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Three Reasons To Share Your Contracts With Your Bookkeeping Services Provider

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Three Reasons To Share Your Contracts With Your Bookkeeping Services Provider

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Mary-Rose-for-web-square.jpgTo get the most from your accounting services provider, it’s helpful to supply them with incorporation documents and contracts. Many of my clients are confused when I ask for these documents. Here are three ways your bookkeeper can use the information from your contracts to help you better run your business.

1. Your Contracts Might Have Direct Implications for Accounting

When you share your contracts with your bookkeeper before and after signing, you might discover contracts that have implications for your bookkeeping and accounting team. The implications could be additional reporting requirements, deadlines for reporting, or a stipulation for special reports which need to be produced. By providing your bookkeeper with these contracts, he or she will be able to spot these compliance issues before they become issues. For example, if one of my clients has large deferred revenues, it might mean that current ratios will not be met. Taking note of this before the contract is signed will allow for additional negotiation and clarification before signing.

 

2. Your Contracts May Require Information Gathering

In order to meet the terms of a given contract, you may need to collect certain information. For example, if you’re running a non-profit which receives a grant, the contract may stipulate that the funds can only be allocated to certain types of expenses, and thus these expenses will need to be tracked. Rather than scrambling to do this after the fact, your bookkeeper will be able to see what kind of data collection is required up front and gather it as required.

 

3. A Valuable Financial Perspective

The most common things I see in contracts I review are things like hidden fees that the client is not aware of and potential future cash flow implications (depending on the payment terms negotiated). I also read contracts to note when the next billing is due (for example, some contracts have annual billing terms) so that it is not forgotten.

By asking your accounting services provider to review your contracts, he or she will be able to offer a financial perspective you may have not considered, as well as act as a warning system for identifying potential future issues.


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Mary Rose

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Mary Rose

Legal and Tax Disclaimer

This website is created by Supporting Strategies to provide general bookkeeping and accounting information only. Supporting Strategies does not provide tax, legal or accounting advice, and the information contained herein is not intended to do so. As such, the information provided should not be used as a substitute for consultation with professional tax, legal, and accounting advisors, and you should consult with a tax, legal and accounting professional before engaging in any transaction.