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Month End Closing - Cash Reporting  

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(@jennafer)
Joined: 12 months ago
Posts: 25
09/07/2020 8:58 pm  

Hello!

I have a client that wants to know his numbers every month. I love this client for wanting to understanding their finances. It is accrual accounting and he wants to know the cash accounting for his business every month. Is it possible to give him numbers at the beginning of the month for the prior month without reconciling the bank accounts? Bank accounts close on the 7th and I try to have everything done by the 9th. 

Thanks!


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 Casey Stokes
(@Casey Stokes)
Joined: 10 months ago
Posts: 21
10/07/2020 1:14 am  

You can enter all the transactions through the month end, and give him the cash basis reports.  Be sure to let him know, that the accounts have not been reconciled, so if those reports are different later, he understands.  Personally, I rarely give financials, until accounts are reconciled, but when I have, i make sure they understand, they are not complete until all accounts are reconciled.

Many clients may file taxes on cash basis, and want to see financials on accrual, or vice versa.  It is fine.

HTH


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(@casey-4)
Joined: 12 months ago
Posts: 126
10/07/2020 2:23 pm  

Sorry...I answered this last night, but apparently wasn't logged in.  

Yes, you can enter all transactions to the bank accounts and give him the financials.  Just be sure he knows, the accounts have not been reconciled, so the numbers could change, once that is done.

It is common for a client to file taxes in one basis, and want to review reports in another basis.


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(@jennafer)
Joined: 12 months ago
Posts: 25
10/07/2020 6:42 pm  

Thank you!

I tried to explain that the numbers aren't final until the accounts are reconciled but didn't get it. I was curious is there was another way. I'm finding in QBO the receipts are getting entered twice which is why I say wait until accounts are reconciled.


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(@casey-4)
Joined: 12 months ago
Posts: 126
10/07/2020 11:32 pm  

Personally, I never provide financials, until all accounts have been reconciled, for this reason.  I supposed you could do a daily recon with the bank, or at month end, but either way, he has to understand that you can't provide accurate info, until all balance sheet accounts are reconcile!  

Try putting it to him like this....  Would he want the CPA doing the tax return, before all the expenses (aka deductions) were entered?  If that is done, something could be missed, and he could pay more taxes.  This is no different....without reconciling, something could be missed, giving him/her false information.  If he makes business decisions, from the monthly financials, he would want accurate information, to make that decision.

As for duplicate entries, that is all in training.  Maybe they are downloading the transactions AND manually entering them?  I know....it should match up duplicate entries, but i have had issues where it did not match them up, therefore, there could be duplicates.  Again, you may not see the duplicates until the reconciliations are complete.

Another way to put it, is that the bank statements are your tools, to complete your work.  You wouldn't make an appointment with a Dr., to have your appendix out, and the day you show up, you are on the table, ready to yank this puppy out, and you hear the Dr. say "oops, i forgot my scalpel".  In this scene, would you prefer to reschedule or allow him to whip out his handy dandy Leatherman, and make the cuts?

If he still insists, put a note on the financials, stating they are not finals, as BS have not been reconciled.  This is the CYA  (Cover you A$$), should he later say you gave him incomplete financials.  You can't care more than they do!

You will need to educate this client.


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(@jennafer)
Joined: 12 months ago
Posts: 25
11/07/2020 1:35 pm  

Casey, I love our examples. Thank you so much!!!!

 


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