For any business, whether it is online or brick and mortar, regular and timely accounting is a must.
The frequency of accounting depends upon your operations and how many transactions your business makes in a month. As a result, you can choose your accounting to be done daily, monthly or yearly.
Most small to mid-sized businesses prefer to have their accounting done on a monthly basis.
When looking for ‘Accounting Services Near Me’ ensure that the business has well experienced and qualified accountants who know about the best practices of modern accounting. There are a lot of green-just-out-of-law-school accountants out there who will charge you less but cost you dearly. And the worse part? You wouldn’t even notice until it’s too late and the mistakes are brought to light by none other than the IRS.
An experienced accountant however, has deep knowledge, expert skills and right software tools to minimise errors and eliminate discrepancies. Because before the tax season all you want is clean books so that you can be stress-free and focus on making your business grow.
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Accounting cannot be delayed or put off for too long as it is a necessary part of your business. Whether you are purchasing some items or services from a vendor or you are selling the items you made, the record has to be maintained somewhere. That’s where accounting comes in.
However, unlike earlier, accounting today is much more than just record keeping. It has evolved into a highly sophisticated practice with the use of advanced software tools and even AI. Furthermore, on the functional front, accounting now involves making and reporting observations that contribute directly to strategic financial management of the business.
The need for modern accounting practices is better understood in the context of today’s business environment. So, let’s see why accounting is important. Well, accounting is important because of the following reasons:
Firstly, modern accounting gives the true picture of your company’s financial health. With the use of financial statements which are an integral part of accounting, companies can accurately assess their assets, liabilities, expenses and revenue. These financial statements include income statement, balance sheet, and cash flow statement. Read more about financial statements here.
A careful analysis of these statements will reveal information that can help the management in making crucial decisions like resource allocation, forecasting future demand, preparing budgets and evaluating the overall performance of the business. This is of vital importance during uncertain times.
Secondly, in today’s world, all organizations aim for legal compliance and transparency. All states in the US require businesses to maintain accurate financial records and report correct financial information to the IRS and other regulatory authorities.
These records validate your business’s income, expenses, and other financial transactions, ensuring that it is meeting its tax obligations and is operating within the state’s and Fed’s legal frameworks.
Thirdly, accounting plays a vital role in enabling businesses to track and control their financial resources. How do they do it? Well, accounting helps you record and categorise your transactions efficiently. This helps you monitor your business’s cash flows, and detect any financial irregularities or potential fraudulent activities. Not to mention that you can identify seasonal trends and stay better prepared. In the long run, this is helpful in preventing financial losses and ensuring long-term sustainability.
Fourthly, proper accounting is essential for attracting investors and securing funds for your business. When seeking capital from investors or lenders, your business needs to demonstrate stability and growth potential.
Professionally made financial statements provide a comprehensive overview not only of your company’s current financial position but also its future prospects. These reports help the investors and lenders assess the viability and profitability of your business, a fact that influences investing or lending decisions. Check out and download financial statement templates here.
Fifthly, not just outside, accounting also aids decision-making inside your organization. By providing accurate and up-to-date financial information, your business can evaluate the profitability and efficiency of different products, services, or departments.
This knowledge is crucial when it comes to pricing strategies, marketing goals, investment opportunities, and cost reduction initiatives. Without accounting, your business is just muddling in the dark without a clear understanding of its financial performance or the impact of key decisions.
Sixthly, accounting is like the medium of communication between different stakeholders. Financial reports prepared by accountants allow business owners, managers, investors, employees, and even customers to understand the financial performance of the company.
This demonstrates transparency and builds trust and confidence among all the stakeholders. Not just that, the internal communication within the departments also improves.
Overall, accounting is crucial for the success and sustainability of all businesses. It provides a solid foundation for decision-making, ensures legal compliance, facilitates financial control, attracts investors, and creates transparency and trust among stakeholders.
Without accounting, businesses would lack the necessary tools and information to effectively manage their financial resources, navigate the complexities of the business environment, and make informed decisions. Therefore, accounting should be considered a fundamental and indispensable function to your business.
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You should choose your outsourced accounting partner wisely as they can make all the difference to your business financial management – for good or bad.
–Gary Jain, Founder and CEO, Ledger Labs
When you hire an outsourced accounting partner chances are, you don’t have the resources in-house to do your accounting for you. Or you may have hired someone to do your accounting for you but they are prone to making errors and don’t know how to work their way around your books.
So it is a wise choice to have an expert with available resources to manage your accounting for you. This leaves you with ample time to focus on growing your business. But how to decide which accounting partner is most suited to your needs. Well, we will give you some helpful pointers.
Outsourced accounting is often considered better than an in-house accounting department. This is because not all organizations have the wherewithal to hire specialized accounting resources. This is specifically true for small or mid-sized businesses where almost all the hired resources are dedicated towards sales and operational tasks.
Such organizations choose to outsource their accounting functions as they basically want accounting expertise but don’t want the hassle of hiring employees on a permanent basis. Let’s see some reasons why businesses choose to hire outsourced accountants:
Firstly, outsourcing allows businesses to access a team of highly skilled and experienced accountants without the need to hire and train employees internally. This can be especially beneficial for small and medium-sized businesses that may not have the budget or resources to maintain a full accounting department.
Secondly, outsourcing accounting services can provide businesses with increased flexibility and scalability, as they can easily adjust the level of service as their needs change.
Thirdly, outsourced accounting also offers cost savings, as businesses only pay for the services they require, rather than maintaining a full-time accounting staff.
Fourthly, outsourcing accounting can provide businesses with access to advanced accounting technology and software, as service providers often invest in the latest automation tools and technology to efficiently handle multiple clients.
In other words, outsourced accounting offers businesses a cost-effective and efficient solution for their accounting needs where they can have the best of both worlds expertise and cost benefits.
Startups are relatively new businesses or organizations that offer innovative products, services, or solutions in the market. These new entrants are characterized by their potential for growth and are often driven by disruptive technologies.
They also have unique business models and typically operate in highly competitive sectors such as technology, healthcare, or finance. They also face significant challenges and risks, including limited resources, finding market fit, attracting customers, and securing funding.
However, successful startups have the potential to disrupt industries and achieve rapid growth, often leading to substantial financial returns for their founders and investors.
Startup accounting refers to the financial management and record-keeping practices specifically tailored for a startup company. It involves maintaining accurate and up-to-date financial records, tracking income and expenses, managing cash flow, and preparing financial statements.
Startup accounting is crucial for analyzing the financial health of the business, making informed business decisions, and attracting potential investors. With their unique accounting challenges, such as limited resources, unpredictable revenue streams, and complex funding structures, it is important for startups to have a solid accounting system in place.
This ensures compliance with regulations, optimizing tax planning, and ultimately supporting the growth and success of the business.