What type of accounting services do you offer?

RANCHO CUCAMONGA, CA – My first answer is we do the type of accounting you need, customized to fit your business.  Tax services seem to dominate the minds of many business owners since it happens every year.  Every business requires an annual tax return or the income can be included in your individual return annually.  Tax planning can be a year round activity to regulate and bring the unexpected into focus.  Consulting with business owners on their accounting is also an ongoing event – once the account is reconciled, the interpretation begins.  Making sure the ownership understands the result and how it occurred is important.

There are several levels of financial reporting a CPA can perform. The first and most prevalent is the compilation.  The next level is review and the highest level of reporting is the audit.  Banks and third party users are namely the reason companies are required to issue financial statements for other than their own use. Sometimes disclosures are required on all three levels of reports to highlight and better explain significant parts of the financials.  A public company notes can go on for fifty to one hundred pages in some cases, likely three to six for most small companies.  The basic cost for financial statements are – a review costs twice the price of a compilation and an audit normally twice the price of a review.  Make sure your accountant is qualified to issue an opinion if needed.  I recall a recent experience in which a banker shared with me that the bank received an opinion from a bookkeeper.  Only CPAs are able to issue opinions on financials.  The bank was misled which could have caused issues for both the company and the bank.

By:  Stephen C. Williams, CPA – Partner

How does technology impact our accounting?

RANCHO CUCAMONGA, CA  Technology is at the forefront in accounting.  Most everything is computerized today.  Basic transactions can still be handled manually but anything with volume warrants automation.  There are good inexpensive programs available to business owners today.  QuickBooks seems to be the software of choice for small business today.  I would estimate that 80% of our clients use this software.  It is not expensive and is easy to use.  Automation should be at the top of the list for a new small business to invest in.  Accounting problems and lack of documentation is much more prevalent when automation is not used.  The gaps and holes appear and time has a way of making everything blurry.  The set-up means everything in accounting and having an accountants perspective on this can make things easier as the business moves forward.

 Too much detail will bog down the process.  I tell business owners that a one page summary is easier to interpret than a 10 page one.  Since most of us will not spend a lot of time in accounting we want the most information in the shortest time period.  On the contrary there can also be too much automation too soon.  An expensive software and computer system may be too much for a small business that is not ready to utilize it.  We must try to look ahead but not lose sight of what has occurred.

You don’t have to be in Rancho Cucamonga, the Inland Empire or even Southern California to be helped.   GYL Decauwer LLP has clients all over the United States.

By:  Stephen C. Williams, CPA – Partner

Why is Accounting Important to Me?

A business owners’ accounting is the fuel that keeps the engine running. Not understanding profit and cash flow can fatally injure a business and has injured many since it is optional and not required. Accounting is put off and ignored by many and there are lessons to be learned if we look at the numbers.

We all have an emotional bond with our business numbers. An accountant takes the emotion out and forces us to look at reality. Since none of us like change and many do not understand accounting, this can lead to failure to take action on a timely basis.

A business that has declining revenue normally has a hard time decreasing variable costs fast enough to keep pace with the declining revenue, accelerating the loss in many cases. Looking at profitability per client is also an interesting exercise. Some clients take more resources than others, thus costing more to maintain.

Lifetime value of a customer is another important subject. If the average accounting firm client stays 7 years and the annual revenue is $5,000 that client has a lifetime value of $35,000, which would be looked at differently than the $5,000 alone. Another important accounting related item you should know about your business is what are your key performance indicators? The things that indicate health or lack thereof. If our firm’s average billable rate is increasing we are becoming more efficient. If the opposite, then why, and what can be done about it. Each business has its own set of KPIs, all businesses need to know their numbers, as there is a saying “we can only manage what we can measure!”

By:  Stephen C. Williams, CPA – Partner