Recordkeeping and accounting play crucial roles in most businesses. Recording source documents for financial transactions and business operations is a must for analyzing the capacity and financial position of the company.
Benefits of Excellent Bookkeeping and Recordkeeping
Whether you have a Certified Public Accountant, a Bookkeeper on the payroll, or another avenue of bookkeeping and recordkeeping, keeping thorough records is imperative for monitoring your business’ financial health. But monitoring is only one of the many benefits of keeping accurate, up-to-date bookkeeping and accounting records. There are many other advantages besides that you may not have even thought about. Below are the benefits to have an eye on…
1. Speeds up the decision-making and planning process. Situations pop up that you are called to make quick decisions on in areas such as budgeting and planning. If your records are up to date, you’ll be able to make wise decisions based upon your accounting and bookkeeping stats. Having a Small Business Accountant or Certified Public Accountant helps ensure your records and books are updated and accurate so you can make the right decisions for your business and create more effective and efficient policies based upon their input. This avoids you having to spend hours, even days, going through your transactions to analyze the figures in order to make a decision.
2. Provides a clear understanding of the financial position of your company. Sales and purchase records, financial statements, and audit books are among the financial records that reflect your financial position. If your records and books aren’t up to date, huge and costly mistakes can easily be made. With accurate updated records, however, you can compare accounts from previous years so you can analyze your growth and results. The analysis helps you to know if changes need to be made within the management end of your business to help ensure success. This is another area where a CPA earns their keep and shows you what needs to transform for betterment.
3. Making tax preparation a smoother and more comfortable process. By having up-to-date, accurate books and accounting records, there’s no panic at the timing of tax payments. Not only will your records and bookkeeping be organized and easy to prepare, but chances of mistakes are also reduced. Tax mistakes can be devastating to a business so this advantage is one of the most valuable. In addition, you’ll be able to plan for your taxes throughout the year so you aren’t caught off guard and so you can maximize deductions as well.
4. Making audits easier. Updated records and books makes for a much easier time when an audit is conducted because everything is clear and concise. There’s no scrambling for figures or statements. The process is simple and accurate.
5. Business dealings are improved. If the bank or creditor needs information, it doesn’t look very professional if you have to sort through a mess in order to retrieve it. Income statements, cash flow statements, and balance sheets will be at your fingertips if you have your books and records in order.
How to Achieve Accurate Books and Records
Updating and maintaining accurate bookkeeping and recordkeeping is best done by a professional accountant. While a small business accountant is able to manage day-to-day detailed accounting and bookkeeping services, a Certified Public Accountant (CPA) is an important resource for in-depth financial duties such as providing a thorough analysis and internal and external auditing as well as tax planning and preparation.
If your current bookkeeping and accounting system falls short, it’s time to make changes before you encounter issues if you haven’t already. Failure to keep immaculate records and update your finances regularly can be costly. While you may be thinking you can afford to hire a CPA, once you think it over, you may find outsourcing one isn’t that costly.
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