There are numerous advantages to maintaining accurate bookkeeping records that every business owner should understand. A small business should update their books as often as they can to avoid costly mistakes. Additionally, having updated small business bookkeeping records helps business owners make better decisions. Here are the top 5 reasons bookkeeping is essential for your small business.
Business Decision Benefits
Are you a business owner struggling with decision making? Proper small business bookkeeping should ease the process of making tough decisions. Without updated bookkeeping records, any decision regarding product lines, pricing, or customer capacity is just a guess! Running a successful business is far more than just guessing and not understanding the numbers behind it, which is where the importance of updated bookkeeping records come into play. Every business, big and small, should have updated bookkeeping and accounting records so leaders can make the right decisions with a foundation in the data.
With the right details in your hand, you can pick out the product or service lines that aren’t performing well, or sucking away too much of your time for too little money. Your business can identify expensive recurring tasks that you may be able to outsource or eliminate. Good small business bookkeeping records are also essential when you are applying for a business loan by making it easier for lenders to make decisions about your business.
Having excellent small business bookkeeping records can be used as a competitive advantage since many small businesses owners don’t make it a priority. All in all, spending the time on keeping good and accurate records could help your small business save some money and make better decisions.
While running a small business every penny counts. An up to date small business bookkeeping system will allow you to not worry about where you are currently financially… you will see it right in front of you! Instead of spending time worrying and stressing about the current financial state of your business, you will be reacting to real-time data to improve your financial situation. Using your reports to increase sales or cut expenses directly contributes to the profitability, and let’s be real, there are not many business owners out there that are not trying to increase profits.
Minimize Your Tax Liability
One thing that many small businesses have in common is when it comes to paying taxes, everyone wants to pay as few and as little as possible. No matter what type of business you have, compliance with business tax laws are extremely important. To minimize your tax liability small businesses should be evaluating their financials with their local CPA prior to year-end opposed to waiting until after the year-end to start thinking about taxes. This way, your business may be able to make some moves that will both benefit your business and tax situation. Hiring a bookkeeper or having a bookkeeping system in place will make a tax review prior to year-end possible, and easy!
Bookkeeping results in many benefits for your business, including the ability to pay income taxes, payroll taxes, workers’ compensation, and sales taxes. You will have the financial data right before your eyes, making it easy to know what you owe in small business taxes.
Additionally, keeping dialed in bookkeeping records will also relieve some stress and anxiety if you find yourself facing an Intern Revenue Service audit. Small business bookkeeping records are extremely valuable to have during an audit, you’ll have canceled checks, receipts, tax returns, and other papers relevant to the audit.
Creating and tracking your budget is especially important while running a small business to know where your money is going. Comparing actual results to projections in the budget can be easily facilitated with the help of your bookkeeping records. Keeping up-to-date company financial information allows a business owner to easily cross-check with the budget to make sure that your company is not overspending. Updated small business bookkeeping records can also identify instances of under-spending, and the company may find new uses for the extra money to help growth and productivity.
Without real-time data, monitoring your budget can be tough. Automated small business bookkeeping software can help generate budget reports with the click of a button.
Although payroll setup will look different from business to business, most small businesses have employees to pay and payroll records to maintain. Bookkeeping services include checking the accuracy of each payroll period and amount paid to each employee to ensure it is correct. This is especially important in an organization that pays bonuses and sales commissions to double check the employee received the proper amount. Reviewing payroll numbers keeps employees satisfied with their pay and prevents the company from over or underpaying taxes as well.
Limitless Investment and Capital Bookkeeping Services in Denver, Colorado
As a business owner, you are more efficient in making business decisions when you have access to your Profit and Loss and financial statements (AR’s and AP’s) in real-time. Limitless Investment and Capital’s certified professional advisors will make sure you have this information in the palm of your hand and kept up to date. Whether you need to prepare for tax time, a financial review or you just need to clean up some problem areas, Limitless Investment and Capital’s small business bookkeeping services in Denver is a smart and affordable way to get a handle on your books.
Running a business is hard work. Small business bookkeeping shouldn’t be. Let our professional bookkeepers in Denver, Colorado do it for you.