IMPORTANCE OF BOOKKEEPING FOR SMALL BUSINESSES (PART ONE)

Bookkeeping is the practice of keeping a record of all financial transactions of services and products of your business. This practice is a great tool, especially for the buying and selling industry and has equally been helpful to the progress of the industry. As the name goes, all you needed in the past was a pen, a notebook and a calculator to perform bookkeeping.

However, over the years, there has been an evolution from pen and notebook to software that holds up all transactional data for bookkeeping thanks to technology.

Dear small business owner, you might be wondering why you should practise bookkeeping for all your transactions, whether wholesale or retail and I am here to tell you why you should.

ONE!

TRACK YOUR PROFIT AND GROWTH

The mission of everyone in the commerce industry is to make a profit. Yes! To make a profit! Okay, let me ask you, how much profit did you make during the covid-19 season? Putting in daily transactions will determine how much profit you are making a day, a week, a month and even a year which determines if you are growing as a business or you are stagnant or probably retrogressing. A profitable business is the goal! Bookkeeping guides!

TWO!

ANALYSIS

Analysis cannot be ignored in the chain of business and can only be done with available data. Questions often asked and challenges faced can only be solved from the roots (transactions), yet without bookkeeping, the cycle continues. Bookkeeping thus presents you with all the necessary data to analyze, find the root of all your problems and get all your questions answered.???

THREE!

DECISION MAKING

I once made a bad decision with my startup that nearly cost me my entire capital. Decisions made can push your business to cloud 9 or pull it to the ground and obviously, we all want the former. On the contrary, the outcome of our business solely depends on our decisions. On what insights do you make your decisions? On instincts? On moods? Based on others’ decisions? That might work for you sometimes but what if it doesn’t? Then, that gravitational decision pulls you to the ground? The only source from which you can make decisions for your business is your records.

Yeah, it is what it is! Bookkeeping is a necessity for business if growth is what you seek.