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Why Accurate Financial Information is Critical for Small Businesses.

Why Accurate Financial Information is Critical for Small Businesses.

The importance of maintaining accurate accounts should never be underestimated. Join us to learn why accurate financial information for small businesses is critical for small businesses.

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Why Accurate Financial Information is Critical for Small Businesses.

Why Accurate Financial Information is Critical for Small Businesses.

The importance of maintaining accurate accounts should never be underestimated. Join us to learn why accurate financial information for small businesses is critical for small businesses.

The importance of maintaining accurate accounts should never be underestimated. Current and accurate financial information is critical for tax reporting purposes, raising capital from outside investors, and updating investors about your company's progress. 

In addition, your accounts will provide critical insights into your company's financial and operational performance that will likely influence your strategic decisions. Financial data can also help you identify spending patterns and improve the efficiency of your capital employment.

Other advantages properly maintained accounts would provide include:

  • Saving you considerable time and expense in preparing external financial statements
  • Helping you develop accounting policies and processes to support a better control environment 
  • Adding value by facilitating financial due diligence for investment or exit purposes 

The early stages 

Your financial reporting needs and requirements will vary according to your company's growth stage. In the early stages, focus on: 

  • Keeping it simple - for example, Decimal is the new way to manage accounting for business owners who struggle with DIY software and the never-ending administrative tasks of accounting. We take bookkeeping off your hands by leveraging intelligent automation, a custom financial dashboard, and a professional bookkeeper-in-the-loop.  
  • Seeking advice on revenue recognition, as it may not be appropriate to recognize all revenue when invoiced understand the impact of the new revenue recognition standard to your organization 
  • Completeness and accuracy of underlying records for all business transactions, including equity transactions, which are the priorities 
  • Cash forecasting to keep investors informed about liquidity 
  • Understanding and fulfilling your tax compliance requirements, including sales, use, and property taxes 
  • Outsourced providers who can assist with employment matters and payroll taxes 

Controls 

Money will probably be a scarce resource, so controls over cash flows are critical. They will also instill confidence in your investors. Focus on: 

  • Monitoring and management review controls can be effective for smaller enterprises if controls are executed with the appropriate rigor and precision to identify exceptions 
  • Bank reconciliations (including real-time reconciliations provided by Decimal) to ensure completeness and accuracy of cash balances 
  • Protecting systems and intellectual property from unauthorized access and use 
  • Developing a budget to guide operations in the achievement of milestone goals from available capital resources, regularly comparing actual results to budget
  • Reviewing expenditures before purchase commitments to minimize waste and ensure alignment with strategic priorities 
  • Establishing standard terms and conditions for sales arrangements, with exceptions subject to appropriate review and approval 
  • Understanding obligations and restrictions embedded in financing arrangements. 

Next best steps

Decimal provides managed, online bookkeeping with real-time accounting specialists to answer questions and provide guidance throughout the year. They’ll help you make the most of your financial data to further your business goals year-round while saving you time by handling the accounting operations on your behalf. 

Contact us today for a free consultation!

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