MARIELA RUIZ, CPA, PLLC

Helping Individuals and Businesses Financially Thrive.

Tag: financial audit

Why Your Business Isn’t Making Money and How to Fix It

Businesses may offer outstanding products, maintain satisfied customers, and experience steady growth, but still face challenges in generating profit. This issue is frequently seen in small businesses but it’s not exclusive to them. Even long-standing, well-established businesses can experience this problem. In this month’s blog, we will explore the common reasons businesses struggle financially and provide practical solutions.

Businessman stacking coins with a graph of profit. Business successful growth

Lack of Budgeting and Financial Planning

Failing to plan is planning to fail, especially in business finance. Many businesses don’t have a detailed budget or financial plan, leading to overspending or misallocation of resources.

Solution: Keep a close eye on your finances. Implement strict budgeting and use integrated accounting software to track expenses and revenues. Regular financial audits can also help identify and rectify issues before they escalate.

Related: Learn more about when to consider a financial audit for your startup here.

Inadequate Tax Planning and Compliance:

As a business, it is your responsibility to ensure you’re paying the appropriate amount of taxes specified. Any non-compliance with tax laws can lead to hefty fines and penalties. For instance, in Texas, ignorance regarding the filing of tax returns will result in a 5% up to 20% penalty.

Solution: Work with a tax professional who can help in strategic tax planning and ensure compliance. This may involve tax-friendly business structures, tax deductions, and credits that your business can benefit from.

Related: Learn more about the reasons you need to hire a tax expert here.

Woman accountant use calculator and computer with holding pen on desk in office. finance and accounting concept

Unstructured Financing

Borrowing money or having a line of credit is expected and useful for growing businesses that feel the pressures of tight cash flow. However, what should relieve pressure can become a source of stress if it is not well-structured. High-interest business loans come with high monthly payments, which can tighten cash flow and increase monthly costs.

Solution: Businesses with high monthly payments should seek accountants for professional guidance on how to manage their debts effectively. An expert accountant can assist in creating a customized strategy for managing debt, pinpoint ways to save costs and guarantee the financial stability of your business.

MARIELA RUIZ, CPA, PLLC: Your Partner In Managing Your Business Finances

At MARIELA RUIZ, CPA, PLLC, we help businesses just like you thrive by providing comprehensive financial solutions. Our approach combines personalized financial planning, innovative financing strategies, and cutting-edge technology to empower your business’s growth journey. Visit our website at mruiz-cpa.com or give us a call at (956) 997-0067 to learn more about how we can transform your financial challenges into growth opportunities.

When to Consider a Financial Audit for Your Startup

Startups are a world of excitement, challenges, and opportunities. As the gears of innovation turn, there’s one wheel that entrepreneurs often overlook: the financial audit. While it may seem too formal or unnecessary during the early stages, a financial audit can provide numerous benefits to a young company. In this month’s blog, we’ll talk about when and why a startup should consider undergoing a financial audit.

What is a Financial Audit?

At its core, a financial audit is an examination of a company’s financial statements and related operations to ensure accuracy and compliance with accounting standards and regulations. An external auditor, often from a reputable accounting firm, conducts this examination and provides an opinion on the financial statements’ accuracy.

Key Indicators Your Startup Might Need an Audit

At the outset, startups often operate with lean margins and limited resources. Still, as they gather momentum and secure funding or begin to generate consistent revenue, the intricacies of their financial transactions multiply. This is where a financial audit becomes instrumental. Firstly, an audit provides a detailed and neutral view of the startup’s financial health. This is invaluable to stakeholders, investors, and lenders who bank on accurate financial statements to make informed decisions. Secondly, as a startup plans to scale, whether organically or via mergers and acquisitions, having audited financial statements can smoothen negotiations and due diligence processes. Additionally, certain regulatory and contractual conditions may necessitate an audit. For instance, if your startup is looking to raise a significant funding round or go public, potential investors or regulatory bodies might require audited financials.

Related: Learn more about the key considerations and accounting best practices for startups here.

Benefits of a Financial Audit

A financial audit can help founders and managers identify inefficiencies, uncover potential fraud, and streamline processes. The insights garnered can guide startups toward financial prudence, ensuring that resources are optimally utilized. Moreover, an audit fosters a culture of transparency and accountability within the organization. By regularly reviewing and validating financial transactions, startups build a strong foundation that can weather uncertainties and be well-prepared for future growth.

Related: Learn more about accounting mistakes that could harm your small business here.

Hire MARIELA RUIZ, CPA, PLLC For Your Financial Audit Needs!

We at MARIELA RUIZ, CPA, PLLC understand the unique challenges faced by startups. Our expertise is not just in conducting meticulous audits, but also in guiding young enterprises towards sustainable growth. Let’s embark on this journey together and ensure that your startup’s financial roadmap is both robust and transparent. Reach out to us at our Mission, TX office by calling (956) 997-0067 or visit our website at www.mruiz-cpa.com. Your startup’s future is bright; let us help you illuminate its path.