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Bookkeeping Terms - Small Business Bookkeeping Services - Abacus Bookkeeping - Kerry Postel
15 Oct 2018

Why do I need to do my bookkeeping? – Part 2

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This is a question that many small business owners ask and they don’t understand why bookkeeping is such an important aspect of their business. They think that they need to do their bookkeeping just so that they can file their taxes at the end of the year. Yes, this is part of it, but there is so much to bookkeeping than just putting the numbers together so that you can file taxes.

Critical Information

Bookkeeping gives you critical financial information that you need as a business owner in order to make informed financial decisions. Cash in the bank does not equal profit. Profitability and cash in the bank are two different things and when you operate your business based on how much cash you have in the bank, you are running the risk of losing business. When you don’t know this information it makes it hard to grow your business.

Bookkeeping System

When you have a bookkeeping system, you know what bills are coming up and what bills need to be paid and when. You know what money is due to come in and when it’s due to come in. You know the total of your expenses and you can make informed decisions as to what you need to do to cut those expenses or whether you need to be increasing your revenue.

Profitability

Your bookkeeping helps you to determine if you are profitable. This so important to any small business owner, and this is the only way that you can grow. You need your bookkeeping so that you can make informed financial decisions that can give you peace of mind that you can know what your profitability is and that you can have cash in the bank so that you can grow your business.

In Summary

Any small business owner that is not doing the bookkeeping is leaving the door wide open for failure. Bookkeeping is so important and so many business owners would benefit from having a professional bookkeeper take care of that books on a regular basis. This way, not only do they have that information ready for their CPA at the end of the year to get their taxes done, but they also have the tools that they need throughout the year, the other 12 months of the year that they need to be making the right decisions for their business.

Interested in learning more about having a bookkeeping system in place? Click HERE

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