I was getting kicked out of coffee shops at closing time because they were the only source of Internet I had, I found many ways to execute daily tasks and tactics for minimal cost.

Here are some alternatives I found.

  1. Free alternatives: Instead of using a software design program to design the magazines, I found free alternatives that offered design solutions but maybe not for print. I improvised with their tools and created a workflow that I needed to design print magazines. The software I used was, which is intended for website design. I used it to design a magazine. I’m pretty sure out of the millions who have used Wix, no one used it like me!
  2. Favors: In my free time I learned how to develop WordPress blogs and websites by watching tutorials on the web. I needed a website for my company so this was a way to save money. But, I figured I could use some of my free time to develop websites as a favor to some established business owners that allowed me to gain some great relationships. Some of these business owners became mentors to me. I did not expect anything in return but maybe advice and support in any way to my mission of providing a magazine with resources to the community.
  3. Reports: A situation I am in now is that I have come to a point in business where I rely heavily on spreadsheets. Unfortunately I never took the path in the past that promoted education in Excel or other spreadsheets.  With knowing that my future as a CEO will rely heavily on my knowledge base and execution of metrics in a spreadsheet I immediately went into search mode.  Meaning I showered the internet for spreadsheet solutions with more user friendly features and possibly direct connected features geared towards my specific reports.   Just weeks ago I found a free solution that has the exact technology I was looking for.  I was able to immediately input information and generate reports without spending hours just trying to figure out how to organize cells.  Annoying!  Check out or
  4. Trade goods or services: Now this is a slippery one.  When we trade something with another company we need to be very careful to report everything (Mike’s right. Learn more here).  If we execute it correctly it is one of the best ways to save money.
  5. Tutorials: Today, you can basically have a college degree level education by watching videos online.  It’s amazing.  Example:  Instead of paying two designers to take on the extra design work I watched 120 hours of tutorials on Adobe InDesign (Magazine Design Program).  This allowed me to not only help fill the gaps where design was needed but I also took on an incredible understanding of the program and process.  This understanding has helped with understanding how to hire the right designers and where we can save money and become more efficient by utilizing the software to it’s full potential.

Some tools and tricks I use to get results without large investments:

  • CouponMate: This Chrome Extension searches for coupons on a site and gives you the best possible matches. I’ve used it on sites like Mailchimp and GoDaddy.
  • Calling the companies: It’s amazing what a simple phone call can do, even to some of the biggest companies. When I sign up for a service or product, I usually get on the phone with customer service and see if there are ways to drive the price down or find some hidden promos. Also, I sometimes ask if they have any “beta” programs out there that I could try for free. (Bonus: I always ask if companies would be willing to write on their blog about how my company uses their products or services. The value there is obviously free publicity but also you can get quality backlinks to your website, which Google really likes for ranking your site on search engines.)
  • Join perk based organizations: I recently joined  It’s about $300 a year.  The program caters to founders of companies and provides over 200 discounts on popular goods and services geared towards helping companies start and grow.  I estimate that I have saved over $3,000.00 with this on travel, technology programs and office equipment.  Example: members receive 25% off all Avis rental cars.

While I tried to bootstrap as much as I could, there were some tools and resources that were worth the investment right away:

  • Chamber of Commerce: I remember cashing in quarters to pay for a $25 entrance fee to Business After Hours. I ended up bringing on two new clients that night. Since then, my company partakes in most of the events and programs they provide. I can safely say the Fargo Moorhead West Fargo Chamber of Commerce has been one of the best reasons for our success and growth.
  • Quality Products: I am a huge believer in quality over quantity in my business. I spent a majority of my profits in the first five years improving the quality of my products. I travel the country attending and speaking at niche magazine conferences and nobody can believe the quality in our products for free local publications. There were hundreds of times I could have sacrificed quality and stuck that money in my pocket. I’m glad I didn’t.

As with any journey, there are always lessons learned the hard way. Here are two that I really should not have bootstrapped:

  1. Accounting: In the beginning I underestimated bookkeeping and accounting. I thought I should find the mom and pop firm that was the cheapest to help out because I thought my books were basic and simple. I didn’t realize I could have been using my numbers to make decisions, or setting my books up for success as I grow the business. I performed and learned every other aspect of my business but the numbers. BAD IDEA!
  2. Human Resources: I underestimated the complexity of human resources and frankly thought I didn’t need to worry about it with only a couple employees. For a few years I was guessing on important decisions involving employees.

Overall, I don’t believe I had the perfect recipe for success and growth, but I think I found a good balance of street and book smarts. I chose to be patient in growth. Now I’m at the stage of business where if I want to grow any further I need to rely on book smarts and professionals.

An Ode to Kicking “Butt”

1 Million Thanks 2016Okay, we’re not going to lie. We’re pretty proud to have won the Kick Ass Award at 1 Million Thanks (read more about it and all the other great honorees here). No, it’s not because we like having an excuse to use the adult version of “kick butt” around the office and in every day conversation … okay, fine, that’s not the only reason.

We’re proud because we believe hard work should be honored. And believe us, we’ve worked hard this past year. We’re working hard to change a mindset. Externally, we often hear we’re intimidating or boring accountants who talk in jargon. That’s why we’re trying to talk differently and really help you understand and embrace your accounting journey (yes, we just said that). To learn more, subscribe to this blog.

We’ve also heard that we’re too big. Well let’s be clear on this, we love working with startups, entrepreneurs and small to mid-sized businesses. We have a lot of resources and nifty people who are more than willing to help you imagine what’s possible through our Possibilities Center (see what we did there?).

In addition, we’re working hard to share our story. Because you see, our story is pretty cool.

In 1917, our business started because of the dream of an entrepreneur right here in Fargo. In May 2017, we’ll celebrate our 100 year anniversary (man we’re old, but you have to admit, some of us look pretty good). During that time, we’ve grown from a one stop shop in Fargo to a Top 25 CPA Firm in the nation with over 1,600 employees (yeah, there’s a lot of us EBers around) in 29 offices in 13 states. And we’re still headquartered right here in Fargo.

While we’ve come a long way, we also know that, to reach the next 100 years, we have to adapt and innovate. So we’re more than proud to have won the award. We’re also truly honored and INSPIRED.

In the past year, we’ve learned so much from so many of you and it has changed our thinking and altered the way we do business.

Here’s just a few of the lessons we’ve learned along the way:

  • It’s really fun to host parties with fabulous people. Our first foray into the entrepreneurial ecosystem in Fargo was Startup Weekend. What a kick off it was. We heard amazing pitches and celebrated with some of the brightest in Fargo Moorhead. It was a stinking blast.
  • Collaboration is so important. We’re proud to call ourselves members of the Prairie Den and partners with the NDSU Research & Tech Park. Through these collaborative efforts, we’ve met amazing people and fostered relationships that (we hope) are beneficial to both parties. We’ve seen new businesses form and grow and have been honored to even be part of the ride on some.
  • Dreams really do come true. It’s unreal to us the amount of cool things happening in Fargo. The people who wake up and decide to make their dream a reality. From Cooper’s Protosthetics research to Girl Develop It, from Co.Starters to Emerging Leaders, we’re thinking our future looks pretty stinking bright with these dreamers. And don’t even get us started on the kids in The Chamber’s YEA! Program.
  • It’s all about community. There are people all over this area who are building a community they want to live in (we’re looking at you Emerging Prairie). There are entrepreneurs making things happen and starting new companies. But there are also community partners coming alongside and lifting these individuals and companies up and collaborating with them to build a better place for all. It’s a beautiful thing to watch.

So before this gets too mushy, we’ll just say this. You inspire us. Thank you for sharing your stories with us, for coming to parties with the numbers nerds and for genuinely caring about your community. Thank you for taking this almost 100 year old company along for the ride and helping us rewrite our story. We think you’re pretty kick ass (or butt if you prefer) too.