Now that spring is in full swing, are you looking for ways to make sure your startup business client’s financials are in tip-top shape? Yes, you definitely want to organize their financial statement reports and make sure bills for operating costs are all paid, but there is a lot more to think about when it comes to spring cleaning their finances. It is so important to take the necessary steps now to ensure their books are all accurate and up to date.
Taking a much deeper look into your client’s finances could help you think of new ways that they can cut unnecessary costs, generate more profits, and improve their overall financial health. This in turn will help them enhance their success and ensure they stay prosperous (and that you keep them as a client) in the long run. That said, check out these tips on ways to spring clean and improve your startup client’s financials.
Finalize all journal entries
As a bookkeeper, you know how vital it is to document all of your client’s daily transactions as journal entries in your books. Keeping track of all of their business purchases, sales, client invoices and payroll gives you a clear overall depiction of the startup’s financial standing. Thus, take the time to meet with your client to review and record any pending accrual or deferral journal entries. Recording backlogged entries will provide more accurate financials so you can help your client make more informed decisions and safeguard against any unforeseen financial issues that can hurt the business.
Document all your client’s receipts
Now it’s time to ask the client all about their business expenses. Do they sometimes take their customers out to dinner to discuss current projects and plans? Do they have to regularly ship products to customers and make frequent office supply purchases? If so, make sure they provide receipts for all of these expenses so they can be properly documented. Let your client know that in the event of a business audit, proper recordkeeping and documentation will make the whole process go a lot smoother. Taking initiative by recording the receipts could save them a lot of unneeded stress later down the line.
Check their P&L and balance sheets
Review the business’ profit and loss and balance sheet statements to verify all entries were booked correctly. Sometimes, we can be in a rush or get distracted and accidentally record transactions in the wrong general ledger account. This mistake can create inaccurate financial statements, which can lead to challenges next tax season. With this in mind, take the time to review the startup’s financial statements to keep all transactions accurate. You cannot skip this step!
Bank reconciliations
To keep your startup client’s financials in order, schedule a time to perform bank reconciliations for each month. Conducting bank reconciliations will keep the business’ bank balances in order and ensure every transaction is accounted for. In doing this, you may find your client was charged twice for a company purchase or that there is still an outstanding invoice that needs to be paid.
Examine their budget versus actual expenses
While spring cleaning the startup’s finances,
Close all monthly financials
To properly balance your client’s checkbook, close their monthly financials up to the most recent month. If financial statements are not up to date, the startup’s executives will blindly run operations and be completely unaware of any possible financial issues. Providing up-to-date financials gives relevant information to key decision-makers in the company so that they can keep progressing into new levels of success.
To wrap it all up
As an accountant for a startup, you must have a solid grasp of your client’s financial health in order to help them make the best business decisions they can. Spring clean your client’s finances by finalizing journal entries, documenting all receipts for expenditures, and reviewing their profit and loss and balance sheet statements. Also make sure to schedule bank reconciliations, examine their budget versus actual expenses, and close all monthly financials. Taking these steps will help ensure the long-term growth and prosperity of your startup clients.
