With all that goes into smoothly running a business, it is likely that some tasks will end up getting less attention than others. Don’t let your accounting records be one of those areas. Instead, make sure that they are a priority and are updated regularly. Whether you manage all finances in house or need outside help from an accountant, having your records in order is still essential. Without proper records or records that are disorganized, it will be difficult for you or your accountant to properly track and record financial information. If you are looking for accountant assistance for your business, Beck and Company’s Certified Public Accountants and Business Advisors are here to help you with these needs. We provide many accounting services.
It may be that you feel financially illiterate and have no idea where to even begin with organizing accounting records. It could also be the case that you have not had the discipline nor the systems in place as a company to keep records cleaned up. Regardless, you likely are aware that having these records organized and efficiently laid out would be immensely helpful in so many ways. With a fast-paced business world and so much at stake, there is no need to spend valuable time sorting through messy records time and time again. Instead, creating a system for a month-end accounting process clean-up will allow you to make informed decisions with ease and quickness while also helping you to focus more time on the future of the business instead of on financials alone.
How can your records be cleaned up so financial reporting is both possible to do and accurate, too? Below are some tips to do just that on a monthly basis. This checklist will help when evaluating the performance of your own accounting support and will make outside help from an accountant easier thanks to records that are ready to use and organized.
- Do retained earnings agree with my tax return? If not, do I understand exactly why it’s different? You don’t have a good starting point if this isn’t right.
- Cash accounts are reconciled and agree with bank statements. Items that are not reconciled are investigated.
- Fixed assets are appropriately capitalized. This means that you look at accounts in your profit and loss for lease payments and other purchases that should be capitalized.
- Other assets are appropriately stated. If you have an asset account that hasn’t changed, look into whether or not it’s still realistic.
- Credit cards are reconciled.
- Unrelated party loans (e.g. lines of credit, bank loans) agree to statements, and interest is booked appropriately.
- Related party loans (e.g. inter-company) agree on both sets of accounting records (if you own more than one company and loan money back and forth).
- If your balance sheet is accurate (steps 1 – 7), review your profit and loss statement. Are expenses within tolerable thresholds relative to prior years and periods?
If you do all of this, you know you have good data, and you can make decisions based on accurate information or have an accountant help you with this. It also ensures that, when asked, you can produce financials at a moment’s notice to interested parties. Beck and Company CPAs can help you in this process of preparing accounting records for accurate financial reporting so you are ready when the need arises for these records. Please contact us to learn more about how we can help you and your business to succeed in all areas including in the financial realm.