Period Close Processes
Does month/quarterly/annual closing periods seem chaotic and reports not getting out as soon as you would like? Do you find that you are unsure of the information that is in your statements? Do they somehow not feel quite right, intuitively? Allow me to help you develop period end closing routines that will eliminate the chaos, consistently get reports distributed on time, and ensure accuracy in the data being presented. Lets walk through the process, devise a strategy for your team, and create a checklist to be followed each month in order to deliver timely and accurate reports each period, every period!
Reviewing Financial Statements
You get reports out on a timely basis, that is fantastic! But now what? Do you truly know what they are telling you? Do you know how to analyze them to understand what happened during the period you are reviewing? Does your income statement say one thing while your cash account is saying another? These are just some of the questions I can guide you and your team through. A better understanding of these statements leads to a better understanding of your business.
How well are you tracking your capital assets? Is depreciation recorded monthly, or only at year end? Is there debt associated with the asset? Is the interest expense being recorded each month, or is that a year-end adjustment as well? If transactions like these are only recorded at year-end as your tax professional directs, that could be costing you extra money. In addition, year-end adjustments make trend analysis difficult. Let me help you smooth out those fluctuations and save you money by having fewer year-end transactions for your tax professional to prepare.
If you are just getting started and have little accounting knowledge, terms like Chart of Accounts, Depreciation and Amortization, Owners Equity probably seem like a foreign language to you.
Chart of Accounts – the fundamental building block of all financial reports. It is a systematic and logical format to group all transactions that occur in your business.
- Even though some software programs make getting started seem easy, best business practices are to establish a systematic and logical chart of accounts that will help your future reporting and analysis processes. This is an underappreciated tool that can either help or harm businesses in the future.
- Wouldn’t it be nice to have someone at your side who can guide you through the process and teach you how to use it and, possibly, add future accounts if necessary (which is most likely)?
Equity Accounts – Do you know how to properly record assets, such as vehicles, computers, machinery, cash, etc., that you bring into the company?
- Should the money you put into the organization be a loan to the company or placed into capital? How do you know? Does it matter? What are the effects of those choices?
Assets and Liabilities – The most common mistakes in recording transactions happens at this level. I can help you avoid these errors.
- Are you sure how to properly record that equipment you just purchased?
- Did you take out a loan to purchase equipment or property? How do you record the debt associated with the property or equipment? How do you record the monthly transactions associated with that debt?
Month-end Reconciliations – we all know that the bank accounts (checking, savings, money markets, etc.) need to be reconciled each month. But what about your other accounts: loans, credit cards, machinery and equipment, etc.? All these items should be reconciled as well.
After 20+ years in accounting, I know accounting! I can help you get started and I can help the existing business clean up errors that may be negatively affecting statements. Properly designed and maintained accounting set up and maintenance create value through comprehensive and correct financial statements. Banks use these statements to determine the viability of a company and if that company is worth lending money to. Do not underestimate the value of financial statements. Underwriters are seasoned professionals trained how to analyze them – so lets work together and create the real story of your business venture.