Bookkeeping is first important step of the accounting process by recording financial transactions related to the company on hand. The accounting process involves classifying, reporting and analyzing of data and none of it can take place if there is no organized and accurate bookkeeping. http://www.bmgaccountants.com.au/top-reasons-why-bookkeeping-is-important/
The question often asked as to why bookkeepers are employed by companies when accountants feel they can do the work required; – what they are saying is we can use bank feeds to audio code the transactions. The auditor’s response to this is that this would be a step backward. Bookkeepers already use bank feeds to verify transactions as the business concludes its normal process. What companies must also not forget is that Bookkeepers help accountants with the understanding of software and feedbacks which speed up the process of helping the company find problems and solutions within a shorter period than otherwise made possible.
Here are some valid reasons sourced from BMG Accounts website as to why Bookkeepers are vital to the life of business
The importance of bookkeeping cannot be emphasized enough, but here are top reasons why this is important to the health and life of your business.
- Better financial analysis and management
Cash flow management is one of the most important things to focus. Regardless if you are busy or not, once invoices are delayed, no follow-ups on customer payments and falling out on supplier’s list of customers will eventually crash you down. Bookkeeping can systematize it up from up-to-date follow-ups, invoicing and on-time payment for vendors.
- Fulfillment of Tax Obligations
Bookkeeping keeps track on any information and documents to accomplish annual taxes. You don’t have to rush anymore to find all those bills or try remembering expenses when tax time comes. Tax returns are also made easier with an organized Balance Sheet, Cash Flow, and Profit & Loss; your tax advisor will devote time in giving you sound tax advice instead of correcting entries in the financial statements.
- Reporting to Investors is Easy
The process of reporting to your investors on crucial information about the financial status of the company is no longer a worry. From charts, graphs to lists of data presented to the investors are all acquired from the book of account.
- Business Planning is Easy
What you need is only the Balance Sheet and Profit & Loss to check if the company is on the right track financially, from there you can start your business planning so much easy.
- Proper Record Keeping as Required by Law
Bookkeeping keeps record keeping properly organized from small to big /invoice. It makes retrieving process easy once audit time comes
To achieve all these, you can hire a bookkeeper or accountant to do it and keep your financial aspect intact and organized. Bookkeeping can spell the difference between success and bankruptcy and can also literally mean thousands of dollars for your business. http://www.bmgaccountants.com.au/top-reasons-why-bookkeeping-is-important/