I have always been active in sports, but as I grow older, I’m starting to experience a few aches and pains. It has made me reflect on the need for an often-ignored element of exercise—muscle development. Without a strong foundation, I could be facing worse physical ailments down the road.

As an emerging growth accounting consultant, I have seen a similar phenomenon with my clients. Small businesses focus primarily on developing products and services and bringing them to market. With limited resources, it’s not surprising that they often neglect the development of their muscles—a solid accounting framework.

But that can lead to problems later on. In finance, as in exercise, future pain and messy (expensive) clean-ups are not that hard to avoid with a little forethought and discipline. Clean, accurate books provide a clear understanding of how your business is doing and support key decisions. If your company requires an audit, you’ll have all your ducks in a row. And you’ll be ready for the due diligence that comes with being acquired or going public.

It’s important to evaluate your infrastructure needs as you grow. A great resource is RoseRyan’s Scalable Financial Architecture, a model that shows what’s needed for all finance functions at every stage, from prefunding all the way through IPO and secondary offerings.

And you never know what’s coming down the pike. I had one promising client that simply ran out of money, and in the eleventh hour a potential acquirer appeared. Our finance team had to jump through hoops in a very short time frame, but the transaction got a green light. This was possible because the accounts, reconciliations and financials were very clean and well documented, all compliance filings were up to date, and no significant risks were identified.

No matter what stage you are in, it is critical to have the basics covered. Here are some fundamental but often ignored areas:

• Policies and procedures. Travel expense, capital expenditures and revenue recognition are just a few areas that require well-documented policies and procedures. Without them, you get inconsistent practices and incoherent books—and possibly tax and legal issues. (And don’t even think about surviving an audit.)
• Chart of accounts. Set up a scalable structure that will work for your business as you grow. This results in accurate financials and clean compliance reporting.
• Reconciliations. Reconcile balance sheet accounts regularly. This is especially important with cash accounts, since cash management is critical for small businesses.
• Agings. Review and clean up accounts payable and receivable periodically. An outdated picture can skew your financial outlook and result in inappropriate decisions.
• Equity. Implement proper procedures as soon as you issue stock compensation and other equity instruments. Ensure tax compliance reporting is done regularly, and don’t forget 409A valuations. The risk is not only a big accounting mess to clean up, but also tax and legal issues.
• Compliance. Make sure you are registered with all authorities and file as required. This includes not only the obvious, such as state and federal income tax, but also business licenses, property tax, sales/use tax and secretary of state filings. You’ll avoid penalties and interest, and even the suspension of your right to conduct business.

Developing a muscular, basic accounting structure should be a no-brainer, but many small companies push it off until the pain is too much to ignore. As Benjamin Franklin so profoundly stated, an ounce of prevention is worth a pound of cure.