One of the best favors a business can do for itself to insure success is to prepare timely, monthly financial statements. They are the one basic tool that measures how a business is doing, helping it to plan for the future, and hopefully eliminating any unpleasant surprises. Financial statements allow the business to analyze revenues and expenses, and plan growth, capital improvements, and expansion projects in a logical, methodical way to maximize use of cash flow and tax benefits.
One of the most important steps in monthly accounting is verification of balance sheet accounts. The balance sheet is the foundation from which the income statement and other information is derived. Monthly by the fifteenth, cash accounts, accounts receivable and accounts payable should be reconciled to the general ledger for the prior month. The monthly balance sheet and income statement should include last year’s financial information and a year-to-date budget so management can better determine where the business stands compared to the prior year and the current year’s budget estimates.
If you business currently does not have monthly financial statements, EFS can help by setting up an onsite system and training your staff. We can come on site monthly or quarterly to assist you, or you can send us your information to process in our office. We can tailor our services and your system to fit your needs.