If you’re like a lot of business owners, you may have gotten into the habit of avoiding your numbers.
I used to be the same way, and it came back to bite me.
It’s normal to want to put off your accounting until a later time, but it’ll cost you more than just money.
In this post, I’ll discuss why outdated and unreconciled accounts can cause trouble (and share what you can do instead).
Maybe you’ve been here…
Let’s say you’re running your business, managing your team, dealing with clients—and then suddenly, it’s payroll time.
You check your bank account, see enough cash, and think you’re fine.
But you forgot rent is due the day after.
Or maybe you paid a contractor, but didn’t log the expense in your accounting system.
Or you’ve got sales taxes due in a few days and no cash set aside to cover it.
Now you’re scrambling. You’re stressed. You’re trying to hold it together.
You might be making payments—sending money to vendors, cutting checks for your accountant—but you’re not actually recording anything.
There’s no visibility.
You’re flying blind.
Avoid cash flow surprises
When you’re flying blind (i.e., you don’t have accurate insights into the financial health of your business), you’re setting yourself up for cash flow surprises.
You won’t know if you’re making money.
And if your books aren’t up to date and reconciled, you’re guessing on business decisions, hoping things will work out.
It’s easy to believe you’ll catch up on your books later.
You think, “I’ll do the bookkeeping tonight after dinner.”
But then you get home, your family needs your attention, something else comes up, and you think, “I’ll do it tomorrow.”
But day after day, week after week, it doesn’t get done.
And problems start stacking up.
You can’t dodge sales tax and payroll tax
Taxes are where it really gets dangerous.
If you’re collecting sales tax from customers and not passing it along to the state—you’re in trouble.
That’s trust money.
It’s the same with payroll taxes–you can’t spend that trust money like it’s yours.
If you do, the state and the IRS will come after you.
Unlike income tax, you can’t get out of paying trust money, because it doesn’t belong to you.
So when your books are behind, you might think you’ve got cash—but it’s already claimed.
The solution is to get your books caught up, so there is clear visibility into the financial health of your business.
This is what we do for business owners like you.
Schedule a free consultation today by clicking the button in the top right-corner of this page.
Growth without a plan will wreck you
You also run into trouble if you’re trying to expand your business.
For example, say you’re ready to grow. You want to add a new truck, or open a second location, or hire another employee.
If you don’t have a clear financial picture of your business, you’re setting yourself up for failure.
Because you won’t know if you’re actually profitable and especially cash flow positive.
Growth comes with commitments (leases, loan payments, payroll, etc.) and if your current business isn’t really making money, trying to grow will only hurt you.
I’ve lived this life (unfortunately)
When I was running my own restaurant years ago, I thought I could handle the accounting by myself. I thought I’d get to it eventually.
I didn’t.
And it came back to bite me.
Frankly, I was overwhelmed, because I knew I was flying blind.
I wish I had someone in my ear saying, “Hey, here are your updated financials, and your cash flow was negative last month. What are we going to do about that?”
You need someone helping you stay on top of things. Otherwise, you’re just reacting (I sure was).
The solution is to hire someone you can trust to take care of this for you (like us).
When you work with us, you’ll have peace of mind knowing everything’s buttoned up, and you won’t be stressing yourself out trying to handle it all yourself.
Plus, you’ll get to spend more time focusing on growing your business.
Clear financials provide clear answers
When you have your financials buttoned up, you’ll know if you can grow.
For example, one of my clients considered leasing a commercial space for thousands of dollars a month.
Because his books were clean, we could sit down, review his financials, and ask the right questions, like…
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- What does that new cost do to your bottom line?
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- What kind of revenue increase would you need to cover it?
And the answers helped him know if it was time to expand.
Don’t fly blind
At the end of the day, you can’t make the best business decisions if your accounting isn’t updated and reconciled. Because you’re flying blind.
So, to avoid crashing, you’ll want your finances buttoned up. You’ll need your accounting updated and reconciled on a monthly basis.
This is what we do.
Schedule a consultation with us today to learn how we can help you get an accurate view of your company’s financial health, so you can make better business decisions.
