Bookkeeping Basics for New BusinessesBrian Jang ON October 25, 2016
Poor bookkeeping is one of the main reasons why many startup businesses don’t go the distance. Maintaining an accurate record of the books provides valuable insight into your current financial situation. It will also help you keep up with the needs of your organization and capitalize on any financial benefits. Proper bookkeeping is not only vital in understanding the future needs of your business, but also crucial in recognizing possible opportunities for growth. Here are some bookkeeping tips to help your new business stay afloat.
Why is bookkeeping important for my business?
For starters, keeping up-to-date financial records is important for the future potential of your business. Looking to expand? Investors and financial institutions will need to see accurate, efficiently kept books. If your business is profitable or consistent, your books need to reflect that.
Without a doubt, good bookkeeping is going to help keep the Canadian Revenue Agency (CRA) at bay. But just as important, it will also create a clearer picture of your company’s strengths and weaknesses. In turn, you will make well-informed decisions on the direction of your company, making the appropriate adjustments along the way. Ultimately, if you want to grow your business, you need to be able to quickly access key financial data. Sound bookkeeping allows you to do just that.
Another major reason why bookkeeping is vital for any business is to help you stay on top of crime. Identity theft, for example, is a reality that many companies may have to face. Keeping accurate books will alert you to inconsistencies, helping you to deal with this wide-spread crime. If you let bookkeeping slide, you could open the door to a host problems that your company may never recover from.
So what are some basic bookkeeping tips?
Organization is a fundamental component of good bookkeeping. You want to be able to access vital information easily, whenever you need it. On top of that, financial information needs to be clear and concise. No business owner has the time to sift through a mountain of hard-to-read statements.
Accuracy and Maintenance
Tax time always seems to have a way of quickly creeping up on businesses, whether you are ready for it or not. When this hectic time of year approaches, you need to be prepared. You want to make sure you have an exact account of all your receipts, expenses, and other financial reports. If you’re hoping for a profitable return, ensure you have accurate and well-maintained books.
If you are starting a new business, well-maintained financial records are a must. And when it comes to growing your company, you simply can’t afford to neglect proper bookkeeping—it could make the difference between success and failure.
Need some guidance on how to do basic bookkeeping? Contact BCJ Group, Chartered Professional Accountants today.