If you’re a business, you need to keep accurate records. Noting down key financial and performance information helps you to grow. However, vague records won’t give you the information you need. If you’re going to keep records, they need to be detailed and accurate.
There’s a couple of reasons why this is the case. If you’re a new business, you probably won’t know why your records need to be spot-on. Let’s talk about a few benefits that come from accurate record-keeping, so you know why people champion the idea.
You get key information about how your business is growing
Knowing how your business is doing is key as a CEO. How are you going to make future decisions about your company without knowledge to influence you?
Accurate record-keeping gives you a bunch of analytics like facts, figures and statistics. This information gives you the tools you need to make smart choices.
Doing your end-of-year financials is a LOT easier
At the end of every business year you will be expected to submit a tax return and financial statements. This process is a legal requirement, and if you get it wrong, you could be in serious trouble.
Keeping accurate records for your business makes this process a lot easier. If you haven’t kept accurate records, you may struggle to pull the information you need to submit your statements and pay taxes. There’s nothing worse than having to go sifting through a whole year of unorganised finances.
You can separate your expenses and types of income
Financial information can get complicated pretty quickly if it’s not organised right. How do you sort your outgoings from your income? Can you differentiate between the types of income you’re getting? Have you thought about insurance?
As you can see, there’s quite a lot to think about when it comes to running a business. Keeping accurate records - like your books - helps to make this information accessible, neat and tidy. It’s much better than trying to wing it.
It saves your bacon if you’re facing an audit
Auditing happens from time to time. If you submit suspicious-looking tax information by mistake or you draw attention to your company, you could face an audit and investigation by the government or a representative.
Keeping accurate records means you look a lot better from day one. You don’t want an auditor turning up and seeing nothing but a mess of financial information and scraps of paper. Keeping proper books is the best way to make an audit quick and painless.
Accurate Record-Keeping Pays Off
Nobody can deny that good record-keeping pays off in a big way, especially if you want to protect yourself from the risk of fraud or simply have your information handy.
A good bookkeeping system can save your bacon in more ways than one, so it’s worth checking out. If you do find yourself in need of some help with this (it tends to get complicated), then you can contact Probookkeeper and we’ll sort you out.