Business Accounting and Consulting
CPA Audited, Reviewed and/or Compiled Financial Statements
It is common for a third party such as a financial institution or a bonding company that has a particular relationship with your business to require that a financial statement be prepared. Private investors or stockholders may also request these financial statements.
Under the guidelines of the AICPA, there are three levels of assurance relating to financial statements. These levels are summarized as follows:
AUDIT – An audit provides the highest level of assurance and includes the most in-depth analysis of the data. It is an examination of the financial statements and a report is issued indicating whether the financial statements are fairly stated and are free of material misstatements. It includes tests of transactions, evaluation of the internal accounting controls, and verification of balances with third parties. Obviously this level of work is more costly than a review or a compilation of the financial statements.
REVIEW – A review provides limited assurance that there is no material modifications that should be made to the financial statements in order for them to be in conformity with generally accepted accounting principles. The work and procedures performed in a review are less extensive than an audit but more detailed than a compilation. In a review the work consists of inquiries from Company personnel and various analytical procedures such as ratio analysis, comparative financial data analysis, etc. applied to the financial data. If these inquiries and or analysis lead to questionable results then additional testing may need to be performed. A review is less expensive than an audit and can satisfy the requirements of a third party in most cases.
COMPILATION – A compilation provides no assurance or opinion on the financial statements. The financial statements are generated from the Company’s internal financial information without audit or review and are the representation of management. This level of reporting is commonly required as part of a year-end financial package from a lending institution for lower balance loans or lines of credit.
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Business Plan Preparation and Review
Business Plans are an important tool that should be prepared for all proposed businesses. Our firm encourages you to prepare the plan prior to beginning the business venture and then offers assistance with the preparation in the plan. We offer suggestions from our experience with start up businesses that we have assisted in the past and are knowledgeable throughout the entire planning process.
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Financial Projections and Budgeting
The first step towards managing your business is to prepare a budget that will be compared to your actual results. Financial projections and budgeting can be as simple as an Annual Sales Budget or as complex as a line-by-line monthly budget. In either case we can provide you with the experience and knowledge in how to prepare a budget to meet your needs and then monitor the budget against actual results to help manage your business.
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General Ledger and Financial Statement Assistance and Preparation
The “General Ledger” is the detailed books of all of your Company’s transactions for a particular period of time. It details all of the transactions by category and then totals each category. The General Ledger can list out each transaction (detail) by transaction or can be summarized into “batches” or by “module” and then summarized into totals. The general ledger is where the professional will search for inconsistencies between accounts, errors in recording, etc. The Financial Statements (basic) are the data or totals by category (account) of the General Ledger presented in a format that is known as the Balance Sheet and the Income Statement. (or Profit/Loss statement). Some computerized accounting packages automatically produce financial statements while others need customized programming. We recognize the need for an accurate general ledger and accurate financial statements and can assist you in the monitoring of the general ledger and the development of customized financial statements and reporting. Some examples of this type of specialized reporting are:
- Division/Location Reporting
- Job Costing
- Product or Service Line Analysis
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Bookkeeping Services
Although we place a strong emphasis on maintaining the accounting books and records in-house we also offer bookkeeping services that will ensure organized financial records. We also place an emphasis on developing a system that is easily transferable to you. This way we can train you for the future at any time and the system is in place should you decide to transfer your bookkeeping in house.
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Long Range Planning Alternatives
Long range planning for a business is one of the most difficult but exciting areas of operating a business. Each area of your business is evaluated (past and present) and factors such as economic predictions, current and future tax legislation, interest rate considerations, stockholders ages and future goals, etc. are considered when performing this service.
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Assistance and Evaluation of Bank and Other Financing Opportunities
Are there any prepayment clauses? Does the interest rate change over time? Are there any restrictions regarding “Owner Salary”? What type of financial statement and other reporting requirements will the business need to provide and maintain? These are just some of the questions that we would be asking when it comes to the evaluation of bank and other financing opportunities. We work closely with your financing institution and always encourage a team approach.
A well-organized financial package from a reputable CPA firm will always make a lasting impression to the lender. We have a great reputation with all the banking and lending institutions and know how to present the information in the format that lenders request.
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Financial and Tax Planning Related to Specific Family Situations
(Divorce, Estates, etc)
Sometimes the planning up front in a divorce or estate matter can save substantial dollars, professional fees and future family issues. We work closely with your attorney and provide recommendations as they relate to current and future tax issues. (i.e. retirements plan distributions in settlement, selling real estate currently or in the future, transfer of assets between spouses) Proper planning in this area can dramatically help you and/or your heirs preserve wealth.
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Forensic Accounting Services
Forensic Accounting Services is one of the fastest growing areas in the accounting profession. We offer specialized services whereby we will investigate particular issues or concerns and develop and prepare reports that summarize our findings of the investigation. Engagements in this area usually arise from divorce cases, business disagreements, fraudulent suspicion, etc whereby we are engaged to uncover irregular transactions within the accounting records.
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Cash Management/Cash Flow Services
Cash Management/Cash Flow can sometimes be the most stressful part of operating a business. As your business grows you need to have an understanding of how your cash flow is affected. We can assist you in developing short term and long term cash flow projections to determine if your business will require additional capital or loans, instituting collection and payment terms with customers and vendors, and maximizing the amount of returns on excess cash.
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Assistance or Preparation of Accounting Procedure Manuals
Small businesses typically have a need of documentation for its policies and procedures, especially in the accounting area. A well-documented Accounting Procedure Manual will enable you to operate the accounting system should one, some or all of your accounting employees become ill, have a temporary leave of absence or leave the organization. This manual is always a great tool when training new employees or if you need to reference any procedure yourself. We can assist you in preparing or reviewing such manuals.
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Business Valuation Services
Businesses need to be valued for a variety of reasons including estate or estate tax matters, marital negotiations, potential buyout of a stockholder or partner or for an overall sale of the business. In any of these instances we can provide insight and an independent objective valuation that is based upon our experience in obtaining the proper and relevant information pertaining to your business.
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Business Entity Selection
There are several types of business entities you can select when either starting your business or continuing with your business. When starting your business we not only consider the tax implications of each different type of entity, we also consider the legal and other implications of the selection and work closely with your attorney and other advisors when making this decision. The choices of “Corporation, S Corporation, Partnership, Limited Liability Company (LLC), Trust, Sole Proprietorship, etc”, can be different for each type of industry or in each State.