Large corporations have in-house accountants to keep their account books straight. This isn’t a luxury many small businesses can afford. That’s because it takes serious resources to maintain an in-house department. You got to set up a proper office, put up the furniture, hire competent people to work up the books.
Most small businesses simply can’t do that. This leads to struggles with the account books. Many SMEs can’t focus on the accounts and their core operations one at the same time. This leads to the accounts books being messy, improper tax filing, and unsorted financial records.
While all these can lead to heavy penalties, there’s a chance that even the internal operations of the company might suffer. Because when companies aren’t in a true understanding of their financial position, they can’t strategize for the future the right way.
This article is about the importance of having the account books right. Here are 3 reasons for small businesses to never neglect financial matters and always keep their records straight:
You can budget accurately
As mentioned above, you can’t jump the pool without knowing the depth. Similarly, you can’t have a roadmap for growth if your books don’t show the true figures of the incoming and outgoing cash flows. You can have some estimations, sure, but that’s not a sustainable strategy in the long run.
Having the true figures will rightly reflect your business position, and then you can budget the growth strategies without the guesswork.
You avoid tax discrepancies
Financial negligence can easily lead businesses into hot waters. When your books are sorted to the point, you always have the right figures to pay as tax. That way, you are never troubled by the tax authorities.
Many businesses don’t bother with this point much and end up paying penalties. Some procrastinate till the very end and file taxes haphazardly, only to be reprimanded later. All those problems fade out from scratch if your account books are in order.
You are well aware of the situation
With the books set right, you can always conduct an internal audit of the business. That way, you’ll know exactly your financial standings. Plus, you have almost zero ambiguous transactions, and it then becomes easy to justify your financial activity.
This is one problem that several SMEs suffer. Since their accounts are shabby, they have too many questionable financial transactions. This can cause problems with taxation and financial regulatory bodies.
When your books are right, you have no problems with the authorities, and that’ll allow you to focus on the operations!
How to set the books right?
Now that you know the importance of maintaining accounts, what should be the next step?
One way is to hire in-house resources. But as mentioned, they are costly and difficult to maintain. Plus, small businesses don’t need to have such costly accounts departments when there are other options available that are better competent!
If you own a small business, then you can easily hire virtual bookkeeping solutions and get your account books sorted. This way, you are always on top of your financial game. Plus, you only get to pay for the services you get. No need to pay the fixed costs of setting up and maintaining an accounts department.
So now that you want to get the books right, what should you do next?
Overdraw is an accounting firm that offers bookkeeping services for small businesses in the USA at reasonable prices. We have handled numerous accounting books for our clients. With our assistance, several SMEs got their financial mess sorted and are now on an exponential growth trajectory.
Want us to work up the same magic for you? Just call us to get our virtual bookkeeping services. You’ll definitely see and appreciate the difference that we’ll bring to your traditional ways of bookkeeping!