Updated: Jan 24, 2020
Would you rather spend a Friday night in catching up on your company’s bookkeeping or would you much rather be spending a well deserved night out with your friends and family? Or you could also be staying in to watch Netflix & Chill with a glass of wine (like we would)? The answer is pretty clear, right?
There are many things that you need to worry about as a small business owner. Not only are you evaluating cash flow to make sure that you have enough money for payroll, but you are also carrying the burden of supervising employee management, budgeting, business development, customer service, marketing, and more. We’re going to indulge your fantasy and walk you through what might happen if you chose to ignore anything that resembles accounting.
YOUR COMPANY’S FINANCES ARE LEFT OBSCURED
- If you put a full stop to bookkeeping, your books will no longer show a clear picture of your company’s financial viability. Without accurate records, it can be difficult (or nearly impossible) to track cash flow projections and statements. Remember, your cash flow helps you identify money-in (what you’ve made) and money-out (what bills need to be paid).
SAY FAREWELL TO YOUR HARD EARNED MONEY
- If you don’t organize your paperwork at all, money that should be in your pocket ends up in someone else’s. Here are some of the bottom line detriments of not doing your books.
You lose track of your invoicing cycle - Are you sure you didn’t overlook about the invoice for the client who always pays late? If you did, they’re not going to willingly remind you that they owe you money. The slower you are at organizing outstanding invoices, the longer your business will go without those funds.
Payroll problems start to rise - Payroll records need to be up-to-date with staff paid on time. This includes tracking leave time, expenses, benefits, and more—can be extremely complicated if left unorganized. Without accurate bookkeeping, you could be under-compensating (or overpaying) employees. Any errors on year-to-date earnings will be reflected in your employee’s form from your records—causing tax problems for both of you.
Managing expenses become tricky - Without proper bookkeeping, your business could suffer from slow leaks. Did you track those miles you drove two weeks ago to visit a client? Improper logging of expenses could lead to unclaimed tax deductions or an overstatement of expenses
FINANCING OPTIONS BECOME LIMITED
- Need access to money, fast? If your books aren’t up-to-date, you can forget about financing options—they’re going to be limited. Without detailed records, you likely won’t receive a loan, and a cash advance might be your only option.
To avoid hurting your business, stay on top of your books. Hire someone to sweat the small stuff—which is actually pretty substantial when you lay it all out—so you can get back to running your company. Give us a call and we will guide you further.
This means that you get that additional business knowledge, advice and insights when you have your initial consult.
If you’re still unsure about bookkeeping services or where to start, please don’t hesitate to get in touch with us; we’ll be happy to answer any bookkeeping questions you may have.
About the Author
Justin Wong is the Financial Comrade at PAQ Group.
The mission of PAQ Group is to create a stress-free bookkeeping experience.
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