What your books owe you

The problem it solves

The arrangement with the books is usually settled in the first year and never discussed again. Someone started keeping the records, it worked while the company was small, and nobody ever wrote down what gets delivered, on what date, or what else could be asked for.

What follows is a company that receives documents rather than information. Figures arrive that the owner cannot tell are complete, a month is called closed without anyone having defined the word, and a bank reconciliation may or may not have been done, an enormous difference that is invisible from outside. When something does not agree, the conversation turns into an investigation instead of a review.

What is lost is not accounting precision. It is decision time. The month's numbers arrive once the following month is already under way, and an owner who does not know what to require ends up accepting whatever calendar and format they are given, even when neither is usable for deciding anything. Left undiscussed, the arrangement falls further behind as the company grows: more activity running on the same informal understanding, errors carried from one month to the next without anyone noticing, and then the day a bank, a partner or a buyer asks for reliable numbers, when the company finds it has to rebuild them rather than hand them over.

What it covers

The workshop is run from the owner's chair, not the accountant's. The organizing question is what someone paying to have their records kept is entitled to expect, and the answer is built as a written agreement: which deliverables, on what date, backed by what evidence, and what exactly it means that a period is closed. There is a reason for the angle. The trouble is rarely the competence of whoever keeps the books; far more often, nobody ever defined what the job was supposed to produce.

A good part of the time goes to review. An owner does not have to redo the accountant's work, but a few things are worth checking before accepting a close: that the cash in the books agrees with the bank, that what is owed to you and by you carries an age and a name, that no personal spending is mixed in, that large or unusual items come with an explanation. The distinction drawn here is between reviewing and auditing. The first is a habit of whoever runs the company, takes minutes and needs no accounting training; the second is a regulated profession with a different purpose and different rules.

The intensive format lets each piece be built in the room. In the first part, every participant drafts their own agreement on deliverables and dates and sets down what has to be done before a month can be declared closed in their company. The review is then practiced on real material, prepared so that there is something to find, and that exercise produces each person's checklist, short enough to run every month.

The last block is the conversation. There are questions an accountant answers gladly and almost nobody asks, and reasonable requests that were simply never made; they are rehearsed in pairs, because how they are put the first time shapes the relationship. The boundary on the other side gets marked too: keeping records, preparing returns and issuing an opinion on financial statements are different trades with different licenses, and it pays to know which one you have contracted. You leave with four pieces of your own work: the agreement, the definition of a close, the owner's monthly review and the questions for your next meeting with whoever keeps your records. Putting in writing what the books are expected to deliver is as much a matter of process as of numbers, which is why the subject spans ALUD's work in both Finance and Operations.

What participants learn

• Set out in writing which deliverables your books produce, and on what date.
• Define what it means, in your company, for a period to be closed.
• Review a monthly close with a short list of checks that do not require an accountant.
• Tell bookkeeping, return preparation and professional opinion apart, and know which you contracted.
• Take whoever keeps your records the questions that are not being asked today.

Agenda

1. 01What well-kept books produce, and how often
2. 02What closing a period means, who declares it closed and what happens to the document that arrives late
3. 03Bank reconciliation: the check everything else rests on
4. 04Receivables and payables with an age and a name attached
5. 05The chart of accounts: why yours should look like your business
6. 06The evidence behind each entry, and where it lives
7. 07Bookkeeping, returns and professional opinion: three separate services
8. 08The owner's review: checks that take minutes

What the organization leaves with

• A written agreement on deliverables and dates for your bookkeeping.
• Your own definition of a monthly close, with what must be done before declaring it.
• An owner's review checklist, short enough to run every month.
• A set of questions for your next meeting with whoever keeps your records.