Are you looking to grow your business? How about improving your profitability? The solution to these issues isn’t adding another product or raising product prices. Bookkeeping might be the answer to your business needs.
Bookkeeping is the backbone of every business, with solid controls promoting growth and inadequate controls leading to issues. This makes regular bookkeeping extremely important to implement in your business to realize various benefits.
Improves Budgeting Potential
The first reason that regular bookkeeping is essential is to improve your budgeting potential. Business owners succeed when they set financial goals. This could be cutting production costs by a certain percentage or lowering operating expenses. Bookkeeping gives you real-time access to the transactions your business is incurring, allowing you to make accurate and informed decisions when it comes to purchasing.
Leads to Business Growth
Regular bookkeeping also promotes business growth. When you have transparency into the financial health of your business, you can find avenues to grow your business without spending thousands of dollars creating a new product. You may see your product costs rising, but you aren’t increasing sales prices. Understanding where your income and expenses fall is vital to promote business growth.
Provides Tax Planning Opportunities
Tax planning strategies are only effective if they are implemented before year-end. Many business owners wait until after the new year to clean up their books. This eliminates most of the options available to reduce your tax burden. For example, let’s say you have more taxable income than you thought. This may lead to purchasing that new equipment before year-end to have additional expenses and lower your profit.
Supports Effective Cash Flow Management
Cash flow management is one of the top downfalls of businesses. This area of your bookkeeping focuses on the cash account balance. You want enough cash to cover upcoming operations without having too much sitting in the bank. Too much money sitting in the bank leads to lost opportunities to earn income. For example, once you have enough cash to cover six months of operations, consider opening an investment account that makes additional income.
Effective cash flow management with regular bookkeeping leads to more leverage potential, such as the ability to purchase more efficient equipment without draining your bank account. Real-time access to your cash balance can help you save an extra $100 or $200 each month to fund that large purchase. When you understand what is flowing in and out of your bank account, you are in a stronger purchasing position and don’t have to worry about an overdraft.
Does it sound like your business could take advantage of the different benefits of bookkeeping? Whether you are struggling to understand bookkeeping basics or don’t have the time necessary, working with Nea Alexandra Bookkeeping might be the right solution for your business. We have been helping businesses for 16 years stay on top of their bookkeeping function. Contact Nea today for a free discovery call.
Nea Alexandra Bookkeeping is based in beautiful Byron Bay, servicing Australia-wide.