Winters and Associates
Bookkeeping and Information Reporting
Financial Statements
The unpleasant nature of the business record keeping process leaves many small business owners totally uninterested. Most consider bookkeeping a necessary evil. We are required to keep books in order to comply with government regulations and to pay taxes – pretty hard to get excited about that! Sure, you’ve heard that financial statements report revenue and profit, but how? Where? Why do the statements you receive seem so devoid of useful information?
It is understandable why most feel this way, but the situation really can be made much better. While your existing books probably don't contain much useful information, that might be because your current approach is based on standard reporting formats.
Normally, a bookkeeper sets up a bookkeeping system using templates contained in the bookkeeping software. These templates contain generic categories for recording data and product generic industry reports. This is an easy way of creating documents to file with the government, but as you probably already know, this approach really doesn’t capture how your business really works.
Unless the company books closely mirror the business operations, the records you’ve spent so much money and time to create can't be used for managing your firm. Those expensive, time consuming statements don’t tell you what is happening in your business.
Conversely, properly constructed and maintained books should be designed to capture how your business operates. Well-designed books will be an invaluable aid for making business decisions.
For example, the expense and revenue categories should reveal the important relationships between the various parts of your business operations. Reports should provide information that makes intuitive sense, so that you can easily understand why you are doing well or poorly.
Most important of all, your bookkeeping service should be able to teach you how to read your financials so you can use them to make decisions that will increase profitability.
So how can you tell if your books can be used to help decision making? An easy answer is to ask you banker! Bankers use financial reports to understand how well, or how poorly, your business is doing. Bankers then use this information to determine what the loan risk will be, and therefore what interest rate to charge). Your banker will be able to tell you if your financial reports are truly useful, or a frustrating mess.
Our standard service includes constructing a set of books that will emulate your business processes exactly. We help you learn how to use your financial records to better understand your business, and to increase profitability.
Many local banks are so impressed with our Management Information Reporting system that these banks often offer reduced loan rates when you use our services.
Call your banker and ask if you should consider changing your bookkeeping services.
Winters and Associates