Plain and Simple: Bright Business Insights Summer 2018 | Page 3
GIVE YOUR BALANCE SHEET THE ATTENTION IT DESERVES
Empowered Decision-Making Stems from Excellent Bookkeeping Habits
As a small business owner, there are probably aspects of the job that
you absolutely love and are passionate about. On the flip side, there are
sure to be a handful of responsibilities you dread – like bookkeeping.
Sure it’s important, but so is that other thing you actually want to do.
So you push off your bookkeeping project again and again. Before you
know it, you have a huge mess on your hands. Then you resent the
mess, and the cycle continues.
Bookkeeping may not be the most exciting work, but it’s one of the
most important things you will do to keep your business running
smoothly long into the future (and that’s exciting, right?).
Accurate Inventory
The end of the year may be the ideal time to take physical
inventory, but it’s certainly not the only time. Reduce your
burden and create a system to track inventory throughout
the year. An inaccurate inventory can impact your ability to
The financial wellness of your business can’t be gauged by your profit properly manage your resources and, in turn, can hurt your
and loss statement alone. For a complete picture, you’ll need your bottom line.
profit and loss statement and your company’s balance sheet. Together, New/Disposed Fixed Assets
these two tools will provide you with an accurate representation of
your business’s financial health, which will make it easier to make and
prioritize decisions moving forward.
Make Your Balance Sheet Work Harder
Before you make any decision that could impact your business’s
financial stability, pay attention to these six items.
Add all new assets to the correct accounts and don’t allow
them to become buried with purchases. Your assets can create
a large unexpected profit when discovered at year-end. Also,
if you’re planning to sell your company in the near future, it’s
vital to keep an accurate record of your assets because they
help determine your business’s true value.
The ability to write off capital purchases has significantly
Cash Reconciliation
Ensure that all cash accounts have been reconciled and make
a special note of any outstanding deposits or checks. Be sure to
verify that all checks (incoming and outgoing) have been tracked
increased since the Tax Cuts and Jobs Act became the law of
the land. However, the benefit needs to be weighed against
cash flow and debt considerations.
and recorded. If you’re a cash-basis taxpayer with some extra cash Liabilities
on hand, see if you can accelerate your deductions to save on taxes. Keep an updated record of your liabilities to maintain accuracy.
Collectability of Accounts Receivable
Does your business currently have bad debts? If so, find out if the
account in question is uncollectable. If it is uncollectable, you may
be able to benefit from it.
If payments are improperly entered, your loan may total more
than your books show. Making sure all of your debts are
tracked and recorded will help you avoid future headaches.
Member Withdrawals
Ensure your member withdrawal account is accurate and
investigate any expenses you don’t see. If you find personal
expenses that were recorded in your regular expenses column
after year-end, your profit will increase along with your taxes.
The Time is Right Now
Don’t wait another minute to get your books in order. When you take
the time to review your balance sheet regularly, you gain access to
an incredible wealth of vital financial information that will empower
by: Joel Yoder, CPA
Manager
212 North Washington St.
Millersburg, OH 44654
330. 521.4536
[email protected]
you to make informed, strategic financial decisions designed to help
grow your business. Give me a call to learn about the impact good
bookkeeping has on your business, and find out what you can do to
better gauge your company’s financial wellness.