Imagine trying to drive a car with a foggy windshield. You might get where you're going, but it's risky, slow, and you're bound to miss important signs along the way. Your business financials are your clear view of the road ahead. At RSK Tax and Consulting LLC, we've seen firsthand how messy books can lead to missed opportunities, wasted time, and unnecessary stress.
Here are the most common questions we get and our straightforward answers.
Q1: "How important are clean financials REALLY for growing my business?"
Think of your books as your business GPS. Without accurate numbers, you're making decisions based on guesswork, not data. Banks and investors won't take you seriously—in fact, over 80% of small business loan denials are due to poor financials. And when tax season rolls around, it becomes expensive detective work, costing you time and money.
Real Consequences We've Seen:
- A client lost a $500,000 investment opportunity because six months of expenses were improperly categorized as "Miscellaneous."
- An investor overpaid $28,000 in taxes by missing key depreciation deductions that could have been easily tracked.
Q2: "I'm making money—why fix what isn't broken?"
Profit isn't the same as financial health. We regularly see businesses that show a profit on paper but can't pay their bills because of cash flow problems. Others grow their revenue while their profit margins are secretly shrinking due to poor pricing strategies. The #1 reason scaling businesses fail is running out of cash, even with "profit" on the books.
You need to know where every dollar is going to truly understand your business's health.
Q3: "What's the bare minimum I should be tracking?"
Start with these three essential reports, and review them weekly:
- Profit & Loss Statement: Are you actually making money? This report shows your income and expenses over a period.
- Balance Sheet: What do you own and what do you owe right now? This provides a snapshot of your assets, liabilities, and equity.
- Accounts Receivable & Payable Aging Reports: Who owes you money and who do you owe? This is crucial for managing your cash flow.
Q4: "I'm behind—how do I clean up my books FAST?"
It's never too late to get on track. We recommend a 90-Day Rescue Plan:
- Digitize: Connect your business bank accounts and credit cards to accounting software like QuickBooks or Xero. This automates transaction imports.
- Categorize: Hire a professional bookkeeper for a one-time cleanup. They can categorize past transactions and organize your data.
- Systemize: Once clean, set up a system for monthly reconciliations. This ensures your books stay accurate moving forward.
Pro Tip: The cost of hiring a bookkeeper for cleanup is a deductible business expense!
Q5: "What's the first thing I should fix TODAY?"
You can start with a few simple, yet critical, five-minute action items:
- Separate business and personal accounts. This is the number one audit red flag!
- Schedule 15 minutes a week to review your bank transactions.
- Forward this email to your CPA and ask them to review your current financial situation.
The bottom line is simple: you wouldn't drive with a foggy windshield. Don't try to grow your business with messy books. Let us help you get a clear view of your financial health so you can make confident, data-driven decisions.
Sincerely,
The RSK Tax and Consulting LLC Team
Contact us today for a free consultation to discuss your specific needs.
