Many founders and SME owners in Nigeria and across Africa view corporate bookkeeping as a black box. They hand over bank statements and receipts, trusting that the monthly financial reports returned to them are accurate.
This hands-off approach often carries heavy commercial consequences. Unnoticed ledger errors can quickly lead to cash flow shortages, inflated tax liabilities, or severe penalties from regulatory agencies like the Federal Inland Revenue Service (FIRS).
You do not need a professional accounting qualification to spot critical discrepancies in your financial records. By establishing a basic process to review accountant s work being accountant or business owner in executive control, you can protect your company’s capital and ensure compliance.
Start with the monthly bank reconciliation
The simplest and most reliable way to verify your books is to demand a monthly bank reconciliation report. This document matches the cash balance on your bank statement with the balance recorded in your accounting software.
An unreconciled ledger is an immediate red flag. If your business has an actual bank balance of 10 million Naira, but your accounting books show 12 million Naira, your accountant must explain the variance in writing.
Look closely at the list of outstanding deposits and unpresented cheques. If transactions remain listed as pending for more than 30 days, it usually points to delayed entries or duplicate records that distort your cash position.
Always request the actual bank statements directly from your banking portal. Compare the final balances yourself to ensure the accountant is not reconciling the books to an outdated or incorrect statement.
Verify tax compliance against actual filings
Tax errors can quietly drain an SME’s cash reserves through avoidable penalties and interest. In Nigeria, failing to file Value Added Tax (VAT) or Withholding Tax (WHT) on time attracts immediate fines.
Do not simply take your accountant’s word that taxes have been calculated and paid. Request the official receipts and acknowledgement slips generated directly from the FIRS Taxpromax portal or state tax portals like LIRS.
Cross-check your sales ledger against the filed VAT returns. If your internal records show revenue of 15 million Naira for the month, but the VAT filing only reports 10 million Naira, your business faces significant audit risks.
Similarly, ensure that WHT credit notes from your corporate clients are being actively tracked. Your accountant should be utilizing these certificates to offset your company’s Income Tax liabilities.
Analyze margin trends and aging receivables
Your gross profit margin should remain relatively stable unless you have experienced major supply chain disruptions or pricing adjustments. A fluctuating margin often points to poor inventory tracking or misclassified expenses.
For example, if your gross margin drops from 35% to 20% in a single month without a corresponding drop in sales prices, your accountant may have recorded the cost of goods sold incorrectly.
Request an aged receivables report every month to monitor customer debts. You should look specifically for accounts that are past 60 or 90 days and compare them against your cash flow forecast.
If your books show high profitability but your bank account is consistently empty, your accountant may be recording revenue that has not yet been collected without setting up a proper provision for bad debts.
To establish a clean oversight routine, schedule a mandatory 30-minute monthly review session with your finance team. Use this time specifically to walk through these reconciliations and tax receipts before any monthly books are closed.
