Every business owner handles their office differently. Some are sticklers for clean, organized desks and calendars. They like everything to be in its place and filed away asap. Others prefer to place their paperwork in piles based on topic or timeliness.
It may be a sufficient approach for simple bookkeeping and yearly taxes. But now, if a business owner is ready to expand they need a bank loan to cover the project. It might be challenging to sift through piles of financial records to provide the bank with a clear picture before any money is exchanged. Or if the state of California sends an audit letter, they’ll need to get their paperwork together quickly.
Business owners can’t lawfully handle these situations alone; it requires an independent third CPA to handle audited financial statements. And although the CPA will professionally prepare the financials, this process isn’t a ‘hand off,’ it’s a partnership. Because a CPA will need the business owner to sift through their piles and online reports to help pull the pertinent information. If you are preparing your audited financials for a CPA, here are seven things you’ll need to collect;
- The General Ledger: accounts payable, receivable, and reconciliations, along with the current chart of accounts.
- Financial Reports: Prior and interim financial records with all liabilities, assets, revenue, expenses, and equity.
- Balance Report Documentation: bank statements, inventory, loan and debt agreements, payroll records, HR records, vendor invoices, P.O.’s, and expenses. Customer sales records.
- Legal Contracts and Documentation: auditing commitment, loan agreements, leases, and contingencies.
- Company Policies and Procedures: information about accounting policies and procedures, internal controls, reporting, approvals, and reconciliations.
- Board Records: Company board communications, including meeting minutes and board correspondence to banks and other entities.
- Estimates and Adjustments: warranty reserves, accounts, contingent liabilities, and impairments.
And business owners who are ready to organize their records by account and date, they’ll receive extra bonus points from the CPA (in quicker service)!
You’ll appreciate a great bookkeeper when it’s time to speak to an auditor
A smart financial move any business owner can make is working with a highly skilled bookkeeper. Not only will they keep the “in box” clean of checks and invoices, but a great bookkeeper will have a process that makes it a breeze to put together the paperwork for a professional audited financial statement. Business owners wondering what the best traits for a bookkeeper are may find the post from Cashflowfrog helpful.
If hiring a full-time bookkeeper would stretch the budget, there are other options. For example, cost-effective bookkeeping services offer a professional on a contracted basis. This is an excellent alternative for smaller businesses who don’t need a full time bookkeeper. Any San Francisco business owner who needs a bookkeeper or a CPA to manage audited financial statements are welcome to contact us!
