You own and operate a business or company. You have a ton on your plate to take care of, manage, and stay on top of. And, you’re fighting to grow your business in an economy that’s not very forgiving.
But what if you’re not keeping up with your bookkeeping and accounting responsibilities?
It’s one thing to get a few weeks or months behind on your books (it’s not ideal and shouldn’t happen, but it does).
It’s another danger entirely to be behind years on your books and accounts.
If you’re behind on your books, even a few weeks, you expose your company (and life) to serious risks and downsides.
Know what to expect and what will eventually happen if you avoid your books and accounts for too long (hint: a few weeks is too long).
What Happens If I Don’t Keep Up With Bookkeeping & Accounting?
Proper bookkeeping and accounting keeps your company in the light. Without it, you’re in the dark. You won’t have a crystal clear picture of your business financials, which means you’re “flying blind”.
Here are the known consequences of getting behind on your books (and why you should keep up with them at all costs):
Unknown Finances Crush Cash Flow
Cash flow is the lifeblood of your company. Without it, you’re dead in the water. This is why bookkeeping and accounting are so imperative for both your financials and your operations.
Properly measuring your cash flow grants you the ability to make financial decisions otherwise unknown to a business with backed books.
Things like recurring variable expenses, hourly wages, shipping costs, overdue invoices, or held inventory matter to your bottom line.
Consistent, accurate bookkeeping and accounting gives you the ability to determine your breakeven point, plan for the future, and fend off competitors. Being able to pay bills, pay employees, and invest in your company’s future starts with cash flow.
Know your finances.
Limited Financing Options
If you’re looking to expand your operations, get funding, or more, bookkeeping and accounting help you accomplish this goal.
Without accurate, current financial statements and reports, you will not be able to get financing for expansion or fast cash to keep the doors open. The inability to track your own money erodes trust from those who you’re asking to invest in your venture.
The bank will not loan you money if you cannot keep track of, measure, and monitor your own.
Investors and Partners Will Avoid You
A great way to build and grow a company is to bring in investors and partners. These alliances help add cash to the business, expand its reach, and scale operations faster than nearly anything else.
But what happens when your books are behind weeks, months, or years?
Investors see this as a huge red flag and decline to give you that cash injection you need.
Partners back away because mismanaged money is like a pit of snakes with no ladder to get out.
Your lack of financial management is a giant neon sign that says “do not invest or partner with me.”
Invoice Cycle Chaos
Bookkeeping and accounting are at the heart of your invoice cycle. An accurate, consistent, smooth bookkeeping and accounting system allows you to pay and get paid on time and in full without much fuss.
But, if you allow your books and accounts to get behind, even a few weeks, you strangle cash flow because vendors, contractors, clients, and more start getting invoices that don’t match their own records (or they don’t get them at all).
This spirals downward and creates chaos for your business from the inside out.
The Payroll Dilemma
If you don’t have the cash to pay your employees, how will you keep selling or producing goods?
It’s a dilemma backed books put you and your company in, slowly, over time.
The tighter and tighter the grip gets on your cash flow, the more and more accurate books, and accounting matters. The further behind your books get, the less likely you’ll have enough money at the end of the month to pay your people, which adds to the chaos, stress, and fear.
Managing Expenses Gets Near Impossible
Do you keep your receipts in a shoebox (actual or digital)?
Do you store every receipt somewhere, somehow to refer to later, if you need it?
Here’s the truth:
The “shoebox bookkeeping method” does not work as well as our fathers and grandfathers made it out to work.
Without proper collection, organization, and application of bookkeeping and accounting practices to your company and financials, you could be incurring small, slow leaks in your business where money’s draining.
Whether you’re doing $200K per year or $75M per year, these “leaks” are like death by a thousand cuts for a business.
These “leaks” can also lead to an overstatement of expenses, understatements of profit, and more chaos.
Mismanaging expenses typically throws a few red flags for the IRS, which results in an audit that, likely, you’re unprepared to fight off.
Why Bookkeeping and Accounting Matters
Every penny, nickel, and dime needs to be accounted for. Without proper bookkeeping and accounting services supporting (and growing) your company, you’ll never know exactly where your business stands financially. And in the event that the IRS finds you suspicious, consistent, accurate bookkeeping and accounting practices save you from the ever-looming presence of an audit–even if you do get audited, current books and accounts make it rather straightforward to show the IRS that you’re in the clear.
If your company is behind weeks, months, or years on your financials, then let me rescue your books for you.
It’s in your best interest to find and hire an experienced outsourced accounting department or a virtual bookkeeper like me to rescue your books and accounting department, deliver spot-on accurate reports–weekly, monthly, or whenever you need, and project your future financial success…
All so you can continue to grow your company, generate more revenue, and take home more profit.
How Do I Hire a Master Bookkeeper & Expert Accountant?
All you have to do is click on one of the FREE Financial Analysis buttons here on this page. Fill out the form. And I’ll get back you as soon as possible with next steps.
There’s no better way to invest in your business or company than to bring your books current, get cash flow back on track, and know exactly where your business stands financially.
Let me help! Call me, now!