By: Jeff Quigley, CPA, Partner
If you were surprised by the outcome of your recent tax preparation, you may now be motivated to make some changes. You may decide to adjust your withholdings, commit to give more to the charity of your choice, or simply endeavor to better organize your records.
You may now have the time to take that same proactive approach to assuring you have identified all of your organization’s contracts. In some cases the accounting department may only know a contract has been signed when it processes the cash receipt or disbursement generated by it.
If your accounting department does not currently review all contracts prior to approval, there are a few steps you can take to assure you compile a comprehensive list of contracts:
- Establish policies to assure the accounting department is included in the contract approval process
- Periodically inquire with department heads regarding signed contracts with key service providers
- Periodically inquire with human resources department regarding any agreements regarding: employee compensation, royalty agreements and insurance related agreements such as premium stabilization reserves
- Periodically inquire with development department regarding contributions, grants, and promises to give received by the organization
- Review cash receipts and disbursement for systematic payments
Taking the time to compile a comprehensive list of active contracts can improve cash management, increase organizational awareness and reduce surprises.
Jeff Quigley is a Partner in Tate & Tryon’s Audit and Assurance Services department and can be reached at email@example.com.