February 1, 2013
By Bob Coleman
Editor and Founder
New York Times blogger Ami Kassar writes what happens when the Main Street entrepreneur fails to keep up on the books – a higher cost of credit.
Today’s small business owner must be the ever-sophisticated renaissance person – being an expert in their industry, marketing, sales, human resources, inventory control, purchasing, privacy, health care, social media, apps, local search engine optimization, making sure they won’t be put out of business by Amazon – and, yes accounting.
Ami writes about a client who has neglected his bookkeeping for six months, severally limiting his financial options – and costing him 27% versus 6%. He sympathizes, “It’s easy to look at this situation and think that this owner got what he deserved. But the reality is that it’s easy to slip on keeping up the books. I am guilty of it sometimes, too. When I get lazy, I keep an eye on the bank statement to make sure cash is coming out, and I save the bookkeeping for later.”
I tend to take a sterner, old school view. Failure to keep an updated, clean set of books is a cardinal sin that masks true operational results.
I believe there is a correlation between timely bookkeeping and the small business owner who is executing a profitable plan for their business.