A common part of why small business failure rates are so high in the first 5 years is because of poor accounting, which is why having records kept by someone knowledgeable (whether you are that knowledgeable business owner with accounting background of some kind or hiring a specialist) can make or break the success of your success and growth.
So far, I have yet to experience a company who doesn't keep up-to-date records but actually has a total picture of where their business really stands. Businesses are frequently driven blindly. Tracking expenses to income, and being on top of transactions allows you to see a monthly, quarterly, yearly visual of actual progress or regression. Business owners can be distracted by the deposits flowing through accounts that the expenses seem minimal, but when tracked and visuals are made you get a very real view of the numbers. Just like with personal finances, the little things can really add up to make a big difference in the outcome. Having a clear picture will help you make better business decisions - before it's too late!
As if having a clear picture of whether or not you are actually making money isn't enough, tax time and audits are another huge reason to make sure your books are in order. This will make life so much less stressful. You save the year-end scramble and anxiety of going through receipts, tracking down statements and transactions, etc. (you know what I am talking about - it sucks!)
Well-done books = less accountant's time = less filing fee = increase to your bottom line
IF, in the crappy event of an audit, the pain can be limited! Messy books and records could possibly trigger an audit in the first place. If you are in good order, the audit will be done quicker PLUS it can help avoid CRA fees and penalties. When businesses take a hard look and start understanding just how important the record keeping is, they understand how teaming with the right bookkeeper and accountant will boost their business, rather than just add another expense.
DID YOU KNOW....
the average company being audited loses over 60 hours complying with CRA auditors??
Being on top of things also makes the whole gst/pst and payroll source deduction remittance process smooth sailing - you easily see what you owe and sending in those payments in the time you need to will save headaches and heartaches running your business.
Budgeting isn't just for households. A budget is a financial roadmap for a business! and with organized records you can create a budget to plan for future expenses. Being able to plan for events to come is a big part of long-term success, but in order to plan for the future you need to understand what has happened in the past - and that is what bookkeeping does, presents the past financial performance of your business.
These are just a few of the points why being organized in your business builds a strong foundation for success. There is so much that quality record keeping does for growth. Invest in someone who knows what they are doing - the right person will increase your profits, not add to your expenses.
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