Have you ever logged into your accounting software to realize that your books look like absolute chaos? Maybe your transactions are all over the place, or you realize a link to your POS system has broken, or none of your bank balances are accurate?
Even worse — has this happened right before an important deadline, like Tax Day?
Or have you ever checked your bank account before making a big purchase? Perhaps you need a new piece of expensive equipment and see that you have enough cash in the bank to cover it. Unfortunately, your bank account has limited information; it can’t tell you things like what bills are coming due, or that the month you’re trying to make this purchase tends to be the month you generate the least sales.
Perhaps you buy that equipment, only to realize later that thousands of dollars in invoices are coming due, and your sales aren’t stacking up to take care of them.
A solid month-end accounting process will save you from the headache and stress of a last-minute, Hail Mary clean-up.
Month-end accounting ensures that your books are accurate, reliable, and up-to-date; this is essential for making good business decisions.
Keeping accurate books on a monthly basis also helps to identify any potential problems or opportunities you may be facing. Accurate accounting and financial statements can identify where you’re performing well, or where you may need to improve. You need this information to make strategic decisions and to develop plans to address any challenges your business is facing.
Moreover, depending on the size and industry of your business, you may have more critical considerations. You may be required to keep your books up-to-date for legal or regulatory requirements, or you may be responsible to stakeholders that rely on accurate financial data to make informed decisions related to your company.
Overall, this is an essential piece to the overall accounting process and should be the first accounting service you have in place. It helps support good decision making, saves you time and resources, reduces errors and inconsistencies, and improves your overall financial performance.
