How Professional Bookkeeping Impacts Your Business & Your Profits
It is very common that we will take on a client who needs to get their books, and bookkeeping, ‘in order’.
But what does that really mean and why is it so important to your business?
The short answer is it gets your bookkeeping on solid ground – how it tracks & documents your business income and outlays.
There’s now a money trail that tells the full story of how & where you’re making money and/or losing it.
Yet it also means fulfilling legal and tax requirements, something you already know is vitally important.
How Bookkeeping Impacts Your Business
By not only getting your past finances and records in order, but also implementing a solid bookkeeping system going forward, your business gets a multitude of benefits, including:
- a true picture of your business’ finances and financial health
- finding errors and issues that are costing you money and profits
- tax compliance that prevents problems no business wants
- a new ability to make informed decisions for your business, cutting the risk factor dramatically
The Bookkeeping Clients We See Almost Every Day
Ultimately there’s 2 camps these ‘books in order’ clients generally fall into. One is the business that never had a real bookkeeping system at all. We’re starting from ground zero here.
The 2nd are those that had, or have, a system of some kind. One that was either not kept up consistently or was maintained, but filled with errors – the kind of errors that can be lethal to your business’ health.
At the end of the day, being in either camp is detrimental, even fatal, to the financial foundations of your company, so you don’t want to be in either one.
Let’s look at each a little more closely and see if you recognize your bookkeeping system, or lack of one, in them.
Why Businesses Wait To Fix Their Books
Many clients don’t come to us until the books become a problem, or at least a potential one because business owners are reluctant to reveal to anyone outside how they’ve been handling this area.
It’s almost a sense of shame.
You shouldn’t feel that way because not only have we seen everything already, it’s actually a sign of strength that you recognize the growing problem and are doing something to fix it. Right Now.
We’ve had clients literally bring in napkins with figures on them or just totals with no notations added up on unlined paper.
Often their receipts are long lost or thrown into a variety of boxes that aren’t labeled. That was their bookkeeping system and it seemed to work for them. For a while.
How a Bookkeeping System Fixes Problems You Shouldn’t Have
When presented with these situations we can’t always get everything in order back to the day they went into business.
What we can do is get as much straightened out as possible, especially for the current tax term, as well as put in place a real bookkeeping system that we can now handle.
That takes almost all of that work and worry away from you, freeing up your time and attention to be put where it needs to be.
In short, you get back to working fully on your most important goal, the health and success of your company.
The 2nd category, made up of those with a bookkeeping system of some kind, will have some elements on hand such as recordings of payables and receivables.
However, there are often missed items or items that are costing you money when they shouldn’t. Major amounts in some cases we’ve seen.
For example, one of our clients was so busy they had not kept up with invoicing, sacrificing easily obtained profits that they had earned.
We immediately got those sent out and collected, bringing in a large amount of money that the business should have had all along. A very nice windfall.
Books In Order = New Business Profits
Others have classified purchases and bills as taxable when they weren’t, causing them to pay taxes they were not liable for at all. Again, wasted money.
Getting your books in order is essential and not just for your ongoing business. What about possibly selling it someday when you retire?
Your books MUST be in order to do that. Examining those is one of the crucial steps a buyer takes before signing on the dotted line. Books not in order? No buyer.
How You Can Get Your Books In Order Starting Now
Contact us today. We can get you on sound footing with your bookkeeping. If you’ve waited to get this done, wait no longer.
The survival of your business just might depend on it.