Whether your business is a multi-franchise enterprise or a small tech start-up, bookkeeping is the key to success. It helps you keep record of all business transactions, from payroll to expenses and sales investments. Here, Wisteria Accountants are taking an in-depth look at how good bookkeeping can improve workplace productivity and help your business thrive.
The importance of accuracy
Accurate bookkeeping is at the heart of any successful business model, and by maintaining comprehensive financial records you can save your company time, money and unnecessary disruption. Here are a few key areas where good bookkeeping can help to streamline your business:
- Organization: Without accurate bookkeeping, things like paying bills, chasing debtors, preparing year-end accounts and producing detailed reports for key stakeholders can prove challenging and time-consuming. By keeping meticulous financial records you’ll save yourself time and money, maximise your profits and increase productivity.
- Taxation: Without appropriate bookkeeping, it can be extremely difficult to file an accurate tax return. This could result in your business paying too much tax, which could affect your company’s overall cash flow, or paying too little, which could lead to costly penalties. Without the correct oversight, you could also miss out on valuable tax breaks. By maintaining good bookkeeping practices throughout the financial year you’ll be able to fulfil your obligations to HMRC and ensure you never pay a penny more in tax than you need to.
- Cash flow: Every successful enterprise needs to maintain a healthy cash flow in order to pay staff and suppliers, as well as rent and other essential operating costs. Failure to meet these obligations could seriously affect the stability of your business, leading to dwindling profits and, in extreme cases, closure. With good bookkeeping you can continuously analyse the finances of your business, keeping a healthy cash flow and ensuring you have a little put away for a rainy day.
By keeping meticulous financial records, you’ll have the tools you need to devise successful strategies for your business, allowing you to consolidate your assets and make informed decisions about the future of your organisation. Here are just a few examples of how good bookkeeping can help to futureproof your business:
By keeping a comprehensive record of your company’s finances, you’ll be able to set realistic budgets to cover things like advertising, marketing and recruitment costs. Sound bookkeeping practices will also enable you to build some flexibility into your budgets, allowing for financial fluctuations throughout the year, and ensuring you don’t overspend.
With comprehensive bookkeeping you’ll be able to produce accurate financial forecasts, allowing you to set achievable goals and make informed decisions about the future of your business.
You’re much more likely to qualify for a loan or a company credit card if you can produce detailed financial information. So, if you’re seeking an injection of cash from your bank or building society, an accurate set of accounts is an absolute must.
4. Investment Opportunities
If you’re looking for investment, it’s imperative that your books are in good order. Potential investors are likely to request financial data before making a decision, and the ability to produce accurate, measurable financial information could make or break any potential deal.
Speak to the Professionals
When you’re running a small business, you don’t always have the time or the know-how to maintain good bookkeeping practices throughout the financial year. You may not be able to afford to hire a bookkeeper full-time, and things like dealing with invoices, recording expenses and preparing year-end accounts can be difficult and time-consuming. Whether you’re just starting our or you’ve been running a small business for a number of years, it’s important that you seek out professional help to streamline your operation, maximise investment opportunities and improve your bottom line.