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Feb 7Andrew Tucker

Are your Financial Statements tied up in "nots"?

Feb 7Andrew Tucker

Are the following statements true and do they describe your financial statements?

  • Not trusted by your bank, investors or other lenders
  • Not prepared accurately
  • Not understood by your accounting staff from an accounting, income tax, business and industry perspective
  • Not issued in a timely manner each month
  • Not reporting the amount you will owe the IRS and/or State on April 15
  • Not providing accurate cash flow projections
  • Not identifying internal or external theft of cash or other assets

Depending on how tied up in “not’s” your company’s financial statement are, you may be feeling anything but calm, coll and collected.  It’s not uncommon for business owners and CEO’s of small and mid-sized companies to feel uneasy, nervous or unsure about their financial condition.  Preparing and having accurate, timely and informative financial reports would certainly help alleviate anxiety providing financial clarity.  Most business owners are in the business of business, not finance, accounting or bookkeeping.

If you want to know how your business is performing, it’s necessary to close your books regularly, typically each month.  There are at  three good reasons to close your books monthly:

  1. To create and prepare financial statements:  The three primary financial statements are the balance sheet (assets, liabilities and equity), the income statement (revenues and expenses), and the statement of cash flows (where your cash comes from and where it goes).
  2. To detect errors:  It seems that only accountants like to talk about debits and credits but adding them together will show any major errors because the totals must always match (check the trial balance).
  3. To make decisions:  When a company has financial statements and reports that are timely, accurate, understandable and actionable, then adjustments and corrections can be made based on the reports.

If you are unable, or simply do not have the time, to untangle the “not’s” in your financial statements, please contact me by e-mail at andrewtucker@b2bcfo.com or by phone at 704/651-2216.  I can help with this and many other aspects of your business.

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