As a business owner, you may encounter various bookkeeping challenges that require your attention at regular intervals. Along with managing finances, you may have to hire professionals, ensure product and service quality, promote your brand, maintain customer relationships, and more.
No matter how difficult every other matter may seem, nothing can compare to the job where you have to maintain the business accounting as well as oversee the profitability of your business or company.
As a company owner, you need to maintain a complete log of all your business spending.
Financial challenges faced by businesses
Although accounting may not be the favorite part of your job it is indeed a necessity to effectively run your business. While going through the books, as a business owner you may come across multiple financial hurdles that have the potential to endanger your business or company.
In this article, we will discuss the financial challenges one may face while running a company in the United States and some of the good bookkeeping practices one can undertake to properly maintain their financial position in the current market.
Let us have a look at the monetary challenges faced by companies and businesses alike first:
Taking care of the unforeseen expenditures
Unforeseen expenditures can be troublesome for companies with limited cash flow. For example, even if your company had a good year and has earned significant revenue, nevertheless they can be in trouble if an unexpected business expenditure comes up.
More importantly, these unforeseen expenses may arrive in different forms. For instance, if one of your employees accidentally falls down at your office and you don’t have insurance coverage it will definitely cost you a significant amount of money (which may include lawsuits, medical costs, etc.) Alternatively, small changes such as a rise in the cost of commodities, one-time government tax from a particular region, etc. can have a significant impact on your business expenses.
Source: Statista
Abiding the state and regional government laws
Every year the laws and taxation rules change and the fact that rules are continuously changing is one of the factors that makes it extremely difficult for companies and businesses to take care of their taxes. More importantly, if you are underprepared or fully unprepared then you might have to pay too many taxes at the end of the financial year.
That is why you should outsource your bookkeeping services to companies with accounting best practices so that you can plan ahead and save a lot of money on taxes. More importantly, you won’t have to worry about being outdated because the financial expert from the bookkeeping service provider companies will ensure that your accounts are up to date.
Finance reports
A lot of companies and businesses in the United States struggle to maintain the compliance demanded by the U.S. Securities and Exchange Commission. More specifically, documenting the information with utmost precision and the reporting standards of the Securities and Exchange Commission make things troublesome for lots of companies.
Henceforth, these companies outsource their bookkeeping services to companies with bookkeeping best practices in order to ensure they are being compliant with the rules and regulations.
Handling the cash flow
Cash flow management is a major problem faced by a lot of businesses in the United States. According to a study conducted by the U.S. Banks, more than 82% of businesses in the United States do not survive the market solely because of inefficient cash flow management. For a lot of companies and business owners running a firm as well as paying for the current expenses become a pretty difficult job.
For accounting best practices and efficient cash flow management you should always be persistent while keeping in touch with the clients and at the same time you will also have to carefully analyze your invoices. Properly track the monthly expenditures of the company and be creative in order to save some money (wherever possible).
Payroll regulations
Regulating payrolls can be difficult for companies if they have not employed any payroll expert. In this case, it is also very important to properly classify your employees and make sure you are fulfilling all of your obligations such as paying them at regular intervals, filing taxes, addressing a variety of compliance challenges, monitoring employee leave days correctly, etc.
Tax filings
Although each and every company and business that conducts their business in the United States has to pay taxes to the government, they can also take advantage of the deductions. In this case, you have to be very careful about the deduction and choose the ones that will benefit your company or business the most.
For example, if you are a company from your own house then you can certainly opt for the home office deduction which will allow you to retain some of your money which can further be redistributed into your business.
Common bookkeeping practices you should follow in order to be successful in business
Although managing your personal finances may not be a hectic job but if you are managing a company then you will have to be very careful with your finances and apply the bookkeeping best practice to thrive in your business. Not to mention, you also have to take care of your customers as well as employees.
Here are some of the best common bookkeeping practices you need to follow to keep your business or company in a good shape.
Maintain a distinction between your business and personal finances
First and foremost, every business owner should keep their personal finances and company finance separate from each other. You and your employees should not purchase anything for personal use as show it as business expedite.
More importantly, you will also have to be very careful about the allocation of business funds because it can create complications in audits, cash flow problems and may leave you in trouble while filing taxes. Also, it will be in your best interest to create a separate business account for your company.
You should regularly balance up your accounts with bank statements and instantly correct any differences.
Outsource your bookkeeping services
A lot of business owners in the US who want to focus on their businesses simply outsource their bookkeeping services to other companies. This is an efficient way to boost your business and at the same time, it helps tackle most of the challenges faced by business and company owners.
If you are thinking about doing the same, then you should consider outsourcing your bookkeeping to IBN Technologies. For more than 22 years, IBN Technologies has aided businesses by offering them hassle-free and productive bookkeeping services. You will get a number of advantages by using their services, including data protection, expertise in multiple accounting software and access to experienced bookkeepers.
Select a particular accounting method
There are mainly two types of standard accounting systems or methods you can use as a business owner. These two methods are accrual accounting and cash basis accounting. If you are a company or business that is going to provide invoices to clients, then accrual accounting will be the most efficient method for you. In case your business strictly maintains cash payment then you should opt for the cash accounting system because it will be the most appropriate one for you.
Source: CFA Institute
Augment your accounting charts
Businesses in the US make use of a simple alphabetical chart in order to monitor their expenditures for compliance as well as taxation. However, you should opt for a more systematic accounting chart.
For example, your administrative and general expenditures should be tracked separately because they can give you more insights into your office expenses. On the other hand, by following the sales and marketing accounts you will be able to understand the total cost of obtaining a customer.
Final words
Behind every successful company, there is a huge contribution of accountants or the accounts department. That is why it is important for companies to focus on the bookkeeping department and apply the best bookkeeping best practices.
Company or business owners also have the option to outsource their bookkeeping services to companies like IBN Technologies. They are experts in the financial field and have been offering professional bookkeeping services for more than 22 years. More importantly, by opting for their services you will have the opportunity to work with dedicated financial experts who can help out while you can focus on the development of your company and business.
Frequently asked questions
Which current issues impact accounting in the United States?
Some of the biggest issues for accounting in the United States include:
Following the updated tax regimes
Cash flow
Remote work
Taking in fresh candidates
Regulatory changes
What are the biggest challenges facing the accounting industry today?
In modern times the accounting industry, in general, is facing several issues like a requirement for complex financial reporting, globalization of businesses, constantly having to adapt to data analytics and other newer technologies, etc.
What are the 4 important activities in bookkeeping?
Bookkeeping involves four fundamental activities which include:
Analysis of account assignments and financial transactions
Regular initial journal entries with the information regarding debit and credit of different accounts
Publishing entries to ledger accounts
Making adjustments at the end of each accounting period
How do you solve bookkeeping problems?
Here are some suggestions you can follow to solve your accounting problems:
Understand the distinction between cashflow and profit
Become serious about bookkeeping
Match your accounts with bank statements
Always keep your accounting records updated
Know how buying assets can influence your business or company
- Q.1 Which current issues impact accounting in the United States?
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In modern times the accounting industry, in general, is facing several issues like a requirement for complex financial reporting, globalization of businesses, constantly having to adapt to data analytics and other newer technologies, etc.
- How this technology works?
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Serenity Is Multi-Faceted Blockchain Based Ecosystem, Energy Retailer For The People, Focusing On The Promotion Of Sustainable Living, Renewable Energy Production And Smart Energy Grid Utility Services.
- What is the comunity benefit?
-
Serenity Is Multi-Faceted Blockchain Based Ecosystem, Energy Retailer For The People, Focusing On The Promotion Of Sustainable Living, Renewable Energy Production And Smart Energy Grid Utility Services.
