Fixing things has never been easy, especially when they are messed up. When things reach this point with a business’ bookkeeping records, they have two options to decide the fate of the business. 1. Close the business and file for bankruptcy if it is a corporation. or 2. Uplift the image of the company from scratch with several revitalization strategies.
Why do Most Businesses Fail to Manage their Business Books?
Being an entrepreneur, you may be more excited about establishing your business and less excited about managing its back-office operations. Entrepreneurs start with the best intentions to make their business successful, hopefully bringing significant gains in return. Quite too often, front-office responsibilities and busy schedules cause back-office tasks, such as bookkeeping and accounting, to fall to the back burner. This creates a lot of problems for the business.
You can’t expect to put your business on the right track and earn significant gains if you lack the financial wisdom to tackle important aspects of business, such as filing tax returns, debt repayments, financial forecasting, projections, and more.
Bookkeeping may be an intimidating task for entrepreneurs. However, now they have many options to manage their business books with online accounting services, automated software, etc. Since most start-ups and entrepreneurs lack the expertise to handle back-office operations, business accounting consultancy services can employ the best practices, tools, and techniques to provide a clear snapshot of cash flow and finances for better decision-making.
Gone are the days when businesses tended to avoid acquiring such services as they lacked professional audits, accountability, and the concealment of sensitive information. Now, businesses have developed faith in these companies and consider them a pivotal tool for their start-up’s success.
First Thing First—Hire a Professional Accountant to Balance Out Business Books
Back-office tasks of every business are complicated as they involve tax requirements, debt repayments, financial reporting and forecasting, vendor invoicing, management, and other similar things. So, the first thing that must be done when the business books become redundant is to hire an accounting professional who will fix things for you.
Getting a business out of crisis is extremely difficult, especially when embroiled in financial distress. Therefore, only a person with relevant skills and profound accounting knowledge can lift the business out of turmoil. This further intensifies the need to hire a qualified and seasoned accounting and bookkeeping expert.
Separate Your Personal and Business Account
Studies show that most start-ups fail because they do not separate their personal and business accounts. It would help if you went through messy business books to find the correct amounts before filing tax returns and debt repayments. By keeping your personal and business accounts separate, you will get a clear picture of your finances and cash flow, which means you can tally all the sources of income and expenses.
Track Every Expense Incurred
You need to label and categorize every expense incurred in the past and make a comprehensive plan to deal with tax and debt-related requirements. Therefore, you must record every single transaction if you expect to avoid unnecessary income taxes. Sole proprietors can afford to record financial transactions manually, but corporations cannot afford to conduct such practices.
Hence, they must use accounting software with a suitable capacity to record and track all sources of income and expenditures for better decision-making.
Reconcile Your Business Books
It is all about achieving the right strategic fit and balancing your finances. You need to reconcile your business books with actual spending and expenses incurred to get your business on the right track. Getting out of crises is difficult, especially when your business is at stake.
Although reconciliation will likely take a lot of time, by hiring a seasoned accountant and employing the best accounting practices, software, and techniques, you can face-lift the image of your company and perhaps give it a new positive image. Reviewing your finances and business books at least once a quarter can help you determine the financial health of your business to make better financial and business decisions.
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 platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO 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.