How Can Keeping My Books Up To Date Help My Business?

One of the most common things I hear as an accountant is, “I can see my bank balance, so why do I need to have up-to-date records?”

When running a small business, it’s so easy to get sucked into making and selling your goods and services. But what about all that bookkeeping? 

Surely you don’t need to worry about bookkeeping every day, right?

If you’re thinking you only need to think about bookkeeping once a month or even once a quarter, think again!

Here’s what you get if you stay on top of your bookkeeping:

Helps you to know your financial situation

Updating your books gives you the information you need to run your company smoothly. Who doesn’t want that?

If you stay on top of your records, you’ll have all your outstanding bills, payroll estimates, and income information, right at your fingertips. 

Smooth sailing, anyone?

Up to date books improves decision-making abilities 

Updating your records regularly makes it much easier to make crucial financial decisions. You know the ones.

And knowing how much capital you have helps you decide between things like purchasing more inventory or hiring more staff.

Alternatively, if your records show you’re running low on capital, you can take out a loan for your business.

On the other side of the coin, banks will want to see proof you’re making money before extending you a line of credit.

Up to date books makes your job easier

By updating your financial records regularly, you’ll save the time you would have otherwise spent playing catch-up at the end of the month.

If your books are always in order, you free up your time to focus on running your business - and your personal life.

Up to date books keeps your small business safe and sound

If you check your books regularly, you’ll catch fraudulent charges, keep your checks from bouncing, and make sure you have enough capital for upcoming payments. 

In other words, you’ll keep your business from running into the ground.

Bonus: When you meet with potential investors, your up-to-date records will show you’re serious.

Up to date books makes problem-solving easier

If you keep your bookkeeping top of mind, you’ll catch problems early - and solve them before they multiply. 

Best of all, the fraudulent activity won’t stand a chance at doing irreparable damage to your business.  

Up to date books enables you to have a stress free tax season 

Do you know your five top income streams? You would if your books were up to date!

If you are ever audited, one of the things you’ll be asked for is a general ledger. If you aren’t up to date, you won’t have this.

Unmanageable stress, anyone?

Up to date books allows you to forecast revenue and manage expenses 

By keeping your books up-to-date, you’ll know if a client forgot to pay you or if you forgot to invoice your client.

Because let’s face it; it’s really easy to let your expenses get out of control.

Best of all, you’ll even catch that subscription you’ve been meaning to cancel.

Need help with reconciliations or updating your accounting? Have comments you’d like to share with me? E-mail me at [email protected] or reach out via LinkedIn.

Renee and her team have over 20 years of experience in helping businesses be more efficient and stress-free. Renee Wengrofsky is the founder of JSN Consultants, a West Hempstead-based accounting firm that helps passionate entrepreneurs realize their dreams by supporting them in building sustainable, profitable companies.