Bookkeeping isn’t exactly a glamorous part of doing business. For many business owners, it is their least favorite part of business ownership. It can seem redundant and is more than likely not the reason you started the business in the first place. You more than likely have other passions that you would rather be focusing on instead. However, bookkeeping is an essential part of owning your own business, and when you neglect it, there are risks involved. Propel Your Accounting is here to talk about some of the risks that come with bookkeeping neglect.
Financial Mismanagement
If you don’t have some sort of system in place to help you stay on top of your bookkeeping, it can negatively impact your cash flow and financial management.
– Cash Flow Shortage: You need to know what your income is and what expenses so that you don’t spend money you don’t have. A cash flow shortage spell disaster for any business.
– Unpaid Invoices: Most business owners need all the revenue they can get their hands on. If there are unpaid invoices because you’re behind on your books, it is a big problem.
– Expenses: You may also find that you have unnecessary expenses that you are spending money on and need to stop when you aren’t keeping track of all the expenses you have.
Tax Implications
There are tax implications involved in inaccurate bookkeeping as well.
– Missed Deadlines: There are several tax deadlines that you need to meet as a business. When your accountant doesn’t have all the financial information they need, they can’t file for you. This leads to late filings and fines.
– Incorrect Reporting: Another issue you don’t want to have is incorrect reporting issues. If the financial records you have aren’t accurate, your taxes won’t be either. It can lead to audits and fines.
Operational Inefficiencies
Bookkeeping will not only affect the number side of doing business, but it will also impact the daily operations as well.
– Productivity: If you have employees or even you yourself, looking for lost receipts, sorting our inaccurate financial records and fixing errors, there is lost productivity for your business.
– Vendor Relationships: It is vital that you maintain good relationships with your vendors. When you are delayed in payment and other issues with financial tracking, it can damage that fragile relationship.
– Disorganization: You need to have clear goals and daily operation processes to make the most out of a work day. It will help you reach your goals and maintain organization. Failing to keep up on your bookkeeping will put this in jeopardy.
Bookkeeping, Accounting, Business Consulting & HR / Admin Services in the United States of America
If you are having a difficult time staying on top of your bookkeeping, you can turn to Propel Your Accounting to help you get it right. We will make sure your bookkeeping is accurate and that your taxes are filed on time. Call us today!
