Self - Audit

Discussion in 'Business Operations' started by Island Lawn, Nov 10, 2003.

  1. Island Lawn

    Island Lawn LawnSite Senior Member
    Posts: 632

    How does one get a detailed perspective of the biz at the end of the year?

    What kind of financial sheets do I need?
    How do I put these together AND “balance” them?

    How do I know where I’ve been and how do I use that to make projections on where I might be later?
     
  2. newleaflandscape

    newleaflandscape LawnSite Senior Member
    Posts: 348

    Go spend 200 bucks and get quickbooks pro. Maybe cheaper then that even. Its easy to use, and is great for invoices and estimates. You can do balance sheets profit and losses and figure out exactly what your overhead is. It will be the best two hundred you ever spent seriously. Also if you use quickbooks alot of accontants will tell you to just save you company on a disk and bring it in for tax time. Makes things simple for them. If you have trouble using quickbooks, most accountants will help you set it up so its very easy for you. Mine did for no charge.
     
  3. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    The reports section of QB's Pro is unsurpassed...Income Statement, Cash Flow, P & L, Balance Sheet, etc. We have been using it for years and we're extremely satisfied with it.
     
  4. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Posts: 833

    I would have to say one problem with generic QB statements is they are done a little too simple.

    For example printing a P & L listing expense accounts alphabetically does NOTHING for useful information. I see lots of statements that start with

    advertising
    automobile
    bank fees
    so-forth so on.

    A page full of numbers does little for anyone. So you know you spent $x on XYZ. So what? How can it help you?

    It is better to group related accounts on the statements, apply ratio analysis (vertical and horizontal) while comparing mulit years and months.

    The most important part of using finanical information is exactly that- how is it useful?
    How does it help you in the next business decision?
     
  5. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    What's wrong with simple? I'm a businessman and the owner, not an accountant or statistican.

    Vertical and horizontal ratio analysis? WTF, over? Sorry Green, but for most of us here, that is a wee bit over-analyzing. I'm not saying your're wrong or incorrect or anything...just a bit much (kind of trying to find the fly s*** in the pepper shaker) if ya know what I mean...lol.

    My P & L previous year comparison (report) is the one I look at daily. It tells me where I was and where I'm going.
     
  6. KenH

    KenH LawnSite Bronze Member
    from CT
    Posts: 1,622

    Ill have to agree with Rodfather on this one. Quickbooks Pro tells ME all I need to know. I can compare how much I spend each year (and deposit) , and I look at any large discrepencies very carefully. It also does my payroll, payroll liabilities, invoices,sales tax, etc.
     
  7. Green in Idaho

    Green in Idaho LawnSite Senior Member
    from Idaho
    Posts: 833

    Rodfather, I hear ya 5 x5.

    But when one can look at three years worth and see advertising was 5% of gross year 1, 3% in year 2, and less than 3% in year 3 there is a clue why the business is not growing as much as it could be.

    Simple is good. Simple, useful, and meaningful is better.


    What was the last decison you made from reading your simple P&L?
     
  8. newleaflandscape

    newleaflandscape LawnSite Senior Member
    Posts: 348

    Exactly you can determine how much you spent on each category per year. My favorite part is that I can see how much my insurance rates increase each year. Works great for arguing with my agent. You can also determine by looking at that kind of profit and loss that if supplies were double the amount then last year, then you can try to determine if you have access money leeking out. And you can still make graphs and analysis on quickbooks very easily if that is what you are after. There are a number or other programs like it also if you dont like quickbooks. Peachtree is another. My father in law uses it. I personally think quickbooks is easier to use though. You have to figure out what works for you and what will take the least amount of time.
     
  9. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501


    Fuel...use mowers and trucks more that use diesel...less per gallon no matter what.

    Mower maintenance/repair...do more and more myself in-house than using the dealer.

    Buying supplies...outsource more and more as I can.


    BTW Green, thanks for making me think some more:D
     
  10. rodfather

    rodfather LawnSite Fanatic
    Posts: 9,501

    Shoot...and since my insurance company/rates changed early last year, that was a real wake up call!
     

Share This Page