When entrepreneurs are unsure of what they’re doing, they tend to wing it with their bookkeeping. The problem is that guesswork accumulates over time, potentially leaving you with a month’s (maybe even a year’s) worth of books to fix once tax season in New York rolls around.
Below is a brief overview of how to fix tax filing errors in NY with the help of a bookkeeping service.
Some Common Bookkeeping Errors
In truth, proper bookkeeping is more than just keeping tabs on your expenses and profits. Many business owners neglect this fact, and as such commit lots of small errors when attempting to keep track of their finances on their own.
The integrity of your accounting system’s information is only as good as the data you enter. To help you stay in check, some of the most common bookkeeping errors are:
- Misclassified expenses
- Failure to list expenses
- Addition or omission of a decimal point
- Items entered into wrong account
The first line of defense in ensuring that items are properly classified and entered on your books is to be cautious with your financial information. Enlisting the help of a professional bookkeeper allows you to have another set of eyes on your financial records, thereby minimizing the occurrence of errors and misreports.
How Bookkeepers Help Your Small Business
Your accounting books are key to understanding the current state of your business. Unfortunately, errors can occur whether you use a cloud-based or desktop accounting system. It is critical to understand what can go wrong and how it can affect your business. Even more crucial is understanding how to correct accounting errors and avoid future ones.
Proper Handling of Accounts
On the most basic level, bookkeepers manage transactions entered into software, such as an app. Furthermore, payments are typically made on your small business’s behalf by bookkeepers. This can include anything from supplier invoice payment to petty cash and expenses.
Another major responsibility of bookkeepers is to prepare invoices and send them to clients so that you can receive payment on time. A bookkeeper is also likely to manage the accounts receivable ledger, as well as chase down late payments to ensure your records are always accurate.
Overseeing Financial Statements
Bookkeepers will also be in charge of preparing important financial statements for small businesses. Profit and loss statements, balance sheets, and cash flow statements are examples of these.
These financial reports show a company’s bottom line and operating expenses, as well as the balance of assets and liabilities and cash flow in and out of the business. Financial statements can help:
- Maximize your yearly tax deductions
- Increase the chances of a successful bank loan
- Maintain a budget
- Show company profitability to potential investors
Creating a Plan Based on Your Business’ Financial History
As a business owner in New York, it’s likely that you have a few ideas of where you want your organization to go in the future. While it’s good to have a grand vision for your company, it’s equally important to make sure this vision is grounded and feasible.
When working with the best bookkeeping service in NY, you’ll have a clearer idea of your business’ financial health and seasonal trends. In turn, this information can help you make sound decisions on what to prioritize for the next business quarter.
Melanin Tax Can Help You With Your Bookkeeping Services
We at Melanin Tax pride ourselves on being a bookkeeping firm in NY that focuses on promoting sustainable small business growth.
By working with our professional team of bookkeepers, you can stay calm that your business is in safe hands. We make sure to implement bookkeeping systems that help your business stay consistent when it comes to financial reporting.
If you have any other questions about how our bookkeeping service can help you, contact the Melanin Tax customer service hotline at (347) 943-6772 today.