Accurate Bookkeeping Enhances Business Success
Accurate bookkeeping enhances business success
Accurate bookkeeping enhances business success. There are too many things to do when you first start a business or become the new owner of an existing business. One of the simplest and most important things to ignore though is tracking and recording the sales and expenses of the business.
My observation is that there are two reasons why this critical piece of owning and operating a business gets ignored. The first reason is that a lot of business owners simply don’t enjoy the task of recording and tracking all sales. It seems obvious. The money comes in, gets put into the bank on a daily or semi daily basis as a deposit. Each month or whenever the owner chooses, they can go online and see the deposits including the bank balance. As checks are written they are recorded in the check book and so the information is readily available if and when needed. Besides, a tax return only has to be filed once a year and as it’s a long way off from being needed, it can be looked at closer to that date.
The second reason is that not all business owners have the skills to do the book-keeping accurately. Making the right entries in the right boxes, handling the debits and credits, the refunds and right journal entries and then reconciling the bank statement requires and takes a lot of time.
Regardless of the reason, one of the most important tasks to help your business be successful is accurate and up to date financial statements. Good software with good people who know how to use it is readily available. But what’s most important of all, is that within this financial data is good information to help you better own and operate your business. Information such as knowing your top 20% of your customers so you can thank them, where you are buying all your products and services from so you can negotiate better terms including volume discounts, how much interest you are paying on any bank loans so you can negotiate better terms with another bank, if your rent is being paid on time and so it goes on.
There are many things to learn and put in place when you own and operate your own business. As we are human, we tend to work from habits. Get the right habit in place when you first start and it will be a great investment in the success of your business as poor financial records is one of the top reasons most businesses fail.
If you would like more information about selling a business, buying a business, buying a franchise or a related service such as valuing a business, please visit my webpage Services and choose from the drop down menu the information you would like. For more immediate help, you are welcome to send an email to Andrew Rogerson or give me a call on 916 570-2674.