What is bookkeeping?

Bookkeeping is different from your day-to-day accounting operations. An accounting professional will give you a high-level interpretation of your financial data. In contrast, a bookkeeper is intimately acquainted with the financial dealings of your business. They can do everything from bank reconciliation to maintaining your general ledger. With a bookkeeper, your company will be at an advantage over companies without one. Timely, accurate books will reveal everything from bookkeeping mistakes to increased cash flow. Your bookkeeper is one of the most vital parts of your company. Your bookkeeper’s daily tasks are the things that keep your business afloat. Here are a few of the hidden truths about bookkeeping.

Even the smallest bookkeeping mistakes can hurt your company

When you’re running a small business, it’s important to note that even small expenses can make a big difference. If you don’t have a tenured professional running your books, small mistakes may crop up. Anything from small errors to small expenses can sink a small business at any stage. Small errors or messy books can affect your business’ cash flow and ultimately, your business’ success. Your bookkeeper will keep your books clean and accurate. This gives you and your accounting staff the financial data you need to make big business decisions.

Accurate bookkeeping will save you time and money on your taxes

As tax season nears for your company, a detailed and up-to-date bookkeeping record will save you time and money. If you already have clean financials for your tax accountant to use, it will take less time for them to prepare your tax forms. Since your tax forms are accurate and submitted early thanks to your accurate books, your maximized return will arrive quickly. Accurate bookkeeping also protects your company. When your books are accurate, so are your tax forms. When your tax forms are accurate, your company escapes large tax bills and regular audits.

Timely bookkeeping data will give you an advantage

For everything from seeking investor funds to filing an accurate tax return, regular and accurate bookkeeping data will give you a leg up over your competitors. If there’s an issue with your finances or your bank reconciliation, your books will reveal the issue quickly. That way, you can stay on top of your cash flow and watch for potential growth opportunities. Investors also like to understand your cash flow prior to investing. A peek at clean and accurate books will give them a clear picture of how your business runs. Your clean books will also assure them that their funds are in good hands. Bookkeeping is one of the most important parts of your business. Keeping your financial records in order is essential to your companies success. Don’t go with the cost-effective option when it comes to hiring someone who will be responsible for making sure your finances are in order. Your bookkeeper will monitor your cash flow, and make sure that your business is growing and succeeding. By understanding the truths about bookkeeping, they will help save your business time and money.

Some business owners opt to take on their own tax forms every year. However, unless they have accounting experience, it probably takes a lot of time. With a tax accountant, they’ll save time and money on their tax filings. A tax accountant will track the company’s income and expenses. They can do this all year long or during tax season.

Claim All Your Deductions

A tax accounting expert has experience with tax filings across multiple industries. They will document all your business earnings, expenses and any deductions you have available to you. They won’t let a tax deduction go undocumented. Whether you maintain a tax accountant all year or only need someone at tax season, a tax accountant will compile your data for your forms and filings. Many tax accountants also have tax preparers that can come in and help your accounting team put together the right documents. This saves you and your staff time and ensures that all your information is accounted for.

Avoid an Audit

If the Internal Revenue Service (IRS) finds multiple errors on your tax documents during review, they’ll initiate an audit of your company’s finances. An error can be anything from giving inaccurate information to not following the directions on the form. An audit will disrupt your business operations. The executive team and accounting staff will have to work in overdrive to gather and prepare documents for the auditing team. A failed audit can result in up to five years in prison and up to $100,000 in fines. A tax accountant will ensure there are no errors on your tax forms and filings so you can go into the new year stress-free.

Maximize Your Return

Tax accountants keep up to date on deductions, credits and incentives available to businesses filing their taxes each year. Often, the government offers incentives and credits for start-up businesses or small businesses just for doing business as usual. Your tax accountant will keep track of whether you need extra paperwork or documentation as well. A tax professional may even find deductions you didn’t even know you could claim. With a fresh pair of eyes and a lot of industry expertise, your tax return will be a high one. Hiring a tax accountant takes the pressure off your business and your staff. With someone else to worry about tracking your income, expenses and deductions, you can focus on your business. A tax accountant for your business means a higher return and a stress-free year.