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Handle Risk Management with Optimized Bookkeeping Services

Last updated: 19 Nov, 2021 By | 6 Minutes Read

Risks are inherent, especially in businesses and to guard our interest adoption of skillful personnel always proves to be helpful. So start safeguarding professional exposure with this blog, stating the significance of optimized bookkeeping services.

Every small business has to face a certain level of risk in day to day operations. While you can avoid a few of them, the others have to be treated with a great deal of attention and due diligence if you have to ward them off.

The main ones that you should be careful of are fraud, liability and non-compliance statutory regulations. All these can be taken care of if you choose to minimize your personal and professional exposure through a judicious mix of opting for outsourced bookkeeping services and a strong risk management plan.

Financial exposure

This is one thing that you should guard against – erosion of the value of your business regardless of whether it is in the form of your investment, time or your personal stake. If this happens, it adversely affects your profitability and you are exposed to great financial loss, a blemished business image and in the worst case scenario dissolution of the company.

This financial exposure can also be termed as risk and it is here that it is imperative that you understand the threats that you face. What then are the most common hazards that small businesses are susceptible to?

Non-compliance

Small businesses often fail to comply with State or Federal regulations, simply because they focus purely on business growth and development and the profitability angle.

By not adhering to stipulated regulations you become susceptible to fines and penalties, lawsuits, government audits and even business dissolution. Putting stress on this aspect should be one of your risk management priorities.

Fraudulent transactions

In spite of their limited size and number of employees, a small business is open to fraudulent transactions which are in no way less than large corporations. Accounting errors such as inaccurate tax deductions or tax reporting or wrong wages payments can also lead to stiff Government penalties.

Because of the complexities of these processes you should choose to hire bookkeeping outsourcing companies that have long years of experience and can precisely handle your accounting processes.

Physical and non-physical liability

Another aspect that is often ignored is the non-financial liabilities that you might incur. These include hazards to your clients simply through associating with you. Consider a fire in your premises or a simple case of an unintended accident. By not planning preventive solutions you open yourself to unwarranted litigation at a later stage.

Other areas that can adversely affect your business and set it back financially are security breaches, loss of financial data and a high attrition rate of key personnel.

Fundamentals of Risk Management

You have to get the basics of a risk management right and work to insulate your business from any hazards. You can hire a professional risk management expert who will study your organizational structure and determine which aspects should be prioritized by you. However, the main areas that need to be emphasized are:

Being aware of statutory laws and regulations

State and Federal compliance guidelines are generally a complex web and not easy to decipher. You can either try to learn the ropes yourself or hire a professional to help you out in this regard.

Availing external accounting services

Accurate processing of all accounting data is crucial for your business as all future financial plans will be based on this. Whether it is your company’s financial data or annual tax return preparation, accuracy and timely submission is very crucial.

It is always advisable that you hire the services of external bookkeeping services that will ensure that all accounting procedures are completed at highly affordable rates while making sure of timely submissions and report generation.

Opting for small business insurance 

One of the optimized ways to protect yourself from any risks is to opt for small business insurance. A wide range of possible risks are covered by such a policy and you can even customize the cover to suit your specific requirements.

If you are planning to handle possible financial risks through bookkeeping and accounting outsourcing, Cogneesol can be a perfect choice. We have more than a decade of experience in this field and are fully conversant with the accounting procedures followed in different countries. To know more about how we can help you overcome the challenges in risk management, contact us at +1 646 688 2821 or write to info@cogneesol.com.

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