Small Biz: Avoid December Whiplash

Business owners who elect to cut costs by doing their bookkeeping themselves, or who enlist the help of a family member to do their books, accumulate a substantial amount of accounting errors by the end of the year.

The errors always show up when the CPA does their year-end review.

If you're a business owner who repeatedly shows huge profits or losses in December year after year, you've experienced December Whiplash. This happens when the CPA has entered year-end "clean-up" entries before the books can be closed.

Poor or No Bookkeeping is Costly
An increase in accounting expenses is not the only cost as a result of poor or no bookkeeping. Business owners have no idea what their true YTD profits or losses are after the year closes, and most likely won't for months. Tax season runs through the first four months of the year, which means a business owner will have to wait for their CPA's schedule to open up so they can make sense out of their client's numbers. Tax filing extensions will mostly like have to be submitted to the IRS not only for the business, but also the owners personal taxes (can't file personal if income is unknown).

Jaguar on a Beer Budget
Can you do your own accounting? If you're the business owner with accounting experience who can handle their books, absolutely! Are you the business owner who needs to manage and grow their business? Maybe.

If you're the business owner who wants to buy a Jaguar on a beer budget - you'll be in trouble. From extra hours of pay due to inefficiencies, to the time it takes the owner away from managing and growing the business, "cutting costs" by keeping bookkeeping in the wrong hands no longer holds any validity.

You have to spend money to make money. It may seem a bit pricey in the beginning, but the bargain versus the cost of poor bookkeeping is a win-win.

Email us at info@bythenumb3rs.com to see how we can help you avoid December whiplash.