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How Month End Accounting Packages from a Fractional CFO Can Help You Run Your Business Better

One of the most valuable services that a Fractional CFO can provide a business is a month end accounting package. This deliverable can contribute to a big shift in how your business runs. If you own a business and do not have this type of service yet implemented, hopefully by the end of this article you will understand why you should.


If you have been reading my blogs, you probably get a sense of passion behind what I write about. As accountants, we aren't saving babies over here so there has to be something that drives us, that pushes good ju-ju out to the world.


With that said, my drive comes from the fact that I have seen entirely too many people financially (mentally, physically, spiritually), get hurt because they have no accounting or someone that has not been trained as an accountant, running the books.


Having set pieces of information and the financial storyboard from which you are able to make the best decisions possible for your business, is an ideal situation to be in. So start by putting this into practice.


So what does a month end package look like and how will it help you?


It's a series of financial statements and analysis that gives you feedback on the operations of the business. The more information you have, the better chance you have at taking action to avoid pitfalls and take advantage of opportunities.


Balance Sheet for a Month End Accounting Package

The most basic package is a month or year end Balance Sheet and year to date Income Statement. This the least that I would do, but rarely do it, as it doesn't provide enough analysis to give the owners what they need.


Yes, it's nice to see what assets, liabilities, and equity a company has, along with how much money was made during the time period, but there is much more that can be done to enhance the package to unfold the story that is trying to come through.


To give you a view of what I consider to be a high value monthly package, we'll look at all areas and give you a few examples so you can visually understand how it can help run your business better!


Again, a standard Balance Sheet and Income Statement needs to lead the pack. I will also include the Income Statement by month, for the period of time, so that we can see trends in revenue or expenses and how that can feed into budgeting needs and pivots in the business.


Another standard piece of a month end accounting package is a Cash Flow Statement. This statement provides the user with how exactly, their cash is being used. This accounting tool is used to forecast the cash needs of the business. It also helps teach us how to shift the assets to produce more growth, by understanding how the cash has been spent.


All of those statements are great and provide a wealth of knowledge (especially if you never have had them before), but the additions to the package that I feel give the most value are budget to actual analysis, and the variance analysis.


The budget, in my eyes, is a work of art! This is where the Fractional CFO takes a bunch of information and uses it to create what, they believe, will be the forecasted numbers.


By using the company's past financials performances, current market variables, experience in the particular industry, and any other piece of information that can help build the budget, we are able to craft, what we hope to be information that is in line with what actually happens in the future.

Budget for a Month End Accounting Package

Budgets down right drive a business. If we feel that the budget is on point, then we will want to let the budget push our decision making in certain ways.


For example, if our payroll is running 8% over budget, but there is no lift in revenue, what is happening? Are we overstaffing the business?


When a budget to actual variance is done, we are looking at each line item of the income statement (there are Balance Sheet budgets also), and analyzing the difference between what we thought would happen and what actually did.


The explanation of why there is a difference between budget versus actual, provides very valuable information to the user. Again, the budget components are driving how to run the business better.


Variance Analysis for a Month End Accounting Package

A Variance Analysis is looking at the difference in the accounts between two periods of time. It can, and should be, done with the Balance Sheet and Income Statement as both statements tell the full financial story of your business. If you don't use both, you won't get the whole picture.


Let's say that Revenue, from YTD this year versus YTD last year, has went down by 3%, but Freight Expense has increased by 10%.


How does that make sense? The only way to find out is to dig further into the numbers and network of people in that area of the company, most likely purchasing. Come to find out, your main vendor had changed their shipping policies and the break that was once given, is gone.


When analyzing the difference, we as the accountant, have to understand what is and what was, in each account. It takes investigative knowing to find explanations for everything, but the story that the information tells is what, when combined with the budget versus actuals assessment, will be some of the most important information you could have to help the owner run their business better than what had been.


The combination of all of these accounting tools is amazing. As a business owner, you soon learn that you should have had this type of feedback from the beginning. Better late than never as having this powerful knowledge is what will help your business continue or pivot to the correct direction.

Creating a quality month end package takes a lot of work and a trained brain to develop this asset and it's usually something that a business owner doesn't know how to do, or didn't know the value of it, versus the cost.


A Fractional CFO is a Chief Financial Officer (highest rank in the accounting world) that can greatly benefit a business. Fractional, meaning what it means, gives the client an affordable cost because the expense is in line with the size of the business.


This person should be able to do everything from basic accounting to month end close to doing a presentation for an investor that is looking to buy your business. It is an all encompassing role for the accounting spectrum of work.


Cool thing is, you will be able to afford it.


For example, some businesses only require 5 hours per month as they are just starting their operations. Having a Fractional CFO gives the business the ability to have a high level accountant managing your financial information and helping you grow your business.


Hoping that you feel a little more comfortable with what a month end accounting package is and how it can help!


Blue Collar CFO

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