Spurred on with the desire to convert confusion into a beautiful picture, you dig in and take on the challenge.
If you ever wonder what a virtual accountant / CFO / controller does, think of the analogy just given. Our job is to straighten out the financial books and records of an organization and bring clarity to the mass of numbers that often confuses the business owner. Most owners are visionary entrepreneurs and results driven. What they often forget is that to create a picture and put all the pieces together takes time and diligent consideration.
As accountants, nothing gives us more satisfaction than to dive into the business puzzle box and begin the efficient approach of bringing a company’ financial picture to life. This systematic approach involves the following steps:
Identify the edges of the puzzle. The company’s balance sheet accounts (i.e. assets, liabilities, and equity) are identified and structured according to character and importance. Our goal is to simplify the balance sheet and establish a parameter for moving forward.
Sort pieces by color and/or tabs and blanks. Understand the purpose of revenue and expense accounts for classification and whether there are multiple departments or classes that should be taken into consideration. Categorize activities and accounts according to purpose (i.e. costs of goods, selling, general and administrative) will help segregate key components of the income statement, to further define the financial picture of the company.
Complete different color groups of the puzzle. Trace and agree various account balances to supporting documentation, understand the business transaction’s purpose, and piece together any other items that may impact the account balance(s).
Place completed sections in approximate location of where they should go. Identify the most suitable placement of transactions within the company’s financial statements.
Fill in the gaps. With sizable pieces of the financial puzzle outlined and supported, this step involves filling in the gaps with items that are not significant to the financial statements or finding answers to questions and open items on various areas previously addressed.
Picture comes into focus. At this point, the financial picture of the company begins to come into focus. Decisions become less time consuming and tedious and financial reporting begins to take on a new meaning.
Complete the puzzle. The feeling of exhilaration and accomplishment when the final piece is proudly placed down! There is now clarity in the picture. It makes sense and leads to educated, supported decisions. Each year may be looked at as a puzzle that requires completion. Although the financial picture of a business is ever changing, the thought of putting the last piece down on any given year is enough to make any business owner happy.
At CFO Your Way, we enjoy opening the financial puzzle box of small and mid-size businesses and placing each piece into its appropriate place. As with any puzzle, the picture doesn’t come into focus without first experiencing the tedious and time consuming work of identifying and assembling various pieces. Patience is key to unlocking the unlimited potential found in accurate, timely, and reliable financial reporting.
Not up to the challenge of conquering your company’s financial puzzle? Schedule a Complimentary Consultation to discuss your unique business puzzle.