When you run a business, you’re a small cog in a big machine. The only way to know how well your machine is working is by keeping track of all the other parts.
Without proper bookkeeping, you’ll never know if there’s a problem brewing or if things are going swimmingly. If something goes wrong and no one notices, it could be catastrophic for your company. And if everything is going well and no one knows it, that’s also bad news!
Running a business is no easy task, but it doesn’t have to be difficult. Countick will provide you with the help and support you need to take control of your finances and focus on what matters most: growing your business!
Let us have a look at the 6 alarming points you must face when you do not do bookkeeping:
your company’s finances are not well documented.
When you stop paying attention to your bookkeeping, you can no longer keep track of your company’s financial status. Your records and statements will be inaccurate, which makes it much harder to calculate cash flow projections or prepare financial statements.
Without calculating the cash flow of your business, you might overlook overdue invoices, held inventory, or recurring variable expenses such as shipping costs or hourly wages. The break-even point is the point at which revenue equals expenses.
Having a paper trail can help you keep track of your cash flow, so you can see when money is coming in and what bills need to be paid. If you don’t have bookkeeping for your business and are struggling financially, it might be time to take action!
invoice cycle of the company fussed up!
If you don’t organize your paperwork, you will lose money that could be in your pocket. Mistakes happen, but we’re all human, and sometimes we forget things if proper bookkeeping is not done. If you forget about an invoice for a client who pays late, they might not remind you that they owe you money. The longer it takes to organize your outstanding invoices, the longer it will be before you receive payment on those outstanding bills.
payroll problem grow
If you don’t have a system in place to double-check your payroll records, mistakes will happen. It’s essential to keep track of staff time, benefits, and expenses otherwise, it can get confusing. It’s important to keep good records to ensure that you’re paying your employees what they’re due and that they’re paying the right amount of tax. Not doing proper bookkeeping may cause issues in employees’ W-2 form.
expense management becomes complicated
If you want to save money and keep your finances organized, you need to keep track of your receipts. Without keeping good records, it will be hard to determine what business expenses you can deduct from your taxes; this could lead to trouble if the IRS ever decides to audit your records.
tax prep can be time-consuming
If you don’t have a bookkeeping system in place, tax prep can be very time-consuming. We recommend hiring a bookkeeper to help with your taxes. This will allow you to focus on running your business.
If you don’t set up a system for monitoring your books and your accountant has to do it, you’ll end up paying huge fees in the process.
problems in financial loans
The lack of up-to-date financial records can prevent you from getting the financing that you need. Banks, for example, may ask to see your records before granting a loan so that they know that you have the assets to back up any liabilities on your balance sheet.
you may be on IRS radar
If you have not been reporting income that has previously been accounted for to the IRS (on W2s or 1099s), don’t be surprised if your business gets hit with late fees and expensive IRS penalties. However, your business could incur late fees and expensive IRS penalties if you are on their radar for committing one of the following acts:
Neglects to report income that has previously been accounted for to the IRS (on W2s or 1099s)
Takes dubiously enormous allowances, such as 100% of your vehicle use
Mismanaged your employees
Neglects to give returns — W2s, 1099s, and so forth.
If you don’t have up-to-date books, an audit will be a nightmare. Are those piles of papers on your desk starting to look like a daunting task? If you keep proper records and receipts, you’ll be ready for any audit. Countick has helped many businesses streamline their bookkeeping.
cutting ends shorter!
If you don’t have a system for keeping track of your business finances, it can be difficult to know where money is going and how much cash flow is coming in and going out. This can make it hard for you to make decisions about things like pricing, inventory, and even just basic stuff like paying bills on time.
The bottom line: if you’re looking forward to growing your business or making changes that require financial planning, then you need to have a system in place like Countick so that your finances are organized and accessible.
