Accounting Record Cleanup
Accounting records should never be left behind. Many companies hire bookkeepers, who try hard, but are not trained accountants and certainly don’t have the experience of Chief Financial Officers.
Good data enables informed decision-making, which is reason enough to clean up accounting records. But clean financials are more than just desirable – in some cases, they are required.
For instance, acquiring investors or partners is one scenario where clean financials are essential. Cash flow management can not be done properly without accurate information. Providing flawed financial data can botch a pending deal or result in penalties later. Furthermore, these records are required in the event of an audit.
Not having them can delay the audit process and providing muddled or incomplete records can result in penalties and other undesirable consequences.
For a business to flourish, it needs clean books
Deciphering whether you have a problem, auditing problem areas, and resolving identified issues is crucial for cleaning up accounting records.
Do You Have a Problem?
These common signs can signal accounting record issues:
- Missing retained earnings
- General ledger errors
- Cash discrepancies
- Unauthorized withdrawals
- Excessive business expenses
- Bank fees and penalties
- Customer and vendor invoice inconsistencies
- Asset overestimation
- Inconsistent fixed asset depreciation
- Negative cash or credit balances
- Restricted payment terms from suppliers
- Static inventory levels
- Unaccounted for interest on cash and credit accounts
- Muddled business loan records
SBA * Consulting will assist you in correcting the problems and training the staff simultaneously
- Match Retained Earnings with Tax Returns
- Reconcile Cash Accounts
- Capitalize Fixed Assets
- Verify Inventory Levels
- Account for Other Assets
- Reconcile Credit Card Statements
- Track Inter-Business Loans
Clean Up Problems
Regardless of size, industry, or formation-type, any business with messy books is in danger. But despite the clear risk, some business owners choose to ignore or delay cleaning up their financials. Often, they are overwhelmed by the mechanics of hiring an accounting firm or external auditor. They ask, “How do I find the right company?”, “Will it be expensive?” and “Where do I even start?”
An outsourced/fractional CFO can, with the help of the client:
- Examine current and past financial records to identify problems
- Book journal entries and/or amend previous tax returns (with your tax preparer) to resolve any identified issues
- Ensure proper accounting regulations and procedures are being followed for the specific business type
- Implement the right accounting software (or update an existing platform)
- Equip and train internal employees to keep the books clean moving forward
Find out how SBA * Consulting can assist you in cleaning up your books and to establish proper protocols to avoid future problems.
Contact us today.