If you don’t do bookkeeping, you may find yourself in a difficult financial situation. Bookkeeping is important because it helps you keep track of your income and expenses. Without bookkeeping, you may miss important deadlines or make costly mistakes. If you put a full stop to bookkeeping, your books will no longer show a clear picture of your company’s financial viability. Without accurate records, it can be difficult or nearly impossible to track cash flow projections and statements.
Here are some of the risks if your company doesn’t do bookkeeping:
Your Records Become Inaccurate and Unreliable
When you do not update your books, your company's financial records become outdated and unreliable. You no longer have an accurate idea of where your cash is coming from or where you owe money. This makes it harder to sort out your fixed and variable costs and thus obscures what your company’s breakeven point is. Essentially, without bookkeeping, there is no financial trail you can refer to if there are discrepancies spotted.
Financing Options Become Limited
If you don’t do bookkeeping, your financing options become limited. Lenders and investors want to see financial statements that show how your business is performing. Without this information, it’s difficult to get the funding you need to grow your business.
Your Invoicing Cycle Goes Off-Track
Without bookkeeping, you are likely to lose track of all the invoices you are owed and which you need to pay, particularly over a long period of time. This could lead to unnecessary shortages of funds, and on the other hand, you risk piling up late fees for your accounts payable. In short, your entire cash flow for the business goes astray.
Payroll Problems Start to Rise
Payroll is among the most critical aspects of running a business. Your employees need to be paid on time and accurately. If you don’t do bookkeeping, you may start to see payroll problems. This can include things like not having enough money to cover payroll, or not being able to pay employees on time. This can lead to frustration and even legal problems.
Managing Expenses Becomes Tricky
Without a proper system of bookkeeping in place, you risk losing money in slow but steady leaks over time. Small expenses that are easily forgotten end up not being recorded and can add up to a significant amount. This, in turn, could lead to unclaimed tax deductions or overstate your expenses to the IRS, which can lead to problems if your company is being audited.
Miss Tax Deadlines
Tax time might become a massive headache when your back office is out of order. If your record keeping isn’t updated on a regular basis when tax season comes around, your business will inevitably have a huge tangle of receipts to sort through. This task requires a lot of energy and time while involving inaccurate deductions. Ultimately, you risk missing your filing deadlines, making mistakes on your tax documents, and facing expensive penalties.
Start Bookkeeping, On Whatever Budget You Have
Hiring an online bookkeeper can save you time and hassle by keeping track of your finances. Everyone deserves a supportive team of people who care. If you feel overwhelmed with year-end bookkeeping, reach out to an online bookkeeping service. Cloud Bookkeeping Inc.’s team provides monthly bookkeeping and accurate financial reports. We’ll give you financial visibility throughout the year and deliver insights to make strategic business decisions.
Get in Touch with Us for Our Services
We don’t just say it, we deliver – our work speaks for us! Contact us for 30 minutes of free consultation and opt for our Online Bookkeeping Service.
Cloud Bookkeeping, Inc.
3281 E. Guasti Road, Suite 700
Ontario California 9176
Tel: +1 (909) 952-3804