Bookkeeping for Small Business: Why it’s Important
Bookkeeping is one of the most essential tasks of any business. Without proper bookkeeping, your business could very quickly and easily crash into a wall. Small business owners can do their bookkeeping on their own, but many invest in a bookkeeping service that will save them not just precious time but the risk of making very costly financial mistakes.
1. Corporate Veil
Maintaining a separate checkbook substantiates the corporate veil, which is one of the primary reasons for forming a new corporation. Having a separate checkbook shows that you recognize the company as its own distinct entity. Furthermore, separate checkbooks should encourage you not to commingle personal and business funds.
2. Tax Savings
Separate banking will improve bookkeeping procedures, prevent payments from being missed and provide better records to improve your tax return. We all know that “bad books” will cost us on our tax return, so why not stop that cost from being incurred in the first place?
3. Audit Protection
In the event of an IRS audit, having a separate checkbook will improve your chances of passing it without consequence. The IRS will often disallow a number of expenses when personal and business expenses are commingled in a single checkbook.
4. Less Stress and More Sanity
When your books are disorganized, you’ll feel constant stress to take care of it, and this ultimately can cause you to come undone. While having separate checking and bookkeeping for a new company will save you time and money in the long run, consider the price and value of having a clear head. Those that rely on your decision-making process will thank you.
5. Improved Decision-Making
As alluded to above, having a separate checkbook starts the process of better bookkeeping, expense tracking and budgeting, which leads to quality decision making. How can you expect to be a successful business owner without accurate records? Furthermore, how can you project future success without being able to see facets of your business clearly today?
Many business owners like the comfort and security of knowing they not only have highly skilled accountants doing their books daily, but also have the benefit of one-stop shopping for tax planning and quarterly and annual reports as well. Contact Crowley Accounting and Consulting Services to get your bookkeeping in order today.