Why Business Owners Must Prioritize Recordkeeping
Most business owners don’t lead with recordkeeping as a priority in their business. Rather, they are solely focused on developing the product or services they provide and bringing it to market. However, recordkeeping is a vital part of the success of any business. Yet many business owners wait until last minute, when it is needed for taxes, to think about recordkeeping. It is not only necessary for taxes but there are many other reasons that recordkeeping is crucial.
- Taxes are definitely one of the reasons for recordkeeping. To avoid headaches at tax time, you must keep track of your receipts and other records throughout the year. This allows you to report the correct income and take the right deductions on your tax returns.
- Speaking of taxes, if you don’t have your records together when you take them to your tax accountant, that could be higher fees for the extra work that your accountant has to do. Save fees with proper recordkeeping.
- Another advantage of recordkeeping is that it saves you time. Imagine the time it would take when you actually need your numbers for taxes or to get a business loan, etc. You now would need to pull all of your paperwork to construct the financials needed. Save time with timely recordkeeping.
- Financial reports should be reviewed by business owners monthly. Reviewing your financial statements, especially your income statement, let’s you know if you are making money or losing money and how much. This information will be at your fingertips with proper recordkeeping.
- Knowing your numbers helps you to make better decisions in your business, such as what should you do more of, what changes need to be made in your spending, and where you should be investing your money.
Now that you are clear why recordkeeping is important; the next step is the how. We will discuss in our next blog. In the meantime, if you are looking for recordkeeping solutions, book a discovery call with us. Let’s discuss your options.