Accurate bookkeeping is essential to a business’s sustainability. As a business owner, your records are the key to understanding what’s happening in your business, making sound decisions for moving forward, and staying compliant.
- Budgeting: When income and expenses are correctly recorded, it is easier to review available financial resources and estimate your cash flow.
- Organization: Bookkeeping is an essential tool for the IRS, investors, accountants, and lenders interested in your financial records. With well-organized records, it is easier to locate and provide information as requested, it can be easier to file your taxes, and it can improve your chances of securing funding.
- Analysis: Bookkeeping helps your company generate financial statements used to track cash flow and determine profitability and ROI.
- Planning: Financial statements can also indicate initiatives that have or have not worked well, which can help plan future process improvements.
The integrity of the data in your bookkeeping system is only as good as the information you enter. And entering good information means recording an item in the correct account, applying the proper description or code, and recording the correct dollar amount. And a simple error can cost time, and money, and cause poor decision-making.
