I make all payments through bank or credit card and as such all my expenses are automatically recorded, so why should I spend for Accounting & Bookkeeping?
As an Accountant, I have to often face this question. In the beginning years of the business, in a quest to control the operational cost, this might sound like a valid point but it is not right thing to do. Why?
As of today, you may have just a few business transactions but where you want to be after a year? Please remember that when you started a business, someone told you that here is a nice cake (wealth) in front of you and it is up to you to decide how big piece of that cake you want and how fast you want. Obviously you want to think big and positive.
A bank statement or credit card statement does not classify the income and expenses of a business as required by GAAP concept. In business, it is always necessary to identify your business revenue, capital revenue, deductible business expense, capital expense, assets, short term & long term liabilities, equity and retained earnings. Bank statement and credit card statement would not be able to give you profits or losses of the business for a given period of time. They cannot explain financial health of your business on a given date. They simply cannot offer you proper records to facilitate tax compliance. It is nothing but accounting and accounting only that can help you in these areas. Keeping in line with your business growth prospects, you will please appreciate the following great benefits of good Accounting and Bookkeeping.
- This enables you to efficiently manage multiple products and services that your business offers
- This enables you to operate with different price levels for the same product or service
- You can identify the client group that can promote your business and profits
- Based on payment habits, you can offer experience based credit terms to your clients
- This helps you keep track of cost of each of your products and services for each of your locations
- This helps you efficiently manage your inventory and decide the timing and pace of your manufacturing or purchasing or storage needs
- You can efficiently manage multiple vendors and subcontractors with more suitable terms
- Better cash flow management
- Helps you record all your deductible business expenses like depreciations, accrued expenses
- Keep track of all types of expenses
- Helps you to identify non-productive activities
- Helps you efficiently manage your payroll expenses and payroll taxes
- Helps you efficiently manage your budgeting, planning, and projections
- Provides a perfect basis for financial reports and tax compliance
- It promotes great internal controls and fraud prevention system
- This enables you build up great records that have great values
- Great help to take proactive, prudent, and well-informed business decisions
- Peace of mind and great satisfaction
There are many books written on why many businesses fail and close in the beginning years. There are many reasons of their failure and one of those reasons was they did not know how they were doing and when they knew, it was too late to fix. In this competitive time, you really cannot wait and you must have proper Accounting system that offers you timely, complete, and effective control and helps you take prudent business decisions. Taking right decision at right time does matter a lot. Please also remember that proper and timely tax compliance is mandatory.
We have given you the best, most convincing, and pressing reasons that strongly advocate proper Accounting system for your business from day one. Now it is for you to decide if you want to keep going without knowing where you are going to or have well-planned and properly accounted business activities that ensure a secured and better future. Good luck! We are sure you will take a right decision and please remember that we are always here to help you. We are just a phone call away. Please call us at 201-723-3853. Thank you for your time and we look forward to speaking to you soon. Remember, we will serve all your NJ Accountant needs with most affordable rates and highest quality.