Importance of bookkeeping
Bookkeeping is a vital element in any business whether small or large. This process is often abandoned which has an adverse effect on a business. Some companies fail due to financial mismanagement while others have no accounting records or have really poor documentation kept.
What is bookkeeping?
Bookkeeping involves keeping a record of your company’s financial transactions, which is the first step of the accounting process. This process involves categorizing, recording and evaluating data and this cannot take place if there are no structured and correct records
The significance of bookkeeping cannot be stressed enough, but below are some of the important reasons why it is vital for the success and presence of a business.
Improved financial analysis and management
Cash flow management is a key element to concentrate on no matter how busy you are or not. If sale invoices are delayed, no credit control in place to chase outstanding customer debt and failing to pay suppliers on time will eventually crash you down. Bookkeeping helps you organize this by being able to follow-up aged debtors and creditors
Tax Obligations being met
Bookkeeping stores all information and transactions to be able to calculate various taxes. This saves you time from having to rush to find bills or trying to remember expenses. Tax returns are also made easier with well kept day books, which enable your tax advisor to devote more time in giving future tax planning advice instead of correcting entries in the financial statements.
Producing reports for investors is made easier
Having to produce certain financial reports to investors is made easier as all the information can be obtained from the bookkeeping records
From the Balance Sheet and Profit & Loss you can check if the company is financially feasible, from this point you can start your business planning so much easily.
Correct record keeping is required by law
Bookkeeping helps to keep records accurate and organized.
To help you achieve all these contact Subtilis Accountancy to do it for you and keep your financial aspect intact and structured. Bookkeeping can make the difference between success and insolvency and can also save thousands of pounds for your business.