Updated: Oct 10, 2019
The Importance of Bookkeeping in Business: The questions every business owner must ask themselves!
There is a lot that goes into starting and running a successful business. In the beginning, small business owners usually wear a variety of hats during the launch process. This means skills like accounting and web design, which are typically handled by outside professionals to ensure things are done professionally and with care will need to be done by the business owners. Here at DataMath we know bookkeeping is a vital part of the vision for your business. Without proper records and financial numbers, it can become difficult to grow your business.
An accounting professional can be expensive for a small business just starting out, so the best alternative is to invest in a competent bookkeeper that makes it simple and easy to stay up to date with your companies financial situation.
Are you looking for funding to expand the business?
Business owners who require investment and funds from outside sources should make bookkeeping a high priority to their business. Providing investors with accurate records will showcase two concrete elements that benefit your business:
Builds trust with your investors.
It makes the funding process faster.
Accuracy and organization within your accounting department will display a sense of awareness to your investors, this makes deciding to invest with you easier. When the investor is confident in the numbers, they are drastically more confident in investing their money with your company.
Are you prepared for taxes?
A mistake that many small business owners make during tax season stems from lacking organization with their books. Not being able to locate receipts or account for expenses can make tax preparation difficult, forcing your company to pay a tax professional to help organize a year worth of receipts and statements. This process could lead to audits or your business or even owing more money than expected to the IRS. No one wants to pay the IRS more than they need to just to sustain the business.
What happens when you hire new employees?
Bookkeeping is not only about the expenses, liabilities, and taxes that are accounted for, but it is also important to maintaining the organization of the total business. When you hire new or promote employees, they must be able to understand your record-keeping system and how to maintain the financial health of your business. If it is disorganized it will have a domino effect on the rest of the business.
Is your company financially healthy?
The best way to answer this question should be by looking at your financial books. Accurate financial books will indicate your biggest expenses, liabilities, and revenue generators. Knowing the health of your business will aid you in making important decisions and clear the initial doubt of business ownership. You’ll also have a wider view when tracking profit and growth, which are the backbones of your business.
Most importantly, organizing your bookkeeping will simply provide you with the peace of mind to live without concern of the IRS. When you know the numbers and records match, you will have the ability to maintain an accurate overall budget and ensure you stay off the radar of an IRS audit. Audits are typically the main concern to a young business because the expenses and revenue may cancel each other out during the early stages of the business. Once you have your financials ironed out, your chances of an audit will decrease, allowing you to focus exclusively on building and growing your business.
Does your company need help getting finances in order?
DataMath can help you organize your company's financials. Whether you are just getting started or just need to reevaluate some bookkeeping processes. Our experts can offer great advice on how to handle these situations. If you own or manage a business in Lexington, KY, let us know if you need help with managing finances.