My business books are a mess! Help!

Keeping accurate and up-to-date books is essential to keeping other areas of your business functioning. Some of the most common areas bookkeeping impacts include:

Taxes

Every year you file taxes for the business as well as yourself. Overestimating your profits when filing taxes needlessly increases your taxes owed, while underestimating them can lead to an audit and fines. Even miscategorizing assets and expenses can lead to paying more in taxes than you need to. Rather than scrambling for receipts, invoices, and other financial information from the past year, proper bookkeeping keeps all of this information neatly organized in one central location with documents needed to complete your taxes.

Payroll

It should be no surprise that payroll is affected by bookkeeping accuracy. You may be over or under-compensating employees on their paychecks or with benefits, and not even know it! An error that carries over to an employee’s W-2 from your own records can cause tax problems for them and your business!

Loan or Financing Approval

Well maintained books make it easier for business owners to receive outside financing, such as a Business Loan. They are often the most important records required by loan providers and investors. Let’s face it, when you are in the midst of a critical cash flow problem requiring assistance, you do not want to slow down receiving help because you have to gather all of your financial data.

Audits

Filing taxes late or having exemptions, expenses, or deductions that don’t add up raises red flags for the IRS. Even with proper documentation and accurate deductions, the tax process can be time-consuming. With an audit added on top of that and no clear business booking to back it up, you are opening the door for a painful process with multiple irregularities and penalties to arise.

Budgets

Similar to the payroll issue, messy business books can lead to issues with your overall business plan and budget. You may think you are sticking to your budget or even under budget, when in fact you are not properly tracking various expenses your business is incurring. Or worse, you may be accounting for payments from clients you have not received making your earnings smaller than you accounted for.

Payment Cycles and Accounts Receivables

Without accurate records, you won’t be able to keep straight who owes you what. Making the process to organize and send invoices much longer. And the longer it takes you to invoice outstanding accounts and get paid, the longer you’ll go without those funds. Ensuring you are being properly compensated in a timely fashion is one of the best things you can do to prevent a cash flow crunch from threatening a viable business.

Business Insights

If you’re only updating your books a few times a year, you’re potentially missing out on crucial insights that can help you achieve business success. Without accurate bookkeeping, you’re often forced to be reactive, as you’ll only become aware of problems when they become too obvious to miss. Established bookkeeping allows you to be proactive.

Now before you begin to go into full-on panic mode thinking about areas your business might be taking a hit, we are here to help. To avoid things like tax issues, payroll oversights, missing client payments, loan denial, IRS audits, and more, start cleaning up your bookkeeping today. You can certainly clean up your books by yourself, however, the benefits of using a professional may be worth the headache prevention and time you will gain back. Because as we all know, time is money.

Hiring professionals will not only free up large chunks of your time and alleviate stress, but they can also save you money. Bookkeepers and Certified Public Accountants are trained and qualified to record financial transactions, categorize financial data, and reconcile accounts. Ultimately, hiring a professional can ensure your books are accurate in an efficient manner.

Don’t let your business fail because of poor bookkeeping. Take the first step to cleaning your messy books, whether that means working with a consultant or tackling the project on your own time. Either way, don’t wait. You, your clients, and your employees will all thank you in the long run.