1Report periods and source records
The company examples use two QuickBooks exports: Hermetic Networks_Profit and Loss.csv, January 1 through October 6, 2026, and Hermetic Networks_Balance Sheet.csv, as of October 6, 2026 with monthly comparison columns. Both reports state accrual basis. Accrual accounting records earned revenue and incurred costs in their applicable periods, even when cash moves later.
January through September contain complete calendar months. The exports do not confirm that each monthly close has been reviewed or approved. October covers only October 1 through 6. Keep October separate from completed months when comparing performance.
The CEO confirmed that monthly billing occurs on the first, while payroll synchronizes after the 5th and 15th. Synchronization dates describe when information reaches the books. A cash forecast needs the actual bank payment dates as well.
This reference contains selected totals and derived calculations. Account identifiers, customer names and employee pay details are omitted. The original reports remain the evidence for a reconciliation. A blank cell in the export is shown as blank rather than treated as a confirmed zero.
2Completed-month income and costs
| Measure | Reported total |
|---|---|
| Revenue | $1,109,891.18 |
| Vendor/product cost group, before payroll | $274,624.90 |
| Payroll classified in cost of goods sold | $477,879.64 |
| Total cost of goods sold | $752,504.54 |
| Gross profit | $357,386.64 |
| Operating expenses, including benefits | $257,241.83 |
| Net operating income | $100,144.81 |
| Other income | $1,892.40 |
| Net income | $102,037.21 |
Gross profit equals revenue minus cost of goods sold: $1,109,891.18 - $752,504.54 = $357,386.64. The weighted gross margin is gross profit divided by revenue: 32.2%. Weighted margin uses total dollars for the period; it is not the average of monthly percentages.
The reported operating margin is 9.0%. The income-tax payment accounts are included in reported operating expenses. Ask the accountant to confirm whose tax liabilities those payments settle before preparing a management adjustment. Keep the reported results unchanged and show any approved adjustment separately.
The 4000 MRR account group reports $888,896.41 over these nine months. MRR commonly means monthly recurring revenue, a measure of recurring monthly contract commitments. The account-group total is recognized income labeled recurring in the books. Contract records are still needed to calculate committed MRR, new business, cancellations and price changes.
3Monthly results and the partial October period
| Period | Revenue | COGS | Net income | Reported gross margin |
|---|---|---|---|---|
| Jan 2026 | $95,746.44 | $69,521.28 | $5,714.34 | 27.4% |
| Feb 2026 | $143,833.65 | $101,250.53 | $13,226.89 | 29.6% |
| Mar 2026 | $126,463.42 | $80,199.78 | $15,572.06 | 36.6% |
| Apr 2026 | $122,489.20 | $74,772.86 | $20,585.59 | 39.0% |
| May 2026 | $128,781.90 | $81,187.58 | $15,461.47 | 37.0% |
| Jun 2026 | $110,855.06 | $85,663.70 | -$947.56 | 22.7% |
| Jul 2026 | $100,882.30 | $73,327.74 | $5,373.32 | 27.3% |
| Aug 2026 | $129,972.34 | $79,744.65 | $17,621.55 | 38.6% |
| Sep 2026 | $150,866.87 | $106,836.42 | $9,429.55 | 29.2% |
| Oct 1-6 2026 (partial) | $126,799.99 | $9,223.43 | $109,258.35 | 92.7% |
September reports revenue of $150,866.87, gross profit of $44,030.45 and net income of $9,429.55. October 1 through 6 reports revenue of $126,799.99 and net income of $109,258.35. October's salaries-and-wages row is blank, while most recurring billing has already posted. The partial report therefore does not support a conclusion that monthly profitability has improved.
For a midmonth review, label the report date, list costs still expected, and distinguish estimates from posted entries. The accountant can confirm whether accrual adjustments are needed under the company's reporting policy. Keep the original export and the dated adjustment record.
4September and October balance-sheet totals
| Measure | September 30 | October 6 |
|---|---|---|
| Bank accounts | $364,295.70 | $312,490.80 |
| Accounts receivable | $10,860.00 | $128,891.43 |
| Current assets | $375,155.70 | $442,013.03 |
| Fixed assets, net | $77,797.47 | $77,797.47 |
| Total assets | $452,953.17 | $519,810.50 |
| Accounts payable | $3,750.00 | $3,750.00 |
| Credit cards | $85,183.05 | $42,782.03 |
| Current liabilities as classified | $88,994.30 | $46,593.28 |
| Long-term liabilities as classified | $18,305.53 | $18,305.53 |
| Total liabilities | $107,299.83 | $64,898.81 |
| Equity | $345,653.34 | $454,911.69 |
At September 30, assets of $452,953.17 equal liabilities of $107,299.83 plus equity of $345,653.34. Equity is the accounting remainder after liabilities. A buyer's price for the business requires a separate valuation.
Bank-account totals fell by $51,804.90 between September 30 and October 6. Receivables increased by $118,031.43. Those two changes describe balances; they do not identify every receipt or payment. The books, bank statements and transaction detail are needed to explain the change in cash.
Bank balances do not establish how much cash is available for distributions or an investment. Review reconciled balances, committed payments, taxes, any restrictions and the dated forecast. A liability's position in this export also does not prove that the current portion of a loan has been classified correctly.
5Specific reconciliation questions
| Report observation | Supporting evidence needed |
|---|---|
| Receivables are negative in July and August. | Customer aging, unapplied payments, credit memos and their matching invoices. A net credit can have a legitimate explanation. |
| Payroll-tax account is large relative to the wage account. | Payroll register, employer-tax expense, employee withholding, remittance detail and the posting map. The account label alone cannot establish employer burden. |
| Accumulated depreciation is unchanged across these report columns. | Fixed-asset register, depreciation policy, posting schedule and accountant adjustments. An annual posting policy or omitted entries may explain the pattern. |
| Some month-end balance-sheet accounts remain unchanged. | Statements, reconciliations and transaction records. A stable balance alone does not prove that an account is wrong or inactive. |
| All reported payroll is in COGS; benefits appear in overhead. | Employee roles and an approved delivery/admin allocation. Reconcile management client-cost analysis to reported expense once. |
| October has posted billing and incomplete wage costs. | Billing service periods, payroll sync status, expected costs and approved cutoff/accrual policy. |
The aggregate accounting equations reconcile within one cent in every supplied month. A balanced report can still contain an omitted, duplicated or misclassified transaction. Reconciliation connects the reported balance to independent evidence.
6Additional inputs for decisions
The reports support lessons on statement reading and reconciliation. Hiring, pricing, cash forecasting and acquisitions need detail that these exports do not contain:
- Employee roles and delivery/admin payroll split
- Contract-level committed MRR and user counts
- Client-level revenue, vendor costs and time
- Bank reconciliation and restricted/committed cash details
- Receivables/payables aging and dated receipts/payments
- Payroll register and employer/employee tax split
- Debt repayment schedule and current portion
- Tax entity election and applicable jurisdictions
- Month-end close approval and accountant adjustments
- Hiring, expansion or acquisition assumptions
The admin manager gathers the report evidence and explains remaining gaps. The CEO supplies planned hiring, investment and acquisition assumptions. The accountant confirms accounting and tax treatment. Use approved totals in the practical work; keep client and payroll detail in the restricted finance workspace.