A survey by Score, a business mentoring network, found that 40% of small business owners feel accounting and tax preparation are the worst aspects of running their business. The survey also showed that accounting is the most time-consuming administrative task in a small business. However, good fiduciary oversight is vital for an SME (small to medium enterprise) as lax accounting can harm a company or even put it out of business. As a business owner, you need to have a clear financial strategy to ensure your accounts are well-maintained and keep track of your expenses.
If you don’t have your accounts and expense records in order, it’s difficult to determine the true financial state of your company. Without that information, making informed decisions about strategy, borrowing, pricing, or hiring can be fiscally risky because you really have no idea what you can or cannot afford. Without a clear picture of cash flow and expenses, your business can experience challenges with day to day operations. You won’t be able to measure or improve your profit margins and increase your cash flow. Worse than that, you run the risk of tax issues, financial insolvency, or even expensive legal entanglements.
Working with a reputable bookkeeper or CPA can provide the oversight your company may need to avoid the catastrophic consequences of lax accounting. When you have adequate fiduciary oversight, your financial advisor will likely end up paying for themselves because they can advise you not only how to save money, but even find legal ways for you to capitalize on opportunities to help you grow long term.
Sound fiduciary management can not only yield benefits to your company, it can help ensure the survival of your company and the people counting on your leadership for their own families and businesses.
Sources:
Back Office: 5 Consequences of Bad Accounting: https://bit.ly/3uWgxd7
CPA Practice Advisor: SMBs Admin Tasks and Bookkeeping: https://bit.ly/3FTRca5
The Finance Writer: Lax Accounting Brings Trouble: https://bit.ly/3V5mzCO
Growth Force: 10 Consequences of Bad Bookkeeping: https://bit.ly/3V1POGW
PR News Wire: Burden of Small Business Accounting: https://bit.ly/3PyIt0i
Windes: Consequences of Bad Bookkeeping: https://bit.ly/3Ft5dtY
