Bookkeeping is an essential component of small business success. Some of the benefits of bookkeeping include; maintaining compliance, tracking your business activity, and producing the data needed for business decisions. But despite its proven importance, many owners dread and avoid bookkeeping. In fact, most entrepreneurs claim that it is one the worst parts of running a business!
Wondering if it’s really worth the aggravation? Consider outsourcing the bookkeeping function to avoid the aggravation while leveraging the benefit of hiring someone to professionally manage your books. Read more about our monthly bookkeeping solution.
Here are reminders on the benefits of bookkeeping and its contributions to small business success.
Keeping track of expenses
A reliable system for tracking expenses ensures you reap all the benefits you’re entitled to when filing your taxes. Expenditures sorted into categories, such as “food”, “travel”, and “office supplies,” can be catalogued in QuickBooks Online and other bookkeeping software.
Using a dedicated credit card for business expenses, and updating your records on a monthly basis, will help put money back in your pocket come tax time.
Measuring profitability and planning for the future
In order to grow your business, you must be able to track and compare finances from one year to the next. In addition to reconciling the books and bank statements every month, effective bookkeeping generates records you can use to gain a comprehensive overview of your business.
This data can help you:
- measure year over year profits
- identify opportunities to cut costs
- update quarterly estimated tax payments
- plan for major expenses (such as new office space, equipment, or staff)
- develop data-based strategies for expansion.
Preparing for tax season
Few things are more stressful for business owners than scrambling to get poorly maintained financial records ready for tax season. In addition to the panic of last-minute filing, inaccurate or incomplete documentation can lead to serious penalties, fines, and even an audit.
Save money and get the peace of mind with sound bookkeeping. You’ll be assured of compliance with regulations and will receive a reliable estimate of amounts owed long before your tax bill is due.
Final Thoughts
Most entrepreneurs are passionate about developing new business ideas, not crunching numbers. Employing a professional bookkeeper can help optimize your accounting and increase overall profitability.
There’s a good reason a large number of small businesses outsource at least one accounting function to help manage tasks like payroll, closing the books each month, and managing accounts receivable.
It’s well worth it. Invest in effective bookkeeping and you’ll build a solid foundation for a resilient, forward-moving business.
P.S. Contact us for a 30-minute discovery call to learn how outsourcing the monthly bookkeeping can help your business grow!