The foundation of any business is financial health. Bookkeeping and consistent accounting are important means to make sure your company is on track.
Many people and companies leave bookkeeping and accounting to the last minute. This makes for an extremely difficult tax season and leaves room for unnecessary errors. The last place you want to encounter preventable errors is in your financial records. Although it may seem counterintuitive, hiring a monthly accountant can help you save money in the long run. They can help find and fix the simple mistakes in your bookkeeping month after month that add up over time.
There are multiple benefits to having a monthly accountant for your business. Here are our top reasons.
Better Tax Predictions and Planning
Keeping up with your financial records through monthly accounting is an excellent way to make sure you’re accurately forecasting for tax season, especially if you run a more complex system or business where money changes hands frequently. Monthly accounting helps you stay on top of all finance-related transactions.
The IRS will require an official financial statement from you and your company about your income for tax purposes. Keeping detailed records and balance sheets ensures that you can better predict the outcome of your finances. This also helps you keep an eye out for trends in your company’s business. Identifying and predicting trends helps you prepare for the future and gives you more confidence going into tax season.
Detailed monthly records help you produce accurate financial statements in the event that you are audited. Any auditor you employ will need access to detailed balance sheets to compare them to tax records. Preparedness is the key to preventing mistakes in your finances and with your taxes — and the key to making audits a simple and seamless experience.
Banking and Loan Benefits
Detailed records can bolster your loan application and even improve investor relations. Monthly records prepared and completed by an accounting professional will give a sense of legitimacy to your business’ finances. Even though you usually need to wait for an accountant or official auditor to finish reports and conclude financial statements, you will always have an updated balance sheet readily available whenever anyone asks about the state of your accounts.
Once they see accurate financial statements, any interested party will have additional confidence in investing in your business. Consistent monthly accounting communicates a sense of responsibility and dedication. Your company’s health is clearly documented and serves as proof of responsible fiscal decisions.
Saves Money and Simplifies Bill Paying
Electronic bills, paper stubs, receipts, and bank statements accumulate over time. If they are not addressed in a timely manner, they have a tendency to get lost and become overwhelming to sift through.
Hiring someone to handle your monthly accounting gives you peace of mind that all of your financial records are taken care of in a timely and appropriate manner. You won’t need to worry about finding certain receipts when tax season comes. They can also help you create a detailed budget based on your income and expenses, and help you determine where your money should be spent.
Accurately forecasting your finances and keeping diligent records will ultimately save you money, even if a monthly accountant comes at an additional cost. Knowing where your money is and where it is going will only benefit your company in the long run.
Small business owners, in particular, will see great benefits from a monthly accountant, as they are highly susceptible to fluctuations in cash flow. A monthly paper trail of all your financial records helps you analyze your business performance over time and prevents errors that could come up during tax season.
If you’re ready to take the next step toward getting your business into top shape, contact us today for a free consultation.