Haphazard bookkeeping is a recipe for financial disaster. In the long run, quality bookkeeping services should save you time, allow you to better manage your cash flow, and help you make informed decisions regarding your business goals. Having said that, you can’t hire just anyone—and you’ll need to hone a deeper understanding of how bookkeeping can make or break your business. Let’s count the ways.
Bookkeeping Vs. Accounting
The key to understanding the gravity of hiring a good bookkeeper is being able to distinguish them from accountants. While both an important function towards business success, bookkeepers are responsible for recording financial transactions, whereas accountants are meant to analyze them.
Like accountants, bookkeepers are expected to be financially knowledgeable and highly accurate in their work. As it goes, bookkeeping is a more transactional and administrative role as compared to accounting, which is slightly more subjective in its task towards providing business owners with financial insights based on a bookkeeper’s work.
Good Bookkeeping: Saves Both Parties Time
If you’re handling bookkeeping responsibilities yourself, you could be spending valuable time trying to learn the ropes rather than focusing on more important aspects of your business. An honest business owner will swallow their pride, allowing more qualified specialists to handle jobs you aren’t eligible for.
Having a strong grasp of the financial health of your business is something you, as a business owner, can’t forego. However, you’re better off leaving the day-to-day administrative work to a professional bookkeeper who is already an expert in the field. They can take on the tasks of organizing your receipts, paying your bills, preparing financial reports and invoices, and managing your payroll while you focus on generating more income.
Good Bookkeeping: Manages Cash Flow Effectively
While it may sound a little frivolous, being able to account for every cent that flows throughout your business hones transparency and clarity about the financial status of your business. By crafting a business budget, you can more effectively pinpoint where to minimize and maximize your efforts and whether or not you need to make certain adjustments with any particular account. Accurate bookkeeping also allows you to keep a closer eye on suspicious transactions, thus protecting your business.
Good Bookkeeping: Nurtures More Informed Business Decisions
Excellent bookkeeping isn’t just accurate—it’s a timely process that allows you to make more strategic decisions regarding the growth and improvement of your business. By regularly comparing your actual performance to budgeted targets, you can adjust your spending habits accordingly as well as respond to emerging trends and take immediate action to rectify any mistakes. Reliable financial information gives you the opportunity to scale up or down, which is essential to keeping your business running smoothly.
On the whole, good bookkeeping is a must for your accounting operations. Understanding the current financial landscape of your business operations will help you to make better, more informed decisions. Decisions include when to hire, what projects to invest in, where to prioritize the business and so on.
For dedicated business growth services in the form of bookkeeping and accounting, reach out to us at A4E! With over 20 years of accounting and finance experience, we are passionate about nurturing the growth of small businesses and solo founders.