19/12/2018
3 Major Benefits of Updated Bookkeeping and Accounting Records
Every business big and small should have regularly updated bookkeeping and accounting records so business leaders can make the right decision with a foundation in the data.
Guessing is not the way to run a business. On the contrary, every business big and small should have regularly updated bookkeeping and accounting records so business leaders can make the right decision with a foundation in the data. Follow along to learn three big benefits of keeping your bookkeeping and accounting records updated on a regular basis and some tips to get you started with your bookkeeping for your business.
1. Strategically ladder-up your revenue
This process is great in theory, and most freelancers and business owners understand the concept. But why do they continue to struggle with low-quality clients? Because they don’t look at the numbers and objectively look for ways to bring on better clients and get rid of the bad ones. With no metrics, you might not even know which clients are draining your resources and which lead to the best profitability in your business.
2. Cut underperforming products and services
It doesn’t matter if you are a solo freelancer or a business with thousands of employees, you absolutely need this information!
With the right details in hand, you can pick out the one product that sucks away too much of your time for too little money. You can identify expensive recurring tasks you may be able to outsource or eliminate. Sometimes cutting underperforming products or services can lead to significant growth.
Success in this area of your business comes down to focus. But without properly updated bookkeeping and accounting records, you don’t know where to focus. You might be wasting hours and have no idea because you don’t have the data. End that big mistake right away. Get those accounting books together and keep them updated, at least monthly, so you can make the best management decisions.
3. Save time and money at tax time
If increasing revenues and cutting costs were not enough motivation to keep your books updated, here is one last lynchpin: your taxes. You have to do taxes if you have a business. That is not optional. What is optional is making it a stressful period by ignoring your accounting throughout the year and rushing to get it all done before the deadline.
Instead of this method, plan and keep your books updated at least once every month. I go a little over what most people need and update my accounting records weekly. But whatever you do, quarterly should be the bare minimum for bookkeeping updates for tax purposes.
While most individuals have to file and pay taxes once every year, most business owners and many side hustlers have to pay quarterly estimated taxes. While you can file and pay based on last year’s tax rates, keeping your books updated can help you get a better estimate if you need to pay more quarterly to avoid the big one-time lump payment.
4. Don’t ignore updated bookkeeping and accounting needs!
If you find the idea of accounting and bookkeeping intimidating, you can always hire an expert to handle it for you. However you decide to do your bookkeeping is great as long as you stick with it! If you don’t, you’ll quickly find yourself behind and with useless financial reports. With the right focus on your books, you have the right information to put your business on track to thrive for years to come.
