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3 Ways Bookkeeping Reduces Worry for Business Owners

Bookkeeping reduces worry for business owners in a number of ways.

Firstly, let’s outline what bookkeeping is.

Bookkeeping is keeping the records and financial transactions of a business up to date. The reason why it’s called bookkeeping is because in the old days (and still in some archaic accounting firms), is because financial records used to be recorded in physical books.

Nowadays, things are done on accounting software such as MYOB, Xero and Quickbooks.

In Australia, one in three businesses fail in their first year. Bad bookkeeping can often be the reason why businesses fail. Often, business owners simply do not know what is actually going on in the financial side of their business because their financial records are not up to date. In these situations, business owners find out that things are going wrong when it’s already too late.

But with proper bookkeeping, issues can be identifies early and business owners do not need to worry.

1) Peace of mind business numbers are accurate

Hemingway’s famous phrase “gradually, then suddenly” applies to business failure.

Often, businesses are failing gradually but a business owner does not even know their business is failing. That is because they are not reviewing the lagging indicators which come up in their bookkeeping.

They are unable to review the key indicators of their business because they do not even have accurate financial records for their business.

When business owners have peace of mind the numbers in their business are accurate, they can be assured their business is not failing underneath them – provided they are hitting their key business KPIs.

If you would like help setting your business KPIs please check out our CFO Growth Package.

2) Accurate internal reporting

Internal reporting is critical for business success.

Your internal reporting tells you your net recoverable time as well as the total amount you have invoiced, among other helpful information. Internal reporting is also critical for management of staff and productivity.

But for your internal reporting to be accurate, you need accurate bookkeeping.

When your financial records are kept up to date, you can have peace of mind your reports are accurate.

3) Accurate information to report to the tax office

Perhaps even more important than the above reasons, you need to ensure your legal compliance with the Australian Taxation Office.

It is critical that for the purposes of reporting to the ATO that your bookkeeping is correct.

That means that having your bookkeeping done right means you can have peace of mind that your are not reporting incorrect information to the ATO. This is a critical way that bookkeeping reduces worry for business owners.

If you would like help with bookkeeping, please get in touch with us.

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