Here’s one fact that new small business owners will find hard to swallow: half of all new small businesses fail and close down within the first five years. The main reason for this huge failure is financial mismanagement.

The thing is, many new business owners think that there’s no need for them to get bookkeeping services from a professional accountant because their business is not that big. Perhaps they plan to do it later when they’ve grown without realizing that professional bookkeeping services are exactly what they need to succeed. 

If you are still wondering whether or not you should hire an accountant for bookkeeping services in Denver, here are some of the top reasons to do so: 

You Don’t Want to Mess Up Your Bank Account

Having a balanced bank account is the first step to financial success. If your business is not yet making enough profit, you may be tempted to use a portion of your income to pay for expenses you can’t afford. However, if you don’t keep track of what you’re spending, you might end up spending more than you should.

For instance, you may find yourself purchasing office supplies or paying for advertising that you can’t afford. This will undermine your profits and put your business at risk.

You Want to Know Whether or Not You’re Making a Profit

One of the biggest reasons small businesses fail is that business owners don’t know whether or not their business is profitable. If you don’t know whether or not you’re making a profit, you will likely make risky decisions that can hurt your business.

For example, you may think that your business is profitable when it isn’t. As a result, you will be tempted to put your money into projects that don’t bring in returns, putting your business at risk.

You Want to Pay Less in Taxes

If you want to save money, you need to show that you’re making a profit. If you don’t, you will have to pay steep taxes. Having someone look over your books, however, will help you determine whether or not you’re making a profit.

This is especially important if you are self-employed because you will have to pay taxes on your profits and losses. You can use some of your profits to pay yourself a salary, but you can only reduce your taxable income through business expenses.

A bookkeeper can track your business expenses and report them to the IRS, lowering your overall tax liability.

You Want to Avoid Audit Risks

If you are not a CPA and you are not keeping track of your business’s finances, you may think that you’re not at risk of being audited. Sadly, you would be wrong. If you don’t have a record of your business’s transactions, you can’t prove whether or not you’re making a profit.

As a result, you’re setting yourself up for an audit. Getting bookkeeping services from a professional bookkeeper will help you avoid this.

Conclusion

Keeping track of your financial transactions and keeping your business’s financial records organized is not easy. If you lack the time and knowledge to keep your business’s books in order, you should consider getting bookkeeping services in Denver from a professional.

A bookkeeper can help you maintain your business’s finances and ensure that you’re getting the most out of your profits.

Tottax is one of the most trusted accounting companies in Denver that can provide you with bookkeeping services from a seasoned accountant. Contact us today to set up an appointment!