Why You Shouldn't Put Off Bookkeeping
Bookkeeping is an accounting and business term that almost all small business owners have heard about, but only a few take seriously. It refers to the recording of all the financial transactions and activities of a business that occur daily.
If you own or manage a small business, it is important to keep its financial books organised for a variety of reasons. Here are some of the top reasons you should be keen on hiring an accountant for your business:
1. To have a sense of where your business is heading.
By keeping records of your business's daily transactions including sales, purchases, receipts, and expenses, you can have a picture of how all parts of your business are performing. For example, increased sales may indicate growing customer demand for your products while increased expenses may explain your cash flow problems. Neglecting your bookkeeping is like steering your business with your eyes closed. You simply won't see what's coming.
2. To keep the doors open for investor funding.
At some point, you may need to seek funding to expand or grow your business. One of the things that prospective investors will want to see before they can pump money into your business is its financial health. Financial records can communicate crucial information about the financial health of your business to potential investors. Whether your business is blossoming or is on its deathbed will be evident in the records. Without up-to-date financial records in place, very few investors will be willing to invest in your business, as they'll lack the information needed to make informed business decisions.
3. To avoid losing money.
There's no two ways about it: you're going to lose money if you don't keep track of your financial transactions. Receivables, for example, show who owes you money. If you don't keep a proper record of customers that haven't yet paid for goods delivered, you risk not getting paid by all your customers. If your business's income stream is poor, you'll struggle to pay your creditors on time and this can create relationship issues.
Admittedly, bookkeeping isn't every business owner's cup of tea. Yet, it is crucial to the survival and growth of any business, especially start-ups or small businesses. Bookkeeping requires proper accounting skills and takes time. If meeting these requirements is a problem for you, consider outsourcing your bookkeeping tasks to an accounting firm or service near you.
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