Josh Aharonoff, CPA

The World of Finance & Accounting 🌎

where numbers align, and profits shine…

I wish I had this poster when I first majored in Finance & Accounting…

There is SO MUCH opportunity in the field.

Let’s dive into each area:

🌎 ACCOUNTING

🗒️ Responsibilities include:

▪️ Producing financial statements, and managing financial operations

👥 Roles:

▪️ Bookkeeper

▪️ AP / AR Clerk

▪️ Payroll specialist

▪️ Procurement specialist

▪️ Controller

🎓 Certifications & licenses:

▪️ Certified Public Accountant (CPA)

▪️ Certified Management Accountant (CMA)

▪️ Enrolled Agent (EA)

▪️ Graduate or Undergraduate Degree in Accounting

🗣️ Common Terms:

▪️ Debits & Credits

▪️ Balance Sheet, Profit & Loss, Statement of Cash Flows

▪️ GAAP

▪️ Accrual

🔧 Common Tools:

▪️ Accounting Software

▪️ Enterprise Resource Planning (ERP)

▪️ Excel, PowerBI & Google Sheets

🌎 FP&A

🗒️ Responsibilities include:

▪️ providing projections, analyzing projections vs actuals, and drilling deep into margins & metrics

👥Roles

▪️ FP&A Analyst

▪️ FP&A Manager

▪️ VP of Finance

🎓 Certifications & Licenses

▪️ Certified Corporate FP&A Professional (FP&A)

▪️ Graduate or Undergraduate Degree in Finance, Business Administration, or Accounting, or Economics

🗣️ Common terms

▪️ Budget vs Actuals
▪️ 3 statement modeling
▪️ Board Reporting

🔧 Common Tools

▪️ Excel & Google Sheets

▪️ Microsoft Powerpoint

▪️ Tableau, PowerBI, Looker

▪️ SQL

🌎CORPORATE FINANCE

🗒️ Responsibilities include:

▪️ Identifying investment opportunities and assisting with various financial objectives

👥 Roles:

▪️ Investment Banker

▪️ Head of Mergers & Acquisitions

▪️ VP of Capital Markets

▪️ Valuations Analyst

🎓 Certifications & Licenses:

▪️ Chartered Financial Analyst (CFA)

▪️ Masters in Business Administration (MBA)

▪️ Undergraduate or Graduate Degree in Finance or Economics

▪️ Series 6

▪️ Series 7

🗣️ Common terms:

▪️ Free Cash Flows

▪️ Internal Rate of Return

▪️ EBITDA

▪️ Stock price

▪️ Market Capitalization

🔧 Common Tools:

▪️ Bloomberg Terminal

▪️ Excel & Google Sheets

▪️ MATLAB

There’s a lot more that I wanted to include, but Linkedin restricts posts to only 3k characters.

Check out the infographic to learn about it all!

Got anything to add?

Let us know in the comments below 👇

PS: Want to level up your career?

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20 Excel Tricks & Tips 👇

Master all 20 and become an excel wizard 🧙‍♂️

👉 Download the worksheet and high res infographic right here for FREE for the next 48 hours:
🔗 https://lnkd.in/eRbavm5h

1️⃣ Add a dropdown tied to a dynamic list

Know how to create a drop down using data validation?

Cool…now how about extending that reference when your list expands?

Step 1: create a table out of the list. This will extend the table anytime a new row is added

Step 2: create a named range for that column

Step 3: reference the named range in your data validation, and voila 👌

2️⃣ Unpivot data

This may be my favorite…

and is extra useful when creating dashboards.

Step 1: Select your range (with dates going horizontally)

Step 2: Select Data > From table/Range

Step 3: Select all date columns in powerquery, right click, and hit unpivot columns

3️⃣ Add buttons to a pivot table (slicer)

Pivottables are a huge part of excel…and slicers make them come to life.

Think of them as buttons that can instantly filter your pivottable (or table).

👉 Select Table Design > Slicer…or pivottable design > slicer

4️⃣ Text to column

Clean up your data and separate values in a cell into multiple columns.

👉 Select Data > Text to Columns

5️⃣ Transpose data

Take data going this way ↔️

And transform it to go this way ↕️

and vice versa

Step 1: copy your range

Step 2: go to paste special

Step 3: click transpose

alternate: use the =UNIQUE spill function

6️⃣ Duplicate window

Ever work on 2 separate tabs, and found a need to view them both at the same time?

👉 Hit View > New Window

7️⃣ Add a watch window

Wanna take tip 6 to the next level? Add a “watch” on a cell..

and you can track the values everywhere you go

👉 Hit Formulas > Watch Window

8️⃣ Add a Table of Contents

Don’t make the mistake of thinking you’re the only one using your excel file - be prepared for people to review & ask questions.

Give your readers clear visibility into what’s what by adding a table of contents

Step 1: Add a new tab, and type out each tab name & description.

Step 2: Press CTRL + K to insert a link to each tab for easy reference

9️⃣ Create different scenarios via scenario manager

Wanna know what your business will look like under a more aggressive set of assumptions?

No need to create a new workbook…instead, use the scenario manager.

Step 1: Select the cells you’d like to update

Step 2: Select Data > Scenario Manager

Step 3: Choose the new values you’d like for each cell

Step 4: Toggle to different scenarios

===

That’s a preview of some of the 20 tips & tricks using only 3k characters.

The good news is you can grab the full worksheet, walking you through all 20 tips & tricks for free via the link on the bottom of the graphic

What excel tips & tricks would you add?

Let us know by joining in on the discussion in the comments below 👇

24 Startup KPIs 👇

1️⃣ Gross Margin → Gross Profit / Revenue

2️⃣ Cash Burn → Cash consumed, not factoring in financing activities

3️⃣ Churn → Lost revenue / customers who are no longer active

4️⃣ EBITDA Margin → EBITDA / Revenue

5️⃣ Customer Acquisition Cost → Cost to acquire a customer

6️⃣ Customer Lifetime Value → Total expected revenue from a customer over their lifetime

7️⃣ EBITDA → Net Income + Interest + Taxes + Depreciation + Amortization

8️⃣ Monthly Recurring Revenue → Revenue from customers subscribed to monthly recurring plans

9️⃣ Net Dollar Retention → Net revenue / opening MRR

🔟 Annual Recurring Revenue → Revenue from customers subscribed to Annual recurring plans

1️⃣ 1️⃣ CAC Payback → Period of time till you make back your Customer Acquisition Cost

1️⃣ 2️⃣ Sales Attainment → % of quota attained by sales team

1️⃣ 3️⃣ Average Contract Value → Total Revenue / # of Contracts (B2B)

1️⃣ 4️⃣ Expansion Revenue → Added Revenue from recurring customers

1️⃣ 5️⃣ Contraction revenue → Reduced revenue from recurring customers

1️⃣ 6️⃣ Budget Attainment → % of your budget achieved

1️⃣ 7️⃣ Average Revenue per User →Total Revenue / # of Users (B2C)

1️⃣ 8️⃣ Net Promoter Score → Used to measure customer loyalty based off of likelihood to refer

1️⃣ 9️⃣ Runway → How many months till you run out of cash

2️⃣0️⃣ Revenue run rate → This months revenue * 12

2️⃣1️⃣ Gross Profit → Revenue - COGS

2️⃣2️⃣ Cash out date → Date in which you run out of cash

2️⃣3️⃣ Net Income → Revenue - COGS - Operating Expenses + Other Income - Other Expenses

2️⃣4️⃣ Operating Expenses → Company Expenses not related to your Cost of Goods Sold, or Other Expenses

Did I miss any?

Let me know by joining the discussion in the comments below 👇


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Looking to level up your career with Finance & Accounting?
These are the people you need to be following 👇

We live in an incredible day and age…

the amount of free resources available is overwhelming.

And it’s never been easier to distribute and consume content.

Whether that be:

→ reading materials

→ videos

→ podcasts & audiobooks

→ live workshops

→ just about any other way in which you can learn something

These creators have taken the time to prepare these resources for all of our benefits.

Posting content is no walk in the park….

it takes hours and hours of preparation…

and often times requires a staff of people to manage.

I’ve been fortunate over the last 2 years to connect with close to all the creators listed on this infographic…

creators that I once saw as competitors to me…

and now I see them as my partners in teaching the world Finance & Accounting

If you’re looking to level up your career, these are the people that you need to be following.

So much of what they are giving away is entirely free…

and for those looking for more, there are a ton of courses, workshops, templates, and other resources available.

As the saying goes…

”He (or she) who seeks the knowledge, shall obtain it”

Join me in the comments below in commending these creators for the tireless effort, and countless effort they put in each day 👏👏

PS: I know that for sure I missed some great people here (these are just the ones that I’ve connected with). Let us know in the comments below who else should be added to this list 👇

How to perform a Month End Close 👇

Month End Close is one of the most common tasks for an accounting function...

and it’s also one of the most important tasks.

Below you’ll find my MEGA GUIDE (80+ pages) on everything I know about how to perform a month end close…

something I’ve developed after closing the books for 100s of companies.

But first…

➡ What Exactly is a Month End Close?

While many may define this differently…

to me, a month end close is the

PREPARATION…

RECONCILIATION…

& SIGN OFF on a company’s financial statements

➡ What are the Steps in a Month End Close?

1️⃣ CLASSIFY ALL TRANSACTIONS TO GL ACCOUNTS

All of your bank & credit card transactions should automatically flow through to your accounting software…

allowing you to easily start classifying to your General Ledger accounts.

When classifying accounts, keep these tips in mind:

⏩ Include a vendor / customer name on all transactions to allow for further reporting & analysis

⏩ Bulk classify transactions for the same vendor that belong to the same category to save time and stay efficient

⏩ Attach receipts & documentation on any large transactions (typically above $1k)

⏩ Put all transactions you are unsure of to uncategorized expense / income, and revisit at the end. Don't let it hold up your month end close!

2️⃣ RECONCILE ALL BANK & CREDIT CARD ACCOUNTS

Now it’s time to reconcile your transactions.

A reconciliation is simply taking the balance from one location (IE, your accounting software)…

and TYING it to another location (IE, a bank statement).

Bank reconciliations are IMO the most important piece of a month end close…

without it, you don't have any credibility on the numbers being presented!

3️⃣ BOOK ADJUSTING JOURNAL ENTRIES

Here comes the real work in a month end close - adjusting journal entries.

Common ones are Prepaid expenses…

Deferred Revenue…

Depreciation....

the list is endless.

The key here is to have rock solid workpapers, typically in excel, helping you both validate & calculate the adjustments / balances

4️⃣ CONFIRM ACCURACY & FINAL REVIEW

Here, it's time to zoom out and review all of your work.

I like to first start by scanning the month over month financials

🤔 Do any accounts show large swings in balances?

🤔 Are there any new accounts that can be merged with existing accounts?

🤔 Do any accounts have missing values?

From there, I'll do a final review on all transactions posted to ensure everything is coded correctly

Once you've completed the steps above - you're all set!

And you can then move onto distributing the financials, performing analysis, etc.

Those are my tips for closing out the month.

What has been your experience?

Join us in the comments below and let us know your thoughts : 👇

PS: This post is an excerpt from my newsletter, where I send out a daily Finance & Accounting tip right to your inbox.

Join 30k+ Finance & Accounting professionals by subscribing via the link at the top of my profile ↗️

The Month end Close calendar 📅
Steps for each day of the month to close your books on time

👍 Give this post a like if you enjoy it (it helps a ton)
⬇️ Download a copy from the link in the graphic below while it's still free

Here’s my schedule:

🗓️ Days 1 - 4 → Classify & Reconcile

✅ Import remaining transactions

✅ Classify remaining transactions

✅ Collect outstanding bills from last month

✅ Send remaining invoices from last month

✅ Download bank statements

✅ Perform bank reconciliations


🗓️ Days 5 - 7 → Book adjustments

✅ Prepare workpapers in excel

✅ Book adjusting journal entries

✅ Match workpapers to trial balance


🗓️ Days 8-10 → Review for accuracy & finalize

✅ Review Balance Sheet

✅ Review P&L

✅ Review AP Ledger

✅ Review AR Ledger

✅ Finalize review for accuracy

✅ Publish Month End Close


🗓️ Days 11 - 15 → Financial Reporting

✅ Review Budget vs Actuals

✅ Review Comparison against prior month

✅ Meet with CEO, and Management

✅ Prepare Board Report


🗓️ Days 16 - 20 → Feedback & Open Items

✅ Respond to any ad hoc requested and open items

✅ Regroup with team on learnings & feedback

✅ Follow up on action items


🗓️ Days 21 - 30 → Prepare for Next Month

✅ Import transactions from Bank & Credit Card

✅ Classify transactions by category, class, and vendor

✅ Upload and process bills from vendors

✅ Import and send invoices to customers

➡️ Some important notes:

1️⃣ Don’t wait till the end to get started

The key here is NOT to wait till the beginning of the month to do the work

It’s doing the workout throughout the month to prepare for the following month’s close

2️⃣ You can close the book even faster

The above schedule shows how you can close the books by the 10th of the month

but the truth is you can close even faster if you are strategic with your resources

3️⃣ You don’t need to work weekends 😇

The calendar below includes weekends, but if you are well staffed, that shouldn’t be needed!

Got anything to add to the calendar?

Let us know by joining in on the discussion in the comments below 👇

PS: If you enjoyed this post, you’ll LOVE my upcoming course on Accounting 101

Let me know your interest over here: https://bit.ly/42mjqlY

Vlookup vs Hlookup vs Xlookup
Learn the most popular excel functions, and which one to use when 👇

Lookup functions are REALLY popular in excel…

because they allow you to “lookup” a value from a dataset, based off of criteria that you enter.

Most people only focus on Vlookup, without realizing that there is a far more powerful lookup function available called Xlookup.

Let’s explore these 3 lookup functions and become a pro:

👀 Stick around till the end to grab my excel worksheet to master these 3 functions + the high res infographic 👇

1️⃣ VLOOKUP

💡 How it works → Searches VERTICALLY in the first column of a specified range and returns a value in the same row from a column you specify.

🧮 Syntax → =VLOOKUP(lookup_value, table_array, col_index_num, [range_lookup])

✅ Pros →Easy to use for vertical lookups, Supported in all versions of Excel.

❌ Cons → Limited to vertical searches, Searches must start in the first column of the range.

🤔My take → VLOOKUP is probably the most common lookup function, but it’s sooo limited. Learn to ditch this function and focus on XLOOKUP!

2️⃣ HLOOKUP

💡 How it works → Searches HORIZONTALLY in the first row of a specified range and returns a value in the same column from a row you specify.

🧮 Syntax → =HLOOKUP(lookup_value, table_array, row_index_num, [range_lookup])

✅ Pros → Useful for horizontal lookups, Supported in all versions of Excel.

❌ Cons → Limited to horizontal searches, Inefficient with large datasets.

🤔My take → HLOOKUP isn’t as popular as VLOOKUP, but is very similar. As mentioned above…while this may get the job done, there is bigger and better available with XLOOKUP.

3️⃣ XLOOKUP

💡 How it works → Searches for a value in an array or range in EITHER DIRECTION and returns a value from a corresponding array or range.

🧮 Syntax → =XLOOKUP(lookup_value, lookup_array, return_array, [if_not_found]

✅ Pros → Can search in any direction, Allows for return of an array and provides an option for a default value if no match is found, is very efficient.

❌ Cons → Only available in Excel for Office 365, Excel 2019, and later versions, can be complex

🤔My take → XLOOKUP solves all the issues that VLOOKUP and HLOOKUP has, and little by little will be taking over the excel lookup universe.

What makes this even more powerful is when you nest another XLOOKUP inside your XLOOKUP to allow you to find the value with both your X and Y axis.

===

That’s my take on these 3 common lookup functions - which one is your favorite?

Let us know in the comments below 👇

PS: Grab the excel worksheet + high res infographic right here:
🔗 https://lnkd.in/eFre5cn3

The Top 10 VC Metrics 👇

Investors LOVE collecting metrics from startups

Whether that’s part of the due diligence process in a fundraise…
Or each month as part of your board reporting

VCs may not be as demanding on this information if you are at the pre seed / seed level of funding

But once you get to Series A, these metrics will be your best friend…if you can produce them
Or your worst enemy…if you can’t

In this guide, I’ll walk you through each of these metrics, and how to calculate them

Did I miss any? Let me know in the comments below 👇

#finance #startups #accountingandaccountants
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Calculate Break Even Point 🎯

The Break Even point is a coveted destination for many companies

It’s where your revenue finally matches your costs, and profitability is on the horizon

For most companies, this can be the goal right from day 1

For startups, this can come much further down the line as they start to prepare for an exit

➡️ What exactly is Break Even?

There are a few ways to define this -

1️⃣ The point where your current months revenue matches your current months expenses

2️⃣ The amount of units you must sell in order to break even

3️⃣ The amount of $$ sales you must generate to break even

4️⃣ The amount of profit you must generated to recoup all cost since inception

Each of these are based on the same question - when do you start to match your expenses with sales?

➡️ How do you calculate break even?

This is most commonly expressed using your Revenue, and comparing it to your Fixed Costs and Variable Costs

➡️ What are Fixed costs?

These are costs that don’t scale with each sale.

If you are operating a restaurant, a fixed cost may be the rent that you pay each month

➡️ What are Variable costs?

These are the opposite of fixed costs…

IE, they change in proportion to the level of business activity

Back to our example of operating a restaurant, a variable cost may be the cost of materials in the food you are selling

➡️ How do you calculate Break Even?

The formula is rather simple

Break Even Point = Fixed Cost / (Sales price - variable cost)

➡️ Can we go over an example?

🥪 Let’s say you sell sandwiches

🏬 Your rent is $10,000 / month

💰 You charge $10 / sandwich

💸 and your variable costs if $6 / sandwich

The formula would be $10,000 / ($10-$6) = 2,500

That means when you sell 2,500 sandwiches…

You make $10,000 in profit…which is exactly what you need to break even on your fixed costs

🤑🤑🤑

That’s my take on break even - what would you add?

Let me know by joining the discussion in the comments below 👇

PS: Grab your copy of this template by clicking on the gif below

https://bit.ly/3NWObKf

The Universe of Financial Statements 🪐🌑☀️\nVisit each galaxy to learn more about business!\n\n🌌 THE PROFIT & LOSS\n\nThis galaxy is filled with planets, asteroids, and moons all designed to tell you 1 thing: \n\nhow PROFITABLE is your business\n\nIt is separated by the following planets:\n\n🌑 Revenue → your income\n\n🌕 Cost of Goods Sold → the cost to deliver your income\n\n🌕 Operating Expenses → the cost to operate your business\n\n🌑 Other Income → income not related to your core business\n\n🌕 Other Expense → expenses not related to your core business\n\nThis galaxy brings us to what may be arguably be the most important planet in our galaxy…\n\n🌍 Net Income → your net profitability… taking all income accounts, and subtracting all expense accounts\n\nBut the constellations found in the galaxy of your P&L is just one part in the vast universe of Financial Statements…\n\nwhich brings us to what may be the most important galaxy of them all…\n\n🌌 THE BALANCE SHEET \n\nThis galaxy was orchestrated by the heavens to tell you one thing…\n\nWhat is the net worth of your business?\n\nIt is separated by the following planets:\n\n🪐 Assets → items of economic value that the business owns / substantially controls\n\n⚫ Liabilities → amounts owed to creditors (hence it being a black hole!)\n\n🌐 Owners Equity → amounts owed to the owners of the business\n\nBefore you put your telescope away 🔭…don’t forget about one very important galaxy\n\n🌌THE STATEMENT OF CASH FLOWS \n\nThis galaxy…like the other galaxies…was orchestrated for one purpose…\n\nTo explain where your cash is going each period 💰\n\nSome scientists use their telescope to study this galaxy using the DIRECT method…\n\nwhile many scientists point their telescope to this galaxy using the INDIRECT method\n\nIt is separated by the following planets:\n\n🌘 Cash from Operating Activities → cash related to operating your business\n\n🌘 Cash from Investing Activities → cash movements related to long term assets invested by the business\n\n🌘 Cash from Financing Activities → cash movements related to funding the business\n\nAs the saying goes…nothing in the universe happens by chance…\n\nand we are all CONNECTED.\n\nThe financial statements are no different.\n\nTake a trip through a wormhole in the Profit & Loss, and you’ll find yourself traveling through space & time into the balance sheet...\n\n🚀 Where Net Income will connect you to Retained Earnings\n\nTravel at the speed of light from the cash flows to the distant planets of both the P&L and Balance Sheet…\n\nFollow these routes:\n\n🚀 Net Income, Depreciation, Amortization → Cash from Operating Activities\n\n🚀 ▲ in current assets / liabilities → cash from operating activities\n\n🚀 ▲ in long term assets → cash from investing activities\n\n🚀 ▲ in debt, or contributed capital → cash from Finance Activities \n\n===\n\nCongratulations!\n\nYou’ve completed your voyage across time and space.\n\nGot anything to add about the amazing universe of Financial Statements?\n\nJoin the expedition in the comments below 🧑‍🚀👇