Pricing
Our pricing is straightforward and consists of a one-time set-up fee and a per-bank or credit card transaction fee. Additional accounting work is done on an hourly basis and the Accountant’s Compilation Report has a set fixed price.
Financial Statement
Preparation and
Compilation Services
We take clients’ bank and credit card transactions and some non-bank information and through a series of steps prepare their financial statements and, when requested, provide an Accountant’s Compilation Report
Table of Contents
What Services Do We Offer?
Certified public accountants generally provide any of the five services listed in the table below. At Glasgow Knight Financial, financial statement preparation and compilation services are our flagship service offering, as described in greater detail on lines 1.B through 3 below:
| Name of the Service | Do We Provide It? | Notes |
|---|---|---|
| 1.A. Bookkeeping and Accounting (performed on an ongoing, day-to-day or periodic basis) | No | Although we do not provide day-to-day accounting outsourcing services for our clients, we have established business partnerships with other accounting professionals who do this work for our clients. See here for details. |
| 1.B. Bookkeeping and Accounting (performed infrequently (for example, once a quarter or annually)). | Yes | We take clients’ bank and credit card transactions and certain non-bank information for any reporting period and in any number and process them to produce an accounting trial balance for the reporting period, further used to prepare our clients’ financial statements (see the next service below). |
| 2. Financial statement preparation | Yes | The financial statements that we prepare are intended for the use by business owners or its management, tax accountants, banks, and government officials. The name of our firm does not appear anywhere on these statements, consistent with the AICPA financial preparation standards (but see the next service below). |
| 3. Compilation Services | Yes | As our clients’ accountant, we will do the general accounting work (1.B), prepare the financial statements (2), and issue an Accountant’s Compilation Report on our letterhead that states that we compiled the financial statements and used our professional expertise in their preparation. Compiled financial statements are intended for the use by lenders or government officials who may appreciate the business’s association with a CPA and are generally appropriate when initial or lower amounts of financing or credit are sought or a significant collateral is being pledged. |
| 4. Review of the Financial Statements | No | CPAs generally provide some limited assurance with respect to the financial statements and whether any material modifications should be made to bring them in accordance with GAAP or other reporting standard. |
| 5. Audit of the Financial Statements | No | CPAs provide reasonable assurance whether the financial statements are free of material misstatements. This is the highest level of assurance services that the accounting profession can offer. |
To get additional information about these services, refer to the Guide to Financial Statement Services: Compilation, Review and Audit published by the American Institute of Certified Public Accountants here.
Who Do We Offer Our Services To?
We offer financial statement preparation and compilation services to both our business clients and the clients of other accounting and tax professionals (in an outsourcing mode, working directly for those professionals).
About 80% of our engagements are for the financial statement preparation (services described on lines 1.B and 2 above), and about 20% for bookkeeping, accounting, preparation, and compilation services (see lines 1.B through 3 above).
What Information Do We Use?
Whether working directly with our clients or with accounting or tax professionals, we begin by obtaining the following information:
- All bank, credit card, PayPal, Venmo, and other transactions for the reporting period.
- Images of cancelled checks and balances for all of these accounts.
- All non-bank information that may apply to the client: inventory levels, fixed assets ledgers, loan balances, and non-cash transactions with owners (for example property contributions to the business.)
- Prior period financial statements (if available).
- Prior period business tax returns (if available).
- Information about the owners of the business (their names and names of related parties).
What Does the End Product Look Like?
We convert the information that we receive into sets of properly prepared financial statements such as the Balance Sheet, Profit and Loss Statement, Cash Flow Statement, and a Statement of Changes in Owner’s Equity consistent with the client’s method of accounting. For compilation engagements, we issue an Accountant’s Compilation Report on our letterhead. To see examples of financial statements we prepared, take a look at this presentation.
Additionally, we provide all data that we process in electronic format for further upload to an accounting system of our clients’ choice or possible analysis with Microsoft Excel, Microsoft Access, or Microsoft Power BI. To understand how we do what we do, take a look at the Advantages and Uniqueness of Our Service, below.
What Professional Standards Do We Follow?
At Glasgow Knight Financial we follow the Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA (American Institute of Certified Public Accountants). They are currently codified in Section 60 (General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services), Section 70 (Preparation of Financial Statements) and Section 80 (Compilation Engagements) of SSARS No. 21, SSARS No. 23, and SSARS No. 25, collectively summarized and presented in AR-C 70 (Preparation of Financial Statements) and AR-C 80 (Compilation Engagements) for financial statements for periods ending on or after December 15, 2015.
While preparing or compiling our clients’ financial statements, we do not audit nor review them nor are we required to perform any procedures to verify the accuracy or completeness of the information provided by our clients’ management. We do not express an opinion, a conclusion, nor provide any assurance on these financial statements. We process data provided by our clients’ management, prepare the financial statements, and, when requested, issue an Accountant’s Compilation Report.
How Do Our Clients Benefit from Our Services?
Independent research shows that almost half of small businesses (45%) employ neither an accountant nor a bookkeeper. All they’ve got to show for their business financials at year-end is their bank or credit card statements. One-quarter of small businesses (25%) still record their finances on paper, instead of doing so electronically.
The proverbial shoe box of receipts is real. On average, our clients bring us anywhere from 750 to 1,500 bank and credit card transactions (although we’ve seen as many as 4,500 transactions) from the prior calendar year. These clients generally do not have any prior accounting work done on their part. Three in five accountants we’ve surveyed stated that they would refuse to prepare financial statements and do compilations for prior periods of their new clients and only choose to “do the books” on a prospective basis (the service described on line 1.A of the table above).
We love to solve tough, real-life problems, especially when it comes to working with large amounts of accounting data. We can take on an unlimited number of bank or credit card transactions, some non-bank information, and do financial statement preparations and compilations for our clients as often as they wish (monthly, quarterly, semiannually, annually, or for a custom period).
How Do Our Clients Use Our Product?
Most of our clients use the financial statements we prepare or compile to raise capital, obtain credit, participate in government-sponsored programs (for example, SBA loans), understand the state of their business and improve on its management, or to prepare their tax filings at year-end. As a matter of fact, over 80% of our financial statements are used by us or other tax practitioners to prepare business tax returns.
Advantages and Uniqueness of Our Service
- There are not many CPAs who prepare or compile financial statements in the way we do—meaning starting with raw, unprocessed bank and credit card data. It is even harder to find a CPA who would take on a project of over 1,000 bank or credit card transactions. Most CPAs either prepare financial statements based on some previously completed accounting data or compile financial statements from the client’s already prepared financial statements. Therefore, our financial statement preparation and compilation services occupy a specialty niche in the accounting services market.
- We use state-of-the-art technology, computer robotics, machine learning, the power of the internet, and highly skilled financial professionals to sort, organize, reconcile or properly characterize bank and credit card transactions.
- We use custom-designed charts of accounts and client-specific bank-GL mappings for each of our clients; repeat clients see consistent treatment of similar transactions period over period.
- We have experienced CPAs who post accruals (if needed), true up inventory and cost of goods sold (COGS), calculate depreciation (for book and tax purposes), post adjusting journal entries for interest expense, true up loan and lease obligation balances, and reflect proper balances in the owner’s equity accounts.
- Convenient outsourcing solution for tax accounting professionals: as stated above, we can assist these professionals with onboarding their new clients and process as many of their bank and credit card transactions as needed from any prior period, upload them into the accounting system of choice, and then let these accounting professionals continue with the day-to-day bookkeeping and accounting services.
- Unique alliances and business partnerships: we have established business relationships with other professionals who can do day-to-day bookkeeping for our clients (see service 1.A in the table above), some of the best credit repair and business credit management agencies in the country, the top payroll and HR-service provider in the country (ADP), and many others. See here for details.
- We are a fully virtual enterprise.
- It’s strange to add this to the “uniqueness” list, but unlike many accounting and tax professionals, we pick up the phone and respond to client emails either immediately or within 24 hours.
If you’d like to learn more about our financial statement compilation services, please call us at +1 (904) 377-0077 or contact us.
For a presentation on our financial statement preparation and compilation services and to see examples of our work, see the following.
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