What's it like working with a monthly accounting firm?

It’s a big step moving from an annual accountant to a monthly accounting firm. In fact, it’s such a big step that some businesses put it off because it just seems too, well, daunting. That said, fear of the unknown is pretty easy to understand. What isn’t easy to understand is losing out on business growth just because you’re unsure of the level of commitment needed for a monthly accountant. 

That’s why we thought we’d walk you through what it’s like to ACTUALLY work with an accounting firm every month. We’ll explore your responsibilities, what your CPA firm will be doing, and how it affects your bottom line.  For the purposes of this article, we’ll skip past the onboarding process – as we previously covered that topic. If you’re curious about our onboarding process, read about it here. 

Monthly time frame: In by the 10th, out by the 25th

Once you’ve been onboarded, you’ll know how to use all the reporting tools needed – which is when we can really start getting into a rhythm. What does that look like? By the tenth of the month, we’ll receive from you: sales reports, online platform statements, bank statements, credit cards, etc. Everything that we need to create and maintain accurate books and generate accurate and thorough financial statements. 

On our end, we'll turn around these numbers and give you a financial statement by the 25th of the month. With those numbers, you’ll be able to track and manage your business more effectively. How? Let’s get into it. 

How a monthly accounting firm helps with business planning

We talk a lot about how an accounting firm can help with business planning – the main way that happens is through identifying trends and comparing numbers. Now, that sounds simple – and in some cases it can be – but you’ll never know what to fix until you have the data to back it up. Let’s stop talking in hypotheticals, though, and give you something you can sink your teeth into. 

Is your ROI worth the investment? What a financial statement can tell you

You probably have feelings about certain areas of expenditure, like let’s say: are we paying too much for our marketing? Unfortunately, if you don’t have monthly reporting, that’s all those things will ever be: feelings. It’s hard to act on feelings (and potentially dangerous). 

When you have the numbers from a regular financial statement, you can check those feelings against fact. Let’s say your marketing expense is up 500% this year – is your ROI justifying this? Now, we’re not saying that the answer is to cut your marketing if you aren't getting the results you thought you might, but it will allow you to make more informed decisions about adjustments you can make going forward. This same theory can be applied to your accountant — your financial statements help you make decisions for your business. But, if you’re not getting accurate financial statements from your accountant or you’re stuck trying to make heads or tails of what you do get, you’re not getting a great ROI.

How soon will a monthly financial statement be useful to my business?

The short answer is that a monthly financial statement will be useful as soon as the first one is produced. The longer answer is, it depends on the business. Generating the data that’s useful for your business is largely dependent on the industry you’re in and how often transactions occur.

For example, a retail business that’s heavy on transactions will have a lot of information being generated every month. It’ll be easier to track and make decisions for them than a business that sells big commercial equipment, which might only have single-digit transactions a year. 

Make better decisions on expense management

Oftentimes expense management doesn’t happen until things get bad for your business. That’s no good. It’s like waiting until someone else tells you that you need to brush your teeth: by that point, you’re in a pretty bad spot. 

There’s a misconception that you can’t do much when it comes to monthly expenses, but working with a complete financial statement gives you the data you need to make decisions on what’s actually important. For example, we had a client once who was using a monthly service to help them with their employee handbook. They hadn’t used the service in YEARS, but they’d been paying $200 a month that entire time. Needless to say, as soon as we saw it on their financial statement, we knew it was time to go. 

With clear and accurate financial statements, you'll be able to easily review recurring expenses and fixed costs — and spot duplicate costs and other escalations in your expenses, like price hikes and subscription or recurring services creep. A clean financial and general ledger creates opportunities for better decision-making around expenses, whether it's to correct errors in your reporting or cut costs where you can. 

Plan for bigger purchases

Your accountant is there to help you understand the impact of purchases – the ramifications for your business and the potential tax write-off for said purchase. Will you write-off the expense or capitalize and depreciate it? Those are questions that your accountant or CPA firm can absolutely help you understand and answer.

They may even help with sales

It might sound funny, but CPAs can even help with sales. How so? Well, any CPA you hire should be familiar with the industry that your business operates in. With that familiarity comes experience. Many of our CPAs are specialists in particular industries (like automotive repair, service industry, and retail) and can help point out areas of interest or help you find glaring issues with your business. 

A great monthly CPA isn’t just there to help you understand numbers, they’ll help you make more informed decisions so you can experience meaningful growth and get back to doing what you do best: managing a successful business. 

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