Common Bookkeeping Challenges for Small Businesses
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Bookkeeping is one of the most critical tasks business owners can do, but it is often one of the most overlooked. Whether you don’t understand bookkeeping, don’t have time, or don’t know about it, here are the most common bookkeeping challenges businesses face.
Overlooking Accounts Receivable
Not staying on top of your accounts receivable can cause you to lose your business! Companies that pay late may not pay at all, causing financial trouble. A system to properly track your accounts receivable is the key to a profitable and successful business.
Not Staying on Top of your Accounts Payable
Your accounts payable are also an essential part of the process. If you pay your bills late, you can ruin your business or personal credit and incur late fees and penalties. You may also lose credit lines, making it harder to run your business how you hoped. Not Preparing your Taxes
You must focus on business taxes year-round, not just at tax time. Staying on top of your tax liabilities and filing quarterly tax reports is essential. Letting it slide and trying to play catch up in April can be expensive and time-consuming.
If you have employees, you have a payroll, and with that comes IRS requirements. If you miss the requirements, you could face penalties that could be detrimental to your business. Having someone handle your payroll while you focus on running your business sidesteps this issue.
Not Tracking Expenses
Throwing receipts in a shoe box and hoping for the best isn’t the way to run a business. Instead, you must track your business expenses to get tax write-offs, adequately reimburse employees, and understand your company’s cash flow.
A proper expense tracking method can save you hours of frustration and money.
Not Reconciling Books
Not reconciling your books monthly can lead to erroneous financial reports, creating many problems, including tax reporting issues, payroll issues, and bad business decisions.
Having the correct information at your fingertips ensures you make the proper decisions for your business. Basing your decisions on correct information could prevent you from losing your business.
Not Preventing Fraud
It’s impossible to prevent fraud 100%, but taking proper measures to secure your financial information and only share it with trustworthy individuals is important. Not all employees should have access to the company’s financial information, as you could open yourself up to risks, including theft, payroll scams, and check tampering.
Contact me today if you’re worried about your company’s bookkeeping practices. I can help you get back on track with your bookkeeping needs ensuring 100% compliance. You can rest assured that your books will be accurate, A/R and A/P carefully followed, and accurate reports created to help you make the most of your business.
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