TIP #8 Keep your financials up to date
Here is Tip #8 on BMBR LLP’s top ten list of tips that can avoid common problems. Businesses are typically in it for the money. Stay informed about the business’ financial health!
From the onset of establishing a business, a relationship should be established with a qualified Certified Public Accountant or accounting firm and even a separate bookkeeper on top of that. Under their guidance, policies and procedures should be implemented whereby all of the company’s books and records are properly maintained. Regardless of the type of business entity, separate bank accounts should be maintained for the business and personal funds and transactions should not be commingled with company funds. This is particularly critical in the case of a corporation where the commingling of personal and corporate funds and/or the payment of personal debts with corporate funds may permit the protection afforded by the corporate veil to be pierced and expose the shareholders to personal liability for the corporation’s debts. Make sure to regularly review the work of the people who have knowledge of and access to the business’ money and account information. Doing so keeps you up to date on the financial health of the business and helps avoid theft.