Bookkeeping Basics for Small Business Owners: A Fresh start with Fresh Finances.
Why is bookkeeping important? Accurate and up-to-date financial records are imperative to the health of every business, especially small businesses.. Because, in the beginning, cash flow may be inconsistent and there hasn’t been enough time to build up cash reserves to fall back on. Messy books can make or break the future of your business, with on time detailed reports you can make swift decisions before things become an issue and get back on track to success.
How many small businesses fail in the first year? A whopping 20 % of all small businesses fail in the first year and another 30 % fail in the second. And it only gets worse because another 50 % fail after 5 years in business. Why do they fail? Well about 29% do so because they ran out of cash and another 23 % failed because they did not have the right team.
Running out of cash, not having the right team, budgeting and cost issues, and a lack of not having a detailed business model can all equate to not having the right accountant/bookkeeper or not having one at all.
Today’s bookkeepers not only categorize transactions, prepare financial statements, and reconcile accounts.. They are the controllers of tomorrow who assist with budgeting, cash flow projection, and are “taking ownership of the financial reporting process” of the business.
Small business owners who lack a skilled bookkeeper with expertise in accurate record keeping should consider hiring one soon.