WHY ACCURATE RECORD KEEPING IS VITAL
Whitney White of Whitney White Accounting and Notary Services notes that correctly documenting one’ s income and expenses is critical to having an accurate understanding of one’ s business financials.“ This is critical when you are running a small business,” she adds,“ so that you understand exactly what is going on. Are you profitable or operating at a loss?”
White also points out the tax risk of poor documentation, which can include penalties and interest, increased likelihood of being audited, difficulty justifying deductions, noncompliance, delayed or incorrect invoicing, and late tax filing.“ For construction or any other business, you need to file for sales taxes by a certain date and possibly include supplemental information, or you will be non-compliant.”
Finally, let’ s assume that you are a contractor applying for a public works project that requires financial statements, job history, and safety records, but your documentation is incomplete and sloppy. You will fail the prequalification process, thereby losing access to lucrative contracts that could grow your business
Avoiding the Risks of Inaccurate Record Keeping With a Documentation Checklist
As we have illustrated, in every case, poor documentation costs your business money – either by reducing your income or by increasing your expenses – so below, we have provided you with a documentation checklist to guide you in accurately documenting your business affairs, getting your records organized and tracking your income and expenses, so that you can avoid the many potential pitfalls outlined above and ensure that your financial records and documentation help you meet( rather than hinder) your business growth and success goals.
By starting with a documentation checklist, contractors can start to familiarize themselves with the key types of records and documentation necessary for sustainable business growth and for meeting public works requirements and prime contractor prequalification. Instead of being daunting, this can become an empowering journey, giving you a clear overview of your company’ s key components, including financials.
In addition to downloading this checklist, remember that the Contractor Development Program( administered by Merriwether & Williams, a HUB International Company), can help you with cash flow projections, organizing your paperwork and financials, and advising you on bonding and insurance issues. We are always happy to be of assistance. Email us at cdp @ imwis. com or call( 415) 986-3999.
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