Improving Your Image: Presentable Financial Statements
by Steve Hall | Implementation Manager
The structural display, organization and presentation of your financial statements have a significant impact on the viewer’s perception of you, your organization, and the perceived credibility given to what they are looking at. Financial Statements are to represent the condition and position of the business entity upon which they are reporting, as well as the operational results of that entity. They are a vital measuring tool for those responsible for such evaluation.
Many clients are unaware of the options available to help improve their financial statement presentation.
Yet, many of our clients make little to no effort to improve upon their financial statement presentation. No doubt most are unaware of the options available to them. Motivated by this realization, we decided to include a session in the accounting track at this year’s Innovate conference to cover the vast options available within the AccountMate software to customize the structure and presentation of your financials. This turned out to be my favorite, the most well received, and probably the most valuable session in the accounting track. I will share the contents and concepts in this article.
We start by pointing out that the AccountMate accounting system, like all accounting systems, comes “out of the box” with a default, standard financial statement structure. Additionally, in Autostar’s effort to deliver a consistent, “drop in and go “ Chart of Accounts, this too comes with a default, standard set of Groups and Accounts.
The first level in AccountMate’s standard structure is a typical set of financial statement Categories, such as Current Assets, Fixed Assets, Current Liabilities, Long Term Liabilities, Equity, Revenue, Cost of Sales and G & A Expenses. These category labels are each editable, thus you can make them say anything you wish. For example, for your finance company, you could change Revenues and Cost of Sales to Finance Operating Income and Finance Operating Costs; Selling & Marketing Cost to Collections Costs, etc. The Categories can be changed in the General Ledger module, under Housekeeping and GL Module Setup, then click on the Account Categories tab.
In addition to the option to edit the Category Names, you also have the ability to add a second Category for each Category Type. For example, the first Category Type Asset 1 is Current Assets (by default); the second Asset 1 is blank. The first Asset 2 is Fixed Assets; the second Asset 2 is blank, etc. Simply by adding a description in the otherwise blank description for the second of each type, you can add a second Category. For example, if between Current Assets and Fixed Assets you wanted to add an Intercompany Due To/From category, all you have to do is enter that description in the second Asset 1. Likewise you could add a second Revenue category. Let’s say you label the first Income category Vehicle Revenue, and add a second Income category labeled Service Revenue. You can do the same with Cost of Sales. It’s your choice.
Now, the next structural level of you financials is represented by the Groups. Groups are typically Cash, Accounts Receivable, Other Receivables, Inventory, etc. under the Current Assets category. You may add or remove any Group you wish, under any Category. If you wish to break your GL Accounts into additional groups, with their own subtotals, simply add more Groups under Maintenance, Account Groups. You may also edit the Description of any Group.
Often, rather than the need to add more categories or groups, you need to get rid of some. This is where it really gets interesting. Many of you have, among the standard Categories, Other Income, Other Expenses, etc. Many of you have noticed that these category headings and subtotals are always on your financials, even when the balances are zero. Many of you are annoyed by this, yet are unaware, until now, that you can easily make these go away. Here is how you do it.
Go back to GL Module Setup under Housekeeping, then to the Account Category Tab, find the category you want to get rid of and remove the description. As long as it is blank, it will not appear on your financials. If it tells you that you cannot remove it because it is being used, then get out of that, go to Maintenance and Account Groups, click on the lookup button and find the Group(s) that are assigned to that category. Edit that group and change the category to one of the categories you plan to keep. Once there are not Groups assigned to the category, you may go back and remove the category.
Now, if you want to remove a Group, look at your Chart of Accounts, find the GL accounts assigned to that group, and go edit each in Chart of Accounts Maintenance and change their Group to one you plan to keep. Then you may edit the Group and delete it.