There is something to be said for the words we all speak. Day in and day out, we speak and hear thousands, sometimes millions of them. The words we choose say a lot about who we are and what we are passionate about. Here at Protea Financial, we love to share words of wisdom all throughout the year. During 2022, we’ve had many moments where our words have allowed others to learn, so we are going to share them once more. Here are some of the important words we have offered followers this year, and hopefully, you can take something away from these meaningful lessons, too.
We get asked a lot of questions about reconciliation, so we have offered a few different social media posts talking about different points of financial reconciliation. Here are some of the ones that people tend to love the most.
More Than Just Bank Recon:
Reconciliation is more than a bank recon.
Yes, a bank recon is very important.
But you should be reconciling every account on your balance sheet. You should have an external or 3rd party back up for each and every balance.
An accurate balance sheet is half the battle towards good quality financial statements.
A bank reconciliation is one of the most basic of month end close procedures.
It is also one of the questions I will ask in a hiring interview to judge accounting ability.
It is an important concept to understand.
But, there is a part of the process that a lot of people forget. In order for a bank reconciliation to be truly completed, you need to do something with the differences.
Ignoring them can lead to problems in the future.
So here is a helpful process:
- Complete the bank reconciliation like normal
- Isolate the list of differences
- Document which differences are truly timing versus differences that are “permanent” and need to be corrected
- Take action
Even with the timing differences be sure to review length of time as timing differences can become permanent.
Complete you bank reconciliation by taking action!
Zero is the Answer:
Reconciliations are only complete if your final answer is 0.
Either no differences or you can show what the differences are.
A recon is not done until you reach 0.
Insight About Transactional Accounting
Another topic we get asked about regularly is transactional accounting. Every transaction of your business matters, and if you do not have someone accurately tracking and documenting those transactions, what numbers are you basing your decisions off of? These essential numbers can make or break your business, so we ask that everyone make sure to take them seriously.
Do not underestimate the value of really good transactional accounting.
People are quick to jump on the I need a FP&A person? Or I need a controller? Or I need a CFO? bandwagon.
Yes. There is a good possibility you need these people. But remember these people cannot do their job if they are always questioning the source data.
Do not overlook the importance of a really, really good bookkeeper. This is such an undervalued role in the accounting cycle and honestly it might be the most important. Without this person doing their job accurately and consistently, all the other people are likely to stumble and in extreme cases fail.
Do not overlook your transactional accounting and the value of a really good bookkeeper. The quality of your bookkeeping could make a significant difference to your success.
The Power of the Accounting Equation
An unfortunate truth in this business is that people often forget the simple equations that can help keep numbers straight in their day-to-day tasks. The accounting equation is one of those equations we get asked about. It is one of the most essential pieces of knowledge any accountant, bookkeeper, and business owner should know when it comes to keeping their financials in order. Write it down and keep it handy – it could help you in ways you may not even know yet.
I have shared this before. But I love this image.
The accounting equation is the most important piece of information any accountant can learn.
The simple formula of A=L+O is all you need to handle the basics (and most of the not so basics)
Yes, there are a lot of overly complicated standards written by people in ivory towers. And yes, these do add extreme complexity. But at the core, if you know this equation, apply this equation, and live by this equation, you are bound to succeed.
The accounting equation is simply the most important accounting basic you will ever learn.
You Are Vital to the Success of Businesses Around the World
One of the more forgettable positions in any company is that of the bookkeeper or accountant. We have stress from the expectations everyone has, and many want us to be super-human and infallible. Our goal here at Protea Financial is to be a supportive resource to all, including businesses and financial professionals alike. Here are some important words of wisdom we’ve been able to share this year that really resonated with our audience, and we hope you feel the power of these words, too.
Being an Accountant is Tough:
Being an accountant is one of the toughest jobs out there because we are underappreciated and most of the time seen as a grudge purchase. A lot of people will treat you poorly in a business environment purely because you are an accountant.
On top of that, expectations around us are crazy! You can get 1000s of transactions correct without any thanks. It is just expected. But get 1 wrong, and it is the end of the world.
So, I want to remind you all.
You are doing a great job! And your work is important! Keep working hard and doing the best you can! You are making a difference!
Bookkeepers Are Important:
Sometime people with a title will treat you poorly.
Bookkeepers are important!
Do not let anyone tell you otherwise!
Poor source information will lead to poor decisions.
Contact Protea Financial Today for Advice, Questions, or Networking!
Here at Protea Financial, we love sharing ideas and resources with those who want to learn more. It is part of the inspiration behind what we do. If you ever need to ask a question, are looking for a professional to add to your network, or need some words of wisdom, please contact us. We will always do what we can to help share ideas, thoughts, and knowledge with those who want it.
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If you have ideas and words of wisdom you want to share with our network, join us on social media, or contact us to become a part of the Protea Financial network!