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.