There are many essential components to successfully running a small business, but the backbone of it all is proper bookkeeping and implementing a thorough accounting system. Not adhering to necessary record keeping protocol alone can bring a small business to its knees and not maintaining an effective accounting system can bring the final blow.
From the get go, when a small business owner begins to make their dream a reality, they need to make that first business step on the right financial foot by hiring accounting and bookkeeping services to assist in the sound development of their company. These professionals can offer small business owners detailed business and financial plans, projections of profits and losses, preparation and solutions for potential foreseen cash flow issues, meticulous record keeping in the proper organized format, and creating a realistic budget to keep the company steady.
Common Issues That May Arise
The main dilemmas that can come from disorganized and sporadic bookkeeping are varied, though all can potentially be harmful to the health of your small business. One of the most concerning issues pertaining to bad bookkeeping practices is running into cash flow crunches; a business can't operate effectively if the money flow is not flowing. With employees to pay and business necessities to purchase, if your costs outweigh your income, your business will not be able to move forward.
There are many potentially unwelcome results that can come about from falling behind on your bookkeeping and taxes; the most devastating of which would be losing your small company all together from poor financial and business planning. Also, messy record keeping can very likely lead to an audit by the IRS, which is one thing that no business owner wants to face. An audit can very easily halt a small businesses growth if the owner can't provide all of the appropriate documentation and do so as organized as possible.
How to come back from it
If you see yourself in this picture, or you know another small business owner that you think could benefit from an accountant who works with their clients throughout the year rather than just doing a tax return once a year, or can appreciate the value of tax planning before the year is over, please contact us today.
Steven A Feinberg, CPA of Appletree Business Services LLC, a PASBA member accountant, located in Londonderry, New Hampshire, has more than twenty five years experience in Federal and New Hampshire issues, specializing in small business general, tax and payroll matters. For additional information on these and other current business and tax issues, email Steve at firstname.lastname@example.org or call (603) 434-2775.