It is often said that one who neglects his health does so at his own peril. The same adage is true with businesses that neglect their finances. If you overlook your accounting and bookkeeping systems, all sorts of problems will arise that waste your time, effort, and money.
Here are some consequences you may get even with slight oversights in your financial processes.
Oversight Creates Problems at Tax Time
Think back to the last time your business submitted its taxes. If your company is like most others, it invests significant time into tax planning and the tax filing process.
Tax compliance is exponentially more complicated when a business fails to sweat the small stuff throughout the preceding four financial quarters.
There is also the potential for the IRS to look into your business. It will be up to you to prove that your records are accurate in the context of taxation.
Instead of attempting to examine your revenue and money owed to Uncle Sam once April rolls around, be proactive by relying on Sensible Services ABC services. Our team will perfect these processes for you, preparing a smooth runway for takeoff at tax time.
You’ll Lose Money
Lazy, sloppy, or simply inaccurate accounting can create many problems. Aside from spurring a tax nightmare that might lead to financial penalties, neglect is also problematic as it makes it difficult to track the money going in and out of your business.
Failure to track your accounts receivable properly means you’ll overlook past due accounts and possibly even double bill some clients without realizing it. Sending a second bill or failing to register a client’s payment can alienate them to the point that they will pivot to your competitors.
You’ll Get Payroll Problems
Fail to address your finances properly, and you’ll have significant payroll issues. You won’t even know how much to pay yourself as you won’t have an accurate picture of the company’s finances.
A system with accounting flaws or lazy bookkeeping prevents you from understanding the company’s financial position. This can create uncertainty on whether the business is profitable and whether each employee’s compensation reflects their contribution to the company’s collective good.
Growth Becomes More Difficult
Insufficient or non-existent financial records stifle potential growth. Consider the perspective of a prospective investor, business partner, or other party considering lending money to catalyze the organization’s growth. If the financial systems, statements, and numbers are inaccurate, prospective investors will shift their attention to other opportunities.
Need Accounting and Bookkeeping Services? Contact Sensible Services ABC in Hammond, LA
Sensible Services ABC is here for business owners and managers in Hammond, LA and nearby areas. If you are a business owner, manager, or starting a business, you can benefit from our bookkeeping, accounting, payroll, and other services.