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We get it , bookkeeping is not your favourite part of running your business. It’s an annoying and frustrating chore that takes up a lot of time and is easy to put off until tomorrow, but avoiding your bookkeeping can be disastrous . Not having immediate access to your company’s current financial situation can result in a series of errors that could ultimately cost you your business.

Here are three good reasons why you should keep your bookkeeping up to date.

1. You’ll make better decisions

You can only make informed decisions about your business when you have a full picture of your current financial situation, including how much money is in your accounts, what your cash flow forecast predicts, and how much money you owe. Without that information, it’s much more difficult to know when you can afford to spend money or when you need to hold back. The aim of every good bookkeeper is to avoid surprises – we want you to know what is coming next and be able to deal with it calmly.

You can’t wait 12 months for your Tax agent to tell you whether your business is financially secure. You need to take control and be able to assess your business regularly throughout the year, so that you can change directions if you need to.

Without proper bookkeeping, your decisions will be based on how you think things are going, and that isn’t always accurate. You may have just finished a good month and decide it’s time to hire new employees only to find out  that you have suppliers that you need to pay , and you cant afford to pay them . Waiting three months to hire employees might be more profitable for you in the long run, but you won’t know that because your books aren’t up-to-date.

Maintaining your books ensures you have your company’s full financial picture available to you so you can make smart decisions.

2. You’ll avoid financial mistakes

Your employees, contractors, and lenders all rely on you to make your payments on time, every time. Payroll itself requires considerable attention to ensure you are paying your employees correctly and meeting all of your Fair Work and ATO responsibilities.

Not keeping track of your financial books can result in expensive errors being made, including benefits being missed, bills not being paid on time, or over- or under-payments. This could cost you extra in fees for late payments or rushed payments, which also affects your books and causes you stress.

Imagine running your business when you can be confident in your accounts and you don’t need to put out financial fires all the time. This would be a much more enjoyable way of doing business AND you wouldn’t be wasting money on costly mistakes.

3. You can stop money draining from your business

In addition to losing money in unnecessary late fees and payment charges, not keeping track of your books can result in money draining from your business without you even knowing it.

If your books are not up to date, you won’t know which of your clients or customers aren’t paying you on time, which means you can’t follow up with them and recover their late payments.

You could be paying too much in expenses and if you don’t reconcile your books you’ll have no idea that money is being wasted. Perhaps you purchased a software program to enhance productivity in the early days of your business. Maybe you stopped using it but forgot to cancel it, so each month for the past few years, you’ve been paying for a service you don’t use. Perhaps you don’t realise how much money you are spending in advertising or in paying additional sales staff without knowing if this is actually resulting in additional sales.

Those payments add up and affect your overall financial position. Money can be tight, but if you can direct it so that it is providing the most value for your business, you will have a much great chance of success.

Final thoughts

Bookkeeping might be your least enjoyable task, but it’s an important one. If you find yourself putting off bookkeeping or dreading doing it, it’s a good idea to look into hiring someone to do it for you  ( oh… did we mention that we provide great bookkeeping services???) . Bookkeepers are trained and knowledgeable in the process, and they can save you valuable time and money in the long run. We are also a special breed who really love accuracy , order and processes – so if you outsource your bookkeeping, not only would you be making it easier on yourself, you would be making us VERY happy to do what we love to do.

If you would rather do the bookkeeping yourself,  set aside time regularly to do your books  and don’t let yourself put the task off.  If you need someone to just check over your books occaisionally, let us know.  It’s too important for the future success of your business.

Want to get your books in order without adding more work to your plate? Get in touch with us today by emailing info@balancedadvantage.com.au

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