Bookkeeping and Compilations

Many small business owners cannot afford to hire a full-time Certified Public Accountant ("CPA") to oversee and/or prepare their bookkeeping, financial reporting, etc. So they hire us to be their part-time CPA, allowing them time to properly run their business and focus on generating a profit!

Each month or quarter some of the tasks we can help you with are:

  • Posting transactions into the general ledger
  • Reconciling bank accounts, payroll liabilities, loans payable, etc
  • Compiling a statement of revenue and expenses - income tax basis
  • Compiling a statement of assets, liabilities, and equity - income tax basis 
  • Providing a consultation to explain how your business is doing

These tasks form the solid foundation of your small business accounting system. It is important to keep your accounting records current so you can decide if you are spending too much money, meeting revenue goals, taking advantage of tax deductions, providing information to third parties such as banks, etc.  You can customize the package of services you receive by adding payroll, tax planning, tax preparation, or any of our other services.

Bank Reconciliation

Reconciling your business checking account each month or quarter allows us to keep your bank account, accounting, and taxes up-to-date.

Having us reconcile your account each month or quarter allows you to...

  • Identify lost checks, lost deposits and unauthorized wire transactions.
  • Detect and prevent excess/unjustified bank charges and ensures transactions are posted correctly by your bank.
  • Detect and help prevent embezzlement of funds from within your company.
  • Know how your business is doing? You can't really know unless all accounts are reconciled and properly accounted for on your financial statement.
  • Manage your cash more effectively. Proper management of funds not only saves money, it makes money for you.
  • Protect yourself. By timely reconciling and promptly objecting to your bank about any unauthorized, fraudulent or forged checks presented to your bank and paid by that bank, you can relieve your agency of responsibility for the shortfall and transfer the risk to the bank. This reason to reconcile alone should be enough. Crime exists.
  • Sleep Better. You will sleep more peacefully at night knowing your bank accounts are reconciled, in balance and that all escrow funds, accounts, checks and disbursed funds are properly accounted for.

Compilations - what does the term mean?

In compiling financial statements for a client, we present information that is the "representation of management" and expresses no opinion or assurance on the statements. Compilations don't require inquiries of management or analytical procedures. Instead, we rely on our knowledge of accounting principles and a general understanding of your business.  Banks often require compilations from a CPA as part of their lending covenants. 

Statement of Revenue and Expenses - Income Tax Basis

A statement of revenue and expenses - income tax basis, commonly called a "profit and loss statement", basically adds an itemized list of all your revenue and subtracts an itemized list of all your expenses to come up with a profit or loss for the period.

This statement allows you to...

  • Track revenues and expenses so that you can determine the operating performance of your business.
  • Determine what areas of your business are over-budget or under-budget.
  • Identify specific items that are causing unexpected expenditures. Like phone, fax, mail, or supply expenses.
  • Track dramatic increases in product returns or cost of goods sold as a percentage of sales.
  • Determine your income tax liability.

Statement of Assets, Liabilities, and Equity - Income Tax Basis

A statement of assets, liabilities, and equity - income tax basis gives you a snapshot of your business' financial condition at a specific moment in time.

This statement helps you...

  • Quickly get a handle on the financial strength and capabilities of your business.
  • Identify and analyze trends, particularly in the area of receivables and payables. For example, if your receivables cycle is lengthening, maybe you can collect your receivables more aggressively.
  • Determine if your business is in a position to expand.
  • Determine if your business can easily handle the normal financial ebbs and flows of revenues and expenses? 
  • Determine if you need to take immediate steps to bolster cash reserves?
  • Determine if your business has been slowing down payables to forestall an inevitable cash shortage?

Compiled financial statements are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant you.

Maintaining a Clean General Ledger

The general ledger is the core of your company's financial records. These records constitute the central "books" of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.

Having us maintain your general ledger system each month or quarter allows us to help hunt down any discrepancies such as double billings or any unrecorded payments. Then we'll fix any detected discrepancies so your books are as accurate as possible and kept in tip top shape.

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