Quarterly Close Process for Entrepreneurs

The procedures that we would like to offer are as follows:

1.     Perform a quarterly financial close process.

   a.     This will require the client to upload their financial database to our secure portal.

   b.     The processes that we will perform will include:

         i.      Overall transaction analysis;

         ii.      Cash flow analysis;

         iii.      Quantify defined information to assist with operational decisions;

         iv.       Internal control overview;

         v.      Build a financial dashboard;

         vi.      Provide financial statistics that can be used to make prompt business decisions;

         vii.      Quarterly compilation and consulting report and update and client's tax plan.

This process will be very beneficial for the entrepreneur to gain a better understanding of the businesses results of operations and financial position at the end of each quarter and globally for the entire year. Some of the detailed procedures that will be performed during this process will be as follows.

1.   Scrub the balance sheet.

   a.   At the end of each quarter, we will analyze the balance sheet and adjust certain accounts to actual.

          i.   Accounts receivable will be adjusted to the detailed database you use to track amounts owed to you from customers.

1.   Collection issues should be acknowledged and solutions defined.

         ii.   Inventory would be adjusted to your perpetual inventory reporting system.

1.   Obsolete inventory and slow-moving products should be defined and proactive solutions implemented.

          iii.   We will analyze accounts payable cutoff to determine if invoices are being recorded in the correct accounting period.

          iv.   Accumulated depreciation will be adjusted to actual based on the contents of the depreciation schedule.

1.   All book/tax difference will be considered.

          v.   All notes payable balances will be adjusted to actual based on the statements received by the financial institution for the lender.

1.   Amortization schedules will be created to track all payments.

         vi.   All deferred revenues will be adjusted to actual based on the revenue recognition program.

2.   We will scrub the income statement at the end of each of quarter for correctness and completeness.

   a.   A detail transaction analysis will be performed to ensure all items have been posted in the correct general ledger accounts.

   b.   The chart of accounts will be analyzed to determine if accounts should be added or deleted.

   c.   This process will be greatly enhanced with a common size analysis where we analyze the income statement based on all dollar amounts as a percentage of that revenues.

         i.   This process will typically flush out unexpected differences. Those differences will then be analyzed and defined and then quantified to ascertain how they can assist the entrepreneur with improving the businesses overall operations.

   d.   During this process, we will always look for miss-postings such as items that should have been capitalized as opposed to being expenses.

         i.   Does the entrepreneur have research and development expenses that should be recorded in separate general ledger accounts and used the report an R&D Credit on your Federal income tax return?

         ii.   Revenues should be segmented out by revenue stream.

1.   The entrepreneur can gain a better understanding of their business activity when revenues are correctly separated by specified activity.

2.   During this process, we will look at revenue recognition to ensure that it is being recorded in the correct accounting periods.

3.   We can quantify marketing and advertising and try to measure revenues that are being generated from marketing dollars spent.

   a.   This is a very important process, starting with your Google analytics or other tracking mechanisms to determine how revenues are being generated and if you are wisely spending dollars on advertising.

The Final Product:

Upon completing this process we will assist the entrepreneur with preparing a dashboard that they will understand defined account balances and financial statistics to better operate their business. We will prepare a report in an outline format that can be understood by the entrepreneur and crisply define our findings. We will have a meeting to discuss our findings and develop a plan to implement improvements.    

We believe this process can take the place of the full-time controllership function that would be less evasive. In essence, we're acting as your controller for a third of the price and providing timely quantified information.


Xiomara Reyes