Bookkeeping is important for all businesses, both big and small. It helps you keep your business finances in check. Bookkeeping helps you budget for your business, prepare tax returns, keep your business organized and so much more.
Here are seven reasons why bookkeeping is important for your company.
Helps you Budget accurately
Bookkeeping is important for any business because it helps budgeting become so much easier. With your income and expenses organized properly, reviewing your financial resources and costs become a walk in the park.
A budget is important as it creates a clear financial roadmap for your business. With a budget, you can plan for future expenses that will help your company grow. Operating without a budget could mean inaccurate figures which will in turn affect your company negatively.
Makes Sure Your Taxes Are In Order
Considering taxes need to be filed every year, When your financial information is organized properly, you do not have to search for receipts or invoices during the tax filling period. So, when KRA demands a financial statement from your business for tax reasons, the fact that your financials are organized means you will be able to predict the outcome more accurately if you have detailed balance sheets over time.
Maintains organized records
Bookkeeping will ensure all your records are organized in a central system. So when different stakeholders like the tax department, investors, or partners request to see this information, you already have it organized. The inability to provide this information may call for penalties and fees from the taxman.
Makes it easier to see business targets
Every business’s goal is to grow. So you need to be on top of your books. Poor financial records with no accurate numbers or data to analyze will make this process difficult. You need to see the financial trajectory of your business properly for you to make informed decisions on where and what you need to improve on.
Maintains Organised Records
Trying to find crucial information at the last minute could lead to missed deadlines and small errors creeping through. No business can afford to make such mistakes and bookkeeping ensure that.
By doing your books regularly, and staying on top of them you will be able to maintain organized records. Over time it becomes easier to find the information you are looking for with no hustle at all.
Promotes accuracy.
When looking to scale your business, investors will need to see accurate financial statements that showcase the financial performance of your business. Bookkeeping will ensure that all the records you need at that point are organized so your investors are able to determine the value of their investments
Gives you peace of mind
When your finances are in order, you do not have to worry about KRA audits. Most small and medium business owners are kept up at night by the fact that the taxman would show up anytime and find mistakes in their books, thus attracting penalties.
When your books are organized, you can rest easy knowing that your financials are ready to be reviewed by KRA. Your mind will be at ease and you can focus on other things in your life
It goes without saying that bookkeeping is one of the ways you can ensure growth in your business. Currently, we have an offer on our QuickBooks online, a 30-day free trial, and a few tutorials on how to get started with QuickBooks online.