By Optimum Accounting
Without knowing where you stand financially, opportunities can be missed and bad things can happen. I’ll give you examples of each.
Missed opportunity: Imagine you had no idea that there was $50,000 in surplus in one of your accounts (don’t laugh it has happened). You have an opportunity to invest in a business venture that will vastly expand how you can help you clientele. You spend hours and hours (or you have a bookkeeper spend hours and hours) trying to figure out where you can get $50,000. By the time you discover it, the opportunity is snatched up by a competitor.
Bad thing: You are unsure of the exact balance in your business account. Debits and credits happen automatically all of the time making it complicated to figure out on any given day how much of a cushion you have. A client does a “charge back” for a large amount on the same day your payroll clears the account. There is no money to cover the charge back and your merchant account gets shut down. Had a bookkeeper been on top of the situation, you might have been able to transfer funds to cover the situation. – Ouch.
