Josh Aharonoff, CPA’s Post

8 Popular Accounting Tasks that you can do in Excel Learn each to 10x your productivity 🚀 Get the FREE high res infographics + worksheet in the next 48h by 👍 liking & 💬 commenting on your favorite Excel feature... 👉 Then grab it via the link in the infographic below 1️⃣ PivotTables Have a large table? Odds are you can benefit by creating a Pivot Table out of it. PivotTables allow you to: ✅ Quickly query data sets ✅ Understand relationships ✅ Format data in a way that’s easy to understand To get started, take a table and hit Insert > PivotTable 2️⃣ Lookups Lookups are the most common functions in Excel. My favorites? These 2 will yield maximum flexibility in both directions: ✅ INDEX / MATCH ✅ XLOOKUP My least favorites? This one is outdated and is limited to only one direction: ❌ VLOOKUP 3️⃣ Conditional Formatting Formatting your file is a big part of using spreadsheets… but what if you wanted to format things dynamically? Say…based on a CONDITION? That’s the beauty of Conditional Formatting. I use this all the time with Budget vs Actuals. To get started, simply select your data set and hit Home > Conditional Formatting. 4️⃣ Charts & Graphs Charts are a big part of data management… and Excel has some of the best charting capabilities out there. My favorites are a Donut chart 🍩, and a combo chart 📈📊 To get started, select your data and click Insert > Charts 5️⃣ Data Validation Create a dropdown, and restrict the ability to enter only certain values in a cell. Extra points if you create a dynamic dropdown that extends via a table and named range! Set Data Validation by clicking Data > Data Validation 6️⃣ Power Query Total game-changer…and few realize just how powerful it is. One of my favorite tasks is to take a report like a Profit & Loss…and UNPIVOT the dates. This makes it infinitely easier to manipulate and pull into dashboards. Get started by hitting Data > From table/range (or any other source) 7️⃣ Sort & Filter Take your data set and present it however you want - filter for key accounts, and sort ascending, descending, or any custom rule that you prefer. Get started by selecting your table and hit Home > Sort & Filter 8️⃣ Use a Checklist Got a month-end close process? Create a checklist in Excel and check off each task as you complete it. Get started by hitting Developer > Insert > Check Box (enable the developer ribbon first). === Those are my 8 favorite features for accountants in Excel. What are yours? Let us know in the comments below 👇 PS: don’t forget to grab the free high res infographic + worksheet in the next 48 hours via the link in the infographic below 👇

Learn about Accounts Receivable (AR) Some see it as the antithesis to cash Others as a necessary evil to carry out your sales But how does your Accounts Receivable work? And what are some things to watch out for? As always…let’s start with some definitions ➡️ What is Accounts Receivable? This figure represents amounts owed to you by your customers Because it contains economic value (IE a right to receive cash), it’s an asset ➡️ Why is your Accounts Receivables balance important? A few reasons… 1️⃣ Your Accounts Receivables balance is one of the few assets that are intended to convert directly to cash 2️⃣ The higher your Accounts Receivable balance, the tighter your cash constraints 3️⃣ The longer your balance is outstanding, the higher the likelihood of recording a bad debt ➡️ What are some common formulas related to Accounts Receivable? 1️⃣ Accounts Receivable Beginning Balance ➕ new invoices sent ➖ payments collected 2️⃣ Days Sales outstanding (DSO) Accounts Receivables / Net Credit Sales * Number of Days This represents how many days it takes you on average to collect against your balance - the lower the number, the quicker you are collecting 3️⃣ Accounts Receivable Turnover Ratio Net Credit Sales / Average Accounts Receivable Similar to DSO, this shows you how many times a company can convert it’s AR balance to cash in a given period. The higher the ratio, the quicker you are collecting 4️⃣ Bad Debt Expense Ratio Bad Debt Expense / Total Credit Sales This shows you how much of your AR balance you can expect to write off in bad debt ➡️ What are some common journal entries? When an invoice is sent... Debit AR Credit Sales (or deferred revenue) When cash is collected… Debit Cash Credit AR ➡️ What are some ways you can keep your AR balance low? ❤️ FRIENDLY WAYS ▪️ Request payment upfront ▪️ Collect credit card / banking details for autodebit ▪️ Follow up on outstanding balances continuously - don’t assume people will pay without reminders! ▪️ Request credit check references 💔 NOT SO FRIENDLY WAYS ▪️ Turn off service ▪️ Send the account to a collections agency ▪️ Threaten legal action ➡️ What are some common reports related to AR? 1️⃣ Accounts Receivable Aging Summary This summarizes who owes you what, and is often grouped by how many days outstanding 2️⃣ Accounts Receivable Aging Detail This shows you the detail of each and every invoice that is outstanding === That’s my take on Accounts Receivables - what would you add? Let us know by joining in on the conversation in the comments below 👇

Learn how to build a Cash Runway Dashboard 📊 📽️ Watch the video to Pinpoint the EXACT moment you run out of cash This is a common dashboard that I build for startups…. as you don’t want to get taken by surprise when you run out of cash. When you are taken by surprise… 👎 You struggle to raise capital at favorable terms 👎 You jeopardize meeting working capital needs 👎 You frustrate investors Let’s learn how you can build this dynamic dashboard too. STEP 1 → OUTLINE YOUR DASHBOARD Before we layer in our complex formulas, let’s first outline where everything will go. I like to start by creating a light grey border for where my dashboard will start and end. Next, I’ll study my brand’s colors by using a color picker tool. Now I have my basis for the colors to use in this dashboard. Lastly, I’ll populate dummy data for where I want everything to go - including my cashout date. Now that we have this all outlined, let’s populate our formulas STEP 2 → POPULATE FORMULAS The key with this dashboard is that we want to DYNAMICALLY show our cash ending date…as well as a trail of what our cash balance is for however many periods we want. For that, we’ll set up a lookup function using INDEX / MATCH. The key here is that we want to INDEX our dates… and MATCH the first instance in which our cash will go below zero. Like this: =INDEX(dates,0,match(TRUE,CashBalance<0,0)) Now your formula will update to return the first date that your cash goes below 0. STEP 3 → CREATE YOUR CHART The key part here is we want our chart to be dynamic, and return not only our cash-out date but the cash balance of X months prior to that date. For that, we’ll use the filter function. First, I’ll create a new range for my dates and ending cash balance next to each other to make it easier for my chart/formula. Then, I’ll set up the filter function to return the ending cash value/dates based on these 2 conditions: 1 - my dates are less than or equal to my cash-out date 2 - my dates are greater than X months prior to the cash-out date…where X is an input This creates a spill array, and all I need to do is click into the spill array and enter a column chart - VOILA! Our dynamic cash chart is now created. === Dynamic charts are really powerful in Excel…and unlock a lot of flexibility with your reporting. What has been your experience with dynamic charts? Let us know in the comments below 👇 https://lnkd.in/evprT9g3

Meet the Superhero Financial Reports 🦸🦹♀️ 1. Chart of Accounts       These are the names of the accounts that show up on your financial statements       The key here is to ensure you are using accounts that give the readers of the financial statements clarity into what’s happening….without overdoing it     2. Bank Register       These are the transactions as synced/imported from your bank or credit card       This is the first part of a month-end close and involves you classifying each transaction accordingly     3. Bank Reconciliation Report       This showcases the balances in your bank & credit card accounts on your balance sheet compared to the balances from your financial institution       Bank Reconciliations are a must with a month-end close       4. General Ledger       These are the transactions that make up your financial statements       Think of it like a transaction detail, showing you how each value on your FS was compiled.     5. Trial Balance       This showcases the net debit & credit balance on each account on your financial statements       It’s in essence the same thing as your financial statements, though:       → You’ll see all accounts from your P&L and BS stacked on top of each other       → You’ll see the net Debit and net Credit balance on each account     6. AP Aging       This shows you the amounts you owe to vendors        it can be both on the summarized & detailed level.     7. AR Aging       This shows you the amounts owed to you by customers        Like the AP Aging, it can be both on the summarized & detailed level     8. Income Statement       This tells you about your income, expenses, and profitability       It’s one of 3 of what’s commonly known as the “Financial Statements”       You may also know this superhero by the alter ego, “Profit & Loss”.     9. Balance Sheet       This shows you a snapshot of the business showcasing the net worth at a specific point in time       It’s separated by Assets, Liabilities, and Owners Equity       To me, this is the most powerful superhero of them all     10. Cash Flows       This showcases the movements in your cash       It can be prepared on both the DIRECT and INDIRECT method       It is separated by Cash from Operating, Investing, and Finance Activities       this may be the most popular superhero…as Cash is King 👑     11. Statement of Changes in Equity       This shows the details behind how the owners’ equity has changed over a specific period     12. Notes to the Financial Statements       This showcases the additional information & disclosures about the financial performance of a company       ===     These superheroes keep our financial statements CLEAN and SAFE. Who are some other superheroes that should be included here? Let me know by joining in on the discussion in the comments below 👇

Everything You Need to Know about Departmental Budgeting 👥 Departmental Budgeting is one of the best ways to build a bottoms up budget that is both accurate, and defensible But the process can be complex & labor intensive, especially if it’s your first time Let’s do a deep dive on how you can create a departmental budget ➡️ What exactly is Departmental Budgeting? Departmental Budgeting is the process of preparing a budget based off of the inputs from Department Heads ➡️ When Should You Prepare a Departmental Budget? There’s no right or wrong time, it can all depend on your: ⚫ Size of your company ⚫ Amount of departments ⚫ Transparency level available to Each Department Head ⚫ Tools & systems in place for tracking & forecasting The general idea is that Departmental Budgeting is something that companies start to think about as they grow to a larger number of hires ➡️ How Do You Prepare a Departmental Budget? Step 1 → Start by Understanding the Existing Structure of your Data Do you have your P&L set up so that each department has it’s own section? Or do you utilize a CLASS feature, allowing you to drill into an added dimension to see departmental figures? Step 2 → Outline Who will do What Once it’s clear how your data is being tracked, make a list of each of your department heads Ask yourself… 🤔 Who will be accountable for each department? 🤔 What information will be shared with them? 🤔 What is their level of knowledge with Finance & Accounting? Step 3 → Export your Existing GL Information In order to best provide a projection… you’ll want to first provide any information on what is CURRENTLY happening in their department Step 4 → Prepare intake forms Now that your department heads have information on what is CURRENTLY happening… it’s time to provide them with a form in which they can enter in new spend for your forecast. This is typically done via what is called an “intake form”. Step 5→ Forecast your Headcount by Department Now that you have your expenses forecasted by department, it’s time to move on to the last and most important area of your opex… Headcount. Here you’ll want to showcase who is currently in each department, and all of the associated details with each hire, leaving room for department heads to enter in new hires. Once you have all of this information collected, you can combine each intake form into your Financial Model === It’s important to remember that Department heads most likely don’t have a strong Finance & Accounting background, so they may need your assistance in completing this process Once you are finished - don’t stop there! Provide ongoing reporting to ensure that the company continues to stay aligned on it’s plan, and it’s progress against that plan These are my suggestions from my experience preparing Departmental Budgets - what would you add? Let us know by joining us in the comments below 👇

How to Scale Your Finance & Accounting Function 🚀 Here’s close to EVERYTHING I’ve learned after scaling this function for 100s of companies 📣 LAST CHANCE to join the FREE webinar tomorrow: 🔗 https://lnkd.in/dGyXhuXb Your Finance & Accounting may be the most sensitive function in your company… get it wrong, and you risk running out of cash, unhappy employees & vendors, and churned clients Get it right, and you can make rapid decisions with key insights, and minimal resources. Let’s break down each section, and the key steps to scaling: ➡️ FINANCIAL REPORTING This is where it all starts…without proper financial reporting, you can make proper decisions. • Start by creating a business bank account & credit card (check our Mercury for this) • Then sign up for an accounting software • Once that’s set up, sync your transactions via a live bank feed • Classify transactions • Reconcile the Balance Sheet ➡️ FINANCIAL PLANNING & ANALYSIS When you have proper financial reporting in place, you can move on to predicting the future and analyzing the past with a robust FP&A process. • Start by creating a forecast - ideally a 3-statement model • Actualize your forecast each period and study where you hit/missed your target • Work with Department Owners to add accountability • Present your findings to management, investors, and the board of directors ➡️ ACCOUNTS PAYABLE & PROCUREMENT Keep your Finance & Accounting function running smoothly by implementing efficient operations • Set up an AP platform and SOPs • Onboard your vendors by collecting key info • Collect & Organize Bills via a group email address • Classify Bills & Collect approval via AP platform • Process payments upon due date, once approved ➡️ INVOICING & ACCOUNTS RECEIVABLE Stay on top of your invoices & AR balance to ensure you get paid • Create SOPs • Send out invoices as soon as they are approved • Process payment for those on auto-debit via CC / ACH • Follow up on outstanding balances - don’t assume you’ll get paid by default ➡️ PAYROLL Keep your employees happy with smooth payroll processing • Create SOPs • Set up a payroll platform / PEO • Onboard Employees • Prepare payroll for review • Process payroll, and set up autopay as a safety measure ➡️ COMPLIANCE Stay in compliance and avoid any penalties for mistakes. • Create a Tax Calendar • Monitor Sales Tax Nexus & VAT • File additional taxes as needed • Prepare & Manage Audits as your company grows === There you have it - my step-by-step playbook for scaling any Finance & Accounting function. What did I miss? and what would you add? Let us know in the comments below 👇

Making your First Finance & Accounting Hire👇 no..it should NOT be a bookkeeper 🤦♂️ 📣 Join the FREE webinar on Wednesday at 12pm ET 🔗 https://lnkd.in/dGyXhuXb Making your first Finance & Accounting hire is a really exciting moment… it means that you have gotten to a certain level of activity & traction that warrants a full-time hire. Let’s go over each role, and the pros and cons ➡️ Before making your first hire Almost all startups and SMBs start off hiring a fractional role/firm. The reason is pretty simple… There’s not enough work to go around for a full-time hire… and in reality, you need a bit of a bookkeeper, a bit of a controller, and a bit of a CFO For an early-stage startup, you can accomplish all of this while avoiding paying payroll taxes & health benefits for a few thousand a month. Need a good recommendation for an accounting firm? Check out Mighty Digits 👤 VP of Finance This is a great first full-time role to hire in-house… the idea is that the VP of finance is a perfect mix of experience (not too much where they are very expensive, and not too little where they can lead the organization)… A good VP of finance also has a strong background in FP&A and a decent understanding of Accounting Typically, this hire gets brought on, and leads the full Finance & Accounting function, while managing a fractional approach I most commonly see this around Series A 👤 Controller A controller is another good hire… but to me, the challenge is the fact that: A) Controllers are very senior, so you don’t want to assign them low-level work like bank reconciliations B) Many controllers lack FP&A experience Now…I say this in reference to what the US defines as a controller. I’ve learned that in Europe, many consider a controller someone who has a big focus on FP&A. Either way…a controller is a key hire in a growing startup…it’s just a matter of when there’s enough senior-level accounting work to go around 👤 Bookkeeper A bookkeeper is a really common role that I see startups hire for… A benefit is that bookkeepers are some of the most cost-effective roles… but at the same time, they also come with a decent level of supervision that’s needed. If you are a founder and have a good background in Finance & Accounting, a bookkeeper may be a good hire… but it will pull your attention more towards overseeing Finance & Accounting, which oftentimes is not the best place for a founder to be investing his/her time 👤 CFO OK…now we get to the granddaddy (or mommy) of the Finance & Accounting function. The CFO Here’s a little secret… with startups…CFOs are overrated Until you’re at Series C or above…a full-time in house CFO is kinda overkill The reason is that CFOs are EXPENSIVE… and rarely get involved in the weeds of the work that needs to be done === Did I miss any roles? Would you add anything? Let us know in the comments below 👇

77 Types of Accounting 👇 PROOF that Accounting is one of the most versatile fields out there 😎 When chose accounting as my college major… I thought there were only 2 paths: Tax, or Audit. Boy…was I wrong. There’s no limit to what an accounting degree can bring. Let’s dive in to some of my favorite areas of Accounting: 1️⃣ Public Accounting 👔 This is where I started my career…and where many feel it’s the best place to launch your career as an accountant. The main focus here is between 2 fields: Auditing, and Tax, often times for public companies. The most popular public accounting firms are known as “The Big 4”…which are Ernst & Young, KPMG, Deloitte, and Price Waterhouse Coopers 2️⃣ Cash Accounting 💰 Cash is king…right? That’s especially true if you’re performing “Cash” accounting. The idea here is pretty simple - you record all money received as income… and all money paid as an expense. There are some exceptions here, but that’s the gist of it  3️⃣ Forensic Accounting 🕵️ Ever wish you became a private investigator, or a detective, instead of an accountant? Forensic accounting may be a perfect fit. Forensic accountants investigate financial discrepancies and fraud, often times working on legal cases to uncover any irregularities with a companies financial records. 4️⃣ Accrual Accounting Accrual accounting is much more popular amongst bigger companies… and IMO tells a much better story of what’s ACTUALLY happening. Here, you treat income EARNED as revenue… and expenses INCURRED as an expense… regardless of when cash was received 5️⃣ Operational Accounting Here’s one of my favorite fields in accounting… With operational accounting, you’re handling the accounting tasks that relate to “operating” a company, such as: → Managing accounts payable → Following up on outstanding invoices → Processing payroll and much more While there are many fields in accounting, there are also many industries in accounting…each with their own quirks 6️⃣ SaaS Accounting For the most part, SaaS is just another industry, without too many nuances from any other industry…but it definitely has it’s quirks. For example, with SaaS accounting, there’s a lot of emphasis on deferred revenue, and when something can be recognized as revenue. Similarly, an extra emphasis is put on calculating KPIs such as Customer Acquisition Cost, Customer Payback, and Net Dollar retention. 7️⃣ Restaurant Accounting Think you can easily transition to an industry like Restaurant Accounting? Be prepared for a lot of differences. For example, instead of analyzing dozens of transactions a month… you may be analyzing thousands of transactions a DAY… each with their own complexities in reconciling and reporting === Those are just 7 of the 77 areas of Accounting identified below… but even 77 types of accounting is an underestimation - the real number can be much larger. What are some other types of accounting you’ve seen? And which is your favorite?

The Financial Reporting Pyramid 🔼 Each layer ➡️ feeds onto the next 📣 Register for the FREE webinar on March 29th on Scaling your Finance Function 🔗 https://lnkd.in/dGyXhuXb Financial Reporting is one of the most important areas in a Finance & Accounting function… and with the right processes in place, you can make this process a breeze ➡️BASE LAYER: CLEAN SOURCE DATA 📄 Before you can do anything, you need to have the right information. That information can come from your bank accounts…credit cards…and any additional documents such as receipts, customer / vendor agreements. The key here is that the infromation should be RELIABLE…ACCURATE…and CONSISTENT. By consistent, I mean that it should not contradict if the information is stored in 2 locations (eg: invoice details should not contradict customer agreements) When you have this foundation in place, you are ready to move onto the next layer… ➡️ 2ND LAYER: ACCURATE CLASSIFICATIONS & MAPPINGS ✅ Now that you have your data in place, it’s time to categorize it. Don’t just categorize to your GL accounts…consider: ◾Adding a class to transactions ◾Preparing reconciliations ◾Booking adjusting journal entries Once you have things categorized, you are ready to take a step back and analyze your data ➡️ 3RD LAYER: ANALYSIS 🔎 With your transactions loaded into your accounting software and properly categorized, it’s time to take a step back and analyze what has happened. ◾Are there significate increases or decreases compared to last period? ◾Did the company hit it’s target for the month? ◾Do the balances match to supporting workpapers? This is where you can identify any irregularities that require further research before finalizing your financial statements With that in place, you are ready to move onto the 4th and final step… ➡️ FINAL LAYER: INSIGHTS 🧠 Now it’s time to reap the fruits of your labor, and make more informed decisions about your company. ◾Did the company grow in comparison to last period, or last year? ◾Is the forecast still a relevant benchmark to compare against, or is a reforecast needed? ◾Is the company in danger in a specific area, such as cash flows? ◾Is there an opportunity for further investment, such as a marketing channel? With these questions in place, you can continue steering the company towards growth, and catch any issues in their infancy === Financial reporting is something EVERY company needs… and the more your company grows, the more detailed the process becomes. The key is to set yourself up for success by working your way from the bottom to the top with the financial reporting period… because if one area is weak, the rest can crumble. What has your experience been with Financial Reporting? And what do you feel should be added? Join the discussion and let us know in the comments below 👇

Debits & Credits SIMPLIFIED 📽️ Watch the video to learn the fundamentals of accounting Debits & Credits are one of the first things that I learned when I took my first Accounting course… and has served as the backbone of my understanding of how financial statements work. Many people think there are a lot of complex rules that need to be memorized to learn them…but they are actually REALLY simple to understand when you grasp the logic. Let's break things down👇 ➡️ What exactly are Debits & Credit? Debits & Credits are a way of communicating whether an account balance on your P&L / Balance Sheet is INCREASING or DECREASING… So you’ll hear people say “Debit this” or “Credit that”, which you can just swap out for “Increase this” or “Decrease that”…but then you wouldn’t sound like a cool accountant 🤓 Debits & Credits are neither good nor bad…and they have different rules for whether they mean increase or decrease…depending on which general ledger account you are using. Lastly, they must always equal each other, or “balance”. This ties into the famous term “Double Entry Accounting” ☯️. ➡️ What is Double Entry Accounting? See…in life - there are 2 sides to every story. And accounting is no different 😂 Double Entry Accounting means that every financial event affects 2 or more accounts in your general ledger. And those 2 “events” are communicated via debits & credits ➡️ How can you remember when to use a Debit, and when to use a Credit? First, you need to understand the accounting equation: ASSET = LIABILITIES + OWNERS EQUITY This means that all financial activity affects one or more of these 3 sections of your Balance Sheet…and that is it impossible to own an asset that is not owed to either a creditor (liabilities) or owner (owners equity). So when using debits & credits… the way Assets go up or down… is the complete OPPOSITE for how Liabilities + Owners Equity go up or down. And this is all you need to memorize 👇 Assets —> ⬆️ go UP with DEBITS ⬇️ Go DOWN with CREDITS Liabilities + Owners Equity —> ⬆️ Go UP with CREDITS ⬇️ Go DOWN with DEBITS ➡️ Wait…what about the Profit and Loss? Recall how the P&L and Balance Sheet connect with one another… Net Income for the P&L connects ⛓️ to Retained Earnings on the Balance Sheet So just like your Retained Earnings…your Net Income goes UP ⬆️ with a Credit and DOWN ⬇️with a Debit. This means that any P&L account that’s GOOD for your net income (like Revenue) Will go up by….. a CREDIT And any BAD accounts for your net income (like COGS / Expenses) will go up by…A DEBIT === Whether you’re working in accounting, FP&A, finance, or anything related to business… Understanding how debits & credits work will give you great insight into preparing financial statements, forecasts, and understanding the details behind your general ledger. What else would you add? Let me know what else you would add in the comments below 👇 https://lnkd.in/etPqixCf