Is your bookkeeping a mess? Do you know your current profitability?
Bookkeeping is the recording of a business’ daily transactions. It is one of the few services that every company needs. Bookkeepers issue invoices to customers, record and monitor accounts receivable, verify invoices from suppliers, process payroll, create basic financial reports, and complete other important tasks to keep a business running smoothly.
If you know, or suspect that your company’s bookkeeping system needs help (and is holding back your success), this article should help to identify what should be done.
10 ways your bookkeeping should be helping you:
MyCFO helps our clients in critical ways to improve their bookkeeping. We design and implement day-to-day bookkeeping procedures, then provide continuous oversight and training. Our goal is to reform your bookkeeping system to help with your accounting processes and overall management. Here are 10 ways that your bookkeeping should be helping your business:
- Gives you extra peace of mind: As a business owner, the last thing you want is bookkeeping issues weighing on your mind. When your books are complete and tidy, they won’t keep you up at night. You can rest easy knowing that your business’ financial information is ready to be reviewed when needed.
- Aids with organization: Easy access to well-maintained records makes decision-making less stressful and requires less of your time.
- Spotting financial trends: Through staying on top of your books and keeping regular financial records, you can identify trends and make adjustments.
- Provide critical data for strategy: In order to plan for the future, you need a good understanding of the past. You can track the results of your strategy with bookkeeping and adjust goals accordingly.
- Shows key data for cash flow management: You can see outstanding accounts payable, as well as identify lagging accounts receivable. It’s this delicate balance of cash inflow and outflow that will keep your business going.
- Helps in accurate budget preparation: When income and expenses are properly organized, it’s easier to review financial resources and expenses.
- Makes tax preparation simpler: Instead of scrambling for receipts or invoices, all of your financial information is organized; a key side benefit is your tax preparation costs will likely be less.
- Dissemination of data to outside parties: Whether customers, investors, lenders, or even the IRS, being able to provide the information requested by these parties is vital.
- Avoid late fees: By paying your vendor invoices in a timely manner, you can avoid late fees and keep good vendor relations.
- Complying with loan agreements: If you have a line of credit, it likely includes conditions involving certain financial ratios, such as current ratio and debt-to-income. Instead of just hoping these will work out, your bookkeeping can help in making sure your business is in compliance.
If your bookkeeping system isn’t doing all 10 of the above, it needs help!
Every year, the professionals at MyCFO work with businesses of all sizes, and in a variety of industries, to drastically improve their bookkeeping systems. Contact us today for a free initial consultation!