With the amount of financial info you have to track, a spreadsheet is one of your most potent tools. But the more important (and complicated) a spreadsheet is, the more likely it is to have one of these major flaws. The good news: They’re all fixable. And those fixes can help you work more efficiently in the long run. Here’s what to look out for:

1. Hidden errors. No matter how well — or often — you check, a big complicated spreadsheet is bound to have some errors sneak in over time. And it’ll happen twice as fast if it’s a worksheet that multiple people have access to.  The fix: Periodically use one of the many programs that searches spreadsheets for cells that have missing formulas, broken links, references to empty cells, etc.
2. Too many chefs stirring the pot. There may be good reason for a dozen people to have access to see a spreadsheet — but chances are they don’t all need access to input data. Whenever possible, use Excel’s existing features (such as password-protection) to limit access to “read-only” for key files that need to be shared among many people.
3. Not knowing who did what. Even if access to input data into the worksheet is limited to only two trusted people, there may be times when it’s not clear which version of the spreadsheet is the last one. Make sure you have a system in place to track who made what changes and when. (For larger departments, software is available to handle this. For smaller companies, you may be able to get by with a solid naming/”save as” system.)

Chances are you’ll face more security threats this year. Are you ready?  Whenever the economy slumps, more would-be fraudsters are minted. Part of it is that people are desperate for money and get tempted by the apparent ease with which they can steal.

Others take advantage of everyone else’s fear, and use seemingly legit offers to con people — and companies — out of their money.

There are signs it’s already happening. The SEC has pursued 88% more enforcement actions related to securities fraud this year than it did in 2006. And the FBI recently said it expects its fraud investigations to increase from 38 cases last year to hundreds in the next year or two.

Internal solutions to internal and external threats

No matter how unlikely it seems that Betty in the next cube could be embezzling, or that a fake vendor could get its invoices approved and paid, it’s smart to take preventative steps now.

Your best bet is a two-prong plan to ensure that:

• no one inside the company has the ability to commit fraud, and
• if anyone from outside attempts financial shenanigans, that you’ll be able to catch it right away before any damage is done.

Start by doing an internal review of procedures to find any weak spots and shore them up first. And if you were debating any changes to procedure that might tighten controls, start implementing them. (Upper management isn’t going to grumble about changes or time lost if you can explain how this will help save money long-term.)

Once Accounting has done its part, there’s still one more step: Explaining the changes to other departments. If they aren’t on board, your controls won’t be fully effective.

Granted, you don’t want to give away too much detail — otherwise, you could actually make some types of internal fraud easier. But there are  a few key things you’ll want to communicate to employees:

• Controls have been made even stronger, and their compliance with new procedures is expected
• A way for them to report any suspicious activity they see so it can be investigated, and
• A list of fraud prevention red flags so they know what to look for when dealing with people outside the company.

Are you worried about more fraud attempts this year? What are you doing to shore up your procedures? Share your ideas in the comments.

• New withholding rates. The “Making Work Pay” tax credit will most likely be implemented by having Payroll make two withholding adjustments: one in June of this year, and another at the start of Jan. 2010. (The maximum credit each year is $400 for singles. Because the ’09 credit is effective mid-year, the weekly withholding will have to be re-adjusted in 2010.)
• COBRA coverage/reporting. Employees who are terminated between Sept. 1, 2008 and Dec. 31, 2009 are eligible for lower premiums on their COBRA coverage, starting Feb. 17, 2009. Eligible employees will now pay 35% of the premium. The rest will be paid by the employer — but you can recover the subsidy through a credit on your payroll tax deposits. (Note: The subsidy applies only to former employees whose income is less than $125,000 a year; or family income of under $250,000 a year.)
  That creates a few tasks for Accounting and Benefits pros: You’ll need to contact eligible former employees who rejected COBRA to let them know they are eligible at the new lower rate. You’ll also need to get up to speed on the reporting fast, since the first round is due for 1Q ’09.
• Monitoring COBRA reimbursements from the feds. Related to the point above, if your COBRA premium subsidy is more than your tax deposit, you’ll have to request — and wait for — reimbursement from the feds. So far, there’s no word on how quickly that will be processed.
• Transportation fringe benefits. The new monthly limit on benefits for transit passes and vanpools has been increased to $230 per month, the same as for qualified parking. It’s in effect from March 2009 through December 2010.

In addition to these changes, you can expect employees will be confused about what they’re eligible for, what forms they have to fill out, etc. Be prepared for a slew of e-mails and phone calls. In particular, you may have many more employees who want to update their W-4s due to new tax credits that were tucked into the non-business portions of the law.

Consider putting together a resource you can hand out to answer the questions you’re more likely to hear. Even an e-mail with some links to IRS information releases can go a long way toward reducing how many times your phone rings over the next few weeks.

You can see the entire text of ARRA here.

The catch: The form is real. The fax number isn’t. But like all tax forms, it asks for information (Social Security Numbers, bank account numbers, addresses, etc.) that would be a gold mine for fraudsters.

We can’t say it often enough: IRS will not contact you directly via e-mail. Only press releases, public notices, etc, are sent electronically. If you get an e-mail from IRS don’t click on any links, don’t reply and don’t call any numbers listed in the message.

When in doubt, call IRS (using numbers you’ve looked up on your own).

And forward any IRS-related phishing messages to phishing@irs.gov so they can be investigated — and hopefully stopped.

And a surprisingly low 75% said they support zero-tolerance policies and/or strict discipline, including firing, after fraud is uncovered.

Prior research has shown that a tough response (or the threat of one) can not only deter potential fraud but also minimize the damage done. So it seems upper management’s reluctance to play hardball with internal fraud may actually make your job more difficult.

What do you think: Should companies take a zero-tolerance approach to fraud, or should everything be handled on a case-by-case basis? Share your thoughts and experiences in the comments.

It’s easier to catch T&E swindlers if you know why — and how — they do what they do. A recent survey by T&E Magazine got the real scoop from people who freely admit to having fudged their travel expenses in one way or another. Some of the findings may surprise you.

For starters, employees appear to be getting more honest. 83% said they were always totally honest on their expense reports. That’s up from just 70% in 2004.

Of those who admit to cheating, the amount they wrongfully claimed is down: 8% said they padded their expenses $100 or more — that figure was 34% in 2004. Another 32% said they padded expenses by $50 to $99.

Most travelers who admitted to cheating (66%) said they did so because being on the road cost them in ways that don’t fit on any expense report category. Another 30% said they routinely have to use personal money for business costs when traveling. Padding is their way of “righting” the books.

And 26% say taking a little extra cash is their way of being compensated for the hassles of being on the road. Only 4% said they cheat because they can. [Note: Respondents could pick more than one reason.]

While no one wants to have cheaters in their office, those “reasons” for padding expenses give you a good opportunity to make sure you don’t see any of it in the future. It indicates that people are less likely to inflate their expenses if they feel the company appreciates the hassles — and out-of-pocket expenses — of being on the road.

It’s a good reminder to periodically review your company’s T&E policies and guidelines. Making sure they’re still fair to your road warriors could end up saving you time and money, as well as improving employee morale.

What do you think: Do most traveling employees pad their expenses to right a perceived wrong? Or is that simply an attempt to justify stealing from the company?

And what’s the most egregious attempt at expense report padding you’ve seen? Share your stories in the comments.

But it’s unlikely any of your road warriors are thinking about interstate tax issues when they submit their reimbursement paperwork.

Make it part of your process to flag any “non-travel” purchases you see on expense reports or corporate travel cards. The biggest red flag you want to look for: any items that were purchased out-of-state and brought back to your state to be used by the employee or someone else at your company.

Meals, taxi fares, hotel stays and any other products or services that are meant to be bought and used “on-site” by the traveler are usually safe since the vendor includes any relevant taxes in the transaction.

Keep these tips in mind to minimize your extra work — and make sure you’re covered if IRS has any questions about what you sent when:

• When sending W-2s and 1099s, make a copy of the postmarked envelopes for your files. It shows that you sent the documents on time and confirms that you had the right address from the start.
• If a form is returned by the postal service, keep it in the original envelope. If the employee or vendor provides you with a new address, you can merely send the entire package in a new envelope. If you don’t hear from them, hold the docs for 4 years — to show any future auditor that you did your required filing.
• For 1099s that need to be reissued, there’s a check box to indicate if it’s a duplicate or a correction. For W-2s, you’ll need to write “reissued statement” in the upper-right corner.

Bonus: If you have a lot of requests for duplicate W-2s or 1099s, consider this time-saver. IRS allows you to charge a nominal fee, say $5 or so, to reissue lost forms. You’d be amazed how many “lost” documents are found once people realize they’ll have to pay for a new copy.

Just be sure the document was actually lost or misplaced. You can’t charge for a duplicate if the person says he or she never received the original.

IRS recently released the following information to help you prevent fraud attempts — and to educate employees and others about what risks they may face. Here are four excellent resources you and employees should be aware of to stay safe from phishing attempts and other common fraud:

1. IRS has a special department, Identity Protection Unit, just to deal with identity theft. You can reach it by calling 800-908-4490.
2. IRS will never contact your company or any individual taxpayer via e-mail. If you get a message that claims to be from the Service, forward it to phishing@irs.gov for investigation.
3. For certain fraud attempts, you may also want to contact the Federal Trade Commission at 877-ID-THEFT.
4. At OnGuardOnline, you can get tips on how to strengthen your company’s online security, take quizzes on cyber-threats and much more.

Tax compliance has never been easy — and mistakes are always costly. But it seems the situation is about to get a lot worse. Transaction taxes — sales and use taxes, VAT, etc. — are all expected to see more enforcement and stepped up penalties in the next year or two.

The reason is simple: States need more funds, and lawmakers don’t want to hike the rates of voters who are already feeling pinched.

In fact, the signs are so ominous, 88% of companies said they expect to see more audits in the near future. That’s according to recent research from Sabrix.

What it means for Accounting

With more audits — and auditors who are less likely than ever to cut you some slack — even a small compliance error can snowball into big fines.

Take some time now to review your books and procedures. If there are any errors lurking in your books, you’ll want to find and fix them now — before auditors show up at the door.

Another good idea: Have a refresher meeting (or at least a memo) to remind other key department heads about the importance of getting Accounting the information you need.

Other departments don’t always realize the tax implications of, say, moving a piece of equipment from one facility to another. It’s vital they understand that you’re asking for transaction details not just because “it’s procedure,” but because  it can have serious consequences to your company’s tax compliance.