The cost of bad bookkeeping

Small business owners frequently hope to save on costs by going the DIY route for bookkeeping rather than hiring a professional bookkeeper. That is all well and good provided you have the time and the know-how to keep accurate records. But inaccurate bookkeeping – whether your books are simply out of date or in total disarray – will cost you plenty in the long run.

Here are some of the expensive dangers of bad bookkeeping:

• Your business may be struggling financially, but you will not be able to clearly see what is causing the problem
• Overestimating your profits when filing taxes needlessly increases your taxes owed, while underestimating them can lead to an audit and fines
• Filing taxes late or having exemptions, expenses, or deductions that do not add up raises red flags with the IRS
• Misplaced or overlooked receipts prevent you from being able to claim expenses as write-offs
• You may be over- or under-compensating employees on their paychecks or with benefits
• You will not be able to keep straight who owes you what
• It is easy to fall behind on bills
• It can seriously limit your options for getting loans
• Your books will take money and time (lots of each) to get in order

Why accurate books are important

An accurate, well-kept set of books is a great start to running a successful business. Here is why:

• You can check that you are making more money than you are spending
• You will have reliable financial information for planning and budgeting decisions
• You can see if a cash crunch is coming and take steps to avoid it, by watching when you need to pay suppliers, and when you can expect payment from customers
• You are more likely to find incorrect payments (or even fraud) that might cost you money
• You can complete accurate tax returns
• Having your financial information organised makes it easier for you to work with other parties such as lenders, investors, and accountants

Benefits of outsourcing to Motabar Accountancy

Our comprehensive approach to bookkeeping is tailored specifically to each client's unique accounting needs. Whether you are just starting up, or have been in business for a while, our goal is to streamline your bookkeeping operations and put foolproof accounting systems in place, enabling you to focus on growing your business.

We are experts in all the major bookkeeping software on the market (Sage, Quickbooks, Xero, Free agent, Capium), and can either do your bookkeeping in-house or at our office.

• Eliminated costs – we eliminate the cost of buying software and employer cost for your in-house bookkeeper
• Reduced workload – we reduce the workload of your accountants, hence a lower bill from them.
• Supervision – our staff are well trained and supervised too. We periodically review their work to ensure increased accuracy
• Timely reports – our trained team will provide all necessary reports (e.g., aged debtors, aged creditors, management accounts)
• Flexible arrangement – we either can do your bookkeeping at your place or remotely, at our office
• Security – retain the same bookkeeper forever. We, as a firm, hold your bookkeeping information securely, not the staff working on site