Monthly Reports and Client Copies

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I recently picked up a new monthly account and my client asked me the following two questions ..

(1) What do you need to get each month?
(2) What do I get back from you each month?

I pretty much explained it to be similar to what you will read below the fold. If this type of stuff interests you, you can hit MORE to continue .. or go to the next post upwards!

WHAT I NEED

Basically .. for monthly accounting, I need everything that is needed to record all your banking transactions. This means your bank statements with cancelled cheques or microfiche copies .. and cheque stubs. Rather than ask for deposit books, I prefer that you prepare a posting sheet or prepare some summary that encompasses your cash sales and deposits into the bank. If possible, I request month-end lists of accounts receivable and accounts payable. If there is a periodic inventory count, I request a periodic valuation of that count. I provide the client with a chart of accounts and expect the cheque stubs and information to be coded, although some don’t have the time and that’s okay too. I definately want to see anything from the government relating to taxes or payroll. If the company doesn’t have that much accounts payable or pays everything in the following month .. I sometimes suggest to the client that instead of making a month-end list at the end of the month .. just write a cheque and date it the end of the month. If there is a cheque needed to be prepared on the last day of the month, just date it the 2nd last day of the month. If there are 3rd parties preparing i.e. the company payroll (like Ceridian), I require the payroll summaries for each payday.

Monthly accounting jobs have priorities with me, in that no matter how busy I am, I will find the time to prepare a monthly accounting job in between year end jobs or during. The only exception to this is, if I am in the process of doing the company’s year end .. I wait until that is over first. I still request the monthly information though, just in case there is something that should come to attention .. and also helps add to the subsequent review.

CLIENT COPIES OF PREPARED MONTHLY INFORMATION

This is what clients get each month:

Separate: 9″ x 12″ White Envelopes

* Office Copy – or for the Office Manager

Monthly Financial Statements (unaudited)
Monthly Transaction reports
Monthly General Ledger

* Owner’s Copy

Monthly Financial Statement

* Returned Information

Client records, bank statements, original posting sheets, etc

I do mark the month on the face of each white envelope, giving the client the chance to just keep the envelope and not bothering to remove it and file it accordingly in another file or folder.

Separate: 10″ x 13″ Brown Envelope (For Mail or Delivery)

* All the 9″ x 12″ white envelopes!

* My monthly invoice

MY MONTHLY ACCOUNTING FILE

* I keep a “Monthly File” for each monthly account, and number them and date them. For instance .. “Monthly File #7 for period March 2006 to …… ” (I leave the end date blank until the file gets too thick to operate.

* I photocopy all government documents (GST and PST filings and assessments), month-end lists that may have been prepared, all bank statements including every page (some clients’ statements are 20 pages long), and I request invoices for all fixed asset additions, insurance, property tax and any other expenses that cover more than one period.

* Computerized bank reconciliations. When I input the cheques, I use source code = “OS” for outstanding deposits, so I can just print out all transactions with this source code and obtain a list. I also print the G/L for the bank account and manually add the total from the transaction total of outstanding cheques to prove it reconciles. Any excel worksheets are included in the file. Worksheets, posting sheets that I prepare and enter directly into the G/L program is placed in reverse order instead of account order or something like that. The first thing I work on – is at the bottom of the section of the file. The last thing I worked on is at the top of the file.

* Computerized financial statements – identical to the ones provided to the client with Notice to Reader and date printed. I also provide a transaction listing report for the month. I do not bother with the General Ledger because at Year End time, I print out an entire “Kept Entry General Ledger” that shows all of the transactions. I do print out a summary working paper trial balance, that shows summary transactions of each account .. it takes up about 1/4 of the paper needed to print.

* Legal Size white paper separates each month … as I mark at the bottom of each page .. JAN/2006 .. FEB/2006 .. MAR/2006 .. etc etc. There is one more sheet labelled “TOP OF FILE” which is where I keep all copies of government assessments, fixed asset addition invoices, and other stuff that is needed to be carried forward to the Year End file, or the next monthly accounting file. This includes my calculations for i.e. Prepaid Insurance. I might post or setup the entire policy in one month, and then create monthly recurring journal entries to amortize over the period and record the expense monthly. I would do that all in advance of course, so I don’t have to worry about it again – until Year End. On this separator sheet, between months .. I jot down the date that I finally delivered to the client, and means .. if I mailed it, or hand delivered it in person etc.

* I keep separate files for monthly accounts for GST and PST returns filed and its calculations; for correspondence (fax and email and snail mail); and a loose File Folder with large black lettering on the face that says … “NEXT MONTH STUFF” which I keep loose inside the monthly file itself.

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