Managing small business finances can be challenging for some small business owners and entrepreneurs, and many of you may be neglecting the management of your finances because there's other aspects of your business you find easier to do and you're good at it.
Keeping your small business financial records up to date, organized and accurate is one of the most important responsibility for an owners, solo entrepreneur or manager of a business.
There are many risk you take in the success and growth of your business when your do not maintain up to date and accurate financial records for your business.
Here are 5 things that could happen if you're not practicing a basic record keeping system:
- being audited by the IRS
- loss of income
- unable to make good business decisions
- unable to monitor the progress of your business finances
- higher fees for tax preparations
But creating a basic record keeping system to manage and maintain your small business finances can:
- prepare you for an IRS audit.
- identify income sources and reducing expenses where needed.
- give a better overview of the position of your business to make effective decisions for growth and success.
- ability to produce financial statements to see the progress of your company's revenue, expenses, assets, liabilities and other finances.
- reduce the cost of tax preparation with well-organized financial records.
It could be as simple as organizing your receipts and invoices in an accordion folder and keeping track of your income and expenses on an excel spreadsheet.
But if you choose to get more technical there are many computerized accounting programs you can use. I highly recommend QuickBooks to my clients, because you can choose either online or desktop version, whichever suits your business and it provides all the functions and features you need to manage your business financial records; whether you're a startup or emerging business.
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
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