Accounting: How regularly should bookings be reconciled?

Actually, you only have to update the bookkeeping once a year - at the end of the year when it comes to filing the tax return. Correct?

Well, not quite.

We understand why that sounds tempting - who doesn't love to save money and time? But we strongly advise against it for several reasons:

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1) Be able to provide information to the tax office

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In principle, the tax office must be able to be given information if they have questions about the last tax return or other financial matters. It is therefore advisable to keep the accounting department up to date so that questions can be answered quickly.

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2) Stay in control of finances

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Regular bookkeeping provides a clear overview of income and expenditure. This facilitates financial control and helps identify overspending, budgeting and setting financial goals, thus ensuring the company's financial health.

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3) Make informed decisions

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Solid accounting provides a reliable database for important business decisions. Whether it's investing, expanding or cutting costs, accurate accounting helps make informed decisions.

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4) Be creditworthy

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When a company applies for a loan or financing, banks and investors often require access to the accounting documents. Sound accounting can improve a company's credibility and creditworthiness and increase the chances of successful lending.

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5) Act responsibly

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Proper accounting shows that a company or individual takes their financial responsibilities seriously. This can create trust with potential business partners, customers and suppliers.

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6) File correct tax returns

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Proper accounting is essential for the correct calculation of taxes and the preparation of financial reports. Incomplete or inaccurate accounting can lead to errors in the tax return and increase the risk of tax penalties.

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Findings

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In summary, proper accounting helps ensure financial soundness and stability, comply with legal obligations and provide a basis for informed decisions. It is of great importance for the long-term success and integrity of a company or an individual.

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Numarics does the bookkeeping for you so you can focus on your core business.

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