Bookkeeping is very pivotal to business growth. It is very integral to ensuring that your businesses are well-organized. To start with, bookkeeping can be defined as the activity or occupation of keeping records of the financial affairs of a business. Bookkeeping is the best way to keep your business organized as it helps you easily budget for your business and keep a record of tax returns.
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Here are six reasons why bookkeeping is very important for your business.
A business without bookkeeping will suffer financial loss and financial misappropriation. With budgeting, businesses will avoid financial loss and financial misplacements. Further, when there is budgeting, business frustration is avoided in the long run. Also, with bookkeeping, you avoid over-budgeting or under-budgeting, which can either make or mar your business a whole lot? A budget creates a financial roadmap for your business, and you can create a good financial roadmap for your business if your books aren’t in order.
Preparing your tax will be easier when your business engages in a culture of bookkeeping. As expected of every business, you must present your taxes to constituted authorities to avoid litigation. This is where bookkeeping comes in handy.
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With a good bookkeeping record, you eliminate all forms of confusion during tax periods. When the Federal Inland Revenue Services come knocking you can easily present your financial statement without hassles because of an efficient bookkeeping culture.
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It Organizes Your Company
Without bookkeeping, there is bound to be chaos and disorganization in your business. In fact, without financial management and proper bookkeeping, businesses will suffer losses due to chaos. Therefore, it is pivotal to organize the business’ income and expenditures, the function of bookkeeping is very pivotal. This prevents the business from making mistakes that can be costly. Having an organized financial record can help you achieve your business goals.
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It Helps In Monitoring Business Growth
When your bookkeeping is in proper perspective, you can easily tell if your business is growing or not. You can even tell at what rate it’s growing. Armed with this information, you can re-strategize to either build up or consolidate on business successes. A good financial record can give you the needed data to analyze your business. Bookkeeping is like a report card for a business.
Whether you want a loan from a bank, funding from an investment company, or an angel investor, the first thing you’re asked to present for receiving financial handouts are your tax and financial statements among other documents, and an effective bookkeeping business can easily present this to them.
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Banks and investors are excited about companies that have good record keeping. With your presented financial and tax statements, investors and banks can predict how fruitful your business will be in record time and thus can invest in it if they see any future potential growth.
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It Brings Stability To Businessperson
When your books are in order you can have peace of mind and stability. With an accurate bookkeeping record, you can keep the tax officers from blow hot on your neck. Secondly, accurate bookkeeping can help you have well-defined objectives and give you a sense of direction rather than running your business based on speculation and financial uncertainty.
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This article was first published on 18th July 2022
nnaemeka-emmanuel
Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.
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