Small Business Bookkeeping: Why is it so Important?
Bookkeeping may feel like a chore, but it is an essential component of every small business. Businesses that could have been successful have ended up failing due to not properly maintaining financial records. According to the IRS, 40% of small businesses are fined an average of $845 each year for inaccurate filing or payments. This is why bookkeeping is crucial to your small business whether you go at it alone, or hire a bookkeeping service.
To access the amount of tax dollars you owe, you must be able to regularly provide information about your businesses profits and losses. When this information is requested, it must be presented correctly and in a professional and timely manner. If you fail to stay current with your taxes, the government can and will subject you to fines and penalties that can impact your business in a negative way.
Not only does poor bookkeeping run the possibility of your business being fined, but it can also cause you to miss out on valuable deductions. If your bookkeeping is not kept up to date it can be difficult to review all of your transactions and determine which ones can be deductions for your business. It is not uncommon for missed deductions to lead to paying the IRS more than you actually owe.
Most businesses fail to track cash flow. Tracking cash flow is critical for any business no matter its size. However, managing and tracking cash flow is only possible with accurate bookkeeping records. An upcoming cash flow crisis is possible to predict by reviewing financial data. Without proper bookkeeping this data is not available, and it only takes one financial crisis to seal the fate of your business.
Accurate bookkeeping is essential to determining the amount of profit your business is making. Bookkeeping will allow a business owner to see how much progressive they have made. This will provide a better understanding of what areas are providing profits and what areas need to be cut.
Bookkeeping will sometimes feel like a burden, but it is worth the effort and time. Decide how you want your bookkeeping to be handled, and don’t wait to figure it out later. Many small businesses decide to outsource their bookkeeping instead of buying the software and conquering it on their own. However you decide to handle your bookkeeping, be confident in your decision and be aware of the benefits and downfalls of the option you choose. How you handle the bookkeeping of your small business can result in the success or failure of your business.
Bookkeeping in Wilmington, NC
BOSS provides bookkeeping Wilmington, NC, and is a growing firm of local business advisers who are committed to providing responsive service, strategic thinking, and competitive pricing to our clients. If you’d like help or to learn more about running a small business in Wilmington, NC give us a call at (910) 338-1198, stop by our new office located at 3901 Oleander Drive, Suite G in Wilmington, or click here to fill out our online contact form. We look forward to hearing from you!