Making mistakes in your accounting can
have serious consequences for your business, such as hefty fines for suspected
tax evasion. For a large corporation, this can damage both the reputation and
finances of the company. For a small business, however, it can have a huge
impact and even cause the company to be seized, if there is not enough money to
pay the fines.
Hiring a small business accountant is
therefore essential from the beginning. Many small business owners believe that
they do not need to do any kind of accounting but this is a misconception. It
is crucial for almost every business, regardless of size and nature. Simply
keeping a track of customer invoices and receipts in not enough, the business
must set up a simple but thorough system to record all kinds of transactions
that are made and to produce reports when needed. Phoenix
CPA Firms can help you in this.
When you launch your small business, you
should open a separate bank account for this. It is not uncommon for sole
traders to simply use their personal savings account for their business. There
are many technicalities involved in the process and only a small business
accountant can provide you the right guidance.
Reconciling your accounts and books
regularly, such as monthly or weekly, is a great way to avoid any kind of
accounting errors. This way if the figures do not add up you will have more
chances of being able to spot and correct the mistakes. Imagine trying to find
a small receipt from ten months old records. So this kind of problems can occur
and it becomes really time consuming and exhausting to fix these problems.
Good accounting and bookkeeping such as
producing monthly cash flow statements have several benefits on its own. All
these works become much easier when you have all the essential documents and
data in place. All this can be possible only if you hire an experienced
small business accountant who can make the entire accounting more
streamlined.
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