Why is it Important to Keep Good Accounting Records?Posted on March 11th, 2015
As a business owner in San Antonio, you know how crucial it is to be organized. It’s nearly impossible to run a successful business if you are constantly having to search for paperwork and important files. Keeping good records can sometimes be difficult, but it’s definitely worth the effort. Here’s why:
Better business operations
Good records allow you to identify all of your assets, expenses, income, and liabilities. This lets you see the strengths and weaknesses of your business, which will enable you to make better financial decisions. Accurate accounts give real-time data for better reporting and forecasting. Goals and objectives that are created with accurate information are more easily measurable.
Avoid IRS audits
Businesses are required to keep records of all of their transactions. These records will eventually get used to file taxes. Irregularities or flaws in reporting will create an opportunity for the IRS to audit the company. As a business owner, you will need to open your records to the IRS investigator searching for proof of income and proper documentation. Good accounting records are less intimidating than IRS audits.
Preparation of financial statements
You need accurate records to generate an income statement, apply for a loan or create goals to grow your company. Partners or investors will appreciate the informative data that paints a real-time picture of their assets in the company.
If your San Antonio business has to deal with many different vendors, suppliers, and customers, good record keeping will let you keep your accounts receivable and payable in order. Also, if there’s some kind of dispute with an invoice, retrieving the documentation will simplify the resolution.
If your records are in order, your accountant won’t have to do as much work creating quarterly or yearly financial reports. You will also benefit from quick tax preparation when financial data is efficiently organized.
It is essential for the productivity and profitability for your business to always make sure your accounting and bookkeeping records are in order. If you are in need of a CPA or would like to understand how having CPA help will benefit your business, please contact MFCPA, LLC for more information. Owner, Marco Flores, welcomes new business and individual clients from in and around the San Antonio area.