EA - Avoid These Accounting Strategies that Just Don't Work

Avoid These Accounting Strategies that Just Don’t Work

Staying current with your accounting system is essential so that your business can keep up with the growth that is happening. But, it is important that you are careful to avoid common mistakes and pitfalls that often happen in the accounting industry. The right accounting strategies can be crucial to help with potential success. On the other hand, the right financial strategies could be the downfall of your company.

You can find many resources about accounting and bookkeeping tips for small business owners. While there are helpful resources in the industry, it is hard to know which strategies are applicable to your industry and business. Instead of guessing your way through the systems and processes, you need to tap into the expertise that only comes from someone working “in the trenches.”

Hiring an accounting team might be the best decision that you will ever make for your company. Not only will these accounting strategies give you insider information about the processes that are working in today’s economy. But, you can also learn about the techniques that are applicable based on your personal circumstances.

Accounting Mistakes that are Costing You Money

These are some of the biggest mistakes that we see in the accounting industry. Shining a light on these poor accounting strategies can help you avoid some of the problems. Learn from other people’s mistakes so that you don’t have to harm the success of your business:

  • Profits = Cash Flow: Just because you close a big deal, doesn’t mean that the full contract amount can be chalked up as profits for your company. It is easy to see the money that is coming in and assume that the cash is available for other purchases. But, business owners often make mistakes with the way the money is handled. Then, they run into issues when the cash isn’t available for taxes or payroll. Whenever money hits the bank account, it is a good idea to set a portion aside in a savings account that is dedicated for taxes and other expenses.
  • No Emergency Account: Most companies experience ebbs and flows in the way the money moves through the bank account. Instead of being surprised when there isn’t enough cash to pay the bills, look ahead and make sure that you always have an emergency fund to cover the gaps when needed. The best solution is to have 3 to 6 months of cash flow in an account that is left untouched until an emergency situation This strategy protects your company from going under if the economy slows down or you experience normal seasonal fluctuations.
  • Procrastinating Bookkeeping and Reporting: It is essential that you are recording everything that moves through your business account. No matter the size of the transaction, be sure that you are keeping records of both large and small costs and invoices that come through. Proper categorization for your accounts is essential for tax deductions and future financial strategies. Many business owners find it difficult to implement a good accounting system. So, the best solution is to bring in an outsourced accounting team to help with the business strategy and application of the systems.
  • Improper Tax Filings: Did you know that a mistake on your tax filing could cost your company thousands of dollars? Don’t let yourself be fooled into thinking that you can handle DIY business taxes. If you don’t have experience working on business tax filings, then you need to outsource these services to a team that understands the best methods for your company and industry.
  • Blurry Lines Between Contractors and Employees: Understand the legal requirements that separate employees and contractors so that you are handling the taxes correctly. There are major accounting consequences that can occur if mistakes are made with worker classifications. So, never make assumptions about the way the person is classified without consulting with an industry professional. You need to understand the difference between employees and consultants so that your accounting records are accurate to match the business relationship with each person.
  • In-House Financial Services: When new skills are needed, or the team is overworked, then it is common for a company to hire in-house employees. There can be benefits to having an accounting on staff. But, you need to consider the financial impact that will affect your profit margins. When you own a small company with low revenue, you probably can’t afford to pay for the in-house services that are needed. Not only do you need to cover the cost of the accountant’s salary, but you also need to pay for benefits, office space, equipment and more. Plus, in-house accounting could result in problems with accuracy, tax deductions, and more. The best solution is to choose an outsourced accounting team that can help with everything from payroll to reconciliations.
  • Outdated Accounting Systems: If your tax deductions are tracked on sticky notes, and you are still managing invoices in a spreadsheet, then it means that you are behind the times. Manual accounting was a great strategy back in the day. But, newer systems have changed the industry and improved the options that are available for small businesses. There’s no reason why you shouldn’t take advantage of an automated computer system that is managed by a team of accounting experts. Implementing the right system can have a profound impact on your company, helping you keep up with the trends that are happening in our modern digital age.

Why You Will Love Outsourced Accounting Services

If you want to improve the accounting strategy for your small business, then outsourced services are likely your best option. Bringing in a professional perspective is a great way to ensure that you are staying on the right track in the way your company is being managed.

You can offload the busy work that is associated with financial management. When the accounting team takes over these tasks (such as payroll processing, transaction categorizations, auditing, reconciliations, and more), then you can dedicate your time and efforts to other tasks that are needed for your company.

Too often, business owners get caught up in the busy work required for bookkeeping and accounting. If you are spending your valuable hours going through transactions or calculating payroll, then it means that you are likely missing out on opportunities that could help with the growth of your company in the future. How much will your sales improve if you spend time working on new marketing strategies or product development, instead of crunching the numbers for the monthly financial reports?

Outsourcing these services to an accounting team means that you can enjoy the benefits of accurate financial information and a clear picture of the financial health of your business. But, you don’t have to waste your time when you are already carrying many other responsibilities to keep the company running. Invest a little money into accounting services so that you can focus your efforts and attention on other things that will leverage your results in the future.

Making the Best Decisions for Your Company

One thing to consider is the potential mistakes that could be made if your financial reports aren’t managed properly. For example, if there are issues with your accounting system, then it means that you are likely using inaccurate information when it is time to make big decisions relating to the future of your company.

These accurate reports are essential when you are looking at hiring options, equipment purchase, inventory replacement, business development and more. You need to know how much cash is available right now, as well as the cash that will be needed for the future. Staying ahead of this financial information will help by reducing your stress related to cash flow problems.

What Accounting Strategies Do You Need?

Now that you can see the importance of hiring the right services to support the needs of your small business, it is time for you to choose the services that are required for your company. The advantage of working with a concierge team, such as Easier Accounting, is that these services can always be catered based on your requirements.

We are always looking for solutions to personalize your business systems. Our team has been working in the accounting industry for many years. During this time, we’ve built the right experience to ensure that you always receive the best services that are available. We understand the importance of specialized accounting services, which is why you should choose our team. We’ve focused our experience on small businesses and entrepreneurs.

Learn About the Accounting Services that are Available

How should you get started if it is time for you to learn more about accounting services? You can read information online, but nothing beats a personal conversation with an industry expert. Right now is the time to take action, so we invite you to call our team to learn more about the services that are available.

Easier Accounting is leading the industry by offering innovative solutions for entrepreneurs and small businesses. Call us today to see how we can help with your business needs: (888) 620-0770

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