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? Yes Not Applicable No 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? Yes Not Applicable No 3. [ REVENUE ] Do you separately report revenue earned between major product/service categories, and/or between sales channels (e.g. retail, wholesale, distributors)? Yes Not Applicable No 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)? Yes Not Applicable No 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? Yes Not Applicable No 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? Yes Not Applicable No 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? Yes Not Applicable No 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)? Yes Not Applicable No 9. [ OVERHEADS ] Do you account for the changes in employee entitlements (e.g. annual leave) at the end of each reporting period? Yes Not Applicable No 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? Yes Not Applicable No 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? Yes Not Applicable No 12. [ OVERHEADS ] Do you separate your interest and principal components of loan repayments each reporting period? Yes Not Applicable No 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.)? Yes Not Applicable No 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? Yes Not Applicable No 15. [ PLANNING & REVIEW ] Do you prepare annual forecasts and, If you do, are these forecasts generated from your strategic goals for the year? Yes Not Applicable No 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)? Yes Not Applicable No 17. [ PLANNING & REVIEW ] Do you compare your actual performance to your forecast performance at the end of each reporting period? Yes Not Applicable No 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)? Yes Not Applicable No 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.)? Yes Not Applicable No 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? Yes Not Applicable No 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
