Do we underestimate the importance of good financial records? Or are we uniform of the importance of good financial records? Either way, bookkeeping is one of the most important things you have to do as a business owner. It is required by law to upkeep financial records. It is to your benefit as a business owner that you keep great financial records. I know it can be time consuming. So if it is something that will take up a lot of your time, then a bookkeeper should be the first thing you invest your profits in.
There are several different reasons why bookkeeping can help your business, however I am only going to cover a few.
1.) Good Financial Records help avoid over and under paying taxes
The IRS requires us to pay as we earn our income. You can do this by submitting quarterly estimated taxes. If you are not properly tracking your expenses, you may overstate your profit. which will cause you to over pay in taxes. Many times we pay more taxes than we have to. If we can be diligent with our bookkeeping we can determine how much we owe to the IRS to the dollar.
2.) Good Financial Records make it easier to get a loan or sell your business
Banks and investors like to see good financial records. It makes it easier to make sound decisions. You financial statements tell a story about your business. They also give a snap shot of that story. The last thing an investor or banker want to do is go through unorganized paperwork to make a decision to partner with a business.
3.) Good Financial Records helps identify the strengths and weaknesses in your business
Business owners can make business decisions from their financial records. Your financial statements can show how profitable your business is. What is your most popular product or service. When is your most profitable time of the year. All these things are great information to run a business.
These are 3 great reasons to keep good financial records. There are many software’s that allow you to do this yourself. If you want someone to do it for you click on the link to schedule a 15 minute bookkeeping consult.