One area of continual problems with small businesses is that of accounting. Here are some of the problems I have encountered with accounting:
Not utilizing an accounting system, whereby the owner uses the information to assist him/her in running the business.
- Not a good separation between the business and personal. I.E. a separate checking account.
- Not a good separation between the business and personal. I.E. a separate checking account.
- Not paying attention to the accounts payable. Accounts are not being pursued actively when they go over 60 days delinquent.
- Payroll not being entered correctly.
- The capital section not reflecting the owner’s/shareholder’s equity.
- Personal taxes being used as a business expense.
- Auto expense not being properly entered.
My goal is to assist business owners to utilize their accounting systems to maximize their company information. In this way, I assist them to make timely critical decisions regarding their business. This can be as simple as data entering, to balance sheet / profit and loss / cash flow analysis. This breaks down to the following:
- General ledger accounting: data entering, adjusting journal entries, reconciling bank accounts, reviewing the debt structure to see that the debt is correctly booked.
- Reviewing the capital structure of the corporation:
- Stock
- Dividends
- Treasury stock
- Financial statement presentation: I compile financial statements for businesses.
When company owners want me to come in and do all of the above, I then step into the role of a part time controller. Many owners like this, because a CPA has looked at their books, without the burden of a full time employee.