A Fundamentally Sound Accounting Service

What constitutes  a "Fundamentally Sound Accounting Service"?  What are some of the things you should expect from your bookkeeping system and your accounting firm?

• Correct and Timely Financial Statements:

  Many times business owners get intimately involved in the details of the business and have a difficult time backing out to take the "long view."  Periodically, you need to take a look at the "Forest" rather than the "Trees" -- to step back and assess how your business is doing.  You need information in order to do that.  This information could include the following:

  • A balance sheet and an income statement, at least on a monthly basis -- to give you the financial overview of how you are doing.

  • Open invoice and unpaid bills reports -- so you know who owes you money, who you owe money to, and when they are due.

  • Detailed transaction listing or ledgers to help understand what's behind the figures on your income statement and balance sheet. 

  • Bank reconciliations for each of your bank accounts -- so you know exactly how much you have in the bank.

• Timely Reporting:

A successful business owner operates "in the future," constantly planning for sales, marketing, purchases, expansion, etc.  Yet, accounting is essentially a "historical" activity.

• You should get your financial statements and reports by the middle of the following month -- while the information is still relevant and fresh in your mind.
• If your reports are more than a month behind, they are like "financial archeology" -- they might be interesting, but they won't be particularly useful or relevant.

• Returned Phone Calls and Regular Contact:
  • When your accountant reviews your financial transactions, reconciles your bank and credit card accounts, and prepares your financial statements, tax filings, and other reports, they learn a lot about your business.
  • You should expect them to share that knowledge with you -- on a regular basis!

If your accounting firm and your bookkeeping systems provide you with this type of information, you are in command -- and you have the tools you need to effectively run your business.  If not ... that is a major issue you need to address!  A good accounting firm will be invaluable to you.