Avoid Costly Mistakes

Whether your business thrives or just barely survives depends on whether it has an appropriate accounting system that was customized to fit your specific business by a qualified, trustworthy, proactive bookkeeper who enters data accurately and consistently, as well as performs rigorous checks and balances in a timely manner.

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Recordkeeping is the main function of accounting. The word accounting is derived from the word accountability. In order to be successful, you must be accountable for your finances. Being accountable requires reliably tracking “what you owe them,” and “what they owe you.” Accountability is also about compliance. Noncompliance leads to costly mistakes.

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Books Done Right knows how to avoid costly mistakes in these areas:

• Categorizing transactions.

• Reconciling all pertinent accounts.

• Reporting to regulatory agencies and financial institutions.

• Safeguarding sensitive financial information.

• Collecting, reporting, and remitting sales and use tax.

• Managing business assets.

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Recordkeeping strengthens and streamlines operations by letting you know whether your business is improving, which areas are exceeding expectations along with any that are under performing, thus giving you the opportunity to make changes in a timely manner.

 

Source documents are necessary to thoroughly prepare accurate financial statements. These statements can then be used to reliably calculate the true tax liability and avoid the consequences of paying too much or paying too little.

For audit resilience it is also vitally important to retain and archive source documents for all business transactions such as: invoices; employee-related files; journals and ledgers; all tax returns; travel and entertainment expenses; asset loan and lease agreements; canceled checks; bank and credit card statements; 1099s; as well as every imaginable receipt—regardless of how insignificant they may seem.

In addition, all source documents must be kept in a proper filing system in accordance with the Internal Revenue Code. Storing records conscientiously provides easy access in the event of an insurance claim or an IRS audit, which could save thousands in penalties and interest.

For all your questions regarding recordkeeping, feel free to contact me. With over 30 years’ experience, I offer professional, cost-effective, outsourced bookkeeping and accounting services to small businesses and entrepreneurs so they can focus their time and resources on what they do best.

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