Bookkeeping is significant for helping you keep up to your day to day money related records. However, numerous businesses fail to actualize this fundamental procedure.
Truth be told, “poor bookkeeping” is one of the top reasons small businesses fail. Without accounting or bookkeeping, you fail to have control of your business.
Still not persuaded that your attention should be on accounting? The following are 5 reasons why accounting is significant.
Every business has external parties which are interested in their daily operations.
These parties may include investors, banks and other government regulatory agencies.
As a result of these interests, your financial records should be organized in a manner that will allow you to easily provide financial information when needed. Hence, fostering a good relationship with these parties becomes easier.
Every business must submit its tax returns annually and file its taxes periodically.
In order to avoid a situation where one will be found scrambling about trying to find documents and receipts, it becomes prudent to build a bookkeeping system.
This will allow for receipts and invoices and all other financial information to be organized in one central system making it accessible.
Analysis and making informed decisions.
Accounting is important because it helps with business analysis.
Preparation of financial statements should be done periodically because it provides vital information such as your cash inflows and outflows as well as the effective aspects of your business operations.
With this information one can make informed decisions, so as to avoid making rushed decisions.
A structured book system allows a business owner to focus on other elements of the business.
With a structured book system, a business owner can sit and put the mind at rest knowing that the business’ information is ready for review by banks, government regulatory agency or other stakeholders.
Track profit and growth
A comprehensive statement of profit or loss is a financial statement derived from bookkeeping.
This statement allows a business owner to truly ascertain if the business is profitable.
A structured bookkeeping system overtime will enable business owners observe trends and understand the business cycle better.
Are you a small or medium scale business owner? Do you need to implement a properly structured bookkeeping system? Contact KwekuBookman today to assist you implement this system at an economical rate.