Accounting Should Go Beyond Bookkeeping

September 25, 2018

If your business has grown to reach a certain point in customer volume, you realize how very important your “bookkeeper” is for record keeping and maintaining your billing and collections as well as expense records. Keeping all your receivable and payable accounts “current” improves cash flow and therefore profits. Practically any high school student with a calculator and spreadsheet can accomplish this kind of simple accounting. But there’s a lot more to financial accounting than basic arithmetic.

Every business should have an accounting system for, not only managing income and expenses, but for revenue forecasting, trends analysis, tax planning, filing, record keeping and reporting. For example, understanding current tax laws can have major impacts on your bottom line by informing you how to allocate funds to avoid losses or sometimes even lead to windfalls you would have missed.

Making your accounting function more than basic bookkeeping can be the edge you give your business that finally takes it to that next level. Working with a CPA helps to assure that you’re getting that edge because they have a significant amount of business management training behind their formal accounting qualifications.

A CPA’s responsibility to his or her clients includes analyzing the numbers, not just “crunching” them. They follow through with recommendations only in the best interest of the financial health of the organization. In fact, CPA’s aren’t focused so much on the numbers as they are the money. Which aspects of the business are making money, and which may be draining resources unnecessarily?

Working with a CPA can transform your idea of accounting away from bookkeeping and toward business data analysis, management and financial intelligence. This gives you the ability to make more informed and therefore better decisions. Avoiding allocation mistakes combined with making better investments can give your business the edge over your competition.

Here are a few things a qualified accountant or CPA will help you with:

Avoid playing catch up!  Face it. You don’t have time to put important business on hold just to figure out a financial mistake or find a missing record. Stay ahead of your business priorities.

Forecasting.  CPAs are trained to see “the big picture” and look at historical sales and market data to help determine reasonable revenue estimates and costs into the future so you can get better prepared today.

Tax planning.  This is one of the fundamental and vital business services your CPA provides. Small businesses that fail or go bankrupt do so for failing to pay taxes more than any other reason.

Cash flow analysis and bill collection.  “Cash is king” goes the saying and most businesspeople agree. Keeping cash flow well monitored and current gives you more working capital on any given day.

Trend analysis.  Again, it’s the “big picture” that well-trained accountants and CPAs are trained to analyze and find areas to exploit or perhaps trouble to avoid.

We’ll close by saying that “bookkeeping” is clearly an important function in any business, and keeping it straight requires a good deal of skill. But when your business has reached a certain point, it’s time to seek the services of fellow professionals whose speciality it is to take a heavy burden off of your shoulders. Financial accounting is one of those areas of service that a CPA is well prepared to handle for you.

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