Monthly Closing Reports
Questions to ask yourself:
Do you hate the flurry of activity to get your business reports to your tax advisor each year?
Are you even confident that your numbers are accurate? (And just how accurate do they need to be?!)
Are you able to know the status of your business on a regular basis so you can make knowledgeable decisions?
What if you could reduce some of that panic and have valuable information throughout the year?
Make Your Financial Records a Priority
Whether you, your staff, or an outside firm does the recording, set aside the time and money you need to do this. Waiting to clean up annually makes it much more time consuming and often more costly as problem solving becomes harder months after a transaction happens.
Set Up a System
Whether you choose to update and check your records monthly or quarterly, having a system is important. It’s easy to miss something if you don’t have a checklist. Especially if you can’t do all the follow up at once or have multiple people doing different parts, having a checklist ensures all the necessary steps are taken.
We recommend starting with a simple list and adding as you get more insight into what is needed. A few basic steps are as follows:
Reconcile all bank accounts and credit cards
Review all outstanding items in reconciliation for accuracy
Ensure all invoices and bills are entered.
Compare receivable and loan balances on the books. Do they tie to external records?
If you’re an accrual basis company, have you made all of the necessary adjustments and entries?
Run your P&L and Balance Sheet. Compare them to the prior period. Anything look off?
Run a cash flow statement. Where is your cash coming and going BESIDES your P&L?
Benefits of Accurate Financial Records
Accurate numbers to base financial decisions on
Outstanding Receivables from customers are addressed sooner rather than later resulting in better cash flow and potentially saving
Issues are resolved faster and sooner before they become an even bigger problem saving you and your staff time and money.
Leaves you prepared for sending financials required to outside organizations such as loan officers, potential buyers, outside accountants, etc.
You may not be able to immediately catch up with several months of work but make time to get your books caught up over the next few months so that you have good numbers to look at and save the hassle and stress of tax season.
Need some more help getting your numbers caught up or understanding them?