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Ask the QuickBooks Online Accountant
Meet Lauren, a QuickBooks Online certified accountant who runs a family practice in South Africa founded 18 years ago, Rae and Associates.
“I have been in the accounting industry for more than 14 years, with a specific focus on bookkeeping services and Cloud accounting implementation and sales.
I am extremely passionate about helping SME’s and owner managed businesses so we can relieve their financial pressures and let them focus on their businesses.
I am very client experience focused and have a hands-on approach with all our projects.
Some fun facts, I devour books at an alarming rate so my kindle is my best friend. I have a crazy, loud and fun family, thank goodness we all like each other as we work together every day. I love being a mom to a firecracker 11 yr old daughter. I'm obsessed with animals so I have a mini zoo at home and have a sort of Dr. Dolittle vibe going on around me. “
As a small business owner using QuickBooks Online, an accountant can be the perfect pairing to make sure your books stay clean.
That’s why we sat down with Lauren to ask your top of mind accounting questions.
In this series we ask Lauren:
Why is it important as a business owner to always make sure you have up to date accounting records ?
For me, the number one benefit is access to reports. Partnering with an accountant will ensure that you have real time data - this is the strongest weapon as a business owner when you have to make business decisions
As a business owner you need to have a clear snapshot of how your business is doing, reports provide valuable insights into:
- The financial position of a business
- The results of operations for a specific time period
- Statistical information such as the best-selling item or gross profit margin
- Information about customers and suppliers.
5 top reports for business owners:
Profit & Loss - Reports revenue, expenses, and net income (profit) or loss for a specified period. The statement is based on the income statement formula:
Revenue less expenses equals net income (or loss).
Balance Sheet - A snapshot of a company’s financial position at a specific date. It reflects the company’s assets, liabilities, and equity balances.
Inventory Valuation Summary – Snapshot of the QTY’s and value of your stock on hand
Accounts Receivable (or A/R) reports - allow you to see who owes the business money and how much they owe.
Accounts Payable (or A/P) reports - allows you to see what the business owes and when the payments are due.
Make sure you’re utilising your accountants expertise by taking the time to analyse reports with them. I’ve highlighted a few discussion points to help below. . It’s important to take responsibility for understanding your figures and the best partner to teach you how to do this is your Accountant.
Analysing the Profit and Loss Report:
Key Metrics to Consider
Income:
- Does your total income look about right?
- Which income streams brought in more revenue?
Expenses:
- Look for expenses that were different than prior periods and ask why
- Review key areas like revenue, gross profit and net profit
Analyzing the Balance Sheet:
Key Metrics to Consider
- Has each account been reconciled?
- Review Accounts Receivable
- Review any new asset purchases
- Look at liability accounts like VAT – These will show what amounts are due to be paid in the near future
With knowledge of how your business is doing financially through reading and understanding your company's financial reports, you have the power to make the best business decisions.
Quick-Tip: For more information and help using reports, visit our Reports Help Hub.
Looking for more accounting help and advice? Keep your eyes out for our next topic: What are my responsibilities as a business owner to my employees and for my company?