Controlling and reporting

If the bank balance in your accounts does not match the actual bank balance, something is wrong. Checking the bank is therefore almost always the first step in our review for every client.

Bank reconciliation is essential. If no one has checked that every bank account balances, including accounts in other currencies, many other figures may be wrong too.

Some expenses do not show up in your bank transactions every month. These can include accruals, prepayments and inventory adjustments. We check the reporting period for significant movements that cannot be explained.

Comparing results with earlier periods also helps us find income or costs that may have been missed. Our aim is to report figures that reflect the business accurately, so we make sure these items are included.

If you have raised funding and want to know when you may run out of cash and how quickly you are spending it, we can prepare a budget and reporting worksheet that tracks both. It can also account for costs you choose to capitalise.

In practical terms, we set up a worksheet showing the cash coming into and going out of your bank account each month, divided into operating activities, investments and financing, including loans and equity.

It is easy to record wages paid directly from the bank, but employing people also creates costs that may not appear there. These can include tax, holiday pay, pension contributions and other payroll costs.

Payroll is one of the largest expenses for many Danish companies, so it is essential to include all of it. We review both visible and less obvious payroll costs every month.

Many SaaS companies sell subscriptions that cover more than one accounting period, such as annual plans.

Recognising that revenue in the correct periods is essential to understanding the company’s performance. We regularly review revenue recognition and have developed a practical, efficient method for doing so.

There are several good reasons to record development costs correctly.

A tax credit may be available for qualifying research and development expenditure. This requires a separate assessment under the tax rules; accounting capitalisation alone is not sufficient. We review the account coding so relevant costs can be identified and documented. See the Danish Tax Agency’s guidance on research and development expenditure and tax credits.

There may also be reasons to capitalise development costs where the recognition criteria are met. Investors in a funding round may have preferences about accounting policies within the applicable rules. We therefore assess which development costs qualify for capitalisation and record them on an ongoing basis under the agreed accounting policy. See the Danish Business Authority’s guidance on recognising intangible assets.

Reporting VAT accurately matters both because it is a legal requirement and because you should claim all the input VAT deductions you are entitled to.

VAT reconciliation is part of our quality checks for almost every client. We also reduce manual errors by improving the chart of accounts and letting systems such as e-conomic do more of the work.

If your cost of goods sold is usually stable in relation to revenue, it can be useful to review it regularly.

A sudden change in gross margin can indicate that something has been recorded incorrectly or left out. An invoice may be missing, or the inventory value in your accounting system may not match the actual value. We take these possibilities into account when reviewing your bookkeeping.

Depreciation does not affect cash flow, so it can be easy to overlook. Not everyone uses depreciation to understand the company’s earnings, either.

Whether it makes sense to review depreciation regularly depends on the business. It can be especially important for companies that buy production equipment or other major assets that they expect to generate income over time. We discuss with you whether depreciation should be recorded and reviewed on an ongoing basis.

If interest accrues on a loan but is not paid straight away, it may still need to be recorded, particularly when the amounts are material.

For example, some interest on loans from the Danish Growth Fund is not payable until several years later. You and other stakeholders, including the fund, may still need an accurate view of the company’s results that includes this interest.

If customers owe your business money, you will probably want to know how much they owe and how long the balances have been outstanding.

We regularly report on your receivables and alert you when it may be time to follow up with a customer.

If you use a supplier ledger, where invoices and payments are recorded separately, it is useful to check regularly that the ledger balances.

Without these checks, you may have expenses that have been paid but never recorded, which makes the figures you receive unreliable. We check that supplier balances make sense in practice, including that items listed as unpaid are still outstanding.

We can also help with:

• tracking revenue trends
• reviewing unusually large expenses
• checking whether purchases should be expensed or capitalised
• checking whether costs should be classified differently for tax purposes
• making sure recurring expenses, such as rent and insurance, are recorded each month
• sending graphs of key financial figures
• calculating measures such as churn or customer lifetime value (CLV)

To keep the time and cost of reporting down, it is important to work with a bookkeeper you trust who understands your business. Read how we approach bookkeeping in Bookkeeping and payroll.

To reduce manual errors, we recommend automating document handling and payments and integrating them properly with your accounting system. Read more about how we can help with Automation and integration.

We can also help set up your accounts so you can use them to make decisions. We are particularly good at this, and you can read more about Financial consulting.