You don’t want to constantly play catch-up bookkeeping. Sure, this method of accounting gets your books up- to-date — but the goal should be to stay there. Getting behind on the books affects your accounts payable, could lead to tax penalties, and may ultimately cause your business to go under.
You can’t effectively run a business if you don’t know whether your books are in order. What if you have outstanding payable invoices or you’re not running your payroll tax correctly? You can achieve financial accountability through double-entry bookkeeping, regular reports, and bank reconciliation. But all of this takes time. Keeping your balance sheets and ledger current can be easier when you outsource bookkeeping.
Reasons to stay current on your books
The implications of incomplete financial records are serious. You may forget who owes money to you, who you owe money to, and lose track of overhead expenses. Many small businesses simply don’t have the time and resources to implement complex accounting systems. It’s easy to understand how accounting mistakes are made.
Here are five reasons to make sure your books are kept up to date.
Bookkeeping helps you manage your expenses
Business finances boil down to income and expenses. Every time you write a cheque or process payroll, it needs to be accounted for. Up-to-date bookkeeping helps you manage your expenses and stick to your budget. You won’t blindly overspend again.
Bookkeeping proves revenue forecast
Do you know how quickly to scale? You may have big dreams about becoming a millionaire overnight, but the reality is that scaling responsibly often takes time. Real-time bookkeeping helps you understand the rate at which your revenue is actually growing. If you outsource bookkeeping to an expert, they can provide an objective assessment of what your current financial forecast looks like.
Bookkeeping can take the stress out of tax season
Tax penalties for businesses in Australia have been on the increase, While a small business is unlikely to accrue such a massive penalty, lodging your taxes incorrectly can still have financial consequences. In New Zealand, the story is similar. If you pay taxes more than seven days late, you can expect a 4% penalty. Up-to-date books make filing accurate and timely tax returns easier.
Bookkeeping can help you get investors and loans
Any time you’re asking for money, be it from a private investor or a bank, they will want to see your current books. The financial health of your businesscannot be in question. And if your books have gaps of knowledge or your ledger looks incomplete, you could miss out on critical funds.
Bookkeeping keeps you prepared for emergencies
If the last few years have taught us anything, it’s that businesses and entire economies can be shifted unexpectedly. An accurate picture of your financial health helps you create contingency plans for anything from natural disasters, to real estate shifts, to pandemics. You can’t plan for the worst if you don’t know where you stand right now.
Can outsource bookkeeping help?
The benefits of outsourcing your bookkeeping are many and varied. An outsourced bookkeeping service may notbe available in-person, but they can become as familiar to you as in-house staff. In fact, you may come to rely on them for the financial help of your organisation. Here is how:
- You’ll be matched with an industry expert. A trustworthy outsourced bookkeeping service will pair you with people who know about your industry. Everything from tax implications to growth strategies will be catered to your specific needs.
- You can access records at any time. Using outsourced bookkeeping gives you around the clock access to records. You’ll be able to log on and see your general ledger, balance sheets, and bank records without contacting an accountant.
- You can grow your team as needed. With outsourced help, you don’t have to hire someone full-time when you’re ready to expand your account management team. You can simply add another bookkeeper to your virtual team for as many hours as are necessary.
Managing your cash flow, tax lodgements, and payroll becomes overwhelming as your organisation grows. And falling behind on your books is just not an option. Leveraging the help of Visory can make a tonne of difference. Let Visory take over your double-entry bookkeeping, prepare tax returns, and business planning. You can communicate with us at any time and ask all the questions to help your business grow. You’ll never look at outsourcing the same again.