Consequences of bad bookkeeping

As an entrepreneur it is essential to know that wrong bookkeeping can cause you a serious financial loss, which can put your financial security at risk. If you really do not know what the consequences are of bad bookkeeping at your company, do not worry, in this article we will explain them to you.

We explain the importance of the accounting records of a company.

What will happen if you have bad bookkeeping practices?

To start with, if you don’t know much about bookkeeping, you probably don’t understand the serious implications of its bad practice. Here we will tell you some consequences that you could face if you do not have a bookkeeping service in Colombia:

• Miss tax benefits:

A company that does not have bookkeeping service and does not keep its income and expenses up to date, most likely when filing the Income Statement to the tax office (DIAN), ignores declaring information that could involve savings, deductions and tax breaks. Also, failing to keep an accurate record significantly increases the chances of erroneous or inaccurate statements being made, exposing you to penalties.

• You will be more exposed to fines and penalties:

Likewise, if you do not have bookkeeping service in Bogotá, you will surely be fined at some point by the tax authorities, and once this situation occurs, your company will be more exposed to continuous and random reviews. It should be noted that the amount of these fines is not economic and not only will they affect your bank accounts, but you could be punished with closing orders or cessation of activities, putting your company and economy at stake.

• Cash flow problems:

This is a scenario that could happen to anyone who does not have bookkeeping service in Colombia: Not being aware of a cash flow imbalance. This could lead to serious problems such as reaching the end of the month without enough money in the bank to pay employees or cover office supplies, pay bills, among other things. These problems can be avoided by hiring a good accountant who will keep track of the records and help you avoid future problems.

• Poor business decisions:

Given this, a great question to ask is: How can you make precise decisions for your company if you do not understand the current financial health of it? When you have to face decisions about hiring new employees, business development, or marketing costs, you need an accurate picture of your company’s financial health. This information is essential so you can run financial reports and then make decisions based on the current financial trends you are experiencing. Bookkeeping services enable you to make smart decisions.

• You will waste time and money correcting errors:

You can expose yourself to numerous situations that could take away your time and money if you do not have bookkeeping service to keep your accounting records. Remember, not only you expose yourself to a sanction, you could also limit the entrance of credits to fulfill your objectives within the company, among other things.

Why do you need an accounting professional?

In case you have been careless with your company’s bookkeeping, the recommendation is to find a professional to help you. If you do it yourself, it will probably take you weeks to find the mistakes you may have and fix them. You should review every detail, ask for copies of invoices, annoy customers and suppliers, and give up free time or productive hours to dedicate them to bookkeeping that you should have already done.

Learn how to start an accounting process in companies.

A bookkeeping service in Colombia can cause a domino effect that improves many aspects of your business. Although a missed transaction or math error may seem minor, it can certainly play an important role in the accuracy of your reports in the future. When it comes to finances, it is essential that you have an expert team that oversees every detail. Therefore, hiring a professional accounting and bookkeeping service not only guarantees the accuracy of your reports, but also helps with the long-term success of your company.