Accurate Tax & Bookkeeping Services, LLC (ATBS): February 2023

As many businesses are still recovering from the pandemic, inflation continues to rise. This situation is causing many businesses to wonder if we are headed for a recession and how best to survive an economic downturn. “During any kind of economic downturn, it is important for businesses to track finances closely and be able to make informed and strategic business decisions that will help the business survive and thrive,” explains Greg J. Menia, CPA and founder of Accurate Tax & Bookkeeping Services. “That’s why bookkeeping services are so important.”

What is a Recession?

A recession is defined as “A significant, widespread, and prolonged downturn in economic activity.” But, that is not an “official” definition as many things contribute to a recession which is why current economists often do not agree on whether the current downturn is or is not a recession. While most economists agree that currently, the U.S. is not in a recession, that does not mean businesses are out of the woods as inflation continues to rise.

Why are SMEs So Impacted by Economic Downturns?

Before understanding how bookkeeping can help businesses survive in a challenged economy, it is important to understand why they are so impacted.

During any economic crisis, increased overhead forces higher prices on goods and services. With that, demand and profits decline. In turn, this can quickly cause problems for a business that does not have large cash reserves.

Can Bookkeeping Services Help Small Businesses Survive a Recession?

Even if it is not a recession, any economic downturn can significantly and negatively impact a small business if the owner is not paying attention to the right things. Bookkeeping services help do just that. With the help of professional bookkeeping, a business can stay agile enough to survive and even thrive, no matter the economic climate. Here’s how:

Income Statements

A bookkeeping service provides an income statement. This is a valuable tool that provides profitability metrics over a period of time. This includes information regarding the following:

Revenue

Revenue is how much money comes into a business. Understanding revenue metrics can help a business make the most of sales cycles and target sales efforts more effectively. This is especially important during a recession when revenue drivers may change.

Expenses

A bookkeeper can also help small and medium businesses track fixed and variable expenses. Fixed expenses are the recurring costs of operating a business, such as rent, utilities, and insurance. Though nearly so, the actual cost of these is not necessarily “fixed,” only the need to pay them in order to keep the business running. Variable expenses include things such as labor and materials. Professional bookkeeping services can help a business make educated decisions about where to cut expenses to manage other areas of expenditures.

Profit

Tracking profit allows the business owner to make adjustments to increase profit margins. A profit margin is a difference between the money generated from a sale and the cost of fulfilling the sale. If the cost of fulfilling a sale is too high, the profit margin will be low. Bookkeeping services can help identify this problem before it causes businesses to suffer losses.

A professional bookkeeping service can help any business gain a clear picture of where their money is going and make critical changes in real-time. This provides the business with a critical advantage no matter the economic climate.

Accurate Tax & Bookkeeping Services Brandon FL

Accurate Tax & Bookkeeping Services, LLC (ATBS) is a full-service tax, accounting, and consulting firm offering services to businesses and individuals throughout the Tampa Bay area. For more information about bookkeeping or other services, call (813) 655-9702.

Accurate Tax & Bookkeeping Services

710 Oakfield Dr.

Suite 125

Brandon, FL 33511

While we may not keep all our overly ambitious personal New Year’s resolutions, one resolution every business owner should make and keep is to prioritize professional bookkeeping as a strategic business goal. “Successful businesses understand that bookkeeping is not a monthly service but a service that provides organizational awareness, mindful financial planning, and aids in progressive goal achievement,” explains Greg J. Menia, CPA and founder of Accurate Tax & Bookkeeping Services.

What is the Main Purpose of Bookkeeping Services?

The primary purpose of bookkeeping services is to record and keep all financial data in an orderly and accessible format. Proper bookkeeping allows businesses to track accounts and make critical decisions based on the information.

Why is Bookkeeping Important?

Keeping books in order is an ongoing process, even if the business has professional bookkeeping services. “While it might be stressful and time-consuming, it is one of the most valuable things a person can do for their business. Bookkeeping tells the owner what is or isn’t in the account, provides insight on revenue flow, and can uncover problems such as under-charging for goods or services so the business owner can make critical adjustments in real-time,” he continues.

What Bookkeeping Tips Should I Keep Year Round?

The Brandon bookkeeping service recommends following these seasonally-inspired bookkeeping goals and tips.

Prepare for Tax Season Sooner Rather than Later

Having a bookkeeper means preparing for tax season is an ongoing process that avoids the tax season rush. Hiring a professional bookkeeper, anything that can be started in advance of filing, will save time and frustration.

Get Organized for the Future

Use the new year as a starting point to develop organizational habits. Begin now to keep records of bills, receipts, and invoices. This practice will help maintain accurate accounts payable and accounts receivable throughout the year and make the following year’s taxes easier. It should be a weekly activity, monthly at the bare minimum.

Develop a Budget

Any business serious about being profitable needs to delve into its accounts, develop a monthly budget, and stick to it. It is best to do this in January and review it monthly to stay on target.

Perform Regular Bank Reconciliations

Reconcile accounts monthly, and look for any errors. Clean-up identified issues at that time to avoid issues in future accounting.

Stay On Top of Accounts Receivables

It is easy to neglect accounts receivables on accounts 30 days past due. But they need to be appropriately handled. Accounts that are 30,60,90 days past due will require pay reminders, and those accounts past that may need to be written off as bad debt.

Review the Cost of Goods and Services Regularly

The lasting effects of supply chain issues continue to impact many businesses. The prices of supplies, materials, and products have drastically changed, so the business should regularly review its pricing structures.

Find a Trusted Bookkeeper

One of the most valuable things a business owner can do is find qualified bookkeeping services like those offered by Accurate Tax & Bookkeeping Services to support business success. A qualified professional will be highly skilled in bookkeeping practices, accounting, tax preparation, tax planning, payroll, and IRS/State representation.