It took me a while to realize the importance of up-to-date books. From the beginning of opening my business I hated anything to do with bookkeeping. It was just the worst - sitting down and entering in all these numbers in some boring program. I've learned that an up-to-date set of books is one of your greatest assets as a small business owner. Here are 3 reasons to love your books:
It helps you grow your business.
An accurate up-to-date Balance Sheet and Profit and Loss statement helps you understand where you are financially. Are you making a profit? How much? This information will help you determine if you can hire that first or 10th employee. It will help you determine if you can afford buying new equipment for your business. A healthy set of books will help you get that loan for expansion. The bottom line is that you need to know where you are financially in order to afford growth opportunities.
Your accountant will love you for it.
You need to pay taxes - there's just no getting around this fact. As a small business owner, you will find that in the beginning you are paying much more in taxes than you are paying yourself. There are federal employment taxes, L&I, state revenue taxes, unemployment tax, personal taxes. Unless you keep accurate books, you (or your accountant) won't know how much you need to pay in taxes. That reminds me of another post I'll get into later - what's more important your bookkeeper or your accountant?
Peace of Mind.
When you don't know where your small business stands financially, you just never know how you are doing. It's an uneasy feeling. When you know exactly what your monthly profit or loss is, you know exactly where you stand. It's a starting point and one where you can work from. You need these concrete bits of information in order to march you business and you forward in the direction of profitability and growth. A mind at ease is worth it's weight in gold as a small business owner.
Well-kept books are a cornerstone of your small business. You need to make this a priority from the start. If you've already started your small business and are way behind in your bookkeeping, I definitely recommend hiring a bookkeeper to help. I'll show you how in later posts. It will be very hard for you to grow if you don't have good books. Once you do this, you'll see where you stand and where you need to go in order to move into profitability.
It helps you grow your business.
An accurate up-to-date Balance Sheet and Profit and Loss statement helps you understand where you are financially. Are you making a profit? How much? This information will help you determine if you can hire that first or 10th employee. It will help you determine if you can afford buying new equipment for your business. A healthy set of books will help you get that loan for expansion. The bottom line is that you need to know where you are financially in order to afford growth opportunities.
Your accountant will love you for it.
You need to pay taxes - there's just no getting around this fact. As a small business owner, you will find that in the beginning you are paying much more in taxes than you are paying yourself. There are federal employment taxes, L&I, state revenue taxes, unemployment tax, personal taxes. Unless you keep accurate books, you (or your accountant) won't know how much you need to pay in taxes. That reminds me of another post I'll get into later - what's more important your bookkeeper or your accountant?
Peace of Mind.
When you don't know where your small business stands financially, you just never know how you are doing. It's an uneasy feeling. When you know exactly what your monthly profit or loss is, you know exactly where you stand. It's a starting point and one where you can work from. You need these concrete bits of information in order to march you business and you forward in the direction of profitability and growth. A mind at ease is worth it's weight in gold as a small business owner.
Well-kept books are a cornerstone of your small business. You need to make this a priority from the start. If you've already started your small business and are way behind in your bookkeeping, I definitely recommend hiring a bookkeeper to help. I'll show you how in later posts. It will be very hard for you to grow if you don't have good books. Once you do this, you'll see where you stand and where you need to go in order to move into profitability.
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