We’re gonna be honest here…we know what this looks like. We’re a bookkeeping company telling you to stay on top of your books. Real original of us. But we’re also a group of entrepreneurs, mothers, tax preparers, coaches, sisters, friends, and people who truly care about their clients. We’ve seen firsthand what happens when a company doesn’t do their books and what can happen when they’re on top of their bookkeeping. Trust us, you want the latter.

Why does it matter so much though? Well, proper bookkeeping is the only way to tell if your business is doing well financially. Consider it like your checkup with the doctor. Although you likely started your business to follow your passion, you also want to make money, and proper bookkeeping will let you know if you’re actually doing that. 

Let’s dig a little deeper…

1. You Need to Know What’s Going On With Your Money

Seems like a no brainer, right? But unless you’re up to date with your bookkeeping, chances are you actually have no idea if your business is truly profitable. Sure, you might have a ballpark idea of your sales and recurring expenses, but proper bookkeeping ensures that you know exactly how much money is coming in and how much is going out. Knowing this info helps you gauge how much to price your product, how to pay yourself, where you have room to invest. PLUS, when to hire and other important business decisions. Proof is in the numbers, babe. 

2. You Need Accurate Financial Reports to Stay Compliant

There’s lots of types of financial reports, but the main ones you need to be aware of are the Profit and Loss Statement and the Balance Sheet. The profit and loss (or “P&L”) tells you how much money your business has earned and how much the business has spent during a specific period. That’s how you know if you earned a profit or if you had a loss (hence the name “profit and loss”). The balance sheet tells you how much money your business has in assets (like bank accounts and property) and how many liabilities (things like loans, credit card debt, etc) the business has. This report will tell you if the assets and liabilities are balanced (hence the name “balance sheet”) or if you’re running a debt funded business. Both the P&L and balance sheets are necessary for loans, selling your business, filing your taxes, securing investors, and other important business milestones. 

3. You Need it To Save Money on Taxes

Speaking of taxes, up-to-date bookkeeping allows you to keep better track of your tax deductions. Did you know you only pay taxes on profits? That is, you only pay taxes on the money left over after expenses. That’s kind of a big deal! That’s why tracking and labeling your expenses is so important. You should know exactly where your money is going so that your tax preparer can maximize deductions when filing your return and lower your tax bill.

4. You Need to Catch Mistakes Early On

You know how we said earlier that you need to know what’s going on with your money? Well that includes spotting bookkeeping errors ASAP. Catching mistakes can save you tons, and it can also help you reconsider how you’re choosing to spend your money. You may notice that a vendor accidentally charged you twice or that you’re still being billed for a subscription you canceled months ago. Maybe you realize that you’re spending hundreds of dollars on business cards and print advertising when the majority of your clients find you through IG. The sooner you catch these errors, the more money you can save!

5. Even if You Don’t Think You Need it, Your Mindset Says Otherwise

We’ve seen countless entrepreneurs discredit their business because it was too small. We’ve also seen countless entrepreneurs step into a delusion bubble and grow wildly successful businesses from mere scraps of nothing. Moral of the story: Act like your business is legit and it will be. Don’t, and it won’t be.

Honestly, these are just a few reasons to keep up with your bookkeeping. But you may be thinking, “that’s nice but I can’t afford this either way”. To that we kindly ask, can you afford not to? We have found time and time again that those that take the plunge to hire a bookkeeper found the money (and more) once their books were up to date and clean! You won’t be disappointed! Ready to do this? Book a call today to learn more about our accounting services.