In this blog post, we’re going to talk about 5 bookkeeping tips businesses in Pitt Meadows can use to improve their bookkeeping practices.
It is necessary for every business to record its financial transactions, whether the business is small or large. Bookkeeping helps companies understand the money that comes in and goes out. The business owners can then analyse the data, helping to make plans and improve strategy which in turn helps the business owner achieve their goals.
Why is Bookkeeping Important?
- Records up to date- It is important to keep your records up to date. Bookkeeping makes it easy for the owner to keep an eye on the transaction section of the business.
- Keeps You Ahead of the CRA- Good bookkeeping helps you stay ahead of the taxman. It can also help you know when and how much you need to pay which you can then set aside so you don’t have to incur penalties and interest.
- No fear of miscalculation- when you keep a record of every transaction up to date in your records, you should not have to fear any miscalculation. You can check it daily or weekly and correct if anything you missed or calculated wrong. You or your bookkeeper will then make a balanced sheet to ensure you stay on track.
- Add confidence- The bookkeeping records add confidence in you as you know all the transactions of your business including profit and loss to work further. Information about your business will make you confident in front of your investors, consumers, your business partners, etc.
- Better relations with banks and investors- In your business, you can show a clear balanced sheet with detailed information of the transactions to your bank. The complete transparency of your transactions will help build a trustworthy relationship with your investors and bank. If you can easily show your profit and make reasonable predictions about your financial future, you can attract investors easier.
- Good business analyses- Bookkeeping is best to analyse the performance of your business through the profit and loss statements. By careful analysing, it helps you to understand the opportunities and the faults of your business so you can improve.
Five Bookkeeping Tips For Businesses
- Use good bookkeeping software- You can use bookkeeping software to record your transactions It is the best way to keep your records safe and accurate over a long period of time so you can help analyse trends. It can also help you to check ad correct any of your records anytime.
- Organized record- Keep an organized record to avoid miscalculation and confusion in financial work. Organized work not only looks good, it becomes easy to understand without searching around for the data. If you’re looking for investors, it will give them confidence that your organization is run smoothly.
- Daily or weekly updates- You should make a daily or weekly update to your financial data so that you can stay on top of it. This helps you to avoid mistakes. You should not miss a single transaction of your business and check your bookkeeping system regularly to avoid any mistakes or missing data in your record. Daily updates help you to maintain a clean and right bookkeeping record.
- Business bank account- If a person is doing a business, they should have a business bank account separately from the personal bank account. This will help you to organize the transaction completely for your business. You will not mix up your personal and professional financial transactions in just one account. At last, it will be a burden for you to understand the transaction which is a complete timewasting thing.
- Talk to a bookkeeper- You should always take advice from a well-experienced bookkeeper so that you can know what to do in your financial records, giving you financial clarity. They can make your life so much easier, so you don’t need to stress out about transactions.
When Is the Right Time To Hire A Bookkeeper?
Greater Vancouver is consistently named as one of the top five worldwide cities for liveability and quality of life. However, rent is expensive and labour costs can be hire which means it’s also an expensive city to operate a business in so there are less room for errors.
When you first start a business, you wear many hats. You have to do sales, marketing, operations, customer serve and of course bookkeeping. As your business grows however, you should definitely outsource some of those tasks and home in on what you are truly great at.
Unless you are a financial whiz, bookkeeping is probably not something you are particularly great at or passionate about. Because let’s face it, you started your business because you wanted freedom and flexibility. Not because you wanted to sweat over a spreadsheet.
Every business is different and unique and it’s important to recognize when it’s a good time to hire a bookkeeper. Unfortunately, it’s not always black and white. For example, let’s say you have two businesses each making a million dollars in sales.
One business might have a thousand customers while another might only have ten. Obviously, it’s easier to keep track of those ten customers than a thousand and so while they may be similar on paper, the first company would probably need a bookkeeper while the latter may not.
The best thing to do is to talk to a professional bookkeeping service and see what they say. Any reputable company will give you an honest answer and help you see where your financial blind spots. After that initial consultation, it’s up to you whether you think you need a bookkeeper or not.
With a vibrant economy, Pitt Meadows is a great city to run a business. But in order to be successful, you need to plan ahead that requires knowledge and understanding of both the entire market and the financial innerworkings of your company.
Keeping on top of the books is a simple yet very effective way to ensure you make better decisions which will help you achieve your goals.