Accounting refers to the overall interpretation of financial data or information for a business. In a small business context, this can refer to several aspects of finance, including profits, revenue, and, in some cases, overhead expenses and start-up expenses. It may include other aspects of financial operations, including the imparting of financial advice or guidance about future company decisions. Generally speaking, it refers to the analysis of numbers, figures, and financial data for the company.
The process of accounting usually involves the keeping of a ledger, which contain all records of all major transactions, revenues, and expenses of the company. From there, an accountant may use the ledger and other documents to produce a financial report, which can help the company realize where it can make improvements and adjustments to maximize profits.
There are several different kinds of legal issues that can arise in connection with small business accounting. These include:
- Tax issues, especially remaining prepared for a small business tax audit, which can happen at any time
- Managing debt from financing and loans, including renegotiating loan terms when needed and handling legal issues from investors
- Problems stemming from employee-related expenses and benefits
- Identifying and resolving fraud, theft, embezzlement, and other issues that can create profit losses
One of the main sources for small business accounting disputes is a conflict over a financial document or a ledger entry. If you are dealing with a small business accounting dispute, some steps that you should follow are:
- Identify the source of the conflict or disagreement (this can often involve in-depth reviewing of ledgers and financial reports)
- Make and retain copies of important financial documents
- Consult with all parties involved to help determine where a disagreement may stem from
- Research laws related to business accounting, and consult with a lawyer for further advice
Lastly, frequent reviews of business documents and records can help prevent small business accounting disputes in the future. It also helps to include accounting guidelines in the small business plan. Failing to have a comprehensive business plan in place to prevent major legal problems is a common small business mistake.
Maintaining sound accounting practices is an absolute must in order for small businesses to remain profitable. It may be in your best interests to hire a business lawyer in your area for assistance with legal issues or disputes involving accounting. Your attorney can provide you with up-to-date legal research as well as advice to help you move forward. If you need to make an appearance in court, or if you need to file a legal claim, your lawyer can assist you with those processes as well.