As a business owner, managing your finances should be the number one priority on your to-do list. You have to focus on inventory, manage accounting and bookkeeping, and other financial tasks that are lying in front of you. But all these functions require clarity in your financial statements and bookkeeping records.
Delayed or missed entries in the business bookkeeping can pave a way to financial disaster and business failure. Building a clear picture of your financial health will contribute to business growth. If a business is ready-to-audit, it attracts investors.
Accounting Problems that can Sink your Funding
You do not use an accounting software
Manual work is always the hardest and is at risk of errors. A small accounting error can lead to big losses in the business. An accounting software, according to your business size, is as important as funding your business. Small business owners can also get specific software to meet their needs.
Working on a spreadsheet is not like working in accounting software. Be sure to research and find the appropriate accounting software to make your business bookkeeping run smoothly.
Financials are incorrect
Any error in financial statements leads to big losses. Business bookkeeping and other business operations will be a mess if you do not keep your financial data up to date. Your accounting statements must be clear and transparent. Income and expense statements must be clear and related to cash flow and balance sheets. Delayed data entry is a big risk for fraud and theft.
There are projections in revenue, but there is no financial data
You cannot have a clear picture of how much revenue your business has generated unless you know the expenses and purchases you have made. Your sales are increased, but is that according to the profitability of your business? Investors want to get a clear and transparent presentation of your financial data to invest their money. A business loan cannot be achieved from banks unless a clear, transparent financial record of your company is present.
Financials are not produced monthly
In a small business, it is often thought that it is appropriate to produce finances on a quarterly or bi-annually basis. However, monthly financials show investors that you are closely monitoring your business.
If you do not produce monthly financial statements, it can lead to a negative balance if expenses are made, but no income statement is updated. Invoices that need to be paid by the company may go unnoticed, and it can put a bad reputation on a company. It can end terms with the suppliers. Business growth is halted or significantly reduced.
Your personal and business accounts are all mixed up
Business owners often mix their personal finances with business expenses. Keeping these two finances separate is of utmost importance. If these two finances (personal and business) are not segregated, then it cannot be known what was intended for business and what was used personally. The amount of profit that was generated out of your invested capital cannot be estimated correctly.
Your funding is going to sink if you do not keep a separate business account.
A small business owner is enthusiastic about growing its business at a rapid rate. In the start, small business owners fund their business without keeping their financial data up-to-date and tend not to focus on accounting problems while running a business. Such accounting problems can sink your funding round.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.