Accurate Records: Why You need them
Setting up a small business requires determination, motivation, and the know-how of the business industry. As a small business owner, you have no doubt heard it is important to keep accurate records but you are busy, and besides you have gotten along fine so far. You do not see how it can be worth the time it would take. And besides, you need to spend your time on the business front, not wasting it on tasks that don't add to the bottom line.
The truth is there are few things more important to any business than keeping complete and accurate records. Without these records, you will not have the information to make the important decisions that affect the business.
For example, you will not know if you can afford to hire employees or even know which of your products and/or services are profitable or should be discontinued. Every successful business owner needs a goal system that allows them to use their time in the most efficient way possible. If you do not have complete and accurate records, you will not be able to set reasonable goals or even determine if you have reached the ones you do have.
Some Important factors to be considered are:
Evaluate Performance for Improved Financial Decisions: Accurate bookkeeping will give you concrete, reliable data to help you analyze whether you are making a profit, identify your company’s strengths and weaknesses, and help ascertain whether you are meeting your financial goals. With this data, you can confidently arm yourself to make necessary adjustments and improves you see fit. Reliable data is your competitive advantage because unlike many startups and small businesses in Canada that make decisions without concrete data, you will make decisions with clarity and perspective.
Better Manage Expenses: A proper bookkeeping system will accurately track your expenses so you can see whether you are exceeding your spending limits. Being able to see total expenses will help you decide if you have spent too much.
Increase Cash Flow: Good bookkeeping will show you each customer’s A/R balances. Some user-friendly programs like Quickbooks can also display the age and customer detail information to read reports that would otherwise take hours to compile. Bookkeeping programs generate reports quickly so you can invest your time and effort into collecting those invoices instead of sorting through piles of paperwork.
Accurate Taxes & Maximized Deductions: Poor tracking of your income and expenses make it very difficult, even for the best tax accountants to prepare your taxes accurately and timely.
Prevent Employee Theft: Keeping your records organized and tracking things such as inventory and office supplies will discourage employee theft. Additionally, reconciling your checkbook regularly will discourage unscrupulous employees to steal.
Save Time: Small business owners have so many responsibilities. Being able to prepare documents or simply find information quickly should be a priority. No amount of good, old-fashioned organized manual bookkeeping can outperform the speed of a computerized bookkeeping program. However, those what want to keep things in the previous century, can still set-up a good, workable system provided it’s been thought out and allows you to quickly and easily locate information and track data, and seamlessly prepare documents such as invoices or sales orders.
Interested in learning more and get your books cleaned up? We specialize in working with small-medium sized, locally owned businesses in the retail and food and beverage industries!
