Some of my blog posts include affiliate links. If you purchase an item from one of my links I may receive a commission. Please read my disclaimer for more details.
As a bookkeeper, I can’t stress enough how important it is to have a good bookkeeping process in place for your business. Bookkeeping is the first step in compiling income and expenses and then turning the financial data into reports, statements, and many other essential tools you can use as a business owner.
Behind every good business owner is an experienced bookkeeper who will help you benefit from your record-keeping throughout the year.
Here are ten reasons why bookkeeping is critical to your business!
Bookkeeping will tell you how much income you are making and how much you are spending on expenses in your business.
Evaluating your income and costs will allow you to make conscience budgeting decisions. Budgeting decisions include cutting expenses, changing vendors, or hiring employees to grow your business.
Make life easier with my free Bookkeeping Simplified Guide!
Bookkeeping helps you to make better business decisions. Business decisions range from finding ways to increase income, decrease expenses, and recognize opportunities to make money.
Once you have been in business for a year or longer, comparison reports help find seasonal trends and dips in sales.
Use and understand your Profit and Loss statement.
Once you have a bookkeeping process in place and your bookkeeping is kept up to date weekly, semi-monthly, or monthly you now have statements, reports, and current financial data to keep you aware of the ongoings within your business.
Detailed bookkeeping helps during income tax season. A competent bookkeeper will ask questions about expenses and categorize your qualified tax deductions.
A reliable and accurate bookkeeper will find errors and make necessary corrections in your bookkeeping process. Inaccurate record keeping, categorizing, and lack of procedures are ways a good bookkeeper will help your business.
- What Does a Bookkeeper Do?
- How to Make an Extra $1000 a Month
- 5 Ways to Know You’re Ready to Hire a Virtual Bookkeeper
- 5 Reasons You Need to Outsource Bookkeeping
- How to Become a Freelancer with No Experience
- 10 Simple Bookkeeping Tips to Build Your Business
- 3 Reasons Why You Need a Bookkeeper All Year
- 3 Necessary Actions for New Small Business Bookkeeping
- Don’t Let Your New Business Fall Short
- 9 Things I Learned in 9 Years of Being a Small Business Owner
- How to Stay Motivated While You Build Your Business
- What Does Work-Life Balance Mean to You?
- Why Do Small Businesses Need to Understand W9 Forms?
- How to Prepare Your Small Business for Tax Season
Focus More Time on Your Business
Benefits of bookkeeping include having time to run your business. Processes in place for bookkeeping allow for more time to be the business owner, make managerial decisions, and generate income.
What tasks can you accomplish as a business owner if you had more time?
When your bookkeeping transactions are up to date, it is easier to plan for future business growth, sales highs, sales lows, and other opportunities.
I suggest learning and understanding accounting statements like Profit and Loss and Cash Flow. These two statements will help you in the planning stages of your business.
Requirement by Law
Regardless of your industry, you will need to keep in compliance with federal and state laws. A bookkeeper will ensure payroll tax, sales taxes, and other payments are on time.
Look into legal templates created by a professional lawyer to protect your business and website.
With the help of a bookkeeper, you can save money by tracking expenses, creating invoices, and keeping up with inventory.
It becomes easier to save money for seasonal losses, equipment, or investments.
- Helpful Tips to Prepare for Income Tax Season
- How to Make Drop Shipping Work for Your E-Commerce Store
- How Tailwind Helped My New Blog
- 9 Steps to Make Before Starting a Small Business
- How to Start a WordPress Blog Using SiteGround
- How to Work from Home and Make Money
- Semi-Annual Bookkeeping Tips are Important
- How to Make Money Using Your Blog
- How to Start a Bookkeeping Business with Confidence
- Common Tax Deductions for Small Business Owners
- The Best Business Ideas for Women Entrepreneurs
- 13 Best Easy to Start Online Business Ideas
- 11 Simple Strategies to Increase Your Small Business Profits
Let your bookkeeper collaborate with your accountant or tax advisor!
Your bookkeeper can keep adequate records by asking valid questions. And your tax advisor can complete your income taxes with no trouble. It’s a win-win situation!
Predicting yearly tax outcomes is easier with accurate financial statements and reports. One of the benefits of a bookkeeper who works with your accountant or tax advisor is the ability to break down deductible expenses for income tax season.
Visit my blog post: Important End of Year Checklist for Small Business on more end-of-year tasks.
Like this post? Please share!