Testing Your Financial Reporting - ACCURACY
How Do Your Financials Stand-Up in Terms of Accuracy?
Have you ever been on a trip and thought you were making good time, then realized that you were on the wrong road? That can happen too in business. A CEO can think things are going well for the business, only later to find out that results were misreported and they were not doing as well as they thought.
Bad things happen to good people when the numbers are off. It doesn't have to be fraud. It could just be poor financial systems that don't pull in accurate financial data. It can also be just poor accounting policies that don't fit the industry or how the business operates.
Three tips on our accurate financial reporting philosophy:
- Cash flow is king/queen. You can't fool around with this number.
- We believe in a balance sheet approach. Get the balance sheet right and your numbers can be right going forward. Have the balance sheet wrong and there is no way the numbers will be right. Know the hard questions to ask.
- Get the numbers right and move on to improving the business. Don't mix the two. Don't make the accounting department try to generate income. That's the job of running the business. If there is a lump to take, get it done and move forward.
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