I've worked for quite a few companies over the past 10 years and audited even more during my 6 years at a big 4 firm. For smaller companies and startups, accounting is almost always done initially by the owner themselves or a bookkeeper and started in SAGE or Quickbooks using a template. The templates are decent, but they are always lacking just a little bit. And it always seems to me that with just a little bit of guidance, the information that could be obtained from the financial reporting system could be so much better.
Alas, accountants are always one step behind, working with inefficient manual processes of approvals and record keeping, and, without anyone really looking at the monthly results with a keen eye, take short cuts to get where they are going. I am mind blown at the number of companies that don't do cash flow statements, don't organize their financials in a way that makes sense, or even can't produce a simple, clean and intact balance sheet and statement of earnings, period.
The last company I was at almost went bankrupt, twice - the first time when they were losing sales, the second time, when they were growing really fast - all in the span of 4 years. It wasn't until I showed up, reorganized how the balance sheet and income statement accounts were grouped, actually did accrual accounting, and produced a cash flow statement, did the President finally understand where the money was being earned, where it was going and how much more was needed to support the working capital needs during growth and funding for capital purchases to support the growth.
I'm now at a company that has 30+ entities including Bare Trusts, project specific legal entities, JVs, P/S's, Trusts, and a Foundation. The org chart I received when I started was missing almost 15 entities. The company is small, but the staff all worked in silo's and didn't know what the other did and were not cross-trained. The Chart of Accounts is a mess and the support for a lot of the balances in the g/l is difficult to follow. 35 years of being understaffed and never having a designated accountant meant that a lot of record keeping is deficient or non-existent. We don't have any debt and so we don't get reviews/audits and the tax guys have allowed us to carry-on with accounting policies that don't meet any standard, as they are only concerned with the cash basis for tax purposes.
The sum of my rant is this, I don't understand why there isn't already a best practices accounting manual for bookkeepers and general accountants? The textbooks are too theoretical - what most accountants/bookkeepers need is a practical guide on how to set up a proper chart of accounts and book 90% of their normal day to day journal entries, create a simple, logical balance sheet, income statement and cash flow statement and be able to create a "history" of the company via the g/l entries and notes to the g/l entries.
My biggest weakness is not that I can't think like a CFO and think high level... it's that I can't stand having to search for information and I don't like to see my accounting staff suffer - so, I spend countless hours adjusting accounting policies, talking it through with my staff, learning the accounting software... It could be so much easier...
I'm hoping to use this forum (and any others that I might stumble upon) to ask for opinion's on best practices for recording different types of entries - best practices meaning easy to follow, helps with preparation of the f/s and notes to f/s, helps reconcile balances to tax returns, etc. I plan on staying where I am for a while and so I want to make things as efficient as possible for the future...
I would appreciate any and all thoughts!
Alas, accountants are always one step behind, working with inefficient manual processes of approvals and record keeping, and, without anyone really looking at the monthly results with a keen eye, take short cuts to get where they are going. I am mind blown at the number of companies that don't do cash flow statements, don't organize their financials in a way that makes sense, or even can't produce a simple, clean and intact balance sheet and statement of earnings, period.
The last company I was at almost went bankrupt, twice - the first time when they were losing sales, the second time, when they were growing really fast - all in the span of 4 years. It wasn't until I showed up, reorganized how the balance sheet and income statement accounts were grouped, actually did accrual accounting, and produced a cash flow statement, did the President finally understand where the money was being earned, where it was going and how much more was needed to support the working capital needs during growth and funding for capital purchases to support the growth.
I'm now at a company that has 30+ entities including Bare Trusts, project specific legal entities, JVs, P/S's, Trusts, and a Foundation. The org chart I received when I started was missing almost 15 entities. The company is small, but the staff all worked in silo's and didn't know what the other did and were not cross-trained. The Chart of Accounts is a mess and the support for a lot of the balances in the g/l is difficult to follow. 35 years of being understaffed and never having a designated accountant meant that a lot of record keeping is deficient or non-existent. We don't have any debt and so we don't get reviews/audits and the tax guys have allowed us to carry-on with accounting policies that don't meet any standard, as they are only concerned with the cash basis for tax purposes.
The sum of my rant is this, I don't understand why there isn't already a best practices accounting manual for bookkeepers and general accountants? The textbooks are too theoretical - what most accountants/bookkeepers need is a practical guide on how to set up a proper chart of accounts and book 90% of their normal day to day journal entries, create a simple, logical balance sheet, income statement and cash flow statement and be able to create a "history" of the company via the g/l entries and notes to the g/l entries.
My biggest weakness is not that I can't think like a CFO and think high level... it's that I can't stand having to search for information and I don't like to see my accounting staff suffer - so, I spend countless hours adjusting accounting policies, talking it through with my staff, learning the accounting software... It could be so much easier...
I'm hoping to use this forum (and any others that I might stumble upon) to ask for opinion's on best practices for recording different types of entries - best practices meaning easy to follow, helps with preparation of the f/s and notes to f/s, helps reconcile balances to tax returns, etc. I plan on staying where I am for a while and so I want to make things as efficient as possible for the future...
I would appreciate any and all thoughts!
