Connecticut Businesses Archives - CironeFriedberg, LLP

The Strategic Role of the CFO

September 5, 2022 by Kevin Kearney CPA

The chief financial officer of a company has always had a seat at the table, but the current business environment combined with changes wrought by the pandemic make the role even more important today. CFOs, who are already dealing with the perfect storm of rising prices, higher interest rates, continuing supply chain issues and labor shortages, now must emphasize strategic planning more than ever. Building safeguards into a shifting landscape is hard, but there are ways to bring agility and flexibility to the role. Back in the old, pre-pandemic days, when things were normal, some CFOs felt comfortable just building their cash flow projections around busy seasons and slow seasons. That is no longer a viable way to build projections.

Today, CFOs need to think more strategically as they make their projections. They must think about how events are shaping results in different systems and how departments are affected by external factors such as production, supply chain issues, customer creditworthiness and buying patterns. What’s more, they need access to this information in real time so that company leaders can be agile and flexible as they respond to changes. Once the information is gathered, the CFO must use it to project data-driven cash flows in different “what if” scenarios based on understanding, for example:

The business and the business strategy.
Industry trends.
Supply and distribution issues.
Labor shortages.
Loans and other credit issues.

And the scenario-planning process needs to be ongoing, with CFOs consistently monitoring core financial and operational data. Fortunately, many enterprise systems allow information to be shared across the business’s functional levels and management hierarchies. Unfortunately, some key measures CFOs use to create scenarios are now in flux, changing the data points CFOs need to collaborate on with other C-suite executives as well as IT to get a clear picture of which financial and operational data points need to be measured and how the information can be gathered. (Part of this process is the relatively new responsibility of ensuring that the company has the right systems in place to report the information the CFO and other leaders require.) The scenario-building process has four main components:

Determine what needs to be monitored. This means analyzing the company’s historical data for a specific time period and assessing which variables drove change.
Brainstorm with the team (C-suite plus IT). This part of the process drills down to determine the company’s competitive advantages and disadvantages during the time period being reviewed. In all likelihood, there will be many items in each column. The team, under the CFO’s guidance, should narrow down the list to the most critical two or three items, which become the data points included in the scenarios.
Create the scenarios. Each scenario should be designed to assess the likelihood of its potential success or failure. For example, the scenarios should be built around situations such as:

What would happen to the company if there were a positive or negative fluctuation in demand.
What would happen if inflation continued or there is a recession.
What would happen if the labor shortage worsened or gets better.
What would happen if the company had difficulty getting the funding it needs.

Make decisions and monitor. The team relies on the scenario closest to reality when decisions are being made. The results are then monitored in real time so the team can adapt and adjust to any changes.

CFOs’ positions have changed from number crunchers to strategic partners, which means they must be proactive about, for example, what data points they monitor and measure and how they build their scenarios and make their projections. If you need to tap into this level of knowledge and experience but cannot add a full-time resource to your payroll, consider Outsourced CFO Services form CironeFriedberg. Learn more about our services and how they can help you make more informed business decisions.

If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford) or email us at info@cironefriedberg.com.

There’s a New Retirement Plan in Town

May 17, 2022 by Sandra Callanan CPA

MyCTSavings is a new retirement savings program sponsored by the State of Connecticut’s Retirement Security Authority designed to help the 600,000-plus private-sector employees who do not have an employer-sponsored retirement savings plan. It offers some of the best features of employer plans and IRAs but does not pose an administrative burden to businesses.

With MyCTSavings, employers can offer a retirement savings plan benefit, and employees can protect their financial future with a convenient savings plan. Participation in the program is completely voluntary.

Employees are able to set aside a portion of their paycheck into an individual retirement account that they fully control through online access. The plan is portable, so it goes with the employee if they change jobs or move out of state.

Employer Eligibility

All Connecticut employers with five or more employees whom they pay more than $5,000 in a calendar year are required by law to join MyCTSavings.
Employees must be at least 19 years of age to be enrolled in the program.
There are no employer fees.
Employers are neither required nor permitted to contribute to the program.
Signing up is quick, easy, and free.
There are registration deadlines. (See the chart here.)

Employer Registration

Signing up for MyCTSavings is quick, easy, and free. Once you sign up, MyCTSavings will notify you when it’s time for your business to register and provide an access code. At that time, you will need:

Your Federal Employer Identification Number (EIN)
MyCTSavings Access Code from your notification

Using Your Payroll Administrator

Employers that have registered with MyCTSavings may choose to use their current payroll administrator to provide information to facilitate the program. Vestwell is the retirement administration partner MyCTSavings uses. The employer portal integrates seamlessly with many existing payroll providers (e.g., ADP, Paychex, and more).

If an employer is not currently using a payroll system, they can easily enter and upload their payroll information. After initial setup, a business can assign administrative rights to additional users to facilitate the process.

You will need the following to set up an employer MyCTSavings account:

Your company’s EIN and the unique Access Code from your registration notification.
Your payroll provider’s name (if you use one) and your company’s payroll schedule(s).
Your company’s bank information for payments.
Your latest employee roster and accompanying personal information (employee name, contact info, date of birth, SSN, etc.). Payroll providers can compile employee information in advance using a template available on the MyCTSavings site.

Employers and employees can learn all about the program by visiting https://myctsavings.com/.

Cyberattacks Accelerate and Target Excel Users

February 24, 2022 by Teri Pough

According to Check Point, in the last quarter of 2021 there were over 900 weekly cyber-attacks per organization recorded. In 2021, there was a 50% increase in overall attacks per week on corporate networks compared to the previous year.

The Journal of Accountancy recently published an article on the alarming rise in cyberattacks occurring in the last three months of 2021 related to Microsoft Excel. The article cited the Q4 2021 Threat Insights Report from HP Wolf Security, which detected a 588% rise in campaigns using malicious Microsoft Excel add-in (XLL) files intended to infect computer systems. This is particularly alarming, as this number reflects an increase compared only to the previous three months.

Cyberattacks using malicious add-in files were deployed through emails with .XLL attachments or links. When the recipient opened the attachment or link, they were prompted to install the Excel add-in. Just one click activated the malicious malware.

The Threat Insights Report recommends three steps each organization can take to protect themselves for these Excel attacks:

Configure email gateway to block inbound emails containing XLL attachments
Configure Microsoft Excel to permit add-ins only by trusted publishers
Configure Microsoft Excel to disable add-ins

Cyberattacks can disrupt operations and put the finances and data of businesses at risk. For more information on this topic, see the reference links below.

What to Know About Audits and Financial Statements

December 16, 2021 by Sandra Callanan CPA

You will want to prepare your financial statements in accordance with an accounting framework that’s appropriate for your business. Most of the time, you’ll opt for a CPA to produce your financial statements. Getting an accountant’s blessing is especially useful when you are applying for more credit from a bank. Financial statements are intended to give you current information on your business’s financial standing so you can make more informed decisions. There are three levels of overview you can choose to take — compilation, review or audit — and what you select will have a lot to do with what your objective is.

The Compilation According to guidance from the American Institute of CPAs, a compilation is suitable for use by lenders and other outside parties who may appreciate the business’s association with a CPA. There is no assurance here, but the CPA will read the financial statements in light of the financial reporting framework being used and consider whether the financial statements appear appropriate in form and are free from obvious material misstatements. It may be appropriate when a company is seeking only relatively minor levels of financing and may have significant collateral.

The Review The next level is a review. According to the AICPA, the review is designed to provide lenders and other outside parties with a basic level of assurance on the accuracy of financial statements. The CPA performs analytical procedures, inquiries and other procedures to obtain limited assurance on the financial statements and is intended to provide a user with a level of comfort on their accuracy. A review might be the right move for companies seeking larger levels of financing and have more complex credit needs.

The Audit The highest level of assurance is an audit. The CPA performs procedures to obtain “reasonable assurance” (defined as a high but not absolute level of assurance) about whether the financial statements are free from material misstatement, according to the AICPA. The CPA is required to obtain an understanding of your business’s internal control and to assess fraud risk. Your CPA is also required to corroborate the amounts and disclosures included in your financial statements by obtaining audit evidence through inquiry, physical inspection, observation, third-party confirmations, examination, analytical procedures and other procedures. An audit is an annual requirement for publicly held companies and may be advisable for other companies seeking high levels of finance and opening themselves to outside investors.

How often will you want your CPA to peruse your finances? Overviews can be done in any frequency that is useful to you and your business, or required by law: monthly, quarterly or annually. Some folks say that your financial statements are more than snapshots of your business and can be seen as resources to tell you where your risks and opportunities are. Financial statements can help you identify and solve potential problems before they compromise the health of your business. Be sure to keep in touch with your accountant to decide which financial services are right for your company.

Restaurant Revitalization Fund – Are You Ready?

April 11, 2021 by David Moseman CPA

Author: Tammy Maguire, Director of Financial Services

On March, 11, 2021, President Biden signed The American Rescue Plan Act which includes a grant program specific to one of the hardest hit industries, restaurants. The Restaurant Revitalization Fund (RRF) is a $28.6B program focused on providing grants to restaurants to provide them with relief related to pandemic-related revenue losses. Eligible entities include: restaurant; food stand; food truck; food cart; caterer; saloon; inn; tavern; bar; lounge; brewpub; tasting room; taproom; licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products; or other similar place of business in which the public or patrons assemble for the primary purpose of being served food or drink. A restaurant that is publicly-traded or owned by state or local government is not eligible. Each eligible restaurant is required to have less than 20 locations, and each location is eligible for a $5M grant up to a cap of $10M per entity.

Unlike the Paycheck Protection Program (PPP), the RRF will be administered directly by the Small Business Administration (SBA). The SBA is working on technology to launch the program via an online portal directly within their site. The SBA anticipates the site will be available in early April.

Once the program is made available, it will target smaller restaurants first. During the first 21 days the grant is available, applications will be reserved for businesses with $500k or less in gross receipts in 2019 and businesses owned, operated or controlled by women, vets, and socially disadvantage. A business will also have to self-certify in good faith the grant is needed in order to remain in business.

Grant amounts will be based on the business’s reduction in gross receipts (2020 revenue less 2019 revenue). If a business was not in existence for all of 2019, the grant is determined by taking the average monthly sales for 2019 less the average monthly sales for 2020 and annualizing. Once the total grant amount is determined, any amounts received from the PPP in 2020 and 2021 will be deducted to determine the final grant amount.

During the covered period February 15, 2020 through December 31, 2021 (or a date to be determined by the SBA), the grant funds may be used for the following eligible expenses:

Payroll
- Principal and interest payments on a mortgage – not including prepayment of principal
- Rent – not including prepayments
- Utilities
- Maintenance including construction for outdoor seating
- Supplies including payments for PPE and cleaning supplies
- Food and beverage – in line with normal business activity
- Covered supplier cost
- Operational expenses
- Paid sick leave and
- Any other expenses determined to be essential to maintaining the eligible entity

Expenses cannot have also been claimed for PPP. If money is not spent by the end of the covered period, it will then need to be repaid by the end of the covered period.

If you are a Restaurant Owner needing the assistance of an experienced Controller but don’t currently have this resource on your team as you navigate through recovery, we can help. Click here for a Case Study to learn how we worked with a Restaurant client to help them control expenses and improve efficiency.

Scam Alert for Connecticut LLCs

November 11, 2020 by Teri Pough Leave a Comment

Businesses organized as Limited Liability Companies (LLCs) in Connecticut are receiving an official looking form entitled “2021- Annual Report Instruction Form” requiring payment of a “$120 annual report fee” from companies such as “C.F.S.” and “Workplace Compliance Services.” The form is being received via the U.S. postal service. The forms C.F.S. and Workplace Compliance Services sent to LLCs look like a real state tax form, so it is easy to understand how people could think it is official.

Scammers target small businesses and, unfortunately, this scam resurfaces every few years in an attempt to cheat hardworking business owners. If you receive a mailing of this kind from Workplace Compliance Services or C.F.S. it is a scam and no payments should be made. If your Annual Report needs to be filed with the State, please visit the Secretary of the State website. You can file annual reports through their online e-filing service.

The Department of Revenue Services, the Secretary of the State and the Attorney General are aware of this matter. If your business has received the bogus “Annual Report Instruction Form,” please make a complaint with the Office of the Attorney General at attorney.general@ct.gov and include a copy of the mailing. The Connecticut Attorney General is the state official responsible for legal action in all civil matters, which includes investigating consumer fraud or suspected consumer fraud occurring in Connecticut.

With the end of the year approaching and the upcoming tax season just around the corner, it is imperative to be on the lookout for potential scams. If you receive the above described notice in the mail, or any other notice, email, or phone call that you suspect may be fraudulent, do not respond until the information has been verified.

Contact your CironeFriedberg professional if you need assistance. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford), or email us at info@cironefriedberg.com.

The Strategic Role of the CFO

There’s a New Retirement Plan in Town

Cyberattacks Accelerate and Target Excel Users

What to Know About Audits and Financial Statements

Restaurant Revitalization Fund – Are You Ready?

Scam Alert for Connecticut LLCs

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