How many times have you looked at your financial statements thinking that you must have cash in your company account, only to find it almost dry?
Does this make you rethink your bookkeeping or the financial health of your business?
If you find yourself questioning every step taken by your accounting team or are often encountering bad bookkeeping practices, then your business could be facing some great risks in the near future
Solid bookkeeping and accounting are essential for tracking your cash flow, tax filings, and profit and loss statements. It is important to have the right setup from the very beginning if you are to embark on the first steps towards sustainability and growth.
Most small and medium-sized business owners have little to no experience or training in accounting or bookkeeping. This leaves them more susceptible to bad bookkeeping practices set in place by a low-cost or entry-level accountant. The following are a few common pitfalls to faulty accounting practices.
Cash flow problems: for example, not having enough money to pay your employees at the end of the month, or costs that hit when you are low on cash.
Poor business decisions: based on insufficient data and/or inaccurate financial reports.
Tax and auditing errors: due to inaccurate record-keeping, or incorrect information derived from faulty calculations.
These troubles can be avoided by hiring a good accounting team who accurately tracks your records and transactions, helping you avoid cash flow problems and more. When upgrading your accounting team, opt for a firm with long years of hands-on experience in your select industry working with other businesses, and have excellent feedback. Your accounting team needs to provide you with an organized and solid system to track your daily, monthly, and yearly transactions and generate timely and accurate reports. This system has to be able to categorize expenses so you are updated on how much money is spent and how much is earned.
Your team should be competent in giving you the appropriate financial advice when needed and well versed in local tax laws and regulations when it is time to file your taxes (in case they will handle this financial aspect for your business). Benchmark has well-established expertise in all financial and accounting aspects across business sizes and industries.