Bookkeeping is essential for businesses to maintain accurate financial records. Still, many small businesses fail to use professional bookkeepers and try to manage the financial record keeping on their own. Inaccurate accounting and bookkeeping practices are some of the top reasons businesses fail.
While bookkeeping may seem simple at first, there is more to maintaining accurate financial records than merely logging purchases and sales. Without an experienced bookkeeper, you risk blindly running your business. Let’s look at seven reasons your business needs a professional bookkeeper.
1) Bookkeeping Is Good For Your Budget
Bookkeeping helps you maintain your business’s financial roadmap. By organizing income and expenses correctly, bookkeeping gives you a clear picture of your financial health and helps you make sound decisions. Bookkeepers help you maintain a robust bottom line and plan for your future.
2) Easier Tax Preparation
Filing taxes is confusing enough as it is; without accurate financial records, tax season gets much more stressful. Most businesses must file taxes annually, and the last thing you want to do is file incorrectly due to incorrect financial records. A professional bookkeeper will have all of your documents in order and be able to work with your accountant on your tax preparation.
3) Financial Organization
Your company’s financial health is dependent on your organizational skills. Bookkeeping requires a specific skill set that most business owners don’t possess. Successful business owners understand when and how to outsource specific tasks, like bookkeeping, so they can focus on running their business effectively.
4) Planning Purposes
Accurate bookkeeping helps you better navigate financial decisions and develop your strategic plan. Viewing past financial performance and present financial situation gives you a clearer understanding of how you need to proceed at any given time. Your bookkeeper and accountant can also help you structure expenses to help at tax time.
5) Make Reporting To Investors A Cincher
If your company has investors, you are likely accustomed to providing financial reports to them regularly. Bookkeepers quickly generate financial statements so you can give your investors your balance sheet, income statement, and cash flow statement when needed. Having this information ready at a moment’s notice will keep you ahead of the game.
6) Profit And Growth Tracking
Your professional bookkeeper will help you track your company’s profit and growth. Your bookkeeper will give you a financial snapshot of your bottom line by providing you with reports like the income statement. You’ll be able to see if your business is profitable or not and have the information necessary to make good decisions.
7) Improved Cash Flow
Accurate bookkeeping improves your company’s cash flow. By reporting expenses, revenues, liabilities, and receivables, you can track customer and vendor invoices and ensure bills are paid on time. Keeping up with customer payments is essential to your cash flow, and paying bills on time helps you avoid late fees.
Your Business Needs A Bookkeeper
While you may feel you are capable of keeping accurate financial records or that you are saving money by doing your bookkeeping yourself, your business needs a professional bookkeeper to maintain its financial health. You can accurately manage your company by using a professional, experienced bookkeeper to keep your financial records.
