Indications that You Have a Bad Bookkeeping System

If you have a business, accounting and bookkeeping are probably not part of the core value propositions of your company. However, this does not mean a high-quality accounting system is not important to run your business properly.

Without a reliable back-office to guide and support the decisions you make, your business just cannot execute or operate an effective business strategy.

It does not matter how big your company is. You need to have a reliable back-office by hiring professional bookkeepers Hobart. Today, we’re going to share with you a couple of signs that indicate you’ve got a bad bookkeeping system.

You Fear Tax Season

Nobody loves paying taxes. However, you shouldn’t be scared to do it. If you’ve got a bad bookkeeping system, tax season can be a nightmare. You have probably a bad bookkeeping system if you always end up struggling during tax season.

Aside from the yearly stress of preparing everything on time, enabling your bookkeeping system to fall behind means that your company’s financial picture is also outdated.

You Are Using an Unoptimized Accounting System

Does your business still depend on manual data entry and paper for expense monitoring and reporting? Do you have automation to monitor and allocate everything going in and out of your business? Do you still send paper receipts? Do you pay bills using paper checks?

An old accounting and bookkeeping system puts your company at risk of dealing with inaccuracies and losses because of human error. Aside from that, you are probably spending higher expenses than necessary by missing out on early payment discounts. You’re also probably suffering cash flow issues while waiting for the slow receipt of invoice payments.

Your Back-Office Lacks Balances and Checks

There isn’t any separation of duties or internal controls if your accounting department is you and your bookkeeper.

You risk inefficiencies, mistakes, and errors if you do not have a second set of eyes overseeing the accounting and bookkeeping of your business. Unluckily, most small businesses experience this type of problem. The reason for this is that a company with less than 100 workers experience almost double the fraud-related losses compared to a company with more than 100 workers.

You are Involved in the Bookkeeping

It is your instinct to save money as much as possible as a business owner. Because of this, you might choose to be involved in the bookkeeping process to save money. However, it might cost you more in the long run.

There’s a high possibility that you aren’t doing what you do best if you are spending too much time in the bookkeeping process. You are basically wasting time that you could’ve spent on more important aspects of your company. This includes improving the core value proposition of your company, motivating your employees, making leadership decisions, and much more. If you only spend your time on things that can help you improve your revenue, you can make your company more successful.

It is time to re-evaluate your bookkeeping system if you are doing more than signing the checks.