Cantilever uses basic GAAP accounting methods, which we handle inside our accounting software, Xero.
We use Gusto for our payroll. Gusto is integrated with Xero so as soon as we pay something in Gusto it appears a "Bill" in Xero, even before the cash leaves our account.
Therefore when reconciling bank transactions you often need to do a sweep of the data between Gusto and Xero to make sure you are connecting the bank transactions to the correct costs.
Weekly Process
We run this process at the close of each calendar week (either on the Friday or Monday of the subsequent week).
Monthly Process
After each month has concluded...
- Log in to Fidelity.
- Get the latest account balance.
- Compare that to the existing account balance for the "Long-Term Investments" account. Note the difference.
- Go to the Manual Journals. There will be a new draft journal to update the value of this account.
- Use that journal to debit or credit the account to reflect the change in value of the stock account during the last month. There should be a balancing line item for "Interest Income".
- Double-check the balance sheet against the Fidelity account to ensure that the right account value is shown.
- Double-check the income statement. There should now be a value for last month under "Interest Income" that is either negative or positive depending on how the stocks performed.
Cantilever owns 66.66% of Cantilever Europe. To capture this value in our balance sheet we keep an asset called "Shares in Subsidiary". We update this monthly to reflect how it‘s going in Europe. Currently we do a crude method where we simply take 66% of the value of the Europe bank account. This is an imperfect valuation but it works fine for the sake of our books.
At the beginning of the next month, go to Manual Journals and click Draft. There will be a draft journal to "Update value of subsidiary stock".
Compute 66% of the value of the European bank account (found in Revolut – you may need access to this). Convert to USD.
Find the current value of the subsidiary stock in our balance sheet.
Based on the difference, complete the draft MJ.
Validate that all recent fixed assets have been acquired and disposed of properly. Were there any purchases last month? Dispositions?
After validating, run depreciation through the end of the prior month. Validate that it appears on the income statement and is still clean and realistic on the balance sheet.
Quarterly Process
After each quarter has concluded...
- Temporary: Run invoices between Cantilever Europe and Cantilever US
- Ty: Create report and update the team
- Double-check that the passthrough vendors account is empty. If not, make sure we have the right plan to get paid or pay out whomever is missing money.