McBride for Business Blog

Cost of Bad Books and Records

October 19, 2017 // R. Shawn McBride // No Comments »

R. Shawn McBride recently spoke about the importance of having good records.

Hey folks, Shawn here with you. I’m smiling but I’m not talking about something fun. The cost of bad accounting and bookkeeping – what does it mean? So, if you’ve got an LLC, corporation, even a sole proprietorship, it is critical we keep good books and records. And there’s a number of reasons why.

One of which, is just basic compliance. You know, you have a number of taxing authorities. You’ve got sales and use tax. You’ve got your income tax. You’re going to need records for your taxes.

Number two, you need to make sure you have those records so you understand what’s going on in your business. How profitable are you? Where are you spending your money? Where are the opportunities at? We want to understand all of these things.

Number three is we are usually statutorily required to keep these records. So if you’re running an LLC or a corporation, you’ve got a legal requirement to do it. And in some cases, when the partners get into a dispute or there’s a contention with the investors, these books and records need to be produced. And if you don’t have them in order, you’ve got a problem, because, you’re required to keep them. So you want to make sure you’re doing what you’re required to do because this could turn into a law suit. It could turn very expensive, and it could make you look very bad because it doesn’t look like you’re managing your company correctly if you’re not keeping books and records.

I don’t think you need to be a lawyer to figure out how a court is going to handle the fact that the person managing the company is not keeping proper books and records. It’s going to be a real problem. So we really want to make sure we have good books and records for that reason.

And then the fourth reason we want to keep good books and records is we could end up in a situation where we have an acquisition that’s unexpected and it comes to us. If we have good books and records, we’re ready to answer that offer. We can figure out whether it makes economic sense or not. If we don’t have our books and records, we’re probably going to lose the offer. So, you may as well not even get it. I mean, you work hard to build a business. Somebody thinks they want to buy it. Maybe it’s even an attractive offer. If you don’t have the books and records ready, you’re going to spook that buyer and you’re not going to do great things.

So, we really want to build this thing from the foundation up. And as we’re building the business, we got to keep the books and records. It can cause a lot of litigation problems. It can cause misunderstandings. It can be very expensive and cost us lost opportunities. So books and record are critical. Start from day one.

I talk about this in my book, “Business Blunders.” If this is something that’s resonating with you, let me know. This is something we could talk about and through some coaching. You know, I also come out and I work with groups through workshops and keynotes. Whatever you need, to really step your business up. You let me know what your organization needs and we can help you do things the right way. So, let me know what you need.

I’m here for you. Go to McBride for Business youtube channel and subscribe. And get to the R Shawn McBride fans and audiences page. Like it. Share it. Get your friends involved in this message. Let them see these videos. Compare notes. Work on your businesses together. And then come to me and let me know how I can help you. You have a general question, send it in. I can make a video for those. And if it’s something custom, we can set up some one on one time and get that worked out. Or I can talk about coming out to your group or organization and really make a huge impact. And we really want you doing the things you need to do.

I’m here to help you. If you’re that CEO that feels like your people aren’t listening to you, I can come in and talk to them and kind of break that mold. Be the outside source. So, let me know what I can do for you. R Shawn McBride signing off. I will talk with you very soon.

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This posting is intended to be a tool to familiarize readers with some of the issues discussed herein.  This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. Each case is unique.  Past results do not guarantee future outcomes. This article should not be treated as legal advice to any person or entity. elvis santana.


About the Author

R. Shawn McBride is the Chief Innovation Officer at McBride For Business, LLC. His signature keynote, The 3 Laws of Empowerment, gives audiences an entertaining look at how they can prepare, plan and protect themselves. You can email R. Shawn McBride or (214) 418-0258.

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Posted In: Business, Legal, Management, Risk

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