7 Reasons Why Bookkeeping Is IMPORTANT For Your BusinessOct 10, 2023
If you only do bookkeeping once a year, you know, when your auditor asks for it during your financial year-end, then let me introduce you to the power of bookkeeping. In this video, you will discover why bookkeeping is the KEY to the success of your business.
If we are just meeting, I’m Sharon Tay from Nuts Accounting and I’m a certified advisor for both Xero Accounting and Quickbooks Online. So without further ado, here are the 7 Reasons Why Bookkeeping Is IMPORTANT For Your Business. And if you want to save time doing bookkeeping, stay until the end as I have a bonus tip for you.
Reason number 1: Maintain Organised Record
Let me ask you this: Do you like having a messy desk with piles of documents everywhere? I guess your answer is "Of course not!." Well, guess what? The same goes for your financial records. That's where bookkeeping comes in. It's like having a magical organizer for all your financial stuff. By keeping things neat and tidy, you'll save yourself from last-minute stress and costly mistakes. Plus, having organised financial records will make it super easy for you to find the information you need to make smart decisions for your business.
Reason number 2: Cash Flow Management
Now, let's talk about the lifeblood of your business: cash flow. Imagine if you had no clue how much money was coming in and going out of your business. It would be like you’re trying to find your way in the dark, right? That's why accurate bookkeeping is crucial. It's your financial compass, showing you exactly where your money is going and if you have enough to pay the bills. And hopefully, some extras to invest in your business.
Speaking about bookkeeping, I think you will be interested in our Master User Academy Level 1 Mini-Course, which is completely FREE! If you are new to bookkeeping, confused about where to start, not sure what to do with your receipts & invoices or you’re frustrated that bookkeeping takes up a lot of your time, then this free mini-course is tailor-made for you. Our step-by-step guidance will kick-start your bookkeeping journey, and boost your confidence and skills to efficiently complete your monthly & annual accounts so that you can use the financial reports to grow your business faster. This mini-course is absolutely free for you so sign up today at NutsAccounting.com/400.
Reason number 3: Stress-Free Tax Season
The most stressful time of the year for business owners is the tax season. You may even feel stressed right now when I mention “tax season”. But don’t worry! Bookkeeping is here to save the day. No more scrambling at the last minute, searching for receipts and invoices. You'll have everything organized and ready to go. Trust me, it's a game-changer for your stress levels. By keeping accurate financial records, you may even be on a holiday by the beach during tax time.
Reason number 4: Business Strategy Measurement
Let's take a moment to talk about business strategies. Have you implemented one or two new business strategies? So, do you know what are the results? With bookkeeping, you can easily view the results of your newly implemented business strategies. You'll know which strategy gives you the best result and which doesn’t work. Armed with this knowledge, you can make informed decisions to propel your business forward. It's like having a crystal ball for your success.
Reason number 5: Investments Planning
Now, let's talk investments. Every business dreams of growing and expanding, right? But how do you make smart investment decisions? Drumroll, please... bookkeeping! By keeping accurate financial records, you'll have a clear view of your business's financial health. Whether you want to launch new products, hire more team members, or even open a new store, bookkeeping provides the roadmap. It's like having a treasure map to unlock your business's full potential.
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Reason number 6: Budget For Your Future
Budgeting is something business owners often avoid, but it doesn't have to be hard. By using bookkeeping as a tool, you can easily create and maintain a budget. By keeping track of your income and expenses, you'll establish a budget that keeps you on track. No more overspending or losing track of your finances. You'll be in control, making smart choices to make your business more efficient and profitable.
Reason number 7: Track Profitability
One of the main reasons most business owners do bookkeeping is to know if their business is profitable. By diligently tracking your income and expenses, you'll know exactly how your business is performing. You'll see where the money is coming in and where you spend the money. Armed with this knowledge, you can make strategic decisions to skyrocket your profitability. It's like having a financial crystal ball, showing you the path to success.
So here’s a bonus tip for you. If you only do bookkeeping once a year, you won’t be enjoying all the benefits that I told you earlier. You need to do bookkeeping more often than that. So how often should you do bookkeeping then? I suggest that you do bookkeeping at least once a month. This ensures that you have all the necessary information readily available to make smart decisions for your business. To help save time and effort, I recommend that you use accounting software or an accounting system. By doing so, you can automate certain tasks and enhance efficiency. If you need help choosing the right accounting software or accounting system, I made a video for you showing you exactly how to do this. If you click or tap on the screen, you can watch that. If you want to watch more videos on bookkeeping and accounting tutorials, subscribe to our channel. I’ll see you in the next video.
Next video: How to choose the RIGHT cloud accounting system
This video is sponsored by our online course, Master User Academy. Master User Academy helps entrepreneurs & business owners to do bookkeeping by using Cloud Accounting System like a Pro in simple English. Get real-time financial data of your business to grow your business faster. Join Master User Academy Level 1 now for FREE! ➡️ https://www.nutsaccounting.com/400
Disclaimer: This blog post is not sponsored by any of the products mentioned in any way at all. I created this blog post based on my personal experience and I hope that by sharing my knowledge with you, you can use yours better.
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