How Having A Part Time CFO Can Benefit Your Business

Examples of How We Earn Our Keep

Why Recording Deposits Twice Can Cost You

In reviewing a client’s books we noticed a deposit for about $65,000 from five months earlier that never showed up as a deposit at the bank. Turns out the deposit had been recorded twice, one was the correct account and the other was not. The duplicate deposit erroneously reduced the amount that QuickBooks showed a customer owed. The client was negotiating with that same customer to settle their account and thought the customer owed them $65,000 less than what was showing. The client almost left $65,000 on the table!

You Should Know How Each Segment of Your Business Is Doing

Many businesses have more than one line of business or have multiple locations. The Profit and Loss for one client was showing robust profits and all seemed well. When we broke the P&L into separate segments we discovered the shipping segment had lost $100,000 the prior year. The owner immediately raised his shipping rates. The client went from loosing $100,000 to making $100,000 the next year!

If Your Books Are Showing $3,000,000 In Negative Inventory There’s A Problem

We got a call from a business owner who told us that his QuickBooks was showing $3 Million in negative inventory! He was in the service business and didn’t have inventory! At the same time his P&L was showing large losses. The incorrect usage of QuickBooks billing codes was the cause of the problem. Business owners should get to the bottom of reports that don’t make sense!

Understand What’s Not Profitable and Why

A large contractor with hundreds of jobs a year just wasn’t profitable as he thought he should be. Detailed cost estimates were done for jobs with lots of profit margin thrown in. We set up reporting of profitability by job, and sorted the analysis showing the losing jobs at the top of the report. We discovered that for many of the losing jobs the company was doing extra work but wasn’t getting change orders. The contractor hired a manager to chase change orders and added over $1,000,000 in annual billings. It pays to drill down into your numbers! 

Why Having Good Fixed Asset Records Can Reduce Your Property Taxes

Many states assess property taxes not just on real estate but personal property as well. Fixed assets (long lived assets such as machinery) are assessed a value by the state based on reports submitted by tax payers. Having up to date fixed asset reports are a critical way to reduce your assessment and the tax you pay. We strongly suggest business owners review their fixed asset reports BEFORE personal property tax returns are filed to make sure assets no longer owned are omitted. If you report assets to the state that you no longer own the state will bill you property tax for those assets.

Loan Proceeds Are Not Revenues

We went over the list of loans a new client had with the client and he noticed that a loan to one of the lenders was $2,000,000, not the $200,00 shown on the books. Turns out his bookkeeper was recording all cash receipts as revenue! As a result his taxable income(and taxes) were substantially higher that they really were. He’ll be getting a nice refund when his tax returns are refiled with the correct revenue figures. It pays to take a good look at your financial statements, especially at tax time.