Truth be told, the main reason business owners venture in commerce is to have financial freedom, as the smoother the tax and accounting processes are, the better!
In the Philippines and probably in different parts of the world, tax payment mistakes can lead to imprisonment or other relatively costly penalties. In fact, the Bureau of Internal Revenue created a Run After Tax Evaders Program or RATE to ensure that all operating businesses in the Philippines are legitimate and pay taxes religiously.
While committing honest mistakes is acceptable, it shouldn’t be recurring because these mistakes aren’t tolerable and, not to mention, expensive. Bear in mind that negligence to comply with tax-related concerns can bring about grave consequences to your business.
If you’re an entrepreneur, it’s given that you’re likely to get caught up with a lot of things; and most of the time, you won’t even notice that the organization is crumbling—not until it’s too late. When you’re busy and disorganized, you tend to overlook signs necessitating assistance in organizing, such as from your accounting department, who primarily deals with your finances.
Listed here are the nine most overlooked signs indicating that your business might need professional help.
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Toggle9 Most Overlooked Signs That You Need Professional Accounting Services
1. Inability to recognize accounting staff
Complacency is a common mistake among business owners, such that once they become comfortable with the staff’s ability to fix financial hiccups, they forget about the person’s value by not even considering giving him/her a raise, which may lead to resignation. The struggle in finding the “best accounting staff” continues.
To avoid this trouble, starting from within is important by at least being sensitive and by ensuring that your staff is well taken care of.
2. Spending more time doing the bookkeeping
Most company owners are always on the edge looking after their finances. While there’s nothing wrong with that, remember that there are other things to focus on, such as thinking of income-generating activities and marketing strategies.
In an article shared by Intuit, small-business owners have an average of 10 hours a week on paperwork. If you’re spending more time doing bookkeeping, might as well hire someone or outsource your bookkeeping services so you can have more time dealing with other important matters.
3. Saving and deleting Excel accounting files
Some business owners don’t have the budget to acquire an online accounting tool like Quickbooks or MYOB. While Excel is the safest accounting tool, it’s entirely tedious, as one mistake in the formula can ruin the entire computation. Same goes for saving and updating on a different platform.
A good example is when office workers use Windows while the boss checks the spreadsheets on a Mac platform. Sometimes, the formula changes and would incur a lot of mistakes, which isn’t good for the business. As a result, the staff has to redo and start from scratch, which is time-consuming and frustrating. Moreover, doing so has no assurance that the data is still correct.
4. Losing track of internal processes
As mentioned, one mistake is enough, two mistakes are too much, and three mistakes can be dangerous. If you cope with all the invoices, receivables, and payables becomes problematic, this could entail major accounting problems, which is the least thing you want to happen.
5. Exposing confidential information
While a change of scenery is often helpful to most professionals, working on unsecured WI-FI areas could be a major downfall, as you’re exposing your data information to computer bandits. Once your accounting data have been hacked, fixing these data is not only costly but also emotionally and mentally draining.
6. Staff and executive’s lack of accounting knowledge
Managers lacking knowledge on the accounting processes usually hire a staff that’s the same way too, thinking that hiring a less-skilled worker is cheaper than hiring a proficient one. Little do they know they’re putting their company at risk, as ignorance is usually the reason a business fails.
7. If you’re unsure where your money goes
When you feel like there’s something wrong with your finances, do not delay. Look for possible solutions and try to solve it right away. The longer you wait before acting on it, the greater the problem that you may encounter becomes.
8. Not tracking tax compliance and regulations
When starting up a business in the Philippines, you need to acquire certain business permits and licenses before operating. Hence, monitoring the validity of your permits and knowing your city’s regulations are vital in avoiding costly penalties.
9. Inadequate investment
In relation to complacency among business owners, there’s an enormous chance of investing in unnecessary tools as well. Relying on online accounting tools without fully understanding their uses can put your company in jeopardy. Given that these tools are operated by employees, they are prone to usual business errors.
To avoid these mistakes, getting affordable bookkeeping services as an alternative should be considered. These companies provide seasoned accountants who can help to organize your books and save you from facing possible business mistakes.
Conclusion
As an entrepreneur, you must ensure that your accounting department is secured and organized. Sooner or later, you’ll be occupied with business expansion processes, but a little help in managing your finances can certainly go a long way.
Danella Yaptinchay is the managing director of Full Suite, a service company providing back end support to small businesses. She is a cofounder of Co.lab, a coworking space, and of the media company Homegrown. In constant pursuit of balance and self-development, she tries to apply the practices of yoga to her daily life.
