Under the hood

Bookkeeping Checklist: What we look for when reviewing books

Whenever we take on the finance and accounting function for a new company there are a few things that we dive into (prior to starting) to determine what needs to be done. We usually call this bookkeeping checklist phase “looking under the hood” and it’s part of our discovery process. We use the process to we determine whether or not to bring on a new client. Not every company is a fit for us, and we’re not a fit for every company. We tend to really like working with tech-oriented companies and mission-driven non-profits. However, we’ll occasionally be blown away by a visionary leader who we really want to work with. Here are some of the things that we are looking for when we do our finance and accounting review: 

1. Bookkeeping System in place

We start by taking the time to see what sort of accounting system the company is currently using. Most companies are using cloud-based systems like Xero, Feshbooks, Sage, QuickBooks for their bookkeeping. Some companies even use spreadsheets to tackle the job. If they are using QuickBooks, we are looking to see what version. Many use QB Desktop or Online, so we’ll note what tier plan they are on and whether they are on a cash or accrual basis. We will also take a look at their chart of accounts to make sure nothing seems strange or out of place.

2. Ancillary Systems being used

Next, we check to see what sort of ancillary systems, software, or apps the company is using in addition to their bookkeeping and accounting system. This may include expense management Systems, time tracking systems, payroll systems, payment or bill pay systems, equity management systems, sales and use tax systems, and the like.

3. Types of Transactions logged

We will then do a deeper dive on the company’s transactions. We are looking to understand the volume of the transactions, the complexity of the transactions, and whether the bulk of the transactions are recurring transactions or one-offs.

4. Banking Setups in place

Next on the bookkeeping checklist, we always see what sort of banking setup and payment systems the client is using. Different banks have different types of rules, access, procedures, notifications, system syncing and reporting. We’re also looking at how many accounts a company has and is using (savings, checking, credit, PayPal, Stripe, etc.). More accounts leads to more complexity, and we tend to like some banks more than others.

5. Bookkeeping Reporting Requirements

Often times we will check to see what sort of reporting the client is currently expecting or needing. We will try to see if we need to change reports, create additional reports, and modify the frequency of reports. Additionally, we will check to see if our financial/KPI reporting platform makes sense for the company.

6. Review of Historical Bookkeeping

Finally, we will do a cursory review to see if historical bookkeeping has been done appropriately. We may also check to make sure that previous taxes have been filed, payments have been made, proper documentation is in place, etc.

If you are in need of upping your bookkeeping game and want to figure out how you can integrate your finance and accounting function with your HR operations (but you’re a small business and don’t have a ton of time and resources) reach out to Suitless at info@getsuitless.com to see how we can help you. We’ll run our bookkeeping checklist through your system to give you our honest feedback.

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