Money Found Policy.
This policy outlines, for Prosperent Co and its clients, the principles and scope of what are here defined as 'Money Found' activities, for the purpose of upholding firm standard practice, coordinating cross departmental work, and fostering confidence between firm and clients through clarity of communication, by using mutually understandable terms within a framework of shared understanding.
Definition of Money Found
‘Money Found’ represents the estimated value of savings our clients receive as a result of the professional tax and accounting services Prosperent Co provides.
‘Money Found’ is calculated for the purpose of reasonably representing the value Prosperent Co adds to our clients as a result of our engagement.
‘Money Found’ is also calculated for the purpose of reasonably representing the opportunity cost to our clients of not engaging our tax and accounting services in the 12 months prior to commencement.
Categories of Money Found
The four categories we use for the different types of ‘Money Found’ are:
Money Back (Category 1)
Saved From Paying (Category 2)
Found, But Lost Forever (Category 3)
Future Savings (Category 4)
CATEGORY 1 & 2 EXPLAINED
In most cases and for existing clients, ‘Money Found’ is a calculation of either money we estimate our clients are now entitled to receive back which they have previously paid (Category 1), or money we estimate our clients no longer need to pay which they had previously expected to pay (Category 2).
Where ‘Money Found’ represents a Category 2 saving as a result of a strategy implemented by Prosperent Co, only year one savings are estimated, even if the strategy will result in savings over multiple years. Future savings beyond the first year are not counted in future years.
CATEGORY 3 & 4 EXPLAINED
Typically for new clients, and in some other cases, ‘Money Found’ is a calculation of money we estimate we would have saved our clients within the 12 months prior to engagement based on actual tax and accounting strategies we can implement now which we deem could have also been successfully implemented earlier. This does not include any calculations on hypothetical investment advice which could have been given and instead focuses only on tax and accounting opportunities missed.
Sometimes it is just too late for us to get any money back now, so when this is the case we estimate the amount our client would have received by implementing our strategies within the last 12 months (Category 3) and also how much the immediate strategy we put in place now is expected to save them within the next year (Category 4).
Example Money Found Scenarios
Examples of what is considered Money Found:
We discovered a tax error on a prior tax return that had not been filed by us…
We found an auto-pay from a bank translation that was closed months ago…
We identified that there would be a saving if they made an additional retirement contribution…
We opened a new entity to pay PTE tax from where this was previously being done without PTE…
We reconciled the bank account and found payments going to another account they forgot about…
Examples of what is not considered Money Found: (key detail that excludes the scenario from the definition is bolded)
We made a mistake on a tax return and went back and amended it…
We asked the IRS to abate penalties, but they refused…
Three years ago we found a solution that will save taxes for 10 years but we already counted year 1 savings…
We made a tax deduction that the client asked us about (they found it, not us!)...
