| Every business should have some form of accounting | | | | that do not maintain accounts end up cheating |
| bookkeeping records, but many small businesses | | | | themselves out of valuable deductions and paying |
| neglect this activity. It is important for at least three | | | | more tax than is required. |
| reasons; knowing how your business is doing financially, | | | | The main reason that business owners don't maintain |
| obtaining credit and preparing tax returns. | | | | bookkeeping records is that they do not understand |
| First, operating a business without keeping appropriate | | | | bookkeeping and accounting. This is understandable, |
| financial records is like travelling with a blindfold on. You | | | | but it is not excusable. Accounting software is available |
| are unable to tell where you are. Accounting records | | | | that is relatively inexpensive and makes the process |
| allow us to see if we are profitable, how much cash | | | | workable even for someone who knows nothing |
| we have and will need, what we owe our suppliers, | | | | about bookkeeping. With no practical knowledge the |
| what our customers owe us, and on and on. These | | | | accounts will not be technically accurate, but items will |
| are vital data for a successful business. | | | | be recorded and can therefore be adjusted by |
| Second, should you need credit in order to operate | | | | someone with knowledge. |
| your business, then your banker is going to want to | | | | Another resource is a professional bookkeeper, |
| see financial statements. If you haven't kept records it | | | | accountant or CPA. This is more expensive than do it |
| is going to be difficult to provide the bank with a profit | | | | yourself software, but it requires no more effort than |
| and loss statement, a balance sheet and cash flows. | | | | providing records to the preparer who will then record |
| This will delay your loan, and possibly keep you from | | | | them correctly. A good professional will also see to it |
| obtaining one. | | | | that required tax documents are prepared and |
| Third, the Internal Revenue Service has a great deal of | | | | submitted in a timely fashion. |
| interest in the profitability of your business. Good | | | | It is vital that any business have some type of financial |
| financial records are necessary in order to accurately | | | | records. It is one of the first steps that should be taken |
| prepare tax documents. In my experience, businesses | | | | as soon as the decision is made to start a business. |