AN OUNCE OF PREVENTION
Clean up your internal accounting now to avoid headaches later
Just like a messy home takes infinitely longer to clean than one that ’ s been regularly maintained , so it goes for tidying up your business ’ s accounting records – the more you stay on top of them , the easier they will be to “ clean up ” come tax season . Not only that , but the cleaner and more accurate your records are , the less likely it is that you will be faced with a surprise bill at the end of the year .
But that ’ s not the only reason it ’ s important to keep clean internal accounting records – especially if your business is growing . Make sure your records are in tip-top shape so tiny problems don ’ t snowball as you grow .
Accurate accounting records , well-organized accounts payables and receivables and timely bank reconciliations will help ensure the future health of your business and allow you to :
• Manage and pay down debt effectively
• Correctly forecast your business ’ s growth course
• Pay owners , stakeholders and employees in a timely fashion
• Project tax liability
• Plan and save for the future
Mismanaging records , on the other hand , could have negative effects on your business . In addition to setting yourself up for messy tax filing , you also run the risk of misallocating your cash – which means you might not have enough cash on hand when you need it most .
There ’ s never a dull moment for small business owners . And sometimes accounting activities get bumped to the end of the list when unexpected demands inevitably pop up .
Step Away From The Books
Many business owners take on the responsibility of serving as their business ’ s primary accountant , regardless of whether they are actually trained to take on the role – and they often underestimate the amount of time needed to manage their business ’ s books . The result ? Your business is left with weak internal controls , which not only opens you up for fraudulent activity , it hurts your company ’ s potential for growth .
This isn ’ t to say that this kind of set-up never works ; but it ultimately depends on the individual and their business . Most of the time , however , business owners are simply far too busy running their day-to-day operations that they can ’ t give their accounting activities the time and energy needed .
The bottom line is this : if you don ’ t have timely , accurate accounting information , if your records appear off in any way , or if you feel overwhelmed by the current state of your accounting activities , it ’ s time to make some changes .
Some business owners find that delegating bookkeeping tasks to another family member makes the most sense for their business . Others may choose to hire an accountant . These decisions all depend on the size and budget of your business . If either of these solutions don ’ t seem like a good fit for your business , you may want to outsource this function to a CPA firm … which not only takes a lot off your plate , but you could also see significant savings , compared to hiring a full-time employee . Begin by consulting with a CPA , or ask around within your professional network for a referral . Regardless of where the help comes from , your accounting is too important to go by the wayside . by : Brian Kempf
CPA , Principal 212 N . Washington St . Millersburg , OH 44654
( 330 ) 674-6055 brian . kempf @ reacpa . com