Why do I need to start a new file?

new file accounting is like starting a garden

Having accurate accounting data is absolutely crucial to the long-term success of your business. Especially in the construction business, accurate accounting is the key to growing your profitability, preventing fraud, monitoring costs, and keeping your clients happy throughout the course of a project. Bad or inaccurate data, on the other hand, could lead to disaster. 

Your old file is holding your business back

You’re already making a proactive decision for your business by turning to experienced bookkeepers for help. Maybe you’ve been trying to handle bookkeeping on your own, or your old accountant or bookkeeper just wasn’t providing the service you needed – or deserve. Either way, we often have new clients come to us with old accounting files in the hopes that they can simply be transferred over to us. 

But, 85% of the time, these old files are rife with problems. Some of the most common issues we see are:

  • Your file doesn’t agree with what’s in your bank account
  • The numbers don’t match with what was reported on your tax return
  • There are duplicate entries
  • Your charts are messy, incomplete, or inaccurate
  • Bank and credit card accounts haven’t been reconciled in over a year 

A bad accounting file can have catastrophic consequences for your business. You could end up over or underpaying taxes, missing payments from customers, or not having adequate cash to finish a project. 

Besides creating issues in the present, a bad accounting file also holds you back from growing in the future. Your financial data is the key to making big decisions for your business. Think of accurate financial data as the fuel in your tank: you can’t drive yourself where you want to go without it. 

Building a new file will save you time and money 

You may worry about the extra time, and extra cost, that building a new accounting file will take. In reality, building a new file usually takes less time than cleaning up an old, inaccurate one. Less time spent trying to make sense of missing data, duplicates, and inconsistencies also means less money spent. 

Taking the time to build a new file will also save you plenty of stress in the future. We had a client come to us after setting up her own files for her sole proprietorship. While her file made perfect sense to her, it didn’t adhere to accounting methodology. If this client had ever hoped to bring in a partner, advisor, internal controller, or even just an assistant for her business, she would have had to spend hours explaining the system behind her accounting files. By building her a brand new file, now anyone can look at her data and understand what the numbers are saying with no time wasted. 

You deserve to trust your data 

Running a construction business means juggling lots of different responsibilities. You’ve got enough on your plate without also worrying if your accounting is accurate. A solid accounting file means you can be confident in the day-to-day running of your business, spot red flags, and take advantage of huge opportunities. 

The best part about starting a new file is that you don’t need to miss a beat while we do it. You can continue submitting invoices, making payments, and operating your business as usual with your old file and we’ll make sure all this data is transferred into the new file. We also archive all your old financial data – to an agreed-upon cutoff point – so you can reference it whenever, wherever, forever. 

If you have doubts about your current accounting file, you can have us do a check-up on your existing file where we will identify any and all issues in your books. We’ll then provide you with our findings and a proposal for a clean-up or recommendations for creating a new file. To learn more, check out this blog on our check-up process!