Form: Short Note

HOW TO KEEP BOOKS FOR MANAGEMENT FIRST RATHER THAN FOR GOVERNMENT FIRST.

You cannot get a CPA to keep good books no matter what you do. Best advice is to hire an MBA as your CFO. Then strong director or CPA to work for him. CPA’s worry about compliance first and business second, and MBA’s about information for the business first, and compliance as a sunk cost. MBA’s are right.

— ACCOUNTING PERIODS–

13, four-week accounting periods “(months)” no matter how much work it is for accounting.

Payroll periods, within those accounting periods, preferably every one or two weeks.

— MANAGERIAL INCOME STATEMENT –

Presented in tabular form in the context of rolling 12 months.

FOR MANAGEMENT TEAM

Subtotals for Cash On Hand.

Cash Flow History and Forecast.

[details]

Subtotals for EBITDA: profit and loss from operations (cogs)

A List of cash related Action Items

FOR C-SUITE, BOARD, AND INVESTORS

(“stuff that obscures operational excellence or failure”)

(!!!includes book value, AND current liquidation value!!!)

Subtotals for asset transformation (portfolio)

Subtotals for Interest (money costs)

FOR CFO, CREDIT(banking) AND TAXES(government)

(What I call “Cost of government interference in the business”)

Subtotals for regulatory costs (staff, fees, etc)

Subtotals for depreciation, and amortization. (regulation)

Subtotals for the above: “Net”

Subtotals for taxes (taxes)

AT THIS POINT ITS NONSENSE

Totals of above: “Net/Net” (which is by now a total fabrication in most cases)

—FINANCIAL INCOME STATEMENT-

(for third parties)

Standard income statement for the month/period in question.