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Why Is Bookkeeping Important for a Small Business?

A small business without a bookkeeper is going to have a tough time in its young life. The best way to ensure your company’s success is by employing an expert that is knowledgeable in all things accounting, rather than trying to figure it out yourself. Hiring someone else may seem like an out-of-pocket expense, but these costs are more than worth it considering the potential profit of the business. Let’s look at some reasons why having a bookkeeper in Ridgefield can help make or break your business.

Why do I need bookkeeping?

You will know what money goes where

Mistakes will inevitably happen when doing any kind of paperwork, but as long as those errors get caught early on, they won’t become too costly down the line. A bookkeeper with experience will know what mistakes are easy to detect and prevent the more costly ones from ever happening. You should always be aware of your books and your business’s financial situation if you want to run it successfully, and this is precisely what bookkeeping offers you.

A paper trail

The last thing any startup owner wants is a lawsuit on their hands. Having a bookkeeper in place can help you ensure that everything done is within legal bounds and that there is a paper trail for anything that needs to be traced later on. If you have your own bookkeeper, then you don’t need to keep records yourself.

Revenue recognition

It’s important to know when you must report revenue. Sure, you can save money by outsourcing your bookkeeping services to a firm willing to do it for half the price, but learning how to recognize revenue is too important to cut corners on. If you do not acknowledge your revenue accurately, then you’ll be losing money because of it. A bookkeeper will be able to help you in this area.

Crisis management

Smaller ventures are more susceptible to a crisis, and without a bookkeeper putting the pieces together, you’re running the risk of ruining your business. There may come a time when your company is facing challenging times or even bankruptcy, and not having a bookkeeper means that you’re going to be blindsided by these issues and unprepared to face them.

Bookkeeping can help you keep your venture safe in many different ways, but it is one of the most critical elements when keeping a clear head while making decisions for your company.

Cash flow Management

A large portion of running an in-house business has nothing to do with the products or services you offer but how well that money flows into and out of your company. Having a bookkeeper to keep an eye on this will help ensure that on-time payments are made and meant for the right people. This also allows you to manage your cash flow better, and in turn, your business.

Record-keeping

Using a bookkeeper can help ensure that all your company’s businesses records are kept in order, from financial statements to tax returns. Whereas it may be easy to remember what you sold last year and how much money came in on the day of an account review, having someone else do this will save you time and many headaches.

accountant ridgefield, WA

Useful For Filing Taxes

Keeping records like invoices, receipts, and bank statements will make tax season a little easier. You’ll have a history of how much money you brought in and what expenses you paid throughout the year for easy filing. Your accountant will appreciate having access to all your financial documents on hand too. This helps speed up getting your taxes filed on time, which will help avoid last-minute fees and penalties.

Businesses with an accountant don’t have to worry about whether or not their taxes are filed correctly. This is because they’re guided by their ability to stay on top of them each year. If you don’t keep good records, your business may not qualify for deductions that are available to you.

It is a good business decision

If your finances and accounting are down pat, you won’t have anything unexpected come up at an inopportune time. You’ll also be able to see trends in what type of income comes from what kind of source, and you can make goals to improve your company for the best possible results.

Having a bookkeeper, Ridgefield WA, will help you catch mistakes early on, protect yourself from legal issues and other problems as they arise. Overall, it’s one of the best business decisions that you can make for your company. Hire an expert that understands accounting, save time and money, and get ready to make your business the best it can be.

Stay organized in general

Last but not least, having a bookkeeper will ensure that your business stays as organized as possible and using accounting software is an excellent way of keeping things under control. The more organized your office becomes, the better chance it has for success, and a professional bookkeeper will help you with the organization.

Conclusion

A small business without a bookkeeper is headed towards disaster. It’s necessary to have an expert on hand and not risk your company’s success by trying to learn the ins and outs of accounting yourself. Hiring another person doesn’t mean you’re wasting money; it means you’re investing in the future of your business.

Give us a call at (360) 213-1040 whenever you need bookkeeping services in Ridgefield, WA,  for your small business.

 

FAQ:

Why is bookkeeping important?

If your business’s finances aren’t in order, then it can be challenging to accomplish anything. Having a bookkeeper on hand can ensure everything is filed correctly and recorded. This will save you headaches and chaos down the road.

How does Bookkeeping help you run your business?

The bookkeeper will handle all the transaction data and report them to the manager for better decision-making.

How is bookkeeping different from accounting?

Accounting deals with the complete documentation of the company’s financial activities, while Bookkeeping manages the records and prepares financial statements. Both these activities aim to obtain accurate data related to financial status so that company decisions can be smoothly taken.