Why Choose Bruin Financial Management?
Why Choose Bruin Financial Management?
Our streamlined, low-overhead business model allows us to deliver real accrual accounting services in line with Generally Accepted Accounting Principles (GAAP) at rates much more affordable for small-medium sized businesses. Many small-medium sized companies do not have enough work or a large enough budget to have a full-time accountant on staff. For these companies, it makes more sense to contract with a financial management company to do their monthly or quarterly accrual bookkeeping and financial statement accounting. A financial management company like Bruin can also supply clients with easy to understand analysis reports on their financial performance.
Hiring a remote accountant allows you to have a professional independent third party produce your accounting reports without incurring additional overhead like additional office space, supplies, payroll taxes, and employee benefits. You send us documentation once a month and receive back the customized reports you select.
Advantages of Accrual Accounting
1) In addition to tracking and assigning money to when it's actually spent or received, accrual accounting tracks and assigns expenses to the period in which the purchased assets are actually used and tracks and assigns revenue to the period in which each piece of revenue is actually earned. Without accrual accounting, there is no way to determine how profitable you actually are on a monthly basis or in the long run, and there is no way to tell how well you can meet your obligations on a monthly basis or in the long run. Therefore, accrual accounting is necessary for receiving fair credit to operate on and for determining what you can afford in new expenses and profit taking.
2) Without doing accrual accounting a trial balance cannot be prepared and thus accuracy of accounts cannot be ensured. Books kept with the accrual method automatically double check themselves through the preparation of a trial balance.
3) Accrual accounting makes sure everything that is supposed to be accounted for is accounted for and gives the actual economic performance picture of a company. Without books kept under the accrual method, correct ascertainment and evaluation of financial results of operations cannot be made.
4) Investors and lenders expect to see proper accrual accounting in line with GAAP. Without proper accrual accounting in line with GAAP, a company's economic picture can become very murky over time and accurate analysis of profitability, liquidity, and solvency cannot be done. Further, it may also become unclear which partner or investor put in what investment. The longer a company can show records of GAAP bookkeeping, the more confidence investors and lenders will have in the company, often enabling the company to negotiate higher share prices and more favorable lending rates.
5) Without accrual accounting owners may find it difficult to satisfy income tax authorities in the instance of an audit, especially as a company's revenue grows and the likelihood of scrutiny from the IRS increases. Further, without accrual accounting owners may find it difficult to satisfy insurance companies in the instance of inventory loss due to fire or theft.
Avoid the Pitfalls of "Single Entry" and "Flat Fee" Bookkeeping Schemes
There are companies out there that charge low rates (such as $50/hour) for purportedly providing bookkeeping services, when in fact they are only doing what is known as "single entry" bookkeeping rather than accrual bookkeeping. A single entry system is not really a system at all as it doesn't account for everything or enable a trial balance. The services provided by such firms are virtually worthless and can be done by anyone. Accrual bookkeeping on the other hand makes sure everything that is supposed to be accounted for is accounted for and gives the actual economic performance picture of a company.
Some companies who charge a flat fee are essentially charging you for extra time never spent on your account. Doesn't it make more sense to only pay for the time actually spent on your account? Furthermore, do you want to run the risk of having a bookkeeper who hastily makes errors and cuts corners because they are bumping up against the time estimate that went into creating the flat fee?