Bookkeeping is vital to your companies growth and continued health. Bookkeeping provides you with a special insight into your business!
Many people view bookkeeping as an after thought. A painful task to be completed, or even a waste of time. I understand bookkeeping can be time consuming and frustrating, especially if you don’t have established procedures in place. However, bookkeeping is not a waste of time, bookkeeping is in fact a vital organ of your company, like lungs. Without our lungs quietly, automatically, doing their job, we’d be in big trouble. Bookkeeping is like the the lungs of your company, you want it to run quietly, automatically, and efficiently in the back ground.
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Value of Bookkeeping
So what value does bookkeeping offer to your company? The list is honestly endless, it is a vital function after all! For a small owner run business, these are the benefits that will personally affect you and your company. Bookkeeping will allow you to see at a glance, your cash flow, stock value, expenses, debts, and most importantly your profit or loss for the month, or year. Think for a minute of the value of this knowledge, with this information available to you, what decisions will you make? How will you improve your company with this knowledge? Knowledge is power!
Pitfalls of Bad Bookkeeping
Keeping flawed, incomplete, or ever worse no bookkeeping records, will not only hurt your company and your profitability. it will also get you in trouble with the tax man. Imagine for a moment trying to make business decisions without all the information available to you from accurate bookkeeping? Not a pleasant prospect, and definitely not healthy for the future of your company. On top of making decisions blindly your tax will be a mess, and you could end up with large fines on late submissions, which will negatively affect your profitability. A well kept set of books will show you exactly what you need to pay to the tax man, and enable you to pay on time, as you won’t be scrambling for documents and rushing last minute calculations.
Bookkeeping is a valuable tool to your business. Hopefully knowing the value of bookkeeping will alleviate some of the pain and frustration of the day to day processes. You might even start to find it interesting. Especially as you start to see and understand your business processes inside and out, and to implement changes based on the information you now posses.
The Importance of Processes
Your companies bookkeeping will run more smoothly and efficiently if you take the time to set up procedures to handle different situations, especially reoccurring ones. If you set up and stick to the procedures you will be able to operate your bookkeeping on autopilot. Setting up processes does take a little bit of time and thought, but it is well worth the effort. It will simplify your daily bookkeeping tasks and help you to be accurate and efficient. Processes that need to be set up would for example be how you handle invoicing, credits, purchases, or customer complaints. A well defined set of procedures will help you to handle your client base as your company grows.
The Take Away
Bookkeeping is a not an after thought, or an exercise in needless drudgery. It is a wonderful and dynamic tool to help you to know how to navigate your company safely through the many challenges facing small companies. Bookkeeping helps you reach the dreams you have for your company. That is the value of bookkeeping!
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