Professional CPA Business Services

Small business owners are often looking to save money and tend to do bookkeeping themselves. I would say without hesitation that this is not a good idea. Most business owners are field operatives and by that I mean they are good at running their businesses but don’t have the savvy when it comes to balancing books and looking/understanding figures. However some will still insist on going it alone, and after a few years of compounded bookkeeping errors, find themselves ready to file for bankruptcy. These are not exaggerated statements because it happens every day. In fact poor monetary planning is a common reason some small businesses fail within their first 5 years of operation. In this article, I will show you why proper financial records are important and why it’s a good idea to outsource your accounting to a professional.

1. Proper business planning
When the books are done right, you can easily see the direction your business is heading. The figures will tell you which ventures are performing and which are becoming liabilities; making any problems easier to correct when they first arise. When the books are on track, the business will be on track.

2. Auditing required by law
You cannot run from the long arm of the law. No, I don’t mean you intended to, but when the time comes to be audited, you will realize the importance of having your invoices organized. In some countries, the law requires that invoices be kept 5 years after the transaction occurred. Dealing with government agencies can be a total nightmare if you do not keep a clean audit trail.

3. Bank loans for extra funding
If you are a small business, you will eventually incur loans for extra funding. Today’s banking institutions require financial statements as part of their loan approval process, and presenting messy financial statements is good enough reason for a refusal.

4. Easy exit
Don’t get me wrong, I want you to prosper, but there may come a day when you wish to throw in the towel. When you want to sell your business, clean financial statements presenting the details of the last few years of operation are always well received by prospective buyers.

5. Easy tax returns
When tax season rolls around, you will have an easy time if your books are organized. You don’t need to rush to find bills or reconcile expenses you thought you had committed to memory. Clean books are also an incentive to your tax advisor who can now focus on reducing your tax liability instead of trying to clean up messy financial statements.

By now, I think you are already convinced of the importance of proper bookkeeping; if you can’t do it yourself, it’s also a good idea to outsource your accounting to a professional accountant. It will not only save you time and money, but you can rest assured your books are being maintained by professionals who make it their business to keep your financial statements clean.