At Jaspar, we are increasingly encountering potential clients contacting us with the problem: “We have poorly managed accounting”.
Since we work with many auditors, we discuss not only accounting problems but also personnel problems. Unfortunately, our fellow auditors have also confirmed to us that in recent years there has been a growing “phenomenon” of poorly done work, unaccounted receipts, unfiled statements and reports.
Companies are getting into trouble because they have not fulfilled their obligations to the state authorities, most often to the tax authorities. Another consequence is that the owners or financial directors do not know their company’s financial results, do not have an overview of receivables, etc.
The consequences can be unpleasant. For example, fines from the tax authorities. The company may become an unreliable VAT payer. It may lose money. Etc. Etc. We could go on for a long time.
If there is no basis for managerial decision-making, the company’s management has nothing to base its decisions on its future management, investments, and market operations. It may have problems with the banking sector when applying for credit or meeting the terms of loans already taken out.
One example from our practice: the company for which we reconstructed the accounting records had no overview of the state of its accounts. We understand that if you hire a workforce, an expert in bookkeeping, you expect them to take proper care of it. However, the responsibility is always on the statutory organ. Business owners, and especially managing directors, should be interested in learning more about THEIR accounting and thus have an overview of the accountant’s work as well.
➡️ Recommendation: set up regular meetings with your accountant. Establish the reports and statements you will require each month (quarter). Have the reports explained to you. Set limits on cash registers, do physical inventories. Check your accounts receivable, ask about the financial results.
We certainly don’t want you to be an accountant. But in the end, you know and feel best how your company is doing. An overview of the accounts and reliable cooperation will definitely help a lot.
Jaspar’s accounting and tax team now has several companies for which they are handling accounting reconstructions. Poor bookkeeping at one client, for example, led to a reduction in the bank overdraft.
For another, who had no overview of the amount of funds on hand, the consequences were even worse. In this case, there was even a criminal complaint against an employee who had the ability to handle the company’s cash and bank accounts and took advantage of this in a not-so-good way. In this case, almost one million crowns were embezzled. 😔
We carried out reconstructions and controls, set up parameters and processes for follow-ups. We provided lists of receivables, payables, questionable items.
While there is now nothing left for clients to do but to resolve a lot of issues, they have already set the future path properly and with clear rules. This will give them a monthly overview of their financial management and cash flow. We believe that they are now confident that their accounting is in order again.
