The Importance of Keeping Proper and Accurate Financial Records
Nov 3, 2009 accounting bookkeeping
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Imagine driving a car without being able to see out of the windscreen and without being able to see any of the instruments because the dashboard is completely blacked out. This is the way that many businesses operate. The owner of the business has no idea day to day, week to week, and in some cases month to month, where they are heading to or how they are travelling. If you try to drive your car in this situation, then think about it: you would have no idea where you are heading to; you would have no idea of the hazards ahead; you wouldn’t know the speed that you were travelling at; you probably wouldn’t know the direction that you were heading in; you wouldn’t know how far you had come from where you started; and you wouldn’t know how well your car is performing relative to other cars on the road; nor would you know any of the vital information about the well-being of the car such as the temperature of the engine, the oil pressure or the revolutions per minute.
It may seem tiresome keeping financial records current. You may not find maintaining and managing your accounts fun. But if you do not keep proper and accurate financial records you run the risk of your business failing. A recent survey of Accounting firms reported over 50% of the Accountants surveyed rated their small business clients accounting records as average, inadequate or non-existent. There are some very important reasons why it is vital to your business well being to keep your financial records up to date:
It will enable you to understand your tax position
It will enable you to track who owes you money and encourage you to get this money paid when it falls due
It will enable you to know who you owe money to and when this is due on a day-by-day, week-by-week basis
You will have a very good idea of the current money free in the business to use – your current free cash position
It will enable you to understand your future cash needs through using a cash flow projection.
So don’t think of your business accounting and record keeping as an annoyance, something you have to do, treat it as a health check for the ongoing vitality of your business.
However, the time is worth spending on keeping accurate, timely and up-to-date financial records as a matter of normal business process when you consider how financial visibility aids in the success of many businesses.
Time demands faced by small business owners often puts the accounts and record keeping under pressure. If this is the case for you, then a healthy alternative would be to utilise the services of a professional bookkeeper.
The best businesses understand on a daily basis what their cash position is, what debtors have passed their due date and when cash is likely to arrive in their business.
Want to find out more about Brisbane accounting, then visit Accountia’s website and learn more about bookkeeping Brisbane services.
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Tags: accounting, accounting bookkeeping, bookkeeping, business accounting, Business Management, Professional Bookkeeping Services, Small Business Management
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