Running a small business includes several moving parts, and one of the most important facets of being a business owner is maintaining good accounting and bookkeeping records.
It might seem obvious, but we cannot overstate the importance of keeping thorough, up-to-date financial records for your business. A shoebox full of receipts definitely isn’t the best course of action to promote financial success for an entrepreneur. Nowadays, keeping track of finances is astronomically easier with technology, and there aren’t any excuses anymore for keeping haphazard records of money coming in and out of a small business.
We’ve discussed applications and services that we love to use to stay on top of our bookkeeping, like Xero or Receipt Bank, but let’s talk about the benefits of excellent bookkeeping.
Strategize Revenue Sources
We’ve harped upon the important relationship between time and money to a business owner, and today, there is no exception. Time and money are important, and with thorough financial records, entrepreneurs can begin to analyze which client relationships benefit the company the most. Do you have a client that taxes your company’s time and ends up not being worth the price you charge? Consider either modifying the costs of services or replacing the client with one that is higher quality. Without documentation, though, small business owners will never know which clients to keep and phase out.
Reprioritize Products and Services
Work smarter, not harder– and that often means finding experts, who have the time and knowledge, to complete a task that would otherwise burden your business. Outsourcing a service, such as utilizing a phone answering company or content creator, is a great option for small business owners to supply a need for the company. While outsourcing a product or service is quite resourceful for a small business, it is important to keep track of how beneficial it really is over time. Without well-kept bookkeeping, it is increasingly difficult for business owners to know whether they are receiving enough bang for their buck with another company. Keep good records, and you’ll be able to discern whether a product or service is worthwhile for your small business.
Make Tax Time Easier
Tax time is stressful enough. Don’t complicate the process by having messy financial records. Take the time to organize and update your bookkeeping so that your tax preparer can easily complete your business’ taxes with the best possible return outcome. You’ll avoid receiving various phone calls asking for missing information or clarification on chaotic documentation. Make it easier for everyone involved! Consider outsourcing your bookkeeping for the expertise that could truly benefit your small business.
It is no secret that being organized promotes success for small businesses. The benefits of good bookkeeping are endless, but remember that some of the most important reasons to keep thorough, updated financial records include the ability to strategize revenue sourcing, reprioritize outsourced products and services, and make tax time easier.
Need a bookkeeper for your small business? Get in touch with an Account Manager today.