Bookkeeping usually means keeping track of finances and managing your taxes. Proper bookkeeping not only does that but also helps in boosting the productivity and performance of the business and helps in achieving aspired results for your business. And the bookkeeper is the one who completes this task.
A good bookkeeper keeps a record of finances and lets you know the worth of your client so that you can sustain a healthy relationship with your client. He also aids you in learning what amount of attention you should be giving to a particular client.
Bookkeeping plays a vital role in the functioning of a company and provides you with the monthly information about the performance and the cash flow of the company.
Now the question arises how a simple process of bookkeeping can help you in increasing the efficiency of your business?
Well, bookkeeping might sound a simple process, but it is not a simple one. It becomes more and more complicated with the introduction of tax, assets, loans, and investments.
Therefore the practice of accurate bookkeeping becomes vital. Reliable bookkeeping supplies your company with a trustworthy source to measure financial performance, and it also provides valuable information on general strategic decisions that can increase your company's growth.
Here are a few ways showing how bookkeeping will help you in achieving these goals and increasing the value of your business.
1. It saves a lot of time and increases productivity
It is proven that time management is the most crucial trait when it comes to improving your efficiency. A good bookkeeper keeps all the records of your finances and taxes in order, which saves you time.
This "time saved" can serve as "time earned" to perform other equally vital tasks to increase productivity.
2. Hassle free functioning of the company
Productivity plays a significant role in determining efficiency. Accurate bookkeeping keeps your bank accounting in check and the payroll on time.
This help in maintaining the efficiency, productivity of employees and stable functioning of the company.
3. Having absolute control over your money
Keeping track of your finances helps you in many ways. Bookkeeping tracks your money-flow and gives you complete control over your money. Total control over your money means you can keep a check on your transactions and on any suspicious activity that can harm your money.
It helps you in neutralizing any future frauds and loss of money at an early stage. And after all, “A penny saved is a penny earned.” Bookkeeping also helps you in understanding the needs of your company by understanding the cash flow.
4. Bookkeeping helps you in dealing with taxation and legal issues
Not keeping track of your investments will land you in trouble. We all know how complex is the process of taxation. You have to enter all your details carefully and correctly. Filling even one wrong detail can make you go through the whole process again.
And if you are not managing your accounts and finances well and transactions are not updated in the books, then the whole process of taxation can become time-consuming. This is where good bookkeeping services play an important role. It keeps your accounts accurate and up to date and saves you from making taxation your biggest nightmare.
5. Bookkeeping help in understanding numbers
Numbers play an essential role in the field of accounting. Not being able to understand numbers can cause losses.
Bookkeeping eradicates this problem by providing you with the right set of reports that further helps you in understanding the profit-loss, expenses-earning, etc. A better understanding of your numbers will give you an edge in keeping your business ahead and growing.
6. The importance of budgeting
Budgeting is a vital aspect that adds value to your business. A bookkeeper understands this and gives you useful budgeting tips that help you in maintaining a reasonable budget for your business.
The advantage of technology in bookkeeping
Cloud computing is dynamically changing the bookkeeping process. It offers the option of outsourcing bookkeeping services. Outsourcing is not only cost effective, but it also saves you a lot of time and gives access to accounting and bookkeeping experts.
Early adopters of technology are reaping its benefits. With the introduction of FreeAgent, MYOB, Xero, Intacct and QuickBooks, the process of recording transactions and managing finances has become unimaginable convenient and efficient.
Cloud accounting have APIs (application programming interface) that allows several pieces of software to communicate and share data over cloud computing. It records all your transactions and financial data and keeps it safe and accessible all the time.
These are a few ways showing how bookkeeping can add value to your business. And investing in a good bookkeeper will definitely increase the worth of your company.
Telsea Greene holds five years of experience as a financial advisor at Cogneesol. She specializes in writing about bookkeeping and accounting, small business growth, entrepreneurship, branding, real estate accounting and passionate about helping startups and small businesses to plan and grow their money.