Why It’s So Easy To Screw Up Your Books

Years back when I was told a story from a friend who was going through flight training, there was a general saying for rookie pilots, “if you don’t know what a button does, don’t push it!”. Needless to say pushing a button without any knowledge of what it does can result in dire consequences, especially in an aircraft miles above the earth.

So, how does this relate to accounting?

In the world of accounting, everything is interconnected. So an adjustment here or a deletion there can affect a lot of things without you being aware of it. On the surface it may seem harmless but under the surface it could be nightmare with huge ramifications that you might not even be aware of.

As you might already know, QuickBooks is very easy to use. It’s the accounting part that has you climbing the wall right? Given that we are a NOW society, we all want things to happen quickly and they do. If you take the time to think things through before you click that button, you may be able to prevent accounting mishaps and disasters from happening. Would that be a good thing? Accounting mishaps and disasters cost time and money!

For instance, it’s Friday afternoon, you’re trying to reconcile your bank statements in QuickBooks so you can hurry up and get home for the weekend. The reconciliation doesn’t balance so you are now faced with the following decision, do I force the reconciliation or wait until Monday. You then say, you know what, the difference is only a few dollars, I’ll just force the reconciliation.

Congratulations, your books are now officially out of balance and it will only go downhill from there. The best thing to do would be to go back Monday morning and try and find the problem. If that doesn’t work, wouldn’t it be nice to be able to pick up the phone and call someone who can help you quickly solve your problem. You bet.

Here is a list of some common pain and pleasure points to think about:

Pain Points

• No matter how hard you try, you cannot reconcile your bank and credit card statements.
• Not knowing how much money your company is spending or earning can cause you to run out of money or have a cash flow problem.
• Get turned down for a loan that you desperately need to keep your doors open. Lenders nowadays require businesses to produce accurate financials.
• Having messy books during an audit with the IRS is like waving a red flag in front of a bull. The message is, if your books are a mess, chances are your financial information is inaccurate and would require further scrutiny.
• At year end not giving your tax accountant the correct information which costs you time and money in having your CPA straighten out your books. Cut your CPA Bill and Save Money.
• You could be a prime candidate for embezzlement if someone is keeping your books and you don’t have a clue about basic accounting principles and financial reports. You always need to know what’s going on with your books!
• Being short on cash by not collecting all the income owed to you and double paying vendors.
• Wasting valuable time wading through paperwork trying to find things and figure things out.

Pleasure Points

• Having total control of your finances. Knowing where your company stands at any given moment at any given time.
• Being able to quickly and accurately track your financials information because all financial data is organized and up to date.
• See where you are making money and losing money. Quickly see what your profitability was on a project.
• Having a clean and accurate set of books ready for your CPA at tax time. Cut your CPA Bill and Save Money.
• Always knowing that help is just a phone call away.  Contact Accounting a la Carte (805) 966-2262 TODAY and get your books back on the right track!

Recap

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