As a business owner, you are in charge of every aspect right from budgeting to marketing, customer service, and accounting. Bookkeeping is an essential component that enables you to track income and business expenses, which demonstrates profitability. If you have chosen to do it yourself and do not understand the tax implications or bookkeeping software it can lead to numerous issues.
Poor bookkeeping can lead to a wide range of problems that can bring down your small business. Below are some of the potential problems that have arisen with past clients doing their own bookkeeping.
Poor Business Decisions
Making correct business decisions is imperative to your success. These decisions need to be based on accurate and reliable information. When making decisions about hiring or firing an employee, marketing, or whether you need to acquire new assets or liabilities your current financial health is the best indicator. If you do not have accurate bookkeeping decisions are made on faulty information and are catastrophic to your bottom line.
Late Filing of Your Taxes
Not filing your taxes on time has numerous consequences. Not only are there penalties interest starts to accumulate the date are your original filing was due. In addition, late filing is a red flag with the IRS that can lead to a business adult. Late filing is easy to avoid when your records are accurate and up-to-date before filing.
Destruction of Staff and Client Relationships
Too often a small issue such as not keeping up on your bookkeeping can have costly results. From invoices that were never sent to late fees on bills that are overdue, these mistakes demonstrate that your company has bad bookkeeping principles. These simple mistakes cause a strain on both staff and client relationships and signals a lack of detail and functionality within your operations.
It has never been easier to avoid numerous bad bookkeeping mistakes. Contact us today as we would love to discuss the ways in which we can help you this upcoming tax year.
