When we onboard a client, we often find that the business’s financial records are all over the place: usually the business owner or a single employee has taken it on themselves to track expenses in a spreadsheet or within desktop accounting software. Usually, this process backfires because the owner doesn’t have time to do the task and has higher priorities, or the employee doesn’t have the right expertise to get it done right. Sometimes these records don’t even exist at all and clients are piecing together everything from the bank statements and memory.
Although this can work for a little while, it becomes obvious there are holes in the process during critical moments.
The Two Worst Impacts of Poor Organization
You, as a business owner, are busy enough as it is without the terrible impacts of poor organization. The two worst impacts include:
1. You Don’t Understand Your Cash Flow
“Cash Flow Is King” is an expression most business owners have heard. Are you keeping this sage advice in mind?
Without good cash flow, it can become very difficult to handle even small bumps in the road that your business might face. Cash flow tracks how much cash your business is generating from earnings after meeting your obligations in a timely manner.
Many small business owners intuitively understand cash flow because they look at the bank accounts often. However, there is more to cash flow than just looking at the bank accounts. Good financial organization can help you understand how your cash flow fluctuates over the course of year. It can also help you make key decisions in your business, like whether you can really afford that lease or potential employee. Key partners to your business success, like your lender, also care a lot about the health of your cash flow.
Having accurate and timely financial statements can help you make these key decisions way ahead of time. Unfortunately, many small businesses don’t have this set up the right way and are constantly asking themselves: “Am I doing OK? Can I meet payroll this month? When will I ever be able to take a salary?”
2. You Aren’t Ready for Tax Filings
Do you receive penalties and notices from the IRS because you keep missing deadlines that you didn’t know exist? Or do you file tax forms at the last minute with a lot of time wasted trying to figure out what category to use for each expense?
Taxes are a tremendous reason to get your financials organized. Everyone files them. They aren’t optional. You’ll pay them this year, next year, and every year after too! Taxes are a fact of life.
One of the most common reasons clients reach out to us is a missed tax deadline. On the day of the deadline, you realize that you don’t have everything you need and should have started much sooner. Maybe you even called your tax accountant and she was too busy to take your call and deal with your messy financial records.
If you had only been organized all year long, taxes would be a much easier pill to swallow.
How We Can Help
NETPROFIT 365 puts your financial house in order by combining modern software and hands on attention from professional accountants and bookkeepers. With cloud-enabled technology packages like Quickbooks Online and Bill.com, you’ll get to see your financials right from your smartphone, tablet, or computer. Our professionals will have you ready and organized for whatever your business can throw at you. Save time and money and go back to doing what you do best – growing your business.
NetProfit365. We focus on your bottom line 365 days per year. Become a client today.