April 17, 2023
If you had to make a list of all the things that most business owners hate, taking care of accounting and other financial matters is probably right at the top.
Yet at the same time, a lot of those same business owners are struggling. Maybe they had a financial goal that they fell significantly short of. Maybe they tried to release a new product or service and it underperformed.
Either way, much of this can be changed by returning to those records and making sure that they’re as accurate and as up-to-date as possible.
In no uncertain terms: 2022 is over. We’re well into the new year and if you’re still trying to get your books closed from last year, you’ve got a major problem on your hands.
Thankfully, all hope is not lost. There is a way that you can get caught up on things to make sure you’re on the right path from a financial point of view. You just may have to shift the way you’re used to thinking about what constitutes quality bookkeeping, to begin with.
The Benefits of Proper Bookkeeping: Breaking Things Down
One crucial thing to remember is that getting your books together for 2022 is about more than just retroactive financial maintenance. It can directly impact your business and its ability to function in the coming year, too.
If your records aren’t up-to-date, you can never really be certain where you stand financially. You could have a much, much more positive impression regarding how things are going compared to the reality of the situation. This is especially true if yours is a business that experiences seasonal fluctuations in terms of the income you’re bringing in and the work you’re doing for clients.
Speaking of that, without up-to-date records you also have no true idea of what you worked last year at all. This is about more than just figuring out how much money is sitting in a bank account somewhere. Knowing how much you’re working can help uncover trends and patterns that you likely would have missed. You can see who your biggest clients are, for example, and the ones that you absolutely want to hang onto. You can also see if you need to diversify your client base to avoid putting “all of your eggs in one basket.”
Up-to-date records can also help shed more visibility into the parts of your business that are working and, more importantly, which ones aren’t. If you started offering a new product or service in 2022, for example, it stands to reason that you would want to know as much about its performance as possible. The same is true if you’ve expanded your operations in a way that maybe isn’t generating as much money as possible. That way, you can double down on what is working and get rid of what isn’t as soon as you can in 2023. Without this type of insight, you’re really only making decisions on little more than gut instinct.
Finally, it’s likely that you’ve set out goals for yourself in terms of performance for the new year. They may not be achievable with all the processes and best practices you currently have in place, though. You may need to change to reach those goals and if that is the case, you need to know which direction you should be pivoting towards.
All of this is to say that you are truly doing yourself a massive disservice if your books and other essential records are not up-to-date. Again, these types of records are more than just a “necessary evil” or a “frustrating cost of doing business.” For your business to remain healthy and grow, you need the insight and information contained in these records to stay informed.
That’s why, if you are looking for a single step you can take to help improve your success, it’s this one. Spend the time to get your records up-to-date. Make sure the information contained in them is accurate. Put a process in place to help make sure those books stay accurate and, by all means, use that information in any way that you can in the future.
Truly, you would be surprised by just how much easier it is to plan and remain successful once you have done precisely that.
The Importance of Working With a Professional
If all of the above sounds like it is equal parts time-consuming and frustrating, that’s because it largely is. But it’s still one of the most important things that you can do to build a foundation of financial success for your organization – and it’s also a road that you don’t have to travel down alone.
Especially in the early days of a business, it’s natural for entrepreneurs to hang onto that “can-do spirit” and try to handle everything themselves. In a lot of ways, this is the mentality that got you so far in the first place. But you’re an expert in your industry – you’re not necessarily an expert in bookkeeping, nor can you be expected to be.
At the same time, you don’t want to take chances and do a poor job because it almost always guarantees that you’ll be making decisions based on inaccurate financials. Not only could this potentially inhibit growth, but it could actually cause the types of cash flow issues that cause many organizations to prematurely close their doors every year.
All of this is to say that once you realize the task is too much for you to handle, don’t be shy about bringing in a financial professional. At the very least, they can free up as much of your valuable time to focus on other daily aspects of your business – which for many is the most important benefit of all.
If you’d like to find out more information about why quality bookkeeping matters for small business success, or if you’d just like to talk about your needs with a professional in more detail, please don’t hesitate to contact us today.