Finance and Bookkeeping - Session 24

The Finance Decision Capstone

Prepare and explain a complete finance review using the company's records. Demonstrate reliable bookkeeping, reporting and exception handling while the CEO leads forecasts and major business decisions.

The MSP finance task

The admin manager brings a finance review to the CEO. The reports show historical results, cash commitments and unresolved evidence. Together they decide what can be acted on now and what requires completed records, better assumptions or adviser review.

The shared review

The admin manager owns bookkeeping and reporting. The CEO leads forecasts and major decisions. Advisers handle agreed specialist work.

Source and close status

Record basis, period, export date and close status. A completed calendar month does not prove close approval.

Historical results

January-September operating income: $100,144.81. Other income: $1,892.40. Net income: $102,037.21.

Partial October

October 1-6 has first-day billing and incomplete payroll costs. Blank wages are unconfirmed. The result cannot establish full-month earnings.

Cash change

Cash fell from $364,295.70 in September to $312,490.80 on October 6: $51,804.90. Obtain transactions before assigning a cause.

Decision evidence

State the action, alternatives, facts, assumptions, cash effect and required approval. Missing evidence needs an owner and next action.

Practical proficiency

Demonstrate supported transactions, reconciliations, clear reporting and traceable calculations. Recognize partial data and escalate unresolved issues.

The continuing process

Maintain the close checklist, scorecard, cash forecast, obligations calendar and decision record. Update forecasts when the CEO approves changed assumptions.

The October 1-6 report shows $109,258.35 net income and blank wages. What should the review say?

  1. October establishes a recurring monthly profit
  2. The partial cost cycle prevents that conclusion
  3. Blank wages confirm that staff were unpaid
  4. All report amounts should be discarded

September cash is $364,295.70 and October 6 cash $312,490.80. What is the decrease?

  1. $109,258.35 matching October profit
  2. $107,299.83 matching September liabilities
  3. $51,804.90
  4. $102,037.21 matching nine-month income

Nine-month gross profit is $357,386.64 and overhead $257,241.83. What is operating income?

  1. $100,144.81
  2. $102,037.21 including other income
  3. $357,386.64 before overhead
  4. $257,241.83 of operating cash

Key terms

Source file
A record of inputs, periods, basis, export dates and evidence used in analysis.
Close status
The confirmed stage of review and adjustment for a reporting period.
Exception list
A record of unresolved differences or missing evidence with responsibility and next action.
Decision summary
A record of a proposed action, evidence, alternatives, cash effects and approvals.

Three points to remember

  1. Explain what the records support and what remains missing.
  2. Keep profit, cash and decision assumptions separate.
  3. Repeat a documented process with clear responsibilities.