Compilations


We Regularly Help Businesses with Monthly, Quarterly and Annual Compilations


Compilations are a traditional type of report CPAs compile on behalf of businesses for bookkeeping and accounting purposes. Compilations don’t have the level of independent assurance for accuracy that a review or audit does. However, when based on accurate inputs, it provides reliable financial statements business owners, potential lenders and interested outside parties can use to judge a business’s performance. 

Lacking the level of assurance provided by reviews or audits doesn’t negate the value of compilation, especially if a business is already adhering to GAAP, keeps thorough and accurate bookkeeping records and is transparent with the accounting firm or CPA developing the compilation. 

These collections of financial statements can be particularly powerful tools for business owners and decision makers in a business or organization. They allow leaders to make informed decisions on the best ways to move forward or simply understand their financial health and stability. 

Is a Compilation Adequate for Getting a Small Business Loan?

It really depends on the scenario and the type of loan you’re seeking. Banks may base the level of assurance they need on things like your history with the bank, your credit and the size of the loan you’re seeking. In some cases, a compilation or review may be adequate, while in others you may require a full audit to obtain approval.


Sometimes it helps to speak with an accountant or CPA beforehand to discuss what type of funding avenues are available for your business and what type of financial reporting makes the most sense for your situation. Doing so might save you a lot of money in the short and long term.


Essentially, it makes more sense to go with a much more affordable compilation rather than a more invasive, time consuming and expensive review or audit when all you really need is the assurance provided by a compilation generated by an independent and reputable local Phoenix CPA. 



If a lender wants greater assurance that the financial statements contained within the compilation accurately reflect the operations and health of your business, a compilation may not be adequate to your needs.


How Often Should Your Business Get Compilations?

Monthly, quarterly or annual compilations can provide several benefits for small businesses, including:

  1. Improved Record Keeping: Compilations help small businesses keep their financial records organized and up to date.
  2. Enhanced Credibility: Presenting compiled financial statements to stakeholders can increase the credibility of a small business.
  3. Better Planning: Compilations provide a clear and concise picture of the financial health of a small business, which can help with future planning and decision making.


The frequency at which your business may benefit from compilations depends on the size and complexity of the business, the industry in which it operates and the financial reporting requirements. Small businesses may choose to get annual compilations if they want to ensure their financial records are accurate and up to date, or if they want to demonstrate financial stability to potential lenders, investors or other stakeholders.


Do Lenders Require Regular Compilations?

There may be scenarios where a lender, as part of a loan agreement, requires a small business to provide a compilation on an annual basis. It’s important to understand the requirements of loans or expectations of lenders prior to agreeing to a loan.


If you have questions about compilations, how they are different from audits or reviews or simply want to know if your business should invest in a compilation, call H&H Accounting Services at (480) 561-5805.