Richard Belott is a New Jersey accountant who offers dedicated taxation and accounting solutions alongside his wife Linda. One of Richard Belott’s areas of focus is assisting small businesses and owners in reconciling accounts and ensuring that compliance mandates are met.
One common accounting issue involves equating profits with cash flow. For example, a company could hypothetically land an $80,000 deal to be fulfilled within a 6-month timeframe. If the project is expected to cost $50,000, a profit of $30,000 will often be booked, even before the deliverables are in.
Unfortunately, delays can happen and budget overruns can happen as the complexity or actual cost of the project becomes clear. In order to make sure that cost estimates remain accurate, refrain from marking a deal as income until after it is completed. At the same time, make a thorough monthly accounting of all assets and liabilities related to the project and overall business operations. This will help ensure accurate profit numbers at the time of completion.
Finally, avoid the trap of handling accounting and bookkeeping in house. While this may seem like a valid way of avoiding unnecessary expenses, even one significant accounting error can wind up costing more than a trusted professional service.
Richard Belott 