Why Bookkeeping Is SO Important: Cash Flow, Reporting, Forecasting, and Surviving an IRS Audit
Here at Long Law Group, we frequently encounter poor financial statements and bookkeeping. Many business owners fail to understand why keeping accurate financial records is essential to their success. And unfortunately, most bookkeepers do not fully understand how to classify business transactions for tax purposes.
Here are 4 reasons why hiring a professional bookkeeper is a wise choice for your business:
1) Cash Flow Reporting:
Knowing your numbers is crucial to making sound business decisions. With good bookkeeping, you have the ability to easily pull cash flow reports, profit and loss statements, and balance sheets. These show you where you have defects for accounts receivables and cash flow management, so you can make improvements, where needed.
2) Business and Tax planning:
Up-to-date bookkeeping helps your CPA devote less time to cleaning up your books and more time to looking for ideas to help you save money on taxes. Your CPA will charge you more for their services, the more clean-up they have to do. Outsourcing your bookkeeping also saves you valuable time to devote to your business, family, and personal interests, instead of wasting that precious time entering your own bookkeeping or assisting someone who isn’t truly competent to prepare them.
3) Reporting to investors, banks, and lenders:
If you’re a real estate investor or business owner who relies on bank funding for your business projects, the ability to produce accurate financial statements is critical. Most lenders want to see professionally prepared financial statements as they evaluate the loan process. Additionally, if you have a multi-member company, any member may request to see the financial statements for the business.
4) Keeping the IRS Happy:
Last but not least, having accurate financial statements will keep the IRS happy if you are ever audited. We have found that most bookkeepers classify expenses and income incorrectly and do not know how to prepare an accurate balance sheet. If you get audited and your books and records aren’t accurate, this will cause a mess with the IRS and potentially cost you thousands in additional taxes.
So, why settle? At Long Law Group, our bookkeepers are overseen by CPA’s and Tax Attorneys – something you’re unlikely to find anywhere else. Our tax professionals assist our bookkeepers with classifying your expenses correctly for tax purposes and creating accurate financial records for lenders and banks. Let us help you save precious time and enjoy peace of mind.
To schedule a bookkeeping consultation, please contact us at firstname.lastname@example.org. Thanks so much for joining us!