The Importance of Bookkeeping for Small Businesses
As a small business owner, you deal with a lot. From managing the day-to-day operations, handling payroll and keeping your books up to date, you must wear many hats. Detailed bookkeeping is essential to the success of your business and without it, you could run into a host of financial and potential legal troubles.
Have you given much thought to bookkeeping? Here are just a few of the reasons why bookkeeping is so important for small businesses.
Monitoring Expenses
As a business owner, you’re probably well aware that you can claim certain expenses incurred as business expenses. You should pay these expenses from your business bank account and you should account for them on a relatively consistent basis (such as once a month). With accurate bookkeeping, keeping track of these expenses and paying them consistently will streamline your accounting and your bookkeeper will be able to monitor the outgoing cash and report it for tax purposes.
Taxes
Tax is a word that not many small business owners like to hear. Especially when the end of the financial year rolls around, it’s all they can think about. If you were to hire a bookkeeper focused on accuracy and timeliness, then the 30 June end of month will be just like any other end of month. There are many ways that a professional bookkeeper can help small businesses prepare for the end of the financial year. The most significant way that they can help? By simply keeping up with your books throughout the year and keeping them accurate, you’ll never miss a quarterly payment again!
Tracking Cash Flow
Do you know where your money is going? Do you know how much cash is coming into your business? With a professional bookkeeper, they can stay on top of your business’ cash flow. Many small business owners get caught up in building their brand, improving their products and services and they lose track of their expenses.
With a professional bookkeeper, they will help you track your spending no matter your size. As you grow, you’ll want to ensure that you have enough cash on hand to cover expenses. If you fail to manage cash over time, you could be hit with a nasty surprise in the future.
Know Where You Stand
If you aren’t accurately tracking your company’s books, you are making blind decisions. Before any major decision, you should know exactly where your company stands financially. Without this insight, you could end up making ill-informed decisions that could severely hurt your business.
By hiring a professional bookkeeper, they can track and monitor your books, providing you with an up to date financial picture. Although bookkeepers won’t always deliver good news, it’s better to know your company’s financial health, rather than hiding from it.
Maintaining Profitability
You’d be surprised to learn just how many businesses fail to track their profitability accurately. Tracking your profits is one of the most important financial aspects of your company. By carefully following your profit over time, you can see how far your business has (hopefully) progressed over the years. Like mentioned above, even if the news isn’t good, it’s better to know and be proactive and turn the situation around rather than hide from it. With professional bookkeeping services, you can track your profitability and plan for ways to grow it in the future.
Joe Boyd & Tony Barakat
ABJ Business Solutions
M: +61 401 991 495
M: +61 405 534 934
