This is a big one, because so many small business owners have a “general idea” of their profitability but they don’t really know what their entire business picture looks like. When you’re ready to expand to the next level – do you know which of your products and services are most profitable, and which ones aren’t? If you needed to cut costs, do you know where your biggest expenses are? Knowing the numbers real-time can help you maximize your profits and reduce your expenses.
Here are 5 quick reasons why this is so important:
- Budgeting – Having this organized in simple and clear fashion gives you a very good road map to be able to create a budget for your business. With this it can help you plan for future expenses and start saving or planning.
- Tracking your Profit – Being updated with your books allows you to have a view of your business profit or loss in any given period of time. This is so important to have this view as it will give you a greater understanding of the ebbs and flows of your business across periods of time.
- Tax Preparation – No one likes a surprise especially a tax surprise! Having your information up to date allows you and your tax professional to prepare and review information at the drop of a dime. It helps you adjust if need be any estimated taxes or tax prep that may need to be done. ALSO this certainly helps with being able to file with CONFIDENCE your reporting to your tax professional at the end of the year in a timely and efficient manor!
- Allows you to make better decisions – How can you make decisions if you have no information to back that? You would not buy a 2500.00 computer if you did not know you had the funds to back it up. Do not let your bookkeeping (or lack of) prevent you from making good decision based on financial information.
- Audit Purposes – Unfortunately, business get audited. You want to make sure you are organized and your financials are organized in the case of an Audit. Audits are not fun, but if you are organized and honest they will have less motivation to penalize you for simple things. When you act like a business and make their job as auditors easier things usually go a lot smoother.
In the end you know your bookkeeping is important. It is important for so many reason hundreds more than listed above. As business owners we cannot do it all and really bookkeeping can be complicated and even classify transactions can be confusing and unclear. If you do not feel, want or have the knowledge of bookkeeping, accounting principles and how those relate to your tax returns consider trying our bookkeeping Balanced Office Solutions offers. You would no longer have to work additional time, worry about whether things are done on time or coded correctly and would have year end reporting without the worry or hassle!
Contact me today for a free consultation!