I recently have been getting calls from people who are behind in filing their tax returns. Being “by the book” person that I am, I find it so hard to believe. I would not be able to sleep at night knowing I missed such important deadlines. But . . .. not everyone is me.
I just do not understand how the IRS has not caught up with those missed deadlines but then, that is a whole other story.
In most cases I have dealt with, the person/business owner really knows their business, they just cannot keep up with the administrative work of their business. This includes tracking income and expenses. They are happy that they see money in the bank, and they see bills are paid but they do not know the details. Are they really profitable?
Now more than ever, we need to keep up with the day-to-day financial activities of our businesses. With government assistance such as COVID-19 relief, there are so many opportunities to take advantage of but without proper bookkeeping, access to this special funding is not available. If any of you have applied for PPP Loans, EIDL funding, ERTC credits, know what is required. Without good bookkeeping, these opportunities would be impossible to obtain.
Having that individual that keeps up with the financial activity is crucial. If done properly, reports can be generated with the press of a button. Business owners know their profitability; what business offerings work and what do not work. Not having this information readily available can cause serious financial problems including missed opportunities.
Some may say they cannot afford a full-time person to keep track of their finances. Outsourcing is an option. I know because my company offers this service. A good, organized bookkeeper will be able to provide their services at very affordable prices. They typically get the job done much quicker. They have systems in place that make it much easier to collect information. They organize the business owner, provide systems that make the transfer of information seamless.
We are currently working with several clients who were so far behind they did not know where to begin and so they avoided it. We were able to provide a system that was not so daunting for the business owner. We broke the project into manageable tasks, so the client did not feel so overwhelmed. Once we get them caught up, we will work with their CPA to prepare the delinquent tax returns.
With good bookkeeping practices businesses know where they stand at any given time, can provide reports as needed for business loans, obtaining credit lines, applying for government assistance, keep governing agencies at bay and most importantly they can make sound business decisions.