How Do You Know If Your Company’s Books are Accurate?

calculatorI’m not trying to insult anyone’s intelligence, but comments I’ve heard from business owners begs me to ask the question, “How do you know if your company’s books are accurate?” Many business owners hire staff for their expertise to organize their source documents, flawlessly record details  and keep fastidious backup records, paper documents and electronic files. This job is not small potatoes, my friends, and everyone goes on their merry way without looking back. The owner assumes their team member is doing (and knows) their job, the sales people are out selling, no one is complaining about the financial statements and everyone lives on happily ever after.

STOP!!!! LOOK BOTH WAYS!!!!! Now cross the street into reality. I just took over the role of financial oversight for a company after three staff members had come and gone. The last one that trained me gave me the lowdown of “what we’ve always done”. If I had a nickel for every time I’ve heard this, I’d be writing this with ink made of gold dust. We’ve always had this Chart of Accounts, we’ve always filed documents this way, we’ve always let the server just backup the files. (There is a glazed look when I ask “And has anyone ever checked to see if they can be retrieved?”) When I have to confront the owner that it took 25 minutes to boot up the computer, an hour to make the Invoice template look presentable and that I could not find the basic files used daily as they were scattered all over the server, they are at a loss for words.

Let me reiterate for those of you who don’t know me: I am not a perfectionist. I am ordinary, I have a medium IQ, I am a middle child, but I am organized, picky about formatting documents that go out to the public and represent a company and I’ve had enough experience with companies to know that this is not new. And more importantly, I fret about numbers being right. I’m flush if I make a mistake on billing and someone else catches it, I don’t wait months before looking at my Accounts Receivable to see who owes me money. I compare last year’s financials to this year and ask “Why the change?”

Companies that still call the bank to find out how much money is in the checking account, which equals the notion that their business is healthy, or companies that don’t review their numbers for decision-making purposes or staff who do not perform timely reconciliations and question what has NOT cleared more fiercely than what has cleared…….THAT IS SCARY!

If you are a company who recognizes , ask for help from an outside source to assist you in doing a regular review of your numbers. If you are a bookkeeper and feeling like you are missing the skillset to make your processes beyond reproach, do not hesitate to reach out to me or another trusted advisor to help fill in the missing gaps. Make every moment a learning experience by asking questions and questioning everything that is inaccurate, inefficient or causes indigestion. And don’t be afraid to let someone know that you don’t get it. That is the scariest world of all!

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