Can you trust your financial reporting framework? Name Business Email Phone Number 1. [ REVENUE ] If you receive customer deposits, do you include them in your revenues at the time the revenue is earned (i.e. when products/services are delivered) as opposed to including them in revenue when you receive the deposit?YesNot ApplicableNo 2. [ REVENUE ] If your business involves delivering projects or jobs (e.g. custom manufacturing, project delivery), do you adjust for work in progress valuation at the end of each reporting period?YesNot ApplicableNo 3. [ REVENUE ] Do you separately report revenue earned between major product/service categories, and/or between sales channels (e.g. retail, wholesale, distributors)?YesNot ApplicableNo 4. [ COST OF SALE ] Do you separate the cost of staff/contractors who work on production of your goods, or delivery of your services, from other labour costs (e.g. sales and administration)?YesNot ApplicableNo 5. [ COST OF SALE ] If you have multiple product or service lines that you deliver, do you capture the related costs of sale in those categories to enable you to measure gross profit by product or service line?YesNot ApplicableNo 6. [ COST OF SALE ] If your business holds stock, do you ensure that you have accurate stock records at the end of each reporting period?YesNot ApplicableNo 7. [ COST OF SALE ] If you are a manufacturer or deliver projects/jobs over more than one reporting period, do you objectively estimate work in process values and adjust your recorded cost of sales to match the estimates?YesNot ApplicableNo 8. [ OVERHEADS ] Where your pay cycle differs from your reporting period, do you accrue remuneration costs to ensure accurate labour costs are recorded (e.g. there will be 5 weekly pays once every 3 months or 3 fortnightly pays once every 6 months)?YesNot ApplicableNo 9. [ OVERHEADS ] Do you account for the changes in employee entitlements (e.g. annual leave) at the end of each reporting period?YesNot ApplicableNo 10. [ OVERHEADS ] Most businesses receive bills for costs that relate to multiple periods (e.g. annual insurance cost, workers’ compensation, maintenance contracts, annual subscriptions, etc.). Where these costs are significant, do you allocate them to prepayments and amortise them over the period they apply to?YesNot ApplicableNo 11. [ OVERHEADS ] When your business has incurred costs, but the related invoices have either not been received or are dated in a later period, do you accrue the costs which have been incurred in the relevant period?YesNot ApplicableNo 12. [ OVERHEADS ] Do you separate your interest and principal components of loan repayments each reporting period?YesNot ApplicableNo 13. [ OVERHEADS ] Do you group your overhead accounts into categories to enable a better understanding of different elements of the business (e.g. remuneration costs, sales & marketing costs, etc.)?YesNot ApplicableNo 14. [ BUSINESS SEGMENT REPORTING ] Do you report on the gross profit of each business segment? And, if you do, are you complying with the revenue and cost of sales issues mentioned earlier?YesNot ApplicableNo 15. [ PLANNING & REVIEW ] Do you prepare annual forecasts and, If you do, are these forecasts generated from your strategic goals for the year?YesNot ApplicableNo 16. [ PLANNING & REVIEW ] Have you done the analysis on how your forecast plan will impact on cash reserves and on capacity levels (i.e. can you deliver)?YesNot ApplicableNo 17. [ PLANNING & REVIEW ] Do you compare your actual performance to your forecast performance at the end of each reporting period?YesNot ApplicableNo 18. [ PLANNING & REVIEW ] When you have completed your financial reports, do you understand what has caused the results to vary to either forecast or previous periods (e.g. sales volume, margin, overheads)?YesNot ApplicableNo 19. [ PLANNING & REVIEW ] When you have completed your financial reports, do you understand precisely where cash was generated from and where cash was used by the business (e.g. working capital, wages, equipment purchases, shareholder loans, etc.)?YesNot ApplicableNo 20. [ CONTROL SYSTEMS ] Do you reconcile your balance sheet asset and liability accounts on a regular basis to ensure they represent the true levels of assets and liabilities in your business?YesNot ApplicableNo Time is Up! By Colin Wright|2020-04-30T12:48:42+10:00November 13th, 2018| HELP OTHER BUSINESS OWNERS BY SHARING THIS ARTICLE FacebookTwitterLinkedInPinterestEmail About the Author: Colin Wright
