A lot of owners send in their info, get a report back, and just trust the process. They don’t really understand what’s in it, but they figure somebody does. That’s not a knock on owners. You’re not an accountant, and you shouldn’t have to be.
Why isn’t a quarterly report enough?
Because a report without a conversation is unread, uninterpreted data. You can’t ask about what you don’t know. Most owners open a P&L, look at the bottom line, and close it. Not because they don’t care. Because nobody ever walked them through what the rest of it means.
Can your accountant read your numbers without talking to you?
Not fully. This is the part that surprises most people.
It cuts both ways. Clients don’t know what questions to ask of a report. But without your business context, an accountant can’t be fully sure their own read of the numbers is correct either. A jump in an expense line could be a one-time purchase, a coding error, or a real problem. The numbers alone don’t say which. The meeting is where that gets checked. You bring the context. We bring the accounting expertise. Together, you get an accurate picture.
What can’t a P&L tell you?
A P&L shows whether the business made money over a period. It doesn’t show you everything you need to run it. Two common gaps:
Which jobs are actually profitable
Take a contractor who does kitchen remodels, bathroom remodels, and new builds. He can make plenty of money. But without a job costing schedule, he doesn’t know which type of job is actually profitable. The P&L shows he made money. It can’t show him which job made it.
Job costing tracks revenue and costs by job or job type, including labor, materials, and subcontractors, so you can see the margin on each kind of work. That’s the difference between “we had a good year” and “we should take more of this work and less of that.”
What you actually earned
Some owners can’t state their net number off the top of their head. That’s more common than you’d think. A review meeting is where you’d learn things like:
- Earned revenue vs. deposits. If you take deposits for future bookings or jobs, that cash isn’t the same as revenue you’ve earned yet. Counting deposits as income can make a slow quarter look great, and a busy one look worse than it is. How deposits are handled for tax purposes depends on your accounting method, so that’s a conversation to have with your tax team.
- What your P&L expense lines mean. Every line on your P&L is a category someone chose. Knowing what’s in each one helps you see where the money is going.
- Gross margin. Revenue minus the direct costs of delivering the work, usually shown as a percentage. It tells you how much of each sales dollar is left to cover overhead and profit.
What should a quarterly meeting with your accountant cover?
A good review meeting does two things:
First, it checks the numbers. Are they right? Does anything look off given what actually happened in your business this quarter?
Second, it plans. Where do you want the business to go? What does that mean for cash, hiring, equipment, pricing, and taxes? That’s the part a report can’t do on its own.
At minimum, you should walk out knowing:
- Your net income for the quarter and the year-to-date
- Which parts of the business are driving profit
- Anything that looks unusual, and why
- What to do before the next meeting
What if you don’t know what to ask?
That’s the point. You’re not supposed to. Clients can’t ask about what they don’t know to ask, so the questions shouldn’t be your job. A good accountant comes to the meeting with them already. Why did this line jump? Is this job type pulling its weight? Is that cash yours yet, or is it a deposit for work you haven’t done?
Your job is to bring what’s actually happening in the business. Ours is to connect it to the numbers.
Every report and return should be reviewed together with you, not just sent over. If you’re getting reports and nobody is walking you through them, you’re only getting half of what you should.
How often should you meet with your accountant?
We meet with clients four times a year, and it’s not just someone reading a report out loud. It’s a real conversation about what the numbers mean and what to do next. Quarterly is often enough to catch problems while they’re small and make decisions while there’s still time to act.
Frequently Asked Questions
Why isn’t a quarterly financial report enough?
A report without a conversation is unread, uninterpreted data. Owners can’t ask about what they don’t know to ask. And without the owner’s business context, an accountant can’t be fully sure their own read of the numbers is correct.
What is job costing?
Job costing tracks revenue and costs by job or job type, including labor, materials, and subcontractors. It shows you the margin on each kind of work, so you know which jobs are actually profitable.
Are customer deposits the same as revenue?
No. Deposits for future bookings or jobs aren’t revenue you’ve earned yet. Counting them as income can make a slow quarter look better than it is. How deposits are handled for tax purposes depends on your accounting method, so talk it through with your tax team.
What is gross margin?
Gross margin is revenue minus the direct costs of delivering the work, usually shown as a percentage. It tells you how much of each sales dollar is left to cover overhead and profit.
How often should I meet with my accountant?
At least quarterly. Toran meets with clients four times a year. That’s often enough to catch problems while they’re small and to make decisions while there’s still time to act.
What should a quarterly meeting with my accountant cover?
Two things. First, checking that the numbers are right and match what actually happened in your business. Second, planning where you want the business to go and what that means for cash, hiring, equipment, pricing, and taxes.
Stop reading reports alone
You built the business. You shouldn’t have to decode it by yourself. If you want to see what a real review looks like, Book a Discovery Meeting with our team.
