What Does the Term PBC Mean in Accounting?

The term “PBC” (Provided by Client) is central to accounting and auditing. It represents a structured approach to information exchange between clients and their accounting professionals. This process streamlines financial engagements, ensuring necessary documentation is provided efficiently for services like audits, tax preparation, or financial reviews.

Understanding Provided by Client (PBC)

PBC refers to a comprehensive list of documents, data, and information an accounting firm requests from its client for a specific service. This list guides the client on what materials are needed to complete the engagement. The items on a PBC list are essential for the firm to gain a complete understanding of the client’s financial position and operations.

This information allows the firm to verify financial statements, test internal controls, assess risks, and ensure compliance with various regulations. It is a foundational element for services like financial statement audits, tax filings, or financial reviews. The PBC list helps establish clear expectations for both parties, minimizing back-and-forth communication and potential delays.

The Purpose of PBC

The primary purpose of a PBC list is to facilitate a smooth and efficient accounting or auditing engagement. By clearly outlining the required documents upfront, it helps both the client and the professional save time and resources. For the client, preparing these items in advance reduces disruptions to their daily operations. This structured request process enhances communication between the client and the firm, making the entire process more transparent.

For the accounting or auditing firm, a complete PBC list ensures they have all the necessary information to conduct their work accurately and thoroughly. An organized PBC process contributes to the timely completion of engagements, which can also help manage the overall cost for the client.

Common Items Requested in a PBC List

A PBC list includes financial, legal, and operational documents tailored to the specific engagement and the client’s business.

Financial records often include:
Trial balance and general ledger details
Financial statements (balance sheets, income statements, cash flow statements)
Bank and investment statements, with account reconciliations
Schedules for accounts receivable and payable
Fixed assets with depreciation
Loan information

Operational and legal documents include:
Organizational charts, bylaws, and board meeting minutes
Copies of significant contracts (lease, loan, grant documentation)
Payroll records and tax returns
Internal control policies or fiscal manuals

Best Practices for Preparing PBC Items

Preparing PBC items begins with understanding the specific requests and their due dates. Accounting firms typically send the PBC list 30 to 60 days before the engagement. Clients should organize documents logically, often by category or chronologically, and ensure all requested information is complete and accurate. Clear labeling of files and folders helps the accounting professional easily navigate the provided materials.

Establishing a single point of contact within the client’s organization for all PBC-related communications can streamline the process. Responding promptly to initial requests and any follow-up questions helps maintain momentum. Many firms utilize secure client portals or online platforms for document submission, offering a secure and organized way to transmit sensitive information. Regularly reviewing and updating internal financial records throughout the year can significantly ease the burden of preparing PBC items.