Running a small business is an achievement and a step to live your passion. Yet, the daily grind of recording the smallest of financial detail, ensuring it is organized correctly and making sense of it when the time for tax filing arrives can be equally or more daunting. Once your business reaches a stage where business and sales are booming or managing issues in the operations and client-side is taking centre stage as it should, doing repetitive tasks such as accounting can be a drag. Let’s see few reasons how making easier Bookkeeping for Small Business:
What Small Businesses Like to Do
Many small businesses first feel they can handle the tasks with accounting and filing. While it might be possible with free, simple software’s available online initially, you can end up messing the accounting classification and organization of account transactions.
Read More:- How to Do Bookkeeping for Small Business?
Ill-effects of Messy Accounting
The importance of clean accounting and payroll services cannot be emphasized enough. While reconciliation in itself is a task, unforeseen expenses and cash flow issues mar most businesses. After gaining a critical mass, clear cut accounting will tell you if you have surplus cash or not. This will affect the operational ability of your business in purchasing capacity of materials/inputs, Managing salaries and payments, marketing and much more. Cash flow limitation can have a debilitating effect on the progress of the business. Poor accounting discipline can lead to insolvency and irreparable damage to company reputation.
A messy accounting can lead to a bigger chance of missing out on important transactions, correct recording and analyzing. This can create a snowball effect during monthly, quarterly and annual filings.
Small businesses also make the mistake of poor assignment of accountability. The rush to log in more and more revenues takes away attention from the correct assignment of expenses, deciding credit policies with vendors, ensuring timely accounts receivables and loss of liquidity due to low recovery.
While running a startup or a small business, constant eye on assets and liabilities along with quality can be a huge task for a proprietor. Thus, outsourcing certain activities will be the only way to ensure there is no fall in operational neither quality nor payment cycles.
Contracted Employees, anyone?
Most small businesses look at freelancers or short-term contract workforce to fulfil their needs. While this might be feasible for seasonal operational work, the core group of functions should be handled by businesses’ trusted people who would be attentive to details and run their functions with complete ownership. However, many small businesses are either proprietorship or partnerships with people to knee-deep into daily activities. Hence, professional services might be a useful route to take.
Another difference is the level of liabilities and monetary accounts for an employee will be higher than in the case of a contracted worker. These need to be taken into account for payroll processing. Companies need the expertise to help them understand the nuances of different employee categories, the liabilities pertaining to each as per regulations. Also, processing taxes, deductions, gratuity and other details have to be calculated accurately and recorded for filing purposes. Any issues can result in penalties for a summons from the authorities.
While running a business is important in ensuring accurate documentation and papers on insurance, forms, contracts, vendors, Employer Identification Number (EIN), dates and commercials agreed are essential for audit purposes. These have to be tallied with the accounts payable and the payments to each vendor can be verified.
No Budget and Cost Control
A disorganized and indiscipline approach to accounting will give an inaccurate picture of your finances and any financial allocation or planning will be faulty. It helps to keep a tab on the smallest of expenses, income details and create a budget for each of expense heads. This should bring in a practice of stringent spending and only the most necessary expenses should be spent first. For any other expense apart from this, a thorough need-analysis can be done by the core team to record the critical work that would come at a stop without this. Such stringent practices, though hard to implement will bring a strong budgetary control and help keep a tab on the real picture of your finances.
Timely Paperwork and Reconciliation
A small business entrepreneur, has his hands full bringing in the business. While he wants to ensure everything is in order, it is humanly impossible. Timely filings, payments, invoicing. Contract creation and various other paperwork are essential to be finished on time, which could otherwise result in penalties or loss of reputation. For this outsourcing to a professional might be a good solution.
Also, all this has to be done keeping in mind the policies of each department and legalities. This reconciliation along with accounting tallying is time-consuming, best left in the hands of the experts. These experts can take the load off your head to get involved in operational issues and avoid making any costly mistakes. Billing, Accounts Receivables, Accounts Payable, financial calculations and budgeting are some of the areas where professional help can be very useful. Also, along with ownership, security and safety of your books of accounts along with confidentiality is an important part. As many of your deals and policies will be openly available to your accounting person, a trusted and accountable person is the best way to enhance your business.
How Rayvat Can Help
There are various mandatory filings like GST in countries like Australia, 53 European countries 7 ASEAN countries 44 countries in Africa and 19 countries of the Caribbean, Central and North America. This denotes the market for professional services like Rayvat and how we can add value to not just regular mandatory filings, but new regulations as and when they are promulgated.
Our online accounting services expertise spans across multiple software’s and industries. Different clients are structured in various ways and we diagnose the suitability and then suggest migration of existing accounts.
A detailed analysis will help you figure out various mistakes and the solutions to your existing problems.
If you like, you can also opt for our trial run to get an idea of how we work and how we can ease your burden. To know more, kindly Contact Us our support team.