Business health and accounting
This may seem like a short introduction blog opening, but in truth it’s a simple subject matter. Your accountant is your business’ doctor. Just as you go to the doctor once or twice a year for checkups the accountant’s financial statements presents an illustration of your business’ health for a particular time-period.
The lack of awareness that business owners and managers have is entirely our fault. For over 20 years, financial products and services marketed to small businesses in America have solely focused on tax filing and the respective services that support filing taxes. Yes, we want small businesses to file taxes. Better yet, we want our clients to minimize their tax liability. Filing taxes or minimizing your tax liability only provides a historical view of your business, not a current view. This is where your business’ doctor, the accountant, comes into play.
The COVID business scramble
First, let us say, our deepest sympathy goes out to all the families’ communities, partners, so forth, who owned businesses that closed-down, due to the COVID pandemic. These were our friends, co-workers, competitors, and families. During this period many privately owned small businesses did not have a plan in place for such an event. Many if not all didn’t.
While trying to reboot and reopen, small business owners did not know where or what part of their business operation to focus on. They didn’t know what it costs to operate their business or home life. How much debt? Can they change prices and still survive? Can they negotiate with lenders and amortize debt? Filing taxes will not provide the answers to these questions. But, profits and loss, balance sheet, cash flow statements, along with tailored management reports outlining key performance indicators, would have provided valuable insights, and made business owners immediately aware of their financial positions and provide ideas of what to do next. Remember your accountant is your business health doctor. Financial statements and management reports is your business EKG machine.
Growth and business health
Do you want your business to grow and stay healthy? We believe you do. Then it begins with the fundamentals, recording the transactions correctly, bookkeeping. Let us give you an example. With apps such as Cashapp or Zelle, transferring money to a contractor or family member is as simple as a swipe. Like a debit card, it can become conveniently addictive. Let’s add another caveat, that there may be co-mingling of business and personal funds. (Co-mingling does not scare us. We have solutions when this arise) When instant transfers exist it is addictive, and business owners and managers lose sight of not just how much they transfer out, but in truth how they could have utilized the funds for future growth. Twenty or forty thousand in swipes, is later acknowledge as “good intent” but not targeted growth.
Your accountant, like a doctor, prescribes for you a set of financial policies and procedures to keep your business healthy, so it’s not in the emergency room asking for money from bleeding out. We welcome the opportunity to learn how we can serve your business growth needs by providing accounting solutions that keep you aware and engaged with your business health.