Two Important Accounting Resolutions for 2019

Whether it is Q4 or Q1 it is always a good time to reevaluate your accounting systems and practices. What are some possible resolutions for 2019?

1. Use an accounting system.  This may sound obvious but it is surprising how many multi-million dollar revenue companies keep their accounting records in random excel spreadsheets or in 19th century style handwritten ledgers.  This may be ok when operations are still small (no, it's actually never ok), but it can be shockingly dangerous when revenue increases and suddenly there are millions of dollars at stake.

"Where is the record of that sale?!!" You definitely do not want to be asking this when it is time to prepare financial statements or tax returns, and you certainly don't want the answer to be that you think the bookkeeper recorded it somewhere on paper or on some spreadsheet that nobody can find right now.

2. Don't repeat mistakes. This may sound obvious but it happens so often and to devastating effect.  If your company has been audited in the paset and adjustments were made in some area, for God's sake, don't repeat the error.  Make sure a system is in place to catch it the second time around (and the third, and the fourth, etc.).

Same goes for misstatements on financials that had to be corrected before.  No matter what, do not make the same mistake twice.

I have seen tax audits turn nasty (and even criminal) where a company has repeated mistakes it was caught making in the past.   One mistake may be excusable, but making the same mistake after promising never to do so again starts to look like intentional behavior.  Don't let extreme sloppiness result in fraud penalties, or worse.


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