Filing paperwork, accurate bookkeeping and making estimated quarterly tax payments. If you had to list out the least-enjoyed tasks by most business owners, taking care of accounting and other financial matters is probably right at the top.
Yet at the same time, a lot of those same business owners are struggling. Maybe they had a financial goal that they fell significantly short of. Maybe they tried to release a new product or service and it underperformed.
Either way, much of this can be changed by making sure your current records are as up-to-date as possible.
In no uncertain terms: 2022 is over. We’re well into the new year of 2023. If you’re still trying to close last year’s books, you’ve got a major problem on your hands.
Thankfully, all hope is not lost. There is a way that you can get caught up on things and ensure you’re on the right path financially. You just may have to shift the way you’re used to thinking about what constitutes accurate bookkeeping, to begin with.
The Benefits of Accurate Bookkeeping: Breaking Things Down
One crucial thing to remember is that getting your books cleaned up is about more than just retroactive financial maintenance. It can directly impact your business and its ability to function in the coming year, too.
If your records aren’t up-to-date, you can never really be certain where you stand financially. You could have a much more positive impression regarding how things are going compared to the reality of the situation. This is especially true if your business experiences seasonal fluctuations in cash flow and work performed.
Speaking of that, without up-to-date records you also have no true idea of what you worked last year at all. This is about more than just figuring out how much money is sitting in a bank account somewhere. Knowing how much you’re working can help uncover trends and patterns that you likely would have missed. You can see who your biggest clients are, for example, and the ones that you absolutely want to hang onto. You can also see if you need to diversify your client base to avoid putting “all of your eggs in one basket.”
Accurate Bookkeeping Helps With The Big Picture
Up-to-date records not only help shed more visibility into the parts of your business that are working. But almost more importantly, which ones aren’t. If you started offering a new product or service last year, for example, it stands to reason that you would want to know as much about its performance as possible. The same is true if you’ve expanded your operations. Perhaps you expanded your operations in a way that isn’t generating as much money as it could. Knowing where you stand at any time, allows you to make informed decisions. Without this type of insight, you’re really only making decisions on little more than gut instinct.
Finally, it’s likely that you’ve set out goals for yourself in terms of performance for the new year. They may not be achievable with all the processes and best practices you currently have in place, though. You may need to tweak some aspect of your business to reach those goals. If that is the case, you need to know which direction you should be pivoting towards.
Flawed Accounting Practices Do More Harm Than Good
All of this is to say that you are truly doing your business a disservice if your books and essential records are not accurate. Again, these types of records are more than just a “necessary evil” or a “frustrating cost of doing business.” For your business to remain healthy and grow, you need the insight and information to stay informed.
That’s why, if you are looking for a single step you can take to help improve your business success, it’s accurate bookkeeping. Spend the time to get your records up-to-date. Make sure the information contained in them is precise. Put a process in place to help make sure those books stay accurate. Finally, use that information in any way that you can in the future.
Truly, you would be surprised by just how much easier it is to plan and remain successful once you have done precisely that.
The Importance of Working With a Professional For Accurate Bookkeeping
If all of the above sounds like it is equal parts time-consuming and frustrating, that’s because it largely is. But it’s still one of the most important things that you can do to build a foundation of financial success for your organization – and it’s also a road that you don’t have to travel down alone.
Especially in the early days of a business, it’s natural for entrepreneurs to hang onto that “can-do spirit” and try to handle everything themselves. In a lot of ways, this is the mentality that got you so far in the first place. But you’re an expert in your industry – you’re not necessarily an expert in bookkeeping, nor can you be expected to be.
At the same time, you don’t want to take chances and do a poor job because it almost always guarantees that you’ll be making decisions based on inaccurate financials. Not only could this potentially inhibit growth, but it could actually cause the types of cash flow issues that cause many organizations to prematurely close their doors every year.
It’s Never Too Late To Start
All of this is to say that once you realize the task is too much for you to handle, don’t be shy about bringing in a financial professional. At the very least, they can free up as much of your valuable time to focus on other daily aspects of your business – which for many is the most important benefit of all.
If you’d like to find out more information about why accurate bookkeeping matters for small business success, or if you’d just like to talk about your needs with a professional in more detail, please don’t hesitate to contact us today.
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