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Monthly Accounting
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Monthly Accounting
for Michigan Law Firms, Medical and Dental Practices
Monthly accounting services
Monthly accounting encompass a range of financial tasks and responsibilities that are typically performed on a recurring basis to maintain accurate and up-to-date financial records for a business. These services are crucial for businesses to understand their financial health, make informed decisions, fulfill obligations, and comply with regulatory requirements. Here are some key aspects of general monthly accounting services.
Bookkeeping
Accurate bookkeeping forms the foundation of monthly accounting services. It involves recording financial transactions, such as sales, purchases, expenses, and payments, accurately and systematically. Bookkeepers organize and maintain various financial documents, such as invoices, receipts, bank statements, and payroll records.
Accounts payable
Accounts payable refers to the money a business owes to its vendors, suppliers, or creditors. Monthly accounting services include managing AP by tracking and recording invoices, ensuring timely payment to vendors, reconciling statements, and maintaining a clear record of outstanding payables.
Accounts receivable
Accounts receivable represents the money owed to a business by its customers or clients. Monthly accounting services involve tracking and recording AR, sending invoices to customers, following up on payments, reconciling AR balances, and managing collections if necessary.
Bank reconciliation
Bank reconciliation is the process of comparing a business’s financial records with its bank statements to ensure accuracy and identify any discrepancies. Monthly accounting services include reconciling bank transactions, identifying and resolving discrepancies, and maintaining a clear understanding of the business’s cash position.
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Month-End Financial Reporting and Analysis
for Michigan Law Firms, Dental and Medical Practices and Small Businesses
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Month-end accounting reports and analysis are essential for evaluating the financial performance and health of a business at the end of each month. These reports provide a snapshot of the company’s financial position, revenue, expenses, and other key metrics. Additionally, they help identify trends, measure progress towards goals, and inform decision-making. Several key reports, analysis, and key performance indicators (KPIs) are typically included in month-end accounting reporting. Here’s an overview:
Income Statement
The income statement (also called: Profit and Loss Statement) summarizes the company’s revenues, expenses, and net income or loss for the month. It provides insights into the profitability of the business, showing the revenue generated and the costs incurred to generate that revenue.
Balance Sheet
The balance sheet presents the financial position of the business at the end of the month, reflecting its assets, liabilities, and equity. It provides a snapshot of the company’s overall financial health, including its liquidity, solvency, and working capital.
Cash Flow Statement
The cash flow statement tracks the inflow and outflow of cash during the month, categorizing cash flows into operating activities, investing activities, and financing activities. It helps assess the company’s ability to generate cash, manage liquidity, and meet its financial obligations.
Accounts Receivable and Accounts Payable Aging Reports
These reports detail the outstanding customer invoices (accounts receivable) and vendor invoices (accounts payable) at the end of the month. They help monitor cash flow, identify potential collection or payment issues, and manage working capital effectively.
Financial Ratios
Various financial ratios can be calculated and analyzed to assess the company’s financial performance, liquidity, profitability, and efficiency. Examples include gross profit margin, net profit margin, return on assets (ROA), return on equity (ROE), and current ratio.
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Variance Analysis
Comparing actual financial results against budgeted amounts or prior periods allows for variance analysis. This analysis helps identify discrepancies, understand the reasons behind them, and take corrective actions if necessary. It can be performed for revenue, expenses, and other key financial metrics.
Key Performance Indicators (KPIs)
KPIs are quantifiable metrics that track the performance and progress of the business towards its strategic objectives. Examples of relevant KPIs for accounting reporting include revenue growth rate, customer acquisition cost (CAC), customer lifetime value (CLTV), accounts receivable turnover, and inventory turnover.
Trend Analysis
Examining financial data over time helps identify patterns, trends, and seasonality in the company’s financial performance. It allows for a deeper understanding of the business’s financial trajectory, helps make projections, and supports decision-making.
Narrative or Management Commentary
Alongside the financial reports, a narrative or management commentary provides additional context, explanations, and insights into the financial results. It highlights notable events, market conditions, and factors influencing the company’s performance.
Budget-to-Actual Comparison
Comparing actual financial results against the budgeted amounts provides insights into the company’s financial discipline, adherence to the budget, and the accuracy of initial projections. It helps identify areas of over or under-performance and supports future budgeting and forecasting processes.
By analyzing these reports, performing variance analysis, tracking relevant KPIs, and conducting trend analysis, businesses can gain a comprehensive understanding of their financial performance, make informed decisions, and take appropriate actions to drive growth and profitability.
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WCO Accounting provides real-time dashboards, accurate and timely reports giving Michigan doctors, dentists, lawyers, and business owners the tools to run their businesses.
We serve law firms, lawyers, dental and medical practices, and small businesses in Auburn Hills, Bloomfield Hills, Troy, Rochester Hills, Clinton Township, Shelby Township, Sterling Heights, and Washington, MI.
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