Bookkeeping Case Study

Bookkeepers:

An Asset or a Liability?

Mired in dread by most and oft an exercise in futility, business owners spend agonizing hours tracking and paying obligations, calculating payroll, balancing checkbooks, and soliciting payments from past due accounts. From a place of naiveté, most business owners initially deny delegating these fundamental tasks to a seasoned bookkeeping professional whereby reasoning this method of business operation will improve their bottom line. Furthermore, each year a growing number of business owners find themselves scrambling in a near panic, sometimes successfully, sometimes not, to assimilate records in order to present to a CPA to meet tax deadlines. According to Jason Nazars’ article “16 Surprising Statistics

The bookkeeper of a small business can be the direct link to avoid penalties, interest, and even the threat of the IRS closing the business’ doors. As an example, payroll taxes are withheld from an employee’s paycheck and matched by the employer. These funds are paid to the Internal Revenue Service (IRS) on a schedule set forth by the taxing authority that is based upon the liability owed during the look back period. In an article published by the IRS titled “IRS Warns Businesses: Individuals to Watch for Questionable Employment Tax Practices,” Mark W. Everson, an IRS commissioner, states that “Failure to pay employment taxes is stealing from the employees of the business. The IRS pursues business owners who don’t follow the law, and those who embrace these schemes face civil or criminal sanctions.” Lack of knowledge of the tax laws is indefensible, and it is assured the IRS will pursue the available consequences. Hiring a bookkeeper can provide you with the assurance that tax remittance rules are being stringently met; and as such, there a decline in profitability due to penalties will be

By keeping track of due dates, companies can save money by paying bills in a timely manner, and in some cases take advantage of early payment discounts. In addition, a bookkeeper can collect money owed to the business from its customers which then increases cash flow, and it potentially saves money by preventing collection agency recovery fees.

Equally important is the benefit of maintaining accurate records. Accurate records give you the information necessary to manage and help grow your business. Verifiable accounting records are employed to support a business in acquiring loans needed for sustainability or investment, tax projections, internal controls, and the maintenance of a business’ legal responsibility of reporting to government