When I worked at a CPA firm, and performed audits on clients’ books, I realized something very interesting. Most of the audit, and review processes are centered around making sure that the balance sheet is accurate. 

Reviewing the balance sheet makes sense. When you dig into the financial statements, and start to get an understanding about how everything flows, then you can see why this works. All roads lead to the balance sheet at some point. The net income closes out to the equity section. Accounts Receivables are directly tied to sales. Accounts Payable are directly tied to expenses. Payroll Liabilities are tied to payroll expense. If you see loans payable, then you know there needs to be interest expense on the income statement. 

This got me thinking. The Balance Sheet really drives the bookkeeping. In fact when I work on a client’s books, that is my checklist. I do a mini review of the books every time I work on them for a client. This means I start with the bank accounts and make sure they’re up to date. Then I work my way down the balance sheet. 

Then I got an idea. If the balance sheet really drives the scope of work (and it sure seems to when you look at the above) then why not do an estimate based on the balance sheet?

The video will show you what this looks like. 

There is more to this, than just coming up with an estimate. There is a psychology to this. If you are not confident in the estimate you send your client, then the client won’t be either. The beauty of course, of the template I’ve come up with for this, is that you can tweak the numbers very easily if you like, to get that estimate set at a level where you have the perfect balance between being comfortable asking for that amount, and being excited as hell once the client agrees, to do the work, because you’re getting paid so well to do it!

You should not take on an engagement just because you need the money. Walking away will often keep you open and available for a MUCH better opportunity. In the last few minutes of the video I will discuss why you need to be prepared to walk away, and when you should.

In the video I discuss this, and of course the template is available to Patrons only.

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