Filomeno & Company, a West Hartford, CT-based CPA and business advisory firm, is turning financial audits into profit centers.
Filomeno & Company helps its clients use their audit as a tool
to show them the efficiency and effectiveness of internal processes and how they compare against peers in the industry. Filomeno & Company does this by understanding the company's liquidity, margins, borrowing, and assets, according to company officials.
"Our approach gets folks thinking about the audit process differently," said George Thomson
, director of Accounting and Auditing Services for Filomeno & Company. "It has a negative connotation for many, but an annual financial audit can be a great resource to learn where your business can improve by leveraging the analytics and benchmarking completed by your auditors."
Taking a good look at the aging of accounts receivable is a good example, Thomson said. He and his team calculate the average amount of time it takes the client to collect payment.
"If we find that a business we are working with has an average number of 90 days, but the industry average is 45, then we can recommend a plan of action to remedy the situation," he said.
Oftentimes, businesses might be using a line of credit to fund accounts receivable, which can amount to substantial interest expense over a period of time. In this instance, Filomeno & Company might recommend that the business require credit card payments, because it might be more affordable to pay the merchant fee than rack up interest charges.
"This action can have a domino effect for savings," said Thomson. "If cash flow is good, then the company may be able to save money by taking advantage of opportunities from vendors that offer discounts for early payment."
As Thomson and his team move through the audit process, many issues are uncovered that reveal opportunities for streamlining that can save clients a lot of time and money, according to the firm.
In addition to opportunities to streamline processes, Filomeno & Company also works with clients to maintain the integrity of internal controls to ensure that proper checks and balances are in place.
Auditors are required to understand their client's internal checks and balances. Small- or middle-market businesses typically don't have enough internal resources and too many overlapping responsibilities are handled by one bookkeeper, which does not lead to the proper segregation of duties and could put businesses at risk. Filomeno & Company works with its audit clients to devise a system that includes internal controls – most often without having to add new employees or burden to existing staff, according to the company.
"These are just a few examples of the many things we can bring to light for companies to help them boost their bottom line," Thomson said. "Every client we work with gets a management letter at the end of the audit that clearly outlines where they can improve and offers suggestions that range from the mundane to the highly sophisticated."
About Filomeno & Company:
Filomeno & Company is a West Hartford, CT-based business advisory firm offering a range of services including: accounting & auditing, business advisory, business valuations, corporate tax, individual or strategic tax, qualified plans, and fraud prevention. For more information, contact Filomeno & Company at (860) 561-0020.