Bookkeeping work culminates in a final product. That product is a set of reports that you, as a business owner, can use to make decisions, report to your creditors, and fulfill government reporting obligations.
Reports should accomplish a number of objectives:
- Confirm your bookkeeper has performed an agreed upon task. For example, a bank reconciliation report, when compared to a bank statement, can provide evidence that a bookkeeper categorized bank transactions and may also be used to confirm that those transactions occurred.
- Provide evidence that all transactions were correctly recorded. For example, an accounts payable report will show what outstanding payables were entered, assigned to which suppliers, and their balance. The reports provides you with the opportunity to discern if any payables you expected to see are missing, if payments made are still unapplied to bills, or if there are duplicate entries.
- Capture the timing and description of your actual financial activities. For example, a month over month profit loss report will show you when revenues and expenses were recorded, and to what accounts. This helps you to understand if purchase are recorded, to which accounts (capital, direct costs, or overhead), and to what time period.
Reports to view on a monthly basis (minimum!):
Bank, Credit Card, Loan Account Reconciliations and Statements
Accounts Payable and Accounts Receivable Aging Detail
Payroll Summary
Profit and Loss by Month
Balance Sheet
Tip: Ensure you check in with your bookkeeper before you pull reports and have them confirm their work relating to the period you want to review has been completed.
Cedar Creek CPA 