WE ARE SPECIALISTS IN CLEANING UP THE BOOKS

We are Specialists in Cleaning Up the Books!

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Messy financial books are a significant problem for businesses, especially small businesses, as they can lead to a host of negative consequences. 

 

We are expert in the art of cleaning up messy books. We embrace the complexity and deliver clarity.

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Our Cleanup Services will deliver tax-ready books, financials that are meaningful and accurate, books that are caught up, cleaned up and reconciled. 

 

FPG-USA Considers Cleanup a One Time Services:

• Free one time consultation. Request.

• Deep Dive review. Analyze financials, see where you stand and provide options.

• Cleanup the books. Can cover one or multiple years 

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Some Real World Examples of how Messy Books Sink Ships! 

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Tax Penalties for Late Business Reporting

Businesses can incur several penalties for failing to report taxes on time, as outlined by the IRS. These penalties can be significant and impact a business's finances. 

• Failure to File and Failure to Pay Penalties. If both failure to file and failure to pay penalties apply in the same month, a combined penalty rate is used. The maximum total penalty for both can reach 47.5%. 

• Interest Charges: Interest is charged on unpaid taxes from the due date until paid in full. The interest rate, determined quarterly, is the federal short-term rate plus 3 percent and compounds daily. 

• Other Potential Penalties: Additional penalties can include accuracy-related penalties for negligence or understating tax, civil fraud penalties for intentional underreporting, penalties for failing to file information returns, underpayment of estimated taxes, and failure to deposit employment taxes. 

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Missing Tax Deductions

• Increased Tax Liability: Failing to claim eligible deductions means your business's taxable income remains higher than it should be, leading to a larger tax bill.

• Penalties and Interest: Late filing and payment penalties, often calculated as a percentage of the unpaid tax, can quickly accumulate. Interest on these penalties further increases the amount owed.

• Reduced Cash Flow: Paying higher taxes, penalties, and interest reduces the cash available for essential business operations, investments, or managing debt.

• Negative Impact on Profitability: Higher expenses and taxes directly reduce a business's net profit.

• IRS Actions: Ignoring unpaid taxes can lead to notices, liens on business assets, levies on bank accounts or wages, and even criminal charges in extreme cases.

• Missed Opportunities for Reinvestment: The money saved through tax deductions could be reinvested in the business, helping it grow and thrive. 

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Financial blind spots lead to poor business decisions. 

Messy books hinder the ability to understand a business's true financial standing, making it difficult to make informed decisions and potentially leading to financial problems and ultimately business failure. 

• Potential for Fraud: Messy records can make it easier for fraudulent activities to go unnoticed. 

• Inaccurate Financial Reporting: Disorganized and incomplete financial records lead to inaccurate financial reports. These reports fail to provide a true picture of the business's financial health, making it difficult to understand profitability, cash flow, expenses, and liabilities.

• Poor Decision-Making: When businesses rely on unreliable financial data, they are essentially making decisions "blindfolded". This can result in:

• Misguided Strategies: Decisions like expanding into new markets or investing in new equipment may be based on faulty assumptions about the company's financial capacity.

• Overspending or Underinvestment: Incorrect cash flow forecasting can lead to businesses overspending or missing out on opportunities for investment.

• Inefficient Resource Allocation: It becomes challenging to identify areas for improvement or allocate resources effectively when financial data is inaccurate.

• Missed Growth Opportunities: Accurate bookkeeping provides the insights needed for growth and identifying opportunities. Without clear financial records, businesses may miss potential avenues for expansion, innovation, or increased sales.

• Cash Flow Problems: Poor financial management can lead to cash flow issues, like delayed payments from customers or unforeseen expenses, ultimately straining the business's ability to meet its financial obligations.

• Damaged Reputation, Credibility and Trust: Inaccurate financial data can damage the business's credibility with stakeholders (investors, lenders, suppliers, and customers), leading to strained relationships and potentially lost business opportunities.

• Legal and Compliance Issues: Accurate financial records are crucial for adhering to regulatory requirements and tax laws. Inaccurate bookkeeping can lead to fines, penalties, and legal action. 

 

Loan Rejection

• ​Lack of Trust and Confidence: Lenders rely on accurate financial records to assess your business's financial health, stability, and ability to repay a loan. 

• Inability to Provide Required Documentation: Loan applications typically require detailed financial statements like profit and loss statements, balance sheets, and cash flow statements. 

• Inaccurate Financial Picture: Sloppy bookkeeping can distort the true financial standing of your business, misrepresenting financial performance and potentially affecting investor reports. 

• Difficulty in Assessing Risk: Lenders evaluate your credit score, cash flow history, financial projections, and business plans to determine your loan application's safety and reliability.

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Cash Flow Problems, negatively affect business.

• Poor financial visibility: Without accurate and up-to-date financial records, you lack a clear picture of your business's financial health, making it difficult to effectively manage cash flow. This can lead to overspending or not having enough cash on hand to cover expenses.

• Delayed income and collections: Disorganized invoicing and inadequate tracking of accounts receivable can lead to delays in payments from customers, negatively impacting cash flow.

• Inefficient expense tracking: Messy records make it harder to identify and track expenses, potentially leading to overspending or missed opportunities to cut costs, thereby reducing cash reserves.

• Cash flow problems due to accounting errors: Inaccurate accounting practices can lead to cash flow mismanagement and difficulties meeting obligations. This can include difficulties paying suppliers and employees, and meeting loan commitments.

• Operational inefficiencies: Disorganized books can lead to inefficiencies in operations, such as wasted time on data reconciliation or correcting errors.

• Missed opportunities: Without accurate financial data, you may miss opportunities for growth, cost-saving measures, or identifying areas where your business could improve. 

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Audit Risk, Extended Audit Process and Higher Costs

• Difficulty in Verification: Auditors rely on clear and accurate records to verify financial transactions. Messy books make it difficult for auditors to obtain sufficient, appropriate audit evidence to support their conclusions.

• Auditor Skepticism: Lack of organized records can raise suspicion with auditors and lead them to believe that proper controls are not in place or are not being followed consistently. 

• Increased Audit Time: Auditors will spend more time sorting through disorganized records to find necessary information, which can significantly extend the audit process.

• Higher Audit Fees: Because of the extra work required to sort through messy books, audit firms may charge higher fees, potentially double and triple the cost of of a clean books quote.​

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