The Value of Accurate Accounting

Recording perfect entries but heading for disaster? It happens more often than you think. Here’s why: Countless business owners confuse meticulous bookkeeping with strategic accounting. They focus on recording transactions but miss the insights that drive growth. One of my clients made the same mistake. They stayed stuck in data entry mode—when what they needed was financial interpretation. Then we stepped in. Here’s how: 1️⃣ We built a functional hierarchy – Recognize bookkeeping as the essential foundation while accounting serves as the strategic superstructure. 2️⃣ Skill Set Differentiation – Develop bookkeeping skills focused on accuracy, consistency, and organizational discipline, while building accounting capabilities centered on analysis, interpretation, and strategic thinking. 3️⃣ Output Distinction – Understand that bookkeeping produces organized financial data while accounting transforms that data into actionable insights. 4️⃣ Scope Awareness – We implement bookkeeping processes that focus on documenting what happened, while developing accounting practices that explain why it happened and what should happen next. 5️⃣ Decision Impact Clarity – We position bookkeeping as the system that ensures financial accuracy, while elevating accounting as the function that drives financial strategy and business decisions. As a result, my client’s strategic financial decisions improved by 74%. Always remember, strong bookkeeping ensures the financial facts are correct. Whereas, effective accounting ensures those facts drive smart decisions. Don't let confusion between bookkeeping and accounting limit your business potential. #accounting  #bookkeeping #finance 

Accurate accounting gives you increased bonding capacity. 🎯 Bond underwriters look closely at a contractor’s financial statements to assess risk. Accurate records inspire confidence and credibility, helping secure better bonding terms. 🎯 Consistent, accurate accounting reveals the true cash position of a business. Positive cash flow is a significant indicator of financial strength to surety providers, showing that the contractor can meet obligations, cover project expenses, and handle unexpected costs. 🎯 Well-maintained job cost accounting systems allow construction companies to track and manage costs by project, providing data to better estimate future jobs. This helps demonstrate effective financial controls and profitability on each project, which sureties see as a positive indicator of risk management capability. 🎯 Surety companies evaluate a contractor’s equity, to gauge their financial health. Accurately accounting for expenses and revenue helps contractors retain earnings and build equity over time, which increases bonding capacity. 🎯 Providing timely, accurate financial reports enhances a contractor’s ability to qualify for larger bonds. Delays or inaccuracies in financial reporting can raise red flags for bond providers, reducing confidence in the contractor’s financial stability and capability. Accounting isn't just for filing taxes. When used correctly, it drives business growth.

Revenue up, cash down? Your books might be lying to you. Provisions in accounting are often overlooked, but they're crucial. I love provisions not for what they are, but for the help they do in business. For example, if you’re running a restaurant business without provisions. Your sales are soaring, but your bank account is dwindling. Why? You've forgotten to account for future expenses. That new oven you'll need next month?  Are the staff bonuses due next quarter? They're nowhere on your radar. This is where provisions come in.  They're your financial crystal ball, helping you set aside money for anticipated costs. If the provisions are good, your financial health can be good. And if your financial health is good, you can drive great business decisions. But for most accountants, it's often unseen and taken for granted. It's often the least understood function in small businesses. I hope two things: 1, business owners see the value in good provisioning, and 2. That accountants will do more than just record transactions. If those two are done together, your financial function can become a strategic asset rather than just a necessary evil. Remember, accurate financials are your business's compass. Use provisions to navigate the choppy waters of entrepreneurship and steer your company towards long-term success. #businessaccounting #provisions #finance

Your bookkeeping might be costing you more than you think... Over the past year, every single new client or prospect that I’ve met has needed some level of cleanup in their books. It doesn’t matter if they’re a half-million-dollar startup or an established company bringing in several million annually—the issues are similar. Here's the common denominator: ➡️ DIY accounting: Sometimes done out of necessity, sometimes by choice. ➡️ “Bargain” bookkeeping: Providers who promise the moon but deliver chaos. There are many common issues that we see in these situations. Here are a few examples: ❌ Uncoded Transactions: Bank feed items sit idle for far too long. ❌ Missing Reconciliations: Bank and credit card balances don’t match up monthly. ❌ Incorrectly Recorded Credit Card Payments: Payments recorded without leveraging the accounting software’s built-in functions. ❌ Payroll Missteps: Wage and tax entries are inaccurate, sometimes due to integrations to payroll software not set up correctly. ❌ Manual Accounts Receivable: Skipping built-in invoicing features and making journal entries instead. ❌ Faulty Fixed Asset Records: Purchases or sales of fixed assets aren’t tracked properly. ❌ Questionable Journal Entries: Either unexplained or used to force numbers, creating confusion. Here's the real cost of these errors: ⚠️ Lost Time: Owners get buried in bookkeeping tasks instead of focusing on growth and strategy. ⚠️ Cash Flow Headaches: Inaccurate accounting hinders understanding your cash flows, leading to bad financial decisions. ⚠️ Misleading Financials: Messy, misleading, and confusing financial statements that can lead to wrong assumptions or conclusions about your financial performance. ⚠️ Tax Risks: Inaccurate books can mean paying too much—or too little—in taxes. The good news? ➡️ These can all be fixed, and you can have timely and accurate financials that you can use to make better decisions for your business. ________________________________________________________________________________ We bring financial clarity to #purposedriven businesses through accounting and advisory services. Virtus Accounting Solutions, LLC #financialclarity #faithinbusiness #purposedriven #faithdriven #CFOServices #cashflows #virtualcfo #budgeting #strategy #forecasting #planning

If you're a small-business owner and you think that accounting is just boring debits and credits, you are hamstringing the success of your company. Accounting ensures that the numbers related to your business' historical activity are correct and can be relied upon for business decisions. This is needed for many reasons, with the top two being: 1. The data doesn't lie. For example, if your accounting team notes that you may be spending too much in one area with minimal ROI, changes need to be made. 2. While a budget is written in stone, a forecast should be written in pencil. The business forecast should be adjusted to account for what has actually happened, which comes from accounting. Business decisions rely on solid accounting. Let's stop treating it like the red-headed step child.