Bookkeeping and Accounting plays an important role in running a business because it helps to keep track of income and expenditures, ensure statutory compliance, and provide investors, management, and government with quantitative financial information which can be used in making business decisions. It is critical you keep your financial records clean and up to date if you want to keep your business a float.
Whether you’re looking to grow your business, or cut down on your expenses, Outsourcing your Bookkeeping and Accounting functions a great option. Outsourcing provides access to quality services at an affordable price.
5 main reasons for why it is important to maintain proper bookkeeping and accounting.
Helps in Budgeting and making Future Predictions
Budgeting and future predictions can make or break a business, and your financial records will play a crucial role when it comes to it. Business trends and projections are based on historical financial data to keep your operations profitable. This financial data is most appropriate when provided by well-structured accounting processes.
Helps to Manage and Monitor Cash Flow
The working capital and cash requirement of an enterprise can be duly taken care by proper accounting system
Helps Business to be Statutory Compliant
Proper Bookkeeping and Accounting ensures timely recording our liabilities which needs to be paid within the prescribed time line. This includes provident fund, pension fund, VAT, sales tax, Income tax. Timely payment of liabilities helps enterprises to be statutory compliant.
Many stakeholders need financial information in the form of a financial statement. Examples of stakeholder that need financial information are investors, creditors, government, debtors, customers and employees. The investor will move away if the organization is lack of financial records and accounts. They need this information to know about business progress.
The importance of bookkeeping in business when it comes to tax compliance and keeping track of information and documents for the fulfilment of tax obligations is quite high. With bookkeeping, you don’t have to worry about finding all the bills and gathering all your expense reports during the time of filing tax. As everything is organized in a balance sheet, you can invest your time on tax saving and finance management.