Bookkeeping do have to manage your cash flows
but in addition to it, it’s a much deeper in what it seems. In additional to bookkeeping helping you manage in cash flows actually protects you from audit, it allows you to get the credit that you want and the loan that you need. It’s very beneficial to the client and to the business owner. Bookkeeping is beneficial, but it’s necessary. If you are running a business and you have not purchased your quick books account, you have not purchased your own or some types of software that help you manage your business money. You need to ask yourself why you are in business. Are you in business for the long hold?
1. Allows you to see the true picture of your business
The true picture of your business is actually telling you on any given day, month, and period. What is your business income, business expenses, profits, margins? Did your business break even? You actually get to see the true picture of your books. If they are done effectively. You get to see the true picture, if you have quick books. But if you don’t have quick books or you do have it, and you’re just paying for and haven’t set it up right, or you haven’t done what’s necessary when you don’t know what’s going on with your business. You need to see what’s involved in that revenue. Where was that revenue generated? What workshop, books, programs were generated? And for your expenses, you need to know where you over spending more, expenses going, what are the due dates for all these payments.
2. Tracks your payment.
You need Quick Books to track your payments; you need bookkeeping to track your payments because your bank statement doesn’t do it. If you only use PayPal, Stripe to track your payments you won’t know if that money actually hits your bank account unless we reconcile your Quick Books to PayPal or to Stripe to your bank account. Bookkeeping is so essential because it connects the dots between from your bank account to your PayPal or Stripe account into your invoices system. You cannot manage your cash flows without tracking your payments.
3. Protects you from overpaying taxes
How can you validate your expenses if you don’t have bookkeeping? How are you going to prove to the IRS that you pay those expenses or you didn’t collect as much money as they say that you did? When you get audited, they connect your bank statements to your tax return, from your tax return to your general ledger and so forth. Receiving your initial audit statement from the Internal Revenue Services. They are going to request you General Ledger, profit loss statement, your bank statement, and tax return. If you have an effective bookkeeping
Ø To reduce your time of the audit.
Ø It shows them it is true and accurate
Ø Also, shows your validity in your transactions. If you don’t have reconciled banks statement, you have a problem.
Majority of small business owners have never reconciled to the bank’s statements. You don’t have books that are sufficient that can help you. Quick Books it’s not a substitute for keeping your receipts. That’s no longer exist they are no longer allowing banks statements and credit card statements to collaborate your payments.
4. Bonus Leverage
Just seeing the true picture where all of you as money going to guess the leverage to start to really negotiate and that’s a way to improve your cash flows. Use your Quick Books as a method to negotiate. If you buy a product and you spend a lot of money on that product you have some form of leverage but the only way to illustrate that leverage is to your invoices, and you’re bookkeeping
Nuggets
PayPal is not a bank. Why you could tell PayPal is not a bank because what they do is to make pay invoices that you have received that you put into from your staff and other service providers. They want to use your balance. They want to get that money off of their books faster than anything. And if they were a bank they would not need you to have a debit card or an alternative payment attached to your PayPal account, so those are two ways off for you guys to really understand that having a PayPal account is not a business account.
