• July 22, 2014

CPA shares benefits of keeping good finances

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Posted: Sunday, May 18, 2014 4:30 am

Chris Munn, Lampasas county auditor and owner of John R.C. Munn CPA, has offered public and private accounting services for 26 years.

A Lampasas native, Munn graduated from University of Texas in Austin after six years in the Navy. He received a bachelor’s of business administration in accounting in 1984 and became a certified public accountant in 1988. By 1992, he earned an master’s of business administration at Southwest Texas State University.

He spent many years in public sector auditing before starting his own accounting and tax practice in Round Rock in 2002.

In 2011, Lampasas County appointed him county auditor, and he opened a second accounting office in Lampasas.

Munn explained the benefits accounting can have on businesses to Killeen Daily Herald Business Mason W. Canales.

Why are accounting services important for businesses?

Accounting has been described as the lifeblood of business. Accounting services provide the financial information that business owners and managers need in order to make decisions and to measure success. This information is not only vital to management, but to other parties as well. Bankers, investors, regulators, for example, are a few of the other users of financial information.

How can accounting services help businesses make future decisions?

Accounting services provide the financial records and reports that decision makers need in order to effectively and efficiently run their businesses. It is needed in order to measure profitability and the financial health of any business.

Making any kind decision without reliable and current financial information could spell disaster for a business. The historical data contained in a business’ financial records provides a wealth of information that could be mined for future planning.

What are some things businesses can do to streamline their accounting service?

Accounting and financial reporting needs grow as a business grows.

A startup company with just a few transactions a month may be fine using a hand-written ledger or an electronic spreadsheet.

As the business grows and the number of transactions grow, then the need for a more streamlined process may arise. Businesses may turn to computer-based accounting solutions, and there are a number of reasonably priced accounting software programs available. That solution still requires someone from the business to enter the transactions.

Other businesses look to hiring an outside accounting service. This solutions outsources the accounting functions and frees up the small-business owner to do what he does best — run his business.

How can keeping unorganized financial records hurt a business?

There are a number of ways. A business may need to attract investors or to get a loan from a bank in order to meet its goals.

Both of these sources would require up-to-date and accurate financial information before considering investing in or making a loan to the business.

Additionally, businesses are required to submit periodic reports to regulatory entities and those deadlines occur frequently and regularly.

Sales tax and payroll reports, to name two, are prepared using financial information and not having a reliable and current source of that information could lead to fines, penalties and audits.

What are some common mistakes business owners generally do when handling their own accounting?

You name it! Missing reporting deadlines is pretty common. Missing out on tax deductible expenses could lead to an overpayment of income taxes. A common error is expensing a capital asset instead of appropriately depreciating that item. Payroll issues, if there are employees, can take up a lot of a business owner’s time and is a big reason a lot of businesses outsource their bookkeeping and payroll processes.

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