Keep Your Business' Books in Order
I know, I know…bookkeeping is probably the least sexy of all small business activities. You probably feel like you have better things to do. However, it is important to understand that efficient management of financial resources is an integral component of your small business; thus, the need for bookkeeping.
Bookkeeping includes maintaining regular records of a wide range of monetary activities like profit, loss, debts, credits, expenses and other relevant details. The bookkeeping method that you should adopt will be influenced by the size of your business and the volume of transactions.
A Legal Necessity
It is essential for all small businesses to keep their books in order for tax purposes. Every business, whether big or small, is required by the law to keep track of its revenues and costs – and just in case you're audited, you'll have the proper records to show the IRS.
Determines Your Financial Position
Bookkeeping helps your business to evaluate and establish its financial condition. Recording details like profit and loss, revenues and expenses, debts and credits along with their corresponding dates and amounts are vital in order for you (the owner) to assess the financial stability of your business.
Raising Finances
Detailed records of your business' financial transactions and activities will prove invaluable if you ever want to secure a loan. Proper bookkeeping establishes the viability and feasibility of your business to potential investors.
Hire Professionals
Most small businesses carry out financial transactions through invoices, receipts, checks and credit cards. If you don't already have one, consider hiring the services of a bookkeeper or an accountant who can handle the entire process efficiently.
Be Regular
To have a clear picture of your business, it is important that you balance the books on a routine basis. Updating your records regularly is vital for effective management of financial resources.
