Negosentro | What Is Bookkeeping And Why Is It Important For My Business? | You may find you are great at keeping on top of your books; you might enjoy going over your finances and ensuring that you are up to date with everything. On the other hand, you may be someone who doesn’t quite have this knack and might need a bit of help.
No matter which person you are, it’s always good to have a refresher on the importance of bookkeeping.
What is bookkeeping?
Bookkeeping is the way in which we keep all records of our financial information. It is a great way of making sure we are on top of our finances and are aware of how much money we are taking in and how much is going out. If we didn’t balance our books, we would find that we weren’t sure of how much money the business was making and so wouldn’t know if we had enough to cover the cost of paying our staff or enough to keep buying our stock or just to look after our shop/premises and maintain our services.
This is why bookkeeping is so important. It is a way of being prepared for the financial year ahead. You have to keep this in mind even if you are a small business as you never want to be caught off guard with surprise fees or taxes you need to pay.
Book balancing is how we know our business is successful; it shows us how much money our business has so that we can easily see if we are a success or not.
Even if you do have an accountant to look after your finances, you will still find that you have to be involved somewhat in this process as it’s you who will be receiving your invoices and expenses and you who needs to pass this information along. An accountant can’t do their job of looking after your business’s expenses without your help.
Looking to the future
Another reason that bookkeeping is so key in running a successful business is that if you ever plan on growing your business, you will need to be able to demonstrate to investors and business partners that you are running a profitable and above-board business.
If you don’t have your finances sorted, they will have no way of knowing this and will most likely not trust you and so refuse to invest and support you based on just your word.
What are the best tips for good bookkeeping practices?
Start early; no matter how small your business, it’s always a good idea to start organizing your finances early. A great way of doing this is to set yourself designated time slots each way to go look over all inflow and outflow of costs that your business goes through. This is so important as if you fail to do your taxes correctly, you will find that you are on the receiving end of fines.
Keep all work accounts separate from your personal ones when going over your finances if you run a business, as it can be an easy mistake to bring these finances together. You have to remember no to do this and instead open a separate business account.