As an owner of a small business, you invest tremendous personal time and effort to develop your business. Your primary focus mainly lies on marketing, making sales and maintaining a better customer relationship. On the other hand, you want to save any cost that can be managed by yourself but often end up doing things in a wrong way, such as accounting.
Closing books for your business can be an annoying task, especially without a proper accounting system in place. Small business owners often mistake the implementation of a good accounting system for a costly and time-consuming investment with very low reward.
Be sure that implementing an accounting system does not equal to merely outsourcing the accounting function to a professional firm. It is your responsibility, as a director of the company, to ensure that your accounting procedures can capture all the business transactions accurately at the end of the day. It is your responsibility as well to keep all the evidential proof of the business records organized and easily accessed. A professional accountant can help you develop a system most suitable for your business needs and train you in maintaining these records on a regular basis. This system forms part of your good business practices in order to prepare your business for the potential financial and business risks.
A good business practice starts with regular review of financial information. How regular? Some must be done on a daily basis while others can be reviewed monthly, quarterly or annually. Take closing the books as an example; we suggest doing it on a monthly basis based on the following reasons:
1. Secure timely tax compliance
By closing your books on a monthly basis will help you have cleaner and organized books in order to secure a faster year-end close. You will have an easier time preparing your books to give to your tax preparer at the end of the year.
2. Accessible to real time performance information of the business
Preparing monthly P&L, balance sheet and cash flow statement allow you to evaluate what’s working (and what’s not) in your business promptly. The sooner you respond to these evaluations, the sooner you can correct or improve the company’s financial performance. For example, you have a better chance to find out that either Accounts Receivable or Accounts Payable is incorrect because of a missed wire transfer.
3. Integration with best business practices on internal control
The end of the financial year is a good time to review your business. However, you do not want to fall into the trap of rushing to correct a misapplied accounting procedure or a mismatch of balances at the end of the financial year. Even after you have corrected everything in time, how will you make sure that you do not make the same mistakes again? A good business practice calls for an annual review at least; a better business practice will see you reviewing critical areas on a more frequent basis. Monthly bookkeeping can integrate with your best business practices for internal control.
4. Ongoing compliance support and internal control advisory from our accounting team
Monthly bookkeeping service will provide you with complete and timely information and also will allow the accountant to develop knowledge of your business and be in a more comfortable position to render professional advice as the business grows. Monthly bookkeeping allows our accounting team to review your accounting information and documentation every month. Your designated accountant in CW will get to know your business nature and operational model from the very first month. We encourage a direct communication by all means including emails, telephone calls as well as meeting face to face with our clients when it is necessary to resolve any problem during the bookkeeping process.
5. Facilitating audit process after the year-end close
Through a more frequent communication, our accounting team can help you identify any potential internal control risk at an early stage. Also, any questions raised by our accounting team regarding your business transactions will be resolved throughout the year as soon as they are identified. Our accountants are trained to be familiar with audit procedures and will help you anticipate any query to be raised by your auditor.