Small business owners may only think about accounting when time and circumstances force them into it, like tax season or when certain bills come due.
Effective accounting practices require constant, year-round attention. A good accounting system can spot problems early on, or even prevent them from happening in the first place.
One aspect of accounting best practice is known as a monthly write up. These write ups include account reconciliation, ensuring each transaction is recorded accurately. They also include your Profit and Loss statement (P&L or Income statement), as well as your balance sheet so you know your current position, and lastly, a review of the general ledger, checking for proper balance.
With this foundation in place, the information can be used to plan for your future. These reports are key when reaching out to a bank for financing a new growth project. The banks will use this data along with other factors to determine your ability to repay.
Hire a trusted CPA to prepare your monthly and quarterly reports. The CPA's extensive training and experience will help ensure the reports are prepared with precision and professionalism. Engaging with the CPA month after month also allows them to grow familiar with your business and gives them insight into trends that might influence their advice for tax season and growth planning. The experienced professionals at Accountability Team would be happy to discuss your monthly write up needs with you.