Information Gathered For Estimates

Now that we addressed the types of accounting records we typically face out in the field let’s discuss what will be needed to start working on the estimate itself. 

DATA AND ACCESS POINTS REQUESTED

A) WELL MAINTAINED ACCOUNTING RECORDS 

1) Access to the accounting records (QuickBooks, Xero, etc.) or comparable

Once we are in, if we see that the accounting records are in good order, we use those to understand the following information:

• the number of accounts involved 

            *accounts include profit and loss statements items (income and expense) as well as balance sheet items (assets, liabilities, and equity)

• amount of transactions that need review and potential revision
• the complexity of the transactions involved
• which features are utilized in QuickBooks 

             *QuickBooks features include inventory tracking, sales tax tracking, payroll processing, invoicing, billing, etc.

In our experience, when the client has a solid handle on the bookkeeping/accounting aspect of the business and has an experienced individual professionally handling the ongoing transactions, we should be in a sweet spot to keep our costs low. 

This is very different from when we are in a “review” mode instead of a “cleanup” or full-on “reconstruction” mode. 

B) CLEANUP ACCOUNTING RECORDS 

             *Same as section A) 1) above and add layers below

2) Request to access or to render us with the actual financial data in PDF and Excel format for the year(s) of engagement

the financial data would stem from anything tied to your business, and examples would be as follows:

• banking (this can include traditional banking, lines of credit, PayPal and other processing)
• credit cards 
• merchant processing (Amazon, Stripe, PayPal, Etsy, etc)
• point of sale system (This is least needed and may not be requested in many situations)
• debt (This would be the least priority as well. However, there may be tax ramifications that would come of loaned funds)
• Other miscellaneous accounts that 

3) Request any tax documentation that would coincide with the accounting records, and these would include the following for the year(s) of engagement:

• business tax filings (corporate, partnership, and other business returns as applicable) 
• quarterly and annual payroll tax filings
• quarterly and annual sales tax filings 
• organizational tax documents

C) RECONSTRUCTION OR CREATION OF ACCOUNTING RECORDS 

*Same as section A) and B) above and add layers below

4) Review any available data from the client 

• -data kept in Excel format or comparable 
• -data set from another accounting system from a prior accountant