Bookkeeping is essential for your small business! Having organized books that are simple to read and organized can literally make or break your small business. After all, having a successful business means you are profitable. You can’t be profitable if you don’t have a clear and accurate bookkeeping process.
Find a Bookkeeping Process
Since bookkeeping is so crucial for your small business, it is important you have a system that works for you. Depending on the size of your company, the bookkeeping method you chose to use will vary. The most common bookkeeping processes are managing it by yourself with your own tools, using a software, or hiring an accountant/bookkeeper. As business grows, hiring an accountant for your books is highly beneficial. Not only can you ensure your financials are accurate, but you can get the financial guidance you need in any situation. If you are currently managing your own books but want a little extra help, don’t hesitate to reach out to the My Accountant Bookkeeping & Tax Service Inc team. Plus, hiring an accountant for your books means more time for you to focus on other aspects of the business.
Benefits of Bookkeeping
Without bookkeeping, your business can crumble. You may be spend money you really don’t have, make unhealthy business decisions or purchases, and you can even make annual reporting or tax season more difficult. Having a bookkeeping process in place that is reviewed regularly, whether that be weekly, monthly, quarterly, and even annually will allow you to be in the best financial position for your company. Bookkeeping can empower you in the following areas:
- Cashflow Knowledge: Cashflow is seeing the money coming in versus the money going out. You can also see where your money is being spent. In order to stay in business, you need to be bringing in cash to pay for product, staff, rent, contractors, etc. Without knowing your cashflow, you can be losing money month after month and not know until the doors to your business are closing indefinitely. With proper bookkeeping you can track all of your business’s cash and where/how it is being spent. If adjustments are needed, you can easily make cuts or lower spending as needed.
- Accurate Budgeting: Once you have all of your cashflow data readily available, you can easily create or update your budget plan. Budgeting can help your business if it is in a financial bind, but it can also help you save money and increase revenue (which is always something to strive for). If you notice business is continuing to boom, you may be able to increase your spending budget and make purchases that have been on the back burner. But on the other hand, if money is tight, you can use your budget to tighten up spending even more.
- Another perk of hiring an accountant for your bookkeeping needs is they can help you review your existing budget and tweak it as needed. They can also get you started on an initial budget if you’ve yet to create one.
- Record Keeping: Having accurate record keeping in place means you are organized, compliant, and up to date. By staying organized, you can have all of the information you need to file taxes clearly labeled and easy to obtain. Or perhaps a client is needing a copy of their invoice from the previous year, with proper record keeping, you can easily access the requested information. Record keeping also allows you to see all of your paid and outstanding invoices. If a client is behind on making payments or has yet to pay for services, you can easily monitor this and follow-up regarding payment. No need to let unpaid invoices go unnoticed!
- Financial Planning: Now that you know your cashflow, have a budget, and have a system in place to view all of your important files and documentation, you have the tools necessary to make important financial decisions. In order to stay relevant in a competitive market, you need your business to stay up to date. To do this, you need to make important business decisions and purchases. Financial planning will allow you to make educated decisions when it comes to hiring staff, upgrading the internal software or POS systems, or even expansion. Along with cashflow statements and proper record keeping, you may want to talk some of these large financial decisions through with a professional. Remember, the My Accountant Bookkeeping and Tax Service Inc team can help answer any question you may have and give guidance on your financial situation so you can make empowered decisions.
Without proper bookkeeping, the health of your business can suffer. Without a structured system in place, you won’t have all of the information needed to make an informed financial decision (which puts your business at risk)! You can choose how you want to manage your bookkeeping, but with the help of a professional accountant, you get the books taken care of along with an unlimited wealth of guidance and knowledge. Don’t let bookkeeping break your business! Get a plan in place to efficiently manage your business’s finances.