Whether you are starting a shoestring business or a small corporation, the way you handle your finances will make or break you. So often, controllable expenses are out of hand and business owners don’t realize it because they have little experience with understanding P&L statements. If they don’t have an accounting firm, they probably aren’t getting monthly P&L statements, otherwise known as Profit and Loss statements.
For the person who is experienced with P&L statements, they can understand trends in business, losses due to theft, and internal theft. Areas of waste can be targeted with these spreadsheets and the best way to access this information and understand it, is to have a CPA in place that has your back. A Denver accounting firm with experience helping small businesses set up record-keeping and designing spreadsheets for your use, to be prepared daily, weekly, monthly, and yearly will help you see where your business stands at a glance.
How a Professional Accountant Can Make or Break Your Business
If you don’t have a handle on your business, you don’t have your business under control. So many businesses close their doors within the first five years that the empty storefronts sit idle, waiting on a new person to give it a whirl. Indeed, it’s the American dream. You have an idea, you gather funds by borrowing from friends, family, and possibly the bank too. You open your doors with no idea about how to run a business. You just know how to make the best pizza, or paint the prettiest homes, or clean carpets to make homes look like new again. You don’t know anything about accounting or taxes. You don’t know a think about payroll or keeping track of receipts for tax purposes. Who does? A professional accountant.
A great accountant can help you through all steps of the process, from setting up your initial record-keeping system to showing you how to digitize everything so that you can scan receipts and save them in the right online files. They can even teach you how to utilize cloud technology so that your CPA and you can look at things together every month, without having to go anywhere.
If there is an issue with inventory, your CPA can point it out to you. If you aren’t doing an inventory, they’ll show you why it is important and how it plays a key role in determining if you are making a profit or losing money.
Mismanaging money is the top reason that businesses close their doors in the first few years. You don’t have to know what you are doing. Be willing to learn and hire the best CPA that you can find. They’ll help to keep you in control, in the know, and moving in the right direction. Don’t get so caught up in the day to day operations that you lose sight of the long-term financial goals, or miss short term issues, like theft or billing issues with clients.