How To Manage Unnecessary Accounting Costs

ID-100248452Have you ever had an unpleasant surprise when receiving a bill from your accountant? A lack of organization could be costing you money but the good news is it’s a fixable problem.

Every business is unique and has different practices that they believe in along with their own philosophy on how things should be implemented. Those in charge of making decisions should always be on the look out for ways to ensure the business is organized; you shouldn’t be bleeding money in the long run on things like restructuring or re-organizing because processes weren’t implemented right to begin with.

Compliance Costs & How They Help Your Business

As I mentioned, every business is unique and this has to be a huge consideration when making a decisions that are financially beneficial for the organization. Compliance costs such as doing year-ends, tax returns and annual filings can help keep the costs of your professional services reasonable but you have to be organized.

Making sure your compliance projects are beneficial to the business require that systems be in place before anything else can happen. For example, using external bookkeepers is a great idea but they need to be receiving business information on a timely basis. But what if they don’t?

These monthly statements give you the information you need to make major decisions in your business. If that data is inaccurate, you’re shooting blind without any knowledge how something happened and when. There is nothing more detrimental to a business then an owner making a decision based on old information or, even worse, inaccurate information.

Remember that it’s not just the cost of the compliance from your advisors you should be thinking about; it’s your time. Many entrepreneurs forget about their own time and they put in systems that require them to do more than they should.

Good Company vs. Bad Company

Most people know how to operate their business but no clue on how to operate their books. This is not to say that what they are doing is wrong but you can’t become the best in your field if your statements are years old. How can you see if your business is advancing if you don’t actually have the numbers to prove it? This can get you into trouble so play it smart and stay on top of the numbers.

Instead of outsourcing compliance costs to a firm, you might decide it is prudent to hire someone in-house who can cover all the transactions and their meanings.

Identifying Problems With Current Processes

There are two questions that people should be asking to help identify problems in their current processes or systems.

  1. Are you getting monthly information in a timely and reasonably basis? If not, fix it!
  2. Are you personally running out of time doing things that are not moving your business forward? This could mean you’re spending too much time doing a job that you aren’t qualified for and it means it’s time to find someone who can do it better and more efficiently.

At the end of the day, the key is to be organized, inquisitive and hold yourself accountable. That’s when a business can truly thrive.

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