Bookkeeping Advice for Business Owners Part One
BOOKKEEPING IS CRUCIAL TO YOUR BUSINESS SUCCESS
Bookkeeping is the process of collecting, filing and organizing, supporting financial documents in order to record transactions efficiently in your bookkeeping system.
Experts have identified lack of proper bookkeeping as one of the causes of small business failures. Thus, by keeping proper business records, you are preparing for the success of your business.
The importance of bookkeeping to your business cannot be overemphasized. Below are five reasons you want to maintain proper records of all your business financial transactions.
1. It makes the preparation of financial statements easy.
Financial statements provide you with important information like your business' assets, liabilities and equity. They provide you what your business' net profit is for a specific period. Accurate financial statements are required by banks to determine your credit-worthiness when you wish to obtain a business loan.
2. It allows you to measure the progress of your business.
With good bookkeeping, you will be able to determine which items sell more and where necessary improvement is required. You can determine who gives your business the most and who takes the longest time to pay you. You will be able to determine how much you are paying out in commissions in comparison with how much you are selling. You will be able to determine what time of the year business is faster or slower in order to make decisions on when you need to make large or less purchases, or when you need to produce large or less quantity.
3. It helps you tremendously to file your annual tax returns.
Proper bookkeeping ensures that you track all your business deductions in order not to end up paying more taxes than you have to.
4. In case of audit investigation of all your expenses and income, proper financial records will be required.
5. In case you decide to sell your business or attract investor, potential buyers or investor will require accurate financial records.
Please check this blog from time to time. We are working to provide you with more useful information.
Put your comment or question below.
Cheers!
Please note:
You can check all the services we offer by clicking the link below:
Bookkeeping is the process of collecting, filing and organizing, supporting financial documents in order to record transactions efficiently in your bookkeeping system.
Experts have identified lack of proper bookkeeping as one of the causes of small business failures. Thus, by keeping proper business records, you are preparing for the success of your business.
The importance of bookkeeping to your business cannot be overemphasized. Below are five reasons you want to maintain proper records of all your business financial transactions.
1. It makes the preparation of financial statements easy.
Financial statements provide you with important information like your business' assets, liabilities and equity. They provide you what your business' net profit is for a specific period. Accurate financial statements are required by banks to determine your credit-worthiness when you wish to obtain a business loan.
2. It allows you to measure the progress of your business.
With good bookkeeping, you will be able to determine which items sell more and where necessary improvement is required. You can determine who gives your business the most and who takes the longest time to pay you. You will be able to determine how much you are paying out in commissions in comparison with how much you are selling. You will be able to determine what time of the year business is faster or slower in order to make decisions on when you need to make large or less purchases, or when you need to produce large or less quantity.
3. It helps you tremendously to file your annual tax returns.
Proper bookkeeping ensures that you track all your business deductions in order not to end up paying more taxes than you have to.
4. In case of audit investigation of all your expenses and income, proper financial records will be required.
5. In case you decide to sell your business or attract investor, potential buyers or investor will require accurate financial records.
Please check this blog from time to time. We are working to provide you with more useful information.
Put your comment or question below.
Cheers!
Please note:
You can check all the services we offer by clicking the link below:
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