Gwinnett CPA Advises Atlanta Entrepreneurs on Preparing Financial Statements & Bookkeeping Issues
When reviewing your company’s financial, it is usually best to review your profit and loss being sure to show the current period under review as well as the year to date totals. This will have the added advantage of reviewing specifically the most current operations for any significant variances or trends as well as contemplation of where you stand vs. your annual and year to date goals. Your financials are best reviewed and presented when you also add a column which calculates items as a percentage of sales which allows the reviewer to have a good grasp/rule of thumb of which to measure operational results. The below is a sample of what we might send to a client to assist them with the tracking and recording of your monthly operating results:
In critiquing your internal books for October I noted:
I did not get in my package the Profit and Loss for the current month. By your critiquing of both your Year to Date Profit and Loss and the Current Month Profit and Loss you will be able to better evaluate, understand and utilize your internal financial statements.
Please add to the Both of Profits and Loss Statements you are preparing for this month and in the future the percent of each item of your total revenue. This will allow you to better gage and evaluate your internal costs vs. established standards/pricing standards.
Please be reminded that you will want to begin using the previously forwarded management report so that you might gain needed/essential financial information for reflection in your internal financial statements.
Please review the large debt payment of $4K against your long term debt vs. the lower year to date net income of $6K. I suggest that you do not make any larger debt principal payments until the below large variances in your net income are eliminated. Please be sure to prepare a twelve month cash flow analysis/forecast before making any additional debt service payments to avoid the business running out of cash.
Per your last two months internal financial statements the company has a $11K loss. Please review/advise ASAP to eliminate/preclude further losses.
Please advise as to what the $3K item is in Fixed Assets was for.
Please review the charges to the Legal & Professional Fees account and advise as to what they are for and if they are classified correctly. Please be reminded that any costs incurred on behalf of client should be coded to Cost of Goods Sold.
Please allocate the Credit Card to the Correct accounts as required (i.e., based upon the type of business expenditure required).
Please note that on your bank account that you have sufficient balances in the bank to cover open and outstanding checks but no monies in the account. Please advise/correct ASAP so that no NSF charges are incurred.
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