Some small business owners think that just because they’re starting out, they wouldn’t need the help of an accountant or reliable software like Sage Quantum. Within months, however, they will begin to notice the stack of undone financial paperwork on their desks. The truth is, no matter the size of the enterprise, it’s never too early to get your books sorted out.
On Profit and Cash Flow
To put it simply, even businesses reaping high profit can still end up failing because they don’t know how to pay the bills efficiently and on time. Reliable accounting software can help you organize the flow of money into and out of your business so as to minimize blockages and efficiently manage your financial payments as well as your revenue generation.
Preparing your Books
Fox Business writer, Bonnie Lee, reports that it’s always important for the survival of any business to maintain accurate records of financial activities and that access to financial records should be available whenever the need calls for it:
Tax preparation is a key reason to maintain a detailed set of books, but there are other factors at play. It’s important to know how much money your business is bringing in along with how and where the money is being spent. Compare your results to industry standards to determine where you need to improve your business model. You should also compare this year’s sales and expenses to the prior year(s) to note your progress in the business world. Reviewing this year’s balance sheet accounts (cash, receivables, liabilities, etc.) to prior years will also help establish profit and sales goals.
Another reason to have current financial statements is to satisfy a lender who will certainly require them in order to evaluate your qualification for a business loan.
Obtaining accounting software from companies like Quantum Buyers can also help you decide whether to choose cash-basis accounting versus accrual accounting. Cash-basis accounting records revenue the moment the cash is actually laid out, whereas accrual accounting does so the moment the transaction is completed (even if the cash still hasn’t been delivered).
If you don’t want to deal with the hassle of hiring an accountant to keep your books for you, opt, instead, for an equally good alternative and invest in programs like the Sage 50 Quantum. Using accounting software can give you the accuracy and precision you need without the added cost of hiring an actual employee.
(Source: Why Your Business Needs Bookkeeping, Fox Business)