Why review the accounts for your business?

Make sure your bookkeeper is doing the right things for your business

Many business owners today often forget about the importance of reviewing the accounts for their business, or simply don’t have the time.

I had a client recently whose bookkeeper merely captured the totals into each expense for the month. What this meant was that when we actually reviewed the accounts and printed out the general ledger we had no information in terms of who the suppliers were that were being paid and what the expenses were for.

What this meant to us was the fact that we now didn’t have any detail to go into some sort of cost versus benefit check to make sure that what are was being spent on these different types of expenses and how much are they actually costing us and what is the benefit – what is the flow on, the positive impact on our cash flow or on our profitability.

It’s really important that, first of all, you make sure you have a good bookkeeper, but most importantly check what your bookkeeper does and review the work that they’ve done. One thing you can do is just ask your bookkeeper to print off a profit and loss statement for the period that they’ve done the work for and also print off a detailed ledger just for those months so you are able to review their work and actually see where they’re actually allocating different expenses and whether their descriptions are actually the correct descriptions. There is no point having all this information in your accounts if you cannot use it to find out how you can increase the profit in your business.