SMALL BUSINESS ACCOUNTING ISSUES
From
experience, I can conclude that most small businesses do not pay
attention to their bookkeeping/accounting records in the first few years
of starting their businesses. They focus on sales, marketing,
operations, recruitment and other business operations other than
finance. They usually say, "let's make the money first, we will do the
accounting later"
How most SMEs handle their accounting process
What usually happens is that the proper books
of accounts are usually "on hold" until the tax authorities seeks them
for tax assessment/payment or a financial institution asks them for
financials and forecast when they require funds to grow/expand
operations. Now, the problem begins. The timeframe for submission of
financial statements to the tax authorities would be short and penalties
will ultimately accrue. In the event that it is a financial institution
making the request, it is at that time they would be seeking out a
finance professional that can do the magic of compiling financial
information for 3 to 4 years in less than 2 weeks. This is after they
have initially tried to do the bookkeeping by themselves. Some will even
buy accounting software or make payment for a subscription-based cloud
accounting software and attempt to initiate transactions thereon.
The issues
The
whole accounting process now gets confusing and challenging when they
suddenly realise they did not properly keep the sales invoices, purchase
orders, payment receipts, good received notes, delivery notes,
inventory records, receipts for payments made as petty cash, etc., as
and when due. That is when they become overwhelmed and begin seeking out
an accountant that can do the "magic job" in a time-constrained
situation. Without much ado, this situation culminates in what the
accountants call a case of "incomplete records".
How can we help?
If you are an
SME owner or manager, and you have been in the above situation or
currently experiencing the above scenario, there is a way to work around
these. Even if you are yet to start a business and intend to, subscribe to our newsletter via the below link:
Or visit our website www.collectiveconsulting.ng for more details on how support you journey to better bookkeeping.
#accountant #accounting #bookkeeping #xerocertified #xeroaccounting #sme #smallbusinessowner
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