How Does Bookkeeping Help To Build Your Business?
For you to start a business you would have discovered an opportunity to make money, unless if you run a charity organization. But even so, charities do handle finances, which surely can’t be done randomly. Since all businesses handle money, you need to make sure that it is professionally managed so that nothing gets lost, subjecting the business to risks. In order to do this well, you need bookkeeping. It is what helps you take your business from one level to the next, until it becomes a real wealth-builder.
Bookkeeping is a process where you record, organize, and keep all financial records in your company. This is all done by a bookkeeper. If you don’t have one by now, hire one or outsource from a company like ours. Contact us as soon as possible to start growing your business.
Before looking into how you grow your business using bookkeeping, I want to highlight something important. Read below.
What NOT to do
I understand that being a small business owner means running around, and becoming a ‘master’ of all trades. You will want to handle all your business accounts, personal finance, and all cash flow issues. But that cannot be good, especially if you want to run a viable business. You definitely need a bookkeeper and an accountant to help you manage your finances. That is the only way to have accurate bookkeeping and sound financial management. You need this to grow your business. The following three points explain how to build your business using bookkeeping.
Bookkeeping helps you budget
A business that does no budget literally walks blind. Budgeting is a roadmap that helps take your business from one level to the next. And that can be achieved nicely through bookkeeping. By tracking business expenses and income, you provide a clear view of the business’ finances. And with these in place, you can allocate your funds efficiently and plan for either good or challenging times ahead. In this case, bookkeeping saves your business from collapsing.
Bookkeeping is great for keeping records in an orderly manner
Well, in my lifetime as a tax professional, I have seen a fair number of businesses that go through a tough time regarding their taxes because of missing information. And all of them had something in common – no bookkeeper hired at all. I hate to say it, but without bookkeeping, your business information will be all over the place. And this includes important tax information like receipts and invoices. If you don’t record them, there is no way you can keep them safe. As such, hire a bookkeeper to keep your records intact. It helps to catch important deadlines, stay ahead with your taxes, and follow up in time when customer owe you. Imagine if you forget to follow up on customers who bought on credit just because their details were not written down and stored somewhere? You will lose your money and that just destroys your business. But if you do keep records, the business cannot lose money that way.
Great bookkeeping equals great accounting
Well, your bookkeeper works hand in glove with your accountant. If you have good bookkeeping in your company, your accountant will not struggle to put together financial statements. These statements are important because they show how your company has been performing in the past – regarding generating revenue and minimizing costs. If they can’t be accurate, then your business may be facing closure – and it will all take you by surprise because you just won’t be aware of anything regarding the numbers.
But if your bookkeeping department has a good handle on things, your accountant will be happy, and that is good for business strategy. Why? It’s because an accountant will make sense of all financial flows in the business and identify where there are flaws, as well as where there is potential. Equipped with this information, they will advise you to take certain actions, strategize, and build your business. Remember, at the end of the day, it is all about the numbers. They are the ones that matter. But you also must be aware that the story about the numbers all begins with a bookkeeper. Do you have one? Or are you like one of the start-ups who still think it is expensive to hire a bookkeeper? Well, according to the above, you need a bookkeeper to grow your business. They help you have a clear picture of your business through the numbers. If you need to hire a bookkeeper and start doing the right thing for your business, contact us now to schedule a meeting.
People have also asked the following questions.
1. What is bookkeeping?
This is a process of recording, organizing, and storing all financial transactions carried out by a business, or individual. It does not matter what size your business is, or if you started it today; you require bookkeeping.
2. Why is small-business bookkeeping important?
Bookkeeping helps small businesses track their expenses and income, which, in turn, helps them to plan, streamline their expenses, and save money. Bookkeeping also helps small businesses with their tax filing.
3. How Can Bookkeeping Basics Support Your Small Business?
Good bookkeeping basics lead to good financial statements for a small business. These statements lead to proper business management since you now understand how money is spent, where you are likely to sell the most, and what goods or services bring in more revenue. More so, if your bookkeeping is good, it helps you win an IRS tax audit
4. How Much Do Bookkeeping Services for Small Businesses Cost?
The costs for doing bookkeeping vary. If you do it yourself, I can only assume that the costs will be too much since it will take your productive time. But if you decide to hire professionals for it, the costs vary, depending on the level of experience of the bookkeeper you hire. But it is better to hire a bookkeeper than to do it yourself.
5. What Do You Need to Set Up Bookkeeping for Your Business?
Well, to begin with, you need an excel sheet and a bookkeeper to start doing your business bookkeeping. In some cases, small businesses use an accounting software for their bookkeeping. However, I am always in support of having a human oversee the process because a software is programmed in a certain way, which may not be ideal for your business. Finally, you need all your receipts and invoices to bookkeep. Always keep them in a safe place.