| Many small scale businesses make the mistake of | | | | business firms will be penalized for aspects |
| operating in their businesses without up to date | | | | including late payment of taxes, errors in tax |
| accounting records or efficient and timely | | | | submission and computation or even non-payment |
| periodical booking write-ups. Business owners are | | | | of taxes. If the books are not maintained well and |
| sometimes in a quandary as to whether they | | | | are not up to date, these types of tax |
| should outsource their bookkeeping activities or | | | | computations can get more difficult. |
| should prepare their accounts in-house using their | | | | In the case of partnership firms, or where more |
| own employees. This may be due to cash | | | | than one person run the business, the lack of |
| shortage or even due to the careless approach of | | | | exact and detailed accounting information will |
| business owners. We shall examine in detail some | | | | make it well nigh impossible to determine each |
| disadvantages of delaying the accounting and | | | | one's share of profits and loss; this can result in |
| bookkeeping activities and functions. | | | | mistrust among the business partners. The longer |
| A businessperson who runs his business without | | | | it takes to implement a good bookkeeping |
| properly kept accounting data will not know how | | | | system by correcting the mistakes in the |
| his business fares at a particular point in time. | | | | accounts, the more difficult it would be to |
| There would be some amount in the bank, but | | | | investigate and apply the remedial measures. All |
| this cannot be counted as profit. He needs to | | | | the transactions and operations should go with a |
| know precisely, in a timely manner, how the | | | | perfect system of internal control and procedures |
| business performs during a certain period. He | | | | so that fraud and errors can be minimized to the |
| must compare accurately the documented | | | | maximum extent. In this regard, it can be said |
| revenue against the expenditure incurred in order | | | | that the timely preparation and upkeep of |
| to see whether he is making a profit or not. | | | | accurate accounts and bookkeeping write-ups will |
| When there is a lack of reliable and accurate | | | | definitely aid in complying with the various internal |
| accounting data, the occurrence and incidence of | | | | rules and regulations. |
| pilferage or fraud may not get detected at all. | | | | More often, some small scale business managers |
| The employee guilty of theft might have | | | | prefer to do bookkeeping all by themselves. But in |
| departed well before the discovery has been | | | | a majority of the instances they may not have |
| made, leaving very slim chances of recovery of | | | | the time or expertise to do the bookkeeping and |
| the lost capital. | | | | operations part. Errors are likely to appear |
| Timely preparation and entry of accounts that | | | | because business owners may not be skilled or |
| are examined by the business owner can help | | | | good at accounting matters, and errors in the |
| prevent many untoward incidents. Accurate | | | | various financial documents and reports can lead |
| financial information is needed at regular intervals | | | | to grave consequences that can have adverse |
| for bookkeeping people to calculate sales, taxes | | | | effects on the operations of the entire business. |
| and other statutory obligations. Proprietors of | | | | |