When Accuracy Matters...
When accuracy matters! Did you know that financial statements form a permanent record of your business? That’s important because banks, shareholders (including head office) and liquidators, despite all the disclaimers, will seek to rely on them. Far too often financial statements contain basic errors. Yet, by the time a problem arises, it’s too late, the numbers are what the numbers are. You’ve signed off on them to say that they give a ‘true and fair view’. You’ve been let down by the experts.
It’s these errors that are costly. Incorrect apportionment of liabilities, for example, can create a presumption of insolvency. Inaccurate (cookie cutter) note disclosures can mislead an investor. Deals fall over because of this lack of attention – a sausage-factory, garbage in-garbage out approach that is quick and convenient now but ends up costing you in the long term.
Why Invest In Financial Reporting?
If you answered “because I have to” you are somewhat right – but we would playfully admonish you for downplaying the real value of financial reporting!
The Corporations Act requires all proprietary (private) companies to keep sufficient financial records to “record and explain their transactions and financial position and to allow true and fair financial statements to be prepared and audited”. It further requires those same companies to prepare an annual financial report in certain instances.
Putting the Act to one side, it’s just good business practice. The act of mapping your management financials across into a financial report that adopts key accounting standards let’s you know where you really stand. That’s important whether you are a company, or some other type of entity.
Any fair dinkum assessment of financial performance, financial position and cashflows requires a certain level of rigour – the ability to compare apples with apples, year after year.
Prudent business owners and Boards think ahead. Accountant prepared financial statements demonstrate your good attitude to, and adoption of healthy governance practices. Choosing a reputable accountant says a lot about who you are, and the things you value most.
And don’t get caught out! You will be asked to provide accountant-prepared financial statements at key moments in time, where the stakes are high. For example, in discussions with your bank, business partners, business owners and prospective buyers of your business.
That’s why you should invest in financial reporting.
How Are We Different?
The BridgePoint Group team has been trained to think, not mindlessly process. We know that one day, this becomes important. Quality work and output is key.
What's The Process?
Our process is (of course) designed to be efficient and effective. Whilst acknowledging there will be differences around the detail, once engaged to prepare financial statements we will always follow these broad steps:
- Pre-engagement procedures
The pre-engagement process is designed to check our understanding of your business, ascertain whether things have changed, suggest relevant services, clearly define scope and fees and document the same. It sets the whole process up for success!
- Information gathering
We take the source data from wherever it is, in its most advanced, accessible and contemporaneous form. Often that’s your internal accounting package, discussions with your bookkeeper, and additional documents where necessary to verify or explain the transactions we will see and account for.
We review the information we have received to ensure it is complete and accurate (though note we do not conduct an audit). We check for consistency with our documented ‘knowledge of the business’ and what you have told us in the pre-engagement discussion.
Once we are happy that we have the full picture, we proceed to the preparation stage. Reconciliations are performed to prove up the balances, and working papers are prepared to support the key items that will appear in the financial statements. Finally, your data is drawn into our specialty software program and draft financial statements are produced.
Draft financial statements are subjected to a rigorous quality review by highly experienced and highly trained staff. If amendments are required, they are processed before a final, high level and high value review is undertaken and the financial statements are approved for sending. Adjusting journal entries are provided to your bookkeeper or entered with their permission.
- Post-engagement procedures
The job’s not done until and unless you are satisfied that you got exactly what you paid for. Our post-engagement procedure is a great opportunity for two-way feedback – what we found, where the opportunities may be, how the process worked and what can be improved.