4 Reasons Your Business Should Use a Bookkeeper

Should I or shouldn’t I use a bookkeeper? From the perspective of us it really looks like a no brainer. Even so we speak to a number of businesses who do not see why it is important for businesses to have a bookkeeper or the importance of sound financial record keeping systems.




First and foremost the reason to implement a bookkeeping process into your business is to help you to manage your business tasks more effectively. It is difficult to have an accurate financial picture of your business without bookkeeping records. In essence financial records answer questions such as: Is my business making money? Are my sales increasing? How does business expenditure compare to sales?



REASON 1: MAKING DECSIONS



Evaluating the financial consequences of all your business decisions should always be part of your decision making process. Without the aid of accurate records and financial information forecasting the results of any given course of action will be difficult. Presumably you are in business to make money. Hence forecasting the profitability of sales will give you an indication of whether or not you will need to hire or fire staff; sell more of one product or to stop selling another.



REASON 2: APPLYING FOR FINANCE



Making the decision to apply for finance for your business is fairly straight forward. However it is not so simple to prepare the supporting documentation if you do not already have it. Both banks and financial institutions will want to see proof of income, balance sheets, tax statements and projected returns before they make a decision about whether or not to loan you money. Preparing such information when it is required is never a good idea. Ideally this information should all be at your finger tips.



REASON 3: SEEKING INVESTORS



Once your business has developed to a stage where you would like to attract investors or a partner you will require financial information to demonstrate that you business is still a ‘going concern’. The source of this information usually emanates from day-to-day bookkeeping. It is possible that suppliers and creditors may want to see this information before permitting your business to have credit.



REASON 4: PREPARING A BUDGET



All businesses should use budgets for planning purposes. Budgets enable businesses to remain on track by forecasting cash needs and controlling expenditures. When reviewing what your business does and what it will be doing in the future it is always good practice to have a budget to prevent overspending and to control costs.



In short bookkeeping is an integral part of every healthy business.