Whether you have a business that just opened its doors or if you have one that you plan to expand an existing one, it goes without saying that all businesses need to do bookkeeping. This blog post will shed light on why your business will benefit from accurate bookkeeping.
Top Reasons Why Bookkeeping is Important for Any Business
1 - Bookkeeping Keeps You Prepared for Tax
Bookkeeping is all about tax preparation. Even the least sophisticated of businesses have to file taxes at the end of the year. If you are a business, it's very likely that you have to file taxes every quarter.
Bookkeeping provides the data to enable you to file your taxes. It also provides data for you to obtain a business license, which is a legal obligation.
2 - Bookkeeping Controls Your Business' Financial Health
Bookkeeping gives you a clear picture of how your business is doing financially. If your business is small and has one person running it, that one person needs to be able to keep track of the money that is coming in and going out.
Businesses with multiple employees need to have someone who takes responsibility for keeping the books up-to-date. Regardless of who is keeping your books, they need to be accurate. Bookkeeping is more than just adding numbers up - it is about the organisation and how well your business is doing.
3 - It Makes Audits Easier
If you are getting audited by the government, it will be much easier to address any discrepancies if you have an accurate set of books.
For example, if you have a discrepancy between what you said you paid out to a contractor and what they gave you as a receipt, you will be able to reconcile the issue by looking at the books. If your books don't match, it will be a lot harder to get your taxes done because you will have to go back to the beginning and figure out what happened.
4 - Bookkeeping Makes Your Business More Efficient
If you are a business owner, you want your business to run as efficiently as possible. Bookkeeping helps you to keep track of your money and make decisions based on what you know. Spending money when you don't have it is a recipe for disaster, and bookkeeping helps you keep a close eye on how much money you have.
In addition to keeping an eye on your money, bookkeeping makes it easy to keep track of expenses and income. This way, you can see what's coming in and what's going out.
Conclusion
Bookkeeping is an important part of any business. Regardless of the size of the business, all of them need to at least keep track of their income and expenses. You can do this yourself, or you can hire an accountant to do it for you.
You don't have to be a business expert to understand the importance of bookkeeping. No matter how simple your business is, your bookkeeping has to be up-to-date and accurate. Any business needs to keep track of its financial health, and bookkeeping is the way of doing that.
Work with a reliable Australian eCommerce bookkeeper by contacting The eCommerce Accountant! Let our advisors help you get on top of your finances today!