Squaring the Books

It’s that time of year when the books have to be ‘squared’
The results of the business are thereby laid bare
The initial  task is to prepare the Trial Balance
An exercise which by itself is no mean challenge

All bookkeepers already  know that for every Debit
There has to be another corresponding Credit
If by chance any are found to be missing
We have an unacceptable condition

Throughout the year we have monitored Cash Flow
If we haven’t done that our success we’ll torpedo
And regard for our Budget is quite fundamental
To ensure no problems have become incremental

Of course the Trial Balance is just the first stage
Not providing all the facts for success to be gauged
We need to proceed to the P & L or I & E account
To reach that, there are problems we must first surmount

Yet many adjustments have to be considered
Prepayments and Charges still to be rendered
The obscure complexities of annual Depreciation
Capital and Revenue expenditure and Asset Valuation

The Statement of Financial Activities will show how we’ve done
And hopefully nothing serious has gone wrong
Enough money to pay our Creditors as due
No Bad Debts to get us in a stew!

All the facts need to be drawn from the daily Ledgers
And aggregated together for us then to consider
And next we can channel the results of this trawl
Into the Balance Sheet which will then reveal all

Of course every Transaction needs to be classified
If we get that wrong others we assuredly misguide
The decision to retain Profit can Stakeholders upset
Keep the Shareholders happy, a much safer bet

Fortunately in this modern age we’ve got rid of the pen
Fancy software now employed by all our businesses
And computer systems process all the raw facts
Leaving us to do little except VAT returns and Tax

So when you receive the Audited Report and Accounts
Please consider them well and don’t simply denounce
Think of all that hard work that is contained in those pages
And you must then appreciate the Accountants’ enormous charges!

Ken Fisher

P&L = Profit and Loss   I&E =  Income and Expenditure