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Why even do your books
Having an accurate accounting of your business
transactions is necessary for business success and to be in compliance with
government agencies. Keeping books current allows a business owner to know his
correct bank balance, who owes him and who he owes. Sales and expense reports
tells the owner where he is making money and where it is going. Once transaction
information is entered in to accounting software, it can be manipulated and
arranged to present a variety of results and comparisons. Income taxes, payroll
taxes and sales taxes all require a proper accounting. Poor record keeping will
result in penalties and interest from the government. The "shoe box"
of receipts generally leads to a tax return with missed deductions.
Henry Ford and Bill Gates did not need to know
bookkeeping for their success but they did know to hire a good bookkeeper. A
good bookkeeper will not guarantee your success but without one, your chance of
failure increases. Without a good bookkeeper you will waste time when you should
be out making money. Cash flow is the life blood of every business. You cannot
manage cash flow with out a good set of books.
You do not want government agencies examining
your business. The best way to prevent an audit is to file accurate and timely
tax returns. If your business is examined, accurate books will get them back out
the door sooner. There are many elections and options related to income taxes.
With up to date books, you can plan and review the best choices. The IRS and
California can be merciless if payroll taxes are not correct. Sales taxes should
not cost you money since it is collected from customers. However, if you do not
account for it correctly you will pay what should of been collected.
Good Owner + Good
Business + Good Bookkeeper = Success |
