Bookkeeping is one task that many small business owners neglect, or make half-hearted efforts at doing. Both options are a mistake. Bookkeeping is the process of recording your company's financial transactions and is the first basic step of the accounting process. In the accounting process you are classifying, reporting and analyzing financial data -- none of that can happen without accurate, organized data.
If you can't balance your personal check book, it may be a good idea to hire qualified help to do your bookkeeping. Bookkeepers will organize all of your financial transaction records -- receipts, canceled checks, sales, purchases, cash disbursements,etc. The bookkeeper makes sure that your books remain organized and balanced and can then turn over records so that your accountant can generate monthly financial statements.
Keeping balanced books will not only ensure that you know where your money is going, but is important for the following reasons:
Investors and lenders will want to see accurate and complete financial data before granting you financing. If you are seeking or plan to seek outside capital, your books must be in order.
You need accurate information to manage the financial health of your company. You must know if there are customers in arrears, or if you have outstanding balances on your lines of credit. Without accurate records you cannot manage the cash flow of your business.
Taxes. In order to know how much to pay the IRS, you must have an accurate accounting of your income. You will also need back up documentation for any deductions and tax credits. Bad record keeping could result in you paying a fines and penalties if you are ever audited.
Knowing and Respecting The Importance of Bookkeeping Will Make Your Job Easier
The good news is that there are a number of ways to make sure that your business keeps its financial house in order. You can hire a bookkeeper or accountant to keep your books. Virtual Administration firms such as IAC Professionals offer bookkeeping and accounting for much less than hiring onsite staff. "We have helped new businesses set up a bookkeeping system using systems such as Intuit's QuickBooks and as they've grown, we then step in to manage the process for them." Comments Heather Villa, President of IAC Professionals.
Hiring a VA firm enables you to keep your financial transactions in order without breaking your budget. You can hire help for as many hours as you need and add hours as needed. You can then sleep soundly at night knowing that you have a system and specialized help to manage it!
If you have any questions about the importance of bookkeeping, contact us today.
IAC Professionals is a single source for contracting qualified professionals to assist you with your most critical business needs. They offer a wide range of outsourcing solution which include Accounting, Bookkeeping, Virtual Assistants, Company Formation and Business Consulting.
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