Updated: Sep 20, 2022
For small business owners, you have more fires to put out and issues to deal with. Bookkeeping is often seen as one of the most challenging tasks you must face. Certain tasks can be handled in the future, but procrastinating on financial matters results in a situation where you are facing serious consequences of bad keeping.
Bookkeeping, as mundane and time-consuming as it appears, is actually your big secret weapon when it comes to business management and growth. Bookkeeping for small businesses encompasses all aspects of the financial side of running a business. It involves tracking money that is coming in and going out so that you have detailed information for tax filings, profit, and loss reports.
Without the proper bookkeeping system, you’re setting your business up for failure. Here are 3 serious impacts that business owners might face due to poor bookkeeping practices.
What Will Happen If You Have Bad Bookkeeping Practices?
Suffer Cash Flow Problems
What happens if it’s time for payroll and accounts payable and you don’t know whether you have enough money in the bank to cover the costs? The business expenses come up every month for business development, payroll, office supplies, and more. If you aren't tracking your inflow and outflow, you might be caught in a difficult situation where your cash flow completely dries up even if your business is profitable. This problem can be avoided by outsourcing a visual bookkeeper who can track the record-keeping and help you avoid negative cash flow problems.
Be Impossible to Get The Insight You Need For Smarter Decision-Making
It’s easily understandable that if you don’t know your number, so you don’t know your business. How much it makes, how much it costs to make every dollar of revenue that comes in, and more - you have to know your number to have a clear insight into your business’s financial health which provides information for your decision markings.
Each business decision, whether involving hiring employees, business development, or marketing cost, has to be based on your business’s current financial health. Sound bookkeeping and effectively running back office is one that allows you to get timely, accurate financials, have confidence in your number, and make smarter business decisions toward your goals.
>> More: Common Bookkeeping Mistakes & How to Avoid Them
Miss Tax Deadlines
Tax time might become a massive headache when your back office is out of order. If your record keeping isn’t updated on a regular basis when tax seasons come around, your business will inevitably have a huge tangle of receipts to sort through. This task requires a lot of energy and time while involving inaccurate deductions. Ultimately, you risk missing your filing deadlines, making mistakes on your tax documents, and facing expensive penalties. Don’t let poor bookkeeping ruin your business. The best solution is to outsource bookkeeping services to manage your records keeping and ensure your business is tax-ready no matter the time of year.
Automation and Outside Bookkeeping Professional Can Help You Keep Your Back Office in Order
Hiring and training an entire in-house staff of bookkeeping and back-office administrator can cost you a large chunk of money, not to mention other overhead costs. In comparison, an outsourced bookkeeping provider has a lower fee with a higher quality of work. An outside bookkeeper with many years of experience in your industry and full knowledge of accounting software can effectively manage your business finance to thrive.
With plenty of outstanding bookkeeping providers out there, most small businesses prefer to outsource bookkeeping services. They have many options with affordable costs and they have a dedicated bookkeeping team to manage their bookkeeping tasks.
If you need a trusted team to help you with bookkeeping and other financial aspects of your business, let us oversee the financial tracking of your company, so freeing up your time to focus on other activities that will help your company grow. Irvine Bookkeeping specializes in a wide range of bookkeeping and accounting services and can extend assistance in creating a solid business to help you stay within your budget.