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Strategic planning vs. long-range financial planning: Successful associations need both


In association management, there is a difference between strategic planning and long-range financial planning, yet they are both necessary to ensure the overall financial health and growth of the association.

We consider long-range financial planning as an inwardly focused look at your association’s goals and objectives. It is an extension of the one-year planning budget with a timeline of at least three years and is simply a prediction of future revenues and expenses based on past events and the “predicted future.” A long-range plan doesn’t take into consideration any social or political factors, assumes a stable future market and is numbers-driven. The long-range plan is important because it sets the process by which the strategic plan will be achieved.

At AMPED, we make sure we begin our client budgeting process at least three to four months prior to the cleint's fiscal year end. We begin forecasting their current fiscal year about four months prior to their fiscal year end so they have an idea where their year will end compared to their budget. This is important so that steps can be taken to reduce expenses should the forecasted revenues fall below budget. Another aspect of our monthly reporting is cash flow forecasting, usually one year into the future. This is very important if the association has invested in new and significant initiatives that are cash heavy upfront with revenue being generated at a later time. Will there be enough cash until that revenue is generated?

Strategic planning is much more complex and crucial to the ongoing success of the association. A good strategic plan will ensure that your association is quick to respond to a changing environment. The strategic plan assesses the larger forces in society including social, natural resource and political factors. Your plan needs to address what your association’s situation is, what your association wants to achieve and what needs to be done to achieve your goals. The strategic plan is idea-driven and more qualitative and needs to provide a clear vision/focus for the association. It is a framework and way of thinking rather than a set of procedures. The strategic plan should be developed cooperatively between the board of directors or a strategic plan committee (subset of directors) and senior staff.

All of our clients have strategic plans in place which continually evolve to meet changing external factors. Don’t forget the financial impact. And remember to consider cutting rather than always adding!

How is the health of your association?

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Are you doing what you can to be ready for retirement?


Following are a couple of tips, both for those in the early stages of their career and those of us getting closer to retirement.

To you young people out there, it is never too early to start saving for retirement. Here is a great example of how the value of your “nest egg” depends on when you start that savings.

A 25-year-old begins investing $5,000 for 11 years until the age of 35. Total invested is $55,000 but at the age of 60, the value of the retirement savings is $615,580 based on an 8% return. Imagine what that would look like if that 25-year-old kept it up until age 60! Next, a 35-year-old begins investing $5,000 and continues saving $5,000 per year until the age of 60. Total invested is $130,000 and retirement savings value is $431,754. So the 25-year-old only invested $55,000 and returned $615,580 where the 35-year-old invested twice as much and ended with $431,754.

It makes a huge difference if you are able to start early. If that isn’t an option, don’t despair, start now and put away as much as you can. Adjust some of your other spending habits to accommodate it. You won’t be sorry.

Perhaps a really easy way to increase the investment in your retirement savings is to take that annual raise or potential bonus and put at least half of it into your retirement savings. You won’t notice it gone because you never had it to begin with.
Remember if your company doesn’t provide a 401k or IRA plan, you still have the option to contribute to an IRA savings on your own.

Now, I admit, I am closer to retirement than I am to the start of my career. The big thing I have been working on is to get my investments consolidated down into two places. Throughout my career, with each successive move to a new employer, I would leave my old employer-sponsored 401k plan in place . My theory was that if I had my money stored in different retirement plans, I was diversified, right? The next thing I knew, I had money in eight different places. Well . . . as we age, having several different plans to manage becomes less and less of a good idea. Do you really want to go into retirement and have to deal with eight different investment companies? NO. You can still have a diversified portfolio without having your money in several places. So I set about getting all of my ducks into two ponds. Ahhhh, much easier to monitor the progress of two 401k’s rather than eight.

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Emotional intelligence in the workplace

social intelligence

Emotional intelligence is something that all of us should spend our entire life striving to improve. Very few people will be naturals but the important thing is that we all make a concerted effort to become better at it.

Emotional intelligence is having the ability to understand and regulate your emotions. It also includes being able to read and understand what others are feeling and expressing. When you are emotionally intelligent you’re able to communicate effectively, empathize with your co-workers, and diffuse conflicts that arise, all of which are important skills to have when interacting with others socially or in the workplace.

Being emotionally intelligent encompasses four attributes: self-awareness, self-management, social awareness and good relationship management skills.

Self-awareness is being able to recognize your own emotions and how they may affect your own behavior. Part of being self-aware means that you can recognize your own strengths and weaknesses, understand how to utilize your strengths.

Self-management involves how you might control your emotions, feelings, and possible impulsive behaviors. When you are self-aware you recognize your emotions and when you can self-manage you see those emotions and are able to direct them in ways that are positive and productive. Being able to self-manage also indicates that you will be able to adapt to changing circumstances in the workplace. I still struggle when it comes to these concepts. Too often, I let my emotions get in the way of rational thoughts. The key is realizing my weakness and willingly continue to work through the weakness.

The next two attributes involve some external abilities.

Social awareness involves seeing others’ emotions and concerns, being able to properly understand communication, body language, and being able to pick up on social cues. Social awareness helps people to be able to pick up on power dynamics within organizations, as well as be comfortable in social settings.

Relationship management involves using your social awareness skills to communicate, develop positive relationships, maintain those relationships and inspire and influence your co-workers or employees. When you have good relationship management, you are able to work well in a team and manage conflict in ways that move the team or organization towards its goal.

Someone with emotional intelligence can inspire and motivate others. Many organizations are now using emotional intelligence tests for their incoming candidates. It is becoming a popular idea and some believe can be even more important than IQ or technical abilities.

There are some basic techniques that will help you be more emotionally intelligent:

  • eye contact
  • attention to nonverbal cues
  • focus on the other person(s)
  • use humor
  • active listening
  • forgive
  • focus on the present rather than past issues
  • when asking questions-listen for the answer and try not to interrupt
  • give yourself time to cool off before discussing an issue
  • write your thoughts and feelings down to give yourself a chance to process them.
  • perhaps a concept to keep in mind for increased opportunity in your employment, allowing better relationships with those in your life.

No matter how old/young we are, there is always room to improve our emotional intelligence. I have to continue to remind myself not to fire off that email reply while my emotions are still “talking” to me. No matter how “bothered” you are by a comment/email, remember to give yourself time to cool off before addressing the issue. Write down positive and negative thoughts so that you can best formulate a response that will make your point in a positive manner. There is always a way to turn a negative into a positive, the hard part is becoming good at finding that way.

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Going electronic: How this accountant got converted


This is the electronic era, so we should be storing files electronically, right?

But I like my paper files, I say. I am much more comfortable with paper and file folders.
Well, that’s wonderful if you are in the office and can physically access those paper files. But, what if you need to work remotely? Not so good.

While I argued many years for paper, due to a recent move and remote work set up, I am now understanding just how convenient it is to have the files you need stored in “folders” on your network. Now, when someone asks me to email them a document, instead of saying “I will get it to you as soon as I scan and email it,” I say “I will have it to you right away.”

AMPED has developed a system of saving and storing all our files in electronic format, including the biggest storage user of all — paid bills. We have an efficient system of scanning bills to an “inbox,” then to QuickBooks and finally an electronic “paid bills” folder. When the check is written, we add the check number to the bill description.

And we’re not stopping there. Our next step toward complete electronic filing will be integrating to download bills and checks paid into QuickBooks, further reducing storage on your own servers. Here’s the process: Bills are entered into and accessible to whomever would otherwise sign the checks. There, the bills are authorized for payment by the signer. Finally, the checks are printed. No more need to make sure a signer is on hand for that last-minute check request; she can authorize payment from the airport on her way to an important meeting. Need a copy of the bill? Just download it from “the cloud.” Further, electronic bank statements with corresponding electronic reconciliations will be easy for the organization’s treasurer to review and approve.

Consider converting your paper file system to an electronic system. As long as you can log in to your server remotely, you’ll always have access to all of your important files. If I can become a convert, so can you!

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How to survive your year-end audit


Years ago at the start of my career, I was an internal auditor for a large company. We always planned “surprise” audits to our branches so we definitely were not a welcome site. Even then, however, I realized that we were just doing our job and trying to ensure that processes were in place that provided protection to our assets.

Fast forward a few years and I came to the other side of the audit fence. I am pretty sure that the beginning of my career is one of the reasons I am comfortable with audits. Don’t despair if this is not how you began. The more times you go through an audit, the easier it gets. Just remember, the auditors are doing their job to ensure processes are in place to protect the assets of the organization. The most important thing to remember is that auditors are not the enemy, they are there to help the organization and to provide important recommendations.

Usually your auditors will provide you with two lists. One list will include items they need a couple of weeks before the fieldwork begins. They will also provide a list of what they would like upon arrival. Reviewing these lists as soon as they arrive will allow you time to think about how easiest to accomplish what they need in the timeframes provided. The best advice I can give is to not wait until the last minute to try to get everything together. Begin as soon as you can, even if it is only an item here and there.

Make sure that all of your balance sheet accounts are reconciled. They will review each of these. They will also look at year-to-year comparisons of both balance sheet and income statement accounts. Likely, they will ask about variances beyond what they consider normal. One very important thing to remember is that if you don’t know offhand, tell them you don’t know and go back and research it. Many times, they may ask something of you that would be better answered by a colleague within the organization. Enlist others to help! You are the main contact for the audit but you don’t have to be the one with all the answers. If you have a responsible auditor, they would prefer that you allow them access to the expertise that surrounds you. I am a numbers person, I have no clue how meetings are run, how many attended, etc. Let those with the knowledge assist.

The hardest thing for me to produce is the breakdown of expenses by functional allocation. This is required for the 990. It helps if your staff tracks their time by admin, member development, meetings, programs and marketing. Your auditor is there to help you distinguish and provide insight that will make your future audits much easier.

One thing to keep in mind with a not-for-profit organization is that there could be certain types of revenue that are considered unrelated business income. That portion of your business may be subject to income tax. For example, if you have a newsletter or directory in which you sell advertising space, you will likely be subject to unrelated business income tax (UBIT). Again, your auditors will assist you in coming up with an income statement that will support the UBIT.

The auditors are usually onsite for two days and then will likely have a few follow up questions. The process from audit to tax returns and financial statements can take a month or month and a half so be patient. Your auditor will have you sign an extension for filing if you are getting near the due date of four and half months past your fiscal year end.

Find an audit firm and audit staff that you work well with. This is very important since audits could be an annual event. Make use of their expertise, don’t be afraid to ask them questions. I enlist their help with questions throughout the year. They really are there to make processes more smooth and to ensure that all assets are protected. They are not the enemy.

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For finance and accounting personnel, year-end tasks can be daunting — A checklist to keep you on track

Tasks and deadlines related to payroll

  • Review employee information that can affect W2 reporting such as name, address and social security number. Check for eligibility to your company’s retirement plan. Don’t forget about terminated employees. If they worked during the year, they will also receive a W2.
  • Many employers pay year-end bonuses. Make sure you schedule enough time for this task. Remember to remove discretionary deductions from the employee bonus checks such as health insurance, dental, etc.
  • If your company provides more than $50,000 in life insurance to employees, remember to tax the difference on their final check if you are not already doing this each pay period.
  • Many employers will be required to report the cost of their employer sponsored group health plan coverage on the employee 2013 Form W-2. This reporting is informational only, showing the value of the employee's health care benefits, and does not affect the employee's tax liability. Employers who filed 250 or more Form W-2s for the 2012 calendar year will be subject to the reporting requirement on W-2s for 2013.
  • If your company has disability plans and any employee has used these benefits during the year, you may have third-party sick pay to include on W2s. This also affects employer FICA and Medicare.
  • Print and distribute your W2s to employees no later than Jan. 31 of the following year.
  • 941 reports for the fourth quarter are due Jan. 31 of the new year. Remember tax payments are due before that based on your payment schedule.
  • Unemployment taxes are generally paid quarterly and will be due Jan. 31 of the following year.
  • Remember to file your quarterly unemployment report as well as your annual 940 (Federal unemployment). Both reports are due Jan. 31 of the following year.
  • IRS and state copies of W2s are due no later than Feb. 28 of the following year.
  • Verify your 1099 information for reporting. You should have been requesting W9 forms from your vendors throughout the year so you have their EIN on file. If not, take some time to get in touch with them to provide you with this information. 1099s are due to the vendors no later than Jan. 31 of the following year. State and federal copies are due no later than Feb. 28 of the following year.

New Year planning

  • It is recommended that employees review their W4 withholding and make changes if necessary.
  • Many employers provide pay raises at the beginning of the year. Before processing your first pay of the New Year, make sure you have the updated salaries. This could also include changes in discretionary deductions such as health care, dental, etc.
  • You will have received your new state unemployment rates in November-December. Make sure to update in your payroll system before processing the first payroll.
  • Update your sick and vacation pay prior to processing your first payroll.
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