It’s hard to know how your business is doing without a clear financial picture. Am I making money? Are sales increasing? Are expenditures increasing faster than sales? Which expenses are too high based on my level of sales? Do some expenditures appear to be “out of control?”
The accounting cycle.
Everything in business revolves around people, products and processes. Proper bookkeeping is no exception.
A sound bookkeeping system.
A sound bookkeeping system is the foundation on which all of this valuable financial information can be built. Having an expert third-party review your records means you’ll be alerted to problems with your record-keeping methodology or just plain computational errors. Better to have your Accountant tell you this, rather than the IRS.
Evaluating the financial consequences should be a part of every business decision you make. Without accurate records and financial information, it may be hard for you to know the financial impact of a given course of action. Will it pay to hire another salesperson? How much will another production employee cost? Is this particular product line profitable?
A banker will usually want to see financial statements: a balance sheet, income statement, and cash flow budget for the most current and prior years, as well as your projected statements showing the impact of the requested loan. A banker may even want to see some of your bookkeeping procedures and documents to verify whether you run your business in a sound, professional manner.
- If your business has reached the point where you need to take in a partner, any prospective partner will want to become intimately familiar with your financial picture. If you need capital and are thinking of taking in an outside investor, you will need to produce a lot of financial information. Even your suppliers and other creditors may ask to see certain financial records. Such information may be produced by your outside accountant, but it is based on your day-to-day recordkeeping.
- All businesses should use a budget for planning purposes. A budget will help keep your business on track by forecasting your cash needs and helping you control expenditures. In addition, if you are seeking bank financing or other sources of capital, a banker or prospective investor will probably want to see your budget as evidence that your business is well-planned and stable. You must have solid financial information to prepare a meaningful budget.
- Whether your business is a sole proprietorship, partnership, or corporation, you must file an income tax return and pay income taxes. With good records, preparing an accurate tax return will be easier and you’re more likely to be able to do it on time. Poor records may result in your underpaying or overpaying your taxes and/or filing late (and paying penalties). If your accountant prepares your income tax return, poor records will almost certainly result in your paying higher accounting fees. If your business is a The content of this report are to be held completely confidential as it includes sensitive company and employee information. partnership, not only will you have to prepare a partnership tax return, but partnership return amounts will pass directly to the tax return of each partner. So your record keeping will directly affect the tax return of each partner.
- If you have employees, you are aware of the myriad rules and regulations relating to payroll taxes. Payroll tax deposits must be made according to strict deadlines. Late payment of payroll taxes results in severe, and unnecessary, penalties. Also, you must file a payroll tax return every quarter, which you must reconcile with the payroll deposits made during the quarter. Then at the end of the year, you are required to give your employees and the government W-2 forms, which must agree with your quarterly payroll returns. Sound bookkeeping practices will make compliance with all these payroll rules easy. Poor records will make it impossible.
- If you collect sales tax from your customers, good records will make it easy for you to compute the tax due and prepare the required reports.
If your business is a partnership, you will need good records to determine the correct amount of profits to distribute to each partner. If you are operating as a corporation, you must determine the company profits that you will be paying out as dividends to the shareholders.
Bookkeeping services we offer.
Our Commitment To You!
Brinkley Financial LLC is committed to providing exceptional customer service and accurate Accounting services. We endeavor to make sure that all services listed on our website are currently available.
Brinkley Financial LLC (Virginia Office)
999 Waterside Dr. Ste 2525
Norfolk, Va. 23510
Brinkley Financial LLC (New York Office)
747 Third Ave
New York, Ny. 10017