Business Articles

Getting Familiar with Month End Reports

Bookkeeping is cyclical. Year in and year out, the cycle is continual and this is why the responsibility placed on bookkeepers and accountants is so important. Just as every business has its fiscal year and quarterly reports, the numbers team has its own reporting to do. But outside of annual reporting, it’s important not to overlook the importance of end of month reporting. Or as insiders call it ‘wrapping up the books at the end of the month.’

In fact doing end of month reports is one of the most important tasks that a bookkeeper has because annual and quarterly reporting hinge on how well the books are balanced, all twelve months of the year. Because if the books are not properly updated, even the smallest problems can snowball into something much greater at the end of the fiscal year. Bookkeeping and accounting are one of the few professions where you’re required to be as error free as possible – when you’re dealing with someone else’s money, mistakes are costly.

So what does a good end of month report look like? Well it starts by establishing a set closing date. Typically this is at or around the very end of the month and the date should be communicated to all those who send you invoices. It’s important that you establish a firm date for this and make it clear that all expenses and revenue must be posted at this point. “It’s basically set in stone,” says Sheri Gulston, accounting officer at Ashton College. “You can’t close the books until everything has been reported and you can’t modify the ledger either.”

Once you’ve established a firm closing date you can move into balancing the sheets. When examining the sheets (or ledgers) what you’re looking for are any discrepancies between your debit and credit columns. “This is where you often find mistakes” says Gulston. “If there are accounts you’re uncertain about then you make a note to come back to them later during the adjustment phase.”

After you’ve concluded putting together a balance report you can start to adjust individual entries. “This is where you correct the balance on your ledger and tie up any loose ends. Sometimes you might have overdue invoices or invoices that came in at the last minute” says Gulston. “If you’ve done your balance report correctly then the adjustment process shouldn’t be too time consuming.”

Once you’ve adjusted your ledger entries then you need to double check your balance report to make sure that the two are synced up. This may seem like a step you can just skip but this isn’t a road you want to go down. “A lot of bookkeeping mistakes are missed at this point,” says Gulston. “Your balances might vary slightly after you’ve done adjustments so you need to backtrack a bit and make sure everything lines up.”

The final step in doing your end of month reporting is the end of month reporting itself. The report needs to include all the expense activity for the period to date and proper documentation of your balance sheet. “If you’ve done all the previous steps correctly then the report should be error free,” says Gulston. “But if it isn’t then you need to go through all of the preceding steps to find the error. Remember, take your time and you won’t make any mistakes!”

Founded in 1998, Ashton College is a post-secondary institution offering flexible education options for working professionals looking to upgrade their certification or change careers.

Posted by Katharine Mills  |  Comments Off on Getting Familiar with Month End Reports  |  in Business Articles

Creating an Audit Trail

By Adam Bajan

If you remember anything from the 1996 film ‘Jerry Maguire’ it’s probably the infamous Cuba Gooding “Show me the money!” line. The line might just as easily have been said about bookkeeping because keeping an accurate financial trail of transactions is a bookkeeper’s most important task. Whether you work for a company or are contracted out for tax season, it’s important to note that creating an audit trail is necessary because if you are audited, you’ll want to be able to give the auditor a clear picture of what’s going in and how much is going out. This helps give the auditor confidence in the company they’re looking into.

So what does a proper audit trail look like?

If the CRA notifies you that they will be conducting an audit the first thing they’ll want to see is a substantial record of the businesses’ income as well as its expenses. Errors in this step are usually the first sign of trouble. The best way to avoid errors is to ensure that the business uses its bank account to pay all of its expenses. If they pay directly through a bank, the bank will have accurate, error free records of funds going in and out. But if the business pays cash and doesn’t keep accurate receipts, your task as a bookkeeper preparing for an audit just got a whole lot more complicated. That’s why it’s important that the business you work at or are contracted to keeps track of its transactions. Remember, it’s a lot easier to fix mistakes by ensuring they don’t happen rather than trying to fix them after the fact. Sheri Gulston, accounting officer at Ashton College in Vancouver BC, says that “the goal with creating an audit trail is that anyone can step in and get an accurate view of the financial stability of a company. That’s why keeping accurate records is so crucial.”


When keeping receipts it’s not enough to just collect them in one place and expect the auditor to collate them for you. What you’ll need to do is ensure that the receipts are numbered and that each number corresponds to a transaction. This is similar to the classic double-ledger system of bookkeeping which has been in place for hundreds of years. And there’s a very simple reason for it: it works. When auditors are combing through the financial records of a business they’re looking for what they call “completeness” and by using numbered receipts that correspond with transactions they’re able to get a big picture view of how that business operates.

Lastly, whether you’re a bookkeeper on contract or permanently attached to a company it’s important that you cross-train. No, that doesn’t mean doing cardio in the office but you do need to ensure that other people in the company are familiar with and understand how to keep track of their own receipts. For instance, if the company has an employee expense account you need to make sure that on a business trip, employees keep track of their purchases and hold on to their receipts. Because when the trip is over and they return back to work errors made in reimbursing them can cause foul ups during an audit.

Just remember, no one likes being audited. But if you keep accurate, up to date financial records there’s no reason the process has to be painful.

Adam Bajan is a write and PR Specialist at Ashton College. Founded in 1998, Ashton College is a post-secondary institution offering flexible education options for working professionals looking to upgrade their certification or change careers.


Posted by Katharine Mills  |  Comments Off on Creating an Audit Trail  |  in Business Articles

Current Bookkeeping News

In a survey, TD Bank asked 508 small-business owners what they loved about owning their own business. Nearly all of the respondents — 96 percent — said they loved having flexibility and a feeling of control. They loved spending time with their customers and serving them.

But bookkeeping? Not so much. Almost half of the owners surveyed said that bookkeeping was their least favorite task. And the more time the business owners spent running their businesses, the more they loathed the task — 58 percent of business owners working 60 or more hours a week said that bookkeeping was particularly draining. Handling finances, banking and marketing were also unpopular items on the to-do list of many small-business owners.

The survey didn’t delve into the reasons why bookkeeping tasks gets no love, but I can fill in some of the blanks from past experience.

  • Bookkeeping can be hard. Unless you have an accounting degree, you won’t automatically know the first thing about basic accounting practices. You have to learn it.
  • Bookkeeping usually isn’t fun. It’s all about cold hard facts — the truth. When you see your business expenses racking up and little income trickling in, it can hurt.
  • Bookkeeping can be very time-consuming (especially if you’re new at it.)
  • With bookkeeping, it’s easy to make mistakes, and mistakes can be costly.
Posted by Jacquie Johnston  |  Comments Off on Current Bookkeeping News  |  in Business Articles, Industry News
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