Each month or quarter we’ll do the following things for you…
Reconciling your business checking account each month allow us to keep your bank account, accounting, and taxes up-to-date.
Having us reconcile your account each month allows you to…
- Identify lost checks, lost deposits and unauthorized wire transactions.
- Detect and prevent excess/unjustified bank charges and ensures transactions are posted correctly by your bank.
- Detect and prevent embezzlement of funds from within your company.
- Know how your business is doing? You can’t really know unless all accounts are reconciled and properly accounted for on your financial statement.
- Manage your cash more effectively. Proper management of funds not only saves money, it makes money for you.
- Protect yourself. By timely reconciling and promptly objecting to your bank about any unauthorized, fraudulent or forged checks presented to your bank and paid by that bank, you can relieve your agency of responsibility for the shortfall and transfer the risk to the bank. This reason to reconcile alone should be enough. Crime exists.
- Sleep Better. You will sleep more peacefully at night knowing your bank accounts are reconciled, in balance and that all escrow funds, accounts, checks and disbursed funds are properly accounted for.
An income statement, otherwise known as a profit and loss statement, basically adds an itemized list of all your revenues and subtracts an itemized list of all your expenses to come up with a profit or loss for the period.
An income statement allows you to…
- Track revenues and expenses so that you can determine the operating performance of your business.
- Determine what areas of your business are over-budget or under-budget.
- Identify specific items that are causing unexpected expenditures. Like phone, fax, mail, or supply expenses.
- Track dramatic increases in product returns or cost of goods sold as a percentage of sales.
- Determine your income tax liability.
A balance sheet gives you a snapshot of your business’ financial condition at a specific moment in time.
A balance sheet helps you…
- Quickly get a handle on the financial strength and capabilities of your business.
- Identify and analyze trends, particularly in the area of receivables and payables. For example, if your receivables cycle is lengthening, maybe you can collect your receivables more aggressively.
- Determine if your business is in a position to expand.
- Determine if your business can easily handle the normal financial ebbs and flows of revenues and expenses?
- Determine if you need to take immediate steps to bolster cash reserves?
- Determine if your business has been slowing down payables to forestall an inevitable cash shortage?
Balance sheets, along with income statements, are the most basic elements in providing financial reporting to potential lenders such as banks, investors, and vendors who are considering how much credit to grant you.
The general ledger is the core of your company’s financial records. These records constitute the central “books” of your system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your books.
Having us review your general ledger system each month allows us to hunt down any discrepancies such as double billings or any unrecorded payments. Then we’ll fix the discrepancies so your books are always accurate and kept in tip top shape.
We are always available to spend time with you so you fully understand how to interpret and utilize the financial information we provide. Our consultations are already included in our price, so please feel free to call us whenever you have a question or concern.
These tasks form the solid foundation of your small business accounting system. You can customize the package of services you receive by adding payroll, tax planning, tax preparation, or any of our other services.
A fast growing DC based government contractor firm requested our assistance to serve as their outsourced accounting department and CFO. They have fixed firm price as well as time and expense contracts for design and conference planning.
Their biggest challenges were managing cash flow and control contract costs while maintain DCAA compliance.
Our analysis reveals that as a government contractor timely issuance of accurate invoice is critical to solve the cash flow problem.
In order to achieve the goal we restructured the financial system to have the following components. First, set up the accounting system COAs using DCAA COAs and jobs to keep track of the budget verses actual for every contract. Second, utilized a DCAA approved timekeeping system where employees enter time activities daily and syncs with accounting system to ensure correct invoicing for direct labor hours. Third, structured Accounts Payables System where all direct bills are coded by CLIN number and tied to proper contract. The AP system also syncs with accounting system to ensure correct invoicing for ODCs and subcontractor costs.
Once the proper financial system is in place, we structured the process of the invoicing and all project managers will reconcile the invoice package with accounting records within 10 days after the end of prior month and once reconciled, submit invoice to the government before the 15th of each month which improved the speed of invoicing significantly.
We further streamlined the project management process so that project managers will confirm with GG before submit bids to make sure the bids take into account the indirect costs using the wrap rate calculated for the company, thus ensuring the company was bidding for profitable contracts. Once a contract is won, the cost of the budget is entered into the accounting system monthly and project managers will be provided monthly actual VS budget report to better monitor their projects.
At the end of the first year of our engagement, the business is showing a sizable profit compared to a net loss the previous year. The cash flow has significantly improved thus the business was able to end its contract with the factoring company they have been using for years. Now the business has sufficient cash flow to maintain a whole year’s operation without touching the LOC. The financial infrastructure added a layer of internal control that was weak within the company and just as importantly, the client can scale its accounting department based on its resources and needs.
Please contact us with any questions.
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Office: 4641 MONTGOMERY AVE #300. BETHESDA, MD 20814
Phone: (301) 913-0008
Fax: (240) 744-7176