At Cappit Solutions, we are a full-cycle accounting firm for small and medium businesses, looking to change the way you view, and interact with your accounting function. We are trying to shake up an industry that has not been changed in a while. Business models are constantly tested by changes to their environments, forcing industries to adapt. For example, Uber changed the way we look at transportation. Facebook changed the way we interact with our friends and family. As the years go on, each industry is flipped upside down and with new ideas, better business practices become a reality. One industry where there has been little change is the bookkeeping, accounting and other financial activities. Let us break down how we see the current state of this industry:
The Traditional Way
Traditionally, small businesses will hire someone internally to do their bookkeeping. With archaic processes in-place, this person is behind on their work, buried in bills and always behind on month-end. An owner may want financial statements, but they are incomplete; this leads to the owner growing frustrated. Constant calls are made to the external accountant. They offer advice, but not too much as they are busy. If the business’ year-end is December 31, around May/June a box of bills and copies of documents are sent to the accountant. They put in the same adjusting entries to “clean up the books.” Once they are done, they file your tax return and you go to meet them at their office where you may have a meeting and review the financials. Once that is complete, it is onto the next year, where you experience it all over again.
The Issue
The internal bookkeeper is covered in paperwork. The books of a small business should be easy, and processes should be put in place for the month-end to be seamless. The month should be closed at the end of the month, not later. Accruals and adjustments should be put in throughout the year. There should be no “cleaning up the books”, entries should be done regularly so the financial statements are accurate on a month-to-month basis. What good are financial statements six months after year-end? Your year is done. There is little opportunity for planning, whether for tax or operational purposes.
Depending on the size of the business, financials should be reviewed with your business advisor either monthly or quarterly. An external accounting firm can help identify financial and operational issues, and provide additional insights, or offer a fresh perspective on topics of concern, while you are focusing on your business.
The Solution
At Cappit, we want to be ahead of the curve. We become your internal business advisors. We will handle your books, process payroll, have monthly meetings to review your financials. Your books will be up to date and your month-end will be completed on time.
Throughout the year we will also offer accounting, tax and operational recommendations. Instead of just reviewing your financial statements yearly, we will offer valuable insights regularly. This is the new way of accounting. We leverage technology to automate all the mundane tasks so we can focus on the value-added activities you should expect from your accountant.
If you are experiencing these issues, or are interested and want to learn more about what Cappit can do for you, please reach out to us for a free, no-obligation consultation by emailing info@cappitsolutions.ca
Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.