Bank and Credit Card Reconciliation
Reconciling your business checking and credit card accounts each month allows us to keep your bank account, accounting, and taxes up-to-date.
Having us reconcile your account each month allows you to…
⦁ Identify lost checks, lost deposits, lost transactions and unauthorized wire transactions.
⦁ Detect and prevent excess/unjustified bank charges while ensuring transactions are posted correctly by your bank.
⦁ Help deter embezzlement of funds from within your company.
⦁ Know how your business is doing on a more detailed level. 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 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, disbursed funds and credit card transactions are properly accounted for.
An income statement, otherwise known as a “profit and loss statement”, basically adds an itemized list of all your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period.
An income 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.
A balance sheet gives you a snapshot of your business’ financial condition at a specific moment in time.
A balance sheet helps you…
⦁ Quickly get a handle on the financial strength and capabilities of your business.
⦁ Identify and analyze trends, particularly in receivables and payables. For example, if your receivables cycle is lengthening, maybe you can collect your receivables more aggressively.
⦁ Determine if your business can 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.
Balance sheets, along with income 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 review your general ledger system each month allows us to hunt down any discrepancies such as double billings or any unrecorded payments. Then we’ll fix the discrepancies so your books are always accurate and kept in tiptop shape.