Bookkeeping is Important to any Business

1. Why Bookkeeping is Important to Any Business?

2. Importance of Bookkeeping Service in Business Tax preparation- annual taxes are quite taxing as one must have all records that include an organized balance sheet, profit and loss and cash flow so as to make things easier while filing. Bookkeeping is essential for filing personal tax return too, as a business owner a large chunk of income comes from the business. So to know what you earned, you got to know how much your business earned first. Helps your budget- when the income and expenses are organized properly, it becomes easy to review expenses as well as financial resources. A budget sets roadmap for the business, which helps in planning future expenses and also the anticipated resources that will cover those expenses.

3. Analysis and management- cash flow can be analyzed and managed in a better way which aids in paying invoices on time to vendors, keep up with the money flowing in and out and keep track of where the outgoing money is being spent. For planning- the past financial health is reflected through bookkeeping. When planning for the future, you need to have a clear understanding of what worked and what didn’t in the past. Not just with strategic planning, it plays a vital role in tax planning. It provides the CPA with necessary information to categorize expenses and revenue accordingly. Better decision making- in order to make the best decision, one must have an access to all information which bookkeeping provides.

4. Easy reporting to investors- investors in order to quantify the value of their investment would want to know the financial performance of the business. Financial statements provide the value of the business. Bookkeeping enables investors to have accessible and up-to-date information that helps investors in taking informed and better decisions. It is important for prospective investors as well. Financial management- there is a complete control of the business finances as you get to know how you spend the money. You can pay your bills on time, see outstanding invoices owed and receive payment for products timely as well. Track growth and profit- bookkeeping reflects the profitability of the business and also helps in tracking growth. The data helps in analyzing how well you are doing and also provide a clear picture of business cycles and helps you compare results across periods. Mandatory under law- the law requires you to maintain financial records of the company. As per the legal structure, the law requires you to maintain financial records separate from the personal expenses, failing which can lead to termination of the business. Please contact our accounting firm today and schedule a consultation. Website: https://www.standardauditors.com/ Audit Inquiries +971 4 37 95 200 +971 50 654 67 98