Importance of Good Bookkeeping – Small Businesses

When it comes to owning a small business, it seems the list of responsibilities is endless. Hiring, ordering, scheduling, managing, pricing, stocking – the list goes on. Because of this, one of the most crucial and fundamental aspects of being a business owner sometimes suffers due to the overwhelming nature of trying to do everything yourself. However, letting this one area deteriorate can ultimately lead to other issues that can result in profit loss, fines, and even insolvency and liquidation. We’re talking, of course, about the importance of bookkeeping.

The benefits of quality bookkeeping far outweigh the cost of having a solid system in place. Here are just a few ways in which reliable bookkeeping can help your business.

  1. Discrepancies – Clear and organized books help business owners to realize if something isn’t adding up sooner. Discrepancies in the books can indicate anything from customer theft and internal theft, to vendors overcharging or register mistakes. Catching these things early on allows for early investigation and intervention.
  2. shutterstock_25793086Tax season – No business owner wants to spend hours or even days pouring over receipts, invoices, and ledgers with their accountant. Having well organized books allows the tax filing process to go much smoother. In addition, lack of mistakes allows for less guesswork which can result in a lower payout or higher returns.
  3. Planning for the future – Having a quality bookkeeping system in place allows for a much more comprehensive picture of where you business has been and where it’s going. This allows business owners to make much more educated and confident decisions as to what they are able to do going forward. Whether that means expanding a product line or taking on more employees, having the numbers to back those plans is a must.

Whether you hire a third party individual to handle your bookkeeping, or you decide to invest in one of the numerous quality bookkeeping software packages available, make sure your bookkeeping is a top priority. Staying organized sets a strong foundation on which to build the rest of your small business.

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