Know Your
Numbers –
Know Your
Business
Strong words with a powerful message
If you are not an accounting professional, how do you know if your bookkeeper
is providing your company with the level of expertise you desire and require?
CONTENTS
Chapter 1
Introduction
• Taking Control
• Managerial Accounting – What is it?
Chapter 2
The Truths About Intelligent Bookkeeping
•TRUTH #1 – It Takes Nectar to Make Honey
•TRUTH #2 – Turning a Swarm into a Hive
•TRUTH #3 – Harvesting Your Honey into Money
Chapter 3
Know How to Put This Information to Work for You
Evaluate the Effectiveness of your Financial Reports
• Look for Upside Down Balance on Your Balance Sheet
• Look at your Bank Reconciliation Report
• Review Accounts Payable and Accounts Receivable Reporting
• Checking Payroll Activity
•
Chapter 4
•
About Us
Our Unique Approach to Bookkeeping
• Small Business Financial Officer – SBFO
• Senior Accountant
• BizKeeper
•About Us
Accuracy Partnered with Checks and Balances
-----------------------------------------------------------------------------------------------Garbage In – Garbage Out
As --------------------------------------------------------------------a business owner, your company is hired because you offer expertise
and knowledge about a particular service or provide a valuable
product.
You are professionals in our particular line of work. There is
---------------------------often the expectation that everyone else offering their expertise for hire
is also
a professional and therefore, knows what they are doing. They
--------------------------------------------------------------------may believe they do, however, tax laws, state laws and local
regulations are changing constantly, and not every bookkeeper stays
---------------------------up with those changes or understand them. Since there are almost no
educational requirements to be a bookkeeper, a business owner needs
to --------------------------------------------------------------------be able to hire the right bookkeeper and monitor their work.
As ---------------------------a business owner, accounting may not be your strong point, but
know WHAT YOU EXPECT AT THE BOTTOM LINE. Often small business
owners
choose an inexpensive bookkeeper to save short-term costs.
--------------------------------------------------------------------However, the long-term costs appears when a CPA tells the business
owner they need to clean up their accounting records so they can
---------------------------prepare your tax return? They are going to charge the business owner
their rate to fix work the owner has already paid for---making an
--------------------------------------------------------------------inexpensive bookkeeper not such a bargain.
----------------------------

GOOD NEWS

As a business owner there
are measures you can take
to avoid costly bookkeeping
errors.

You are in control
Taking Control
----------------------------------------------------------------Okay, What’s Up with the Bee Thing—
-------------------------------You may be wondering why the BEE logo, you will see us use BEE
ANALOGIES throughout this book. The word APIS is the Latin word for
“honeybee.” We use the comparisons to bees, honey, nectar and hives,
etc. Because bees have got a great business model. Just think about it,
they are organized, store assets for the future, have contingency plans,
constantly monitor their inventory, adapt to their environment and
everyone in the company knows their job and how they contribute to the
overall success of the organization. They do naturally what great
businesses work hard to achieve and maintain. If more companies had
similar business models, more companies would realize their goals and
dreams. The second part of our name is BUSINESS SOLUTIONS. We position
ourselves as a proactive financial advocate for our clients. As solution
experts we not only provide accounting and bookkeeping solutions, we
also align ourselves with various highly qualified business support
providers, i.e. IT, tax preparation, marketing, sales, insurance, and
financial planners just to name a few. We understand running a
successful business requires a variety of skills and talents, some of which
are better outsourced with proven professionals in their respective fields.
------------------------------------------------------------------------------------------------
----------------------------------------------------------------If accounting and bookkeeping isn’t your
forte, don’t worry—it’s ours. The Apis
colony of Small Business Financial
Officers (SBFO®) teamed with busy
BizKeepers knows how important your
business is to you and how important your
books are to your business. Whether
you’re doing your books yourself,
outsourcing with a bookkeeper or
looking to do so in the future—we want to
make sure that your business is getting
what it needs from your books so you can
get what you need from your business.
--------------------------------
------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------
High Quality Accounting and Bookkeeping
Professionals Offer a Service Essential to Every
Business
?
Y
Why Is It Important?
Your business records
are an important key to
your success. They tell
you if your current
activities are profitable.
They tell you how much
money you have tied
up with customers who
have not paid yet. They
enable you to get all
tax deductions possible.
Good business records make
you look good to the bank.
Good business records allow
you to accurately target
immediate returns on
investments as well as identify
excessive spending.
An Accounting and
Bookkeeping Professional
Does All This and More...
HEADLINE
You Can Utilize Your Financial
Records Optimally by:
You can utilize your financial records
optimally by:
 Having Accurate Data
 Organizing Your Data
Informatively into Managerial
Reports
 Analyzing the Information and
Strategizing
Managerial Accounting vs. Financial Accounting
----------------------------------------------------------------Financial Accounting ------------------------Produces annual reports mainly for external
stakeholders.
----------------------------------------------------------------Managerial Accounting
--------------------------------
The process of preparing management reports and
accounts that provide accurate and timely financial
----------------------------------------------------------------and statistical information required the business owners
and management to make day-to-day and short-term
-------------------------------decisions.
A Professional Bookkeeper Can
Help You Do Managerial
Accounting
 “Make Strategic Decisions
Based on Fact Not Hope.”
----------------------------------------------------------------Management accounting generates monthly or
weekly reports for the organization’s internal audience.
-------------------------------These reports typically show the amount of cash, sales
----------------------------------------------------------------revenue generated, amount of orders in hand, state of
accounts payable, outstanding debts, raw material
-------------------------------and inventory with trend charts, variance analysis and
other statistics.
-----------------------------------------------------------------
CONTENTS
Chapter 1
Introduction
•Taking Control
•Managerial Accounting – What is it?
Chapter 2
The Truths About Intelligent Bookkeeping
•TRUTH #1 – It Takes Nectar to Make Honey
•TRUTH #2 – Turning a Swarm into a Hive
•TRUTH #3 – Harvesting Your Honey into Money
Chapter 3
•
•
•
•
•
Know How to Put This Information to Work for You
Evaluate the Effectiveness of your Financial Reports
Look for Upside Down Balance on Your Balance Sheet
Look at your Bank Reconciliation Report
Review Accounts Payable and Accounts Receivable Reporting
Checking Payroll Activity
Chapter 4
About Us
• Our Unique Approach to Bookkeeping
• Small Business Financial Officer – SBFO
• Senior Accountant
• BizKeeper
• About Us
The Truths About Intelligent Bookkeeping
The following information outlines three essential truths about
accounting and bookkeeping as a management tool.
Truth #1 – It Takes Nectar to Make Honey
You want your financial
records to give you
meaningful reporting
capabilities. You want to
accurately target
immediate returns on
investments. You want to
identify excessive
spending.
Accurate and complete
data entry is absolutely
essential to the success of
your business.
Mistakes can be costly—look at the
following examples:
Example One  Inaccurate or misclassified data may
require your CPA to clean up your
accounting records—at their rates—
before preparing your taxes. Accurate
and properly classified data entry gives
your tax preparer the tools needed to
maximize tax deductions and saves you
money on the cost of tax preparation
Example Two -
Without nectar there is no
honey—Without complete,
accurate and properly
classified data there is not
reliable financial information
for your company.
 Incomplete and inaccurate data entry
is misleading when pricing products and
services allowing for decreased overall
profits. Complete and accurate data
entry provides you with the information
you need to correctly price your products
and services to cover direct and indirect
costs and make a profit.
The Truth is...
When you data is complete,
accurate and properly
classified, costly mistakes like
those above do not happen.
Knowing your bookkeeper is
providing you with reliable data
allows you to turn your focus to
organizing the information into
reporting that will take you from
spending your money to
managing your money.
TRUTH #2- It Takes Organization to Turn a Nest into a Hive
--------------------------------------------------------------
Do Your Books Accurately Represent Your Company?
----------------------------------------------------------------1.
Are you charging enough to produce and deliver your
product and services?
--------------------------------
Solution: Define and group the cost of goods sold accounts on
your Profit and Loss Statement so you can clearly and easily
------------------------------------------identify all related costs.
----------------------------------------------------------------2. Are you considering all business expenses when calculating
your bottom line?
Bees naturally group into nests giving them
a place to bring nectar to process into
honey, similar to the way any
bookkeeping system provides a business
with a path to enter and store data in order
to turn it into useful information. A hive is
what we call a honeybee community
when it is being managed by beekeepers.
The hive is organized to facilitate
extracting honey without harming or
disrupting the bees. This is our approach to
BizKeeping—we organize bookkeeping
systems in order to facilitate extracting
financial information from your business so
that your business can perform optimally.
--------------------------------
Solution: Define and group general expenses of doing business
on your Profit and Loss Statement so you know what factor to
----------------------------------------------------------------use when calculating the cost of overhead in your pricing.
-------------------------------3. Are you proactive and tax planning or reactive and tax
paying?
----------------------------------------------------------------Solution: Know which deductions you qualify for and have your
bookkeeper prepare detailed reporting for your tax professional
-------------------------------pointing them to the information they need to capture them.
More Questions About Your Records...
4. Do you know how your company is performing overall and comparatively to your industry?
Solution: Rely on comprehensive financial reporting that addresses your key indicators.
------------------------------------------------------------------------------------------------Does your financial reporting support your current and financial goals?
------------------------------------------------------------------------------------------------5. Are you comparing your actual financial activity to your budget?
Solution: Utilize budget to actual reporting features within your accounting software to track
------------------------------------------------------------------------------------------------6. Are you planning for growth?
------------------------------------------------------------------------------------------------Solution: Having consistent reporting allows you to plan for growth. Define your growth strategies using your
historical data to help you analyze what has happened so you can plan for what needs to happen.
-------------------------------------------------------------------------------------------------
7. Are your financial records accurately positioning you for a future valuation and sale of your
------------------------------------------------company?
Solution: Clearly identify discretionary spending within your chart of accounts so a prospective buyer can
easily see the earnings capacity of your company.
The Truth is...
When your data is organized into informative reports you will know the answers to these questions. Knowing
your bookkeeper understands your business and your goals well enough to produce meaningful financial
reports allows you to go one step further into strategizing for growth, increasing profits and building your
financial future.
Truth #3 – It Takes a Watchful Eye to Turn Your
Honey into Money
Reports You Need to See At Least on a Monthly Basis
Profit and Loss Statement – Summarizes the
revenues, costs and expenses incurred during a specific
period of time. These records provide information that
shows the ability of a company to generate profit by
increasing revenue and reducing costs.
Statements of Cash Flows – is
concerned with the flow of cash in and cash
out of the business. The statement captures
both the current operating results and the
accompanying changes in the balance
sheet. It is useful in determining the shortterm viability of a company, particularly its
ability to pay bills.
Balance Sheet – A financial
Financial
Reports
Banking, Credit Card and
Loan Reconciliations - Reports
statement that summarizes a company’s
assets, liabilities and shareholders’ equity at a
specific point in time. These three balance
sheet segments give the business owner an
idea as to what the company owns and
owes as well as the amount invested by the
shareholders.
Accounts Payable Aging
Report – Helps you determine how well
you are (or aren’t) paying your accounts
payable. It is a great cash management
tool.
that compile data and make sure everything
is accurate.
Accounts Receivable Aging Report -
shows the amounts owed to the company by its
customers, including the length of time the amounts have
been outstanding. Typically, the aging report categorizes
receivables as “current,” “30 days,” “60 days,” “90 days,”
and “120 days and over.” The purpose of this report is to
show the business owner what receivables need to be
dealt with more urgently because they have been
overdue longer.
If you are not familiar with what information is provided to you within each of these reports, ask
your bookkeeper. They will be able to help you understand each report and be able to help you
interpret the invaluable information they contain.
Talk with your accounting and bookkeeping professional about other reporting that will assist you
in managing your business. For instance, a business that bills clients for reimbursement of direct
expenses will want to see an unbilled costs report. Do not be your client’s banker. Recovering
costs quickly is vital to your cash flow.
You have money to spend on marketing, but none to waste. Tracking the return on your
investment with marketing efforts lets you know which campaigns are bringing you the business
you expect and which ones are costing you more money than they are worth.
Knowing how each department or store location is performing allows you to monitor managerial
staff and the profitability of product and service lines. Grouping all information together can be
misleading. When reporting easily identifies different facets of your business, you now have a tool
to help you oversee your entire company with a better perspective.
You worked long and hard last November putting together a budget for this year. How successful
have you been in reaching your goals? Do you need to make adjustments mid-year to your
operations to better meet your anticipated profits? Comparing your anticipated goals with the
realities of your business is the only way to make timely and appropriate decisions. Don’t fall into
the mindset that says “We are busy, so we must be making money.”
The Truth is...
When your reporting is reviewed and analyzed on a regular basis you will know the
answers to these questions. Knowing your bookkeeper is providing you with useful and
timely reporting supports your efforts at reaching all your financial goals.
CONTENTS
Chapter 1
Introduction
•Taking Control
•Managerial Accounting – What is it?
Chapter 2
The Truths About Intelligent Bookkeeping
•TRUTH #1 – It Takes Nectar to Make Honey
•TRUTH #2 – Turning a Swarm into a Hive
•TRUTH #3 – Harvesting Your Honey into Money
Chapter 3
•
•
•
•
•
Know How to Put This Information to Work for You
Evaluate the Effectiveness of your Financial Reports
Look for Upside Down Balance on Your Balance Sheet
Look at your Bank Reconciliation Report
Review Accounts Payable and Accounts Receivable Reporting
Checking Payroll Activity
Chapter 4
About Us
• Our Unique Approach to Bookkeeping
• Small Business Financial Officer – SBFO
• Senior Accountant
• BizKeeper
• About Us
------------------------------------------------------------------------------------------------
Know How to Put This
Information to Work for You
--------------------------------
--------------------------------------------------------------------------------------------------------------------------------You don’t have the time or the inclination to micro-manage your
bookkeeper’s work. Reviewing the financial reporting provided
by your bookkeeper and knowing what to look for are the first
-------------------------------steps in ensuring you are working with a qualified professional.
Below you will find specific steps you can take to monitor your
----------------------------------------------------------------bookkeeper’s effectiveness in their position.
--------------------------------

On the next few pages
review not only the
questions you should ask
whoever is doing your
accounting and
bookkeeping; but

also the answers you should
expect.

Learn what you need to
know to manage this
position.
----------------------------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------
Know How to Put This Information to Work for You
 Do the numbers seem reasonable?
 Does your bookkeeper understand your business?
1
How do you know the
reports are accurate?
ANSWERS
 Review your Chart of Accounts to determine if it is tracking activity specific to your
business model or industry.
Within QuickBooks it is very easy for your bookkeeper to “drill down” in a report and show
you the detail for a given number.
 Watch out for accounts called “need to fix” or “miscellaneous”. This indicates that
your bookkeeper did not know how to classify an event and needs your clarification.
 In an account name doesn’t seem right to you, ask for an explanation and the detail
of activity recorded to that account.
 Customize your Chart of Accounts so you track activity that is important to your
bottom line.
2
Have you asked your
bookkeeper to verify
the numbers?
 Within QuickBooks it is very easy for your bookkeeper to “drill down” in a report and
show you the details for a given number. This type of reporting lets you quickly
determine if the total number is made up of the correct financial activity.
 Review all reports with your bookkeeper from time to time to make sure you are both
on the same track.
If you find a negative value designed by a minus sign or brackets around your accounts
receivable number there is something wrong! This indicates one of two things:
 You owe your customers money, or...
3
Look for upside down
balances on your
Balance Sheet
 The bookkeeper has received money into your books, but has not created an invoice
to record the sales side of the transaction.
This inaccurate bookkeeping practice understates your revenue to you and creates a
tax reporting problem with IRS.
If your accounts payable liability account is showing a debit balance something is
WRONG!
 You have either overpaid a vendor or...
 You have not recorded a tax deductible expense.
Either situation is NOT to your advantage.
These are only a couple of irregularities that could show up.
Ask Yourself and Your Bookkeeper the Following Questions
4
Look at your bank
statement. It can tell
you several things.
Did you know that
your bank statement
can be reconciled
every month and still
be wrong?
ANSWERS
Look at the un-cleared or outstanding activity sections of the reconciliation
report.
If you have outstanding activity that is more than a few months old this is an
indicator that your accounts are not really reconciled.
Scenario A:
Your checking account is showing an un-cleared deposit in the amount of $10,000 from six
months ago. How can this happen?
You lost the check from a client and it was never deposited. They haven’t told you
because it is to their advantage or perhaps their bookkeeper isn’t tracking cleared checks
in their system.
Scenario B:
Your checking account is showing un-cleared checks dating back several months. How
can this happen?
These outstanding activities are an indication that perhaps a vendor of yours has lost your
check.
Even more troubling, maybe you or your bookkeeper has inadvertently double booked an
activity. Entering the same check twice in your check register can throw off your expense
reporting, your accounts payable balances and the ending bank balance.
These occurrences could cause you to negotiate payment arrangements with a supplier
because you don’t know that you have enough money in your account to pay their bill.
Or perhaps you are putting off paying yourself.
When your bookkeeper is correctly reconciling your bank
----------------------------------------------------------------account you can rely on the information in your accounting
software to manage your cash flow.
------------------------------------------------------
DO NOT rely on checking your balance online – Reconcile Your
Bank Accounts.
----------------------------------------------------------------This is a very dangerous way to manage your cash flow.
--------------------------------
----------------------------------------------------------------It may seem effective when you have the time to manually
calculate in your head what checks you know you have written
and mailed to vendors and which ones are still in the drawer
-------------------------------waiting to be sent until you make the deposit you are going to
pick up from your client. But we all know this methodology
----------------------------------------------------------------doesn’t always work when we are busy and besides it takes
valuable time out of your day that can be better spent.
--------------------------------
------------------------------------------------------------------------------------------------
Ask Yourself and Your Bookkeeper the Following Questions
5
Look at Your Accounts
Payable and
Accounts Receivable
Reporting
ANSWERS
If you use QuickBooks, review the Open Invoice and Vendor Open Balance Detail
reports. These reports are a very quick way for you to see if the bookkeeper has
correctly recorded activity into your software. A bookkeeper can record receipt of a
payment to an account in your accounts receivable module without recording an
invoice for this activity. This creates a situation where you can properly record a deposit
to the bank, but not record your income.
Scenario C:
If you see an open payment entry on the Open Invoice Report then your revenue is
not being properly recorded. Simply recording receipt of a payment creates a
recordkeeping situation that appears to show you owe a client money for undelivered
services or products.
Scenario D:
Similarly for accounts payable, if there is an open payment you have made and no
bill to attach it to you are perhaps properly stating your bank balance, but have not
recorded the expenditure.
 This causes problems at tax time because you are missing deductions.
 You might overpay a vendor because you have no receipt of a bill going through
your system or you might not charge a client for a reimbursable expense because
you have no indicator that the charge was ever incurred. Your vendor is happy
because they got paid, but you have not and you don’t even know it.
 An open bill payment is a message to you that a bill had been entered into the
system but was then deleted. Again, this is your sign that something is amiss
Make Sure Your Payroll is Properly Processed and Recorded
6
Is Your Payroll Activity
Being Processed and
Recorded?
ANSWERS
It is not necessary for you to become a payroll expert, but there are ways to
make sure you are in compliance and that your records accurately reflect
this activity.
Ask your payroll professional, whether that be your bookkeeper or an
outsourced service provider for a schedule of all payroll taxes due including
the tax name and corresponding tax authority, whether it is a company
expense or an employee withholding, what forms are necessary and the filing
requirements, and how you will see the activity reported on your books. The
buck stops with you when it comes to payroll responsibilities.
We suggest you do not use a catch-all payroll expense account. Break out
the different payroll expenses within your Chart of Accounts so you may easily
identify all expenditures and its related costs. Employee costs may include
salaries, wages, overtime, sick, vacation, and holiday pay, bonuses,
commission, state and federal unemployment, matching Social Security and
Medicare taxes, city tax in some cases, workers compensation insurance,
benefits, uniforms, bus passes or parking, cell phone reimbursement, payroll
administrative fees, and hiring expenses. Can you see how if this is all thrown
in to one pot a business owner may not be able to effectively monitor these
individual costs?
CONTENTS
Chapter 1
Introduction
•Taking Control
•Managerial Accounting – What is it?
Chapter 2
The Truths About Intelligent Bookkeeping
•TRUTH #1 – It Takes Nectar to Make Honey
•TRUTH #2 – Turning a Swarm into a Hive
•TRUTH #3 – Harvesting Your Honey into Money
Chapter 3
•
•
•
•
•
Know How to Put This Information to Work for You
Evaluate the Effectiveness of your Financial Reports
Look for Upside Down Balance on Your Balance Sheet
Look at your Bank Reconciliation Report
Review Accounts Payable and Accounts Receivable Reporting
Checking Payroll Activity
Chapter 4
About Us
• Our Unique Approach to Bookkeeping
• Small Business Financial Officer – SBFO
• Senior Accountant
• BizKeeper
• About Us
The Apis Story...
We Take the Sting Out of
Accounting and
Bookkeeping
Take Control –
Know and Use
Your Numbers
1
The Beginning
• Apis Business Solutions, LLC was started
in August 2008. We developed a
system of financial management
specifically designed to help small
business owners run their business “by
the numbers”. When business owners
understand the numbers of their
business, they make strategic
decisions based on “fact” not “hope.”
• Most business owners do not start
their own business because the “love”
accounting and bookkeeping, yet
effectively managing their financials is
essential to
their initial
and continued
Who?
Where?
success. Organized and complete
financials mean access to funding,
better cash management, and better
When? for success.What?
opportunity
How?
2
The Commitment
• At Apis we believe good business
begins and ends with the
relationship. Because we work with
the financial core of the small
business, trust is essential. We also
know that trust is earned, it is not a
given. We are prepared to work
hard to earn and keep your trust.
• We believe in the following
formula:
Integrity + Reliability +
Competence +
Transparency = TRUST
3
The Results
• In June 2009, we were honored to
be named one of the 10 winners
nationwide in Intuit/QuickBooks®
“Power to Get More Done”
Stimulus Grant Competition. Apis
Business Solutions was chosen from
more than 700 applicants from
across the country because of our
business model, professionalism
and our willingness to give back to
the community.
• In May 2011 we were honored as
one of three finalists for the
“Emerging Business of the Year”
award sponsored by the Denver
Metro Chamber. As an advocate
for small business success and
growth in the Denver Metro
Community, we are honored to be
recognized as a “Small Business
Making a Difference.”
Our Comprehensive Approach
Focuses on:
Advocacy for the
Business Owner
We Stand Behind You, So You Can Stand Out!
Long-Term
Client
Relationships
Professionalism
Managerial
Accounting
Advocacy Role
Quality of Service
Transparency
Clear
Communication
Quality of
Service
 Project Director to
oversee every
account. The focus is
on personal,
individual service.
 Through service
agreements ,
letters of
engagement,
punch lists and
timelines our
clients know
what they can
expect from us.
 Through our website
our clients have
access to a
protected portal
where they can share
and access
important documents
and information
concerning their
account allowing for
total transparency in
the work we
produce.
Results
 We take a
participatory role
with our clients so
that we are best
able to help
achieve and
maintain financial
success. We also
utilize the vast
resources of all
members of our
hive in order to
find the best
solutions to any
given situation.
 Unleashing the
power of a business’
financials allows
owners to make
strategic decisions
based on “fact” not
“hope”. We
transform the way in
which you view your
financial reports so
you can use the
very same financial
transactions your
tax preparer uses
but with a focus on
effectively running
your business, not
just how much tax
you owe on the
bottom line.
Building trust
takes time.
As
advocates
for our clients
it is our
responsibility
to always
look for the
most efficient
and costeffective way
to approach
each task.
24
For More Information about Apis Business Solutions, LLC
Call us at 303.945.2104
Website: https://www.apisbusinesssolutions.com
Email: nbarnett@apisbusinesssolutions