The sole manager or analyzer of a company’s finances is the accounting service of bookkeeping and hence it is crucial for any kind of a business.
If bookkeeping did not exist there it would have been a massively difficult task to assess your assets and liabilities or costs and profits. Moreover, keeping track of overdue payments from customers and loans and bills due to creditors as well as the very many receipts and invoices for the annual tax filing purposes would have become a mammoth task.
Cash Flow is one of the most important aspects of a business, especially the small ones since it help in getting customer payments at the right time and thereby sourcing supplies in a timely manner which goes a long way in attaining success for the business.
During the mapping of the initial business plan or later when it needs to be modified, the businessman needs the help of these bookkeeping reports and financial statements so as to efficiently track the budget and estimated expenses in order to achieve the desired results.
If you have a small business of your own, chances are that you do the bookkeeping on your own in order to save as much money as possible.
Doing this activity all by yourself might not be a good idea since it might lead to errors and then severe compounded errors in each year leading to bankruptcy soon. You might be a great field operative running the business well but that doe not make you a bookkeeping expert, does it?
Do not make the mistake of thinking these as mere exaggerated statements. On the contrary, these are sheer hard facts since the most common reason for a company’s failure in its first 5 years of operations is ineffective monetary planning.
In the following paragraphs we would see the importance of maintaining proper financial records and the effectiveness of outsourcing the responsibility of the same to an external expert bookkeeping service provider.
Firstly, if you want to do a proper business planning, bookkeeping is something you cannot do without. Starting from identifying which ventures are not doing well to solving problems if any, it is something that is of utmost importance to you.
Secondly, it is safe to say that bookkeeping is extremely essential in case of audit since, you now need not undergo the last minute scrambling as bookkeeping makes transaction tracking and invoice organizing a lot easier for you.
For countries wherein you need invoices even after 5 years of the transaction you need to use bookkeeping all the more since a messy audit record can make your dealings with the government quite a hellish experience.
Thirdly, for any extra funding that you might need for your business in terms of a loan, you have to submit your bookkeeping reports and financial statements as a part fo the approval process without which the banks would simply deny your request.
If you want to sell off your business, remember that bookkeeping is essential for a clean exit because the first thing that your prospective buyers are going to ask for is clean financial statements for at least the last few years.
Lastly, the most difficult activity as termed by all businessmen is undoubtedly tax filing which is made a lot easier if your bookkeeping reports are well organized and up-to-date.
You can now focus your thoughts on how to reduce the tax liability rather than deal with confusing financial statements.
As a conclusion it might be said that the matter of bookkeeping is too crucial and important to overlook and hence should be outsourced to an external expert agency if not done internally.
Bookkeeping will help you in saving both time and money and most importantly give you the much required relation and assurance regarding your financial statements which would now be prim and proper, free from any sort of loopholes.
Author: andrewtitaneThis author has published 28 articles so far. More info about the author is coming soon.