Time to update your bookkeeping practices
Does your business maintain updated bookkeeping and accounting records? If not it is high time to start – read below for the reasons why:
- Fact rather than guesswork based decision-making.
The fact is that without updated bookkeeping and accounting records every business decision you make is based on little more than guesswork. In the competitive globalized environment of the 21st century, with ever narrowing profit margins, you need to be alert and updated of the costs and profits you are incurring, and the impact of new pricing indexes, market strategies, and taxation regulations today – not at the end of the tax year!
- Maximize your return on investment (ROI), whether in time or money.
How do you identify the clients, products and markets that offer you the best return on investment? How do you identify the activities that offer, at best, a marginal return on your investment? This is a question that is particularly critical for freelancers and small businesses that have limited time on their hands and wish to make the most of it. Such individuals often engage in “laddering up”: adding new high quality clients while “firing” less remunerative clients.
Well, at least in theory. In practice many small businesses or scaling startups cling to non-profitable clients until they reach breaking point. When they do let them go they often do so base on instinct and feeling, or only once the cost/gain ratio of working with them becomes so glaringly obvious that it cannot be ignored. Only then do they pull out their accounting books and seek to justify their gut decision, often retroactively.
Small businesses or scaling startups which utilize updated bookkeeping, don’t suffer from this problem – they enjoy a constant overview of which activities and clients generate revenue and which are a net drain on their time and resources. Give it a try – you may well find that as soon as you cut away the deadwood your income will expand in short order!
- Cut down on bookkeeping and tax report overhead
If increasing your revenue and optimizing your business is insufficient motivation to move to updated bookkeeping just flashback to the last time you submitted your tax returns or ss4. Consider the last-minute panic to put everything in order, the irate back and forth with your accountant, his hints of a higher fee the next financial year, the nagging concern that you left something out and that a Tax Authority audit is just over the horizon… You don’t really need or want this stress, do you? The thing is, with updated bookkeeping the whole process is streamlined, automated and becomes pretty much stress free – and less expensive.
These three reasons should be more than sufficient to get your bookkeeping in order and update your accounts every month. However, if this task seems daunting (and let’s face it, most people would choose a visit to the dentist over doing their own accounting), do not be dismayed – professional bookkeeping and accounting services are readily available. Can you afford it? Honestly you can’t afford NOT to make the transition to updated accounting. If you can do it on your own – great! But if the task is taking up too much of your time or energy then outsourcing the job to a professional accounting service is without a doubt the optimal business decision.