ss_blog_claim=bd50edc517cf0b7549fe6b5f63b6b5f8 The SLS Business Finance Blog: 5 Questions of a CPA: Andrew Levy, Rockridge Financial Services, LLC

Tuesday, June 26, 2007

5 Questions of a CPA: Andrew Levy, Rockridge Financial Services, LLC

The 5 Questions feature continues with a CPA, Andrew Levy of Rockridge Financial Services, LLC.
SL: What is the # 1 accounting related issue facing small businesses today?
AL: The biggest accounting issue facing small business today is obtaining

timely and accurate information from the accounting system to drive one's
business. The integrity of information that the business owner uses to
drive his or her company is of the utmost importance to making the right
decisions for the business going forward. Whether the accounting
function is maintained in-house or by a CPA, the importance of deriving value from
GOOD numbers is most important. Making sure that one is maintaining
accurate and timely books to drive the company can't be minimized. Don't
forget, integrity of information is everything, otherwise you've got the
accounting problem referred to as GIGO--Garbage in, Garbage out.

SL: What accounting packages do you recommend to us non-CPA business owners
to keep our records accurately, if any??

AL: For smaller companies who don't have the need for anything too
sophisticated, I'm a fan of QuickBooks. The cost is reasonable and
gives a good jumping off point for most companies. For certain businesses, there
are specialized QuickBooks packages that will work well. QuickBooks also
has an online version so that folks within the organization can do
what they need to do from anywhere they can access the internet. This online
version also adds a level of security because the information is maintained
virtually and not on one's own PC/server.

SL: What aspect of small business is accounted for incorrectly the most often
when keeping the books?

AL: Well, where shall I begin? I suppose the most important thing to
keep in mind is the idea of what we "green eyeshade/pocket protector" sorts
call the "matching principal". The idea here is that you want to match the
revenues in the same period as the costs you incurred to get those sales, so
that you can determine the true gross margin and profitability for that period's
revenues. Too often, I see clients that recognize expenses related to a
sale accounted for in a different period from that sale. It makes it incredibly
difficult to see whether a period, or a project, for that matter, is profitable or
not. If you don't know the cost to the penny for expenses incurred
during a period, you can make an estimate, referred to as an accrued expense,
where you can recognize a cost in the period where the revenue is
recognized, and then correct the expense in the following period. While, since
it is an estimate, it is not completely accurate, it is a better method of
applying the matching principle than to simply leave out the expense for the
period in question and recognize it in a following period.

SL: What does Rockridge Financial do to differentiate themselves from the
marketplace full of CPA firms large and small?

AL: First of all, as trusted business advisors and CPA's, we provide a
suite of services for the small business that enables the business
owner/manager to "cherry pick" from the suite of solutions we offer, and
use them when they need--to the degree they need. If one understands the value of leveraging one's resources by co/outsourcing areas that are not core
competencies, then one will understand how RockRidge Financial works
best. Our services include tax planning/strategy, general accounting,
controller by the hour and CFO for hire services. Second, we pride ourselves on
adding real value to our clients by advising and strategizing with them to
improve on their business. We do not simply regurgitate financial statements
or tax returns in a CPA format, but we add value in using this information to
show the business owner where there are opportunities for continued
improvements in the business or opportunities for cost savings. If all we did was
look at a client as a billable hour or a project, we would neither be
serving our clients nor ourselves.

SL: When is a good time for a small business to utilize your CFO for hire services?

AL: CFO for hire is just one area that we focus on--and most companies who
use our CFO services find tremendous benefits from our collective
experience in knowing how to drive businesses forward. For some companies, our
CFO's sit on their advisory boards, while others use our services to refine the
business model or financial plan to have a great roadmap to run their
business by. Business owners have a passion for what they do--and our
CFO's provide the financial insight that the owner may not have. Even when the
owner has a general understanding of accounting and finance, our
insight and business coaching has proven invaluable.

SL: Andrew, how can we contact you and Rockridge Financial?

AL: RockRidge Financial's website address is
We can be reached by telephone at 678-421-9977 or email at

Thanks Andrew for some great information and insight into small business accounting.

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