Unfortunately, many small and medium sized businesses (SMBs) often decide accounting systems are nice to have rather than a must-have. Often resources are more focused on the areas that generate revenue. However, areas that may not seem to be revenue generated have an impact on your bottom line also when they are ignored. A business that doe not use reliable accounting services or procedure can experience some real problems such as missed income and needless losses. The following shows some problems that are commonly experienced by SMBs who operate without the proper accounting services.
Reputation can be damaged if your company fails to pay invoices on time. You also will incur payment fees, decrease credit scores, and lose of preferred rates. Accounts payable need to be managed carefully in order for a business to be successful.
Careful oversight of cash flow and aging reports is absolutely vital to ensure a viable business. Making sure your statements are sent is a vital part of ensuring that money keeps flowing into the company. Slow-paying and nonpaying customers can be overlooked and put a company out of business.
Your business needs a balance sheet. It creates a broad financial picture of your business while the profit and loss statement will show the company's financial performance over a set length of time. A balance sheet always has to balance. It will have assets on one side and liabilities and equity on the other. So, without an absolutely precise picture of current financial performance, and any planning is unlikely to be helpful and cause problems.
The number one reason SMBs hire accountants or outsource their bookkeeping is because accountants can save you money. The tax system is complex, and it takes time and experience for someone to learn how it works. The main reason for tax problems is almost always bad planning and organization in the finance team. Successful businesses consider tax implications as part of a regular routine.
A study estimated that businesses lacking internal fraud controls as simple as proactive data monitoring experienced fraud twice as much as businesses that did an active review of their financial data. Financial statement fraud was by far the largest contributor to fraud in general.
As a small or medium-sized business owner, your time is valuable, and you need to be choosing carefully where to focus your energies. With a good outsouced accouting firm handling your books, you can focus on the core tasks of your business.
James E. Wilson, CPA is a team of professionals provide innovative financial solutions designed for today’s business owner. Our advisors treat each client relationship with the loyalty and care required to properly advise you now and well into the future.
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