| My least favorite thing is 'selling' my services to | | | | this information is based on your day-to-day record |
| potential new clients. It makes me uncomfortable. Then | | | | keeping. |
| a few years ago, Beth my business coach said, "Linda, | | | | #5 Reason for Retaining Bookkeeping Services: |
| why not describe the reasons why someone needs | | | | Prepare a Budget |
| good bookkeeping? Talk about that during your initial | | | | All businesses should use budgets for planning |
| meeting." I was skeptical; I didn't believe it would work. | | | | purposes. Budgets keep businesses on track by |
| She encouraged me to try the approach at my next | | | | forecasting cash needs and controlling expenditures. |
| meeting with a potential bookkeeping business client. | | | | When companies seek financing, bankers or |
| Well, I did, and much to my surprise her bookkeeping | | | | prospective investors look for budgets as evidence of |
| business advice worked! Not only did that client hire | | | | planning and stability. |
| me, but also referred me to two colleagues. The | | | | #6 Reason for Retaining Bookkeeping Services: |
| approach I used - and still use - is simply to explain | | | | Prepare Your Income Tax Return |
| why it is so important to have good records. | | | | No matter what your business entity, you must file an |
| Here are nine reasons why it's important for | | | | income tax return and pay income taxes. With good |
| businesses to have good financial record keeping | | | | records, preparing an accurate tax return will be easier |
| systems. Use one, two or all of them with your next | | | | and filing will more likely be done on time. Poor record |
| potential new client. Whether your potential client is | | | | keeping may result in underpayment or overpayment |
| devising or revising their bookkeeping routine, remind | | | | of your taxes. If your CPA prepares your tax return, |
| them that the purpose of your bookkeeping business is | | | | poor records could result in higher accounting costs. |
| to help them manage their business tasks. | | | | #7 Reason for Retaining Bookkeeping Services: |
| #1 Reason for Retaining Bookkeeping Services: | | | | Comply with Federal and State Payroll Tax Rules |
| Monitor the Financial Success or Failure of Your | | | | If you have employees, you are aware of the myriad |
| Business | | | | of rules and regulations relating to payroll taxes. Payroll |
| It's hard to know where you are going if you don't | | | | tax must be deposited according to strict deadlines. |
| know where you've been. The same is true with your | | | | Late payments of payroll taxes result in severe |
| business - it's hard to know how your business is doing | | | | penalties, including jail time! |
| without a clear financial picture. A good financial | | | | Payroll tax returns must be filed quarterly, and must |
| system provides answers to the questions: Am I | | | | reconcile with payroll deposits made during the quarter. |
| making money? Are sales increasing? How do | | | | At year end, you're required to give employees and |
| expenditures compare to sales? | | | | the government W-2 forms, which must agree with |
| #2 Reason for Retaining Bookkeeping Services: | | | | your quarterly payroll returns. Sound bookkeeping |
| Provides the Information You Need to Make Decisions | | | | practices, even if you use a payroll processor, will |
| Evaluating financial consequences should be part of | | | | make compliance with payroll rules easy. Poor records |
| every business decision. Without accurate records and | | | | will make it impossible. |
| financial information, it's difficult to forecast the impact | | | | #8 Reason for Retaining Bookkeeping Services: |
| of any given course of action. For example, financial | | | | Submit Sales Taxes |
| information gives insight as to whether or not it pays to | | | | If you collect sales tax, good records make it easy for |
| hire another salesperson. Accurate records reveal the | | | | you to compute the tax due and prepare the required |
| profitability of any line item. | | | | reports. Sales tax must be deposited according to |
| #3 Reason for Retaining Bookkeeping Services: | | | | strict deadlines. Late payment of sales taxes can |
| Obtain Bank Financing | | | | result in severe and unnecessary penalties and |
| The best time to seek financing is when you don't | | | | interest. |
| need it. The bank will want to see your income | | | | #9 Reason for Retaining Bookkeeping Services: |
| statement, balance sheet and tax returns for the most | | | | Distribute Profits |
| current and prior years, as well as projected | | | | If your business is a partnership, you will need good |
| statements showing the impact of the requested loan. | | | | records to determine the correct amount of profits to |
| #4 Reason for Retaining Bookkeeping Services: | | | | distribute to each partner. If you're operating as a |
| Obtain Other Sources of Capital | | | | corporation, profits that you'll be paying out as |
| If your business has reached the point where you | | | | dividends to the shareholders must be determined. |
| need to take in a partner or investor, any prospective | | | | I encourage you to try this approach. It's one of the |
| associate will want to become intimately familiar with | | | | best pieces of bookkeeping business advice that I can |
| your financial picture. Suppliers and other creditors may | | | | pass onto you. |
| also ask for certain financial records. The source of | | | | |