Updating Bookkeeping and Accounting Records
Every business should be regularly updating bookkeeping and accounting records, so business leaders can make the right decision with the figures and future of the business.
Without updated books, any decision regarding product lines, pricing or customer capacity is really just a guess!
Here are some big benefits of updating bookkeeping and accounting records on a regular basis and some tips to get you started with your bookkeeping for your business.
Strategically ladder-up your revenue
One of your biggest goals should be finding the best clients that offer the most significant return on time invested. “Laddering up” is where you add new high-quality clients, while letting go lower-quality and lower-paying clients as they are replaced.
This process is great in theory, and most business owners understand the concept. If you don’t look at the numbers and objectively look for ways to bring on better clients and get rid of the bad ones, you might not even know which clients are draining your resources and which lead to the best profitability in your business.
Cut underperforming products and services
If you have no detailed accounting records beyond the reports you get from your payment processor, you don’t have any real records to show your income by customer or product. It doesn’t matter if you are a solo freelancer or a business with thousands of employees, you absolutely need this information!
With the right details in hand, you can pick out the one product that sucks away too much of your time for too little money. You can identify expensive recurring tasks you may be able to outsource or eliminate. Sometimes cutting underperforming products or services can lead to significant growth.
Success in this area of your business comes down to focus. But without properly updated bookkeeping and accounting records, you don’t know where to focus.
Save time and money at tax time
If increasing revenues and cutting costs were not enough motivation to keep your books updated, here is one last lynchpin: your taxes. You have to do taxes if you have a business. That is not optional. What is optional is making it a stressful period by ignoring your accounting throughout the year and rushing to get it all done in April before the deadline.
Instead of this method, plan and keep your books updated at least once every month. While you can file and pay based on last year’s tax rates, keeping your books updated can help you get a better estimate if you need to pay more quarterly to avoid the big one-time lump payment in April.
Don’t ignore updating bookkeeping and accounting needs!
If you find the idea of accounting and bookkeeping intimidating, you can always hire an expert to handle it for you – like The Hollies!
However you decide to do your bookkeeping is great as long as you stick with it! If you don’t, you’ll quickly find yourself behind and with useless financial reports