Bookkeeping

by crystal wilson

I met with a friend earlier this week who asked me a very simple question - Is bookkeeping really important for my business?  How much does it matter REALLY?

Honestly, not being a "numbers" person, I didn't know that answer.  I mean, sure, I "know" the answer - of course bookkeeping matters! 
But why?  What value does it bring to a small business?  Is all the time and frustration worth it in the end?

I decided to investigate, and share the information I found with all of you.  If you have been struggling with the same questions, then hopefully this will be helpful for you.  If you have been on the bookkeeping bandwagon for awhile now, feel free to sit back with a knowing smirk painted on your face.

The following is an infographic I discovered via Pinterest from holykaw.alltop.com.  It describes (with pictures!) one of the primary reasons to have a handle on your books - Taxes.  Having your receipts gathered, filed, and understood can make this time of year much less painful.  A good bookkeeper can help you find the best way for your business to manage these details.

Picture
 
Taxes only need doing once a year though.  Many accountants do taxes, so why would your small business need to hire a Bookeeper as well?  Isn't it redundant?  Well, I worked in an accounting office for awhile, and I can tell you that Accountants are far less receptive to your shoebox full of "records" than Bookkeepers are.  But there's more to it than just that.  There's more to it than just taxes.  Here are some really good points to remember when trying to decide if having a Bookkeeper is really important for your small business.

1.  Bookkeeping can help you plan ahead.
 You can call it budgeting; it is all the same. Forecasting your business needs ahead of time and planning for purchases and other business requirements becomes alot easier with an effective bookkeeping system in place.

2. Bookkeeping will help your small business meet deadlines.  making timely payments for loans, rent, bills, taxes etc. takes alot of focus and organization for an individual, let alone an entire business.  Having your books in order means you will save money on interest and other fees that may be incurred if you forget a due date.

3. Cash flow management is nearly impossible without proper bookkeeping. 
No business can stand the test of time without effective cash flow management.

4. Bookkeeping  will help you evaluate business performance.  Maintaining good records will make it easy to tell if  your small business is flat lining, depreciating or growing. When you know the performance level of your business, you can strategize and put appropriate plans in place.

5.  Bookkeeping accounting will help you envision the future.
 
It provides the tools and information to assist you in setting and evaluating goals.

 6. Bookkeeping can help you to know when it’s time to bring in extra help or increase your employee base.
Wondering if you can afford to hire someone to bring you coffee each morning?  Or maybe someone to clean your office?  Check your books (or ask your Bookkeeper)!

The answer is a resounding YES, bookkeeping is an integral part of succeeding as a small business.  It is a lot of hard work, but with the right team in place to help you it can lead your business down a successful path to a sustainable future.