17 Nov Review
Financial statements and other management reports should be prepared timely. Sloppy or delayed bookkeeping practices make decision making more difficult. In addition, timely review of the reports, especially comparative and trend statements can be the most efficient way to discover many different types of issues. For example, if expenses are higher than usual as compared to revenue this can signal an operational problem which requires immediate attention or it can signal payments being made in error or there is a cash disbursement procedural issue, or it can signal revenue is not being invoiced or there is a cash receipts procedural issue. It can also serve as the first line of defense in finding coding errors.
In addition to reviewing the reports in a timely fashion, following up to ensure that all questions have been answered and errors corrected in imperative. Just discovering issues is not enough. This process may involved research, reclassifications, additional training, etc.
Businesses need good information to make informed decisions. Delays in receiving the information can adversely affect the business and its ability to move proactively in the market place. For example, it is impossible to move money into higher interest accounts if the amount that is in the account is questionable. It is impossible to make a good decision when bidding on a large contract if there is not accurate historical information as to the cost of doing the job and overhead amounts needed for running the business.