There’s an old saying “If you think it’s expensive to hire a professional, wait until you hire an amateur.”
Most people would not consider practicing law, performing surgery or designing a building without a specific level of education, but new business owners sometimes roll the dice with their accounting practices without any idea what GAAP standards are or how to tell the difference between a Balance Sheet and a Profit & Loss statement.
The first mistake many new business owners make is not having a system in place at all when they first open for business. Tax deductible business expenses can be missed, and budgeting issues can take the business owners by surprise if they are not keeping proper track of whether expenses are exceeding income. In some cases, even if income is adequate to compensate for poor accounting, they might miss signals to budget marketing dollars for controlled growth.
The second mistake many business owners make is to purchase or subscribe to software that doesn’t meet the needs of the business or that they cannot properly use. For example, QuickBooks, the most popular and effective small business software company, designs several different levels of accounting software for desktop and online to fit very specific types of businesses. Does your business have employees or independent contractors? Do the business owners pay themselves through owner draws or salaries? Is there an inventory, is product sold, are purchase orders and invoices used, is there service income, and how are sales taxes paid? These are important aspects of the business that will help guide which software you choose and how it is implemented.
Finally, while accounting software like QuickBooks can seem very user friendly, it can be easy to set up a confusing and inaccurate Chart of Accounts. This ultimately leads to asset, liability, income, expense, and equity accounts appearing inaccurately in the company financial statements, rendering them useless as a measure of the company’s financial performance or for income tax returns.
At F.A.S.T., LLC, we help save time, money and frustration by offering many options for how these accounting tasks are performed. In many cases, we use our own software to provide monthly financials with secure access to bank data provided. In other situations, we offer guidance to the correct software choice for shared usage when the business owner is involved in tasks such as purchase orders and invoicing. And in some cases, we help with and updating the accounting for a business that has experienced some transitions.
We, at F.A.S.T.,LLC, are here to help. Feel free to reach out and ask any questions you may have! Call 602-510-6465 ask for Cara~