As many business owners struggle to maintain balance in the middle of their hectic schedule from actually running their business. Bookkeeping can often be forgotten and fall by the wayside. However, keeping an accurate history of the bookkeeping responsibilities of your business can be the difference can mean the difference between staying in operation and closing down because of tax problems or cash flow issue. Or more likely, cash flow issues caused by tax problems.
Not tracking receivables could put you in the position of having a great deal of potential revenue but little actual money coming in. Without a way to manage all outstanding invoices at once and monitor which of your clients still owes you money, you run the risk of losing income from aging accounts. This disruption in cash flow can force you to have to take out a loan to cover expenses or cause your business to grind to a halt. The best way to avoid having invoices that sit for too long is to use invoicing software that sends automatic reminders to customers as due dates approach.
When you were little your parents probably told you to save up your change because eventually even the tiniest amounts of money can add up to a lot. Unfortunately our parents were right. Many business owners will overlooks small expenses like food during travel or lodging that could lead to you missing out on hundreds of dollars in deductions and paying much more than you have to.The government isn’t going to point out that you could have possibly gotten a deduction if you did x y and z. It’s up to you to keep complete and accurate records of ALL purchases so that you can stay on top of you taxes as well as you bank account.
When you don’t make clean record-keeping a priority, you wind up having to scramble to catch up every time you need completed books for a financial transaction.
The more you have to rush, the more likely you are to make mistakes that require correcting. The time lost to this cleanup process costs your business much more than taking a few minutes each day to fill out the books. If you make any serious mistakes in your hurry, you could wind up facing bigger problems in the future.
One Last Thing
Hopefully this article helps you in bringing to your attention how important it is for you to stay on top of you bookkeeping responsibilities. If you feel that you simply do not have the time to keep track of everything your company does and documenting it in a efficient and easy to understand way, it may be logical for you to hire a freelance bookkeeper as the cost of paying the bookkeeper is likely less than how much money you could be losing by having books that are not entirely accurate or up to date.…Read More