The importance of accounting should not be underestimated, and keeping bookkeeping records is a sure way to maximize profits, avoid serious mistakes, and make money on taxes. Then accounting is one of those time investments that make enough money to make sure it's worth the time.
Legal & trust bookkeeping services means recording all money flowing into and out of the company and filing and storing documents such as bank statements, receipts, and letters relating to company finances. The most obvious reasons for this are that it is required by law and that companies are instructed to keep all legal documents and detailed records of their income for at least six years. This is very useful later for tax audits as well as at the end of the fiscal year when they need to declare all their profits for taxation.
Keeping all of your records in one safe place and keeping all receipts can help you reclaim taxes on equipment, supplies, travel (if applicable), and more, which makes accounting more than useful.
However, at the same time, accounting has other advantages from a business perspective. This allows the company to track its profits and expenses for its own purposes and to look for trends and make forecasts. For example, if you are analyzing how profits have (hopefully) continued to increase throughout the year, you should be able to accurately predict what you will likely make by the end of next year. That way, you can create other plans based on those future benefits and measure your success over the next twelve months on a benchmark basis. Detecting a change in profit – a decrease or an increase – can also be a great way to measure what is working and what is not. and can also be a useful warning sign if money is lost somewhere without an account.
Unfortunately, many companies and small businesses believe they can get away with accounting. It is common for small startups and entrepreneurs to edit legal and financial documents to dig them out a few weeks before their tax returns and then certify joint records. This means they will not benefit from the savings from tax breaks or the additional information they will get from detailed reports. This is also a big mistake as any errors in this report can create a difficult situation for the company if it cannot meet its demands or if it is seen as tax evasion.