Financial Strategy & Reporting¶
Authored and maintained by the Accounting Manager. This is the actuals-and-controls counterpart to MC-ATG's consolidated pro forma: the pro forma builds the strategic shape; this area reports what the books actually say, how they are kept accurate, and what the numbers recommend. The companion chronological financial report is updated every Friday.
What the accounting function is for¶
The group is a family of legally separate entities under a holding parent (Arizona Truck and Equipment). Each entity reports independently — there is no consolidated ledger. The accounting function's job is to keep every entity's books accurate, current, and reconciled, so that (a) each entity's standalone financials are defensible to a lender, partner, or tax authority, and (b) the strategic pro forma can be fed with real actuals instead of estimates.
Accuracy is treated as a control problem, not a data-entry problem. The same dollar that is wrong in a subledger is wrong in a tax return twelve months later; the discipline below exists to catch it in week one.
Strategy — the principles the books are run on¶
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Trace-and-fix, never offset (BAAP). When a balance is wrong, the original transaction is found and corrected at the source. Offsetting journal entries that mask a problem are prohibited — they compound and destroy the audit trail.
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One register entry per real-world event. Bank lines reconcile 1:1 to register entries; no split-an-event-across-many-entries, no duplicates. Every transaction is supported by its source document (the invoice, i.e. the billed amount — not merely a payment receipt).
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Cost-recovery transfer pricing for intra-group services. The holding/management entity (Arizona Truck and Equipment) charges the operating affiliates management fees calibrated so the management entity at least recovers its cost — it is not designed to sit on a loss that the operating companies' fees should have covered. Fees are trued up to the period's actual cost at close; the catch-up is billed through the AR subledger (never a phantom-AR journal plug). This keeps each entity's standalone P&L economically honest and is a defensible transfer-pricing method for routine intra-group services.
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Intercompany balances are settled, not left to drift. Cash one entity advances on another's behalf (rent paid through a clearing account, affiliate fees billed but not yet collected) accumulates as intercompany receivables/payables. These are periodically reclassed to formal intercompany loan accounts, which keeps operating cash flow clean and stops the balances from growing unbounded and unexplained.
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Tax basis unless GAAP is required. Where the books use MACRS depreciation and Section-197 amortization, they are tax-basis. If a lender or investor requires GAAP statements, the divergences (goodwill not amortized, book vs tax depreciation) are surfaced and quantified rather than silently carried.
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Re-read reality every run. The chart of accounts, the bank feed, and the open-item ledgers are queried live each cycle — never cached. New accounts and new transactions appear between runs; a stale snapshot hides a real hole.
Cadence — how accuracy is maintained¶
| Rhythm | What happens |
|---|---|
| Daily | Per-entity bank workflow: download activity, post the unrecognized lines against source docs, reconcile the day's bank balance 1:1. |
| Monthly (close) | Recurring entries posted — billing runs, vendor bills + payments, and month-end accrual JEs (depreciation, amortization, payroll/officer-comp accrual, interest); intercompany reclass; management-fee true-up to the period's cost. |
| Weekly (Friday) | Whole-file integrity review — trial-balance proof, subledger-to-control tie-out, recurring-entry completeness, classification/intercompany/aging/basis/hygiene scans → findings + remediation. The week's financial report entry is written here. |
How to read this area¶
- Financial report (chronological) — the running, human-readable log of financial status, health, strategy changes, and recommendations, newest first. Read this first for "where do things stand and what changed."
- This page — the standing strategy and method behind those numbers.
- MC-ATG's consolidated pro forma — the forward-looking strategic shape these actuals feed into.