In this tough economy, business owners are looking to conserve their cash flows to stay financially viable. However, a common area that can create cash leakages is inefficient bookkeeping. Learn about the problems that can emerge as a result and how outsourcing to a professional bookkeeping service helps.
Problems With Stakeholders
If you don’t keep a close eye on your company’s financial numbers, it could create
a negative effect on your business. For example, if invoices aren’t properly tracked and followed up on, payments may fall behind and bad debts can start appearing in your books.
This can quickly lead to a downward spiral that impacts your entire operations. Also, when you won’t be able to pay your suppliers on time, it will impact your reputation and your whole supply chain.
Even the most diligent business owners can make mistakes in their bookkeeping that end up costing them in terms of their reputation and bottom line. IRS is always on the lookout for red flags such as unreported earnings, and excessive write-offs. If your books aren’t properly maintained, discrepancies will start showing which will lead to an IRS audit.
Without an experienced firm to record your cash inflows and outflows, your financial sustainability will start to get affected.
Not Classifying Expenses Properly
In this remote economy, a company can employ freelancers, consultants, and independent contractors. Business owners that handle accounting themselves can make the mistake of not classifying employees properly. This can affect your company’s bookkeeping processes and ultimately your investments, cash flows, and financial obligations.
A professional bookkeeper who is well versed in bookkeeping rules will avoid such mistakes that can even lead to lawsuits and penalties.
Not Tracking Reimbursable Expenses
A business has several reimbursable expenses that help run their day-to-day operations. These expenses may include business phone calls and other costs that sales teams make to land a high-value client.
New bookkeepers might not have robust processes in place to track these reimbursable expenses properly. This could lead to certain employees taking advantage of the situation and exploiting the company’s resources. Businesses can also lose out on tax deductions.
Get Affordable Bookkeeping Services
On the lookout for an experienced bookkeeping service in California, Texas, Washington, and Kansas.? At 3Alpha LLC, we have an experienced team that is well versed with accounting standards and can help you stay in the good books of the IRS. Our bookkeeping practices help you avoid cash flow problems that could even lead to your firm going bankrupt.
Reach out to us today for a free quote.