Do you use a monthly financial checklist? If not, you might miss something important!

A3The primary purpose of business is to generate positive cash flow and make a profit, both of which are determined by two factors: money coming into the business and money going out of the business. As long as the money coming in is more than the money going out, you will be smiling. But what if the scenario changes and money going out is more than money coming in?

Will you even know if your business is not making a profit and/or generating enough cash to stay afloat? If you check the financial figures sporadically you might pick up that something’s going wrong eventually but then it might be too late to save the business. If you check the figures religiously once or twice a month and make comparisons between months, you will discover quickly when profitability and cash flow changes for the worse, and you will be able to take steps to rectify this sooner rather than later and have a fair chance of saving your business.

Checking up on your business’ financial affairs at least every month is a good business practice that will help you as a business owner/manager to stay on top of what’s going on in the business. It is crucial to stay in touch with what’s happening elsewhere in the business especially if you are not involved in the day to day running of the business or if the business have grown and you had to delegate some of your workload to others.

Using a checklist regularly and interpreting the results accurately, enables a business owner/manager to get a bird’s eye view of the business in a relatively short period of time. Some of the most important points which should be included in a monthly financial checklist are:

  • Check that accounting software is updated
  • Make sure financial data is entered into the accounting system regularly and accurately
  • Ensure that stocktakes are performed regularly and reconciled with accounting balances; follow up on discrepancies between the counted stock and the theoretical stock balance on the accounting system; be on the lookout for damaged and/or obsolete stock which must be removed from the accounting system
  • Consider implementing a policy of invoicing clients for goods and services as soon as it has been delivered to them
  • Check all bank reconciliations (including petty cash and investments), and follow up on discrepancies and long-outstanding items on the bank reconciliations
  • Check debtors’ reconciliations and follow up on long outstanding amounts
  • Check creditors’ reconciliations and compare with approved list of suppliers; follow up on long-outstanding items on the creditors’ reconciliations
  • Implement periodical asset stocktakes and reconcile results with fixed asset register
  • Review salary records for reasonability of salary deductions, timely payment of PAYE to SARS, etc.
  • Draw up a budget for a future period and compare the actual results for that period with the budget – investigate any material variances between budgeted and actual amounts, keeping in mind that a budget is a forecast and will never be 100% accurate

Indicators of the financial health of a business are calculated from the financial reports and financial statements. By paying attention to these indicators and comparing them from month to month, you will be able to spot trends in the business and the industry in which it operates, and take appropriate action if and when required.

No two business’ checklists will look the same as every business is unique so use caution if you use a standard checklist that has not been customised for your unique business setup. Lastly, make sure you know how to interpret the results you get from working through the checklist otherwise the use of the checklist will just be a waste of time.

If you would like to implement the use of a monthly financial checklist in your business or improve the financial checklist you are currently using, do contact your financial adviser for professional assistance and advice suited to the specific needs of your business.

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or ommissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice.

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IC Marais

Professional experience:

IC Marais is a certified CA (SA) with public sector and private sector technical knowledge based on 5 years’ Public Sector accounting, auditing and financial management experience and 5 years audit, tax and accounting experience. Detailed knowledge of private and public sector accounting and auditing standards (GRAP, IPSAS, IFRS, IAS, ISA) and public sector financial legislation (MFMA, etc.)

He enjoys the outdoors, hunting and fishing.


Professional experience:

In 1995, Schalk started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and then Mazars Moores Rowland in 2007) in Bloemfontein. In 1998, Schalk was appointed as manager at Moores Rowland, where he became a partner in 2003. Schalk received his Postgraduate Certificate in Advanced Taxation in 2006 and in 2009 he received his Certificate in the Administration of Estates.


Professional experience:

Cedric started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and Mazars Moores Rowland in 2007), Bloemfontein, in 1986. After completion of his articles, he joined the Special Investigations Division of the Department of Finance (SA Revenue Services) as a senior inspector from 1990 to 1991.


Professional experience:

Lucha started her career as a tax inspector at the Inland Revenue Department of New Zealand. After this she worked in commerce in Canada, Mexico and the United States.

On her return to South Africa, she completed her CA training contract with us and has been with Newtons ever since. She became a Partner in 2012.

Apart from her CA(SA) qualification she also holds a postgraduate certificate in Advanced Taxation (2005) and has the overall responsibility for training as our Training Officer.